Executive Summary

Sayana Goat Farm is a registered and licensed livestock farming firm that is based in Tilottama-12, Rupandehi,
Nepal. We have done our detailed market research and feasibility studies and we were able to secured
adequate land to start our livestock farming business.
Our livestock farming business is going to be standard one hence will be involved in commercial breeding of
goats and other livestock. We will be involved in dairy support service, livestock health services and Meat et al.

In the nearest future, hopefully within first five years of officially running Sayana Goat Farm, we will start our
meat processing plant and supply meat broad area of our country. We are in the goat farming business because
we want to leverage on the vast opportunities available in the livestock farming industry, to contribute our
quota in growing the Nepalese economy, in nation food (meat) production, raw materials for industries, to full
fill growing demand of meat and other agriculture product for nation.

Highlights
Chart Input
Sales, Gross Margin, Net Margin
1.1 Objectives

1. To create opportunity of self-employment to human resources, youth and women and to enhanced their
self-respect through appropriate management.

2. To become one of the leading livestock farming brands not just in Rupandehi, but also in the whole country.
4. To Supply Compost fertilizers for crops and reduce the dependency to chemical fertilizers and enhanced
the production capacity of the land.
5. To reduce a large volume import of goats from neighboring country.
6. To increase income generation through scientific goat farming in traditional approaches.
1.2 Mission
To become one of the leading livestock farming brand, sell our produces (goats) and build a livestock farming
business that can favorably compete with other leading livestock farming brands in the Nepal.
1.3 Keys to Success
In order to succeed in the livestock farming Sayana Goat Farm must:
Carry an essential task like building proper shed for goat, right location and land, choose right type of breed
and easy access of veterinarian. Make sure to have enough clean, fresh grass, plants, shurbs,weed and herbs.
Take Proper care of goats, keeping their house neat and clean as possible as regular basis. Take extra care of
breeding bucks, kids and pregnant does.
Proper vaccination to prevent different types of diseases.
Provide customers with top notch personalized customer service.
Advertise and promote in areas that our target customer base will learn about our livestock farming
Continuously review our inventory and sales and adjust our inventory levels accordingly.
Company Summary
Sayana Goat Farm is privately owned firm and located at Tilottama-12, Rupandehi, Nepal. Sayana Goat Farm is
registered at Small and medium cottage industries Bhairahwa and also in Inland Department Bhairahwa,
Rupandehi.
2.1 Company Ownership
Sayana Goat Farm is privately owned firm by Mr. Yadav Paudel an inhabitant of Malarani-09, Argakanchi
district
2.2 Start-up Summary
No matter how fantastic your business idea might be, if you don’t have the required money to finance the
business, the business might not become a reality. Finance is a very important factor when it comes to starting
a business such as greenhouse commercial farming. No doubt raising start – up capital for a business might not
come cheap, but it is a task that an entrepreneur must go through.
Sayana Goat Farm is a family owned business and it will be financed by the owners of the company – Yadav
Paudel and family. These are the areas where we intend sourcing for fund for Sayana Goat Farm;

Generate part of the start – up capital from personal savings.

Generate part of the start – up capital from friends and other extended family members
Generate a larger chunk of the startup capital from the bank (loan facility).

