Mushroom Mavens-Body of the Plan

8/10/2019 Mushroom Mavens-Body of the Plan

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The project is a down-to-earth one; no ivory tower is there and no Dutch courageis needed. Its all about mushroom- its cultivation and marketing where investment isextremely possible minimum. o down time exists here! as the state o" art technology isnot needed. #ven its neither a capital intensive one. The project is aimed at "ul"illingwith the very number one basic need i.e.! "ooding along with the ex gratia! nutrition!

staying at the heart at the agriculture sector! the mother o" all industries. The projectedoutcome is that by investing $DT %!&&&!&&&.&& 'e(uivalent o" )*+ ,!/0.&1! netincome would be $DT 2/!3,!33.&& which states about &4 56I without anysubstantial variation! due to the existence o" antithesis relationship in between risk andreturn 'because! here risk is at rock-bottom but the return is sky-rocketing1.

Quality Mavens INC, LLC 'proposed1 plans to produce and market mushrooms in$angladesh! a country with a conducive climatic condition "or the cultivation o"mushrooms. In $angladesh due to escalating population growth! land to man ratio isdecreasing every year. 7s a result! the land available "or cultivation o" vegetables isdecreasing. These circumstances create a potential market "or mushrooms! a vegetable

with high nutritious value in it. The price o" vegetables is skyrocketing and it is gettingbeyond the reach o" the common people. This inade(uate consumption o" vegetables hascreated malnutrition in the general public. In such a situation! the cultivation o"mushrooms would not only bring pro"it "or the company but also meet the needednutrition "or the people o" the country. 8oreover! the $angladesh 9overnment is alsoproviding a tax holiday "or entrepreneurs cultivating mushrooms. The government andprivate banks are o""ering loans to encourage entrepreneurs to be engaged in mushroombusiness. 7 "ew companies are producing mushrooms "or export! however! "or the localmarket; there are an insigni"icant number o" producers. There"ore! the main objective o"this company would be to pro"itably serve the people o" $angladesh! who are su""ering"rom malnutrition due to the inade(uate consumption o" vegetables.

The main challenge o" the company will be to position mushrooms as a high(uality and high value-added alternative vegetable in the local market. To achieve this! aheavy promotional campaign will be undertaken. In the "irst two years! this campaignwill be concentrated only in Dhaka district. The company gradually will extend to otherdistricts such as :hittagong! *ylhet! 5ajshahi! hulna! and $arisal. The company willalso populari


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Mushroom Mavens INC, LLC

Company Overview

The name o" the company will be =Mushroom Mavens INC, LLC. Thecultivation plant o" the company will be located at >ayat-kar-:hala village o" the *hripurpolice station in 9a


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Objectives

The main purposes the companies are to

serve the customers with top (uality mushrooms!

set-up cultivation plants throughout the country!

establish an extensive distribution channel so that mushrooms o" thiscompany will be available throughout the country!

improve the livelihood o" the rural people by employing them in the

cultivation plants.

Guiding Philosophy

8ushroom 8avens I:! ??: places the customers at the heart o" its allactivities. It pledges to cater its customers with top (uality mushroom! timely delivery!and superior service.

The company asserts that employees are its internal customers and they are theones who are the main means in provision o" (uality products. >ence! it would providethe employees with a sa"e and congenial working environment and above-averageindustry wages.

The company believes that provision o" (uality products re(uires an earnestinvolvement o" the all parties in the distribution channel. Thus! it would treat thedistributors and vendors "airly and would ensure a "air return "or them.

The company also believes that taking care o" the natural environment would

ultimately end up helping the society as well as its business. >ence! it takes the oath toconduct its business in a manner "riendly towards the environment. 8oreover! it promisesto be engaged in environment enhancing activities such as tree plantation.

?ast but not the least; the company declares that it must earn a "air return on theinvestment o" its owners.

Industry Overview and Analysis

The commercial cultivation o" mushroom was "irst started in #urope in the

beginning o" the &th century. 7"terwards it spread to the other countries. In the ancient9reek! 5oman! and Indian cultures! mushrooms have been considered a delicacyassociated with the royal class.

