1

An Entrepreneurship Project

Mushroom Production House

Submitted to: SIR IMRAN ALI Submitted by:

Babar Rashid Zeeshan Ahmad Umer Hayat

: : :

(CIIT/SP09-MBE-011/LHR) (CIIT/SP09-MBE-068/LHR) (CIIT/SP09-MBE-027/LHR)

COMSATS Institute of Information Technology Lahore

DEDICATION

WE DEDICATE THIS HUMBLE EFFORT TO The Holy Prophet HAZRAT MUHAMMAD (P.B.U.H) The greatest Social Worker, Whose every tear was for The Cause of humanity
And also dedicated to

The unfathomable love, unflinching support untiring midnight prayers and steadfastness of

OUR BELOVED PARENTS

Who has been a beacon house for us for the whole of our life, who has always showed us the right path, the path of truthfulness and honesty and who has been along with us throughout our Studying Carrier.

Acknowledgements
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God never spoils any effort; every piece of work is rewarded according to the nature of devotion for it. We are extremely thankful to ALLAH ALMIGHTY who, in spite of numerous difficulties, vicissitudes and acute frustrations enabled us to probe the present study and dissertation. We bow our head to ALLAH ALMIGHTY for the buntings and the blessings that He has bestowed upon us, who has given us the courage and stamina to come up to the expectations of our revered teachers and ever loving parents and to sum up my maneuverings for the completion of this manuscript. All the respects are for the last Prophet of God, HOLY PROPHET MUHAMMED (Peace Be upon Him), Who is the greatest scientist of all the ages, whose moral and spiritual teachings enlighten our heart, mind and soul and flourished our thoughts towards achieving higher ideas of life. We deem it utmost pleasure to avail this opportunity to express the heartiest gratitude and deep sense of obligation to our revered Teacher Sir Imran ALi, Lecturer, Department of Management Science, COMSATS, Lahore for his skilled guidance, keen interest, constructive criticism, constant encouragement, valuable suggestions and pains taking supervision throughout the course of our study and research work. The work presented in this manuscript is accomplished under his dynamic, skillful, affectionate guidance and generous transfer of knowledge. Whenever we sought help from him, he was the person who was always there bearing a welcoming smile on his face and having the doors of his good offices always opened for us. We have learnt a great deal from him.

Table of Contents
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Sr. No 1 2 3 4 5 6 7 9

Contents Executive Summary Company Products & Services Industry Analysis Market & Strategies Marketing & Operations Management & Organizations Financial Section References

Page No 5 7 11 14 16 24 28 45

Executive Summary
==================================================================== 1.1- Executive Summary With the rising costs of basic foods required for survival, is an emerging issue. One estimate puts malnutrition in Pakistan at 30%. The long-term effects of this situation are that, the incidence of various

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diseases and medical conditions such as poor development of brain cells leading to reduced IQ levels. This situation, though alarming, can be readily remedied at a very reasonable cost. In fact a profitable venture, with potential for foreign exchange earnings, can be established at very little cost. This venture is the growth; consumption, and potential export of mushrooms.

Mushrooms are a rich source of proteins; carbohydrates; valuable salts and vitamins. Their nutritional value lies between meat and vegetables. They have been equated with muscle proteins and are called vegetable meat. Thus mushrooms provide a high protein, low caloric diet and are very valuable as a nutritional supplement. They are highly recommended for heart patients. All essential amino acids required by an adult are present in mushrooms. Not only appetizing, mushrooms have the ability of converting nutritionally valueless substances into high protein food.

The key benefits of our business plan are as follows: 1. Create new employment. 2. An attempt to control the food crisis. 3. Generate economic flow in the poor communities. 4. Proper usage of organic waste. Mushroom Production House is engaged in the production of fresh Mushroom at small scale in the city of Faisalabad. Mushrooms are the fruiting bodies of macro fungi. They include both edible/medicinal and poisonous species. We are going to produce edible mushroom at domestic level, with the extension of our business. We will move towards national and international level. Edible mushrooms once called the food of the gods and still treated as a garnish or delicacy can be taken regularly as part of the human diet or be treated as healthy food or as functional food. It is the best alternate of meat. This business can be started with minimum resources and with minimum man power. Our mission is to produce, market and sale the mushrooms.

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Our target customers are Fast Food Restaurants, Mega Stores, Vegetable Store, and Chinese Restaurants we may further precede to Pharmaceutical Companies and Dyeing Industries. In our business we are cultivating two types of mushroom species. First one is OYSTER and second one is BUTTON mushroom, because both have the excessive demand in aforementioned markets. We are supplying fresh as well as caned mushroom in the market according to the market demand. Our corporate strategy is cost leadership. Further we are focusing on direct marketing channel considering the nature of our product. We are using different marketing channels to promote our mushroom products and to build awareness in general public. We are using FM radio, print media, road shows and other electronic media. The mushroom cultivation process requires some technicalities because it is perishable product and its preservation period is about one to two weeks. In production process first we prepare the compost with clay, gypsum and urea. The next step is spawning, after spawning twenty five to thirty days is required for fruiting or Oyster mushroom and two to three months is required Button mushroom fruiting. The production of mushroom is profitable business. It requires low cost to start and gives enormous amount of profit. With this business we can earn considerable profit with minimum duration. So there is lot of opportunities for growing this business and to capture new markets at local as well as at international level.