The purpose of this business plan is to secure a NPR 1,500,000 government subsidies. This supplemental
financing is required to work on expansion of shade, inventory, and operational expenses. The loan amount
appears in the current liability row of the Balance Sheet as current borrowing and the government subsidies
amount appears in the deferred income row of the Balance Sheet on Year1. Other financing will include an
owners investment capital of NPR4,900,000.00 and a short term loan of NPR10,00000.00 for inventory
replenishment during months of high receipts.
Successful operation and building a loyal customer base will allow Sayana Goat Farm to be self sufficient and
profitable in year three.
Products
Sayana Goat Farm is a licensed livestock farming business that is committed to goat farming and meat processing and packaging for both
locally and nationally. We will also ensure that we operate a standard food processing plant as part of our complimentary business
offering. These are the areas we will concentrate on in our livestock farming business. If needed arises we will definitely add more
related animal breeding services to our list.
Management will rely on customer feedback, suggestions, and sales reports to introduce or eliminate doubts & improve customer
relationship.
3.1 Product Description
Sayana Goat Farm will provide a selection of products that fall within our mission statement. Our goal is to carry a selection of labels
from locally to nationally.
Some of the labels we will carry are listed below:
Sales of processed meat
Breeding Services
Dairy Support Services
Livestock Health Services
Sales of cattle and milk (Including goats, grass-rabbits et al)
Livestock farming related consultancy and advisory services
3.2 Competitive Comparison
Sayana Goat farm has a number of advantages that will allow us to build our brand identity, add value to our merchandise and build a
loyal customer base  while standing apart from our competitors. 

We have done our homework and we have been able to highlight some factors that will give us competitive advantage in the
marketplace; some of the factors are effective and reliable livestock farming processes that can help us sell our livestock and processed
meat at competitive prices, good network and excellent relationship management.
Another competitive advantage that we are bringing to the industry is the fact that we have designed our business in such a way that we
will operate an all – round standard commercial livestock farms that will be involved in diverse areas such as animal rearing and meat
processing and packaging plant. With this, we will be able to take advantage of all the available opportunities within the industry.

Lastly, our employees will be well taken care of, and their welfare package will be amongst the best in the industry meaning that they will
be more than willing to build the business with us and help deliver our set goals and achieve all our objectives as a standard commercial
livestock farms with a meat processing and packaging plant
3.3 Sales Literature
Sayana Goat farm will use a targeted advertising and sales program to generate publicity and build a customer base.
Goat is a multi-use animal which is commonly reared for the meat (chevon). In the different parts of the world, goat is raised for the
meat, milk, wool and leather. Goat is also called “the poor man’s cow”. In Nepal, the goats can be reared in different ecological zones;
hence, people are adopting goat farming as an enterprise. Sheep and goat are belonging to different species, but their management is
almost similar. In Nepal, almost in all parts, sheep and goats are raised. And, as all caste and ethnic people like goat meat; day-by-day,
goat farming has become a popular business. For the goat farming, the meager needs of fodder and fewer requirements of feeds
compared to rearing other livestock, goat farming requires low investment. Shed making can also be possible in a low cost, and easy to
sell goats in the case of needs arises to farmer. So, the goat farming enterprise is in growing trend.

3.4 Sourcing
We will shop for our merchandise as outlined below:
Goats have larger belly comparatively to other cattle, and can eat smaller grasses which other cattle cannot. Goats can also eat bitter
grasses. Goats can eat dry matter equivalent of 4% of its own body weight. Goats can produce more meat, milk by taking substandard
grass than other cattle. Goats do not like to eat wet and filthy things. Grasses and shrubs is purchases from farmers.

We will also work to solidify our relationships with sales representatives and vendors so that we may achieve decreased cost of goods.
Our competitors, (both direct and indirect) purchase from the same sources and we believe that through marketing programs and
strategic alliances we will begin to gain a competitive advantage.

3.5 Future Products

As we achieve and exceed our sales and profitability goals, Sayana Goat Farm will add meat processing & packaging plant in near future.
Market Analysis Summary

One of the common trends in the commercial livestock farming line of business is that most players in the industry are no longer concentrating only
on farming a particular species of livestock or just livestock / goat farming alone.

They now find it easier to run both livestock farming and crop cultivation. Some even go ahead to include meat processing and packaging business
alongside their product offerings; it helps them maximize profits in the agriculture industry.

Despite the fact that commercial goat farming / livestock farming has been in existence since time immemorial, that does not in any way make the
industry to be over saturated; commercial goat farmers are exploring new technology to continue to improve goat farming processes and also meat
preservation and packaging process. The fact that there is always a ready market for commercial goat farming makes the business ever green.

