Business Plan: Manufacture of Daily-use Products from Banana Plant Yarn

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Executive Summary

SK Das Eco-Fiber Fabrication is an eco-friendly company that manufactures daily essential products using banana fiber. These products are safe and fully usable as alternatives to plastic. By using the products, it is possible to reduce the use of plastic in the world and will make an exemplary contribution to protecting the environment.

Market Opportunity:

Environmental pollution is a major problem in the world today, most of which is caused by plastic products. Due to this, the demand for environmentally friendly alternatives to plastic products is increasing in different countries of the world including Bangladesh. Our only goal is to meet this demand by creating eco-friendly and plastic alternative products and providing them to the world.

Product Offerings:

Our products include:- Shopping bags, food storage bags, chairs and table mats, home decorator items (eg: baskets, placemats), office supplies (file folders, etc.), ropes, etc.

Target Market:

The main target market will be:-

• Those big companies of Bangladesh who use plastic products but now want to use environment-friendly products. For example – Unilever Bangladesh, Pran, Nestle Bangladesh, etc.

• All companies that are in demand for eco-friendly products in the international market.

• All companies dealing with eco-friendly products.

Aims and Objectives of the business:

First year: Manufacturing and selling 25 thousand units of product and earning revenue of Tk.2 crore 14 lakhs.

Within five years: To occupy a significant place in the market of eco-friendly products in Bangladesh and to enter the international market.

Within ten years: To become the sole supplier of eco-friendly products worldwide.

Competitive Advantage:

• Environmentally friendly and fully usable product.

• Low-cost production compared to other products.

• Ability to attract the attention of environmentally conscious consumers.     

Financial Planning:

Initial Investments:-

Own Savings: Tk.25 Lakhs.

Bank Loan: Tk.1 Crore.

First Year Budget:

Production cost: Tk.90 lakhs.

Marketing Cost: Tk.10 Lakhs.

Campaign Cost: Tk. 7 Lakhs.

Administrative Expenses: Tk.10 Lakhs.

Emergency Fund: Tk.4 Lakhs.

Revenue and profit in the first year:

Total Sales: Tk.4 Crore 20 Lakhs.

Profit: Tk. 1 Crore 57 Lakhs 50 thousand Taka.

Long-term Planning:

• Contracting with organizations interested in using eco-friendly products and supplying products.

• Increasing the quality of our banana products so that everyone is interested in using our products instead of plastic products.

• Continuing research to develop more products from banana fiber.

Management Team:

A management team will be formed with employees capable of producing various products with banana fiber. The management team has skilled members. By whose knowledge we will be able to produce much better quality products.

Business Description

Business Overview:

Eco Fiber Fabrication is a company that can prevent plastic pollution in the environment by making eco-friendly products from banana plant yarn. Our daily-use products are recyclable, durable, and better quality than any other products.

Company Vision:

Our Company Vision:-

• To become the sole supplier of eco-friendly products in the Bangladesh market within five years and start exporting products to international markets.

• To become the sole supplier of eco-friendly products worldwide within ten years.

Our Product:

Our eco-friendly products includes Shopping bags, Food Storage bags, chairs, and table mats, official materials, ropes, floor cleaner cloths, floor mats, etc.

Market needs and Trends:

The demand for eco-friendly products is increasing rapidly due to which people are concerned about buying recyclable products as an alternative to plastic. For which the demand for recyclable eco-fiber products is growing day by day.

Competition:

Some new entrepreneurs in Bangladesh like Rashedul Haque and Osman Biswas are taking various steps to produce banana plant fiber and Jaber & Zubair Fashion Fabrics Limited manufactures Banana Fabrics.

Many companies in India manufacture these banana plant yarn fabrics and make various products. We will have competition with all of them.

Competitive advantage:

• Products made of eco-fiber are completely eco-friendly and fully reusable.

• Low-cost production compared to other products.

• Ability to attract the attention of naturally conscious consumers.