8ushroom cultivation in $angladesh is a recent development. The 9overnmento" $angladesh is promoting the culture o" mushrooms to a large extent. *cienti"icmushroom production in $angladesh started in the late 2,@&s by volunteers "rom Aapannamed =6verseas :o-operative BolunteersC. In the early 2,0&s! commercial mushroom

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cultivation was initiated by the $angladesh 7gricultural 5esearch :ouncil when a8ushroom Development :entre '8D:1 was established at *avar! Dhaka. Thecommercial production o" spawn packets o" oyster mushroom started in 2,0,. 6ver time!production increased "rom one metric ton '8T1 in 2,0,,& to "ive 8T in 2,,2,. Today!there are three mushroom culture centers in the country. The "irst one was established in

8D: at *avar. The other two are situated in 8ymensingh and Dinajpur. These culturecenters mainly train people on mushroom cultivation and also provide mushroomgrowing bags containing EmyceliumE 'growing media1 inoculated with mushroom spawn.The cultivators need to germinate the spawns and later harvest the mushrooms.

There is an active interest among local industrialists to commercially producemushrooms with a view to processing mushrooms "or export. 8ushrooms generally arenot considered as a part o" the regular diet in this country. :urrently! mushroomsproduced on "arms are locally marketed. 8ushrooms are supplied to hotels! :hineserestaurants! and markets in close vicinity to the residence o" "oreigners. 6ne agro-processing company also exports mushrooms to #uropean markets. $esides! only a "ew

individuals cultivate mushrooms upon receiving training on mushroom cultivation.>owever! most o" them cultivate mushrooms as a hobby! rather than a business.

Market Overview and Analysis

8ore than /&4 o" the people o" $angladesh live below the international povertyline. Fhile agriculture remains the main source o" income "or around 0&4 o" the people!the countrys per capita arable land stands at &.2 hectares. There"ore! there is limitedland available "or the cultivation o" vegetables. 8oreover! a population growth rate o"2.@4 per annum is also reducing per capita land holding o" the country. It is obvious thatwith the increasing population! the countrys cultivable land area cannot meet up with thedemand "or vegetables. The price o" vegetables is also very high. Thus! there is a big gapin between the supply o" and demand "or vegetables! which can be pro"itably met byintroduction o" mushrooms.Potential Customers

The company will cater to both business and individual customers.

Business customers

7ll hotels and :hinese restaurants o" the country are the potential businesscustomers "or mushrooms. These customers will be the bulk buyers "or this product. Thissegment is very important to make a pro"it "or this company. There"ore! the company willmaintain good relations with these customers through instant delivery to ensure theirretention.

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Individual customers

Individual buyers would be the other customer segment "or this company.7ttention will be given to the homemakers o" the urban areas who are very concernedabout the health condition o" their "amily members. The economic status o" this segment

would comprise the middle or upper middle class. The "ollowing Table 2 displays thevariables that will characteri


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however! also supply "resh mushrooms to the above-mentioned retail stores. Thecompany producing commercially and the individual cultivators purchase the spawn "romthe 8D:. The average purchase o" spawn by the company at *avar is not more than &&&bags per month. The average purchase o" spawn by individual cultivators is around &spawn bags per week.

There has not yet been a well-established distribution channel "or mushrooms.The company at *avar and the individual cultivators supply to the retail stores based onorders.

Operational Plan

Product Overvie

7 mushroom is the "ruit o" a "ungus. Its purpose is to disperse spores! microscopicsingle cells that can grow into new "ungi. The "ungus looks like a series o" branchingthreads in"iltrating the soil or lea" litter! or in the wood o" living or dead trees. Thesehigher fungi! which produce mushrooms! consist o" many cells. There are di""erent typeso" mushrooms available in this country. The climatic and other environmental conditionso" $angladesh are extremely suitable "or the production o" oyster mushrooms. There"ore!the company has selected this type o" mushrooms to produce in its plant.

