Project Feasibility Study and Evaluation-Hedphan Farm. Aj Chaiyawat Thongintr

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HedPhan Farm
Project Feasibility Study and Evaluation

Mea Fah Luang University
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1203302 PROJECT FEASIBILITY STUDY

AND EVALUATION
HEDPHAN FARM
BY
THANATCHA KHAMCHAN 5031203185
BUSINESS ADMINISTRATION
SCHOOL OF MANAGEMENT
MEA FAH LUANG UNIVERSITY

THIRD SEMESTER, ACADEMIC YEAR 2009
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Table of Content
Table of Content………………………………………………………………………….A
List of Figures List of Tables.............................................................................................C
Chapter 1: Introduction……………………………………………………………….…D
1.1 Background and Significance of the Project………………….………….……2
1.2 Project Objectives…………………………………………….………….……3
1.3 Benefits of Project…………………………………………....………………..3
1.4 Study Methods……………………………………….……………………......4
1.5 Time Frame of study…………………………………………………………....4
Chapter 2: Industry Profile…………………………………………………………….…5
2.1 Nature of Industry………………………………………………………….…...6
2.2 Situation of Industry……………………………………………………….…...9
2.3 Product & Service……………………………………………………………..12
2.4 Vision………………………………………………………………………….13
2.5 Mission………………………………………………………………………...13
2.6 Strategy………………………………………………………………………..13
2.6.1 Corporate Level…………………………………………………….13
2.6.2 Business Level ……………………………………………………..14
2.6.3 Function Level……………………………………………………...14
Chapter 3: Market Feasibility Study …………………………………………………..17
3.1 Market Analysis………………………………………………………………18
3.1.1 General Environment Analysis……………………………………..18
3.1.2 Competitive Analysis……………………………………………….21
- Company Analysis
- Customer Analysis
- Competitor Analysis
3.1.3 Market Size and Market Volume……………………………………26
3.3 Marketing Mix Strategy………………………………………………………31
3.3.1 Products & Services………………………………………………...32
3.3.2 Place ………………………………………………………………..32
3.3.3 Price………………………………………………………………...32
3.3.4 Promotion …………………………………………………………..33
3.4 Sales Forecast ………………………………………………………………...33
3.5 Marketing Expenses ………………………………………………………….41
3.6 Conclusion……………………………………………………………………45
Chapter 4: Technical Feasibility Study ………………………………………………..46
4.1 Production and Operation Analysis…………………………………………...47
4.1.1 Product Characteristics ……………………………………………..47
4.1.2 Product Process ………………………………………………….....48
- Capacity of machine and labor
- Quality control
B4
- Source of raw material

4.1.3 Location……………………………………………………………..59
4.1.4 Store Layout ……………………………………………………......59
4.1.5 Machine, Tool and Equipments …………………………………….63
4.1.6 Logistics Management ……………………………………………...66
4.1.8.1 Inventory Management…………………………………..66
4.1.8.2 Transportation Management……………………………..74
4.1.7 Organization Management ………………………………………….76
4.1.7.1 Project construction ………………………………………76
4.1.7.2 Project scheduling…………………………………………77
4.1.7.3 Operating period…………………………………………..77
4.2 Cost of Investment ………………………………………………….………..80
4.3 Investment Cost …………………………………………………..………….81
4.4 Operating Cost…………………………………………………….………….87
4.4.1 Direct material Cost…………………………………….…………..87
4.4.2 Direct Labor……………………………………….………………..89
4.1.3 Overhead………………………………………….…….…………..50
4.5 Organization expense (Cost)…………………………….……..…….……..93
4.4.1 Salary……………………………………………………………….93
4.4.2 Bonus ………………………………………………………………93
4.4.3 Office supplies ……………………………………………………..93
4.4.4 Electricity …………………………………………………………..93
4.4.5 Water Supply ………………………………………………………94
4.4.6 Telephone…………………………………………………………..95
4.4.7 Telephone…………………………………………………………..95
4.4.8 Car Insurance……………………………………………………….96
4.4.9 Drinking Water ……………………………………………………..96
4.4.10 Borrowing …………………………………………………….......96
4.6 Conclusion ………………………………………………………...…………99
Chapter 5: Financial Analysis …………………………………………..……………..100

5.1 Income Statement …………………………………………….…...………..101
5.2 Cash Flow …………………………………………………………………..104
5.3 Balance Sheet ………………………………………………………………107
5.4 Conclusion ………………………………………………………….………110
Chapter 7: Summary ………………………………………………………….……….111
Reference………………………………………………………………………..………114
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List of Figures
Figure: 2.1 straw mushroom house ………………………………………………………..6
Figure: 2.2 culture straw mushroom cultivation…………………………………………..7
Figure 2.3 life cycle of mushroom to spawn………………………………………………10
Figure 2.4 spawning of Straw Mushroom Pasteurized……………………………..……..12
Figure 3.1 straw mushroom cultivation ………………………………………………….25
Figure 3.2 mushroom houses ……………………………………………………………..25
Figure 3.3 Logo of HedPhan farm………………………………………………………...31
Figure 3.4 MFD of spawn mushroom bag label ………………………………………….32
Figure 3.5 Graph of Three Year - Sale forecast of year 1 ……………………………..…38
Figure 3.6 Graph of Three Year – Sale forecast of year 2 ………………………………..39
Figure 3.7 Graph of Three Years – Sale forecast of year 3 ………………………………40
Figure 3.8 total three year sale forecast ………………………………………………….45
Figure 4.1 spawn of straw mushroom bag ……………………………………………….47
Figure 4.2 production process charts ……………………………………………………..42
Figure 4.3 soaking of spawn substantial …………………………………………………49
Figure 4.4 Filled soaking of span substantial ……………………………………………..50
Figure 4.5 Pressure cooking 120℃ ……………………………………………………….51
Figure 4.6: Steps in spawning procedure …………………………………………………52
Figure 4.7 :Storage until colonies after 3-4 week ………………………………………...52
Figure 4.8: HedPhan location …………………………………………………………….59
Figure 4.9 HedPhan farm layout ………………………………………………………….60
Figure 4.10 HedPhan farm (in front) ……………………………………………………..60
Figure 4.11 HedPhan farm layout (back) ………………………………………………..60
Figure 4.12 Organization structure ………………………………………………………77
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List of table
Table 2.1: calendar of mushroom cultivation……………………………………………. 8
Table 3.1: market size of spawn mushroom bag ………………………………………...29
Table 3.2: market volume expectation …………………………………………………..30
Table 3.3: market volume expectation of direct customer and indirect customer ……..30
Table 3.4: demand forecast of year 1 as 10% of market share……………………… ..35
Table 3.5: Demand forecast of year 2 as 15% of market share ………………………..36
Table 3.6: Demand forecast of year 3 as 20% of market share ………………………..36
Table 3.7: total demand of three year …………………………………………………….37
Table 3.8: Three Year - sale forecast of year 1 ……………………………………..…….38
Table 3.9: Three Year - Sale forecast of year 2 ………………………………………….39
Table 3.10: Three Year - Sale forecast of year 3……………………………….………... 40
Table 3.12: mixed marketing activities ………………………………….……………….41
Table 3.13: Three Years- Market Express of year 1 ……………………………………...43
Table 3.14: Three Years- Market Express of year 2 …………………...…………………43
Table 3.15: Three Years- Market Express of year 3 ……………………………………...44
Table 4.1: Preparation of spawn substantial ……………………………………………..48
Table 4.2: Activities of production spawn substantial ……………………………………49
Table 4.3: The Example of Production time of spawn of straw mushroom ………...........55
Table 4.4: Material usage in unit of Year 1 ………………………………………..…….68
Table 4.5: Purchase policy by POQ in Year 1 of 3 month purchase policy……...…… 69
Table 4.6: Material usage in Year 2 ………………………………………………..……70
Table 4.7: Purchase policy by POQ in Year 2 of 3 month purchase policy……..…… 71
Table 4.8: Material usage in Year 3 ………………………………………………………72
Table 4.9: Purchase policy by POQ in Year 3 of 3 month purchase policy ……...……72
Table 4.10: deprecation of year 1 ………………………………………………………..84
Table 4.11: deprecation of year 2 ……………………………………………………….85
Table 4.12: deprecation of year 3 ……………………………………………………….86
Table 4.13: cost per bag …………………………………………………………………88
Table 4.14: cost of operating Year 1 ……………………………………………………90
Table 4.15: cost of operating Year 2 ……………………………………………………..91
Table 4.16: cost of operating Year 3 …………………………………………………….92
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Table 4.17: Organization Expense year 1……………………………………………….. 97

Table 4.18: Organization Expense year 2 ……………………………………………….97
Table 4.19: Organization Expense year 3…………………………………………..……98
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Chapter 1: Introduction
1.1 Background and Significance of the Project

1.2 Project Objectives
1.3 Benefits of Project
1.4 Study Methods
1.5 Time Frame of study
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Chapter 1: Introduction
1.1 Background and Significance of the Project
Straw mushroom is a high temperature mushroom and the most popularly grown in
Thailand because Thailand has ideal environmental conditions for straw mushroom
cultivation (30-38 C) and a long history of mushroom growing since 1940s by farmer.
Thai people know that straw mushroom growing required low cost materials and
technologies while offering a high and quick return on their money, unlike other
mushrooms. In addition, straw mushroom cultivation can use available materials readily to
grow.
Most of the farmers involved with mushroom cultivation recycle agricultural wastes to
cultivate mushrooms. Some 70% of rice farming area (hectares) cultivates straw
mushroom by utilizing straw or hay that they already have. They don’t need to buy basal
substrate material. And 30% of rice farmers cultivate they burn hay or other reason.
(Postharvest Technology Innovation Center, CMU).
At moment, some straw mushroom cultivation brings them more money than rice
which straw mushroom cultivation takes just 7-15 days to bring money to them. And
earning return around 50-60% profit that is enough for farmers to continue growing.
All region of Thailand can grow straw mushroom which almost at North and
Northeast region. Especially in Chiang Rai, there are 45.45 percent of farmers almost
grow straw mushroom after rice harvested season because they already have their hay
(material to grow straw mushroom) and the return money is also high. According
Department of Chiang Rai Rice Research Center, 2009 reordered that Chiang Rai has
110,628 farmers in year 2009 and having 1.3 -1.4 million hectares per year.
Moreover, the farmer can’t produce their own spawn of straw mushroom. They need
to buy from supplier or some middleman or wholesaler who distribute in area. From
survey, 14-16 April 2010, there is one supplier of spawn of straw mushroom in Chiang Rai
and almost grower buy from supplier Lumpang, Payao province.
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Traditionally, rice grower also grows straw mushroom in their rice fields after
harvest during December – April which they grow since history. Additional, nowadays,
mushroom cultivation for trade they usually grow by built a mushroom house to control
mushroom production (temperature and humidity) to product throughout the year. After
harvest rice they will collect hay for use one year and store in their house. At moment,
Chiang Rai mushroom grower group together to be SMEC, have 15 community enterprises
for trade (Department of Chiang Rai plant research, 2009).
Moreover, straw mushroom grower wants the high quality of a spawn mushroom
for high return productivity and also suitable price. Therefore, our business would like to
be the supplier of spawn mushroom in Chiang Rai for respond toward straw mushroom
growers and also can possible to return investment within 3 year.
1.2 Project Objectives
 To study and learn the technical and management of the spawn mushroom
business.
 To analyze the possible market both Straw Mushroom and spawn mushroom
business in Chiang Rai.
 To analyze the feasibility of capital budgeting and evolution the business area of
spawn mushroom business.
 To calculate the financial factor of spawn mushroom business and possible return
investment within 3 year.
1.3 Benefits of Project
 To understand about the situation of spawn mushroom business.

