A Business Plan on

Haat at your home

PREFACE
This report contains the business plan of fruits and vegetable supply
chain. This is like a map. Starting the business without any plan is same
as a journey without map or guide. Business plan checks the reality and
viability of proposed business. We have tried to justify the project by
analyzing the feasibility of business. This project also includes the
estimation of future income statements, cash flows and break even analysis
as well. The object of this project report is to learn how to write
business plan and how to check the feasibility of proposed business

ACKNOWLEDGEMENT It is really a matter of great pleasure for us to

undertake & present this creative & practical work, a project report on
business development plan. This report has been prepared by keeping in
mind various aspects relating to market condition, financial feasibility
and operational feasibility as well. We undertake this opportunity to
express our sincere thanks to those who guided us in preparing this
report. Finally, we would like to thank our family and friends for their
support and encouragement.

INDEX

Sr.No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Particulars INTRODUCTION PERSONAL INFORMATION PRESENT STATUS & MARKET

POTENTIAL TYPE OF UNIT & SITE SELECTION COST OF PROJECT MEANS OF FINANCE
PRELIMINARY EXPENSES OPERATION PROCESS FACILITIES REQUIRED MANPOWER
REQUIREMENT UTILITIES ADMINISTRATIVE EXPENSES PROJECTED INCOME STATEMENT
PROJECTED CASH FLOWS BREAK EVEN ANALYSIS PROJECT IMPLEMENTATION SCHEDULE
CONCLUSION BIBLIOGRAPHY

INTRODUCTION India is the second largest producer of vegetables in the

world (ranks next to China) and accounts for about 15% of the world’s
production of vegetables. The current production level is over 92 million
MT and the total area under vegetable cultivation is around 6.2 million
hectares which is about 3% of the total area under cultivation in the
country. In case of vegetables, potato, tomato, onion, cabbage and
cauliflower account for around 60% of the total vegetable production in
the country. Vegetables are typically grown in India in field conditions;
the concept is opposed to the cultivation of vegetables in green houses as
practiced in developed countries for high yields.

India is the second largest producer of fruits & vegetables in the world
with an annual production of around 94 million tones. It has the
distinction of producing almost all-tropical and exotic fruits and
vegetables because of varied climatic conditions. Due to the short shelf
life of these crops, as much as 30-35% of fruits and vegetables perish
during harvest, storage, grading, transport, packaging and distribution.
Only 2% of these crops are processed into value-added products. Hence,
there is a need for maximum commercial utilization of fruits and
vegetables and to adapt production and marketing activities to the
requirements of the world market and to cater to domestic demand which,
over the past few years, has been increasing because of various socio-
economic factors. Our proposed business is to channelize the fruits and
vegetables from the market to direct customers through home delivery with
freshness and good quality.

Company Summary : ours will be a company which provides fresh fruits and
vegetables to the customers at reasonable price and at their convenience.
The company will be aiming for customer satisfaction and retention rather
than on expansion and huge growth. The company will be delivering fruits
and vegetables at the door of the customer. Customers in the any part of
chennai city do not have access to the informal vegetable markets and so,
they have to purchase their required produces from the malls and super
markets which sell these fruits and vegetables at higher margins. The
customer also do not mind to pay the extra price for the quality produce
which these retail formats provide. You will find it while standing in the
queue at reliance fresh or big bazaar that people are purchasing their
fruits and vegetables for the whole week or for three to four days and are
paying bills of more than Rs. 500 for their fruits and vegetable
requirements. In this scenario, we will provide relief to the customers
from going and standing in the long queues for their requirements. The
convenience and quality produce will ensure the customers satisfaction and
will be the seed for the company development and growth. Mission: To
become a market leader in fruits and vegetables market in chennai city
within 5 years. Objective: 1. To provide qualitative fruits and vegetables
to consumers at reasonable price. 2. To benefit from eliminating the
limitations of existing traditional supply chain.

