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Business PlanGREEN STOVE
Group- 7
2012
xxx
[Type the company name]
9/15/2012
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A report
On
Business Plan
Course- B-308
Submitted To:
Md. Safiullah
Lecturer
Dept. of Banking & Insurance
University of Dhaka
Submitted By:
Shafiqul Islam 16-044
Istiak Ahamed Shakib 16-046
Md. Rezaul Islam 16-067
Md. Anwar Kadir 16-047
Mehedi Hasan 16-085
Md. Samidul haque 16-251
Zahirul Islam 16-082
Shuvo Chandra Saha 16-084
Department of Banking & Insurance
University of Dhaka
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Friends Enterprise
Head office
215/B, Gausul Azam Super Market. Nilkhet, Dhaka.1000
Local office
52, Station road, Norsingdi.
&
12, Esha kha road, Kishoregonj.
GREEN STOVE
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Business ideaOur business idea is to make something innovative and beneficial to rural people of
Bangladesh. From this mindset we have developed a product which is based on a
brand new idea in Bangladesh. Our idea is to develop a product for our rural
people which will make cooking much more easier and make a healthy
environment in kitchen. The name of our product is GREEN STOVE ()
its a new product built in a way that will not emit smoke and household waste,
Cow dung, banana leaves, Dhol kolmi tree and leaves will be used as fuel pellets.
Most attractive features of this GREEN STOVE are low cost, light weight,
environment friendly and healthy.
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Industry analysis
The economy and business environment in Bangladesh
Bangladesh is not an economically strong country as most of our population is less
educated and their lives are driven by superstitions. The developed countries are
trying their best to have a carbon free world. They are going ahead because they
are economically strong and financially also strong. Bangladesh cannot do well
with the scientific modern invention because of our lacking in infrastructure. Fuel
problem is a severe problem for most of the people living in villages and in the
semi-urban area. On the other hand the urban area people are also not free from
this problem at all. They cannot get enough gas and electricity to use. Most of the
urban people do not get enough gas and they also do not know how to properly
utilize these natural assets. Somewhere government provide gas at a low cost and
somewhere at a semi-fixed price, so people ,especially women do not like to make
a proper utilization of this national asset. People living in the urban and semi-urban
area are not financially enough strong to afford buying LP gas oil for cooking and
for others activities. The infrastructure system also here lacks to provide gas in the
rural areas. So, our project wills focus urban and the rural area people. Some
people here provide LP gas, but at a higher price and the rural and urban people
cannot afford it to use. Some traditional companies here provide traditional stove
but people need to use high price kerosene oil and that is also not much good for
health. The oil importing parties exploit the general people using their syndicate inour country.
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The market place
Our target customers are the semi-urban and the rural people living within a small
income. People living under the poverty line and the people having a middle class
and lower middle class will be our main customers. Smoke-free stoves and pellets
will be less costly to provide easy for rural and semi-urban people. First of all we
will offer some campaign to inform people about our product. Some educated
people will be impressed at the beginning. As it is healthy to semi-urban people
women will be very attracted to it. Smoke-free stove will be provided at an easy to
get price. The rural and semi-urban women use wood and oil which is difficult to
use and unhealthy to use also. Although Bangladesh has a lot of natural gas, it will
come to an end one day. We have our waste in daily activities as we are polluting
our environment. The well-developed countries are mostly polluting the
environment and the third world countries are becoming the victim of the natural
calamities. When we are only using unused raw materials for manufacturing our
product, the oil we use in our country is imported from the Middle East countries.
Every year we need to import a huge amount of oil from the Middle East countries.As the Middle East countries are getting problems with the USA it is becoming
more difficult for us to enough oil and the oil price is also getting high. As we are
destroying our environment by using carbon removing oil for car, helicopters, aero
plane and the others mills and factories ,we are just bringing the curse for us. The
entire vehicle system use fuel for driving and the industries also dependent on the
natural gas and the imported oil. As the oil importing countries are getting
involved in wars, every the oil price is going high. Our government has to bear a
great deal subsidy for oil importation and we will try making it understand our
probable customers. We are going to provide the pellets at a low price. It will open
a great opportunity Bangladesh to minimize our daily expenditures.
