Entrepreneurship

Submmitted To:
Mam Mawish Munawar

Submmitted By:
Sana Ansar (16172720-003)
Faizan Nasrullah (16172720-005)
Muhmmad Bilal (16172720-018)
Houria Shumail (16172720-022)
Muhammad Qasim (16172720-028)
Salman Yaseen (16172720-056)
MBA 4th (Sec c)
Date:2,june,2018
 FlavorFull Mushrooms

Business Name : FlavorFull Mushrooms

Address: Village Dhumma Malika p/o Dulat Nagar Gujrat

Nature Of Business:
Production: Growing mushrooms in a mechanically controlled and automated environment
utilising as bulk substrates locally produced agricultural waste products, such as wheat straw,
wheat bran, sawdust, invasive tree species, and sourcing the owners and additional labour force
from a poverty stricken rural community.

Background of entrepreneurs:
Muhammad Qasim Awan: He is a fresh graduate in marketing and belongs to a agricultural
family.HE has a 5 year experience(part time) in agriculture field.He is so much devoted
person.He is social person and has a communication skills.

Muhammad Bilal: He is also a fresh graduate in HR and has a skill to manage Human
Resouce.He has one year experience in HR manager in social society.

Faizan Nasrullah: He is Graduated in Finace and belongs to a political Background.He has

strong relation with other people.Expertise in managing the Finacial position of Businesses.

Sana Ansar: She is graduated in marketing.She has convincing power to gain customers. She is
Gold Medalists in Academics. She has communication skills and friendly Behaviour.

Houria Shumail: She is graduated in marketing.She has intellectual abilities to solve critical
problems.She actively takes part in promotional activities.

Salman Yaseen : He is Graduated in Finace and belongs to agricultural family.He has strong
relation with other people.He will manage the Raw material,inventory and delivery of stocks.

Need Recognition and Solution of problem : Growing mushrooms profitable hobby.

Demand for mushroom has risen considerably over the past years in processing industry.
Processed mushroom comes in the commercial market as canned, dried, and frozen. Other than
these categories processed mushroom also includes pickled mushroom, powder mushroom, and
mushroom sauces. Mushroom production can be used for medicinal purposes due to its vitamin
B and vitamin D. We grab the opportunity because there is no any regular business in this
area.The most quantity is import in our country.

Marketing :
Product is Mushrooms.Price is based on cost base that is approximately Rs 250 per Kg.place is
availability in the area of GujratTarget customer are fast food centers ,kitchenproducts, health
products, the gourmet industry internationally as well as nationally. Private consumer can be
more interested in the medicinal values.

HR: We will hire local labours and itself efforts to produce and manage all activities.Total
person require in the production are 5 and remaining marketing activities will be performed by
team members.Labour will be on daily wages.

Finance: We will use land on rent .we will contribute from personal source ,fiancé loan by
financial institutions .Total finance reuire Approximately Rs (150,000 to 200,000).

Business Type: Business Type is partnership.

Industry Analysis

Economic Importance and scope:

Status of Mushroom Production in Pakistan The economic importance of the mushroom lies
primarily in its use as food for human consumption. Mushrooms are highly proteinaceous and
are used as food. The white button mushroom is sold as fresh mushroom or is canned and made
into soups, sauces and other food productsThe mushrooms can be cultivated in green houses,
growth chambers, ditches, caves, huts, hovels, cottages, garages, sheds or shelters, bee hive
shaped huts, thatched or meted roofs, thick tree groves and gardens, kitchens,or other extra
rooms of a house or any other vacant building.

Pakistan exported around 201,000 kilograms (kg) of mushroom with a total export price of
$12.930 million in 2016.Not only was the increase in the value of mushroom exports
phenomenal but mushroom exports also contributed over 25 percent to the overall vegetables
exports of over $101 million the same year.In Pakistan, profitable cultivation of button
mushroom requires closer attention, experience and skill. If it is developed as a cottage industry
in villages and on business lines, near towns and cities, the delicacy can become a common diet
item to provide cheap source of proteins, vitamins and other nutrients. It is necessary to take
proper steps to popularize and use of edible mushroom as the items of food and export.