$acilities and Plant

The company will establish a 00!&&& s(uare "oot plant in >ayat-kar-:halavillage o" *hripur district! which is located close to a paved road. >ere! the price o" landis very low compared to other places. The labor is also cheap in this locality. The plantincludes the production plant! drying and storing house! and an o""ice building. Inaddition! the company will also locate a sales centre in awran $a


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Production houses (Mushroom houses)

Gorty "our mushroom houses will be built. #ach s(uare-shaped house would havean area o" 30& s(uare "eet. Initially! houses will be built. Then! over a two year period!the total number o" houses built would be increased to "orty "our. The walls o" these

houses will be made o" bamboo and the roo"s will be thatched with =9olpataC! i.e. leaveso" the mangrove plants. $esides! the houses will have trees towering over them. Thus! there(uired temperature will be maintained. #ach house will have an ade(uate ventilationsystem. It will be e(uipped with bamboo-made racks and each rack will have @ shelves.6ne house will be capable o" accommodating 2%2@& spawns 'each rack can house /,&spawns1. Gigure shows the layout o" a mushroom house "or the company.

rying and storehouse, office!room, and trans"ortation

6ne house with an area o" 2&&& s(uare "eet will be built. There will be two rooms!one to be used as the drying room! which will be e(uipped with electric bulbs! the otherto be used "or storing packaged dried mushroom. There will be a semi-brick built o""iceo" three rooms with a kitchen. The manager and the agriculturist will share this o""ice. 7llthe records o" the plant would be maintained here. In addition! the company will have onepickup van "or transporting mushrooms "rom the cultivation plant to its sales center inDhaka.

%&uipment and machinery

The capital outlay is very insigni"icant. The company will only need a laminatingmachine "or packaging.

Production Process

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"t. "t

"t

3. 3. 3."t "t "t "t "t

2. "t

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Gigure K The layout o" a mushroom house.


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The company will collect poly bags called =spawnC "rom 8D:! *avar. *uch bagsinclude EmyceliumE 'growing media1 innoculated with mushroom spawn. 7"terplacingplanting these bags on the racks o" the mushroom house! harvesting can becompleted on an average o" 0 days. >arvesting is done at the early stage o" L"ruiting just

be"ore the spreading o" umbrella like "ruit body. 6yster mushrooms begin to growthrough holes in the poly bag and "orm a cluster. 8ushrooms can be harvested over threemonths a"ter plantation. 7"ter harvesting! part o" the produced mushrooms will bepackaged "resh and sold immediately. The rest o" the produce will be dried by the heat o"electric bulbs or sunlight. The dried mushrooms will be packaged in airtight poly bagsand stored. These would be sent later to the companys sales centre.

'esearch and (evelopment

The company would maintain a close relationship with the 8ushroom

Development :enter '8D:1! at *avar! Dhaka! to be abreast o" the recent developments inresearch and development o" cultivation o" mushroom at home and abroad. 7lso! thecompanys own agriculturists will constantly observe its cultivation plants so as toincrease production and to ensure (uality.

)uality #ssurance

The production o" (uality mushrooms re(uires a high level o" competence andskill. The principal management "actors that draw attention are temperature monitoring!watering! carbon dioxide monitoring! humidity control! air movement and hygiene! pestand disease control. The manager and labourers o" the plant will be provided training onthese aspects. 8oreover! an agriculturist will be employed to constantly monitor themushroom houses. :are"ul attention would be given to cleanliness and air-tightnessduring the packaging o" the product.

Marketin Plan

Mar"eting Objectives

8aintain positive! steady growth each month.

#xperience an increase in new customers who are turned into long-term

customers. 9enerate brand e(uity at the current individual consumer market as well as

within the business customers market.

Mar"eting Strategy

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8arketing strategy entails discussion o" product! target market! the plannedproduct positioning! and sales! market share! and pro"it goals "or the "irst "ew years. Thisplan speci"ically discusses these issues "or the "irst two years.

Product

7s mentioned earlier! the company would cultivate only oyster mushrooms. It willsell these mushrooms both "resh and dried. $oth "resh and dried mushrooms will bepackaged in polythene bags. The package will also display the logo o" the company.7ccording to 8D:! this type o" mushrooms consists o"-

Hrotein -/4Bitamin M 8ineral @-%&4Gat &3-&%4:arbohydrate &-&%4

Thus! the attributes o" this mushroom and the consumer consumption bene"its can bedisplayed in the product laddering as "ollows.

