Overview of the Business
Discuss about the Development A Business Plan For Organic Vegetable Business.
The assignment will be focusing on the development of business plan for opening a organic farm business. The assignment will be consisting of a detailed analysis of the SWOT framework, marketing plan of the business and also contain a financial plan for the business.
Overview of the Business
The business which the business plans to establish is related to organic farming of vegetables and other products. The name of the business as decided by the management will be Organic Vegetables. The business will be providing organic food products like vegetables and fruits which are fresh from the market. The management of the company plans to establish the business in Saskatchewan region of Canada. The region has a lot of farms and the management of the company plans to purchase a farm plot in the area where vegetables and fruits cultivation will be the main activity of the business. The business of the company will be to cultivate vegetables and fruits in the farm using sustainable means and organic farming techniques and distribute the goods to nearby towns and also distribute the same in supermarkets. The business model of the company will be to provide cheap and fresh quality of vegetables and fruits for everyone.
The form of business as decided by the owners of the business will be in the form of incorporated company. The overall management and control of the activities of the business will be done by the owners of the company.
As per the plan of management of Organic Vegetables, the targeted customers of the company will be the local customers who are present in nearby towns near Saskatchewan. As it is a place of countryside, the people also like to have fresh food and most of the people in the area in cultivation business themselves. The management has planned to provide fresh vegetables from the farm on delivery trucks to all the grocery shops in nearby town (Tanner & Raymond, 2015). The management also plans to get into a tie up agreement with a supermarket brand for supply vegetable produce in bulks which will be giving the business an advantage. The supermarket will be providing the business with an opportunity of expanding the market size and range of the business and the company will be have more customers to access.
Target Customers
As per the plan of the management of the Organic Vegetables, the business model of the company will be to provide the best quality of vegetables and fruits to the customers and ensure healthy living. The cost of the vegetables as per the management will also be low as the business is cutting out the third’s parties profits who by distributing the vegetables themselves in delivery trucks. In addition to this, the motive of the business is to use sustainable techniques to produce organic vegetables which are healthy and free of any chemical which are utilized in the normal cultivation techniques (Liu, 2013). This will be giving the business a competitive advantage against the competitors who are providing normal cultivation grocery products.
The management has also planned to get into agreements and contract with supermarkets brands so that the business might be able to deliver bulk amount of vegetables and fruits which are fresh from a farm to such a market. The management is expecting demand for such vegetables as a majority of the people especially the homemakers prefer fresh vegetables than to canned foods. The management has also planned that in order to increase the production of the farm, the company will be utilizing all the modern equipment for cultivation and harvesting while using organic fertilizers, pesticides and techniques to maintain soil fertility. Theses activities will help the business to build up a competitive advantage in the market.
Business goals are the vision which the business wishes to achieve which might be either short-term goal or long-term goal. The short-term goals of the Organic Vegetable business which is to be establish will be considering a time period of 1 years to 2 years period (Peters & Naicker, 2013). The goals of the business as decide by the management are:
- Applying sustainable techniques for the purpose of cultivation of bulk of the vegetables and marketing the same to nearby towns,
- Adopting organic methods to produce best quality of goods and any damage good will not be discarded for organic farming techniques like composting.
- Keeping the cost of the fruits and vegetables as low as possible while providing fresh quality food products.
The long-term business goals which will be pursued by the management of Organic Vegetables are given below in details:
- Expansion of the business in new territories and regions which will be done by increasing the scale of operation of the business and per unit increase in production
- Opening retail stores of the company itself which will be named as Organic Vegetables store and thereby entering the retail market whereby goods can be produced, distributed and sold as well by the same company.
- Acquiring a brand name for the business in the markets of Canada and mix the technological advantage of modern times with the technique of organic farming such as using of HYV seed and organic techniques for fertilizers and pesticides.
SWOT analysis is conducted by businesses to analyze and identify the strength and weaknesses of the company and also provides an analysis of the opportunities and threats which the business might face (Bohari, Hin & Fuad, 2017). These are given below:
- Strength: The basic strength of the business will be unique products which are to be provided which are made by organic farming and the company distribution network will ensure that the product reach every destination before the market opens on a daily basis (Bull et al., 2016).
- Weakness: The company will not be having its retail chains initially for 2 years and the business needs to depend on the supermarkets and nearby grocery shops which means the profits of the business will be low as the supermarkets will be benefitting more.
- Opportunity: In the wake of environmental consideration. Human health and sustainable development the business will have wide scope of opportunities grocery business as most people will be preferring such goods (Hatami-Marbini et al., 2013).
- Threat: There is a threat which the business might face tough competition from other grocery business and organic farming will be requiring lot of resources like compost crate, organic fertilizers.