Its cultivation in Pakistan is in its teething stage and its pace of development is very slow
because of the insufficient public and private sector support. Their cultivation has tremendous
potential although, at present only some wild types are eaten by rural folk, modern technology
however, has made it possible to grow them under control and semicontrol conditions. Nature
has gifted Pakistan with variety of environmental conditions suitable for their cultivation from
sea level to high mountains, where different types can easily be grown round the year

In Pakistan, mushrooms are grown in farm houses, including but not limited to state owned
national logistic cell. Farm production contributes around 1 percent to overall mushroom exports,
while the rest of it comes from natural production in Khyber Pakhtunkhwa.

The global mushroom production according to Food and Agriculture Organization’s statistics
was estimated at 4.99 million tons in 2016 with major producers being China with 60 percent
production, followed by United States, Canada, United Kingdom, France, Italy, The Netherlands,
Spain, Poland, Ireland, Indonesia and India. Talking to the Daily Times, Akhtar Usmani,
Chairman Mann-O-Salva Pakistan Private Limited who are the pioneers for the cultivation of
mushroom commercially in Pakistan, are not only meeting the demand of the local market, but
also earn foreign exchange by selling fresh and dehydrated mushroom to Europe and America.
The export market rate while in the Canadian stores was $14 for a kilogram against our cost of
$4.

There is a huge export market around the world, some private sector companies export thousands
of kilograms, grown in Swat at a lurative price of over $1,000 for a kg.

With absolutely 100 percent export for the same we will get our product quality approval from a
German firm, and export permission from the US. Mateen Siddiqui, Chairman of Fruits,
Vegetables Processors and Exporters Association said mushroom export helped boost overall
vegetables exports

Mushrooms are playing a significant role in the national economics by earning substantial
foreign exchange from exports.In Punjab and Sindh it is found after the monsoon rains, while in
the valleys of Balochistan it is found to grow in large numbers in March and April. Local people
refer to it as “khamiri”. They not only do they eat it, but sell it in the small villages and vegetable
markets. A part of the crop is dried and sent to large towns. Edible mushroom once called ‘Food
of God’ is still treated as a garnish or delicacy the world over due to its delicious taste and
nourishment value. The umbrella-shaped vegetation grows under the trunk of a tree, among
sparse vegetation, and sprinkled in grasslands after the rains. However, the umbrella-shaped
fungus with a little stalk tickles the taste-buds of millions around the world.

Competitors: ASIAN FRUITS (ISLAMABAD, AURORA FARMS (KARACHI), GHAZI

& COMPANY (KARACHI, INTERNATIONAL MUSHROOM TRADERS (LAHORE),
SALMAN CORPORATION (PRIVATE) LIMITED. (ISLAMABAD),
SHAKIR & SONS (LAHORE
There is also some imported canned mushrooms.That are majorly exported from china,USA
etc.We have discussed with the wholesale dealer and fastfood shop they accept and encourage
our mushroom production in locally.Locally produce first of all will be fresh, low cast and easy
to available whenever require.
 Production and manufacturing process
Business model

Key Key Value Customer Segmentation

partners activities proposition relationship
Mushroom Vegetarian and
farmers mushrooms 100% natural Convenient chicken conscious
Governmen Collecting product distribution people
t species Fresh,spicy,tast Web pages Knowledgeable people
Super Distribution y information Restaurants
markets Production 100% Cooking
Business of vegetarian House wives
owners Marketing Health benefits
supply Unique product

Key Channels Revenue Cost structure

resources Wholesaler streams
Machinery Web sites Raw material cost
Land Social media Selling the product Machinery cost
Labor Local media Labor cost
Packaging cost Local area Packaging cost
room restaurants Distribution
production unit
 Manufacturing process;

The mushroom cultivation procedure consist of six basic steps:

1. Compost preparation
2. Spawning
3. Casing
4. Watering
5. Harvesting
6. Post Harvesting; care & management

Let, learn all those steps in short.

