Business plan on mushroom chips

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UNITED INTERNATIONAL UNIVERSITY
Entrepreneurship and business plan development (MGT 3229)
Assignment: BUSINESS PLAN DEVELOPMENT
Submitted To: Mohammad Tohidul Islam Miya
School of Business,
United International University
Submitted By: Md.Shahaid Jurain Alam
ID: 111 121 645
Date of submission: 03-01-2015

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Report On
Developing New Business Of
Mushroom Chips

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Letter of Transmittal
3rd January, 2015
Mohammad Tohidul Islam Miya
Lecturer
School of Business
United International University
Subject: Letter of transmittal for term paper.
Sir,
With due honor, I wish to inform you that it was a matter of great pleasure as well as learning to
prepare term paper on “Developing New Business of Mushroom Chips” under the course of
Entrepreneurship and Business Plan Development .To prepare the paper, I collected and studied
materials in due time and analyzed these and eventually finalize the term paper.
Actually I have enjoyed more in preparing this term paper and develop new business. I have
worked hard to prepare this report. So I would highly oblige if the content of the report have
been acceptable to you.
Though I have put my best efforts yet it is very likely that the report may have some mistakes
and omissions that are unintentional. So, I hope that the report will worthy of your consideration.
Truly yours,
………………………
Md. Shahaid Jurain Alam
ID: 111 121 645

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ACKNOWLEDGEMENT
At the very beginning I would like to express my deepest gratitude to Almighty Allah for giving
me the strength and the composure to finish the task within the schedule time. Then I am very
grateful to all the general people who have provided the opportunity to complete my report and
help to develop new business plan. They give us long patient hearing and sitting, practical
orientation and answering my numerous queries nicely. This supplied the most valuable working
experience and information for which they deserve appreciation.
My sincere gratitude goes to my honorable teacher Mohammad Tohidul Islam Miya, Instructor
of Entrepreneurship and new Business Plan Development, in United international University.
Without his support and encouragement this report and business plan would not possible such an
endeavor to enhance my practical knowledge about the real situation.
Thanks all from core of my heart.

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Executive Summary_______
This Report is prepared for developing new business of “Mushroom Chips”. Mushroom, this
name is not new to us. At first, mushrooms were grown wildly and lived on rotten tree stems in a
damp forest. But following the high demand of the mushroom, it is now being planted by farmers
and used for medicines as well and many kinds of food. The benefits of mushroom have been
discovered by Chinese people hundreds of years ago. But recently, a researcher from Minnesota
Medical School, America, found that mushroom contained in everyday's meal could help the
blood circulation inside your body. It also could protect the health of blood vessels. Mushrooms
are brimming with protein, vitamins B and minerals. They're low in calories and may have
antibacterial substances to help the body. Mushrooms are the good sources of nutrition and this is
our main ingredients. The main ingredients are- White Mushrooms, vegetable oil, white vinegar,
red chili powder, potato, sea slot. For the market segmentation, I have decided that at first my
main focus will be Dhaka. Because large number of people lives in Dhaka City, it is a very large
market and has many customers as well. Later on I will go for other divisions. Every people can
consume our chips, but my special focus is on Children's and teenagers because they like chips
very much. My major competitors’ are- sun chips, potato crackers, Mr. Twits, meridian chips,
cheese ball. Mushrooms are good sources of nutrition and this is my main ingredients.

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Table of Content
Name Page
Introduction
7
Business and Industry Profile 8-9
Business strategy 9-11
Company Products and Services 11-13
Marketing Strategy 13-15
Location and Layout 16
Competitors Analysis 16
Financial Analysis 17-23
Appendices 23

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INTRODUCTION
Origin of the Report
As I am doing Entrepreneurship and small business plan development and my course instructor
Mohammad Tohidul Islam Miya has instructed me to prepare a term paper on Developing New
Business Plan (Mushroom Chips).
Purpose
 To get a clear concept how to make the new product plan
 To acquire knowledge how to make mission, vision, marketing mix etc.
Limitations
 I had to give lot of times to collect information about competitors, market situation because
enough information not available.
 Time and budget constraints for this kind of research.
 Lack of instrumental facilities to get proper information.
RESEARCH METHODOLOGY
Secondary:
 Internet: www.google.com , www.wikipidia .com, Source: thedailystar.net, www.alibaba.com
 Other: Collected information from marketing report, magazines, running newspaper.