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Competitors
We do not need to be worry about the competitor much. We are providing services
to the semi-urban and rural area people. Rural generally use wood and the dried
leaves of trees which is not always healthy. These stoves are made individually by
the women not commercially. So they are not our competitors
Competitors
In all kinds of business it is necessary to keep into eye what matters to the
competitors. We also have some competitors in our business. As fuel is one of thevery important object that we to cook our food. We always keep in our head the
facts of our competitors. We do not need to be worry about the competitor much.
We are providing services to the semi-urban and rural area people. Rural generally
use wood and the dried leaves of trees which is not always healthy. Semi-urban
area people also use wood and somewhere LP gas and oil for cooking.
Traditional stove providers
The traditional stove providers in Bangladesh are our main competitors. We are
providing more healthy services and also then the pellets at lower costs. Traditional
stoves need to use much wood and the traditional wood providers will be our
probable competitors.
Kerosene stove providers
Traditional kerosene stoves use high price kerosene. Oil, which is not always
healthy and sold at a higher price in our country. People now a days, specially the
women do not like to cook using oil when it is not much healthy and the price is
also moving upwardly gas providers will be our another competitor.
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LP gas providers
We also have to compete with the LP gas providers in country.But we do not need
to think much of about them as they provide limited services only to the urban and
semi-urban people. As help gas price is high we will be able to provide our
services to them.
Bondhu Chula
Bondhu Chula providers also are our competitor in the rural and the semi-urban
area. We will provide warranty, guaranty and after sale services to influence our
customers as our marketing strategy. Bondhu Chula is a good competitor as they
provide a good system to cook by not polluting the environment. They also provide
after sale services as well as it is pollution-free way of cooking. It is a smoke-free
system to cook. Bondhu Chula already has a lot of projects in rural and in the semi-
urban area although most of the village people do not know about it and cannot
afford it at all. It also needs a lot of woods or fuel in use. Bondhu Chula on other
hand village people cannot buy because sometimes it becomes out of buying
power.
Biogas plant providers
Biogas plant providers will also be our competitor. Biogas plant is now much
costly to build and also complicated for the semi-urban and rural people do not
know about it at all. Rural people are not actually aware of using their rubbish by
this biogas plant .It takes time to repair when it goes damaged and any problem.
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Business description
Description of our business are given below considering products, services,
customers, marketing, sales and the management team or HR. In this segment
current situation of our business will be described.
Products and Services:
We will produce two kinds of product. One is cook stoves and another one is
cooking fuel. We will offer two types of Green Cook stoves to the customer. One
is for large families and other is foe small families or single people. The features ofthese cook stoves are burn clean with no smoke, burn hot, cook first and have an
adjustable flame. Price of cook stoves will be Tk. 500 for small families and TK.
1000 for large families.
Our another product will be cooking fuel named pellets and this pellets raw
materials will be twinges of dhol kolmi (Ipomoea carnea), other tree species,
banana leaps, dhol kolmi(Ipomoea carnea) leaps, grass, Cow dung andagricultural waste. Characteristics of our cooking fuel will be clean, efficient,
consistent quality and made in Bangladesh. Cooking fuel will be packed by 1 kg, 2
kg, 5 kg and 10 kg of pellets. Price of fuel will be TK. 10 per kg. 1 kg of cooking
fuel will cooks for about 2.5 hours.
We also provide cooking stoves related services like repairing and kind of
trouble when cooking.
Customers:
We will divide our potential customers in two group poor rural families and
semi urban families. In the initial stage, we will collect raw material from the
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village people and in exchange of we will give those cooking stoves and cooking
fuel with very minimum cost.
