Organic Food Business - Essay Example

? Business plan Number: Lecturer: Business plan My business plan is a franchise that will be selling organic farm products we aregoing to buy from Riverford Farm in Yorkshire. There are several franchises already existing, but I am going to make a unique brand that will sell to the customer. I am alive to the fact that, there is competition in the market already; my model is to be a premier supplier of fresh farm produce from the farm and expand in the future to acquire supplies from more farms. My business has been operating for the last one year as a franchise for the products, but my new plan is to develop a unique brand under a new name, company and brand. The products will be the same from the farm, but I will be selling them as my own brand name. Proposition In today’s world, organic food has been touted as the best option as either genetically modified food or food grown under green house conditions are not nutritious comparatively. Food from organic farming is gaining prominence from consumers despite the price compared with food from these conventional sources. There are many reasons that support any business with a special focus on environmental sustainability, therefore, the current success in my franchise business. My plan is to build a brand that delivers the same promise to a wider clientele at with a vision to cover the whole country in five years and foreign markets starting from European Union. The market is growing tremendously with consumers who are able to afford, ever increasing. Clients visiting my shops have been more than willing to pay a premium for the vegetables, fruits, and animal products. The reasons why they are buying are many including health and safety benefits as they are highly nutritious when delivered when fresh. To the environment, organic farming conserves it by preserving the natural state of soil, no erosion and restoring where they are depleted. Water bodies are conserved as there are no harmful affluent substances from the farms besides not cutting down trees along rivers and trees under agroforestry to create a sustainable environment. The most important reason for growth in sales in organic food is the economies of scale in forming cooperative farming as more farms join the cooperative able to produce en mass. This result in reduced production costs eventually passed on to consumers through reduced prices. The franchise business I have been operating has been able to gain more customers as they place more orders. I have been able to buy a pick up that I have been using to deliver to customer residences regularly from the fee earned from Riverford Farm. There is a great opportunity to serve more customers with the right capacity and repackaging vegetables for delivery to a wider market network. The current stalls have been overstretched as they serve only a small clientele limited by the number of stocking of pre-ordered supplies and delivery. There is a great opportunity to expand beyond the current limitations by placing my own orders which I am able to service. In order not to be limited by the supplies from the farm I am planning to contact more farmers who are able to supply from other regions as I cover a wider geographical location as I expand in future. I will design and print my own delivery box and provide a wider variety of choices. Parts of my target clients are hotels which a have unique variety mix in vegetables, fruits and animal products. The box content can be changed to suit specific needs for each target client by having only fruits boxes, vegetables and animal products. Hotels and institutions may not fall in the kind of client characteristic served by the current boxes but rather require each unique product in large quantities. I will be able to supply directly to Yorkshire Farmers Market to business people operating stalls. Marketing mix To succeed in my plan, I need a proper marketing mix that is able to deliver the promise of value to my business and to the target customers. I should be able to attract and retain customers especially in the service I will be offering to my potential clients successfully. To achieve this goal, I need a 7Ps marketing mix to be able have an impact. Product- the organic vegetables, fruits, and animal products are a strong proposition to attain success from the growing demand. The products are delivered fresh to the market characterised with high nutritional value. Price- the prices of all the products are very competitive and will be able to deliver value to the clients. Though some might think prices are offered at premium rates, but the contents and logistics justify the prices. The prices have been gradually reducing from what it used to be before; they are now very affordable to all due to economies of scale in production. Place- the customer will be able to buy from my stalls to be established downtown, Yorkshire Farmers Market, supermarkets and home deliveries on orders to my neighbourhood. Promotion- I’m planning to carry out a sensitisation campaign drive throughout town of my new business plan through local radio adverts, on newspaper and print brochures to be delivered on the vegetable box meanwhile as I plan to roll over. People- service to the current customers will be maintained as it were, but will be sensitizing as changes begin. I am planning to add employees progressively as the business grows in turn over. I’m planning to sensitize them of the changes that are coming. Process- the process involves sending a canter lorry to get supplies to my packaging premises before delivering them to the market according to customer requisition and specifications. Physical- the produce should be delivered to customers as fresh as possible because this is my selling point. The packaging should be very attractive to inspire the customers and delivered by experienced and knowledgeable employees who are able to explain to customers about the value of the products. Operationalisation I am planning to get an overdraft or a two-year loan (?20,000) from my local bank to operationalise the business. This will enable me acquire a new canter lorry with bigger capacity (7 to 7.5 tonnes) than the pickup I am currently using going at about ?10,000. The balance from the loan will be expended on putting up new stalls and expanding the one I am currently operating. The amount is enough to purchase the first substantial delivery from Riverford Farm and ordering branded carton boxes, printing brochures, and any form of advertising as stated. I am planning target revenue of about ?1,000 per day, 5 days a week for the entire year June 2013 to end of May 2014 when I will close the financial year accounts for review. (Refer to Cash flow and profit and loss statements at the Appendix). This business plan will work as there is huge potential in the market as demand for organic food is ever rising in Britain and outside. Demand will be able to sustain my planned growth for the near future, and with investment there are good returns. Appendices A. Cash Flow statement Particulars ? Sales 255,000 Purchases 160,000 Gross profit 95,000 B. Profit and Loss Statement Particulars ? Gross profit 95,000 Loan (plus interest) 12,500 Labour 15,000 Electricity 2,500 Fuel 20,000 Boxes and other stationary 7,500 Advertising and promotion 400 Telephone 800 Internet expenses 250 Insurance 210 Rent 9,900 Repairs and maintenance 950 Total expenses 70,010 Net Profit before taxes 24,990 Taxes (23%) 5,747 Net operating income 19,243 Read More