As a matter of fact, one of the new trends in livestock farming industry is that with the recent advancement in technology livestock farmers can now
improve the various breeds of the animals they are breeding.

As a matter of fact, it is now easier for livestock farmers to comfortably import the kind of breed of domestic animal they want to breed from any
country of their choice and also advancement in technology has made it easier to cross – breed different animal

4.1 Market Segmentation

Nepal is an agrarian based country where about 65.6 percent of population is based in agriculture which contributes about 35 percent of GDP. The
Nepalese agriculture system comprises of crop, livestock and fodder trees where livestock provides milk, meat, manure, hide draught power,
fertilizer, household fuel and fiber (Kattel , 2016). According to MoAD (2012), the livestock sector contributes 14% of the national GDP and 32% of the
AGDP, which shows significant role of the livestock sector in the country’s economy. The data showed that in total contribution of livestock the
contribution of goat meat is 20 percent. Small ruminant especially goat has a significant role in the total livestock contribution. According to MoAC
(2004) , Goat constitutes a considerable proportion of total ruminants in hills ( 49.66 % of total ruminants in hills) and terai (36.47% of total ruminant
population) of Nepal, however in case of mountain sheep is more dominated. Thus the sector of goat provides a robust support in the livelihood of
Nepalese farmers of hills and terai which constitute the higher proportion of land area and population of the country

4.2 Target Market Segment Strategy

Naturally, the target market of those who are the end consumer of livestock farm produce and also those who benefits from the business value chain
of the agriculture industry is all encompassing; it is far – reaching.
Every household consumes produce from livestock farms be it goat meat, goat milk, and the skin (leather) used for bags, belts and shoes production
et al. So also a large chunk of manufacturing companies depends on livestock farms for some of their raw materials. In essence a goat farmer should
be able to sell his or her farm produce to as many people as possible.
We will ensure that we position our business to attract consumers of agriculture produce not just in the local community alone but also other parts of
the country.

4.2.1 Market Needs

There are several important needs in the livestock farming business that are being either underserved or not met at all. Sayana Goat Farm plans to
meet and service those needs.
Focus and attention to customer's personal preferences and customer retention will be given high priority. Because of the high rate of employee
turnover at major mass retailers, customer service and personal detail has been  lost.

4.2.2 Market Trends

One of the common trends in the commercial livestock farming line of business is that most players in the industry are no longer concentrating only
on farming a particular species of livestock or just livestock / goat farming alone.

They now find it easier to run both livestock farming and crop cultivation. Some even go ahead to include meat processing and packaging business
alongside their product offerings; it helps them maximize profits in the agriculture industry.

Despite the fact that commercial goat farming / livestock farming has been in existence since time immemorial, that does not in any way make the
industry to be over saturated; commercial goat farmers are exploring new technology to continue to improve goat farming processes and also meat
preservation and packaging process. The fact that there is always a ready market for commercial goat farming makes the business ever green.

As a matter of fact, one of the new trends in livestock farming industry is that with the recent advancement in technology livestock farmers can now
improve the various breeds of the animals they are breeding.

As a matter of fact, it is now easier for livestock farmers to comfortably import the kind of breed of domestic animal they want to breed from any
country of their choice and also advancement in technology has made it easier to cross – breed different animal
4.2.3 Market Growth
From the survey conducted, we were able to discover that the sales generated by a commercial livestock farm depends on the size of the farm, the
network of the farm.
We have perfected or sales and marketing strategies and we are set to hit the ground running and we are quite optimistic that we will meet or even
surpass our set sales target of generating enough income / profits from the year of operations and build the business from survival to sustainability.
We have been able to critically examine the agriculture industry cum commercial livestock farm business and we have analyzed our chances in the
industry and we have been able to come up with the following sales forecast. The sales projection is based on information gathered on the field and
some workable assumptions as well with respect to the nature of commercial livestock farm that we run

