YOUR COMPOST HERO

1 YOUR COMPOST HERO BUSINESS PLAN 2020 Arsal Naeem Zainab Zahid Mahnoor Naveed CEO & Founder CFO & Founder COO & Founder [email protected] [email protected] [email protected] 0345-4170242 0331-4851340 0334-4236885 2 “ 3 Table of Contents Grow Organic ........................................................................................................................................................................ 1 Mission Statement ................................................................................................................................................................ 2 ............................................................................................................................................. 5 ................................................................................................................................................ 6 Industry Size, Growth Rate, And Sales Projections ...................................................................................................... 6 Industry Structure ......................................................................................................................................................... 6 Nature Of Participants .................................................................................................................................................. 6 Key success factors ....................................................................................................................................................... 7 Industry trends and Long-term prospects...................................................................................................................... 7 ......................................................................................................................................... 8 Company History .......................................................................................................................................................... 8 Mission Statement ........................................................................................................................................................ 8 Product and Services ..................................................................................................................................................... 8 Current Status ............................................................................................................................................................... 9 Legal Status and Ownership ......................................................................................................................................... 9 Key partnerships ........................................................................................................................................................... 9 ................................................................................................................................................ 10 Market Segmentation and Target Market ................................................................................................................... 10 Buyer Behavior ........................................................................................................................................................... 10 Competitor Analysis ................................................................................................................................................... 10 Estimates of Annual Sales .......................................................................................................................................... 12 ............................................................................................................................... 13 Revenue Drivers And Profit Margins ......................................................................................................................... 13 Fixed and Variable Costs ............................................................................................................................................ 14 Operating Leverage And Its Implications ................................................................................................................... 14 Start-Up Costs ............................................................................................................................................................. 14 Break Even Chart And Calculation ............................................................................................................................. 15 .................................................................................................................................................. 17 Overall Marketing Strategy......................................................................................................................................... 17 Marketing budget ........................................................................................................................................................ 17 4 Product Strategies ....................................................................................................................................................... 17 Price Strategies ........................................................................................................................................................... 18 Promotions Strategies ................................................................................................................................................. 18 Distribution Strategies ................................................................................................................................................ 18 Sales Process ............................................................................................................................................................... 