At the same time our plan will be sell cooking stoves and cooking fuel to the
semi urban families for the purpose of generating minimum revenue in the initial
stage.
Marketing:
Our products are new in our country. So at first we will try to create awareness
about CO2, environmental pollution and deforestation in our selected area. Then
we disclose our product and try to understand them how these products help them.
We will follow different way to market our product. Our products will be shown in
poster for the illiterate rural families and by media though print and electronic,
conversation with them by our marketing team for the selected semi urban families
in the initial stage of our business.
Sales:
We have two products and sell them to the two different customers in two ways.
For the cooking stoves selling, we will open sales point in the selected semi urban
area from their families can buy and stoves will directly supply to the poor rural
people. On the other hand, cooking fuel will be sell at low price in exchange of raw
material to the poor rural people in selected area of our project and semi urban
people can buy cooking fuel from our sales point in the projected area.
Management Team:
Our management team will be headed by CEO. Then come to the head of
specific department like production, marketing manager etc. Our factory will be
two. So two manager will report to CEO of our organization.CEO of our
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organization will report to the governing body run by seven members. We will
build up a marketing team and sales team to market and sales our product.
Technology:
The production of wood pellets depends on various physical properties, such
as moisture content, particle size distribution, bulk density, and operating
parameters, including die shape specifications, operating temperature, and power
requirements.
Customers and Marketing
Customers:
We will mainly go through rural people to make them involved with that project.
As the stoves needed to use the produced pellets will be generated by other
organization, there will be no scope to make any subsidy there. So the major
portion of revenue is expected to be generated from the produced pellets. But as we
are mainly focusing on rural people we can give some concessions to them as they
are they are the main the providers of raw materials .In fact they will be given
pellets free in exchange of the raw materials.
Incentives for special customers:
Cooking with a Stove transforms the biomass fuel pellets into biochar, which is
80%carbon.As the plan includes to sequestercarbon dioxide by applying biochar
as a soil amendment to agricultural land, resulting in increased crop yields and
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improved food security in rural areas. Pellet production uses almost no wood, only
twigs smaller than 1 cm in diameter. In addition, no cropland will be converted to
bio-fuel production. As a social benefit organization, this close contact with the
rural poor is an incredible opportunity for us to further create a positive impact.
Building upon the success of the Stove and biomass fuel sales, we will be able to
begin to offer many extra products for additional social benefit through a customer
rewards program. Customer accounts are credited when the biochar is returned to
the rural areas we have selected. With these credits customers can purchase solar
lights, rechargeable batteries, water filters, school vouchers and more.
Marketing Ps:
Price: As we are mainly focusing on rural customers we will offer them an
affordable price at which they can buy the pellets with their minimum purchasing
power. But there will be price cut for the stove as it will be produced by another
organization. We hope this will bring no adverse impact on our business. Because
once the stove is bought it can be used for 3-5 years at a stretch. Again there will
be minimum revenue generation from rural areas as the raw materials suppliers
will be given free pellets and again they will be given extra incentives if they
return the used pellets which will be processed further. As our revenue will mainly
come from the urban customers, we will charge them much at higher price than the
production to offset our other expenses.
Place: We will select some hill tracts where the raw materials will be available for
the pellet production and also where the people have no access to natural gas for
cooking to make them involved with this lofty project and thus we will be able to
make them an integral part of our project. For this purpose we have selected some
region quite far from Norsingdi, Kishoregonj and Gajipur district.
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Promotion: As we are mainly focusing on rural areas we will try to first draw their
attention by organizing road shows and dramas on our product. There will also be
held some seminars in schools and colleges where we will try to bring the most
respected persons such as chairman, union member and if possible the religious
leaders who will have a brief on the product to the rural people .We will also offer
some coupons if anyone buys our product and thus he will be able to accessible to
offered gifts through the coupons. Whereas in city areas we will draw our attention
on TV medias and online newspapers and FM radios .We will arrange some
festivals where the advantages of product will be discussed by specialist. There
will be songs, dance and dramas by the reputed artists throughout the day. We will
also try to draw our focus there in the schools, colleges and universities with the
help of the concerned parties.