4.3 Main threats

Some of the threats and challenges that you are likely going to face when you start your own livestock farm are global economic downturn that can
impact negatively on household spending, bad weather cum natural disasters (draughts, epidemics), unfavorable government policies and the arrival
of a competitor (a commercial farm that rear same animals) as our livestock farms within same location.
There is hardly anything you can do as regards this threats and challenges other than to be optimistic that things will continue to work for your good

4.2.4 Industry Analysis

The agricultural industry of which livestock farming or better still goat farming is a subset of is no doubt among the leading industry in most countries
of the world; it is the industry that produces food for the populace and raw materials for industries.
Because of the significant role the agriculture sector plays, the government of most countries ensures that they go all the way to subsidize seedlings,
fertilizers, and farming implements and machinery for farmers and also encourage entrepreneurs to go into various kind of farming including goat
farming.
There are several business opportunities available in the agricultural industry and one good thing about the industry is that there is market for all the
produce from the industry. Goat farming is of course a thriving and profitable business because usefulness of goat meat and other by products from
goats.
People eat goat meat, drink their milk, and use their fur and skin. With goat milk, cheese can be made, along with other dairy products. Some farmers
use goats for weeding farmland. Other times, the goats are used to keep grasses and other plants from getting too tall. The diet of the domestic goat
Over and above there are few barriers to entry into the livestock production industry. Usually, all inputs are readily available. In the nearest future,
players in this industry may face the highest costs associated with accessing technology, especially in relation to genetic modification engineering in
livestock breeding
5.4 Milestones
The accompanying milestone chart highlights our plan with specific dates. This schedule reflects our strong commitment to
organization and detail.