19 Sales Tactics ............................................................................................................................................................... 19 ......................................................................................................................... 20 Development status and tasks ..................................................................................................................................... 20 Challenges and risks ................................................................................................................................................... 20 Projected development costs ....................................................................................................................................... 21 Proprietary issues ........................................................................................................................................................ 21 ................................................................................................................................................. 22 General Approach To Operations ............................................................................................................................... 22 Business Location ....................................................................................................................................................... 22 Facilities and Equipment ............................................................................................................................................ 22 ..................................................................................................... 24 Management Team ..................................................................................................................................................... 24 Skills profile................................................................................................................................................................ 24 Board of Directors ...................................................................................................................................................... 25 Board of Advisors ....................................................................................................................................................... 25 Company Structure ..................................................................................................................................................... 25 .............................................................................................................................................. 26 ..................................................................................................................................... 27 Sources And Uses Of Funds Statements ..................................................................................................................... 27 Assumptions Sheet ...................................................................................................................................................... 27 Pro Forma Income Statement...................................................................................................................................... 28 Pro Forma Balance Sheet ............................................................................................................................................ 29 Pro Forma Cash Flow Statement ................................................................................................................................ 30 Ratio Analysis ............................................................................................................................................................. 31 ............................................................................................................................................................................. 32 5 In Lahore 50 tons of organic waste is generated daily that is recyclable but it ends up in landfills and burning resulting in increased pollution. ‘Grow Organic’ steps in as a proposed business initiative which aspires to become a prominent contributor to mitigate the impact and provide a solution to these problems. We plan to make the best use of this organic waste by recycling it to make pure 100% chemical free, nutrient rich, tailor-made organic compost and therefore be an alternative to the soil damaging fertilizer that farmers currently use. The use of organic fertilizers in farming is becoming supplemental to increase the yield and has been globally recognized as the better option compared to chemical compost. The demand of organic compost is increasing rapidly therefore ‘Grow Organic’ provides budget friendly custom made compost perfectly suited for the soil, adding in its enrichment process. The raw organic waste is collected from local vegetable and fruit vendors and delivered to the warehouse where it goes through several manufacturing processes and finally packed in bags for delivery. The customer makes an order of compost through app/website/warehouse-visit/phone and fill in on the plantation needs. A soil sample is collected from the customers address for the testing of the soil and the soil test results displayed on the app/website after which the compost is manufactured specific to the needs of the soil. The compost is packed and delivered to the customer. ‘Grow Organic’ is founded by 3 Fast university final year Electrical Engineering students having equal share and the business model focuses mainly on appealing people looking for a substitute to chemical fertilizers. These are specifically the organic compost user’s i.e. small farmers, horticulture enthusiasts, organic food exporters and home growers. The Competitive Advantage