 To understand process and technical factor of spawn mushroom business.
 To identify the possible market of spawn mushroom business.
 To understand and can evaluate about financial feasibility.
1.4 Study Method
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1. Look for information of mushroom market in Chiang Rai

2. Study general business Industry
- Mushroom cultivation
3. Spawn mushroom business
4. Conduct market survey
- Define the target market
- Analysis the questionnaire information
5. Analysis market
- Customer
- Competition
6. Define technical and process of business
7. Analysis and evaluation Finance information
8. Type and proofread the final report
9. Final Submit
1.5 Time Frame of study
Table1 Time Frame of study, during 29 March – 12 May 2010.
March April May

Study methods Week
1 2 3 4 1 2 3 4 1 2 3 4
1. Look for information of spawn
mushroom business
2. Topic submit
3. Study general business
Industry
4. Analysis market
5. Study technical and process of
business
6. Analysis Finance factor
7. Type and proofread the final
report
8. Final Submit
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Chapter 2: Industry Profile
2.1 Nature of Industry
2.2 Situation of Industry
2.3 Product & Service
2.4 Vision
2.5 Mission
2.6 Strategy
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Chapter 2: Industry Profile
2.1 Nature of Industry
Straw mushroom cultivation is a one of the more popular occupation long time
especially in the central, northeast and north region. In the other hand is farming area.
Because of hay from rice is the best crop material for straw mushroom cultivation. Even
other readily material can available for growing but they are not popular way.
Because of straw mushroom is low-cost activity and high margin return if they
have experience. They are many farmer grow mushroom because they have their hay. And
also Thailand can produce straw mushroom more 600,000 ton per year, and also is the
biggest producer in the world. (The Thailand Research Fund Regional Office 2010)
A method of cultivation straw mushroom in Thailand usually cultivates 2 methods.

First method is called a mushroom house/farm which is modified from a culture
mushroom cultivation in term of control a temperature and humidity. Then producer can
plant all the year. (See figure 2.1)
Figure 2.1 straw mushroom farm/house
Generally, producer usually conducts a mushroom house size 4.00x10.00x2.50

mates and contain 2 shelves which also made by paddy rice too. For this method will
spend 25-28 days of growing period to harvesting until 2 month mushroom produce will
be eliminate.
Growers also order a spawning mushroom bag from the wholesaler distribute in
local area. And this method usually cultivate to trade or as a main occultation which can
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generate high return and low investment. Because there are many cropping material instant
of rice paddy and can generate productivity such as water hyacinth, banana leaves or
Cassava peeling.
A culture mushroom cultivation is traditional mushroom a long time by farmer.

Because they have their own paddy and no need to buy, soak in water, drained, and then
packed (layered) in the wooden frames. then placing spawn mushroom inside with each
layer as the frame is packed or filled until full the wooden frames. After that covering with
plastic sheets and placed under shade outdoors, it can harvest after 7-10 days (see figure
2.2). This method almost plant by farmer after rice harvesting season (December – April)
as a second occupation.
Figure 2.2: a culture straw mushroom cultivation
Department of Agriculture has studied and found that one cake should use 10 kilos
of hay and ½ spawn mushroom to get 1.5-2 kilos/cake. Normally, grower will buy a spawn
mushroom from wholesalers who distribute in local areas and some of them is bought
mushroom back by them. They can sell at approximated 40-50 bath/kilo (Department of
Chiang Rai plant research, 2009).
Depend on a second occupation; a culture of straw mushroom cultivation from

farmer will not occur in a farming period (May-November)
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Table 2.1 calendar of mushroom cultivation
Harvest Current year Next year

product
days 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
Rice 150
Referring : Rice Research Center, Chiang Rai 2010

Rice growing
Rice harvesting
A culture straw mushroom cultivation
Straw mushroom house cultivation
Tendency of mushroom cultivation in Chiang Rai
 Mushrooms can grow well in temperatures 35-40 degrees, and Thailand is

agricultural country which can plant straw mushroom throughout the years, and
they turned to planting many throughout the country.
 A mushroom cultivation, low cost-activity, low risk, harvest fast (7-15 days).
- A mushroom house cost is 6,000-10,000 bath, mushroom producing at
150-250 kg/house/month and sell at 40-50 bath, on average, earns
7,000 baht/ house/month (Chiang Mai new, 2009).
- A cultural mushroom cost is 300-500 baht of 50 cakes, mushroom
produce 1 kg/cake, sell at 40-50 bath on average, earns 4,500-6,000
baht/ month (Chiang Mai new, 2009).
 There are the middleman sell a straw mushroom and purchase their product back
in front of farm at 40-50 baht per kilogram which the profit will be reduced when
In year dealing with an intermediate but if a good agreement can be made, it also
saves on expenses related to marketing.
 Chiang Rai has a vest of hay form rice cultivation. Farming area of farmers in
Chiang Rai is all around 1.3 -1.4 million hectares per year in the area that is
growing still scattered around the area. (Rice Research Center, 2010).
 According the research of Department of Agricultural Extension that “one hectare
of rice plating areas, having hay 3,000 kg, 10 kg of hay (cake), produce 1 kg of
mushroom.
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 There are developed various methods of mushroom cultivation methods. Farmers

can choose to mushroom cultivation as appropriate and necessary. Or habits of
each location of capital and material culture that is proper. For example, a
research and development of mushroom cultivation of Theng district by
Department of Agricultural Extension, Chiang Rai.
 Market needs mushroom so much which the Thailand demand is about 8,000 tons
per year or 98 percent of the whole country. (Department of Agricultural
Extension, Chiang Rai).
 There are government agencies, universities and schools, and several private of
provinces such as Kanchanapisek University a district, Agricultural Promotion
Center, Chiang Rai, community enterprising Chiang Rai support and training in
agricultural turned mushroom growing seasons after harvest instead of burning
straw increased.
 At moment, they set up community enterprise of straw mushroom agricultural in
Chiang Rai 15 community and around 3,570 straw mushroom house cultivation
for long-term using.
2.2 Situation of Industry
Spawn is very important for the mushroom grower because they wise a good
quality spawn of the desired mushroom species to contrite on the mushroom growing
process and can be obtained at reasonable price.
History of spawning of straw mushroom culture in Thailand
Spawning of straw mushroom (Pure Culture) in Thailand is discovered by Dr Khan

Chanvijan who is the researcher of Bureau of Science and Technology Information in 1937
by mixture of shells lotus and rodeo.
In year 1970, Thailand Institute of Scientific and Technological Research (TISTR)

can produce a pure spawning of straw mushroom by a mixture of waste oil from cotton
seeds out and rodeo successful. Then bring a pure spawning mushroom to grow in a
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cropping material (Hay). Follow by the research of Dr Khan Chanvijan that straw
mushroom can divide spawn production into 3 process.
1. Producing a pure culture or mother spawn (There are 2 methods)

a. a mixed of cotton seeds or lotus wasted and rodeo.
b. a fresh and healthy fruiting body of certain fungi.
2. Producing Spawning mushroom

To increase a quantity of productivity for grow with a cropping material
such as peel lotus seed rice straw, cotton, dried water hyacinth leaves and rodeo.
The best cropping material is a mixed of rode and peel lotus or paddy.
3. Mushroom Cultivation (There are 2 methods)

a. A culture mushroom cultivation
b. A mushroom house/farm
Figure 2.3 life cycle of mushroom to spawn
Spawn mushroom producer in Thailand
Thailand is the biggest straw mushroom grower in the world which can produced at
least 500,000 tons per year. Then it needs to use spawn mushroom average at least 320-
350 million tube bag. Therefore spawn of straw mushroom entrepreneur earn revenue of
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selling its more than 20 million per year. (Thailand’s one shop center of mushroom news,
December 2009)
However, mushroom grower wants a good quality spawn mushroom. The producer
who want to trade spawn mushroom should understand that spawn mushroom has high
variance both temperature and humidity and can’t keep in a refrigerator. Even spawn
mushroom still relive but it will less or non productivity. a good quality spawn mushroom
should relive during 1-7 days only (Thailand’s one shop center of mushroom news, March
2010).
To produce a spawn mushroom need to start with a mother spawn mushroom

production to find the best spawn which the this process is complex and very carefully;
concerning with high investment too, as be mention before. However, at moment many
spawn mushroom entrepreneur doing business by shout cut way that is buy a mother
spawn mushroom to produce a spawn mushroom again and recheck by them.
At moment, new spawn of straw mushroom can by a mother spawn mushroom of

any educative organization or agricultural agency such as KasendSart University or Bio-
technology organization.
Therefore the characteristic of the spawn mushroom entrepreneurs have to

industrious and trusting because they have to check a productivity process and quality of
mushroom. Even produce a mother spawn mushroom or spawn mushroom.
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2.3 Product & Service
A spawning of Straw Mushroom Pasteurized

Container plastics bag size 6 ½ x 12 ½ niches, weigh 500 garme.
Figure 2.4 A spawning of Straw Mushroom Pasteurized
A mother spawning of Straw Mushroom
Container glass bottle contained 300 ml
Figure 2.5 A spawning of Straw Mushroom Pasteurized

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2.4 Vision
To become a biggest of spawn of straw Mushroom and provide a good quality

spawn in Chiang Rai province.
2.5 Mission
HedPhan Farm’s mission is produce and sell a good spawn of Straw Mushroom
pasteurized at a reasonable price which to concentrate on the mushroom growing process
for mushroom grower. We believe with our process and specialist employee and also
technology using that made the customer trust with our product; providing product that are
more productivity and best quality for gain the high market share.
2.6 Strategy
Strategy refers to a plan of action designed to achieve a particular goal of HedPhan

Farm which we can follow;
2.6.1 Corporate Level
“HedPhan farm is a new business that plan to conduct next year located in Chiang
Rai province. To develop and growth our film and can reach the vision. For corporation
level, we concern for applying strategic management by pursue a combination of these
strategic.
- Seeking ownership and increase control of a firm’s suppliers by produce a

mother mushroom by ourselves instant of buy from suppliers which this
strategy need to spend a few year to find a best technical or experiment a good
spawn mushroom.
- Conducting a laboratory to experiment or produce a mother spawn mushroom
to fright increase a quality product than other competitor.
- Force our product to sell outside province.
- Entering a shop to trade equipment of mushroom cultivation.
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2.6.2 Business Level
For business level, we focus in one strategy that is FOCUS STRATEGY under
concentrate our resources by entering in a narrow market or pull market. And there is
product to competitively satisfy its needs. Therefore we focus on conformance quality and
productivity of spawn of straw mushroom only. Even other competitor often sell verity
kind of spawn mushroom. This strategy we wish to create customer loyalty and add a
various outstanding value over the competitor. We believe that the mushroom grower
desires a good quality spawn, increase productivity process and reasonable price. We focus
on these strategies.
- Experiment and checking before sell to customer.

- Produce straw mushroom by concerning a good quality and productivity
- Producing Straw mushroom every week because it can relive within 7 days and
also putting a date producing and
- Create brand and logo under name “HedPhan Farm” to desirable firm image.
- Using technological innovation to develop a straw quality.
Mean for achieving strategy
- Outsourcing a scientist or specialist to check a quality produce.