Price

7 cost-plus pricing strategy will be adopted to set the price o" the product. 7s theeconomy o" the country is weak! the common people will not be able to purchase theproduct at a high price. $esides! 8ushroom 8avens I:! ??: aims to be the marketleader o" this industry by establishing a higher (uality product at lower price. This willrestrict the entry o" new competitors and de"eat "oreign competitors in the market. 7 &4average unit 'kg.1 pro"it margin would be achieved by pricing "resh mushroom at Tk.2&per kg and dried mushroom at Tk.& per kg. These (uoted prices are lower than the

,

Hrotein-$uilds 8uscles

Balue 7ttributes:onsumer consumption bene"its

-Hrotects "rom diseases-$uilds bones-8ake bones stron

-Hroduces heat M energy- *moothens the skin

-Hroduces energy to work

6yster 8ushrooms Bitamin Mmineral

Gat

:arbohydrate

Gigure /K The product laddering o" oyster mushrooms


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existing market prices! i.e. Tk.2/&-2&kg "or "resh mushroom and Tk.kg "or driedmushrooms.

(istribution

The company will establish an extensive distribution channel "or mushrooms tomake it available throughout the country. It will build six distribution centers in the sixdivisions o" $angladeshK Dhaka! :hittagong! *ylhet! 5ajshahi! hulna! and $arishal.Grom these distribution centers! the sales representatives will supply the mushrooms todi""erent retail shops 'small and mega1 on the basis o" their demand. The small vegetabletraders will purchase mushrooms directly "rom the distribution centers. 6n the otherhand! the business customers such as hotels and :hinese restaurants will place order 2days prior to delivery and the company will supply them directly "rom the cultivationplant. The "ollowing "igure shows the distribution channel o" the company.

Gigure 3K Distribution channel o" mushrooms

Product Promotion

Positioning

8ushroom 8avens I:! ??: plans to position itsel" on the "ollowing basesK

>igh-(uality producer

Hrovider o" good value "or money

?ocal producer

5eliable partner o" all stakeholders

#dvertising, $rade "romotion, and %airs

The retail shops selling mushrooms will be decorated with attractive posters o"mushrooms indicating the availability and containing the in"ormation about the bene"its

2&

Hroductionplant Distribution

centers

5etail shops'small M mega1

?ocalvegetabletraders

:onsumers

:onsumers$usinesscustomers


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o" mushroom consumption. ?ea"lets will be distributed to the consumers through thenational daily newspapers. The lea"lets will contain the consumption bene"its andcooking process o" mushroom. In the "irst two years! such campaign would be conductedonly in Dhaka division. 7"terwards! when the company moves to other divisions! similarcampaigns would be conducted there as well.

The retail shops and local vegetable traders would be provided with a tradediscount. 8oreover! retail shop salespersons and vegetable traders would be handed outT-shirts displaying the companys logo as part o" the motivational techni(ue.

The company will participate in trade "airs. The stalls will serve the visitorsseveral kinds o" "ood! pickles etc made "rom mushrooms. Gree cooking recipes! and "reemushroom sachets will also be provided as part o" the sales campaign.

7s the company targets the rural as well as the urban market! it will launch radioadvertisements and word-o"-mouth communication will be spread with the help o"

re"erence groups such as the imams! doctors 'rural1 and teachers. It will also provide "reesamples to this re"erence group "or promotion.

Customer Service

The company believes in relationship marketing. There"ore! it wants to build ali"etime relationship with its customers. This will be achieved by paying attention to thecustomer needs. Thus! the company will provide its phone numbers to the customers sothat! they can promptly in"orm about any o" their demands or complaints.

7s it is a new kind o" vegetable introduced to the market! people will be verymuch con"used about preparing "ood items with mushroom. There"ore! the company willalso train and advice customers on preparing "oods containing mushroom. 7 book o"recipes o" exotic "oods prepared with mushroom would be distributed in the urban areas.

Mar"et 'esearch

The company plans to undertake market research as a regular activity. 7 verypotent way o" dynamic market research is a "eedback mechanism based on a suggestioncard system. The company would embrace this system. It contains several statementsthat customers are asked to rate in terms o" a given scale. There are also several open-ended (uestions that allow the customer to "reely o""er constructive criticism or praise.:ustomers who will be provided "ree sample o" mushrooms will also be re(uested tocomplete the suggestion cards and to return them one week later. 8ushroom 8avens willwork hard to implement the reasonable suggestions o" these customers in order toimprove its service o""erings as well as to show its customers that their suggestions arebeing valued.