over competitors is through features such as customizable, specific to soil compost, soil testing, display of online results, chemical free and nutrition rich compost that sets us apart from them. As the market is not saturated there is a place for the company to earn profits while competing with big players. There is a low threat of substitutes. Rivalry among existing firms and threat of new entrants is mediocre as it is an emerging industry. The business requires an initial start-up cost of Rs 660,000 to launch the company with an estimated Rs10,000,00 overall investment. The company's 3 founders are to chip in equal amounts of capital for initial expenses. The main source of income will be from the sales of compost, soil testing services and the delivery services charges with cash on delivery. Due to low overall production costs and high profit margins this is a suitable business to invest time, money and efforts into and it is calculated to become profitable as early as the end of the sixth month in the first year of business. The sales are projected to increase at an average rate of 30% for the first 3 years resulting in an average profit margin of 25% per anumm. It is forecasted that in the first year, the company expects to make sales of RS 1,699,200 per year which are increased to Rs 2,208,960 for the 2nd year and further increased to Rs 2,871,648 for the 3rd year. Subsequently the profit margins will increase as the cost of goods sold will remain low due to cheap raw material. 6 Industry Size, Growth Rate, And Sales Projections The main organic fertilizers are animal wastes and plant wastes. The organic fertilizer industry manufactures pure organic fertilizer and compost products. The products are the properly packaged and distributed to be used for the production of organic fruits and vegetables. Industry Size The organic fertilizer industry is basically a subset of the big fertilizer industry of Pakistan and a flourishing sector of the economy that generates money from 6 registered and licensed fertilizer companies. The industry is responsible for the employment of well over 31,000 people. The key players are Fauji Fertilizer, Engro Chemical Pakistan Ltd and Dawood Hercules Chemicals having the major share of fertilizer industry. Growth Rate The total area under organic agriculture has grown from 35,000 acres in 2005 to 150,000 acres in 2010. An estimated 33% of farmers in Pakistan are going organic and this number is projected to double in the next couple of years. Due to increasing global trend of organic farming, organic compost is becoming the preferable choice. People are becoming more aware of the safety and quality of the food they consume and the land under organic farming has been expanding with the time frame according to IFOAM, 2018. Sales Projections Pakistani farmers have been increasing their profit margins by exporting vegetables as well as fresh fruits to the Middle East and Europe. The export of the organic products stands at US$100 million a year and increasing at a staggering rate of 20%. Globally growth rates in organic food sales have been in the range of 20- 25% for the last 10 years. In 2002, the total market value of certified organic products was estimated at US$20 billion and that value doubled to US$40 billion by 2006. Industry Structure This industry is more fragmented than concentrated as most of the compost manufacturers are fertilizer companies using harmful chemicals to make products for the farmers. Therefore there is a significant gap for a new start-up to emerge that will provide chemical free compost and fertilizer to its consumers. Nature Of Participants Most of the key players in this industry are renowned organic product and compost producing companies such as Kaydee Organic Farm, Pakistan Organic Farms and TRASHIT.PK. Many of these are mostly situated on the outskirts of the big cities such as Lahore and Karachi. Therefore it is ideal for a new start-up such as Grow Organic that can operate within a major city to provide chemical free compost and soil testing services to small scale farmers and home growers at a reasonable price. 7 Key success factors Organic farming is based on fewer inputs, better market demand due to having environmental and social concerns. It also based on local resources and technologies that provide farmer better independence and more control over their means of production. The key factors for success in this industry are: ➢ Focus on Environmental impacts of organic farming ➢ Improvement of soil biological activity. ➢ Improvement of physical characteristics of soil. ➢ Reducing nitrate leaching. ➢ Low-cost production efficiency. ➢ Quality product manufacturing. ➢ Adequate skilled labor. ➢ Low-cost plant locations. ➢ Flexibility in manufacturing a range of models. Industry trends and Long-term prospects. The economic trends are favorable as the products/service of this industry are very cost friendly as most of the customers are from the farming sector of an agriculture based economy dependent country. Social trends of this industry are also in a positive direction as the early adopters of the fertilizers always attracted the healthier things being introduced. The need for chemical-free compost is increasing as the population is increasing and the global warming becoming awful. Also, waste management is important for the society. So, the chemical-free compost service inclining towards the favorable trends. People are more eager to buy chemical-free compost and reusable bags that are environmentally safe. These favorable trends provide room for significant profit margins for a industry that is high in demand. In future we have to check the economic market and policies in which organic products are produced, marketed and checked in the financial results which fluctuate by the resources, farm business, better management, labor availability. We have to establish promotion and training programs to foster export opportunities for organic products and attention should be given to meet the guarantee system that will ensure organic quality and allow consumer to develop their preferences for organic products with feeling of trust. Therefore if diverted towards the right path this industry has a bright profitable future ahead. 