- Joint with a support activity that offer or provide to mushroom grower that is
set up by government , education, researcher or information news such as
spending our place to experiment, selling low price when using with
government project.
2.6.3 Function Level
Functional level strategy including of marketing management, human resource

management, logistic management and inventory management. These strategies are
achieved and support process in business level.
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Marketing management
Marketing functional is a responsibility to perform marketing effort which

attract to customer by verity communication. As our company provide a good
quality product and reasonable price to customer then to serve what our company
having and provide. Then we need to published and eliminate a completely existing
competitors and a barrier of new entre competitors.
Fist marketing, our company uses local radio also to promote us (Radio Chiang Rai
92.75MHz). Reason that mushroom grower is a farmer and agriculturist, generally,
agriculturists usually listen radio during working. And also the target group of
radio is a local people, therefore, there are a large chance to attract them to know
us.
Second marketing, our company will advertising on a local news paper and any
website of Chiang Rai because it is low cost. When they want to find mushroom
information. The easy way by search from internet and find on news paper
especially agricultural news paper.
Third marketing, we proud to create logo and branding in attract customer

to remember us and crate film image under name “HedPhan Farm”
Fourth marketing, we will use and joint with other organization to do

training course offer to a mushroom grower or other people in Chiang Rai because
if they know how to plant and would like plant , so they need to buy spawn
mushroom.
Human resource management
Human resource functional is concerned about employment process. The

best employee will make company gain more profit. For hiring the best
employees, we need to require a job qualification and application. After we
accept them we have to training them before work too because to produce a
spawn mushroom should be careful and trust and so on to warrant our product.
Moreover, we always evaluate worker every month to recheck their performance.
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We concern that the first impression is very important for marketing selling and to
increase productivity our company will govern under “good relationship”.
Logistic management
Logistic management is a responsibility for customer service both

transport and inventory management. We emphasize about forecasting demand
because a spawn mushroom can relive with 7 days. The importing to increase
inventory turnover is forecasting demand. And also some raw material is rare to
find such as rode, then we have to carefully about supplier too.
Manufacturing Management
This strategy is very important to support business strategy that is focus

strategy on a good quality product and its can generate more mushroom. Then we
need to check a quality of spawn mushroom every 3 month, especially rice
harvest period.
Finance Management
- Using financial software and computer to support finance part.

- Setting a reasonable price (10 bath per tube bag).
- Preparing financial statements to systematic, clear, and accurate in every month.
Checking finance account every month and using this one to forecast demand.
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Chapter 3: Market Feasibility Study
3.1 Market Analysis

3.1.1 General Environment Analysis
Social
Political
Economic
Technology
3.1.2 Competitive Analysis
Company Analysis
Customer Analysis
Competitor Analysis
3.1.3 Market Size, share, trend
3.2 Marketing Mix Strategy
3.2.1 Products & Services
3.2.2 Place
3.2.3 Price
3.2.4 Promotion
3.3 Market Share, Market Size, Market Volume
3.4 Sales Forecast
3.5 Marketing Expenses
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Chapter 3: Market Feasibility Study
3.1 Market Analysis
A marketing analysis is invested of a market that is used to inform a firm's

planning activities particularly around decision of: inventory, purchase, work force,
expansion/contraction, facility expansion, and purchases of capital equipment, promotional
activities, and many other aspects of a company. It also is the tools most used for making
sales forecasts and analyzing markets.
3.1.1 General Environment Analysis
Political Factors
Supporting services from government help to promote mushrooms as a

source of livelihood and have the potential to improve condition and knowledge for
mushroom growers then mushroom grower will increasing or increasing more producing.
The supporting for mushroom cultivation from government sector from community can
include,
 Setting up community to allocate capital and creative a self-reliant

such as the Small and Micro Community Enterprise (SMCE) At moment,
Chiang Rai has 15 SMCE of straw mushroom cultivation.
(http://smce.doae.go.th/).
 Supporting knowledge skill to provide knowledge of mushroom
cultivation such as Chiang Rai Information Centre under website:
(http://www.chiangrai.go.th/service).
 Providing training train to farmer such as a mushroom production
course (1 day) by Center of promotion and development of agriculture, Chiang
Rai.
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 Support new knowledge and technical under taking project research

such as project of new method of mushroom cultivation by Department of
Agricultural Extension
 Supporting public policy indirect such as the project of management
of rice by Ministry of Agriculture and Cooperatives.
However some support from activities or information also makes

company lost opportunity such as provide information about a spawn
mushroom production.
Economical Factors
Economic factor affect the cost of production and customer demand. For affecting
the cost of production, it made the price fuel price or fertilizer changing which mushroom
production have to produce every week to serve customer. If the price of fuel increase, cost
of transportation will increase.
According to Department of Agricultural News, May 2010, previous year’s
product price is the motivation for agriculturists to increase the production or change
to other products such as rubber tree or corn. If the price of rice increases they will turn to
grow rice 10% and invest decrease if price of rice is decrees.
Moreover Thailand have to concern about climate change and policy of
government then Chiang Rai is considered an area with optimal climate for cultivation,
with sufficient rain and good soil; it can increase the agricultural production. However,
this depends on the climate for each year.
Technological Factors
The mushroom production wants technology to check and control production such
as temperature and humidity which help to increase customers stratify in product.
Manufacturing equipment reduces labor, or production of mushroom infection. It

helps increase productivity even more. For example, Now University of KhonKan created
20
2 in 1 machine of mushroom soaking and compacting at the same time to reduces the time
in the grinding and stuffing.
Social and Environmental Factors
Environmental
Temperature and humidity is significant of mushroom growing. The landscape

industry as a significant contributor to growth. The temperature range of growing straw
mushroom is 38-40 degrees Celsius for optimal germination of mushroom spores. Good
fiber growth at 32-38 degrees Celsius and the flowers of mushroom are at 30 degrees
Celsius. Notice that on summer straw mushroom can harvest after 7-10 day and around 15
days, on rainy season can harvest after 8-12 days and around 15 days and the winter can
harvest after 15-18 days or more around 15 days (Technical of growing mushroom: book).
If they spend more time to harvest, a using of spawn mushroom will decrease. Moreover,
temperature and humidity, also significant for spawn mushroom production such as
growing of fungi.
The suitable temperature of growing mushroom is between 28-32 degrees Celsius.

If temperature is too low, production of mushroom will be slow, and in contrast if
temperature is too high, production of mushroom will fast. According a cultural mushroom
cultivation, the will start to grow mushroom in December month and gather (increase) in
January and February until March they will rather (decrease) to April just a few grower
(Technical of growing mushroom: book).
Social Factor
A Social factor affects a number of mushroom growing on each season. Generally,

farmer usually plant a straw mushroom after rice harvest called a culture mushroom
cultivation as a second occupation. The growing period is December-April (Department
of Chiang Rai plant research, 2009). Demand of spawn mushroom is increase too and large
volume which many commercial person can profit in this period such as wholesaler who
distribute spawn mushroom, a middleman who buy mushroom at farm, and trend at final
market.
21
21
3.1.2 Competitive Analysis
Company Analysis
Spawn is very important for the mushroom grower because they wise a good
quality spawn of the desired mushroom species to contrite on the mushroom growing
process and can be obtained at reasonable price.
The availability of good quality spawn is the limiting factor for mushroom
cultivation in Thailand such as high shipping costs and the difficulty to keep the spawn
cooled during transport. If good quality spawn of the desired mushroom species can be
obtained at a reasonable price, it would be wiser to concentrate on the mushroom growing
process. If not, spawn will have to be produced or multiplied by the mushroom grower.
Moreover, mushroom grower wants a good quality spawn mushroom. To produce

spawn of straw mushroom for commercial, the producer should understand that spawn
mushroom has high variance both temperature and humidity and can’t keep in a
refrigerator. Even spawn mushroom still relive but it will less or non productivity which
make customer unsatisfied.
Quality is very important for a new commercial business. Therefore the

characteristic of the spawn mushroom entrepreneurs have to industrious and trusting
because they have to check a productivity process and quality of mushroom. Even produce
a mother spawn mushroom or spawn mushroom.
To produce a spawn mushroom can start with a mother spawn mushroom

production to find the best spawn which the this process is complex and very carefully;
concerning with high investment too, as be mention before. However, at moment many
spawn mushroom entrepreneur doing business by shout cut way that is buy a mother
spawn mushroom to produce a spawn mushroom again and recheck by them.
In addition, good inventory management is important for commercial business.

Because spawn mushroom can relive at least 7 days even spawn still produce mushroom
but spawn can use in a composted substrate.
22
So, at the first start business, we will not product a mother spawns because a
mother spawning production is high investment and complicate which have to product
under only a laboratory with specialist for a good quality. Then we start HedPhan Farm
Business provide and sell a spawning of straw mushroom pasteurized by container
plastics bag size 6 ½ x 12 ½ niches sell at 10-15 baht per tube bag. Our business use the
shortcut that buy a mother spawning converting to a spawning of straw mushroom
pasteurized.
Competitor Analysis
The competitor analysis is analyzing the film that product the spawn of straw
mushroom with HedPhan Farm both in Chiang Rai and nearly Chiang Rai. From interview
the straw mushroom grower and survey that we divide our competitors into direct and
indirect one. Each competitor serves the same product but different service, promotion
price.
Direct competitor is providing business in Chiang Rai. There is only one business
under trade by Mrs. Raweewan ChaiJumpa. Her business located in Moo 16, Bhandoo
city, Meang district (rural area). She is the first spawn mushroom business for 20 year
which starts with selling of spawn of straw mushroom by one package design called a tube
bag. Fist time sells at 15 baht per tube bag and after a merchant from Payao entry the
market in Chiang Rai, she change to sell 10 baht per tube bag.
Business size : medium

Product : spawn of straw mushroom container plastics bag
size 6 ½ x 12 ½ niches.
Price : 10 bath/ tube bag.
Promotion : order processing 100 tube bag/times.
Employee : 3 workers, adjust 3-5 part-time workers (hire neighbor).
Production : 10,000 - 12,000 tube bags/month.
: 20,000 - 60,000 tube bags/month (after rice harvested season)
Shipping : door to door, wholesaler, and customer directly.
23
Strength Analysis
She is the first straw mushroom spawning in Chiang Rai. She has high market
share in Chiang Rai. Because of do business long time then she have contact to buy
material especially rodeo. And also low cost investment because she bought any machine
since last 20 year and at that time the machines is low price.
Weakness Analysis
 Producing own a mother mushroom without certainly control which may effect to
production. (From interview the mushroom growers, they commented that her
spawn product nowadays is less productivity and they change to buy other place).
 Her business management is traditional by family.
Indirect competitor is outside Chiang Rai. There are, Lumpang Farm, PhiJin
Farm, Payao Farm. Almost sell though the middle mans and wholesalers that they buy
from these farm at 10 baht and they sell to mushroom grower 11-14 baht/tube bag.
Business size : medium - large

Product : Spawn of straw mushroom container plastics bag
size 6 ½ x 12 ½ niches.
Price : 10 - 15 baths/ tube bag.
Promotion : almost promote via website and mount to mount
Employee : 5 workers
Production : 30,000 - 50,000 tube bags/month.
: 50,000 – 100,000 tube bags/month (after rice harvested season)
Customer Analysis
At present straw mushroom cultivation is a popular occupation in Chiang Rai

because straw mushroom is a good cash return; they is low-cost activity investment with
west material such as paddy, water hyacinth or banana leaves, and rather easy to grow and
harvest at shortly days. Moreover, market demand for domestic consumption also requires
consistent throughout the year.
24
In additional, Government agencies, universities and schools and several private

sector in Chiang Rai such as Kranjapatisenk University, department of Chiang Rai plant
research and Chiang Rai community enterprise provide and support agriculturist turn to
grow a straw mushroom after rice harvest instant of burning paddy. Also educate and
promote a mushroom cultivation by new methods or new alternative crop material.
Customer behavior
Straw mushroom cultivation can classify into two growing methods.
First method is called a culture mushroom cultivation. This method usually

grown after rice harvest season (December – April) by farmer in their field farm or house
area by utilizing straw or hay that they already have (see table 3.1) since history.
Calendar of rice cultivation period
Harvest Current year Next year

product
days 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
Rice 150
Referring : Rice Research Center, Chiang Rai 2010