The business will be promoted along with the products and offers of organic food in advertisement media. The management of the business plans to use pamphlets which can inform the customers what the company is offering (Armstrong et al., 2015). As per the plan of the business, the goods will be delivered to each grocery store before it opens everyday in nearby towns and homes near the farm. In addition to this the business will make ties with supermarket so that bulk amount of goods can be purchased and sold in the supermarkets at the same time this will also promote the company. The company also plans to launch the official website of the company where further advertisement can be made. The company will be offering discounts and credit sales facilities if the order is in bulk. This will also be promoting the business (Bohnsack, Pinkse & Kolk, 2014).
Business Goals
The management of the business will be looked after by the owners who forms top level of management. The decision-making process will also under the control of the owners of the company. The next level of the management will comprise of the managers who will be responsible for effective distribution of the goods to markets and nearby towns (Hammer, 2015). The lower level management be the farmers who will be engaged in the cultivation process. The business will be utilizing organic farming techniques which involves use of sustainable techniques, use of organic fertilizers and proper irrigation techniques.
The management of the company as per the plan will be requiring farmers who can a local and who have experience in organic farming techniques. The management will also be needing to appoint staff for assistance to the farmers and any other support services. The management also needs to hire truck drivers for transporting the agriculture produce. The management will the appoint the managers who acts as middlemen between top level management and workers.
The farmers will be paid on a fixed basis plus incentives for their time contribution to the cultivation process. The truck drivers will be paid on the basis of distance travelled and number of trips made when it comes to incentives and there is always a basic pay. In case of the owners they will have the share of profit after allowing all expenses. These will be split among the co-owners on the basis of capital which the partner has introduced in the business.
The IT resources which will be mostly used by business is computer to keep track of sales and inventory of non-perishable goods. The website is another software which falls under IT dominion. The agricultural equipment which will be used by the business are trackers, ploughing machines, harvesting machines. There will also be a requirement of motors and pipes for irrigation of the lands.
The business will be delivering the grocery shops every morning fresh vegetables and also to the supermarkets on a timely basis for each day and there is always the products which are offered by the company.
As per the business plan of the company, the company will be purchasing a land and building plot from where the main operations are conducted. The building will be serving as a residence of the farmers. The Investment in the building will be $ 10,00,000. The equipment will also be purchased and the cost for the equipment in the first year will be $ 3,00,000. The expenses of the company consist of utilities, salaries, supplies, marketing and promotion expenses. Which is shown in the revenue statement for 3 years.
Revenue Statement
Balance Sheet
In the first year of the business the expected profit of the business will be $ 3,40,000 which is due the increased expenses and low sales which is due the fact that the business is setting up its operations. The expense which are shown in the revenue statement are estimated figures of the management. The expenses for the next tow years have increased but the increase in the profit is due the increased sales of the company.
The initial capital requirements of the business will be contributed by the co-owners of the business which is about $ 10,00,000. The company also will be using debt sources of financing which was also taken in the first year and no repayments are made during the first 3 years period. In addition to this, the company uses retained earning financing. The company transfers a major part of the profits to retained earnings which are then used by businesses to finance the activities of the company.
References
Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction. Pearson Education.
Arrondel, L., Debbich, M., & Savignac, F. (2013). Financial literacy and financial planning in France. Numeracy, 6(2), 8.
Bohari, A. M., Hin, C. W., & Fuad, N. (2017). The competitiveness of halal food industry in Malaysia: A SWOT-ICT analysis. Geografia-Malaysian Journal of Society and Space, 9(1).
Bohnsack, R., Pinkse, J., & Kolk, A. (2014). Business models for sustainable technologies: Exploring business model evolution in the case of electric vehicles. Research Policy, 43(2), 284-300.
Bull, J. W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., … & Carter-Silk, E. (2016). Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services framework. Ecosystem services, 17, 99-111.
Hatami-Marbini, A., Tavana, M., Hajipour, V., Kangi, F., & Kazemi, A. (2013). An extended compromise ratio method for fuzzy group multi-attribute decision making with SWOT analysis. Applied Soft Computing, 13(8), 3459-3472.
Hammer, M. (2015). What is business process management?. In Handbook on Business Process Management 1 (pp. 3-16). Springer, Berlin, Heidelberg.
Liu, Y. (2013). Sustainable competitive advantage in turbulent business environments. International Journal of Production Research, 51(10), 2821-2841.
Peters, R., & Naicker, V. (2013). Small medium micro enterprise business goals and government support: A South African case study. South African Journal of Business Management and finance, 44(4), 13-24.
Tanner, J., & Raymond, M. (2015). Principles of marketing. University of Minnesota Libraries Publishing.
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