School of Business POKHARA UNIVERSITY

1. School of BusinessPOKHARA UNIVERSITY PRESENTATION Business Development Plan(Graduate Seminar- 1 credit Hour) MBA – IV Trimester 23rd August 2011 BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

2. Business Development Plan of Tasty Mushroom Udhyog Lekhnath-12, Kaski Presented by Nitesh Shrestha Roll No. 10220019 IV Trimester BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

3. Project Highlights Name of Project: Tasty Mushroom Udhyog Objective of Project: To Provide quality of tasty mushroom Annual Capacity ( in 100%) : 30,000 Kgs. Duration of Projection: 5 years Total Initial Investment : Rs. 3,500,000. BDP Plan of “ Tasty Mushroom Udhyog “ NiteshShresth

4. Project Highlights Fixed Assets – Rs. 2483,000. Working Capital – Rs. 1017,000. Equity Financing – Rs. 2,100,000. Loan Financing – Rs. 1,400,000. Employment generation: 10 employees. General Manager 1. Production / Service dept. 4 employees. Admin / Support dept. 5 employees. BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

5. Project Highlights • Rational of this project : • The current market have high demand of mushroom. • lack the product which dissatisfies the customer. • The feasibility for inauguration of the business inspired much. • Through market analysis the availability of resources have made my project more convenience. BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

6. Uniqueness of this project : • Methods of production : concerned to quality. • Different strategies to enter the market. • Accessible of mushroom with effective supply chain. • Seeds of mushroom and cultivation. • Producing mushroom in economies of scale that would minimize the cost than competitors with better quality and taste.

7. About the Product • A mushroom is the fruit of a fungus. Its purpose is to disperse spores, microscopic single cells that can grow into new fungi. The fungus looks like a series of branching threads infiltrating the soil or leaf litter, or in the wood of living or dead trees. • Mushroom is an exotic and nutritious source of vegetarian food. BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

8. Production Plan • Production process • The company will collect poly bags called “spawn”. Such bags include "mycelium" (growing media) inoculated with mushroom spawn. After placing/planting these bags on the racks of the mushroom house, harvesting can be completed. • Production. As per the market coverage and the requirement basis the demand and supply are analyzed. The full capacity of the plant is 30000 kg. Per year and produced and sold 60%, 70% , 75%, 80% and 80% in 1st ,2nd ,3rd 4th and 5th year respectively. BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

9. Capacity of production & Sales BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

10. Project Management Plan Highlight t the overall structure of the project in brief • BOD • Tasty Mushroom Udhyog is the sole propertorship company of Mr. Nitesh Shrestha. With assistance of my father Mr. Mahesh Pd Shrestha. The company may hire experts as the partner if required. • Management level • Strategic Level • Operational Level BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

11. Working level • Working: 360 days • 10 employees. Working 8 hrs. • HR Policy • .The employee recruitment and selection, hiring and firing will be accordance with company need and regulation. • Salary will be paid on performance, education and experience basis. • Employee should notice 15 days earlier before resignation. • The basic salary would increment 10% each year along with a 5% dearness allowance. BDP Plan_ <Name of Student>

12. Structure of the organization

13. Marketing Plan • Product Strategy – • Concerned to health and taste it can be the substitute for non vegetarian. • It cures from blood pressure, diabetics, cancer, heart disease etc. • The rising use of mushroom in pizza, burger, in herbal medicine, foods prickles etc. is growing demand on mushroom. BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

14. Pricing Strategies • A cost-plus pricing strategy will be adopted to set the price of the product. • Quality Mushroom Company wants to be the market leader of this industry by establishing a higher quality product at lower price. • Restrict the entry of new competitors and defeat competitors in the market. • A profit margin would be achieved by pricing mushroom at Rs.200 per kg. BDP Plan_ <Name of Student>

15. Promotion Strategies • Advertising, Trade promotion, and Fairs • The company will participate in trade fairs and serve the visitors several kinds of food, pickles etc made from mushrooms. • Leaflets will be distributed to the consumers through the national daily newspapers. • campaign would be conducted only in Pokhara division. • Convey about the consumption benefits and cooking process of mushroom. • Sales person will be handed out T-shirts. BDP Plan_ <Name of Student>

16. Distribution Strategies • It will build distribution centers in the different divisions of Nepal: Pokhara, Lekhnath. • The small vegetable traders will purchase mushrooms directly from the distribution centers. • The business customers such as hotels and restaurants will place order prior to delivery and the company will supply them directly from the cultivation plant. BDP Planof Tasty Mushroom Udhyog <Nitesh Shrestha>

17. Environmental Risk Assessment BD BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

18. Assumption of Financial Calculations • Variable Cost :- per unit price will be constant but depends on sales quantity, it is assumed that the variable cost will be Rs. 107 /kg. • Salary :- Rs 864,000. • Depreciation :- 20% • Interest :-16% • Tax rate :- 25% BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

19. Projected Sales, Cost and Profit BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

20. Projected Income Statement BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

21. Projected Cash Flow Statements BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

22. Projected Balance Sheet BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

23. Capital Budgeting Summary In “000”s Initial Investment : Rs. 3500. Total Present Value : Rs. 6523.01 Pay Back Period : 2 Years Discounted Pay Back Period : 2 yrs. Net Present Value (NPV) : Rs. 3023.01 Internal Rate of Return(IRR) : 34.20% Profitability Index : 1.64 times BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

24. Financial Ratios BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

25. Key to Success of the Project • Capacity Utilization • Number of days of operation • Cost, Interest rates and inflation • Lastly, it is not affected by internal as well as external environment. • Can achieve competitive advantage through its various strategies: Low cost strategy. Differentiation strategy. BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

26. Suggestion • To investors • I would like to suggest that project is profitable for equity investor and maximizes the shareholders value and wealth . • The cost with in the 2 year of operation as well as growth has opportunity in the business. • Tasty Mushroom Udhyog is promising to provide long term benefits in term of profitability, fixed assets and liquidity. • To lender • As the plan is profitable and less risky the lenders are suggested to lend with considerable cost of capital. BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha

27. Thank you OPEN FOR QUESTIONS BDP Plan of “ Tasty Mushroom Udhyog “ Nitesh Shrestha