Business Name Availability Check: Completed

Opening a Corporate Bank Accounts various banks in the Nepal: Completed

Application and Opening Tax Payer's ID: Completed

Application for business license and permit: Completed

Purchase of All form of Insurance for the Business: Completed

Leasing of farm land in Tilottama: Completed

Conducting Feasibility Studies: Completed

Start – up Capital Generation: Completed

Writing of Business Plan: Completed

Drafting of Employee’s Handbook: In Progress

Recruitment of employees: Completed

Building /construction of cages and fence et al: In Progress

Purchase of the needed working tools, machines and equipment: Completed

Farm land Treatment, Health and Safety Arrangement: In Progress

Establishing business relationship with key players in the industry (agriculture farm produce merchants and transporter / haulage): In
Progress
 Year0 Year1 Year2 Year3 Year4
Opening Male (Male) 4.00 60.00 91.00 99.00 112.00
Opening Female Goat 50.00 88.00 138.00 223.00 359.00
New Born (Male Female) 100.00 157.00 265.00 426.00 686.00
Total Qty 154.00 305.00 494.00 748.00 1,157.00
New Born (Female) 40.00 63.00 106.00 170.00 274.00
New Born (Male) 60.00 94.00 159.00 256.00 412.00
Total New Born 100.00 157.00 265.00 426.00 686.00
Death (Female) 2.00 4.00 6.00 10.00 16.00
Death (Male) 4.00 6.00 10.00 15.00 25.00
Net (Female) 38.00 59.00 100.00 160.00 258.00
Net (Male) 56.00 88.00 149.00 241.00 387.00
Net Alive (Female) 88.00 147.00 238.00 383.00 617.00
Net Alive (Male) 60.00 148.00 240.00 340.00 499.00
Total Qty of Goats 148.00 295.00 478.00 723.00 1,116.00
Sold Male - 57.00 141.00 228.00 323.00
Sold Female - 9.00 15.00 24.00 38.00
Saleable Livestock
Average Kg (Male Goat) 25Kg 1,400.00 2,175.00 2,375.00 2,700.00 4,300.00
Average Kg (Female Goat) 15Kg 570.00 1,320.00 2,595.00 4,635.00 7,935.00
Sales Revenue
Sales (Male) - 712,500.00 1,762,500.00 2,850,000.00 4,037,500.00
Sales (Female) - 67,500.00 123,750.00 198,000.00 342,000.00
Totla Revenue - 780,000.00 1,886,250.00 3,048,000.00 4,379,500.00
Direct Cost of Sales Calculation
Fixed Cost
Land Rent 140,000.00 140,000.00 140,000.00 140,000.00 140,000.00
He Goat Purchases (4) 200,000.00 - - - -
She Goat Purchases (50) 750,000.00 - - - -
Transportation 15,000.00
Total Fixed Cost 1,105,000.00 140,000.00 140,000.00 140,000.00 140,000.00
Variable Cost
Dry Feed Purchases 233,100.00 464,625.00 752,850.00 1,138,725.00 1,757,700.00
Green Fodder & forage Plantation
74,000.00 147,500.00 239,000.00 361,500.00 558,000.00
to harvesting
Hey Purchases 26,640.00 53,100.00 86,040.00 130,140.00 200,880.00
Wages 324,000.00 486,000.00 648,000.00 810,000.00 972,000.00
Minerals Exp. 20,000.00 22,000.00 24,200.00 26,620.00 29,282.00
Other Miscellaneous Charge 20,000.00 22,000.00 24,200.00 26,620.00 29,282.00
Insurance chage@500 74,000.00 147,500.00 239,000.00 361,500.00 558,000.00
Total Variable Cost 771,740.00 1,342,725.00 2,013,290.00 2,855,105.00 4,105,144.00
(Closing Inventory) 1,042,000.00 1,879,500.00 2,744,500.00 4,131,000.00 6,911,000.00
Total Cost of Sales 834,740.00 645,225.00 1,288,290.00 1,608,605.00 1,465,144.00
Gross Profit (834,740.00) 134,775.00 597,960.00 1,439,395.00 2,914,356.00
Management Summary
Employees will be encouraged to work within their creative, physical, and intellectual boundaries. All duties will be divided and
delegated according to strengths and weaknesses. we will expect a high degree of customer service skills and personality as this
is essential to our success.
Yadav Paudel will assess the productivity and perform informal employees evaluations of all employees every six months. These
bi-annual evaluations are conducive to the continued growth of our small business.

6.1 Organizational Structure

Sayana Goat Farm is a livestock farming company that intend starting small in Tilottama, but hope to grow big in order to
compete favorably with leading livestock farms in the industry both in the Nepal.
We are aware of the importance of building a solid business structure that can support the picture of the kind of world class
business we want to own. This is why we are committed to only hire the best hands in and around Rupandehi.

Sayana Goat Far, we will ensure that we hire people that are qualified, hardworking, dedicated, customer centric and are ready
to work to help us build a prosperous business that will benefit to all (the owners, workforce, and customers
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on
their performance for a period of five years or more as agreed by the management of the farm. In view of the above, we have
decided to hire qualified and competent hands to occupy the following positions;

Below is the business structure of Jonah Livingston and Family Farms Ltd;

Chief Operating Officer

General Farm Manager
Administrator/Accountant
Cattle Ranch Manager/Supervisor
Sales and Marketing Executive
Field Employee
Front Desk Officer

Job Roles and Responsibilities

Chief Operating Officer:
*Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining
managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising
job results; developing incentives; developing a climate for offering information and opinions; providing educational
opportunities.
*Responsible for providing direction for the business
*Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the
development and implementation of the overall organization’s strategy.
*Responsible for signing checks and documents on behalf of the company
*Evaluates the success of the organization

General Farm Manager

*Responsible for the planning, management and coordinating all farm activities across the various sections on behalf of the
organization

*Supervise other section manager

*Ensure compliance during project executions
*Providing advice on the management of farming activities across all section
*Responsible for carrying out risk assessment
*Responsible for overseeing the accounting, costing and sale of farm produce after harvest
*Represent the organization’s interest at various stakeholders meetings