8 Company History Increasing levels of greenhouse gases and emissions have resulted in pollution and ultimately climatic change. The company’s founders showed deep concern about the burning of waste being the main source of air pollutant, from greenhouse gases like carbon dioxide to tiny particles and toxic chemicals that can harm human lungs. This issue was the driving force that motivated us to work on a waste management model that would try to utilize the thrown organic waste that is not disposed off properly and at the same time convert it into a potential business model. Mission Statement To become a diversified manufacturer of chemical free compost and fertilizer, significantly contributing to the development of agriculture and home based farming sector of Pakistan. Product and Services The business is a combination of both product and service. Grow organic provides its customers chemical free compost and fertilizer at their door step. ➢ We provide Ready-made compost bags. ➢ We provide customized compost bags tailored specifically to the soil needs of the customer. ➢ The company provides home based collection service of the soil sample, the soil is then tested and the compost/fertilizer is engineered according to that specific soil. ➢ The test results of the soil components and minerals are displayed on website/application for viewing of the customer. ➢ The chemical free compost/fertilizer is packaged and then delivered to the customer. These services and specific soil compost are unique to Grow Organic compared to the current product/service available from other companies that only provide packaged of the shelf compost. -see section 5 for the complete rate list 9 Current Status Company is in its mid stages of development as few milestones have been covered. ➢ Zainab Zahid, Arsal Naeem and Mahnoor Naveed are currently the sole owners of the company. ➢ The company is not yet officially registered. ➢ Lined up key partners and business advisers. ➢ Provider and management team has committed to the project. ➢ Referral list is being finalized. Legal Status and Ownership ➢ The company is not yet officially registered and licensed. ➢ The logo, motto and the mission statement is copyrighted and patent purchased ➢ The legal structure of the business is Partnership based. ➢ The business start up is a joint venture of three individuals. Arsal Naeem, Zainab Zahid, Mahnoor Naveed of fast university are B.Sc. Electrical Engineering students and the ownership is split evenly among the three. ➢ The owners share together, all the risk, costs and responsibilities as well as the profits. ➢ Each partner is self-employed and a legal partnership agreement is established stating the roles and shares in profit of each partner. Arsal Naeem CEO/founder share: 33.33% Zainab Zahid CFO/founder share: 33.33% Mahnoor Naveed COO/founder share: 33.33% Table1: owners share Key partnerships The company has formed a contract with its main suppliers/partners: ➢ Local Garbage company that is providing transport services of organic waste from the vendors to the warehouse ➢ Owner of the warehouse / land where compost manufacturing is done. ➢ Delivery Service Company for delivery of compost and collection of soil samples. ➢ Packing company to supply packaging bags for the compost/fertilizer. 10 The research conducted for the complete analysis of the market depicted some major clues about the segmentation of the market and considerations for the adequate target market. Also, the behavior of the buyers was analyzed to note some key factors in order to make our business idea successful. The competitor analysis was conducted that helped us figure out where we lag as an organic compost manufacturing company and what features can take us towards the profitability. Market Segmentation and Target Market According to our in-depth analysis of the compost farming industry, it was segmented on the basis of Nutrient content (Chemical, Chemical-free). The target market is demographic segmentation with the focus on low and middle income farmers and home growers. The target audience are organic farmers or people looking for a substitute to chemical fertilizers. The buyer prefers high quality organic compost with affordable prices. Our business model will focus mainly on appealing the specified target markets that are specifically the organic compost user’s i.e. small farmers, horticulture enthusiasts, organic food exporters and home growers as the product/service we provide is purely organic. Buyer Behavior Buyer behavior was researched and it was concluded that the target market has reasonable customer potential. The buyers are people looking for a substitute to chemical fertilizers. The buyer prefers high quality organic compost with affordable prices. Buyer’s behavior depends upon also on the behavior of the suppliers and the buyers are more sensitive to nutrient rich content. Buyer behavior is inclined towards: ➢ Chemical free compost ➢ Nutrient rich ➢ Low cost ➢ More Durable and reliable Competitor Analysis Direct Competitors: Major fertilizer companies such as Garden Fertilizers, Trashit.pk, Blue Star Composting and Recycling, Vermi compost and Organic farming Pakistan are the major direct competitors of our startup. It was analyzed that most of the competitor companies are well established companies that can be categorized into two categories: The first being fertilizer companies providing compost and the second being organic farming companies. 