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Business Plan :
I. Business and Industry Profile
A. Industry Analysis
1. Industry Background and Overview
Mushroom, this name is not new to us. At first, mushrooms were grown wildly and lived on
rotten tree stems in a damp forest. But following the high demand of the mushroom, it is now
being planted by farmers and used for medicines as will and many kinds of food. People now-a-
days have their own choices and preferences. They are not only seeking for the traditional type
of snacks. Tastes, flavor and nutrition matters to them. I am very much concern about product
quality and test. My product contains mushroom that is very good for health especially for
children. Now-a-days market is very competitive. There are so many company enters the market
with chips so my try to introduce innovative products and packaging needed to satisfy ever-
changing appetites and tastes. I maintain the highest standard of service to my retail customers
through my dedicated sales force.My company produces a new product which name is
mushroom chips.My every product is examined by Bangladesh standards and testing institution
(B.S.T.I).Always my product tries to keep their goodwill and quality also
2. Significant Trend
The policy makers has decide to offer different types of popular cartoon and super hero
characters stickers and tutus with per packet of Mushroom chips for Childs and purchase
intensive to the wholesale and retail for sell promotion. By organizing Charity concert, Open
concert, Sports tournament, Reality shows etc.; Mushroom chips industries would like to build a
good relation whit people in near future.

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3. Growth Rate
The price of the soil meet is affordable in all classes of the society from lower to middle and
from middle to higher classes. There for the growth of the market is going up. This is the one
reason the other on is the change the teats of chips.My will start an integrated print, radio and
media advertisement targeting consumers. This advertisement will show my products
differentiation from other competitor. Advertisements also show my products feature to the
ultimate customer. My Advertisement manager is responsible for those works.
4. Key Success Factors in the Industry
Mushrooms are good sources nutrition and this is my main ingredients.
B. Outlook for the future stage of growth
1. Start-up
In the very beginning, it is difficult to grab the market. As a startup business I focus on to
stay in the market and try innovating more crispy recipes.
2. Growth
In the growth stage, my concentration will cover the largest market share in Bangladesh.
I will turn my company growth oriented, not profit oriented.
3. Maturity
In maturity stage, I want to turn my company in cash cow.
I. Business Strategy
A. Desiredimage and position in Market
Children, teenagers, and young people, those who are my chips consumers, they often seek for
delicious taste with nutrition. “Shahed’s Mushroom Chips” contains mushroom that gives taste
with good nutrition because it has the highest level of Protein, Fat, Sugar, Cholesterol, Sodium,
Carbohydrate & so on. I have decided to build strong customer relationships by providing better
quality products and I hope this will help me to create a positive image in customers mind with
unique potentialities.

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B. SWOT Analysis
1. Strength
 Without any touch of hand the product is made because of development of technological
skills.
 There are another strength of the company is distribution channels. My distribution
channel is very strong; relation of the supplier and resellers is very strong.
 The product quality is more high comparative to the other competitors, because my main
ingredients is Mushroom which is totally new flavor and taste and also work against for
the cancer.
 Because of my good relationship with supplier, reseller and for the good transportation
facility my sale will be definitely increases. My value delivery network is in strong
position. I having good relationships with my suppliers for a longer period of time.
2. Opportunity
 It’s an available product but of the new version of taste and quality create a new
change of the customer taste.
 For the technological changes and advances it’s easier to give any information and
promotional activities to know the product popularity to the people.
 If the government changes policies then it will be easy to access the product to the
market.
 Availability of the raw materials is increasing day by day which is help to produce
more products.
3. Weakness
 Although the company is new, it has not established a brand or images in the market
place this is the weakness for the product popularity.
 Because of the new product and company importer skills are absence here that’s why I
can’t include any internal facilities.
 For the first time the mushroom is exit in the market that’s why people can’t properly
reliable to the product quality.

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 Financial problem is another weakness of the company like what will be the price Cost
and investment.
4. Threats
 If government is increase the taxes and the political issues are not favor then it will be the
threats for the company.
 The product may not be accepted to the people then it will be the great threats for the
company.
 The product competitor rate is very high that’s why sometimes they are facing many
competing problem, which can be a threats of the company.
 Company establishment rules and regulation is strict that’s why sometimes to take any
easy decisions are create complicated situations.
C. Competitive strategy
1. Focus
It is not possible for me to take cost leadership approach because the chip market is very
much competitive. So, I focus on mushroom chips that are very much healthy and people
like to take different taste.
II. Company Products and Services
A. Description
1. Product and service features
My product is mainly “Mushroom Chips”, This retains the nutrients and natural flavor giving
you a healthier and tastier snack choice. My product is made from the chosen high quality
mushroom to assure the benefit it contains for in body. Mushroom chips are a very healthy snack
prepared with combination of mushroom & potato.