Rice growing
Rice harvesting
They don’t need to buy basal substrate material. They soak hey in water, packed
(layered) in the wooden frames (base 40x35x40 cm, high 1.5 m). Then placing spawn
mushroom inside with each layer as the frame is packed or filled until full the wooden
frames (2 cake/1 tube bag) in row. After that covering with plastic sheets and placed under
shade outdoors, it can harvest after 7 days, around 15 days harvesting (see figure 3.1).
Mushroom can produce approximate 1.5-2 kilogram/cake and sell at 40-50 bath/kilogram.
On average, 10 pp can make a cake as 4 rows each row has 22 cake standard (Technical
mushroom cultivation, book).
Almost cultural mushroom grower will grow it in December and February because
these two month temperature is 28-32 C that make mushroom grow well. After March
25
until April they will reduce growing and their hay have been already spent (Technical
mushroom cultivation book).
Figure 3.1 straw mushroom cultivation
The second method called a mushroom house/farm can which is modified from a
culture mushroom cultivation for long term use. This made of thatch and bamboo or other
kinds of wood poles and shading net or brick in term of control a temperature and
humidity. Then grower can plant all the year depend on their investment.
Figure 3.2 mushroom house
Generally, producer usually conducts a mushroom house standard size

4.00x10.00x2.50 mates and contain 2 shelves and have 5 levers (Spread spawn 6 tube
bag/layer). This method spends 25 days for growing and harvest after this day around 2
month. Mushroom will stop to grow. They can produce 500-600 kilogram per mushroom
house.
26
From interview about the purchasing of spawn mushroom in Chiang Rai grower
that;
1. The first time, almost grower buys the spawn mushroom from Bhandoo farm.
Since 2-3 year, the spawn mushroom is less productive. They change to buy other
place (Lumpang, Payao agency).
2. Almost, a cultural of straw mushroom cultivation by from middleman and they will
purchase mushroom back.
3. A mushroom house cultivation buy spawn from middleman or direct at farm. If
they buy any middleman, they always buy form them.
According customer behavior, we focus the cultural spawn mushroom cultivation as a

direct customer because it is 45.45% of farming grower mushroom in Chiang Rai as
hobby occupation after harvested rice season during December to April.
Moreover, almost they buy from middle-men who buy outside Chiang Rai such as
Lumpang, PhiJinch and they distribute to farmer local areas. Famers usually buy from
them because they have no choice that they don’t know where to buy it, and they also offer
opportunity that they purchase mushroom production back and sell at other market which
farmer no need to find their market. If they know that having one more spawn mushroom
in Chiang Rai and good quality they will turn to buy and also benefit with a middleman to
that the will reduce it cost such as flue.
And the indirect customer should be a cultural market because the number of this
group is small even they have chance to buy spawn mushroom all year.
3.1.3 Market Size and Market Volume
The market size level of company base on a chosen marketing plan and an assumed
marketing environment because each group is defensible. As have a discussion that the
straw mushroom growers plant mushroom by two methods. There are a cultural mushroom
cultivation and a mushroom house cultivation and also each methods grow difference
period depend on their objective as show table below.
27
27
Calendar of rice cultivation period
Harvest Days Current Year Next Year

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
150
Referring: Rice Research Center, Chiang Rai 2010

Rice growing
Rice harvesting
Culture straw mushroom cultivation
Spawn straw mushroom cultivation is variable of season factor that regular hill and
vlleys in the time series and usually repeat every year. This situation occur because of
customer behavior or buying patter to calendar date or climatic changes. However the
number of grower in each period also difference. Look for overall market size of a cultural
mushroom cultivation and mushroom house cultivation.
Market size is the number of total volume in a particular a spawn of straw

mushroom market per one year. We divide into the main target and second target which
show the calculation next topic.
Market size of cultural straw mushroom cultivation
To analysis we will use customer behavior to calculate market size of cultural straw
mushroom for using spawn.
According Department of Chiang Rai plant research 2009 said that there are 45.45
percents of rice cultivation grower plant straw mushroom after rice harvesting (December-
April). In year 2009, Chiang Rai has 110,628 families of rice cultivation.
Hence, there are 50,280 rice cultivation growers (families) who grow straw
mushroom cultivation (110,628 x 45.45%)
Chiang Rai has rice harvested area is 1,321,029 hectares per year (Agricultural
statistics of Rice Research Center, May 2009).
28
Hence, on average, one rice grower has 11≈10 hectares
Calculation from;
1,321,029 hectares
110,628 families
And hay of 10 hectares can grow straw mushroom by cake 88 cakes (Technical
mushroom cultivation, book) And one cake spend ½ spawn mushroom bag
Hence, 50,280 cultural mushroom growers (with average rice harvested area) use
spawn straw mushroom 2,212,320 tube bag per year.
Calculation from;
1
50,280 mushroom grower x 88 cake 𝑥 𝑠𝑝𝑟𝑎𝑤 𝑏𝑎𝑔
2
Hence, during December–April of one year Chiang Rai farmer will spend spawn
mushroom about 2,212,320 tube bags per year for a cultural mushroom cultivation.
Market size of straw mushroom house cultivation
According the community enterprise, Chiang Rai, there are 3,750 (averages)
mushroom houses in Chiang Rai (these number not including a temporally mushroom for
mushroom cultivation in after rice harvesting season).
According mushroom house grower customer behavior that mention before,

“mushroom house standard size 4.00x10.00x2.50 mates contain 2 shelves and have 5
layers (spread spawn 6 tube bags/layer)”.
Then, one mushroom house spawn mushroom will use;
= 2 shelves x 5 layers x 6 tube bag/layer
= 60 tube bags per time
Then, mushroom house grower will spend;

= 3,750 house x 60 tube bag
= 225,000 spawn mushroom per time for use
29
According customer behavior, one year they grow mushroom;

365 𝑑𝑎𝑦𝑠
=
25 𝑑𝑎𝑦𝑠 𝑔𝑟𝑜𝑤𝑖𝑛𝑔 +30 𝑑𝑎𝑦𝑠 ℎ𝑎𝑟𝑣𝑒𝑠𝑖𝑛𝑔
= 4.29 times per year
Hence, one year they will spend spawn mushroom;

= 225,000 tube bags per time x 4.29 time per year
= 965,250 tube bags per year
Therefore, the total market size of spawn straw mushroom is;
= 2,212,320 tube bags + 965,250 tube bags
= 3,177,570 tube bags per year
Table 3.1 market size of spawn mushroom bag
Spawn Mushroom Bag Market Size

Customer Target Market Size
Cultural mushroom grower 2,212,320
Mushroom house 965,250
Total 3,177,570
Market Volume
According to information of comparative analysis, there is only one direct

competitor (Bhandoo Farm) in Chiang Rai and its spawn straw mushroom is less
productivity then the growers change to buy other place. Especially, mushroom house
grower they buy from Lumpang and Phichi province.
Moreover, the middle-men also buy spawn mushroom from outside Chiang Rai,
even they buy as same as 10 baht per tube bags. To analysis that the product control and
product quality by Bhandoo Farm is less efficiency. Hence, to force with direct competitor
and we expect market share in first year is 10% of total market size and market share
30
increase initial 5% per year which consider from competitive effect. That they trend to buy
our product and we can maintain existing customer base.
Calculate market volume in first year;

= 3,177,570 tube bags per year of total market size x 10% of market share
= 317,757 tube bags per year
Hence, the total market volume is 317,757 tube bags in first year
We expect market share increase 5% every year (3 years) has shown table 3.2
Table 3.2 market volume expectation
Market volume
Year Following Market Share Increase Total market share
(tube bags/year)
1 10% - 10% 317,757
2 10% 5% 15% 476,636
3 15% 5% 20% 635,514
Total 1,429,907
Table 3.3 market volume expectation of direct customer and indirect customer
Market Market volume

Year Following Market Share Market Size
share (bag/year)
Direct customer
1 2,212,320
( cultural mushroom grower) 221,232
10%
Indirect customer
965,250
( mushroom house grower) 96,525
Direct customer
2 2,212,320
15%
Indirect customer
965,250
Direct customer
3 2,212,320
20%
Indirect customer
965,250
Total market volume 1,429,907
31
3.3 Marketing Mix Strategy
The marketing mix is the way in which the marketing strategy is put into action
under 4 Ps (Products & Services, Place, Price, and Promotion). To maintain existing
customer base and force them trend to buy our product, we set marketing mix strategy
following;
3.3.1 Product strategy
We create logo under named “ เห็ดพาน ฟาร์ม ” to make customer know and remember
our business and tack on bag as show figure 3.3
Figure 3.3 Logo of HenPhan farm
We create a normal logo because it is easy to remember and consisting with farm
location in Phan district.
Spawn mushroom is initial base of mushroom production. If spawn mushroom can

produce more mushroom and rely with environment, mushroom grower always buy from
that supplier. If spawn mushroom is weak of production, they will change to buy from
another supplier. Or, if spawn mushroom is reasonable price and strong quality they will
change to buy that supplier.
In additional, the significant to maintain existing customer base is the quality

product that for sure mushroom grower want spawn mushroom that can produce more
mushroom or high productivity (good fiber mushroom and spread overall bag). So, we
have to control production process to control quality of product and tack sticker label of
32
inculcation date or manufacturing date (MFD) with pack of features for dedication to
satisfying customer accept as true. Size 2 cm x 4 cm, the date will be hand writing, See figure.
Figure 3.4 MFD of spawn mushroom bag label
Moreover, we will ship product directly in front straw mushroom farm by pick-up
to make them stratify with customer service, and the beginning month (January to April)
we will road selling directly toward their farm or house as 10 baht per bag which cheaper
than middleman.
3.3.2 Price strategy
Because our company is base on quality of product, our products are set up price
on reasonable price as 10 baht per tube bag same as competitor in Chiang Rai (Bhadoo
Farm).
Moreover, if middleman want to buy the whole volume at least 1,000 bag, we
will discount to sell at ceiling price 9.5 baht per bag.
3.3.3 Place strategy
- HedPhan Chiang Rai is located in Muang Kham city, Phan district, Chiang Rai
which far from Phan transportation 5 kilometers. We located Farm nearly Phan
transportation because reduce the shipping cost and increasing customer’s
decision when can’t buy at our farm.
- As mushroom production learning.
- Setting up the training course 1 time per year.
33
33
3.3.4 Promotion
- Service door to door.

- Vinyl board size 3.5 m x 1 m of 5 units and tag around Chiang Rai.
- Distribute brochure while ship product to mushroom grower in new market
area.
- Focus on advertisement;
Radio: FM98.75MHz, Chiang Rai Community.
Method: Short sport and speaking “product and place and contacting”
Time : 1-3 pm
Social Marketing:
Post short advertisement on following webboard
- http://www.chiangraionline.com/webboard/index.php
- http://www.chiangraitoday.net/publicrelation/publicrelationall.aspx
- http://www.kasetporpeang.com/forums/index.php
Short massage: HedPhan Farm selling the quality spawn of straw

mushroom bag in Chiang Rai as 10 baht per bag and delivery thought out
province. Tel 087-1917039 or 053-671036.
3.4 Sales Forecast
Forecast demand
To forecast demand in first year we use casual or explanatory method relate with
customer behavior and environmental and also according with market volume and
marketing activities that make them to know us and force to buy as calculate topic 3.2
that;
The mushroom house cultivation grower
This customer behavior always use spawn mushroom throughout the year. The market
volume in first year is 96,525 tuber bag depend on 10% market share.
34
Calculate demand per month;
HedPhan market volume = 96,525 tube bag per year
Demand of spawn mushroom per month = 96,525 /12
= 8,044 tube bag per month
Hence, overall the year we can sell spawn mushroom for a mushroom house
grower is 8,044 tube bags per month.
The cultural mushroom cultivation grower
These customer behaviors usually use spawn mushroom only after rice harvested
season during December – April, totally 5 months. The market volume in first year is
110,616 tube bags depend on 10% market share.
However, their behavior is not use the same spawn mushroom rate all the months
because of their limit hay and environmental. The first month after rice harvested the start
to sell; we assume all farmers grow straw mushroom. We analysis by using ratio of total 5
month per number of using spawn mushroom has show table
Calculate demand during December to April
Demand
Month Ratio Percent
(bag)
Dec 5 33% 221,232
Jan 4 27% 96,525
Feb 3 20% 331,848
Mar 2 13% 144,788
Apr 1 7% 442,464
Total 15 100% 193,050
35
Hence, Demand in Fist year has show table
Table 3.4 demand forecast of year 1 as 10% of market share
DEMAND FORECAST OF YEAR 1

