2012

Business Plan GREEN STOVE

Group- 7

xxx [Type the company name] 9/15/2012

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 Md. Anwar Kadir Mehedi Hasan Md. Samidul haque Zahirul Islam 16-067 16-047 16-085 16-251 16-082

Shuvo Chandra Saha 16-084

Department of Banking & Insurance

University of Dhaka

GREEN STOVE

Friends Enterprise
Head office 215/B, Gausul Azam Super Market. Nilkhet, Dhaka.1000 Local office 52, Station road, Norsingdi. & 12, Esha kha road, Kishoregonj.

Business idea
Our 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.

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 in our country.

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.

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 the very 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.

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 semiurban 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.

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 of these 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 and agricultural 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

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

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 sequester carbon dioxide by applying biochar as a soil amendment to agricultural land, resulting in increased crop yields and

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.

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

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.

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.

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 other impacts have marked Traditional forms as a social difficult 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.

Proper utilization of waste: Some of our ingredients of fuel is household waste 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.

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.

Pro-forma Income Statement

BDT. BDT.

Sales Less: Cost of Goods Sold Beginning Inventory Add: Purchases Freight-in

10, 00,000 ----------1, 00,000 2, 50,000 3, 50,000 50,000 3, 00,000 7, 00,000

Less: Ending Inventory Total Cost of Goods Sold Gross Profit Less: Operating Expenses: Advertising Maintenance Salaries & wages Building Rent Office Expenses Packaging Cost Utilities Professional Fees

4, 05,000 10,000 1, 50,000 50, 000 20,000 50,000 10,000 20,000 6, 75,000

Operating Profit Less: Interest Expense Net loss before Taxes Less: Tax (40%)

25,000 1, 23,200 - 98,200 44,720

Net loss

- 142920

Pro-forma Balance Sheet

Liabilities Current liabilities Suppliers Long term liabilities Bank loan Owners equity Istiak Shafiq Shuvo Reza Zahir Mehedi Samidul Kadir 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000

BDT

Assets Current Assets

BDT

1, 60,000

Cash Bank

10, 00,000 3,00,000 2,00,000

16, 00,000

Inventories Fixed Assets Machinery Furniture Covered van

5,00,000 1,50,000 4,10,000

8,00,000

25,60,000

25,60,000

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 housewife and 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.