How to compost for Mushrooms

Compost preparation in mushrooms cultivation is an important task because it directly impacts

on the production of button mushrooms. As healthy & nutritious is your compost, higher is your
button mushroom production. So, always prepare a healthy & nutritious compost for mushroom
growing.
For mushroom compost preparation, paddy straw, wheat straw, barley, oat and gram straw,
banana, sugarcane and maize, leaves, empty millet heads and corn
cobs, cotton waste, manure & castor straw are most used. The straw can be purchased easily
from the market at a very low cost. Now turn the straw into a compost. Prepare a composting bin
for storing compost & maintaining its moisture level. Then add this straw into this composting
bin along with some gypsum to raise the weight of mushrooms.

Water that filled composting bin for about two to three days so that it acquires a moisture level,
usually about more than 60%. Moisture helps this compost in fast decaying & being healthy
compost. Add some Urea to this at the time of drying it to increase the Nitrogen content of
compost. Higher nitrogen content definitely leads you to good production of mushrooms.

Let dry this prepared compost for about two to five days, so that ammonia content in it get out of
it. After that, mushroom spawn should be added to it for growing mushrooms.

WE can use wheat seeds or Jowar seeds for this; preparing spawn for mushroom cultivation.
However,We can easily buy quality spawn from any lab because labs are the best source of
getting a quality spawn. It is available at the UAF, the National Institute of Biotechnology and
Genetic Engineering, the Ayub Agricultural Research Institute and other government research
stations.

After getting the quality mushroom spawn, mixed it well with that prepared compost. Check the
moisture content of compost, it should be more than 50% for fast & healthy development of
mycelium of Spawn. Fill that compost (well mixed with spawn) in spawn bags (about 20 kg
each), & keep in the dark room.

Add about 150 gm mushroom spawn on the top of that compost filled bags for good production
of mushrooms. Keep the room temp. about 28 ‘C for fast development of mycelium in spawn
bags.Observed the growth regularly, at least once a day.

Mushroom Casing

A casing of the compost filled bags should be done, it will help in increasing water holding
capacity. Mix coco coir along with slight gypsum into it. Coir enhances the water holding
capacity of your compost bags. You can go for bulk casing method in your mushroom farming.

Spread the mixed prepared casing on the compost bags. About four to five kg coir casing is
sufficient enough per unit bag of 20 kg compost bag. Spread as much as casing so that a layer of
1-inch casing is formed on the compost bags.

Irrigation in Mushroom Farming

 Mushroom plants are water-loving, so require more water because are fragile in nature. A
regular watering is should be done to the mushroom plant so that they remain fragile & does not
get tough.

Water those mushroom plant regularly, at least thrice a day. Give lite water to your mushrooms,
because hard & casual watering will remove the new and upcoming mushrooms from the bad. It
is a good idea to give water them by using sprinklers. Since sprinklers throw water too lightly &
help in spreading it thoroughly on the compost bad.

Always check the moisture level of the casing, compost in your compost filled bags. It should
not raise more than 7o% for compost & about 85% for the casing. Allow fresh air in your rooms
in control condition so that your mushrooms grow healthy rather than becoming poisonous.

Does Mushrooms Requires Sunlight?

Mushrooms are a fungus, & does not carry chlorophyll in them. because of this, mushrooms do
not need sunlight for photosynthesis process to grow. So, try to keep your room as dark as
possible for good development of spawn in mushroom production. However, little amount of
light will not harm mushroom growth too much. So, for regular observation of your mushrooms,
useLED light for mushroom growing, easily available in the market.

Mushrooms are fragile food & become poisonous, if not cared properly. So, below are some
suggestions to take care.

1. If you are preparing mushroom spawn by yourself only, then, to make the necessary
moisture for Mushroom Spawns, keep sprinkling water every 2 to 3 days
2. Pay special attention to cleanliness in the room. Always wash your hands thoroughly with
antiseptic or soap before touching your mushrooms spawn.
3. Your compost should not be infected. Infected compost leads to failure in mushroom
cultivation.
4. Do not enter the room with the shoes, slippers, etc
5. Mushrooms can be prone to spoilage by insect-moths and other harmful germs, which
can be ruined your complete crop. In such circumstances, the spraying of pesticides can save
your crop.
6. Try to keep close your all times because if sunlight reaches in your room, it may cause to
moisture low furtherly low production of mushrooms.  Use wet sheets on windows so that they
can not lose moisture in any way
7. Must take while picking of your mushrooms. Pick them softly & store them in a cool
place (about 20 ‘C) because high temp causes the bad quality mushrooms, less in demand.