PERSONAL INFORMATION

Name: Telephone no.: Date of Birth: Educational Qualification:

Name: Telephone no.: Date of Birth: Educational Qualification:

Name: Telephone no.: Date of Birth: Educational Qualification:

Name: Telephone no.: Date of Birth: Educational Qualification:

PRESENT STATUS AND MARKET POTENTIAL: Basic market Information: Currently

the majority of the fruits and vegetables market is unorganized. Organized
retailers are also there in chennai city but they would not be forming
more than 10% of the total market. Chennai city have wholesale koyambedu
market. Customers of the city expect the quality products at reasonable
price. Existing Fruits and vegetables retailers in the area: There are
major organized players in this area such as Big Bazaar, pazhamudhir
cholai, bigbasket and Reliance Fresh having 3 stores in the area. They
pose a strong competition base for the company. Their sales data during
last year are as follow: Expected Customers and Selected Areas: The
customers will be those people who want to spend the quality time with
their families and expect quality fruits and vegetables at their
convenience. The company is going to serve the major four areas of the
city – north chennai, south chennai, east abnd west chennai. Combined
these areas include around 125000 households. The company is aiming to get
1000 customers initially. Annual Market Need: The annual consumption of
fruits and vegetables in the city can be estimated at around Rs. 2000
crores annually. Scope for Diversification: Ours has huge scope for
diversification in various other products like FMCG and Grains. The
company can also go for online business. Ours also has huge opportunity
for expansion the market base as it will less capital expenditure. We are
also planning to procure the fruits and vegetables directly from the
farmers which will open the flood of opportunity for the company for
trading with

other organized retail stores, wholesale open market operations and easy
expansion for the home delivery model. Though the company has many
diversification opportunities, it will insist more on sticking to the core
business of fruits and vegetables business. The company wants to build a
strong brand for the fresh fruits and vegetables. The expansion of the
home delivery model will be the core focus for the company growth and
expansion. Risk Factor: 1.Ours will have to strive hard to keep the
delivery cost in control. 2. Procurement of the quality products and their
quality maintenance while transit will also require substantial system and
efforts. 3. The price of the fruits and vegetables are very much volatile.
Sudden price increase may couch on the profit margin of the company.
Conclusion: Though there are several competitors in the market of chennai
city, we will be able to achieve success through its core focus on the
product quality and high level of on time commitment.

TYPE OF UNIT & SELECTION Name of the unit: Real fresh Name of our unit
will be () because it is the project which helps customers to get the
fresh fruits and vegetables at their home. Home delivery system is one of
our competitive edges. The system of home delivery will not only help the
customers but it will also help us to reduce the wastage and efficient
purchasing as per the order. Products: Primary product of the company is
fruits and vegetables. It will include all the seasonal fruits &
vegetables, off season fruits & vegetables. Address: We will be operating
in chennai . Type of unit: The co.,will be a partnership firm. The company
will fall under the category of Small Scale industry unit because its
turnover as well as the capital investment in fixed assets is less than
Rs. three crores. Techno economic reasons for site selection: Techno
economic factors must be considered before selection of site because it is
the decision which is irrecoverable in nature and it is very hard to
change the location. There are many reasons for site selection. Our
decision of site selection is based on the following economic reason.
Nearness to customer base Easy for transportation Efficient time
management

Location of Warehouse: . Requirement of land: The basic activity of the

will be to acquire and pack the fresh vegetables and fruits and deliver
it. One warehouse will be taken on rent. The goods will be purchased daily
and there will be no any storage. One warehouse of 10000 square feet will
be enough for above stated activities.

Marketing feasibility
Positioning: Whenever customers need fruits and vegetables, ‘we’ must come
first in their mind first. Ours will be positioned as the fresh fruits &
vegetables provider for on time delivery. Fruits like grapes, strawberry,
blackberry will be cooled at the assortment centre and then will be
delivered. Only qualitative fruits and vegetables will be packed and poor
quality fruits and vegetables will be assorted and sold in the wholesale
market if possible. On time delivery schedule also will be strictly
adhered. Drivers will be negatively reinforced for on time delivery to the
customers. Management concentration will be more on existing customer
satisfaction and customer retention rather than on expansion.
Segmentation: Target segment will be upper middle and upper class people
living in the targeted area. Target customers would be those housewives
who do not want to move around for purchasing fruits and vegetables.
1