Cultural mushroom grower Mushroom house grower
Month Total
(bag) (bag)
Jan 59,733 8,044 67,777
Feb 44,246 8,044 52,290
Mar 28,760 8,044 36,804
Apr 15,486 8,044 23,530
May - 8,044 8,044
Jun - 8,044 8,044
Jul - 8,044 8,044
Aug - 8,044 8,044
Sep - 8,044 8,044
Oct - 8,044 8,044
Nov - 8,044 8,044
Dec 73,007 8,044 81,051
Total 221,232 96,525 317,757
Calculate demand forecast in Year 2 and 3
As mention in topic 3.2 of chapter 3 that our company expected the market share
increase 5% of total market size every year as 15% in year 2 and 20%. Hence, the demand
in year 2 and 3 has shown next page.
36
Table 3.5 Demand forecast of year 2 as 10% of market share

Month Total
(bag) (bag)
Jan 89,599 12,066 101,665
Feb 66,370 12,066 78,436
Mar 43,140 12,066 55,206
Apr 23,229 12,066 35,295
May - 12,066 12,066
Jun - 12,066 12,066
Jul - 12,066 12,066
Aug - 12,066 12,066
Sep - 12,066 12,066
Oct - 12,066 12,066
Nov - 12,066 12,066
Dec 109,510 12,066 36,158
Total 331,848 144,792 391,222
Table 3.6 Demand forecast of year 3 as 20% of market share

Month Total
(bag) (bag)
Jan 119,465 16,088 101,665
Feb 88,493 16,088 78,435
Mar 57,520 16,088 55,206
Apr 30,972 16,088 35,295
May - 16,088 12,066
Jun - 16,088 12,066
Jul - 16,088 12,066
Aug - 16,088 12,066
Sep - 16,088 12,066
Oct - 16,088 12,066
Nov - 16,088 12,066
Dec 146,013 16,088 121,575
Total 442,463 193,056 635,519
37
Summary Demand Forecast
Table 3.7 total demand of three year
Summary Demand Forecast

Month First Year Second Year Third Year
Jan 67,777 101,665 101,665
Feb 52,290 78,436 78,435
Mar 36,804 55,206 55,206
Apr 23,530 35,295 35,295
May 8,044 12,066 12,066
Jun 8,044 12,066 12,066
Jul 8,044 12,066 12,066
Aug 8,044 12,066 12,066
Sep 8,044 12,066 12,066
Oct 8,044 12,066 12,066
Nov 8,044 12,066 12,066
Dec 81,051 36,158 121,575
Total 317,757 391,222 635,519
3.4.2 Total Sale Forecast
According price strategy in topic 3.3, our company sale 10 baht per unit (on
average). Three year sale forecast show table next page
38
0
39
Table 3.8 Three Year - sale forecast of year 1
SALE FORECAST OF YEAR 1

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Demand
67,776 52,290 36,804 23,530 8,044 8,044 8,044 8,044 8,044 8,044 8,044 81,050 317,757
(bag)
Price
10 10 10 10 10 10 10 10 10 10 10 10 10
(baht)
Total
677,764 522,902 368,039 235,300 80,438 80,438 80,438 80,438 80,438 80,438 80,438 810,503 3,177,570
Sale
Figure 3.5 Graph of Three Year - Sale forecast of year 1
Three Year - Sale forecast of year 1

900,000
800,000
700,000
600,000
500,000
Baht
400,000
300,000
200,000
100,000
-
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
39
1
Table 3.9 Three Year - Sale forecast of year 2

Demand
101,665 78,435 55,206 35,295 12,066 12,066 12,066 12,066 12,066 12,066 12,066 121,575 476,636
(bag)
Price
10 10 10 10 10 10 10 10 10 10 10 10 10
(baht)
Total Sale
1,016,646 784,352 552,059 352,950 120,656 120,656 120,656 120,656 120,656 120,656 120,656 1,215,755 4,766,355
(baht)
Figure 3.6 Graph of Three Year – Sale forecast of year 2
Three Year - Sale forecast of year 2

1,400,000
1,200,000
1,000,000
800,000
Baht
600,000
400,000
200,000
-
Month
40
2
Table 3.4 Three Year – Sale forecast of year 3

Demand
135,553 104,580 73,608 47,060 16,088 16,088 16,088 16,088 16,088 16,088 16,088 162,101 635,514
(bag)
Price
10 10 10 10 10 10 10 10 10 10 10 10 10
(baht)
Total Sale
1,355,528 1,045,803 736,078 470,600 160,875 160,875 160,875 160,875 160,875 160,875 160,875 1,621,006 6,355,140
(baht)
Figure 3.7 Graph of Three Years – Sale forecast of year 3
Three Years – Sale forecast of year 3

1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
Baht
800,000
600,000
400,000
200,000
-
Month
3
41
3.5 Market Expense
Following table 3.8 mixed marketing activities to calculate
Table 3.12 mixed marketing activities
Mixed Marketing Activities

Current Year Next Year
Month
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
Advertisement
Door to Door / / / / / / / / / / / / / / / / / / / / / / / /
Vinyl /
Brochure / /
Center Learning / /
Training Course /
FM98.75MHz FM98.75MHz
Radio
1-3 pm 1-3 pm
Social Marketing http://www.chiangraionline.com/webboard/index.php
http://www.chiangraitoday.net/publicrelation/publicrelationall.aspx
(webboard) http://www.kasetporpeang.com/forums/index.php
Rice growing
Rice harvesting
42
0
Market Expense Description
Door to Door
Door to door every week
Flue Cost: 500 per week or 2,000 per month
Vinyl Advertisement
At Design Alive
Sixe 3.50 x 1.00 meters
Price 420 baht per unit (5 units)
Brochure
At Mr. copy shop
1,000 units
Price 250 baht per time
Center Learning
Expense 1,500 baht per course
Training Course of straw mushroom cultivation

Expense 10,000 baht per course
Radio
98.75 MHz, Chiang Rai Community.
80 baht per time
80 baht per day or 1760 baht per month (Monday-Friday)
Social Marketing
Free
43
Summary marketing expense for each three year has show table 3.9
Table 3.13 Three Years- Market Express of year 1
Market Expense Year 1

(Baht)
Market activities Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Door to Door 2,000 2,000 2,000 2,000 1,000 1,000 1,000 1,000 1,000 1,000 2,000 2,000 18,000
Vinyl Board 700 700 700 2,100
Brochure 250 250
Center Learning -
Training Course
Radio 960 960 960 960 960 960 960 960 960 960 960 960 11520
Total Market Expense 3,660 3,660 3,660 2,960 1,960 1,960 1,960 1,960 1,960 1,960 3,210 2,960 31,870
Table 3.14: Three Years- Market Express of year 2

(Baht)
Door to Door 2,000 2,000 2,000 2,000 1,000 1,000 1,000 1,000 1,000 1,000 2,000 2,000 18,000
Vinyl Board -
Brochure 250 250
Center Learning 1,500 1,500
Training Course 10,000 10,000
Radio 960 960 960 960 960 960 960 960 960 960 960 960 11520
44
Table 3.15 Three Years- Market Express of year 3

(Baht)
Door to Door 2,000 2,000 2,000 2,000 1,000 1,000 1,000 1,000 1,000 1,000 2,000 2,000 16,000
Vinyl Board -
Brochure 250 250
Center Learning 1,500 1,500
Training Course 10,000 10,000
Radio 960 960 960 960 960 960 960 960 960 960 960 960 11,520
45
3.6 Conclusion
According information form Department of agricultural Chiang Rai plant research in

year 2009 that Chiang Rai famer grow straw mushroom as 45.45 % of the total 110,628
farmer families. This straw mushroom grower behavior after rice harvested season during
December to April call a cultural mushroom cultivation. The total straw mushroom grower
as 50,280 grower. Moreover, there is a mushroom cultivation as grow thought out the year
which all most growing as main occupation. From the information of Department of
agricultural Chiang Rai plant research as well, there are 3,750 straw mushroom house in
Chiang Rai according 15 SMEC.
Referring the calculating company know market size as 3,177,570 bag per year. We
expect the market size in the first year as 10% and it will increase 5% per month depend on
company running out marketing mix. The total sale forecast of three year has show figure 3.8
that we sale as 10 baht per bag.
Figure 3.8 total three year sale forecast
Three Year Sale Forcast

฿6,355,140
฿4,766,355
฿3,177,570
1 2 3
46
Chapter 4: Technical Feasibility Study

4.1 Production and Operation Analysis
4.1.1 Product Characteristics
4.1.2 Product Process
4.1.3 Location
4.1.4 Store Layout
4.1.5 Machine, Tool and Equipments
4.1.6 Logistics Management
4.1.7 Organization Management
4.2 Cost of Investment
4.2.1 Pre-Operating Cost
4.3 Investment Cost
4.4 Operating Cost
4.4.1 Raw material Cost
4.4.2 Direct Labor
4.1.3 Overhead
4.5 Organization expense (Cost)
4.4.1 Salary
4.4.2 Bonus
4.4.3 Office supplies
4.4.4 Electricity
4.4.5 Water Supply
4.4.6 Telephone
4.4.7 Telephone
4.4.8 Car Insurance
4.4.9 Drinking Water
4.6 Conclusion
47
Chapter 4: Technical Feasibility Study
4.1 Production and Operation Analysis
4.1.1 Product Characteristics
Spawn of Straw mushrooms bag
“Spawn” is a substrate into which a mushroom mycelium has impregnated

and developed, and which will be used as a seed in propagation for mushroom
production.
Spawn of straw mushroom is mycelia of straw mushroom as final spawn by
a specific spawn substrate such as CaCo3, Gypsum and Urea hey containers in
plastic bag (or flat whiskey bottles). Container plastics bag size 6 ½ x 12 ½ niches
or 500 grams.
Figure 4.1 spawn of straw mushroom bag

48
4.1.2 Production process
Figure 4.2 production process charts
Stroage or
Preparing Soaking Filling Streaming Plugging Inoculation
7 days 1 day 7days
1. Preparation of spawn substantial
Table 4.1 Preparation of spawn substantial
RATIO
NO. MATERIAL PICTURE
(Kg)
Main Material
1 10-15 seeds per bag
Mother spawn mushroom
50 bag per 1 bottle
2
Residue soybean 30%
3
Cotton west 30%
4
Dry rodeo 30%
5
Lotus waste 10%
Humidly of main material

Water 75%
Supplement of main material
6 - CaSO4 0.01%
7 - Lime 0.01%
8 - MgSO4 0.01%
9 - Gild rice 0.01%
10 - Pumice 0.01%
49
Packing
11 Bottle neck +closed neck 1 per bag
12 PP bag 1 per bag
13 Rubber tied 1 per bag
2. Soaking of spawn substantial
Table 4.2 Activities of production spawn substantial
Day Activities
1 Soaking lotus waste and rodeo on a cemented floor
2 - Mixed them
- Soak Grind hay and cotton waste
3 Mixed and Spin all of them (lotus waste, rodeo, hay, cotton waste)
4 Adding supplement of main material and mixed
5-14 Mixed them every day
15 Mixed them again and fill in bag
Figure 4.3 soaking of spawn substantial
3. Filled into bags
 Fill soaking of spawn substantial in to polypropylene bags size 6 ½ x 11½

inches volume 3/4 bag about or 500 games per bag.
 Compacting 2/3 of bag by compacting machines.
50
 Putting bottle neck, tie it with a rubber band and plug with cotton and paper (see
figure 4.4).
Figure 4.4 Filled soaking of span substantial
4. Steaming of spawn bag
 Pasteurized at 120℃ for 3 hours by steam in pressure cooker (Figure 4.3)

 After that cool down at 30 ℃, taking it down in a special room with UV lights
 Let the bags cool down without ventilation, or ventilate with filtered air
51
Figure 4.5 Pressure cooking 120℃
5. Inculcation (Putting mother mushroom)
During the process of spawning the following measures need to be taken to

control contamination of the substrate:
 Put on clean clothes.