Mushroom Harvesting

In a very short time period, about two months of composting, We will be able to harvest these
healthily grown mushrooms. Usually, first harvesting is done to collect only overgrown
mushrooms.
Take care while mushroom picking. These healthy mushroom should be picked with hand,
softly. Mushrooms are fragile in nature. So, if do not pick them softly, then their quality could
not be maintained, & sometimes are sold even. Consumers always look for fresh, healthy and
also pay much for it. For picking them carefully, you can use skilled labor.

If we are cultivating mushrooms commercially, then maintain the temp. of room at about 18 to
21 ‘C, so that case runs faster & you will able to get mushroom production in short time. In
mushrooms cultivation, after picking those overgrown mushrooms within a month, we will be
able to harvest them three to four times.We can pick them at regular interval like once a week or
at an interval of ten days. However, it is a good idea to pick them on the basis of their growth.

In mushrooms cultivation, after picking those overgrown mushrooms within a month, we will be
able to harvest them three to four times. we can pick them at regular interval like once a week or
at an interval of ten days. However, it is a good idea to pick them on the basis of their growth.

Miscellaneous Assets Some other assets like furniture & fixtures, working tables, storage racks,
SS utensils, plastic tubs, etc. shall be required for which a provision of Rs. 20,000/- is made.

• CAPITAL INPUT: Land and Building A area of 200 Sq. feet may be acquired in the suburban
area of a major city like Gujrat for the project. Estimated Rent amount is Rs.5000/-

• MARKET POTENTIAL Mushroom is a vegetarian delicacy and a suitable substitute for meat
and eggs. It is easily digestible as well. It is very popular in most of the developed countries and
being accepted in many developing countries like Pakistan. Market for mushrooms is growing
rapidly because of their nice aroma, subtle flavor, nutritious values and special taste. Many
exotic preparations are made from them like soup, pickles, vegetables etc. It is also used for
stuffing several food preparations and for garnishing. But its consumption is still confined to
urban and semi-urban population. Mushrooms have very short life after harvesting and hence
they are sold in fresh form. Their shelf life can be enhanced by processing them.

Processed mushrooms are packed in special quality polythene bags or canned. This variety can
be sold to far off places. Consumption of mushrooms is increasing in the Jalalpur
jatta,Kharian,Gujrat Gujranwala,Bhimber Ajk,Lahore and Islamabad etc. are potential markets

Name of suppliers of raw material;

No one is specific supplier..

Muhammad shareef

Muhammad adil

Machinery and equipment;

Processing cooling room

Water

Delivery vehicle

Grain

Straw

Packaging machine

Mineral water

Head filling machine

Marketing paln
Marketing objectives;
The main objective of our business is to provide high quality mushrooms to local restaurants at
low cost to gain market

Product is Mushrooms.Price is based on cost base that is approximately Rs 150 per Kg.place is
availability in the area of GujratTarget customer are fast food centers ,kitchen products, health
products, the gourmet industry internationally as well as nationally. Private consumer can be
more interested in the medicinal values.

Low cost

High quality

Local restaurants

4P’S;
Product Price

Oyster mushroom Rs 150 per kg

White mushroom

Button mushroom
 Place Promotion
Jalalpur jatta
Kharian Local media
Gujrat Newspaper
Gujranwala Web sites
Bhimber Ajk Workshops
Lahore
and Islamabad etc.

Segmentation, Target market, positioning

Segmentation
Vegetarian and chicken conscious people

Knowledgeable people

Restaurants

Cooking

House wives

Market Target;
Jalalpur jatta

Kharian

Gujrat

Gujranwala

Bhimber Ajk

Lahore

And Islamabad etc.

Positioning;
Create image in the minds of customers and create value for customers for their prices.

Marketing Budgets;
Budget include the amount of

Minimum RS.50000 to RS 100000

Marketing Tools;
For promoting our product we use the

Local media

Social media

Pena flexes

Radio

Workshops

BCG Matrix;
 We want to increase our Market share and also Market growth because or business is new so
there in no category in which we fall.

