Three optional financial proposal for expansion of business

Assignment Taken

Create a fund raising proposal to support expansion for funding from venture Capitalists. (Finance department)

Case Understanding

Our client Mr. Desai is a experienced person with a vision to bring Farm to table. The business plan is to provide fresh vegetables directly from farm to the customers. The business is planned with a sustainable and economic framework. The business was started with personal capital of ₹10 lacs in the city of Pune. It is e-commerce business start up. The client visioned for an economic business of organic and fresh vegetable with farm to table concept. Business plan is quite attractive and has a persistent growth rate. Due to lockdown, the client has earned quite a customer base which is actually the future of industry. The client approached us for expansion plan and to help him come up with a financial plan to present to Venture Capitalists. The business has been running for 2 years now and the client wants to expand business to nearby metro cities. The business plan has potential to attract the customer base in metro cities well looking at the growth rate and experience of the client. The business has achieved its break even point already at 390 subscriptions. It will be able to make great profits in the coming years. Since the variable cost is ₹170 per customer and on an average, he is able to fetch ₹200 per customer per day which gives him the contribution of ₹30 per customer per day. Currently he has customer subscription of 400 which is continuing prospectively and can be assumed to retain atleast 400 customer base. Lockdown, Covid 19 and e commerce platform has helped the business to grow quite a bit since social distancing is the need of this pandemic which is quite good for the client. People don't need to go out of home specially in pandemic situation with businesses like our client. Looking at the business idea, financials and the interest of the client, we understand that the client is quite invested in the business growth and looking for successful expansion in the near future. He is paying our consultancy firm quite an amount and looking for a good and attractive business expansion plan to be presented to VCs. We need to prepare a good plan for the client considering all the key factors and limitations he is currently facing such as early harvesting, partial harvesting, use of pesticides and fertilizers, need for a marketing strategy and other such problems with the current business case. He is purchasing the fresh vegetables from farmers, packing it and deliver it within 6 hours which he wants to bring down to 3 hours so that fresh vegetables are served directly to customers. He wanted organic farming but which is not currently happening for him. He wants certain limitations to be overcome with the help of our team. Thus we not only need to prepare a good business expansion and financial Proposal instead we need to prepare a holistic plan using principles of business process engineering so that all the limitations and key factors are eliminated or mitigated to the extend possible.

BCS Solution Summary

Looking at the case scenario, our team have come up with a business process engineering plan for the client using all the management principles with a holistic view. Human resource aspect of the business : It is adviced to follow multi-generational model of human resource hiring and management. People who are good in various fields at a time are advised to be hired here who can manage various facets of business viz sales, marketing and other chores of business. There are various management graduates whose family background have been agriculture. People who know how to communicate with locals as well as customers. These people will help to communicate with the farmers and the customers as well. This will make farmers open up with their issues and help them in the best way possible. Everybody wants someone who understand them well. Thus this will solve various problems of the client with regards to management and communication with farmers and locals. Marketing aspect of the business : It is advised to follow aggregator model of the maketing with thorough marketing strategy. There are various people who have excess tools and land available, who are willing to lend them to those who need it. Client can hire the required tools and land and provide it those who need it on subscription basis. This will help the farmers to get the needed things easily. Also this market is not much regularised, thus this type of aggregator services will help the farmers fight the financial constraints easily and get tools at cheaper rates. Information technology aspect of the business : Create a holistic website which is easy to use for aggregator services, share services and current business as well. Develop app based services which is easily accessible for everyone. Financial aspect of the business : Since the variable expenditures in this type of businesses cost a lot, it is adviced to go for centralised management of business. Marginal costing approach should be used and also break even should be achieved earlier than current case.

Solution

As per attached pdf file 

Conclusion

The business plan is quite attractive and successful since the break even is achievable and the start up of this sector is the future needed e commerce business

Attached File Details