Company Products and Services

========================================================================= 2.1 Product Concept:

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An edible mushroom is a delicacy relished as popular but costly food. In the developed countries, mushrooms have become one of the most important of all the horticultural crops. The production of mushrooms is increasing rapidly throughout the world, which is available all the year round and is used in many kinds of table dishes. 2.2 Description: There are about 6000 different species of which at least 1290 are reported to be edible. Mushrooms are normally found in Swat and Kaghan and other hilly areas are annually exported to foreign countries. Mushrooms are used as food as well as medicine since time immemorial. The edible variety contains a high percentage of protein, all indispensable amino acids, and vitamins B-complex and other biochemical compounds. This vegetable is also a food source of dietary fiber whose quantity present is much higher than the crude fiber. 2.3 Features and benefits to users: The protein value of mushroom is double that of cabbage, potatoes, four times that of tomatoes and carrot and six times that of oranges.

low in calories (l3kcal per 100g when raw) low in fat and salt and have no cholesterol a good source of minerals, especially potassium a good source of vitamins, particularly B vitamins The white cap mushroom ranks above all other vegetables, except beans and peas in this respect. Between 70-90 per cent of the vegetable protein present can be easily digested.

Mushrooms also make the use of pulses, beans and peas in vegetarian cookery more palatable and enjoyable

2.4 Opportunities for Further Development: We are going to produce edible mushroom at domestic level, with the extension of our business. We will move towards national and international level.
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The production of mushroom is profitable business. It requires low cost to start and gives enormous amount of profit.

With this business we can earn considerable profit with minimum duration. So there is lot of opportunities for growing this business and to capture new markets at local as well as at international level.

We are currently operating in Faisalabad and will further expand our business in Lahore and MultanMarketing Marketing is the most important consideration of all. If you cant sell your mushrooms at a price that ensures a reasonable profit margin, you dont want to invest in this enterprise. Spend some timeand even some moneyeducating yourself about marketing your potential product. 2.5 Market Research The goals of market assessment are to project the sales volume and gross income of a new enterprise, to analyze its potential profitability and cash flow, and to gather information about potential buyers and competitors (to help develop a market strategy). Many specialty mushrooms can be cultivated, but the market, though growing, is still limited. If you are thinking about starting a commercial mushroom enterprise, begin at the end: to whom will you sell them? You cannot make money in any business if you dont have buyers for your product. Learn who buys mushrooms, what kinds they want, and where they shop. You must thoroughly investigate the demand for each mushroom species or product as well as the available marketing outlets before committing large amounts of capital to the enterprise. Check the local situation on your own. Some common methods for conducting initial research include observation of buyers, surveys of stores, personal interviews with growers, and test marketing (once you have an experimental product). Another function of market research is to evaluate the competition. This will help you determine what market already exists and identify any niches you could fill. To find out more about your competitors, use their products. Talk to them. You may be surprised how much information they will share. 2.6 Market Channels

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Explore as many marketing strategies as appeal to you. Below are some possibilities. Market the fresh or dried product directly to your customers (at farmers markets, to gourmet chefs, over the Internet, through mail-order offerings). Add value to the mushroom by creating processed products (mushroom sauces, dried entre mixes, teas, extracts) direct marketing If you can sell your mushrooms or mushroom products directly to an end user, you will naturally receive a better price than if you sell to a wholesaler. Direct marketing of mushrooms at local farmers markets, to restaurants, or in supermarkets is possible in many locations. When competing in local markets, excellent service, top quality, and consistent supply, rather than the lowest price, might win the sale. Some chefs specialize in locally grown foods and may be interested for that reason. Others are willing to pay for fresh, premium produce. In any case, establishing a relationship with the buyer and reliably delivering a quality product are essential for this type of marketing. Local grocery stores are another potential buyer of fresh mushrooms. However, an Arkansas grower found that local grocery chains were interested in her shiitake mushrooms only if she could assure them of a year-round supply. She decided that she had to add indoor production in order to meet this requirement. Natural foods stores are a market that may be more tolerant of seasonal supply. Any chef or grocer will require assurances of both quality and regular supply before switching from established wholesale sources. Although the wholesaler with an established account creates stiff competition, the small, efficient producer might still have an advantage in some niche markets 2.7 Target Markets: Fast Food Restaurants Vegetable Store Dyeing Industries 2.8 Target Customers: Mega Stores Pharmaceutical Companies Chinese Restaurants Mushrooms have many uses it can be used for food, for medicinal

purposes as well as for dyeing purposes. Followings are the main target customers of the Mushrooms

Pharmaceutical Companies Dyeing Industries

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Fast Food Restaurants Market Opportunity The actual market size for mushroom has dramatically expanded over the recent years. The demand for mushrooms has become more significant. There is a wide gap between the demand and supply, demand outnumbering the supply by miles, other than that, local restaurants industry has progressed and, new western and Chinese restaurants have pop up, that extensively use this wonderful vegetable. So in the next 5 years the market will further expand and more production unit would be required to full fill that enormous demand.