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S!O" Analysis

Strengths

%ood value of mushrooms

8ushrooms contain :hitin! a non-soluble protein that precipitates bile in the large

intestine so that the bile is eliminated"rom the body instead o" beingreabsorbed! "orcing the body to makenew bile. It does this by breaking downcholesterol! and improving cardiachealth. Traditional :hinese herbalistsknew o" this e""ect "or centuries. Theyalways argued that eating mushroomscleans the arteries. Gor the most part!these health bene"its center on thee""ect these mushrooms can have in

enhancing and bolstering the immunesystem. :ontained in the cell walls o"many medicinal mushrooms arecompounds that interact with the bodyNsimmune system! helping to modulateand enhance it.

:ancer treatments that employ thecompounds extracted "rom medicinal mushrooms have shown tremendous e""ect onsurvival rates and disease "ree rates "or patients. >owever! it is also being investigatedthat these mushroom species can be considered to be e""ective in alleviating the e""ects o">IB7ID*. 7s mushrooms have a great "ood value the consumers will accept it veryrapidly.

Pioneer com"any

There is no mushroom company which produces purely "or the domestic

consumers. There"ore! 8ushroom 8avens I:! ??: will be the pioneer o" the marketand it will be easy "or it to build a position in the mind o" the consumers.

La&or!intensive

This business does not re(uire a large amount o" capital. It is mainly labor

intensive. It does not re(uire a lot o" land! e(uipments or machinery. 7 simple croppinghouse! built "rom locally available material is ade(uate. *u""icient watering o" thecropping house provides the moisture level re(uired to trigger mushroom "ruiting.

2

Increase

libido

:ontrol blood

pressure

:hitin

Diabetes

protected idney

tonic

?owercholest

erol

:ardioBascul

ar

Immune

enhancer

7ntitumor

7ntiBiral

8ushroom

Gigure K 8edicinal Balue o" 8ushroom


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'overnment facilities

The 9overnment o" $angladesh is encouraging the business people to invest inagro-business. It is also providing di""erent types o" loan "acilities "or these types o"programs. There"ore! it will be easy "or the company to obtain loans and thus to expand

the business.

*ea"nesses

Image of the "roduct

In the local market many people believe that mushrooms are a poisonous thingand that it is not edible. This image o" the core product is a major weakness o" thecompany.

Consumer illiteracy

7s it is a new product and consumers have a negative image about mushrooms! itwill re(uire educating the consumers about the bene"its o" mushrooms.

Price

7s high costs are involved in the production process o" mushrooms! the price o"this product is much higher than o" general vegetables. There"ore! it will not be possible"or the company to serve the lower income groups in the beginning stage.

Opportunities

"and the "roduct line

7t the very beginning the company will just produce oyster mushrooms but it willhave the opportunity to produce other types o" mushrooms in di""erent seasons. It willalso be possible to grow the other types o" mushrooms by creating an arti"icialenvironment using technology.

"and the mar*et

I" the company can educate the rural consumers through a heavy promotionalcampaign! it will be able to expand its market to a large extent. The company also has thepotential opportunity to export mushrooms to other countries.

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$he "roduction of s"a+n

In initial "ew years the company will be dependent on the government agency "orspawn. $ut in three to "our years! when it has accumulated earnings! it can buy thetechnology "or production o" spawn itsel". $esides! as raw materials "or production o"

spawn such as sawdust! grass straw! mai


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"alls much lower "or a period longer than % days! electric bulbs would be lit up inside thehouses to keep it warm. This measure would be very costly to operate.

To tackle the second barrier! the company would keep abreast o" the developmento" diseases or pests o" mushrooms at home and abroad. I" the company observes any

anomalous change in any mushroom spawn! it would immediately separate the troubledspawn "rom the rest and would send it to the 8ushroom Development :enter at *avar!Dhaka "or investigation and report.