11 How we are different: ➢ We offer our customers with the availability of customizable features like soil testing and display of online results on the application/website. ➢ The famous fertilizer companies provide compost and soil enrichment products that are not chemical free so our chemical free compost has an advantage over them. ➢ Their main customers are large scale farms compared to our target market that is specifically home growers and small scale farms. ➢ Other organic farming companies are the main competitors providing similar organic compost services but our tailored compost specific to soil service is the unique attribute that sets us apart from them. ➢ Our products and services are overall cheaper than these competitors As the market is not saturated there is a place for the company to earn profits while competing with smaller players. There is a low threat of substitutes. Rivalry among existing firms and threat of new entrants is mediocre as it is an emerging industry. Name Grow Organic Higo Organic Pvt Garden fertilizers Limited Organic Pakistan Nutrient Content Even Advantage Even Even Pricing Structure Even Disadvantage Even Even Social Consciousness Advantage Even Advantage Disadvantage Packaging Advantage Even Even Even Advertisement Disadvantage Even Advantage Advantage Table 2: Similarities and Differences between us and our competitors Farming 12 Estimates of Annual Sales By reviewing and analyzing similar firms such as Garden Fertilizers, Blue Star Composting and Recycling and Vermi compost and organic farming Pakistan etc. we were able to generate financial projections, historical income statements and the expected annual sales. ESTIMATE OF FINANCIALS 3,500,000 3,000,000 2,871,648 AMOUNT IN RS 2,500,000 2,000,000 1,500,000 2,208,960 1,699,200 1,608,408 1,000,000 1,148,400 1,060,560 1,044,000 500,000 1,263,240 655,200 1 2 3 YEAR Net sales Cost of Sales Figure 1: Estimate of financials -See section 11 financial projections for details Gross Profit 13 Due to its low overall costs, composting is deemed to be a suitable business to invest time, money and efforts into. GROW ORGANIC like all companies, plans to be a profitable company and because of its low cost factor it could feasibly become profitable as early as the end of the first year of business operations. Revenue Drivers And Profit Margins The key revenue drivers for GROW ORGANIC will be the number of people receiving services, type and quality of services delivered, amount charged for delivering services and the overall demand for organic products. Therefore it will be of uttermost importance to work in these areas to maximize profit margins. The main source of income will be from the sales of compost, soil testing services and the delivery services charges with cash on delivery. These numbers are based on costs that are currently below the averages seen by competitors. Rates: 1. Ready-made compost bag in 6kg for RS 420 2. Ready-made compost bag in 40kg bag for RS 2000 3. Tailor made compost bag for Rs100 per kg 4. Extra 300 for soil testing service. 5. Delivery services will charge Rs 200 ➢ In the first year the company expects to sell these products for sales of RS 141600 per month average while number of units sold increases per month and RS 1699200 per year. ➢ For the second year in business the net sales are projected to increase by 30% and subsequently the profit margins will increase as the cost of goods sold will remain low due to cheap raw material. The company is expected to run with an average of 25% profit margin. Year Profit Margin 2022 30.78% Table 3: Profit margins by year 2021 24.30% 2020 16.54% 14 Fixed and Variable Costs Cost drivers for the business include labor costs, administrative costs, and facility costs. Fixed costs Variable costs ➢ Rent ➢ Purchase of raw organic waste ➢ Utilities expenses ➢ Production supplies ➢ Cost of the production equipment. ➢ Bags and packaging ➢ Salary of the workers ➢ Payments to the organic waste supplier ➢ Delivery Service Company. Table 4: Fixed and variable costs Operating Leverage And Its Implications The company’s operating leverage is the cost accounting formula that measures the degree to which we can increase operating income by increasing revenue. Operating leverage will be low for the company having a high percentage of variable costs to total costs. Minimize fixed costs will increase our profits without making any changes to the selling price, contribution margin or the number of units we sell. Start-Up Costs The initial start-up costs for this venture are assumed and approximated closest to the market trends, inflation rate and initial costs of similar businesses. In the first 6 months of operation, expenses will be at the highest. Renting a warehouse 5 Marla 20,000 Warehouse Utility expense 40,000 Branding and promotion 10,000 Equipment needed 50,000 Machinery 400,000 Setup of machinery and warehouse 20,000 Production costs 18,000 15 Company registration fees/legal fees 10,000 Website/app cost 5000 Purchase of organic waste 7000 First month Salary of 2 workers 30,000 Other/misc 30,000 Initial Marketing cost 20,000 TOTAL RS 660,000 Table5: startup costs Break Even Chart And Calculation The initial starting budget for the company is set at Rs10,00,000 and as equal partners, the founders of the company will contribute some amount to cover expenses and all start-up costs for the first 6 months when the cost of goods sold will be greater than the net sales and the company will be making no profits. The net-sales will eventually increase and right after the sixth month it will equal the cost of goods sold and the break-even point reached after which some gross profit will be made. Break-even analysis of a new venture can be given by the following formula: Fixed costs =RS 20,000+10000+7000+20000+30000 Total Fixed cost = RS. 87,000 Price per unit = RS.140 Variable cost (Cost of goods Sold) = RS.53 Break-Even Point=87000 / (140-53) Break-Even Point =1000 units Assuming an average of selling 2000 bags per year, we can reach break-even point after 6 months, after which we will start generating profit. 