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2. Customer benefits
 The benefits of mushroom have been discovered by Chinese people hundreds of years
ago. But recently, a researcher from Minnesota Medical School, America, found that
mushroom contained in every day’s meal could help the blood circulation inside ymy
body.
 It also could protect the health of blood vessels. Mushrooms are brimming with protein,
vitamins B and minerals. They're low in calories and may have antibacterial substances to
help the body.
 Mushrooms are rich in disease-fighting photochemical, and eating them regularly has
been linked to a lower risk of breast cancer in studies of Chinese and Korean women.
Mushrooms also prevent prostate cancer cells from multiplying in mice—and might do
the same in men.
 Mushrooms are an excellent source of potassium, a mineral that helps lower elevated
blood pressure and reduces the risk of stroke. One medium portabella mushroom has
even more potassium than a banana or a glass of orange juice. One serving of mushrooms
also provides about 20 to 40 percent of the daily value of copper, a mineral that has
cardio protective properties.
3. Uniqueness
The uniqueness of the product is it is made my mushroom and also here add some
flavors.
B. Description of production process
1. Ingredients
Mushrooms are the good snakes of nutrition and this is my main ingredients. The main
ingredients are-
 White Mushrooms
 Vegetable oil

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 White vinegar
 Red Chili Powder
 Potato
 Sea salt
2. Costs
3. key suppliers
Bangladesh Mushroom Development Company and local farmers are the key suppliers.
C. Future product or service offerings.
 I will add new flavors in the chips.
 Expand the business.
 Provide home delivery services
III. Marketing Strategy
A. Target market
1. Complete geographic profile
I have decided that at first my main focus will be Dhaka. Because large number of people
lives in Dhaka City, it is a very large market and has many customers as will. Later on
my will go for other divisions.
Per unit cost
fixed cost 500000
variable cost 990000
total cost 1490000
Unit Production 130000
Per unit Cost 11.46154

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2. Complete demographic profile.
Age segmentation: 5-12, 12-18, 18-24, 24
Social segmentation: higher class and middle class of people.
B. Customer’s motivation to buy
 User enjoys the food not only for health but as a teats enjoyment.
 User also spends money on food for different enjoyment of unique teats.
C. Advertising and promotion
1. Media used
For the promotion of my products, my will use attractive print ads, leaflets in the
newspapers. Free sample of my product will also be provided to the students of school,
college, and universities as a promotional campaign. Later on my will think for TVC.
D. Pricing
My “Mushroom Chips” will be introduced at Tk.14 wholesale and Tk.15 estimated retail
price per unit of medium size and Tk.24 wholesale and Tk.25 retail price per unit of

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family size product. I expect to lower the price of packets within few months. Because of
the first time at market the company would like to give some discount to the retailers
which will make them some profit. The company is also giving some credit terms
facilities to the wholesaler and retailers.
1. Cost structure
a. Fixed and variable cost
2. Customer wise
Target customers are higher and middle class people.They ready to pay BDT 20 for good
and healthy chips.
3. Comparison against competitors price
Right now, all the competitors in the market charge average 15-20 taka per chips.
E. Distribution strategy
1. Channels of distribution used
Factory Warehouse Divisional Warehouse Salesman Retailer
Customer.
 My factory situated at Tongi in Gazipur. After producing my products it will store in my
own warehouse Mirpur.
 From this warehouse products are distributed 6 divisions by my own transport and then
storing these goods in divisional warehouse.
 Then my trained salesman distributes my products in the market to the retailer.
Pricing
Per unit sales 15
Per unit variable cost 7.615385
Per unit contribution 7.384615

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IV. Locationand Layout
A. Location
1. Demographic analysis of location versus target customer profile
As my new to the market, i want to make available my products for my Dhaka city
customers through several distribution channels. I will use different wholesalers, retail
stores and super shops like- Meena Bazar, Agora, Shopno and so on.
V. Competitor Analysis
A. Existing competitors
Who are they: There are companies have grabbed over 80 percent share of the country's
branded-chips market, driving others almost away from the scene. They have a strong
competition among themselves. As a result it is very tuff to build a strong competition in
market.
 Mr. Twist
 Potato Chips
 Meridian chips
1. Strengths:
 There are so popular.
 People know them.
 They satisfied the customer a lot.
 Customers are highly satisfied.
2. Weaknesses:
 Serve they customer common item.
 Have no variation.