Strategy:

SWOT Analysis:-

Strengths

• Eco-friendly and recyclable products.

• Competitive pricing of products.

• Can be used as an alternative to plastic.

• Quality and durable products.

Opportunities

• Possibility of new product development.

• Plastic has the potential to be established as an alternative product.

• Potential to enter the global market within a short period.

Weaknesses

• Lack of adequate funding.

• Not getting loans easily from banks.

• Not getting enough raw material.

• Lack of skilled workers.

Threats

• Local and International Politics.

• Arrival of the new company.

• Problems in product export and import.

Marketing Plan

Market Analysis:

At present, the demand for eco-friendly products is increasing rapidly in the market of Bangladesh as well as in different countries of the world. For which the demand for eco-fiber products is increasing day by day.

Individual consumers: People aware of environmental pollution are interested in using eco-friendly products as alternatives to plastic for daily use.

Commercial Sector: Various establishments produce daily-use products in Bangladesh, supermarkets, chain stores, and retail stores.

International market: Demand for products made of eco-friendly eco-fiber is full of customers and various companies.

Competition Analysis:

Various companies producing plastic products are competitors for us. However, eco-fiber products manufactured by us are eco-friendly, fully usable, durable long-lasting, and of good quality, so we will have a significant advantage in the market of eco-friendly products.

Marketing Strategies:

Product Promotion:-

• Promoting various types of advertisements for our Eco Fiber products on television, radio, magazines, and various online platforms such as Facebook, Instagram, Twitter, TikTok, LinkedIn, and other social media.

• Publishing various blogs and articles to inform everyone about the use of eco-friendly products.

• To promote eco-friendly products made of eco-fiber by email.

Product Showcase:-

Promote products by participating in various local and international competitive trade shows, business shows, and expos.

Products Pricing:-

• Our eco-fiber shopping bags will be priced between 10 to 100 Taka.

• Food storage bags will be priced between Tk. 50 and Tk. 150.

• Chairs and table mats will be priced between Tk. 250 to Tk. 500.

• The rope made from banana fiber will be sold at Tk. 700 to Tk. 1000 per kg.

Marketing Strategies:

• The products will be sold on its website and various e-commerce sites such as daraz, chaldal.com, Evaly, amazon, ghorerbd.com, etc.

• Products will be sold directly in the local market.

• Products will be sold through dealers at remote locations.

Operation plan

Collection of raw materials:

Banana trees will be procured from local farmers. Arrangements will also be made to collect banana trees from distant places.

Production process:

• First, cut the banana tree well and dry it in the sun.

• The fiber will be collected from the banana plant after drying.

• Banana fiber needs to be stored well so that it can be made into a variety of essential products.

Place of Manufacture:

Our primary factory will be set up in a district near Dhaka.

Factories will be set up in different parts of the country as production and sales of products increase.

Production Capacity:

• Our target will be to produce 5000 units of product per month.

• We are producing 50000 to 60000 units of product per year.

• Improving production units from 5000 to 200000 per month within five years.

Supply chain:

• Agreements will be made with the farmers supplying the raw materials to purchase banana trees.

• All those banana trees will be brought from the farmers to the factory through local transport.

• Produced products will be delivered to various companies and local shops through local transport.

• Buy Year will have contracts with various courier companies for the delivery of goods to international markets.

Equipment and Technology:

• Various types of equipment will be purchased for proper production and skilled workers will be hired to operate them properly.

• A modern Enterprise Resource Planning (ERP) system will be installed in the factory for production, supply of goods, and sales.

• Various computer-controlled technologies will be used in factories to control product quality.

Number of Staffs:

Our target is to start processes with 50 staff in the first year.

In the next five years, our staff will be 500 people.

And within ten years we will have 2500 employees.

Staff Training:

• New workers will be trained by skilled workers to explain all types of work.

• Training will be given first to operate each machine.

• Two months of training will be mandatory for new employees.