16 Figure 2: Break even chart 17 Overall Marketing Strategy 1. Understand, identify potential customers and targeted segmented market. 2. Analyze the compost manufacturing competitors in the locality. 3. Define the marketing mix strategies. 4. Allocate a marketing budget. 5. Implement the action/execution plan to market the product. Marketing budget GROW ORGANIC will allocate its marketing budget year 2020 of Rs 200,000. Brand promotions 60,000 Advertisements 80,000 Online marketing 10,000 Events 20,000 Others 30,000 Total 200,000 Table 6: marketing budget Product Strategies A range of products will be developed to enlarge the customer base, including: bulk compost as soil amendment; very mature compost as nursery media; and vermi-compost as high value compost product for households. This diversity will increase overall sales. Value proposition ➢ Chemical free nutrient rich compost which is 100% organic. ➢ Tailored to the soil compost, specific to the soil therefore faster and healthy growth. ➢ Door to door Soil testing services and display of results online. 18 Branding We will brand our products as excellent quality products by using quality raw materials, producing on time and delivering on time. The company’s website will have unique user friendly interface and logo to promote the overall look of the company. Compost package will be printed with the company's logo and tag-line. Tag-line: “YOUR COMPOST HERO” Price Strategies The pricing strategy adopted by GROW ORGANIC is a combination of “cost based pricing” and “Pricing below competitors” to make sure that the compost is sold at a very reasonable price while ensuring profits by selling though a better scheme compared to our competitor’s unreasonable “value based pricing” strategy. We arrived at this pricing strategy by carefully examining based on-cost, variable cost, fixed costs, gross margin objectives, market prices, and perceived value. Demand and supply will determine prices of our products i.e. when demand increase, increases price of that specific product and vice versa. The pricing strategy will be reviewed on a quarterly basis. Promotions Strategies ➢ Online paid advertising on social media platforms. ➢ Ads played on different websites using search engine optimization and on click ads to redirect the user to our company's website. ➢ 5000 Brochures and leaflets to be distributed among the posh homes of DHA and Model town areas on a monthly basis. ➢ On a quarterly basis, newspapers and magazines published to promote our product. ➢ Promotion through stalls on events and expo’s. E.g. participation in Lahore’s annual fertilizer expo. Distribution Strategies Direct Distribution strategy is adopted. The distribution channels include the delivery services to transport samples of the customers’ soil to the warehouse for testing. The raw organic waste is collected from local vegetable and fruit vendors by a supplier and delivered to the warehouse for the manufacturing of the compost. The custom made soil will then be delivered back to the customers address at their door-step. By partnering with local supermarkets, our product can be stocked at their different branches to make distribution easy by using their delivery services. 19 Sales Process 1. Find leads and potential buyers through referrals, advertising strategies and promotions. 2. The customer contacts via phone number, responds to an advertising email, visits the website, visits the warehouse or login through the mobile app. 3. The lead is qualified if he/she successfully provides and asks sufficient information related to the product and his/her needs either on phone or data entry on the app/website. The lead is then pursued for a possible sale. 4. The potential customer is well guided and briefed fully on the product/service i.e. the complete soil enrichment process along with the service of soil testing and tailored made compost. Different deals and packages are provided for the customer to choose form. 5. Employees are encouraged to answer any ambiguities on the customers end either through helpline or by email. 6. The customer after successfully placing an order through the app/website will have the option to pay via easy-paisa or cash on delivery. The sale is closed. 7. A representative will call the subscribed customer after 1 month of product usage for progress an assessment overview. Loyalty card will be generated online on the website and a portal for complaints made. Sales Tactics ➢ The environmental and health benefits of organic compost are highlighted and promoted i.e. less pollution and global warming. Thereby attracting more customers. ➢ To lure a potential customer to the company’s website using SEO by showing ads to people who have searches related to farming, fertilizers and crops. ➢ Sales representatives will target those areas which are more likely to have home based farms e.g. Farmhouses. ➢ The sales Representative and the marketing team will try their level best to show maximum customer and product knowledge. 20 Development status and tasks The product is in its mid phase of development as compost recipe is being formulated with correct ingredients and their composition researched with the help of agricultural specialists. Time required to complete each task is mentioned after the task. Current status: ➢ The production phase is in its final form of development as machinery and equipment required for production has been finalized and booked in advance. ➢ Local fruit and vegetable vendors have been contacted for the supply of organic waste on a daily basis. To be done and estimated time required: ➢ Soil testing equipment finalization. 6 days. ➢ Soil testing service structure development. 9 days. ➢ Negotiations and contract signing with delivery service company. 3 days. ➢ Negotiations and contract signing with packaging company. 2 days. ➢ Finding suitable labor for machinery operation. 