CONTENTS
1. Executive Summary
2. Business Description
3. Business Environment Analysis
4. Market Analysis
5. Marketing Plan
6. Operations Plan
7. Management & Organization
8. Financial Plan
9. Conclusion
10. Conceptualization
EXECUTIVE SUMMARY
Following the high demand of Agricultural products in
the state and having considered the constraints and the factors that limit the
maximum production of Agricultural products in the state. It has occurred to my
focus mind that it will be of a great business opportunity to go into
importation/marketing of Agro-Chemicals which will cater for the farmers
economic lost in their farms and induce high economic return from the farm
products.
However, this business idea is aimed at setting in
reputable Agro-Chemical enterprise to address the challenges farmers do have as
result of the scarcity of this product in the state. The scarcity of these
Agro-Chemical products has lead farmers to the purchasing of adulterated products
from rood-side outlets which in turn causes high economic lost to the farmers.
Obviously, this enterprise is poised to bring
improvement and transformation in the quality of the Agro-Chemical product it sells
to farmers. Moreover, this venture will specialize in the importation/marketing
of all sorts of Agro-Chemicals such as insecticide, vaccines, animal drugs,
etc. both in wholesale and retail form.
This report on the establishment of this Agro-Chemical
enterprise was based on the research and the feasibility study I have carried
on for quite a good number of times starting from Nov, 2012 – Feb, 2013.
The information was collected through series of survey
I conducted within Abakaliki metropolis to determine the viability of the
business.
However everything has also been put in place to
ensure that this enterprise is properly registered in such places like the
corporate affairs commission etc.
I have also succeeded in linking with the best company
specialized in Agro-Chemical manufacturing sited at United State of America.
However, it is
capital intensive to start this business but with N2000, 000 I can hook up with
the company specialized in the production of this product.
With little or no competition in the business for now
in Abakaliki, I believe that the farmers will view it as well development. It
therefore mean that this business will utmost thrive in this state with a total
annual income of 20.4 million with increasing sales at 40% for the next 4years.
BUSINESS DESCRIPTION
This enterprise will venture into selling of different
types of chemical required for Agricultural production such includes low pest, Furan Dan, selective and nonselective herbicide vaccines and animal drug etc.
The services of this enterprise are structured in such away that farmers will
easily access it and thus, enjoy it.
Measures will also be put in place to avoid importation of adulterated
products to prevent economic lost from the farmers.
The business will be located at the heart centre of
the town which has a good channel to all the rural areas within the state. As a
beginner, all my equipments and house are brown new which has been brought at
the rate of 3.2 million. Its environment is also well positioned with space for
car parking and other purposes.
As an undergraduate in Agriculture and having gathered
so much experience in the field, I have developed many strategies to ensure
that the business stands firm without collapse. Such strategies include
extension teaching which has to do with educating the farmers on how to use the
products effectively so as to achieve high economic return.
BUSINESS ENVIRONMENT ANALYSIS
CURRENT STATUS
Though for now may have not seen any need to go into
this business reason been that they still see farmers in this state as a poor
class citizens who cannot patronize them well. As a result of the above, there
are no competitors in the market for now.
DEVELOPMENT PLAN
The design of this business will in future attract so
many investors, which will in turn make the business competitive thereby making
supply higher than demand.
For the enterprise to withstand this shock that will
emerge in future as a result of competitors in the market, more skillful technique
will be put in place to beat them down such which may include service contact
with the farmers, business promo. Etc.
MARKET ANALYSIS
Based on the survey I carried across the markets in
the state, I have found out that there is no accredited outlet that supplies
Agro-Chemical products in the state. And for the fear of purchasing adulterated
products, farmers are always scared of going to those outlets to get their
products.
In view of the above, it shows that there is a good
atmosphere for this business to thrive in the state hence there is no already
existing competitors.
Due
to the high demand of this product by the farmers in the state, I want to aim
at generating at least 20.4m annually with sales increasing at the rate of 40
percent for at least the next 5yrs.
MARKET PLAN
CURRENT STATUS
There are no actual competitors in the market for now
and hence it gives my business an added advantage to thrive in this state.
Therefore, currently I planned to start by colonizing
the capital city of Abakaliki before founding my way to the targeted village
farmers.
DEVELOPMENT PLAN
The products will be made available to the farmers
residing far from the main site of the enterprise by creating other channels
for outlet of the product.
However, each depot will be given a sales quota that
will be achieved in order for us to realize the estimated sales of N500 Million
annually. There will also be best awarding of prices to depots that made the
highest sales.
Public awareness or Advertisement arrangements are as
follows
Advertisement on Tev =
N25,000
Advertisement on Radio
= N7,500
Others news papers =
N3,500
Total =
N36,000
Sales promotion will also be observed as I will from
time to time use our delivery vans to visit some of the local markets in the
state to advertise the products by selling at attractive price.
OPERATION PLAN/MERCHANDISING PLAN
CURRENT STATUS
Before on and now, proper arrangement has been reached
between my enterprise and a production company in U.S.A as it concerns the
importation of these Agro-Chemical products. As it stands still they have
accepted to be supplying my enterprise three (3) containers of this products
every 3months at a negotiable price of N4m.
An inventory record shall also be properly kept to
monitor the expansion or liquidation of this enterprise.
The storage facilities for some of this product include:
1. Refrigerator/Freezer at the rate of
N80,000
2. Micro-wave at rate of N80.000
3. Air
conditioner to maintain suitable environment for the products at the cost of N150,000
for 3 sects
4. Hydrogen
peroxide for storage of some of this products at the rate of N30,000
5. Bus for
the dissemination of the products to rural populace at the rate of N3m
Total = N7.38M.