Management structure/HR:
The management team of mushroom production has a strong skills in financing, marketing,
technology, sales and operations. The structure is hierarchical. Top Management to low.

Organizational Structure

Muhammad Qasim Awan

(CEO)

Muhammad Houria Sana Ansar Faizan Warraich Salman Yaseen

Bilal(HR Shumail (Quality Control) (Finance mngr.) (Suppluy chain)
mngr.)
Resources (Marketing)
Sales & Tests,Labortry Finance To ensur
Allocation Advertising Visits and Management availabilityof
ITalso. raw material
 1. Muhammad Qasim awan – CEO
Mr qasim is very honourable and skilful person. He is keenly eligible to hold the seat of CEO
and manage all the operations. Currently he is doing MBA from university of Gujrat.

CEO Responsibilities

Include:

 Developing high quality business strategies and plans ensuring their alignment with
short-term and long-term objectives
 Leading and motivating subordinates to advance employee engagement develop a high
performing managerial team
 Overseeing all operations and business activities to ensure they produce the desired
results and are consistent with the overall strategy and mission

2. Muhammad Bilal (HR Manager)

He is an energertic ,have skills in managing Human Resources. In previous year he worked
as HR manager in organizations. Maintains and enhances the organization's human resources
by planning, implementing, and evaluating employee relations and human resources policies,
programs, and practices.

Job Descripton :

 Maintains the work structure by updating job requirements and job descriptions for all
positions.
 Maintains organization staff by establishing a recruiting, testing, and interviewing
program; counseling managers on candidate selection; conducting and analyzing exit
interviews; recommending changes.
 Prepares employees for assignments by establishing and conducting orientation and
training programs.
 Maintains a pay plan by conducting periodic pay surveys; scheduling and conducting job
evaluations; preparing pay budgets; monitoring and scheduling individual pay actions;
recommending, planning, and implementing pay structure revisions.

3. Sana Ansar (Quality control )

 Sana Ansarwill work as a quality control manager.She is well aware about the production
processing of mushrooms. So they can handle the production unit in good and confidential
way.

Inspect raw materials to ensure consistency and integrity

Maintain, test and troubleshoot all instrumentation devices

Attempt repairs on broken or damaged products to determine the best way to scale those
repairs

Test a certain percentage of all products based on industry standards

Report problems or concerns to senior management immediately

Manage our quality assurance division and ensure all employees meet their required quotas

Provide training and support to QA team

Create an effective, efficient testing protocol to be used across all product lines

4. Houria shumail ( Marketing)

Houria is doing MBA from university of Gujrat and can manage marketing.

Duties of the Marketing Manager include:

 Managing all marketing for the company and activities within the marketing department.
 Developing the marketing strategy for the company in line with company objectives.
 Co-ordinating marketing campaigns with sales activities.
 Overseeing the company’s marketing budget.
 Creation and publication of all marketing material in line with marketing plans.
 Planning and implementing promotional campaigns.
 Manage and improve lead generation campaigns, measuring results.
 Overall responsibility for brand management and corporate identity
 Preparing online and print marketing campaigns

5. Faizan waraich (Finance)

 Faizan is also a MBA student ans he has very goof skills to manage financial matters .he will
deal with accounts and finance.

Responsibilities of the job include:

 collating, preparing and interpreting reports, budgets, accounts, commentaries and

financial statements
 undertaking strategic analysis and assisting with strategic planning
 producing long-term business plans
 undertaking research into pricing, competitors and factors affecting performance
 controlling income, cash flow and expenditure
 managing budgets
 developing and managing financial systems/models
 carrying out business modelling and risk assessments
 supervising staff
 liaising with managerial staff and other colleagues

6. Salman Yaseen (Supply chain Mgr.)

Supply Chain Manager Responsibilities:

 Assist logistics process for the development of new products, inventory maintenance,
manufacturing, shipment and delivery, and returns on products.
 Keep detailed records, generate reports, and develop presentations to help management
understand the logistics perspective.
 Build relationships within the company and with external parties, such as suppliers or
distributors.
 Read and comprehend legal documents, such as contracts or import/export agreements.
 Understanding of principles of accounting and finance.
 Collaborate with others from diverse backgrounds in order to identify problems and find
solutions.