*Ensures that farming goals desired result are achieved, the most efficient resources (manpower, equipment, tools
and chemicals et al) are utilized and different interests involved are satisfied. Responsible for preparing financial
reports, budgets, and financial statements for the organization
Administrator / Accountant
*Responsible for overseeing the smooth running of HR and administrative tasks for the organization
*Carrying out staff induction for new team members
*Responsible for training, evaluation and assessment of employees
*Responsible for preparing financial reports, budgets, and financial statements for the organization
*Responsible for financial forecasting and risks analysis.
*Responsible for developing and managing financial systems and policies
*Responsible for administering payrolls
Cattle Ranch and Animal Manager / Supervisor
*Responsible for managing the commercial breeding of goats and other livestock

*Responsible for managing boarding services, breeding services, dairy support services, livestock health services,
farrier services, and shearing services et al.

*Work closely with the General Manager to achieve the organizations’ goals and objectives
Sales and Marketing Officer
*Identify, prioritize, and reach out to new partners, and business opportunities et al.
*Identifies development opportunities; follows up on development leads and contacts; participates in
the structuring and financing of new business
*Writing winning proposal documents, negotiate fees and rates in line with company policy

*Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients

*Help increase sales and growth for the company

Field Workers / Contract Staff
*Responsible for feeding goats and other livestock as instructed by the supervisor
*Responsible for cleaning the cattle ranch
*Change the water in fish ponds as instructed by the supervisor on a regular basis

*Handles farm implements and machines as instructed by the section manager / supervisor

*Assist in transport working tools and equipment from the farm and back to the designated store room

Client Service Executive / Front Desk Officer

*Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries

*Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer
service experience of the highest level

*Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and
services

*Manages administrative duties assigned by the manager in an effective and timely manner
*Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate
and helpful information is supplied to clients.
SWOT Analysis
Sayana Goat Farm do not intend to launch out with trial and error hence the need to conduct a proper SWOT analysis. We
know that if we get it right from the onset, we would have succeeded in creating the foundation that will help us build a
standard goat farming business that will favorably compete with leading livestock farms in the Nation and in the rest part of the
world.

As a goat farming business, we look forward to maximizing our strength and opportunities and also to work around our
weaknesses and threats. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Sayana Goat
Farm.

*Strength

Our strength as a livestock farming business is the fact that we have healthy relationships with loads of major players
(agriculture merchants) in the livestock farming industry; both suppliers and buyers within and outside of the country.

We have some of the latest livestock farming machines, tools and equipment that will help us breed goats and other livestock
in commercial quantities with less stress. Aside from our relationship (network) and equipment, we can confidently boast that
we have some the most experienced hands in livestock farming industry in our payroll

*Weakness

Our weakness could be that we are a new livestock farms in the United States and we may not have the required cash to pump
into the publicity of our business. We are aware of this and from our projection will overcome this weakness with time and turn
it to a major advantage for the business.

*Opportunities:

The opportunities that are available to us cannot be quantified, we know that there are loads of homeowners, and industries
that will source for goats, goat meat, and milk and also industries that will source for the raw materials from our livestock farms
both locally & nationally.

*Threats:

Some of the threats and challenges that you are likely going to face when you start your own livestock farm are global
economic downturn that can impact negatively on household spending, bad weather cum natural disasters (draughts,
epidemics), unfavorable government policies and the arrival of a competitor (a commercial farm that rear same animals) as our
livestock farms within same location.
There is hardly anything you can do as regards this threats and challenges other than to be optimistic that things will continue
to work for your good.
Financial Plan
When it comes to calculating the cost of starting a commercial livestock farm, there are some key factors
that should serve as a guide. The most important expense is the construction of the cattle ranch / cages /
fencing as the case may be. For example, the start – up cost for a fish farm is different from the start – up
cost for mechanized crop farming, so also the start – up cost for poultry farming is different from the
start – up cost of cattle ranch (dairy farm) et al.

