BUSINESS PLAN

Date of submission: 2071-1-8

Prepared by: 1) Kumar Shrestha

2) Megh Raj Poudel

3) Subash Devkota

A. Applicant Profile
1. Name of business Shrestha Enterprises (Feed Supply)
Types of Organization Farmers Group Cooperative Agri-entrepreneurs
/firm/industry
Address Place: Sundarbazaar Contact Phone No:
Ward no: 4 Fax No:
VDC/municipality: VDC e-mail:
District: Lamjung
Name of Responsible person Name: Bishnu Shrestha
Contact Phone No: e-mail:
Fax No : 9856028606
VAT/PAN No:
Information on Bank Name of Bank: Sunrise Bank

Address: Sundarbazar -4, Lamjung

Types of account

A/c No

Introduction of the Business :

Shrestha Enterprises is a well-established custom feed store. The company is engaged in the
selling of poultry feed.   The company is dedicated to providing the highest quality customer
service, meeting the agreed delivery dates, and keeping the sales prices controlled in accordance
with ongoing market trends. The focus of this business plan is to identify future target clients,
explain our marketing strategy, improve internal procedures so we can substantially increase
profitability, and obtain the funding required to expand the business.

The marketing research and tailored marketing strategy described in this business plan will result
in after-tax profits of Rs.10,78,365 in Year 1 and increasing to nearly Rs.12,78,000 and
13,22,400 in after-tax profits in second and third year, despite significant new advertising and
renovation expenses. Since the demand of feed is high in Lamjung district, it is estimated of
around 6,000 to 7,200 tons of feed is consumed yearly. Since, Shrestha Enterprise will be
suppling around 1000 tons in in its first year and increasing by 100 tons in each year according to
the demand.

To achieve these goals, Shrestha Enterprises needs funding in different phases of expansion. We
are currently seeking a Rs. 20,00,000 short-term loan. This loan will enable us to purchase a
delivery truck, a key element of our new sales and marketing strategy.

Objectives
There are five primary objectives by which the success of Shrestha Enterprises will be
tracked:
1. Maintain 100% of existing customer base by consistent customer services.
2. Expand our product line gradually, based on customer request.
3. Expand the types of services offered to our customers, as their desires are identified.

Mission

Shrestha Enterprise is a family owned and operated company, dedicated to providing our
customers with the best premium products and services on the market. Shrestha's offers all of
our customers the direct personal attention they deserve. Our committment to customer
service and satisfaction assures us that our customers are 100% satisfied with our products
and services.

Keys to Success

The primary keys to the success of Shrestha Enterprises are as follows:

1. Product freshness and quality.
2. Variety and price.
3. Management: products delivered on time, professional customer service, managing
budgets.
4. Constant evaluation of strengths and weaknesses with adjustments made as warranted.

1. ProductionPlan
 Format 1: Production/Supply Cost Estimate .

  Year 1 Year 2 Year 3

S. Particular
N Qn
Unit Qnt Rate Amount Rate Amount Amount
t
Fixed/Working
A                
assets cost
 rop
1 Land  1.5   50,00,000      
ani
2 Truck No. 1 15,00,000 15,00,000
3 Building No.  1 30,00,000  30,00,000      
4 Furnitures  no.  4  15,000 80,000      
5 Weighing balance pcs   2 10,000  20,000      
Total 96,00,000
Raw materials
B
/variable cost
Feeds
4,75,00,00 5,22,50,00  5,70,00,00
1 (B0, B1, B2, ton 1000   47,500 ton 1100
0 0 0
L0,L1,L2)
4,75,00,00 5,22,50,00  5,70,00,00
  Total          
0 0 0
C Labour            
 ma
1 driver 1 15,000  1,80,000     1,80,000 1,80,000
n
 ma
2 Labour ( carrier) 1  8,000  96,000     96,000 96,000
n
 ma
3 labour  2  7,000 1,68,000     1,68,000 1,68,000
n
Total       4,44,000     4,44,000 4,44,000
D Training, visit cost 30,000 30,000 30,000
1 training 20,000 20,000 20,000
2 visit 10,000 10,000 10,000
Total 30,000 30,000 30,000
E Other costs
Lease land 0
Farmadvertisemen
  t (pamphlets,       20,000     30,000  30,000
radio)
Total       20,000     30,000  30,000
Grand Total 5,75,94,00 5,32,58,00  5,80,08,00
           
(A+B+C+D+E) 0 0 0
Production
F            
/supply
Main Production 5,00,00,00 5,55,00,00  6,00,00,00
 ton 1000  50,000    
(feed supply) 0 0 0
2. Market Plan
We will differentiate ourselves with CUSTOMER SERVICE! We will establish our
business as a clear and viable alternative for our target market, from the scores of competitors
known for "do-it yourself," "no we don't offer that product," and "no delivery available."