 Clean hand with alcohol 70%.
 Use a flame near the mouths of the bottles of spawn and plastic bags to
keep the environment more or less sterile (figure 4.3).
 Fill a mother mushroom 10-15 seeds.
 Hold both substrate and spawn containers in a horizontal position to
prevent spores falling in.
 plug with cotton and paper and tried with a rubber band
Note: Do the spawning on the following day (do not forget to turn off the UV
light). Spawning is performed by lifting the plugs from the bags containing the
substrate (thus opening the bags) and putting in a small amount of spawn. This is
the moment at which contamination is most likely to occur. So ensure that the
time the bags are open is as short as possible!
52
Figure 4.6: Steps in spawning procedure
6. Storage and purity
Placed the spawn on shelves in the incubation rooms at temperature required

28-35 C Depending on the strain and temperature the mycelium will colonies the
substrate in 7 days and start to form small fruiting bodies. And they can start to sell
and should within 7 days because the mycelium can’t meet productivity.
Figure 4.7 Storage until colonies after 3-4 week
Production Rate
100 kg of spawn substantial can produce 200 bags

53
Production Time Process
According product process, totally it spend time to produce spawn mushroom is 14-15
days;
Prepare and soaking spawns substantial 7 days
Filling bag, Streaming, Inculcation 1 day * specify
Incubation or storage 6-7 days
Hence, farm should produce before 14 days to serve enough demand in next period.
Capacity of Machine and labor
To calculate capacity of machine and labor with each process, our process is
produce every days in office time (Monday-Friend)we estimate the average demand
of three year demand forecast to find productivity per day that shown calculate;
Year 1 317,758 bags
Year 2 476,636 bags
Year 3 635,514 bags
Average demand per year 1,429,908 bags
Month (12) 119,159 bags
Week (4) 29,790 bags
Day (7) 4,256 ≈ 4,500bags
Note: 1000 kg of spawn substantial can produce 2,000 bags
Working time is 8 hours per day (Monday-Friday)
100 kg of spawn substantial can produce 200 bags
Then 4,500 need to use spawn substantial 2,250 kg
Hence, each machine have to hold capacity at least 4,500 bags and 2,250 kg of
spawn substantial per day. The calculate machine and labor show;
54
Pressuring cooker:
Capacity: 2,500 bag per 3 hour
Process per day: 1-2 time per day (8 hour/3hour)
Unit: 2 machines
1. Grinding Machine:
Capacity: 500 kg per hour

Process per day: 8 hour per day (8 hour/1hour)
Unit: 1 machine
2. Hashing Machine: 3,000 kg per hour
Capacity: 3,000 kg per hour

Process per day: 1,500 kg per day
Unit: 1 machine
3. Compacting Machine:
Capacity: 300 per hour

Process per day: 3,000 bags per day with 3 hour
Unit: 2 machines
4. Workers
= (4 process x 10 hour of total process)/8hour
= 5 workers
55
Table 4.3 The Example of Production time of spawn of straw mushroom
Product Process Schedule of spawn of straw mushroom

Month
Week 1 Week 2 Week 3 Week 4
No.
Day
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
1 2,250 kg 4,500 bags 4,500 bags
2
3
4
5
6
7
Note: according capacity
Prepare + Soaking process (7days)
Filling bag + Streaming + Inculcation (1 day) * specify
Storage (7 day)
Product available for sell
Product discount
56
Production Plan
Season 4,500 bags per day
Normal 2,000 bag per day
*depend on pressuring cooker 2,500 bag per day per machine
Quality Control
The process which entities review the quality of spawn mushroom production that
approach places an emphasis on two aspects:
1. Managing Process
- Training full-time worker that sending them to take cause of spawn mushroom
production work shop 1 day. Costly: 2,000 baht per worker.
- Testing mushroom production every 6 months.
2. Production process
After 7 days, color of mycelium have to be white and cluster together overall bag. The
mushroom mycelium will be increased by growing through a solid organic matrix under
sterilized media
Inoculation rooms
The interior of the inoculation room should consist of non-biodegradable

materials. All the surfaces should be smooth and easy to clean. Shelves should be
designed in such a way that the floor beneath can be cleaned easily. Shelves are
typically made of galvanized iron or Formica. Cleaning inoculation every 3 months
Storage
Keep the spawn under controlled environmental conditions room at 28-32 C.
and only take it out when needed. Cleaning the storage room every 3 month by using
Marathon cleaning.
57
Soaking
The aim of mixing is to distribute ingredients or substantial should not be

delicate, including water, as evenly as possible. If adding a small quantity of one
component like chalk, then it is better to mix it first with some of the substrate and
only then add it to the large heap.
Otherwise its distribution will probably remain non-uniform. Moreover,

lumps might occur and the very high concentration of nutrients at these spots will
result in contamination.
Mixing is also very important for the moisture distribution. The correct
amount of water should be available everywhere in the substrate. After mixing, the
moisture content should be 60 – 65%.
The spawn substantial should not have ammonia smelling and should smell
similar straw mushroom overall.
Filling in bag
 Checking bag before filling that no broken or spin.

 Do not push compost deep straight down for overall kill infect.
Inoculation
 Cleaning clothes and washing hand before inoculation.

 Checking mother mushroom before inoculate in bag
 Work under method of inoculation only and specialist worker.
Streaming
 Checking the capacity and condition of pressures cooker every 6 months.

58
Source of raw materials
No. Raw materials Price per unit Place

Main materials
1 Mother spawn
5 baht per bottle Chiang Mai
mushroom
2 Dry Rodeo 5 baht per kg Chiang Mai
3 Cotton wasted 6 baht per kg Samutprakhan
4 Residue soybean 5 baht per sack Chiang Rai
5 Lotus waste 15 baht per kg Nakhonsawan
Supplement
6 CaSO4 150 baht per sack (50 kg)
7 Lime 120 baht per sack (30 kg)
Chiang Rai
8 MgSO4 600 baht per sack (50 kg)
9 Pumice 150 baht per sack (60 kg)
10 Gild rice 120 baht per sack (40 kg)
Packing
11 Bottle neck 400 baht per bag (2,400 units)
12 PP bag 60 baht per bag (800 unit) Chiang Rai
13 Rubber tied 90 baht per bag (5,000)
59
4.1.3 Location
HedPhan Farm is located 123, Thungphaw village, Muang Kham city, Phan district
Chiang Rai province. Placed near entrance to the sides street which connect with Phathon
Yothin Road far 500 meters attractions nearby Phan hospital and far away from Phan
transportation 5 kilometers. Far from Muang district 45 kilometers and far from Phayao 45
kilometers.
Figure 4.8HedPahn Farm Location
4.1.4 Farm Layout
HedPhan farm has the area around 1 PP located in Phan district. Compose of;
Size (meters)
Building
WxLxH
1) Production building 10x15x5
2) Plugging room 5x6x5
3) Raw material store 4x10x5
4) Inoculation of mushroom house x2 3x18x5
3x15x5
5) Office building 6x6x5
toilet 2x2x5
small empty room
6) Car park 9x6x5
7) Worker toilet 2x2x5
8) Mushroom cultivation testing area
60
Figure 4.9 HedPhan farm layouts
Figure 4.10 HedPhan farm (in front)
Figure 4.10 HedPhan farm layouts (back)

61
1. Production building
This area for using process 1 2 3 and 4
Preparing Soaking Filling Streaming
Capacity: Max 5,000 kg
2. Plugging room
This area use process in 5 to putting mother mushroom in bag with clean room or
special room.
Plugging
Capacity: Max 6,000 bags
3. Raw material store
- Straw : capacity : 20,000 kg

- Cotton : capacity : 5,000 kg
- Rodeo : capacity : 10,000 kg
- Lotus waste : capacity : 5,000 kg
4. Inoculation of mushroom house
Inoculating
Capacity: Max 15,000 -20,000 bags
5. Office building
- 4 table office
- 1 set of sofa
- Toilet
- Small empty room
6. Car park
- Park 2 cars
62
7. Outdoor toilet
- For worker
8. Mushroom cultivation testing area

- Spawn mushroom testing
63
4.1.5 Machine, Tool and Equipments
Total
Operation Price
Picture Capacity Unit Price
Usage (unit/baht)
(baht)
MACHINE
- 2,500 bags
- using gas
- 100 -120 C
Steaming
2 70,000 140,000
+ Gaate126
unit
(free)
Compacting 300 bag per

2 13,000 26,000
hour
500 kg per
Grinding 2 20,000 20,000
hour
Composting 3,000 kg per

1 50,000 50,000
hour
VEHICLE
Interest 0%
Pickup 540,000 540,000
Credit 36
months
EQUIPMENT & TOOLS
Small hone 5 45 225

64
Chair 5 80 400
Shower
2 65 130
40 GL. water
tank
5 350 1,750
Rubber pip
1 900 900
25 m
Jug 5 55 275
Big hone 3 900 1,800
Knife 3 35 105
Small tank 5 45 225
Inoculate
5 50 250
iron
Alcohol
3 250 750
lame
Alcohol 1 100 100
Gaate126
500 50 25,000
unit
Grove cotton 100 50 80
3
Bloom 20 150
65
Plastic
10 150 1500
basket
Convince
3 300 9000
force
Bloom 10 15 150
Plastic chair 10 120 1,200
Keeping
5 20 100
garbage
Containing
water 2 5,090 10,180
+glass
Cleaning 1 2,500 2,500

Supplies
Office Equipment
Price Total Price

Organization Usage Unit
(baht/unit) (Baht)
OFFICE EQUIPMENT
Computer 2 17,000 34,000
Fan [wall] 1 2,500 2,500
Fax 1 5,290 5,5290
Printing 1 2,199 2,199
Office desk 4 2,500 10,000
Chair 4 1,680 6,720
Air 1 39,990 39,990
File cabinet 2 2,825 5,650
Document file 1 3,390 3,390
Telephone 1 1,490 1,490
Sofa 1 11,900 11,900
Refrigerator 1 5,590 5,590
66
Clock 1 299 299

Dry Chemical 1 650 650
OFFICE SUPPLIES
ex. Pen bill paper 1 5,000 5,000
UTILITY SUPPORT
Containing cool water 2 5,090 10,180
Microwave 1 1,350 1,350
Container hot water 1 680 680
Television 1 3,080 3,080
Radio 1 3,425 3,425
Containing cool water 2 5,090 10,180
MISCELLANEOUS
ex. Cleaning 1 1,200 1,200
4.1.6 Logistics Management
4.1.6.1 Inventory Management
HedPhan Farm is operational under stock to order. We set inventory policy by using
Periodic Order Quantity because the production demand is varied depend on season period.
To determining how much to order and when to order for meet customer demand and reduce
cost of inventory we set policy of purchase raw material using enough within 3 month.
Calculate material for use
Table: material usage in percent
NO. INVENTORY RATIO

1 Mother spawn mushroom 1 bottle per 50 bag
2 Residue soybean 30% per kg
3 Cotton west 30% per kg
4 Dry rodeo 30% per kg
5 Lotus waste 10% per kg
6 CaSO4 0.01% per kg
67
7 Lime 0.01% per kg

8 MgSO4 0.01% per kg
9 Gild rice 0.01% per kg
10 Pumice 0.01% per kg
11 Bottle neck +closed neck 1 per bag
12 PP bag 1 per bag
13 Rubber tied 3 per bag
68
Table 4.4 Material usage in unit of Year 1
Material usage in unit of Year 1