Safety and Maintenance:

• Various measures will be taken for the safety of different types of products starting from different equipment of the company.

• Every important place in the factory will be monitored by CCTV cameras all the time.

• Proper maintenance will be done to maintain the quality of each product.

Management

Composition of Management Team:

Founder and CEO:-

Oversee the overall business and take responsibility for taking any important business decisions. Take various decisions for new business strategy, product marketing plan, and product sales.

Expertise: Will have knowledge on how to make business bigger, will have leadership ability, will be able to solve any type of problem quickly, ability to give ideas for new product development etc.

Manufacturing Manager:

He will be responsible for all types of production from the beginning to the end, from the arrival of the product in the factory to the delivery to the store.

Expertise: Knowledge of all aspects from product manufacturing to product quality improvement. Can take work pressure.

Finance Manager:

All types of financial accounts of the company, financial transactions, from production to all types of budgeting, company investment, and loan management will be responsible.

Skills: Knowledge of investments, loans, budgeting, and financial management.

Also our company will have sales and customer service managers, production staff, marketing team, sales representatives, customer service staff, cleaning staff etc.

Staff recruitment and Training:

• Initially, we will recruit people with local experience as staff. Later, skilled workers will be recruited through various tests.

• We will provide world-class training to our employees so that we can maintain the quality of our products in the global market.

• One or two trainings will be arranged within six months to one year to improve the quality of the staff. Employees who can demonstrate their skills will be promoted.

Financial Planning

Startup Costs:

Costs of procurement of raw material: Tk. 20 lakhs.

Cost of production equipment: Tk.50 lakhs.

Initial inventory cost: Tk.10 lakhs.

Infrastructure:-

Space Rent: Tk.1 Lakh.

Factory setting up cost: Tk.20 lakhs.

Office equipment cost: Tk.5 lakhs.

Legal and other consultancy expenses: Tk.5 lakhs.

Marketing & Promotion Costs:-

Purchase of promotional materials: Tk.3 lakhs.

Operational cost for three months: Tk.7 lakhs.

Total Startup Cost: Tk. 1 Crore 21 Lakhs.

Income and Expenditure Forecast:

Earnings Forecast in First Year:

Monthly Sales: 5000 units.

Price per unit: 700 Taka.

Monthly Income: Tk.35 Lakhs.

Annual Income: Tk.4 Crore 20 Lakhs.

Estimated Expenditure in the First Year:

Cost of procurement of raw material: 50 lakhs 50 thousand Taka.

Production cost: 90 lakhs Taka.

Salary & Wages: Tk.50 Lakhs.

Marketing Cost: Tk.25 Lakhs.

Office and factory rent: Tk.12 lakhs.

Other Expenses: Tk.35 lakhs.

Total annual expenditure: 2 crore 62 lakh 50 thousand Taka.

Total Annual Profit: 1 Crore 57 Lakh 50 thousand Taka.

Profit and Loss Statement:

First Year:-

Gross Income: 4 Crore 20 Lakhs Taka.

Total cost: 2 crore 62 lakh 50 thousand Taka.

Total profit: 1 crore 57 lakh 50 thousand Taka.

Balance Sheet:-

Assets at the end of the first year:

Cash: 1 crore 57 lakh 50 thousand taka.

Raw materials and Inventory: Tk.30 lakhs.

Production Equipment: Current value is Tk.40 lakhs.

Office Equipment: Current Price Tk.3 Lakhs.

Total assets: 2 crore 30 lakh 50 thousand Taka.

Liabilities:

Bank Loan: 1 crore Taka.

Other Debts: 50 lakhs Taka.

Total Liability: Tk.1 Crore 50 Lakhs.

Total assets: 2 crore 30 lakh 50 thousand Taka.

Total Net Worth: 80 lakh 50 thousand Taka.

Funding Plan:

Personal savings: Tk. 25 lakhs.

Loan from Bank: Tk. 1 crore.

Funding Utilization: Startup cost of Tk. 1 Crore 21 Lakhs.