SWOT ANALYSIS
SWOT analysis for Green stove Has been done to delineate the progressive
hurdles to be faced by the entrepreneurs as well as out lining the possible solution
for solving the problems.
STRENGTH OF THE PLAN
To find out the competitive edge of Green Stove over the existing competition, we
must identify its strength to emphasize on them. Ronda stove has a number of
advantages over its competitors
First, Green stove will provide better services to the customer for the purpose of
using the product
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We will charge a lot less than the existing companies which charge a lot
Green stove will maintain superior supplier contracts and personal connections
with officials of different venues which will enable the customers to choose from
the highest possible variety of option
WEAKNESSES OF THE PLAN
The weaknesses of this new venture have been identified so that Green stove can
find a way to get these obstacles.
At the beginning of the operation Green stove may find that it has underestimated
the marketing cost and this may leave the firm high and dry in terms of cash if it
decides to continue with the campaign or the firm may be forced to abandon the
campaign midway. The educated & semi-urban customers may react differently to
what the firm has envisioned. This may force the firm to change the product mix.
The firm may find that it is consistently failing to meet the revenue targets. This
would cast doubt over firms ability to manage the business as well as the future
prospects of the firm.
Operational cost like employee cost may turn out to be more than anticipated thus
squeezing the profits. This would have negative impact on the business.
It may sometimes not suitable for the continuing growth of the firm in the industry.
This would force the firm to make quick review and change of the current market
policy.
When it comes to financing, the first risk that the firm may run into is that the
amount of loan sanction by the bank may not be sufficient to satisfy our needs.
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OPPORTUNITIES OF THE PLAN
Fuel problem is a severe problem for most of the people living in villages and in
the semi-urban area. On the other hand the urban area people are also not free from
this problem at all. They cannot get enough gas and electricity to use. Most of the
urban people do not get enough gas and they also do not know how to properly
utilize this natural assets People living in the urban and semi-urban area are not
financially enough strong to afford buying LP gas oil for cooking and for others
activities. The infrastructure system also here lacks to provide gas in the rural
areas. So, our project will focus urban and the rural area people. This presents a
huge opportunity for Green Stove. If the firm can make the proper use of this
opportunity, it will be able to emerge as a major player in the count
THREATS OF THE PLAN
For Green, one of the major threats is that the firm may find out that the innovative
product may be copied by the nearest competitors and it may be out dated to fulfill
the customers demand. This may have negative impacts upon the quality of the
products service and the mode of operations.
The competitors- Bondhu Chula, the biogas plants providers, kerosene stove
makers; LP gas providers pose another threat for Green Stove.
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Social Benefit
Now people want to eliminate the use of kerosene for indoor lighting in the
rural and semi-urban areas. Green stoves will provide an alternative to
polluting and forest-destroying brush-fueled cook fires. We want to bring
carbon-negative stoves into the majority of homes at minimum cost to rural
users. As the stove pellets will be made from bananas leaves, grass and other
waste materials; it will make sure the proper use of waste. Not only will that
it provide fuel at a very low cost. Comparing to other traditional means, it
will be more environmental friendly. Another important factor is it will
make employment facility to the unprivileged group. Green stoves will
benefit the society by:
Deadly smoke emissions will reduce:Traditional forms of cooking are
now recognized as causing more deaths worldwide than malaria and TB
combined. The attendant social costs of time spent on collecting fuel, low
work productivity due to illnesses, and an almost endless list of otherimpacts have marked Traditional forms as a socialdifficult problem.
Less deforestation: As pellets of the stoves will be made from leaves,
grasses deforestation will reduce at a notable rate.
Climate impact: Unsustainable consumption of charcoal and biomass are
massive sources of carbon dioxide emissions. Green stoves will reduce
carbon dioxide emissions.