Demand
Bag 67,776 52,290 36,804 23,530 8,044 8,044 8,044 8,044 8,044 8,044 8,044 81,050 158,879
Kilogram 33,888 26,145 18,402 11,765 4,022 4,022 4,022 4,022 4,022 4,022 4,022 40,525 79,440
Material Usage
Mother spawn
1,356 1,046 736 471 161 161 161 161 161 161 161 1,621 6,355
mushroom (unit)
Residue soybean
10,166 7,844 5,521 3,529 1,207 1,207 1,207 1,207 1,207 1,207 1,207 12,158 47,664
(kg)
Cotton west (kg) 10,166 7,844 5,521 3,529 1,207 1,207 1,207 1,207 1,207 1,207 1,207 12,158 47,664
Dry rodeo (kg) 10,166 7,844 5,521 3,529 1,207 1,207 1,207 1,207 1,207 1,207 1,207 12,158 47,664
Lotus waste (kg) 3,389 2,615 1,840 1,176 402 402 402 402 402 402 402 4,053 15,888
CaSO4 (kg) 33.9 26.1 18.4 11.8 4.0 4.0 4.0 4.0 4.0 4.0 4.0 40.5 158.9
Lime (kg) 33.9 26.1 18.4 11.8 4.0 4.0 4.0 4.0 4.0 4.0 4.0 40.5 158.9
MgSO4 (kg) 33.9 26.1 18.4 11.8 4.0 4.0 4.0 4.0 4.0 4.0 4.0 40.5 158.9
Gild rice (kg) 33.9 26.1 18.4 11.8 4.0 4.0 4.0 4.0 4.0 4.0 4.0 40.5 158.9
Pumice (kg) 33.9 26.1 18.4 11.8 4.0 4.0 4.0 4.0 4.0 4.0 4.0 40.5 158.9
Bottle neck (unit) 67,776 52,290 36,804 23,530 8,044 8,044 8,044 8,044 8,044 8,044 8,044 81,050 317,757
PP bag (unit) 67,776 52,290 36,804 23,530 8,044 8,044 8,044 8,044 8,044 8,044 8,044 81,050 317,757
Rubber tied (unit) 203,329 156,870 110,412 70,590 24,131 24,131 24,131 24,131 24,131 24,131 24,131 243,151 953,271
69
Table 4.5 Purchase policy by POQ in Year 1 of 3 month purchase policy
Amount Unit Purchase Purchase policy in Year 1 of 3 month purchase policy

3 month purchase policy Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Mother spawn mushroom (bottle) 4,706 1,189 724 2,720 9,338
Residue soybean (kg) 35,296 8,914 5,430 20,399 70,038
Cotton west (kg) 35,296 8,914 5,430 20,399 70,038
Dry rodeo (kg) 35,296 8,914 5,430 20,399 70,038
Lotus waste (kg) 11,765 2,971 1,810 6,800 23,346
CaSO4 (sack) 2 1 0 1 5
Lime (sack) 4 1 1 2 8
MgSO4 (sack) 2 1 0.4 1 5
Gild rice (sack) 2 0.5 0.3 1 4
Pumice (sack) 2 1 0.4 1 5
Bottle and Close neck (bag) 98 25 15 57 195
PP bag (bag) 294 74 45 170 584
Rubber tied (bag) 141 36 22 82 280
70
Table 4.6 Material usage in Year 2
Material usage in unit of Year 2

Demand
Bag 101,665 78,435 55,206 35,295 12,066 12,066 12,066 12,066 12,066 12,066 12,066 121,575 476,636
Kilogram 50,832 39,218 27,603 17,647 6,033 6,033 6,033 6,033 6,033 6,033 6,033 60,788 238,318
Material Usage
Mother spawn
2,033 1,569 1,104 706 241 241 241 241 241 241 241 2,432 9,533
mushroom (unit)
Residue soybean (kg) 15,250 11,765 8,281 5,294 1,810 1,810 1,810 1,810 1,810 1,810 1,810 18,236 71,495
Cotton west (kg) 15,250 11,765 8,281 5,294 1,810 1,810 1,810 1,810 1,810 1,810 1,810 18,236 71,495
Dry rodeo (kg) 15,250 11,765 8,281 5,294 1,810 1,810 1,810 1,810 1,810 1,810 1,810 18,236 71,495
Lotus waste (kg) 5,083 3,922 2,760 1,765 603 603 603 603 603 603 603 6,079 23,832
CaSO4 (kg) 50.8 39.2 27.6 17.6 6.0 6.0 6.0 6.0 6.0 6.0 6.0 60.8 238.3
Lime (kg) 50.8 39.2 27.6 17.6 6.0 6.0 6.0 6.0 6.0 6.0 6.0 60.8 238.3
MgSO4 (kg) 50.8 39.2 27.6 17.6 6.0 6.0 6.0 6.0 6.0 6.0 6.0 60.8 238.3
Gild rice (kg) 50.8 39.2 27.6 17.6 6.0 6.0 6.0 6.0 6.0 6.0 6.0 60.8 238.3
Pumice (kg) 50.8 39.2 27.6 17.6 6.0 6.0 6.0 6.0 6.0 6.0 6.0 60.8 238.3
Bottle neck (unit) 101,665 78,435 55,206 35,295 12,066 12,066 12,066 12,066 12,066 12,066 12,066 121,575 476,636
PP bag (unit) 101,665 78,435 55,206 35,295 12,066 12,066 12,066 12,066 12,066 12,066 12,066 121,575 476,636
Rubber tied (unit) 304,994 235,306 165,618 105,885 36,197 36,197 36,197 36,197 36,197 36,197 36,197 364,726 1,429,907
71

Mother spawn mushroom (bottle) 6,824 1,723 1,050 4,225 13,822
Residue soybean (kg) 51,179 12,925 7,873 31,691 103,668
Cotton west (kg) 51,179 12,925 7,873 31,691 103,668
Dry rodeo (kg) 51,179 12,925 7,873 31,691 103,668
Lotus waste (kg) 17,060 4,308 2,624 10,564 34,556
CaSO4 (sack) 3 1 1 2 7
Lime (sack) 6 1 1 4 12
MgSO4 (sack) 3 1 1 2 7
Gild rice (sack) 3 1 0.4 2 6
Pumice (sack) 3 1 1 2 7
PP bag (bag) 426 108 66 264 864
Rubber tied (bag) 205 52 31 127 415
72
Table 4.8 Material usage in Year 3
Material usage in Year 3

Demand
Bag 135,553 104,580 73,608 47,060 16,088 16,088 16,088 16,088 16,088 16,088 16,088 162,101 635,514
Kilogram 67,776 52,290 36,804 23,530 8,044 8,044 8,044 8,044 8,044 8,044 8,044 81,050 317,757
Material Usage
Mother spawn
2,711 2,092 1,472 941 322 322 322 322 322 322 322 3,242 12,710
mushroom (unit)
Residue soybean (kg) 20,333 15,687 11,041 7,059 2,413 2,413 2,413 2,413 2,413 2,413 2,413 24,315 95,327
Cotton west (kg) 20,333 15,687 11,041 7,059 2,413 2,413 2,413 2,413 2,413 2,413 2,413 24,315 95,327
Dry rodeo (kg) 20,333 15,687 11,041 7,059 2,413 2,413 2,413 2,413 2,413 2,413 2,413 24,315 95,327
Lotus waste (kg) 6,778 5,229 3,680 2,353 804 804 804 804 804 804 804 8,105 31,776
CaSO4 (kg) 67.8 52.3 36.8 23.5 8.0 8.0 8.0 8.0 8.0 8.0 8.0 81.1 317.8
Lime (kg) 67.8 52.3 36.8 23.5 8.0 8.0 8.0 8.0 8.0 8.0 8.0 81.1 317.8
MgSO4 (kg) 67.8 52.3 36.8 23.5 8.0 8.0 8.0 8.0 8.0 8.0 8.0 81.1 317.8
Gild rice (kg) 67.8 52.3 36.8 23.5 8.0 8.0 8.0 8.0 8.0 8.0 8.0 81.1 317.8
Pumice (kg) 67.8 52.3 36.8 23.5 8.0 8.0 8.0 8.0 8.0 8.0 8.0 81.1 317.8
Bottle neck (unit) 135,553 104,580 73,608 47,060 16,088 16,088 16,088 16,088 16,088 16,088 16,088 162,101 635,514
PP bag (unit) 135,553 104,580 73,608 47,060 16,088 16,088 16,088 16,088 16,088 16,088 16,088 162,101 635,514
Rubber tied (unit) 406,658 313,741 220,823 141,180 48,263 48,263 48,263 48,263 48,263 48,263 48,263 486,302 1,906,542
73

Mother spawn mushroom (bottle) 9,098 2,298 1,400 5,634 12,796
Residue soybean (kg) 68,239 17234 10497 42255 95,969
Cotton west (kg) 68,239 17234 10497 42255 95,969
Dry rodeo (kg) 68,239 17234 10497 42255 95,969
Lotus waste (kg) 22,746 5,745 3,499 14,085 31,990
CaSO4 (sack) 5 1 1 3 6
Lime (sack) 8 2 1 5 11
MgSO4 (sack) 5 1 1 3 6
Gild rice (sack) 4 1 1 2 5
Pumice (sack) 5 1 1 3 6
PP bag (bag) 569 144 87 352 800
Rubber tied (bag) 273 69 42 169 384
74
4.1.6.2 Transportation Management
HedPhan Farm has 2 types of transportation process which are in source logistic and
outsource transportation
Outsource transportation system
It is the transportation for shipping through suppliers or raw material source outside
Chiang Rai. To pick up the raw material we will outsource third party transportation name
Jongjarean transport. Container by 6 wheel truck which have capacity 7 ton.
Capacity : Long 6.5 meters, x Wide 2.25 meters, x High 3.0 meters.
Lead time : 1-3 days
The rate of service according our supplier has shown by following table
Transpiration rate
No. Raw materials Place
(baht)
3 Cotton wasted 12,000 Samutprakhan
4 Residue soybean 5,500 Chiang Rai
5 Lotus waste 2,500 Nakhonsawan
75
In source transportation system
This transportation system we divide into shipping to customer and pick up raw
material.
Picking up raw material
We use own Vigo pick-up car to buy raw materials in class B and C and special raw
materials. The rate of shipping cost has show in the table below
Transpiration rate
No. Raw materials Place
(baht)
1 Mother spawn mushroom 750 Chiang Mai
3 Dry Rodeo 750 Chiang Mai
6 CaSO4 100
7 Lime 100
Chiang Rai
8 MgSO4 100
9 Pumice 100
10 Gild rice 100
11 Bottle neck 150
12 Closed neck 150
Chiang Rai
13 PP bag 150
14 Rubber tied 150
Shipping to customer
It is the transportation services to customer that serve the movement of spawn

mushroom to customer from the store to the place that customer want. Each place in Chiang
Rai the flue cost per day is 500 baht. The totally on pick-up can contain 5,000 bags.
76
4.1.7 Organization Management
HedPhan Farm is register under company limited as juristic person registration

submitted that the name’s company is “ HedPhan Farm”. Compose of company logo as show
figure below And registered location at 123, Thungphaw village, Muang Kham city, Phan
district Chiang Rai province. The capital investment is 2,000,000 baht, number of stock is
100 value per stock of 20,000 stock.
Figure company logo
List of shareholder
1. Mr. Nutthanee Shongsiri 26 years old
2. Miss. Pharita Vijiyaphon 25 years old
3. Mr. Phongsathod Yavichiphan 25 years old
4. Miss. Mananya Suwan 21 years old
5. Mr. Thawesak Khanthon 27 years old
4.1.7.1 Project construction
To construction project, the company hire a contractor named PhanSangBan

company to control and build the all building which expected and make contact under 3
month completely. Moreover this company also set all electricity and water infrastructures,
operating telephone, internet network contacting. HedPhan Farm use own layout.
77
4.1.7.2 Project scheduling
Month
Activities
6 7 8 9 10 11 12 1 2 3 4 5
1. Loan money
2. Construct building
3. Order machine
4. Setting machine
5. Order raw material
6. operating
4.1.7.3 Operating period
Figure 4.12 Organization structure
Top manager
Accontant Sale and Marketing

person Operation Person
Human resource Requirement
1. Top manager (1 position)

Task:
- Oversee all departments and along with to sign in that agreement documents
Characteristic:
- Male/Female, Age 25 up
- Bachelor degree up and work experience must more than 1years
- Can use with best Microsoft Office such as Word, Excel
- Have good management skill and good relationship
Salary: 12,000 baht per month
78
2. Accountant (1 position)
Task:
- Work that relate to financial and accounting
- Manage and control budget of company
Characteristic:
- Male or female, Age 24-30
- Graduated high vocational certificate or bachelor degree in account
- More than 1 year of work experience that relate to finance
- Computer skill especially Excel and Express
- To be honest on work
Salary: 8,000 per month
3. Sale and marketing specialist (1 Position )

Task:
- Do marketing and advertising
- Analysis market trend form season
- Managing for product and service to customers satisfaction
- Continuous to fine new customer
Characteristic:
- Male / Female, Age 24-30
- Bachelor degree of marketing or relate filed
- Computer skill especially Microsoft
- Have negotiation skill, good personality and relationship
4. Production Specialist (1 position)

Task:
- Plan and control production process
- Control quality product
Characteristic:
- Male Age 24-30
- Graduated high vocational certificate or bachelor degree in science
- Can analyze and plan production
79
- Hard working
- To be honest on work
5. Driver and shipper (2 position)
Task:
- Driving to shipping product
Characteristic:
- Male 24 up
- Having A driver's license
- Available in Chiang Rai only
Salary: 180 baht per person
Characteristic of administration
- Officer : start work at 8 am 5 pm

- Worker : start work at 8 am 5 pm
Because of this project is a new project. The administration, which has executive
offices and factory equipment associated with the core service management system and to
help each other and focus on living together as families.
Compensation planning
- Having holiday 13 day under law.