Financial Forecast:

Five-Year Revenue Forecast:-

First year: Tk. 4 crore 20 lakhs.

Second Year: Tk.10 Crores and 50 Lakhs.

Third year: Tk. 17 crore 25 lakhs.

Fourth year: Tk. 25 crore 75 lakhs.

Fifth year: Tk. 35 crore 50 lakhs.

Five-Year Profit Forecast:

First year: Tk. 1 crore 57 lakh 50 thousand.

Second year: Tk. 3 crore 50 lakh 25 thousand.

Third year: Tk.10 crore 75 lakhs.

Fourth year: Tk. 18 crore 25 lakhs.

Fifth year: Tk. 27.45 crore.

Critical Risks

Production Risks:

Lack of sufficient amount of raw materials for the production of products, lack of skilled workers, various types of obstacles in the production process, problems in maintaining the quality of products, etc.

Remedy:

• Procuring raw materials by contracting with farmers in multiple locations.

• Educational campaigns should be carried out constantly.

Financial Risk:

• Not having enough money to produce the goods.

• Not getting enough money loan from the bank.

Remedy:

• Products should be produced by fair distribution of money.

• Accepting money from investors as an alternative to banks.

Risk of Competition:

Many will be inspired by our products and start producing such products thereby increasing the number of competitors in the market.

Remedy:     

• To be ahead of everyone by producing quality complete and technology-based products.

• Continuing research to develop new products.

Supply Chain Risks:

• Inability to deliver goods on time to remote locations.

• Delay in delivery of products to international markets.

Remedy:

• Contracting with organizations that supply products.

Human Resource Risk:

• Inability to find skilled workers and hire workers on time.

• Employee moving to another company.

Remedy:

• Maintain good relations with employees.

• Paying their salaries on time and increasing their salaries.

Harvest Strategy

Initial Public Offering (IPO):

Through initial public offering, we can expand our business and earn and share profits with various investors.

Advantage: As a result of which the business capital will increase, investor interest will increase due to which the share price will increase.

Dividend Distribution:

The profit share will be paid to investors and shareholders in due course.

Advantage: Shareholders and investors will be interested in investing more.

Re-investment:

Profits must be reinvested to expand the business.

Advantage: Long-term profit can be achieved.

Sale of Business:

Businesses should be sold to companies that are interested in purchasing environmentally friendly products.

Advantage: A large sum of money will be available together with which the business can be expanded.

Asset Sale:

Selling all the equipment and tools that are not needed in the production of products.

Advantage: Some extra money will be added to the business with which other necessary equipment can be purchased.

Milestone Schedule

Business Plan:

Duration: One to Three months.

• Market, analyze, monitor, and research for businesses.

• Financial planning for business.

Preparation and motivation:

Duration: Four to Five months.

• There should be enthusiasm for business and preparations should be made for that purpose.

Establishment:

Duration: Six to Eight months.

• Finding a specific place to set up the business and starting the process of setting up the organization.

• To promote the establishment for recruitment of raw materials and workers.

Investment and Return:

Duration: Nine to Fourteen months.

• Investing money in business and ensuring profit returns and planning how to profit from the business.

Management and Enlargement:

Duration: Fifteen to Twenty months.

• Taking all procedures to make products with banana yarn and also management of every item in the factory.

Appendix

Important and Basic Information: A short description to describes the company’s history, objectives, vision, mission, and future plans.

Users’ Data Storage: We need to store accurate data of users of our products so that we can subsequently improve the quality of our products based on customer reviews and interest.

List of Production Activities: A list of specific tasks from the beginning to the end of another production process will be expressed through a list.

Findings of Research: Keeping the research done in developing any new product in short form so that it can be used later in other research.

Business Statistics: Monthly and yearly business statistics will be added which will include everything from cost of production to profit and loss.

Preservation of other Information: Details of the communication system, address of various institutions, phone number, transport system, etc. will be in short form.

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