Customer Relation: Existing customers would be retained by providing

fresh, hygienic and good quality fruits and vegetables; timely delivery is
also highly insisted for higher customer satisfaction. In case of non
delivery of the goods; those goods will be delivered for free on the next
day. The customers will be allowed to change their order till 10pm.
Competition: We will have competition from Reliance Fresh, Big Bazaar,
Star Bazaar, More Retail Store, local fruit & vegetable stores and fruits
vendors & vegetables venders.

Competitive Advantage: We will be able to deliver goods at the customer’s

home. Home Delivery Model has ensured zero cost in real estate; which will
help to serve customers at lower/reasonable price. Loyal customer base
creation will help for sustainable development/growth.

COST OF PROJECT
Particulars Deposit for warehouse Warehouse development expenses Karat
(300*100) Weight machine(8000*4) Fridge Auto rickshaw carrier (20000*5)
Preliminary expenses Working capital Software & It Computer Telephone
(1500*2) TOTAL Amount in Rs. 300000 50000 30000 32000 70000 100000 60000
200000 30000 25000 3000 900000

MEANS OF FINANCE:
MEANS OF FINANCE Particulars Promoter's contribution (

PRELIMINARY AND PREOPERATIVE EXPENSES:

Particulars Legal expenses Project report preparation Electrification &

water deposits Inauguration expenses & other expenses Market research
Initial advertisement expenses TOTAL

Amount in Rs. 10,000 5,000 10,000 10,000 10,000 15000 60000

OPERATION PROCESS:

Purchasing fruits & vegetables from wholesale Market Making standard sized
packages of fruits & vegetables Packaging as per customers’ orders Loading
of the packages in Vehicles and delivery of the goods Taking orders for
the next day
REQUIRED INFRASTRUCTURE AND FACILITIES Particulars Delivery Vans Karats
Computers Billing Machines Warehouse Chairs Tables Refrigerator Expected
Operational Capacities Delivery Van Karat Refrigerator storage capacity
1000Kg 25Kg 500Kg No. 5 100 1 2 1 10 3 1

Expected Operational Efficiency Average Customer Interaction time at

Delivery Time (Payment 1.5 Minutes collection) Delivery Van Mileage
15Km/Ltr Average customer Packaging Time 1 Minute Average Order Taking
Time (On Phone) 1 Minute Other Assumptions Expected Amount Per Order
Packaging Cost Transport Route of Vehicle (2 Routes for a vehicle per day)
Electricity Units consumed per day Average No. of customers per day

Rs. 100 50p/package 20 Km/Route 20 Units 500

MANPOWER REQUIREMENT:
Sr. No. Particulars Nos. Salary Monthly (in Rs.) A) Warehouse staff
Supervisor Packing staff cum delivery man B) Office staff Clerk/typist
Accountant C) D) Purchase staff Drivers Total 1 1 3 5 3,000 6,000 27000
30000 93000 36,000 72,000 324000 360000 1272000 1 5 10,000 30000 120000
360000 Yearly (in Rs.)

UTILITIES AND OVERHEAD:

AMT. IN RS. Particulars Rent Transportation (inward carriage) Electricity
Miscellaneous TOTAL Monthly 30000 15000 3500 Yearly 360000 180000 42000
10000 592000

ADMINISTRATIVE EXPENSES:
Sr. No. 1 3 4 6 7 Particulars Stationary and printing Telephone and fax
Legal charge Travelling Miscellaneous Total Monthly 1,000 5,000 5,000 9000
Yearly 12,000 60,000 60,000 108000 10,000 250000

Note: 1. Travelling expense includes fuel expense of the person collecting

orders and taking feedbacks.
RAW MATERIAL REQUIREMENT:

Particulars Fruits & Vegetables

Amt. in Rs. 1,05,88500

DEPRECIATION:
Particulars Refrigerator (@ 10% on Rs. 70,000) Karat ( @ 50%) Computers
(@25%) Weight machine (@ 33.33%) TOTAL Amt. in Rs. 7000 15000 6250 10667
38917

SELLING & DISTRIBUTION EXPENSES:

Particulars Outward carriage Delivery expenses (fuel cost) Vehicle rent
(5000*5) Packing expenses TOTAL 20000 25000 6000 240000 300000 72000
612000 Monthly Yearly

Assumption: 1. Packaging expense will be 50 paisa per order.