The market for mushroom in Pakistan is significantly large and there isn't a single producer present locally to cater for this demand, as a direct result mushroom are imported, initially we plan to produce quality mushroom on a small scale locally, providing mushroom at a cost half that of imported, so we expect to get at-least 70% of the market initially given the scale and resource available to us. Specifically our customers are restaurants and big general store, but with our excellent marketing we expect to expand this range. We aim at introducing mushroom as a vegetable that could be used to make tasteful dishes at a very affordable price.

Industry Analysis
==================================================================== 3.1 Industry Analysis Industry analysis comprises of three main factors given below
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Customer Analysis Competitive Analysis Supplier Analysis

3.1.1- Customer Analysis Followings are the main customers of Mushrooms Metro/ Super Stores Vegetable Stores/ Vegetable Shops Fast Food Restaurants Chinese Restaurants Households

3.1.2- Competitive Analysis The market for mushrooms in Pakistan is significantly widespread, and there is not a single producer present locally to cater specifically to this demand. As a direct result of this deficiency, mushrooms are imported carrying high costs. Since we plan to produce quality mushrooms on a large scale locally, we will be able to provide mushrooms at a cost half that of those which are imported. Therefore, initially, we expect to earn at least 70% of the market, given the scale and resource available to us. We dont have any competitors to look for

But there are some indirect competitors of our business are S & S Traders Unsilvers

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Hock Seng Company GFCPak Ltd

3.1.3- Supplier Analysis Followings are the main suppliers of Mushrooms University of Agriculture, Faisalabad Agricultural Research Institute Seed Companies Raw Cotton Markets Tin Manufacturers Farmers

3.2 SWOT Analysis

Strengths New idea that has never been introduced before. People already have awareness of mushroom Very high profit rate Easy implementation Inexpensive raw material Climatic conditions congenial for mushroom production. Abundant raw material, technical pace, cheap manpower, enormous domestic market coupled with government support. Weaknesses Illiteracy that can be easily overcome by ardent training.

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Higher cost of finance, packing material, energy and transportation. Opportunity Decline in production of mushroom in other countries. Well adapted modern technologies for production and post harvest management. Arrange events on larger scale like to promote cottage industry Threat Existing players in the market (Importers) Threat from Chinese Mushroom Industry.

====================================================================

Market and Strategies

==================================================================== 4.1 Vision

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To become the leading mushrooms cultivators in Pakistan

4.2 Mission

Our mission is to provide fresh and energy enriched fruiting body of mushroom to the restaurants and households at affordable price, we aims to be environment friendly, we will achieve this with our highly motivated internal customers.

4.3 Core Values Followings are the main core values of our business. Create new employment. An attempt to control the food crisis. Generate economic flow in the poor communities. Proper usage of organic waste.

4.4 Business Concept Production of Mushroom is the concept of our venture. Mushrooms are the fruiting bodies of macro fungi. They include both edible/medicinal and poisonous species. We are going to produce edible mushroom at domestic level, with the extension of our business we will move towards national and international level. Edible mushrooms once called the food of the gods and still treated as a garnish or delicacy can be taken regularly as part of the human diet or be treated as healthy food or as functional food. Our mission is to produce, market and sale the mushrooms. This venture contains the target markets & customers, benefit cost analysis, revenue generated and different kinds of risk that are involved in our venture will be discussed.

4.5 Business Level Strategy

Cost Leadership Cost leadership is the main strategy for our business. We will be the cost leaders in mushrooms through offering the two eatable varieties Oyster Mushrooms Button Mushrooms There is great demand of button mushrooms in Faisalabad but unfortunately no one is producing

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it yet, all restaurants import it from China or somewhere else which is very costly, we will produce and supply it in Faisalabad Region and as a result of it we will be the cost leaders in Mushrooms.

4.6 Functional Level Strategy

Production Steps of Mushroom Farming Making Mushroom Compost Finishing the Compost Spawning Casing Pinning Cropping

It takes approximately 15 weeks to complete an entire production cycle, from the start of composting to the final steaming off after harvesting has ended. For this work a mushroom grower can expect anywhere from 0 to 4 lbs. per square foot; the national average for 1980 was 3.12 lbs. per square foot. Final yield depends on how well a grower has monitored and controlled the temperature, humidity, pests, and so on. All things considered, the most important factors for good production appear to be experience plus an intuitive feel for the biological rhythms of the commercial mushroom. The production system used to grow a crop can be chosen after the basics of mushroom growing are understood.