7.1 Key Financial Indicators

The following chart shows the benchmark figures for Sayana Goat Farm.
Insert Chart

Benchmark

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

-
Sales Gross Margin Operating Exp Net Profit Margin

(500,000)

Year 1 Year 2 Year 3

General Assumptions

General Assumption
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 9.50% 9.50% 10.00%
Tax Rate 36.00% 36.00% 36.00%
Other 0 0 0

7.2 Break-even Analysis

A break-even analysis table has been completed on the basis of average costs/prices. With fixed costs of Rs. 55,591,
in average sales, and Rs.5863 in an average variable costs, we need 7 unit per month in sales to break even.

Break-even analysis
$200,000

$150,000

$100,000

$50,000

$0
0 1 2 3 4 5 6 7 8 9 10 11 12

($50,000)

($100,000)

TFC TVC TC Sales Profit 0

Break-even Analysis
Monthly Units Break-even 9
Monthly Revenue Break-even 110,323
Assumptions:
Average Per-Unit Revenue 11,818.00
Average Per-Unit Variable Cost 5,863.00
Estimated Monthly Fixed Cost 55,591.00
7.3 Projected Profit and Loss
The following chart and table will indicate projected profit and loss.

Net Profit

1,200,000.00

1,000,000.00

800,000.00

600,000.00

400,000.00

200,000.00

-
Year 1 Year 2 Year 3
(200,000.00)

(400,000.00)

(600,000.00)

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales 780,000.00 1,886,250.00 3,048,000.00
Direct Cost of Sales 645,225.00 1,288,290.00 1,608,605.00
Other Production Expenses - - -
Total Cost of Sales 645,225.00 1,288,290.00 1,608,605.00
Gross Margin 134,775.00 597,960.00 1,439,395.00
Gross Margin % 17.28 31.70 47.22
Other Income 150,000.00 350,000.00 490,000.00
Expenses
Payroll 372,000.00 409,000.00 449,780.00
Sales and Marketing and Other Expenses 22,595.00 56,537.50 91,440.00
Depreciation 177,500.00 168,625.00 160,193.75
Telephone/Pagers/Cell 15,000.00 18,000.00 20,000.00
Utilities 5,000.00 7,000.00 9,000.00
Educational Tour and Training Exp. 75,000.00 35,000.00 25,000.00
Total Operating Expenses 667,095.00 694,162.50 755,413.75
Profit Before Interest and Taxes (382,320.00) 253,797.50 1,173,981.25
EBITDA (382,320.00) 253,797.50 1,173,981.25
Interest Expense 100,000.00 100,000.00 100,000.00
Taxes Incurred - - -
Net Profit (482,320.00) 153,797.50 1,073,981.25
Net Profit/Sales -61.84% 8.15% 35.24%
7.4 Projected Cash Flow
The following table explains projected cash flow.

Cash

140,000.00

120,000.00

100,000.00

80,000.00

60,000.00

40,000.00

20,000.00

(20,000.00)