In the event o" a prolonged transportation strike all the yield o" mushrooms wouldhave to be dried up. *ince "resh mushrooms bring more pro"it than dried mushrooms!such event would lower the pro"it "or the company.

'uman #esource Stratey and Plannin

The three "ounding owners will supervise the entire operation o" the companyuntil a general manger '981 is recruited and appointed. The 98 will be providedtraining on the cultivation o" mushrooms! and the accounting systems o" the company.The 98 would be responsible "or supervising cultivation and sales activities. *he wouldalso be responsible "or executing promotional campaigns to achieve target sales. *hemust be a business graduate with previous experience in managing business in a similarcapacity.

The company will also recruit a manager! an agriculturist! "ourteen labourers! twosecurity guards! and a cook "or its cultivation plant. The manager will supervise theactivities o" the entire plant. *he will also hold the whole husbandry. Thus she must be

at least a business graduate with a "ew years o" previous experience o" supervising! andkeeping accounts. *he must also be a computer literate with skills in using 8*-word!spreadsheets! and accounting so"tware. The manager would be provided with training onthe cultivation o" mushrooms! and the accounting systems o" the company. Theagriculturist will work under the manager. *he will serve as an operations and (ualitycontrol manager o" the plant. *he will also conduct 5MD activities to increase theproduction and to ensure the (uality o" the mushrooms. 8oreover! she will train andsupervise the labors in taking care o" mushroom spawn! harvesting and packagingmushroom. In case no competent agriculturist can be recruited! the Thana 7griculture6""icer will be engaged on a part time basis "or the job. Gourteen labourers will work intwo shi"tsK seven in the "irst shi"t '0K&& am to 3K&& pm1 and the rest seven in the second

shi"t '2&K&& am to %K&& pm1. The labourers will have at least primary schooling so thatthey can understand directions. These two shi"ts will ensure that mushroom spawn getproper watering early in the morning as well as late in the evenings. 6ne o" the securityguards will work "rom %K&& am to %K&& pm and the other will work "rom %K&& pm to %K&&am. The job o" the security guards would be to protect the mushroom houses "romanimals and humans. The guards must also have at least a primary education. The cookwill serve tea and biscuits once a day to the plant sta"". *he will also cook "or themanager and agriculturist! at least one o" whom would reside in the plant o""ice.

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In the sales center! one manager! one accounts o""icer! and one sales representativewill be employed. 7 driver will be recruited "or the pick-up. The manager o" sales centerwould supervise sales activities. *he would establish contacts with the restaurants andretail stores to sell mushrooms and execute promotional campaigns. *he must be abusiness graduate with previous experience in selling. The accounts o""icer must be abusiness graduate in accounting with skills in utili


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6ne percent o" the revenue "rom both "resh and dried mushrooms will beexpended to provide trade discounts and "ree samples. Gresh mushrooms will be sold outimmediately a"ter its production while 24 o" the produce o" dried mushrooms will be ininventory. Twenty percent o" the "resh mushroom will be sold on credit with an averagecollection period o" receivables o" 0 days. The dried mushroom will be sold 2&&4 on

credit with an average receivables collection period o" 2& days. The advertisementexpenses "or year one and year two is expected to be 4 o" the net revenue o" therespective years.

The pro"it o" the "irst and the second year will be completely retained in thecompany! i.e. there would be no dividend paid to the owners. In the end o" the "irst year!an amount o" Tk.2!&&&!&&& will be invested in GD5 and I:$ investment port"olio. Theaverage annual interest yield "rom such a port"olio is expected to be 2&4. In the end o"the second year! an amount o" Tk.2@!&&&!&&&! which includes interest income o" thesecond year "rom the port"olio! would be reinvested in the same port"olio. The investmentin government securities would help the company enjoy a tax holiday. In the third year!

the company plans to establish sales centers in :hittagong and *ylhet. The retainedearnings would provide su""icient "unds "or this purpose. The company would not be"orced to borrow. >owever! the company would maintain a good relationship with thecurrent loan providing banks through regular repayments. This relationship would helpthe company out! in case o" a sudden need "or external "unds. '*ee appendices 27! 2$! !/! 37! 3$! 7! $! :1.

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Documents

Mushroom Mavens-Body of the Plan