Marketing and Operations

====================================================================

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5.1 Marketing & Sales Strategies

5.1.1) 4 Ps of Our Business. Product We will offer mushroom in three forms Polyester bags. Tin pack Glass jar

Mushrooms are very delicious food with high proteins. It is used in pizza, snacks soup and many chines food. The product which is offered in polyester bags is fresh and of good quality and tasty. Where as its shelf life is only seven to ten days. While tin and glass jars have shelf life more then a year. Price We will set the price of mushroom after proper financial analysis. As our business strategy is cost leadership. Thats why we will offer our product at economical price because we are offering fresh mushroom at domestic level and it is free from all kind of tariff, quota and import duties. The price will vary considering the fresh mushroom, glass jars and tin packs. We will set the market penetration price. Place Distribution Channel Direct Marketing We can sell our mushrooms directly to an end user, we will naturally receive a better price than if we sell to a wholesaler. Direct marketing of mushrooms at local farmers markets and to restaurants is possible in many locations. When competing in local markets, excellent service, top quality, and consistent supply, rather than the lowest price, might win the sale, particularly with traditional chefs. Some chefs specialize in locally grown foods and may be interested for that reason. Others are willing to pay for fresh, premium produce. In any case, establishing a relationship with the buyer and reliably

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delivering a quality product are essential for this type of marketing. Local grocery stores are another potential buyer of fresh mushrooms. Although the wholesaler with an established account creates stiff competition, the small, efficient producer might still have an advantage in some niche markets. Locallygrown oyster mushrooms have an advantage because oysters have a very limited shelf life and are too fragile to ship easily. The grower with direct, local sales can supply a fresher product that arrives in better condition.

Transportation The finished product after being packed will be supplied to our customer as per their demand via loader. Outstation customers will get the mushroom through cargo service like Asia cargo and DAEWOO etc. Promotion Media Followings are the main Medias used for the marketing of our products o Cable TV o Radio (FM) o News Paper

Audio-Video Radio (FM) This media is used for the marketing of our product through audios. Because everyone listen radio in Cars, Homes, Cell Phones etc. we will target all classes of people so that they may aware about mushrooms their products and recipes. Cable TV

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It is used for the marketing of our product through local TV Channels and Cables. Add will aware the people about the Mushrooms, their products and recipes of Mushroom.

Print Media Print media is also one of the sources of marketing our product. Both English and Urdu newspaper are used for this purpose so that we may capture the people of both classes.

Followings are the some secondary promotional activities of our business. o Road Shows o Cooking Contest o Recipes of Mushroom Products

5.2 Operational Process

Followings are the main operational activities 1. Production by themselves and Farmers as well. 2. Collection of mushroom through a systematize process. 3. Post production (canning, simple packing to sell fresh). 4. Marketing and selling. We plan to adopt direct relation with customer or PR approach to market and sell our product though a team of highly enthusiastic volunteer and paid workers. Other than that's under our plan we would be organizing different events that would promote the use of mushroom as a useable vegetable. For this reason a weekly mobile restaurant is also among the strategy. We dont have any competitors to look for

5.3Operations Technology

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5.3.1 Process The process of production is consist of followings steps Preparation of Compost Wheat straw is used for the preparation of compost. Firstly wheat straw is kept moist; it will become soft and wet. Chicken manure and urea is added to wet wheat straw. After mixing all these raw material it is kept in the form of a pile. The piled is mixed daily so that it may become homogenous. After 9 and 12 days gypsum is added before and after mixing the compost. Water is added daily to keep it wet. The percentage of water will be 70% in compost. The pH of compost must be in between 6.5-8.00. Pasteurization Compost will be packed in polythene bags. The size of these bags must be 45 60 cm. these bags are pasteurized in a drum for 30-45 min. after that they are placed on the ground. The pasteurization is done to kill the germs present in the compost. Spawning The seed of the mushroom is called spawn. The pasteurized compost when become cold spawn is added in it. There are two methods of spawning. In first method spawn is mixed on the upper surface of the compost up to 7-10 cm while in other method spawn is mixed totally in the compost. Spawn quantity should be 50-70% of compost net weight. Polythene bags are tied in such a way with rubber band so that air may pas through it easily. These bags are placed in racks. Spawn Running Spawn spread in the form of thin threads. For the growth of spawn the temperature should be maintained up to 22-27 degree centigrade. Growth of spawn in the compost is said to be spawn running. Spawn will take 2-3 weeks for growth in compost. Casing

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When the growth of spawn is completed in the compost then it is covered with the layer of soil/ peat. Peat is a special kind of soil which is brought from Swat and Kala. Both soil and Peat may be used but if you want to use the soil then add 4% lime in it. Soil is wet with water and it is pasteurized as well so that to kill all kind of germs present in it. After cooling a layer of soil is covered up to 3-4cm on the compost. After casing, first 23 weeks temperature should be maintained up to 22-27 degree centigrade and Humidity should be 90-95%. Cropping (Crop Management) When it seems that the Mycelium of mushroom are going to produce then temperature is maintained up to 16-19 degree centigrade. For the fruiting of mushroom fresh air is needed therefore it is a good practice that windows should be opened. Humidity should be maintained up to 85%. Water should be sprayed to 2-3 times so that the casing may not get dry. After 3-4 weeks of casing mushroom will be start to grow in the form of small grains. When it will become like an egg then cut it with the help of a cutter. After 8-10 days mushroom will grow again so that we may harvest it.in this way 5 times a producer may get the crop of mushroom. In Pakistan the production of mushroom is up to 10-15 kg/sq.m. 5.3.2 Materials Raw material needed for the production of mushroom is o Spawn o Cotton waste o Bags o Rice waste (Husk) o Wheat straw o Farm Yard Manure.