Financial plan:
Project Economics

All the figures in this financial model have been calculated for mushroom production of 100
square feet room with an annual production of 700 Kg.
Project Financing

Following table provides details of the equity required and variables related to bank loan;
Table 1. Project Economics

Description Detail

Internal Rate of Return (IRR) 66%

Pay back period (years) 1 year

Benefit Cost Ratio (BCR) 2.4

Table 2. Project financing

Description Detail

Total equity (35%) RS. 18000

Bank loan (65%) RS. 32000

Mark up to the borrowers (%/annum) 8%

Tenure of loan (year) 05

Grace period (year) 01

Project Cost

Following requirements have been identified for operations of the proposed business.

Table 3. Capital Investment for the Project

Capital investment Amount(RS.)

Machinery and equipment 7900

Racks 15000

Total capital cost 24900

Initial working capital 15000

 Total project cost 49900

Space Requirement

Basically, mushroom production can be done vertically. A space of 100 sq/ft area is required for
mushroom shed. Its production is done by making shelves in the room. The shed space will be
taken on the rental/lease basis. The rent of the room varies area to area and location to location.

Table 4: Land Requirement

Monthly Rent
Area Required Area(Sq.feet) Charges(RS.) Yearly Rent(RS.)

Mushroom farm 100 1000 120000

Total Rent 12000

Machinery and Equipment

Following table provides list of machinery and equipment required for production and packaging
of mushroom.

Table 5. List of Machinery and Equipment

Total
Description Quantity Cost RS /unit
RS

Spray pump 1 2000 2000

Humidity sensor 1 1500 1500

Temperature sensor 1 400 400

Electric paking gun 1 1000 1000

Tool kit 1 1000 1000

Weight machine 1 2000 2000

 Total - - 7900

Raw Material Requirements

Table 6: Cost of Raw Material

Description Unit Quantity Rate RS. Total

Wheat straw Kg 1000 10 10000

Poultry manure Kg 25 20 500

Spawn Kg 4 500 2000

Gypsum Kg 10 15 150

Urea Kg 10 20 200

Polythene bag Kg 2 220 440

Rubber band Kg .5 600 300

Peet moss Kg 1 150 150

Sticker - 300 3 900

Lime Bags 2 350 700

Pesticide Liter 2 500 1000

Total (RS.) - - 16340

Revenue Generation
Total expected mushroom crop on 100sqft farm would be that is 700kg approximately. The
marketing price of the mushroom is 150 RS, per Kg which is the minimum rate. The total
revenue of the expected crop would be 105000 RS, on first year.

Table 7. Revenue of the Project

Expected Mushroom crop Expected crop price Sale income

 Year 1 700 kg 150 105000

Table 8: Income statement:

Particulars Year 1 Year 2 Year 3

Sales 105000 130000 150000
Less CGS
Raw material 22000 26000 30500
Gross profit 83000 104000 119500
Operating expenses:
Electricity 1000 1200 1500
Travelling 3000 4000 5000
Advertisement 8000 11000 14000
Depreciation 790 790 790
Telephone 600 800 1000
Rent 12000 13200 14520
Total operating expenses 25390 30990 36810

Earnings Before interest and 57610 73010 82690

Taxes

Balance Sheet for year 1:

Particulars RS. RS.

Current Assets:
Cash 15000
Stock 30000

Fixed Assets:
Spray pump
2000
Humidity sensor
1500
Temperature sensor
400
Electric packing gun
1000
Tool kit
 1000
Weight machine
2000
Total Fixed Assets:
7900
Less Depreciation @10%
790
7110
Total Assets 52110

Liabilities and capital:

Current liabilities
Account payables 15000

Retained Earnings 37110

Total liabilities 52110

Contigency Plan:
Our first priority is to provide fresh mushroom if it does not work well .A check of major
supermarkets recently revealed that chilled and canned mushrooms can be sold. The chilled
mushrooms were imported from the United States. The canned products were imported from
places like China, India, Indonesia, and the United States. We can move in any other agri
product.