 Build a relationship-oriented business.

 Build long-term relationships with customers, not single-visit deals. Become
their "feed dealer of choice." Teach them the value of the relationship.

2.1 Sales plan

Sales after this plan

Name of production Total amount Before Plan 2nd
1st yr 3rd yr
yr

Feeds 1000 ton 500 ton 1000ton 1100ton 1200ton

2.2 Purposed buyer (Forward linkage):

The enterprise will supply feeds to different areas of lamjung , they are sundarbazar, paudi,
Bhoteodar, Parewadanda, kuncha and khudi. The buyer will be people running poultry
business in these areas and also the householders rearing in few numbers.

2.3 Selling Process

Name of Selling quantity through
product Farm gate
Collector Whole seller Retailer Exporter
selling (local)
Feed - - 1000 ton -
-

2.4 Price determination Plan/ Process

Wholesale price Price determination

Product Retail price
Qnt 1 Qnt 2 Qnt 3 strategy
50 50 50 50
Feed The price of feed is fixed
by the feed association so
no much difference in the
price of the feed.

2.5 Competitive Strategy

Your Your Management What you What is your competitive strategy<

 selling Quality Sure and
competitor's gap between do to keep Less
product regular Other
product product two products quality price
production supply

Feed Feed Depends on Storage at Timely Cash

the different optimum supply payemen
company temperature-before t and no
product. date credits.
expiry.
We will differentiate ourselves with CUSTOMER SERVICE! We will establish our
business as a clear and viable alternative for our target market, from the scores of
competitors known for "do-it yourself," "no we don't offer that product," and "no delivery
available."

 Build a relationship-oriented business

 Build long-term relationships with customers, not single-visit deals. Become their "feed
dealer of choice." Teach them the value of the relationship.
 Direct Marketing: we will personally market (sell face to face) our products to various
poultry growers, local peoples, farms.
 Customer Referral: we will provide customer incentives for direct referrals, in the form of
price discounts.
 Website Marketing: we will implement our web plan and review the outcome to determine
the efficiency it has on our customer base.
 Event Marketing: we will visit area of poultry farm events (within 150 miles) to hand out
flyers, business cards, and product catalogs, and to meet potential customers face to face.

3. Management Plan
3.1 Staff management structure

Number
Position of the staffs Mal Role Remark
Local Outer Female
e
Manager 1 (self) 1 Administrates,
decision
maker, create
sound
environment
Accountant 1 1 Manages the
balance sheet
and income
statement
account
Sales Incharge 1 1 responsible
for selling of
the goods
For supplying
Skilled labours 1 (driver) 1
goods
Unskilled labours 2 2 For loading
and unloading
 feeds.

3.2 Risk Reduction Plan

Impact of Business Nature and intensity Strategies for facing

Risk and assumptions

1 Credit cover low high Selling of feed in cash.

2 No timely supply of feed
due to loadsheeding and medium Political stability
strike
This business plan is developed by Shrestha Enterprise,assuming the following:
 An adequate loan amount to allow for initial implementation of plans.
 Competition and buying patterns remain similar to those used for forecasting
 New customers will be gained through direct sales and advertising.
 Long-term interest rate will be no more than 7%.

4. Financial Plan
4.1 Profit and Loss Account
Fiscal year: 2070/ 2071
There should be one business ledger in the organization
Income Statement Of Shrestha Enterprises.

Net sales revenue(Credits or receipts) 5,00,00,000

Credit sales 1,00,00,000
Cash sales 4,00,00,000

Cost of goods sold:

Beginning inventory
Purchases 4,75,00,000
Goods available for sale
cost of goods sold
Gross profit 25,00,000
Operating expenses(Debit)
Advertising 20,000
Insurance
Depreciation 10%(Truck) 1,50,000
Building 3,00,000
Equipment 1,00,000
Salaries 4,44,000
Travel 30,000
Entertainment
Total operating expenses 10,44,000
General expenses
Utilities 5300
Telephone 10,000
Postages 1,200
Payroll taxes
Total generating expenses 16,500
Other expenses
Interest expenses 2,00,000
Bad check expenses
Total other expenses 2,00,000
Total expenses 12,60,500
Net Income 12,39,500