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o Rubber Band o Water o Packaging Polyester Bags o Tin o Salt o Citric acid o Gypsum o Peat o Soil o Lime o Chicken Manure o Urea 5.3.3 Machines Tools Tools needed for mushroom production are
o

Air Cooler

o Air Conditioner o Water Sprayer o Water Pump o Pasteurization Equipment. o Thermometer

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o Humidity Meter o Cutter o Exhaust fan. o Freezer o Gas Burner o Drum 5.4 Packaging Packaging comes under post harvesting treatment. In Tin packing a mixture of water, salt and citric acid is used for increasing the shelf life of mushroom. While in polyester bags fresh mushroom is packed. Production assistant will pack the mushroom in three forms o Polyester bag o Tin o Glass Jar 5.5 Maintenance We will maintain the product during three ways o During Production o Post Harvest o Pre-Harvest During Pre-Harvesting the preparation of compost is the main factor, it should be prepared before seeding the crop. 25% wheat straw, 25 % farm yard manure and 50% soil is needed to prepare the compost. During production the temperature and humidity is the main concern, because the mushroom is the temperature and humidity conscious crop. If we cant maintain the above stated factors then the whole production will be affected.
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Therefore production assistant are hired so that they may look after the production area and whenever and wherever there is need of humidity and temperature maintenance they will. During Post-Harvest treatment it should be handled with care because every delayed day will decrease our profit because the mushroom is a perishable crop. By freezing the product will increase the shelf life of product. 5.6 Testing It is full time business. The production incharge and production assistant test the process before, during and after the production. Because it is perishable product any negligence may affect the production and ultimately the business. So in short we can say that testing the production at every step is necessary and critical for our business.

5.7) Value Chain Analysis 5.7.1 Inbound Logistics

Transportation The process of transportation will be done for supplies of Raw Material (Spawn, cotton waste, wheat straw, rice straw, farm yard manure, Packing materials, bags, rubber band, stationary). Rental Loader will be used for this purpose.

Material Handlings The supplies of the raw material will be purchased from different markets Seed (Spawn) will be purchased from University of Agriculture, because seed of that institute is economic and of good quality because seed that are available here are registered and free from diseases. Crop Waste (Cotton, Wheat, and Rice) will be purchased from farmers because it will be cost effective and will provide us supply at our production house. Material Storage

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Raw material will be stored at storage house and will be used whenever and wherever needed. Storage house will help us to use the off season raw materials. Because the wheat straw and rice straw will be available in their appropriate season if we will store them it will be helpful for us in the climatically changes and minimize our risk. Communication Production incharge will prepare a list of required production material and communicate it to the admin officer. After reviewing the list the admin officer will allocate the budget keeping in mind the content of the required material. Admin officer will place order to the supplier. Supplier will deliver the material to our production house. Production incharge will utilize the material and remaining material will be store in store room. Testing Before utilizing the material, the production incharge will test all the material keeping in minds the standards and quality of mushroom house needed. If the material is not up to the standard it will be replaced or connect with some other supplier to save time and money.

5.7.2 Outbound Logistics

Transportation The finished product after being packed will be supplied to our customer as per their demand via loader. Outstation customers will get the mushroom through cargo service. Material Handling The finished product after being packed will be freeze and will remain in a store room until they are delivered to the customers. Mushroom can also be dried to make a powder of it and it will be sold in a market. Packaging The mushroom we have already packed in form of tin and polyester bags. Now production assistant will finally pack it in cartons for the final delivery of product. Mushroom in Polyester bags and tin will be finally packed in cartons separately. And tags

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will be pasted on the cartons mentioning the production batch and he expiry date of the product. Note: there is no need to paste labels on tin packs, polyester bags and on cartons because the tins, polyester bags and cartons which we will use are in printed form on which all the required contents are mentioned. Communication The admin officer will receive the order and after the stock verification from production incharge the admin officer will confirm the order and after the delivery of product the admin officer will record the transaction. Finally the mushrooms will be sent to the desired destination via loader or courier. Then it will be requested to our customer, please notify us when they have received the product. In this way we will be properly aware if the customers have any concerns regarding the product delivery.

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Chapter No 6

Management & Organizations

====================================================================

Organogram of Mushroom House

Admin Officer

Production Incharge Production Assistant Office Boy

Marketing Officer

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6.1Admin Officer
Objectives The objective of the admin officer is to supervise the administrative and financial activities of the Mushroom House.

Job Specification Followings are the main job description required for admin officer. o MBA (Finance) o Management Skills o Decision Making Skills o Communication Skills o Problem Solver
o

Having Planning skills

o Skills of managing accounts o Analysis and solution of Accounts o Ability to set prioritize goals o Auditing of Accounts

Job Description Followings are the main job description required for admin officer. o To Take Order o Record keeping and Maintaining
o

Performance Appraising & Procurement

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o Salary, Compensation and Rewards o Book keeping

o

Maintenance of cash flows & balance sheets

o Develope cost of goods sold statements o Develop income statement

6.2Production Incharge
Objectives The objective of production Incharge is to look after the production process from raw material to finished product.

