Establishment of Nursery and marketing of flowers, ornamental & Bonsai plants

Presented By:-

Aditi

Chandan Kumar Ravi

Sudarshan Kumar Patel

Flow of Presentation

• Executive Summary

• Objectives & Mission

• Establishment of nursery

• Financial & Data Analysis

• Market & Industry analysis

• Conclusion

Executive Summary

• Natural Nursery is dedicated to providing a quality choice for people looking for plant and garden supplies, as well

marketing of good quality flowers, ornamentals and bonsai. Our start-up expenses come to Rs. 27,62,000 which

includes the cost of the greenhouses and the cost of rent for the land .

• We will offer a wide variety of plants, trees, vegetable plants, along with a selection of garden supplies. Most of the

plants we sell will be grown in our greenhouses. With a convenient location Natural Nursery intends to successfully

market to the residential customer, as well as contractors and renters.

• We would like to see a five to ten percent increase in our customer base each year. Our marketing strategy includes

providing a knowledgeable staff, affordable prices, a great location, and top notch customer service.

Executive Summary

• Natural Nursery has been the dream of owners for the last five years. Aditi, Ravi & Patel will manage all aspects of

operations at Natural Nursery. Aditi will oversee the staff and be involved with the ordering of merchandise, while

Ravi will be responsible for the ordering of the garden supplies including flowers and ornamental, while Patel will

see the maintenance of the greenhouses & Bonsai business.

• Natural Nursery aims to experience a growth rate of 20% in sales for the second year of operation and build upon

that as the company grows. With creative marketing, and a quality choice of plants and garden supplies for our

customers Natural Nursery intends to make its presence known in the nursery community.

Objectives

• Maintain an average gross margin at or above 50%.

• Generate an average of $1,000 of sales each business day of each month.

• Realize an annual growth rate of 10% in Year 2.

Dedicated to providing a wide variety of plants and trees to customers with pleasant shopping experience.

Mission

• Sell products of the highest quality with excellent customer service and support.

• Retain customers to generate repeat purchases and make referrals.

• Continue to expand daily sales by adding to the variety of plants we sell.

• Communicate with our customers through creative advertising.

Keys to Success

Establishment of Nursery

• Site Selection:-

(Land preparation:- 2ha [ 1 ha for mother plantation, 0.5 acre for office, road, storage, garage; 1 acre demonstration and remain;

1 acre net house and shade house)

• Planting material , packaging material

• Construction

• Workers:- 6 (4+1+1)

• Tools, Equipment and vehicles:-2 TATA ace; 1 power tiller

• Irrigation system

• Computers and other hardware

Nursery’s Portfolio

Products

• Ornamental plants

• Bouquets

• Loose and cut flowers

• Bonsai

• Lawn turf

• Climbers

• Seasonal plants

Services

• Online transactions

• Rent a pot

• Training to customers

• Free home delivery

• Monthly maintenance

Input cost

Item

Cost

Land (2 ha) 600000

Regulatory approval 200000

Irrigation Unit 100000

Fencing 50000

Road, Building, Net house construction 600000

Planting material 150000

Vehicle, tool & equipment 900000

Total 2600000

second year onwards (as a maintenance cost)

50000

Item

Cost

Workers (6 @ Rs 3000/month) 216000

Bonsai Preparation 75000

Turf Preparation 75000

Advertisement 120000

Cultivation cost 100000

Electricity, fuel, repairing 80000

Total 666000

second year onwards 810000

(Rs 144000 for additional four workers @ 3000/month)

Fixed Cost (Rs.) Variable Cost (Rs.)

Input cost (Contd)

Fixed cost Variable cost

total

1st year 2600000 666000 3266000

2nd year 50000 810000 860000

3rd year 50000 810000 860000

4th year 50000 810000 860000

Total expenditure 2750000 3096000 5846000

Prospective income

Item Income (1st Year) Income (2nd Year)

Bouquet 7*150*80 = 84000 14*300*100 = 420000

Seasonal plants 6*200*30 = 36000 40*300*30 = 360000

Cut flower & looseFlower for marriage decoration 5*10000 = 50000 12*10000 = 120000

Rent a pot@ 20 pots in each party 40*1000 = 40000 60*1000 = 60000

Climbers 300*100 = 30000 450*100 = 45000

Processing industry 30000 = 60000

Ornamental Plants 2*300*200 = 120000

Turf (carpet lawn grass) 500*250 = 125000

Prospective income 270000 1310000

Prospective income

Item Income(3rd Year) Income(4rth Year)

Bouquet 15*300*100 = 450000 15*300*100 = 450000

Seasonal plants 60*300*40 = 720000 65*300*40 = 780000

Cut flower & looseFlower for marriage decoration 20*11000 = 220000 20*11000 = 220000