INTERST CALCULATION:
PROJECTED INCOME STATEMENT
Years Particulars Sales revenue Less:- expenses Cost of goods sold
Depreciation Repairs& maintenance(vehicle) Salaries & wages Administrative
expenses Selling & distribution expenses Interest Advertising expenses
Warehouse expenses Wastages Total expenses PBT Income tax @ 30% Net profit
10588500 38917 21600000 77834 43200000 155668 86400000 311336 172800000
1122672 1 18000000 2 36000000 3 72000000 (in Rs) 4 144000000 5 288000000

20000 1272000 250000

40000 2544000 400000

80000 5088000 640000

160000 10176000 1024000

320000 20352000 1638400

612000 50000 150000 592000 500000 14073417 3926583

979200 40000 300000 888000 850000 27719034 8280966

1566720

2506752

4010803.2

600000 1332000 1445000 54107388 17892612

1200000 1998000 2456500 106232588

2400000 2997000 4176050 209816925

37767412 78183074.8

1177974.9 2484289.8 5367783.6 11330223.6 23454922.4 2748608.1 5796676.2

12524828 26437188.4 54728152.4

Assumptions: 1. Company aspires to grow at 100% growth rate y-o-y. 2. Loan

will be paid in the second year fully. 3. Salary and wages will be
increasing at 100% y-o-y.

4. Administrative expenses will be increased at 60% due to increase in the

span of operation. 5. Wastages will be increasing at 70% on y-o-y basis.
6. Company will increase advertisement expenses at 100% on y-o-y basis. 7.
Volume of the orders has been considered instead of the individual items.
8. Gross margin rate is considered to be the same. 9. Additional
Refrigerator, karats, computers, weighing machine will be purchased every
year due to higher capacity requirements. 10. Company office will be
opened in the fifth year. PROJECTED CASH FLOW STATEMENT:
Years Particulars Sources Promoters contribution Loan from SIDBI Cash flow
from operating activity Total Applications Cost of project Preliminary
exp. Increase in assets Repayment of loan Increase in working capital
Total Net cash flow 1060000 2687525 100000 900000 60000 157000 400000
400000 957000 4917510 600000 757000 800000 957000 1000000

BEP CALCULATION:
Particulars TOTAL REVENUE LESS:- VARIABLE COST Cost of goods sold
Transportation Delivery expenses (fuel) Packing expenses Wastages Total
10588500 180000 240000 72000 500000 11580500 AMT. IN RS. AMT. IN RS.
1,80,00000

CONTRIBUTION LESS:- FIXED COST Administrative expenses Salaries & wages

Vehicle rent Depreciation Repairs & maintenance Electricity Interest
Miscellaneous expenses Advertisement expenses Warehouse rent Total 250000
1272000 300000 38917 20000 42000 50000 10000 150000 360000 2492917

PROJECT IMPLEMENTATION SCHEDULE:

PROJECT IMPLEMENTATION SHEDULE Particulars Product selection & completion
of market survey Project report preparation Site selection Selection of
vehicle & customization Warehouse development Recruitment of manpower
Sales arrangements No. Of days required to implement project DAYS 10 5 10
10 15 5 3 58
CONCLUSION

Looking at the overall business plan we can conclude that, as far as the
need of the consumer is concern, it can be satisfied with the help of this
business model. Freshness is the aspect which matters as far as the fruits
and vegetables are concerned. This model emphasizes home delivery system.
The challenge for this model will be inventory management, effective
procurement and waste reduction and cost reduction. As far as the
profitability is concerned, this project is very lucrative and attractive.