Job Specification o Master in Agri. Sciences with 1 year Experience o Having complete knowledge about process of mushroom production o Knowledge about post harvest treatment o Production technology of mushroom varieties o Packaging and preservation techniques

Job Description o Conduct the production process o Post harvest treatment o Packing and freezing o Pre harvest treatment
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6.3 Marketing Officer

Objective The objective of marketing officer is to promote the production of mushroom house and market the product Job Specification o MBA preferable in Marketing o Highly Motivated o Industrial Awareness o Good Judgment Skills o Team building Skills o Building relationship with customers and suppliers o Promotional activities Job Description o To build relationship with customers o To build relationship with suppliers o To conduct the Marketing Activities o To Organize the promotional activities for the Product

6.4Production Assistant
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Objective The objective of the production assistant is to assist the production incharge in the process of mushroom production. o Job Specification o Matric with Science o Assist in the process of Production
o

Having knowledge about process of mushroom production

o Knowledge about post harvest treatment o Production technology of mushroom varieties o Packaging and preservation techniques Job Description o Pre harvest treatment
o

Look after the site of production

o To Maintain of Humidity o To Maintain of Temperature o Post harvest treatment o Packing and freezing

6. 5- Office Boy
Objectives The objective of the office boy is to entertain the customers, suppliers and office staff of Mushroom House.

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Job Specification o Middle o Good in hospitality o Good Manners o Minimum Education is middle o Expert in cooking and tea making o Motivated & Committed

Job Description
o

Entertain the customers and staff

o Entertain the suppliers o Cleaning and sweeping o Files maintaining o Help in Carry Outing Copying and stationary

Financial Section
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QUARTERALY FINANANICAL SECTION MUSHROOM PRODUCTION HOUSE Cost of Goods Sold Statement For the Period Jan-March, 2011

Acc. No

Particulars
Raw material purchased (1)

Amount
30450

Amount

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31 Add: Direct Expense Transportation In Material Available for Use Less: Closing Inventory (2) Direct Material Consumed Add: Direct Labor Cost (3) Prime Cost Add: Factory Over Head (4) Cost Of Goods Sold Raw material purchased (1) Spawn Cotton Waste Wheat Straw Soil Gypsum Glass Jars Polyesters Trays Citric Acid Transparent Plastic Wrapper Salt Plastic Bags Total 8000 11700 2000 700 1000 1000 4000 1000 500 50 500 30450 2000 32450 32450 3800 28650 28650 15000 43650 43650 31091 74741 74741

Closing inventory (2) Cotton Waste Wheat Straw Soil Gypsum Citric Acid Total 1300 700 200 800 800 3800

Direct Labor Cost (3) Production Manger Assistant Total 10000 5000 47155

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Factory over Head (4) Electricity Bill Rent of Factory Area Indirect Material Rubber Bands Water Spray Machine Gas Bill Office Boy Salary Repair Cost Depreciation Total 4500 15000 150 300 1000 9000 500 641 31091

MUSHROOM PRODUCTION HOUSE

Income Statement For the Period Jan-Mar, 2011

Acc. No
Sales Cash Sale Credit Sale

Particulars

Amount (Rs) 157500 47500 205000 74741

Amount (Rs) 205000 130259 130259

Net Sale
Less: COGS

Gross Profit
Operating Expense Selling & marketing Expenses Advertising Transportation Out Marketing Department Salaries Packaging (1) Entertainment Expenses Administrative Expenses Travelling Expense Admin Department Salary Telephone & Postage Office Supplies Stationary Stamp

5000 5000 24000 3600 1000 800 30000 2000 500 100 200

38600

32800

Calculator etc. Depreciation of Fixed Assets Operating Profit

800 500 57559

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Less/ Add Other Income/ Expenses Interest on Loan 30000@13.% 3900/3 Net Profit
Packaging (1) Cartons Packaging label Ropes & Tapes Miscellanies Expense Total 2000 500 100 1000 3600

1300 56259

MUSHROOM PRODUCTION HOUSE Statement Cash Flow

For the Period Jan-Mar, 2011

Cash flows from Operating Activities Cash Received from Customers Less: Cash paid to Suppliers Cash paid to Operating Expenses Interest Paid Other Expenses a- Maintenance b- Advertisement Cash flows from operating activities 47550 Cash Flow from Investing Activities Purchase of Long Term Assets Office Furniture IT infrastructure Racks Cash Flow from investing activities (35000) Cash flow from Financing Activities Loan Taken Cash flow from financing activities 30000 Net Cash Flow 42550