2 days. Estimated 22 days to be developed completely. Challenges and risks ➢ Accurate and precise composition of ingredients to be formulated. ➢ Correct manufacturing procedure finalization ➢ Equipment purchase at the lowest cost to remain under allocated budget. ➢ Packaging of the product to remain under costs, available in different sizes and be impurities free. ➢ The product life-cycle and on shelf freshness compromise. ➢ Handling copyright issues. ➢ Inefficient output of compost machinery. ➢ Dependence on raw material availability and quantity. ➢ Lack of quality control avoidance. 21 Projected development costs RS Agricultural specialist for composting recipe 5000 Research on manufacturing process 2000 Initial research on product and services 3000 Advance Booking of machinery/equipment 20,000 Copyright costs 25,000 Miscellaneous: 10,000 Total 65,000 Table 7: development costs Proprietary issues The company will have to be registered with certification from PAFA with the trade name ‘GROW ORGANIC’. All the products will be patented and copyrighted from IPOP to avoid copying of the product. Main issue will be of the high cost of registration and copyrights. 22 General Approach To Operations Soil samples collected from the customers by the delivery service will be bought to the warehouse for testing. The sample results will be input to the organic fertilizer granulator to produce the required compost. Vegetable waste mainly including: onion, carrots, cauliflower, sweet corn, cabbage, lettuce, broccoli, beetroot will be collected by the garbage company every day from the local fruit and vegetable vendors and transported to the company's warehouse production area. These vegetable wastes will be biologically stabilized through composting in a pile in order to obtain humified organic matter (green compost). Vegetable waste with high moisture, will be crushed by fertilizer crushing machine and is send to the horizontal fertilizer mixer to be mixed evenly. Crushed vegetable waste compost is passed into organic fertilizer granulator, to process into uniform particles (screening process). Large particles will be selected for the next round of granulation. The qualified organic fertilizer is sent to be packed manually by workers in bag containers and stored in the storage area. Workers will supervise the processes. This process will consume 2 to 3 days. The delivery service will drop off the package to the customer. Business Location The business will have a reasonable rent warehouse near Johor town rented for operations and production purposes. This will be an ideal and strategic location in terms of ease of transport, access and facilities. All the manufacturing will be done inside the warehouse. The warehouse will be open for customer dealings from 9 AM to 2PM while the manufacturing will continue 5 days a week from 9AM till 5PM. Facilities and Equipment The warehouse will be divided into 4 parts with separate departments: Department 1 Dealings and customer support To handle customer queries and process orders. Table 8: departments Department 2 Soil testing Department 3 Manufacturing and packing Where the testing Large area to fit in machinery and production machinery. equipment will be placed. Department 4 Storage To store finished goods and packages to be delivered to the customer 23 Only 2 workers will be needed to operate the machinery in the initial phases. Main machinery to be purchased for the manufacturing process: ➢ FERTILIZER CRUSHING MACHINE. ➢ ORGANIC FERTILIZER GRANULATOR ➢ HORIZONTAL FERTILIZER MIXER ➢ SOIL TESTER 24 Management Team For the initial years of the start-up the management team will consist of only the three founders of the company who will work full time on the business with each co-founder assigned different roles. Figure 3: Management team Skills profile Figure 4: skills profile 25 Board of Directors ➢ Syed Iqtidar Saeed, Retired Executive Vice-President, Fauji Fertilizer Bin Qasim Limited (FFBL), Director Since: 2020. ➢ Muhammad Ali, Retired Chief Financial Officer, Pak American Fertilizers Ltd., Director Since: 2020. ➢ Muhammad Abdullah, Retired Chief Executive Officer (CEO), Garden Fertilizers, Director Since: 2020. Board of Advisors ➢ Khadija Aamer, Chief Marketing Officer (CMO), Active Media. ➢ Ahsan Yousaf, Retired Chief Operational Officer (COO), Pak American Fertilizers Ltd. Since: 2020. ➢ Brig Muhammad Waheed Khan, SI(M) (Retd), Chief Technology Officer (CTO), Fauji Fertilizer Bin Qasim Limited (FFBL), Since :2020 Company Structure The company is currently only operated by its co-founders, but as it will continue to grow and have established partnerships with other esteemed companies, it will be necessary for the company to expand its management team for multiple operations and have hired experienced and high-level managers with similar interests to fill in the positions. In 4-5 years’ time the company's organizational structure is predicted to be as follows: Figure 5: company structure 26 Figure 6: Timeline of tentative schedule 27 Sources And Uses Of Funds Statements Similar business and their financials were studied and using their historical statements of income statements and balance sheets, the financial projection of ‘Grow Organic’ was forecasted. Income statements and balance sheets of fauji fertilizers were used to make appropriate estimates of amounts in the pro forma statements. A Similar start-up like ‘Compost Kings’ provided basis for expected profits, costs and revenue. Assumptions Sheet 28 Pro Forma Income Statement 29 Pro Forma Balance Sheet 30 Pro Forma Cash Flow Statement 31 Ratio Analysis 32 List of tables: Table1: Owners share Table 2: Similarities and Differences between us and our competitors Table 3: Profit margins by year Table 4: Fixed and variable costs Table5: Startup costs Table 6: marketing budget Table 7: development costs Table 8: departments List of figures Figure 1: Estimate of financials Figure 2: Break even chart Figure 3: Management team Figure 4: skills profile Figure 5: company structure Figure 6: Timeline of tentative schedule