Net Cash Flow Cash Balance

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Fund from Operation
Net Profit after Income Tax (482,320.00) 153,797.50 1,073,981.25
(+) Depreciation for the year 177,500.00 168,625.00 160,193.75
Net Cash Flow from Operations before Working Capital Adjustment (304,820.00) 322,422.50 1,234,175.00
Change In Working Capital
Decrease (Increase) in Current Assets (3,664,240.00) (865,000.00) (1,386,500.00)
(Decrease) Increase in Current Liabilities 2,730,000.00 530,000.00 190,000.00
Cash from Operations after Working Capital Adjustment (1,239,060.00) (12,577.50) 37,675.00
Investing Activities
Property and Equipment (Purchase)/Sales (3,550,000.00)
Collection of Principle on Loans - - -
Making Loans to Other Entities - - -
Investment securities (Purchases)/Sales - - -
Net Cash Flow from Investing Activities (3,550,000.00) - -
Loan Increase (Decrease) - - -
Investment Capital 4,900,000.00 - -
Drawings - - -
Net Cash Flow 110,940.00 (12,577.50) 37,675.00
Cash Balance 110,940.00 98,362.50 136,037.50
7.5 Projected Balance Sheet
The following table explains the projected balance sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets
Current Assets
Cash 110,940.00 98,362.50 136,037.50
Inventory 1,879,500.00 2,744,500.00 4,131,000.00
Biological Assets 950,000.00 950,000.00 950,000.00
Other current assets - - -
Total Current Assets 2,940,440.00 3,792,862.50 5,217,037.50
Long-term Assets 3,550,000.00 3,550,000.00 3,550,000.00
Accumulated Depreciation 177,500.00 346,125.00 506,318.75
Total Long-term Assets 3,372,500.00 3,203,875.00 3,043,681.25
Total Assets 6,312,940.00 6,996,737.50 8,260,718.75
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable 175,000.00 850,000.00 1,000,000.00
Current Borrowing 1,000,000.00 2,000,000.00 2,000,000.00
Deferred Income (Government Subsidies) 1,500,000.00 - -
Other Current Liabilities 55,000.00 410,000.00 450,000.00
Subtotal Current Liabilities 2,730,000.00 3,260,000.00 3,450,000.00
Long-term Liabilities - - -
Total Liabilities 2,730,000.00 3,260,000.00 3,450,000.00
Paid-in Capital 4,900,000.00 4,900,000.00 4,900,000.00
Retained Earnings (834,740.00) (1,317,060.00) (1,163,262.50)
Earnings (482,320.00) 153,797.50 1,073,981.25
Total Capital 3,582,940.00 3,736,737.50 4,810,718.75
Total Liabilities and Capital 6,312,940.00 6,996,737.50 8,260,718.75
Net Worth 3,582,940.00 3,736,737.50 4,810,718.75
7.6 Business Ratios
Business ratios for the years of this plan are shown below.

Ratio Analysis
Year 1 Year 2 Year 3
Sales Growth 0.00% 141.8% 61.6%
Percent of Total Assets
Inventory 29.77% 39.23% 50.01%
Other Current Assets 15.05% 13.58% 11.50%
Total Current Assets 46.58% 54.21% 63.15%
Long-term Assets 53.42% 45.79% 36.85%
Total Assets 100.00% 100.00% 100.00%
Current Liabilities 43.24% 46.59% 41.76%
Long-term Liabilities 0.00% 0.00% 0.00%
Total Liabilities 43.24% 46.59% 41.76%
Net Worth 56.76% 53.41% 58.24%
Percent of Sales
Sales 100.00% 100.00% 100.00%
Gross Margin 17.28% 31.70% 47.22%
Selling, General & Administrative Expenses 98.35% 42.10% 28.06%
Advertising Expenses 0.00% 0.02% 0.02%
Profit Before Interest and Taxes -49.02% 13.46% 38.52%
Main Ratios
Current 1.08 1.16 1.51
Quick 0.39 0.32 0.31
Total Debt to Total Assets 43.24% 46.59% 41.76%
Pre-tax Return on Net Worth -13.46% 4.12% 22.32%
Pre-tax Return on Assets ($7.64) $2.20 $13.00
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -61.84% 8.15% 35.24%
Return on Equity -13.46% 4.12% 22.32%
Activity Ratios
Inventory Turnover 0.42 0.47 0.74
Accounts Payable Turnover 12.07 12.17 12.17
Payment Days 27 27 27
Total Asset Turnover 3.74 2.41 1.8
Debt Ratios
Debt to Net Worth 27.91 53.52 41.57
Current Liab. to Liab. 0.57 0.69 0.81
Liquidity Ratios
Net Working Capital
Interest Coverage (3.82) 2.54 11.74