157500 30450 72200 1300 1000 5000

10000 10000 15000 30000

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MUSHROOM PRODUCTION HOUSE Balance sheet As on 31 March 2011 Acc. No Assets Current Assets Cash Account Receivables Prepaid Expense Inventory Fixed Assets Furniture Computers Depreciation 20000@10% Machinery &Equipment Air Cooler Exhaust Fan Humidity Meter Spray Machine Cutter Thermometer Pasteurization Equipment Racks Gas Burner Spade Depreciation 25650@10% Total 5000 2500 300 300 100 300 1000 15000 800 350 (641) 150909 150909 10000 10000 (500) 3800 42550 47500 Amount (Rs) Declared Capital Utilized Capital Income Current Liabilities Account Payable Expense Payable Interest Payable Non Currents Liabilities Loans 30,000 Liabilities Amount (Rs) 100000 64650 56259

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ANNUAL FINANCIAL SECTION (1st Year) MUSHROOM PRODUCTION HOUSE Cost of Goods Sold Statement For the Year, 2011

Acc. No
Add: Direct Expense

Particulars
Raw material purchased (1) Transportation In Material Available for Use Less: Closing Inventory (2) Direct Material Consumed Add: Direct Labor Cost (3) Prime Cost Add: Factory Over Head (4) Cost Of Goods Sold

Amount
121800 8000

Amount

129800 129800 3800 126000 126000 60000 186000 186000 123464 309464 317064

Raw material purchased (1) Spawn Cotton Waste Wheat Straw Soil Gypsum Glass Jars Polyesters Trays Citric Acid Transparent Plastic Wrapper Salt Plastic Bags Total 32000 46800 8000 2800 4000 4000 16000 4000 2000 200 2000 121800

Closing inventory (2)

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36 Cotton Waste Wheat Straw Soil Gypsum Citric Acid Total 1300 700 200 800 800 3800

Direct Labor Cost (3) Production Manger Assistant Total 40000 20000 60000

Factory over Head (4) Electricity Bill Rent of Factory Indirect Material Rubber Bands Water Spray Machine Gas Bill Office Boy Salary Repair Cost Depreciation Total 18000 60000 600 300 4000 36000 2000 2564 123464

MUSHROOM PRODUCTION HOUSE

Income Statement As on 31 December, 2011

Acc. No
Sales Cash Sale Credit Sale

Particulars

Amount (Rs) 630000 190000 820000

Amount (Rs) 820000

Net Sale

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37 Less: COGS 309464

Gross Profit
Operating Expense Selling & marketing Expenses Advertising Transportation Out Marketing Department Salaries Packaging (1) Entertainment Expenses Administrative Expenses Travelling Expense Admin Department Salary Telephone & Postage Office Supplies 74741

510536 510536

20000 20000 96000 14400 4000 3200 120000 8000 2000 100 200

154400

131200

Operating Profit Less/ Add Other Income/ Expenses Interest on Loan 30000@13.% 3900/3 Net Profit
Packaging (1) Cartons Packaging label Ropes & Tapes Miscellanies Expense Total 8000 2000 400 4000 14400

2300 2000 220636 3900 216736

MUSHROOM PRODUCTION HOUSE Statement of Cash Flow

For the Year, 2011

Cash flows from Operating Activities Cash Received from Customers Less: Cash paid to Suppliers Cash paid to Operating Expenses Interest Paid Other Expenses a-maintenance

630000
121800 289900 3900 4000

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38 b-advertisement 20000 Cash flows from operating activities 190400 Cash Flow from Investing Activities Purchase of Long Term Assets Office Furniture IT infrastructure Racks 10000 10000

15000 Cash Flow from investing activities (35000) Cash flow from Financing Activities Loan Taken 30000 Cash flow from financing activities 30000 Net Cash Flow 185400

MUSHROOM PRODUCTION HOUSE Balance sheet As on 31 Dec 2011 Acc. No Assets Current Assets Cash Account Receivables Prepaid Expense Inventory Fixed Assets Furniture Computers Depreciation 20000@10% Machinery &Equipment 10000 10000 (2000) 3800 185400 Amount (Rs) Declared Capital Utilized Capital Income Current Liabilities Account Payable Expense Payable Interest Payable Non Currents Liabilities Loans 30,000 Liabilities Amount (Rs) 200000 173550 216736

190000

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39 Air Cooler Exhaust Fan Humidity Meter Spray Machine Cutter Thermometer Pasteurization Equipment Racks Gas Burner Spade Depreciation 25650@10% Total 5000 2500 300 300 100 300 1000 15000 800 350 (2564) 420286 420286

ANNUAL FINANCIAL SECTION (2nd Year) MUSHROOM PRODUCTION HOUSE Cost of Goods Sold Statement For the Year, 2011

Acc. No
Add: Direct Expense

Particulars
Raw material purchased (1) Transportation In Material Available for Use Less: Closing Inventory (2) Direct Material Consumed Add: Direct Labor Cost (3) Prime Cost Add: Factory Over Head (4) Cost Of Goods Sold

Amount
152650 9000

Amount

161650 161650 6600 155050 155050 198000 353050 353050 129795 482845 482845

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Raw material purchased (1) Spawn 100*400 Cotton Waste 4500*15 Wheat Straw 2000*5 Soil Gypsum Glass Jars 420*10 Polyesters Trays 5000*4 Citric Acid Transparent Plastic Wrapper Salt Plastic Bags Total 40000 67500 10000 700 1000 4200 20000 4000 2500 250 2500 152650