Rent a pot@ 20 pots in each party 100*1250 = 125000 100*1250 = 125000

Climbers 600*100 = 60000 600*100 = 60000

Processing industry = 150000 = 150000

Ornamental Plants 5*300*250 = 375000 5*300*250 = 375000

Bonsai 100*3000 = 300000 100*5000 = 500000

Turf (carpet lawn grass) 1000*250 = 250000 1000*250 = 250000

Prospective income 2650000 2910000

Gross income & prospective profit

1st year income 270000

2nd year income 1310000

3rd year income 2650000

4th year income 2910000

Gross income 7140000

Prospective profit

Gross income 7140000

total expenditure 5846000

Profit 1294000

Year wise profit

income – expenditure profitFirst year - 270000 – 3266000 = - 2996000

Second year - 1310000 – 860000 = 450000

Third year - 2650000 – 860000 = 1790000

Fourth year - 2910000 – 860000 = 2050000

Net worth after first year = - 2996000

after second year = - 2546000

after third year = - 756000

after fourth year = + 1294000

Break-even Analysis

Cumulative cost Cumulative Income

1 year 3266000 27000

2 year 4126000 1580000

3 Year 4986000 4230000

4 Year 5846000 7140000

Industry Analysis

• Future outlook and Trends-

• 1. Important commercial activity in agriculture

• 2. Evolved as viable and profitable alternative

• World Production and Consumption-

• Growing a rate of 10% per year (Production)

• High Demand- Country like Germany, UK, France, Italy

• Production Trend of flowers in India-

Cont…………….Indian Floriculture Industry-

• CAGR- 27%

• TR- US $ 250 million

• Export Opportunity-

• 2006-07- 653 Crore

• 2007- 08 – 340 Crore

• Decreased by 48%

• 2008-09 further decreased by 5.18

Analysis of Competitors –

• Foreign-

• African Countries

• Asian- China, Nepal, Pakistan, Srilanka

• Domestic- Ganga Nursery, SRS Biotech, Nandan Kanan, Sharon Nursery and Many More

Cont………….

• Challenges-

• Low Export Potential

• The performance of Indian floriculture sector has not been encouraging

• High Freight Rates

• Inadequate Cold Chain Management

• Innovation, quality and environmental issues

• Strategies-

• Efficient backward and forward linkage

• Integrated cold chain from harvesting to customers

• Improvement of cargo handling facilities

• Risk Management Strategies-

• The business will use the diversification of species as its main risk management tool.

• Nursery crops are covered by crop insurance.

Market Analysis

Market Segmentation

Geographic's

•Metropolitan area with a population of 200,000 people.

•A 100 mile geographic area would want our services,

•The total target market is estimated at 500,000 people.

Demographics

•Male and Female.

•Age range of 25 to 80 years, with a median age of 40.

•Residential, Homeowners

•Commercial contractors

•Renters

Market Analysis

Our marketing strategy centres around superior performance in the following areas.

• Customer service

• Large selection and fair pricing

• Quality products

Objectives:-

To provide quality products at competitive prices.

To provide consistent quality throughout the life of the business.

To retain customer’s respect.

To provide products for customers that will meet their standards.

Target Market Segment Strategy :-

SWOT Analysis

• Internal Strengths: External Threats:

• The owner has experience growing plants. . Drought

• The owner has a current pesticide license. . Large Suppliers

• The owner has business experience.

• The owner has a truck that will be used for delivery.

• Continued growth of the new housing industry in the target area.

• Internal Weaknesses:

• Wholesale sales will not net as much income as retail sales.

• The owner will need to purchase some equipment.

• Lack of High Technology

• External Opportunities:

• The owner has many connections to the nursery industry .

• High Demand

Existing Rivalry High Many Competitors

High demandMore profit

Bargaining Power of buyer

High

Major AvailabilityNew Business

Low PricePenetration Strategy

Bargaining Power of supplier

Less

LessMany SuppliersOwn Production

Threat of new entrants

Moderate

Establishment in village Establishing strong market linkages and trust among all stakeholders reduces the risk.

Threat of substitute

LessNo other alternative.

Marketing Mix and STP

• Product- Flowers, Ornamental Plants, Bonsai Plants

• Promotion-

• Promotion of the business will be by direct contact with potential customers. This contact

• will begin before plantss are started in the nursery so the business knows the market desires

• before entering the business. This promotional tool will be the most effective and cost effective

• for the business.

• Price- Fair

• Place- Kolkata

• Services-

• Quality Plants

• Free of Diseases

• Desired Quantity

• Supply At Doorstep

• STP

• S- Wholesale, Retail, Customised.

• T- Industries like Jindal, Monnet, Reliance, Corporate Office, Hotels etc. P- High volume with low price

Own Strategies for Success

• Before deciding on species to plant, the owner plans to visit with several businesses in the target area to determine the species they are selling.

• The business is located within thirty miles of the target market. This will enable the target market to have better accessibility to plants when they are needed.

• Because of the time required to produce the trees, the business cannot change products easily. This will make changing products difficult. This will also require the business to thoroughly research the species to be produced. The business must have the foresight to predict what species will be desired in four years. This will make it difficult for the business to expand or contract dramatically or quickly.