4.2 Balance sheet

Table: Balance Sheet of Shrestha Enterprises at Lamjung.
Balance sheet preparation date: 2071/3/1
1.Assets
Current assets
Cash 15,00,000
Prepaid expenses 50,000
Inventory
Account receivable 1,00,00,000
Total current assets 1,15,50,000
Fixed assets
Land 50,00,000
Building 30,00,000
Less accumulated depreciation 3,00,000 27,00,000
Equipments(vehicles) 15,00,000
Less accumulated depreciation 1,50,000 13,50,000
Furniture and fixtures 1,00,000
Less accumulated depreciation 10,000 90,000
Total fixed assets 91,40,000
Intangibles
Total assets 2,06,90,000

2.Liabilities
Current liabilities
Account payable 80,00,000
Notes payable 10,00,000
Accrued interest payable 2,00,000
Total current liabilities 92,00,000
Long term liabilities
Mortgage 5,00,000
Note payable
Total long term liabilities 5,00,000

Owner’s equity
Shrestha’s capital 1,09,90,000
Total liabilities and Owners Equity 2,01,90,000
4.3: Cash flow Forecasting : The cash flow projection shows that provisions for ongoing
expenses are adequate to meet the needs of the company, as the business generates sufficient
cash flow to support operations and future expansions.

Income and expenditure Year 1 Yr 2 Yr-3

Income 5,00,00,000 5,50,00,000 6,00,00,000

Sales expenditure 4,75,00,000 5,22,50,000 5,70,00,000
Net profit 12,39,500 14,00,000 15,20,000
Advertise promotion 20,000 30,000 40,000
Depreciation 4,60,000 4,00,000 3,50,000
Office goods 2,00,000 1,00,000 1,00,000
Communication 10,000 15,000 20,000
Income without tax 1239500 14,00,000 15,20,000
Total tax 161135 182000 197600
Net Profit 1078365 1218000 1322400

4.4 Cash flow statement

Particular Year 1 Yr 2 Yr-3

1. Cash Inflow
- Cash from sale 5,00,00,000 5,50,00,000 6,00,00,000
- Loan or borrowings 20,00,000 10,00,000 5,00,000
- Own capital 10,00,000 25,00,000 40,00,000

Total 5,30,,00,000 5,85,00,000 6,45,00,000

2. Cash Outflow

- Production goods expenses 4,75,00,000 5,22,00,000 5,70,00,000

Expenses for labour 4,44,000 6,00,000 15,00,000

- Loan payments 4,00,000 6,00,000 6,00,000

-Interest payments 2,00,000 1,60,000 1,00,000

- expenses in fixed assets 30,00,000 10,00,000 30,00,000

Total 51544000 54560000 6,22,00,000

Net Cash flow 14,56,000 39,40,000 23,00,000

4.5 Financial analysis

1. Breakeven point (B/P analysis): Break-even is based on fixed costs of approximately
Rs.9,04,000 annual profit including loan repayment, insurance, maintenance and labor.
Additionally, controllables such as service labor, payroll taxes, property taxes, advertising
and legal/professional fees are included.
2. B/C Ratio : 0.82
3. NPV : 15%
4. FIRR : 18.33%
5. Payback period: 3 years.

5. Business Development Plan

5.1 Logical Framework
Objectively Verifiable
Narrative summary Means of Verification Risk and assumptions
Indicator (OBI)
Long-term interest
rate will be no more
Business goal: To To supply fresh, than 10%.
expand our custom feed timely and economic No credits.
Report Presentation.
mill to meet the growing feed to poultry New customers will
sales market. growers. be gained through
direct sales and
advertising.
Business purpose : Selling of 1000 ton of No any problem in the
To sell the feed in the feed to the farmers feed industry due to
Report Presentation.
market to raise the and meet their load shedding and
livelihood of farmers. increasing needs. political stability.
Output
1. Meet the need of
1000 ton of feed Report analysis and
feed of certain
supply yearly. statements.
areas of lamjung
4 peoples will be
2. Increase in the
directly benifitted by Salary payment.
employment
job.
Feed supply will
definitely increase the
3. Raise livelihood of Potential market for
chicken production Survey
farmers. meat selling.
that will fetch high
cash.
Activities
1.1 Agreement with Business cost summary:
bank on loan 1st Year: 5,75,94,000
1.2 Purchase of truck 2nd Year: 5,32,58,000
3rd Year:5,80,08,000
1.3 Purchasing of the
furnitures
1.4 Hiring of the labours
1.5 Contract with feed
industries
1.6 Market advertising
and promotion
1.7 Farm visit and
promotion of business