Environmental friendly: From every perspective our Green stove is
environment friendly. It is made with materials which have no harm to the
environment. Its fuel will is also beneficial for our environment and society.
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Proper utilization of waste: Some of ouringredients of fuel is householdwaste and a local weed Dhol kolmi plant and cow dung.
Employment facility for unprivileged group: It will make employment
facility for the unprivileged group especially for the rural women. Village
women will be able to produce our fuel pellets staying in their houses.
Fuel facility at lower cost: it will put an end to the fuel problem of our
country in rural areas. Because our Green stove will be much cheaper then
other stoves and their fuel will be also cheaper and available.
Financial Plan
How will we finance it?
Bank Loan
As we all are students, we hardly have enough capital to implement our business
idea into a successful business project. So we have to rely on bank loan to
implement our idea. Now-a-days private commercial banks are being instructed to
provide loan in SME sectors by the Bangladesh bank. As a result private
commercial banks are providing loans to small and medium business projects.
Thats why we are going to apply for loan to a private bank. We also gather some
cash by ourselves which will be our equity capital and the bank loan will be our
debt capital. We will select such a bank which provide loan with the lowest interest
rate and have easier conditions. Obviously the loan should be collateral free loan.
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Donation
We will also look for donors who are willing to finance such innovative business
ideas like us. We are hopeful to find an individual or organization having enough
funds and looking for business ideas to finance without the expectation of monetary
return. If we succeed to manage a donor then we wouldnt apply for the bank loan.
And that will minimize our cost as we wont need to bear interest expense.
Maintenance issues
In the first few years we are expecting to have a net loss. These are years for
foundation of our business. In these years our main concern will be maintaining
regular production and attracting customers by various marketing campaign. If
these things go well we will be able to make the interest payment if financed from
bank loan.
First 10 years our first priority will be repaying the bank loan if our project is
financed from the bank loan. We shall try to repay the whole loan within this time
frame. We expect that our business will become established and profitable within 5
years. We shall not take any thing from the business for ourselves in this time.
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Pro-forma Income Statement
BDT. BDT.
Sales 10, 00,000
Less: Cost of Goods SoldBeginning Inventory -----------
Add: Purchases 1, 00,000Freight-in 2, 50,000
3, 50,000
Less: Ending Inventory 50,000
Total Cost of Goods Sold 3, 00,000
Gross Profit 7, 00,000
Less: Operating Expenses:
Advertising 4, 05,000Maintenance 10,000
Salaries & wages 1, 50,000
Building Rent 50, 000
Office Expenses 20,000
Packaging Cost 50,000
Utilities 10,000
Professional Fees 20,000
6, 75,000
Operating Profit 25,000
Less: Interest Expense 1, 23,200
Net loss before Taxes - 98,200
Less: Tax (40%) 44,720
Net loss - 142920
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Pro-forma Balance Sheet
Liabilities BDT Assets BDT
Current liabilities
Suppliers
Long term liabilities
Bank loan
Owners equity
Istiak 1,00,000
Shafiq 1,00,000
Shuvo 1,00,000
Reza 1,00,000
Zahir 1,00,000
Mehedi 1,00,000
Samidul 1,00,000
Kadir 1,00,000
1, 60,000
16, 00,000
8,00,000
25,60,000
Current Assets
Cash
Bank
Inventories
Fixed Assets
Machinery
Furniture
Covered van
10, 00,000
3,00,000
2,00,000
5,00,000
1,50,000
4,10,000
25,60,000
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Conclusion:
We think this is the great opportunity for the Bangladeshi rural and semi urban
families. Because everything of Green stove is positive. It saves the money,
environment pollution, deforestation, climate, from different diseases of housewifeand overall its new business idea in Bangladesh. If we successful in our projected
area then we will try to spread our social business all over the country. It also
profitable for the entrepreneur who wants generates revenue from new idea based
business considering social point of view.