DEVELOPMENT PLAN
As the business expands, I will definitely increase
the number of containers I import from 3containers to 6containers in every
three month.
However, I will equally create more outlets and
branches for the dispersion of my goods and services. And also time will come
when I will establish a company that produces all these chemicals in the state.
MAMAGEMENT AND ORGANIZATION
CURRENT STATUS
Though that this venture is sole proprietorship
business, it also encompasses other members of management team who their roles,
responsibility and entitlement are stated below
1. MR. A: He is the CEO of the enterprise. He has acquired managerial skills in
his course of study in the university. He has also added advantage in the area
of business administration as he has been exposed widely in the area of
Agric-business at his course of study.
2. MRS. B: General manger. He has had worked as a production manager in a
reputable chemical production company which generates a total revenue of
N10.5billion annually. He has gathered so much experience during his working
days in that company. As the general manager of the company, he will regulate
the activities of other workers in this firm and other diligent duties as the
manager of the company. His salary will be 30% above other workers.
3. MR. C: Accountant. He is a professional account who bagged degree
honour in accountancy. He shall be the finance manager of the company. His
salary will be N60,000 a month.
4. Other:
This option includes sales boys/girls, distribution agents and units
coordinators.
Each
of their salary will be determine by the quality and quantity of service they
render to this enterprise.
DEVELOPMENT PLAN
As the business expands such that I have succeeded in
establishing my own production/manufacturing company, I will as well employ
more workers and technicians and as well production and operation managers.
As this is done, it will go along way in redressing
the problem of unemployment in the state and our country Nigeria at large.
The salary of the workers will as well be increased by
30% to boost their income.
FINANCIAL PLAN
Project
income statement for first year ending December, 31
|
Sales
|
|
|
|
Opening
stock of finished goods
|
|
4,000,000
|
|
Cost
of factory output
|
1,100,000
|
|
|
Goods
available for sale
|
3,200,000
|
|
|
Less
ending stock
|
500,000
|
|
|
Cost
of goods sold
|
2,500,000
|
|
|
Gross
profit
|
|
2,800,000
|
|
Operating
expenses
|
|
|
|
Wages
and salaries
|
350,000
|
|
|
Rent
|
150,000
|
|
|
Insurance
|
15,000
|
|
|
Light,
fuel & power
|
85,000
|
|
|
Maintenance/Repairs
|
25,000
|
|
|
Transportation
|
20,000
|
|
|
Advertisements
|
36,000
|
|
|
Stationery
|
10,000
|
|
|
Depreciation
|
45,000
|
|
|
Security
|
18,000
|
|
|
Miscellaneous
|
30,000
|
|
|
Total
operating expense
|
784,000
|
|
|
Net
profit before taxes
|
|
2,540,000
|
|
Less
45% tax
|
|
1,
143,000
|
|
Net
profit after fixation
|
|
1,397,000
|
CONDENSED PROJECTED INCOME STATEMENT FOR
THE FIVE YEARS
|
|
1
|
2
|
3
|
4
|
5
|
|
Sales
|
4,000,000
|
5,100,000
|
7,200,000
|
9,000,000
|
12,000,000
|
|
Cost
of goods sold
|
2,500,000
|
2,800,000
|
3,200,000
|
4,100,000
|
6,500,000
|
|
Gross
profit
|
2,800,000
|
3,200,000
|
4,500,000
|
5,000,000
|
5,500,000
|
|
Operating
expense
|
784,000
|
1,200,000
|
1,740,000
|
2,800,000
|
3,400,000
|
|
Net
profit before tax
|
2,540,000
|
3,454,000
|
3,984,240
|
4,294,222
|
5,428,924
|
|
Less
45% Tax
|
1,143,000
|
1,689,000
|
2,204,940
|
2,740,442
|
3,240,114
|
|
Net
profit after Tax
|
1,397,000
|
1,728,940
|
2,142,827
|
2,898,728
|
3,480,780
|
N/B: Average net profit after taxation
(1,397,000+1,728,940+2,142,827+2,898,728+3,480,780)
5 = 2,329,655
PROJECTED BALANCE SHEET AS AT DEC. 31,
20 (1ST YEAR)
|
Asset
|
|
|
|
Cash
|
650,000
|
|
|
Accounts
Receivable
|
840,000
|
|
|
Inventories
|
1,740,000
|
|
|
Current
Assets
|
2,840,000
|
|
|
Fixed
Assets net
|
2,420,000
|
|
|
Total Assets
|
|
5,260,000
|
|
Liabilities
|
|
|
|
Accounts
payable
|
|
68,940
|
|
Capital
|
3,000,000
|
|
|
Add
net profit
|
1,397,000
|
|
|
Net worth
|
|
4,397,000
|
|
Total liabilities and net worth
|
|
4,465,940
|
CONCLUSION
Based on the proceeding analysis, this
venture has theoretically proven itself to be a viable one taken every factor into
consideration.
Undoubtedly,
I believe that this Agro-chemical business will thrive successfully in this
state with increasing 40% return of interest profit for the period of 5-7
years.
CONCEPTUALIZATION
It is very obvious that every entrepreneur
does not depend on paid salary but is been enticed by what he can initiate on
his own and that is the major point that triggered me into conceptualization of
this idea.
Secondly, the
point that there is no any employment opportunity in this country currently has
also been one of the factors that compelled me into initiating this idea to
help secure employment for the youths.
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