Closing inventory (2) Cotton Waste Wheat Straw Soil Gypsum Citric Acid Total 4500 1000 100 500 500 6600

Direct Labor Cost (3) Production Manger Assistant Total 11000*12 5500*12 132000 66000 198000

Factory over Head (4) Electricity Bill 1600*12 Rent of Factory 5000*12 Indirect Material Rubber Bands Water Spray Machine Gas Bill Office Boy Salary 3300*12 Repair Cost 19200 60000 800 600 5000 39600 2000

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41 Depreciation Total 2595 129795

MUSHROOM PRODUCTION HOUSE

Income Statement For the year, 2011

Acc. No
Sales Cash Sale Credit Sale

Particulars
4000*250 1000*190

Amount (Rs) 1000000 190000 1190000

482845

Amount (Rs) 1190000 707155 707155

Net Sale
Less: COGS

Gross Profit
Operating Expense Selling & marketing Expenses Advertising Transportation Out Marketing Department Salaries Packaging (1) Entertainment Expenses Administrative Expenses Travelling Expense Admin Department Salary Telephone & Postage Office Supplies Stationary Stamp

30000 25000 108000 16000 4000 4000 132000 10000 2000 100 200

183000

146000

Calculator etc. Depreciation of Fixed Assets Operating Profit Less/ Add Other Income/ Expenses Interest on Loan 100000@13.% 3900/3 Net Profit

2300 1800 374055 13000 361055

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Packaging (1) Cartons Packaging label Ropes & Tapes Miscellanies Expense Total 9000 2500 500 4000 16000

MUSHROOM PRODUCTION HOUSE Statement of Cash Flow

For the Year, 2011

Cash flows from Operating Activities Cash Received from Customers Less: Cash paid to Suppliers Cash paid to Operating Expenses Interest Paid Other Expenses a-maintenance

1000000
152650 333100 13000 4000

b-advertisement 30000 Cash flows from operating activities 467250 Cash Flow from Investing Activities Purchase of Long Term Assets Office Furniture IT infrastructure Racks _____ _____

_____ Cash Flow from investing activities (0) Cash flow from Financing Activities Loan taken 70000 Cash flow from financing activities 70000 Net Cash Flow 537250

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MUSHROOM PRODUCTION HOUSE Balance sheet As on Dec31, 2011 Acc. No Assets Current Assets Cash Account Receivables Prepaid Expense Inventory Fixed Assets Furniture Computers Depreciation @10% Machinery &Equipment Air Cooler Exhaust Fan Humidity Meter Spray Machine Cutter Thermometer Pasteurization Equipment Racks Gas Burner Spade Depreciation @10% Total 5000 2500 300 600 100 300 1000 15000 800 350 (2595) 775405 775405 10000 10000 (1800) 6600 537250 Amount (Rs) Declared Capital Capital Income Current Liabilities Account Payable Expense Payable Interest Payable Non Currents Liabilities Loans 100000 Liabilities Amount (Rs) 500000 314350 361055

190000

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Return on Investment (ROI) Quarterly

Net income / Total assets 56259 / 137859 = 0.40 40 %

First year
Net income / Total assets 216736 / 420286 = 0.51 51.6 %

Second year
Net income / Total assets 361055 / 775405 = 0.465 46.5 %

Total Asset Turnover (TAT) Quarterly

Net sale / total asset 205000 / 137859 = 1.487

First year
Net sale / Total asset 820000 / 420286 = 1.95

Second year
Net sale / Total asset 1190000 / 775405 = 1.53
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Payback Period (PBP)

Initial investment = 173550 Net cash flow in the first year = 185400 As our business results shows that we make the initial investment of Rs.173550 and our cash inflow in the first year is 185400. It shows that our initial investment will cover with in first year. So our business pay back period is less then a year. It is expected that our initial investment will cover in the last quarter of first year.

Attraction for Investors:

Mushroom farming Business has a lot of opportunities to grow. Because, in the present era people likening more fast foods. With the rise in fast food industry the demand for mushroom is increasing and there are no big producers at domestic level. More, there is no need of huge amount of capital to start this business. Mushroom farming business gives maximum output from the least inputs and there are no too much technicalities involve in this business even a lay man can start this business. And this business can play an important role in eradicating the unemployment. Further mushroom farming business is environmental friendly it is also called Green Business because it uses different wastage like cotton wastage etc. as a raw material. The financial results showed that there is huge profit margin in this business.

Purposed Offerings:
This business can be started on Musharikah or Modaribah bases considering the Islamic mode of financing. In Musharikah both parties invest their resources and efforts and share the profit and loss in agreed ratio or according to the amount of investment. In Modaribah one party will make the investment (Rab-ul-Mal) other party will manage and control the operations of business (Mudarib). The profit will be shared in agreed ratio but loss will be beard by Rab-ul-Mal only.

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COMSATS Institute of Information Technology Lahore