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VI. FinancialForecast
A. FinancialStatement
Financial Plan
Shahed's mushroom chips
Cost of project
Item Initial Final
Land(3000 square foot)(Advance) 50000
Microwave Mushroom Processing Machine 170000
Brush washing machine for mushroom.(semi
automatic,Local) 50000
mushroom dryer machine.(local) 70000
Stainless steel mushroom slicer machine(second hand,local) 100000
automatic electrical mushroom packing machine. 200000
Miscellaneous Assets 100000
Machine tools 30000
Computers(2) 70000
Lights and fans 15000
Fire system 5000
water supply system 10000
Generator 100000
Software 20000
Speed money
PDB 20000
WASA 10000
Other sector 10000
Total speed money 40000
License and approval 20000
Tax identification 20000
Patent and trademark 25000
Total cost 1095000

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Fixed and variable cost
Descriptions
Fixed cost Initial Final
Item
Employee salary
Guards(2 guards)(1 shift)(9.00am-5.00pm) 10000
Employees (12 employee)( shift)(9.00am-5.00pm) 120000
Total employee salary 130000
Contingency on machinery 25000
Machine operation cost 200000
Space rent 50000
Waste management 15000
Speed money 80000
Total fixed cost 500000
Variable cost
Item Initial Final
Inventories 550000
Bills
Electricity bills 20000
Gas bills 5000
Mobile phone bill 8000
Water bills 15000
Generator oil bill 20000
Total bills 68000
Software maintenance 5000
Transportation cost 20000
Operating cost
Workshop cost 17000
Supply chain management 60000
Distribution channel 150000
Total operating cost 227000
Promotional cost 120000
Total variable cost 990000

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1.Income Statement
Shahed's
mushroom chips
Forecasted income
statement
1st
year
2nd
year
3rd
year
Sales 1500000 1600000 1750000
Cost of goods sold 750000 800000 825000
Gross operating income 750000 800000 925000
Selling expense 150000 165000 180000
General & Admin. Expenses 85000 91000 95000
Depreciation 25000 25000 25000
Other expenses 32000 54000 60000
Earnings before interest and taxes 458000 465000 565000
Interest expense 5% 12500 12500 12500
Earnings before taxes 445500 452500 552500
Tax 35% 155925 158375 193375
Net Income 289575 294125 359125

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2. Balance Sheet
Shahed’s mushroom chips
Forecasted balance sheet
1st year 2nd year
3rd
year
Assets
Cash in hand 250000 270000 260000
Account receivable 430000 560000 510000
Inventories 390000 410000 415500
Other current asset 222000 245000 240000
Total current asset 1292000 1485000 1425500
Property, Plant & Equipment 750000 775000 795000
Accumulated depreciation 45000 90000 135000
Other non-current asset 160000 185000 210000
Total asset 2247000 2535000 2565500
Liability & Shareholders' equity
Account payable 220000 250000 255000
Short-term debt 60000 65000 75000
Other current liabilities 265000 295500 300000
Total current liabilities 545000 610500 630000
Long-term debt 1100000 1125000 1200000
Loan 250000 300000 320000
Deferred Income taxes 37500 40000 45000
Other non-current liabilities 64500 159500 20500
Total liabilities 1997000 2235000 2215500

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B. Breakevenanalysis
Per unit cost Amount
Fixed cost 500000
Variable cost 990000
Total cost 1490000
Unit production 130000
Per unit cost 11.46154
BreakevenAnalysis
Sale price per unit 15
Fixed operating cost per period 500000
Variable operating cost per unit 7.615385
Breakevensales in unit 67708.337
Shahed’s Mushroom Chips
Cash Flow Statement
Cash Flows from Operating
Activities:
Operating Income (EBIT) $458,000
Depreciation Expense 50000
Increase in Accounts
Receivable
−80000
Decrease in Prepaid
Expenses
8,000
Decrease in Accounts
Payable
−40000
Net Cash Flow from
Operating Activities
396000

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Cash Flows from Investing
Activities:
Purchase of Equipment −100,000
Net Cash Flow from
Investing Activities
136,000
Cash Flows from Financing
Activities:
Net Cash Flow from
Financing Activities
−290,000
Net Change in Cash $115,806
Beginning Cash Balance 319,730
Ending Cash Balance $435,536
VII. Loan or investment proposal
Shahed's Mushroom chips
Sources of Fund
Item Initial Final amount
Bank loan 250000
Own fund 600000
Other contribution
Family contribution 200000
Friends contribution 45000
Total other contribution 245000
Total sources of fund 1095000

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Conclusion
Mushroom this is not new to us. At first mushroom were grown widely and lived on rotten tree
stems in a damp forest. But following the high demand of mushroom it is now being planted by
farmers and use for medicines as well and many kinds food. People now-a-days have their own
choices and preferences. They are not only seeking for the tradition type of snacks. Tastes, flavor
and nutrition matters to them.
Appendices:
 http://www.recipesource.com/fgv/vegetables/mushrooms/00/rec0053.html
 http://www.malaysiabest.net/2006/03/06/snacks-mushroom-chips/
 http://ihor5.freeyellow.com/mushchip.html
 http://banglapedia.search.com.bd/HT/M_0416.htm
 http://www.mushroomlovers.com/Health.htm
 www.google.com
 www.alibaba.com
 www.wikipedia