- Bonus 1,000 baht per person in the last every year.
- Over late work at 80 baht per hour.
Production plan of lack of the job
- Must be notice before 30 days in case of leaving work

- Must be notice before 1 day in case of sicking
80
Human Resource Development
- Training production worker every year. Cost 2,000 per person

- Evaluation employee every year.
4.2 Cost of Investment
Pre-Operation cost
Land 106,500 baht

Building 550,350 baht
Water infrastructure 65,000 baht
Electronic infrastructure 35,000 baht
Company Limited Registration 11,500 baht
Telephone service 3,250 baht
Internet service 950 baht
Total Pre-Operation Cost 772,550 baht
81
4.3 Investment Cost

4.3.1 Investment Cost
Investment Cost
Investment Unit Price Total Price Year Dep. Annual Dep. Monthly Dep.
Machine 138,000 221,000 44,200 3,683

Streaming 2 70,000 140,000 5 28,000 2,333
Compacting 2 13,000 26,000 5 5,200 433
Grinding 1 20,000 20,000 5 4,000 333
Hashing 1 35,000 35,000 5 7,000 583
Vehicle 540,000 540,000 108,000 9,000
Pick-up 1 540,000 540,000 5 108,000 9,000
Equipments & Tools 11190 54,400 54,400 4,533
Small hone 5 45 225 1 225 19
Chair 5 80 400 1 400 33
Shower 2 65 130 1 130 11
40 GL. water tank 5 350 1,750 1 1,750 146
Rubber pip 25 m 1 900 900 1 900 75
Jug 5 55 275 1 275 23
Big hone 3 900 2,700 1 2,700 225
Knife 3 35 105 1 105 9
Small tank 5 45 225 1 225 19
Inoculate iron 5 50 250 1 250 21
Alcohol lame 3 250 750 1 750 63
Alcohol 1 100 100 1 100 8
Gaate126 unit 500 50 25,000 1 25,000 2,083
82
Grove cotton 100 50 5,000 1 5,000 417

Bloom 3 20 60 1 60 5
Plastic basket 10 150 1,500 1 1,500 125
Convince force 3 300 900 1 900 75
Bloom 10 15 150 1 150 13
Plastic chair 10 120 1,200 1 1,200 100
Keeping garbage 5 20 100 1 100 8
Containing cool water 2 5,090 10,180 1 10,180 848
Cleaning Supplies 1 2,500 2,500 1 2,500 208
Office Equipment 97,303 179,668 59,889 4,991
Computer 2 17,000 34,000 3 11,333 944
Fan [wall] 1 2,500 2,500 3 833 69
Fax 1 5,290 55,290 3 18,430 1,536
Printing 1 2,199 2,199 3 733 61
Office desk 4 2,500 10,000 3 3,333 278
Chair 4 1,680 6,720 3 2,240 187
Air 1 39,990 39,990 3 13,330 1,111
File cabinet 2 2,825 5,650 3 1,883 157
Document file 1 3,390 3,390 3 1,130 94
Telephone 1 1,490 1,490 3 497 41
Sofa 1 11,900 11,900 3 3,967 331
Refrigerator 1 5,590 5,590 3 1,863 155
Clock 1 299 299 3 100 8
Dry Chemical 1 650 650 3 217 18
Office supplies 5,000 5,000 1,667 139
ex. Pen bill paper 1 5,000 5,000 3 1,667 139
Utility expense 19,215 24,305 8,102 675
Refrigerator 1 5,590 5,590 3 1,863 155
83
Containing cool water 2 5,090 10,180 3 3,393 283

Microwave 1 1,350 1,350 3 450 38
Container hot water 1 680 680 3 227 19
Television 1 3,080 3,080 3 1,027 86
Radio 1 3,425 3,425 3 1,142 95
Miscellaneous 1,200 1,200 400 33
ex. Cleaning 1 1,200 1,200 3 400 33
Total Cost of Investment 1,025,573 276,658 23,055
84
4.3.2 Three Year Depreciation
Table 4.10 deprecation of year 1
Depreciation of Year 1
Amount
Investment Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Value
Operation Expense
Machine 221,000 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 44,200
Equipment & Tools 54,400 4,533 4,533 4,533 4,533 4,533 4,533 4,533 4,533 4,533 4,533 4,533 4,533 54,400
Total 275,400 8,217 8,217 8,217 8,217 8,217 8,217 8,217 8,217 8,217 8,217 8,217 8,217 98,600
Administration Expense
Building 550,350 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 27,516
Vehicle 540,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 108,000
Office Equipment 179,668 4,991 4,991 4,991 4,991 4,991 4,991 4,991 4,991 4,991 4,991 4,991 4,991 59,889
Office Supplies 5,000 139 139 139 139 139 139 139 139 139 139 139 139 1,667
Utility expense 24,305 675 675 675 675 675 675 675 675 675 675 675 675 8,102
Miscellaneous 1200 33 33 33 33 33 33 33 33 33 33 33 33 400
Total 750,173 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 178,058
Total Dep. 1,025,573 23,055 23,055 23,055 23,055 23,055 23,055 23,055 23,055 23,055 23,055 23,055 23,055 276,658
85
Amount
Value
Operation Expense
Machine 176,800 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 44,200
Total 176,800 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 44,200
Building 522,834 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 27,516
Vehicle 480,111 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 108,000
Office Supplies 3,333 139 139 139 139 139 139 139 139 139 139 139 139 1,667
Utility expense 16,203 675 675 675 675 675 675 675 675 675 675 675 675 8,102
Miscellaneous 800 33 33 33 33 33 33 33 33 33 33 33 33 400
Total 620,226 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 178,058
Total Dep. 797,026 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 222,258
86
Amount
Value
Operation Expense
Machine 132,600 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 44,200
Total 132,600 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 44,200
Building 495,318 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 27,516
Vehicle 372,111 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 108,000
Office Supplies 1,667 139 139 139 139 139 139 139 139 139 139 139 139 1,667
Utility expense 8,102 675 675 675 675 675 675 675 675 675 675 675 675 8,102
Miscellaneous 400 33 33 33 33 33 33 33 33 33 33 33 33 400
Total 442,168 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 178,058
Total Dep. 574,768 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 222,258
87
4.4 Operating Cost
4.4.1 Direct material Cost
Material usage and unit price
NO. MATERIAL Price per Unit PICTURE

Main Material
1
Mother spawn mushroom 5 baht per bottle
2
Residue soybean 10 baht per kg
3
Cotton west 6 baht per kg
4
Dry rodeo 30 baht per kg
5
Lotus waste 15 baht per kg
Supplement of main material
6 CaSO4 150 baht per sack
7 Lime 120 baht per sack
8 MgSO4 600 baht per sack
9 Gild rice 50 baht per sack
10 Pumice 120 baht per sack
Packing
11 Bottle neck +closed neck 400 baht per bag
12 PP bag 60 baht per bag
13 Rubber tied 90 baht per bag

88
Calculate unit cost of raw material
Material Unit Amount Total Cost Unit Cost

Mother spawn mushroom 5 5 5
Residue soybean 5 5 5
Cotton west 6 6 6
Dry rodeo 5 5 5
Lotus waste 15 15 15
CaSO4 (sack) 30 150 5
Lime 30 120 4
MgSO4 30 600 20
Gild rice 50 120 2
Pumice 30 120 4
Bottle neck 2400 400 0.17
PP bag 800 60 0.08
Rubber tied 5,000 90 0.02
Table 4.13 cost per bag
Percent Material Total material Unit

Material Total cost
usage usage usage price
Mother spawn mushroom 0.20% 1 0.002 ฿0.002 ฿ 0.000004
Residue soybean 30% 0.5 0.15 0.15 0.02
Cotton west 30% 0.5 0.15 0.15 0.02
Dry rodeo 30% 0.5 0.15 0.15 0.02
Lotus waste 10% 0.5 0.05 0.05 0.00
CaSO4 0.01%
0.5 0.00005 0 0.000000005
Lime 0.01% 0.5 0.00005 0 0.000000005
MgSO4 0.01%
0.5 0.00005 0 0.000000005
Gild rice 0.01% 0.5 0.00005 0 0.000000005
Pumice 0.01% 0.5 0.00005 0 0.000000005
Bottle neck 1 1 1 1.00 1
PP bag 1 1 1 1.00 1
Rubber tied 1 1 1 1.00 1
Total Unit Cost ฿ 3.07
89
4.4.2 Direct Labor Cost
Worker: (5 people)
Task: production work
Qualify: Male or Female 20 year old up
Salary: 180 baht per day
Total Direct Labor cost per month is (180 x 5)*22 = 19,800 baht per month.
4.4.3 Manufacturing Overhead
1. Training full-time worker that sending them to take cause of spawn mushroom
production work shop 1 day. Costly: 2,000 baht per worker.
2. Inoculation and plugging spawn mushroom room clearing every 6 month cost
2,000 baht.
3. Deprecation of machine and Equipment & Tools, 3,683 and 4,533
4. Ordering Cost per time (flue cost)
o Mother spawn mushroom
Transportation cost (Pick up) 750 baht per time
o Residue soybean
Transportation cost (6 wheels vehicle ) 15,000 baht per time
o Cotton west
Transportation cost (6 wheels vehicle ) 5,500 baht per time
o Dry rodeo
Transportation cost (Pick up) 750 baht per time
o Lotus waste
Transportation cost (Pick up) 2,500 baht per time
According inventory management topic the value purchase of material has show table.
90
Table 4.14 cost of operating Year 1
COST OF OPERATING YEAR 1

DIRECT METERIAL
Beginning materials inventory - 494,949 231,000 45,223 137,850 97,247 56,644 144,806 104,203 63,600 506,774 466,171
Add: Purchases of materials 837,069 - - 211,401 - - 128,766 - - 483,777 - -
Materials available for use 837,069 494,949 231,000 256,624 137,850 97,247 185,409 144,806 104,203 547,377 506,774 466,171
Materials use in production 342,120 263,949 185,778 118,774 40,603 40,603 40,603 40,603 40,603 40,603 40,603 409,123
Ending materials Inventory 494,949 231,000 45,223 137,850 97,247 56,644 144,806 104,203 63,600 506,774 466,171 57,048
DIRECT LABOR
5 workers x 180 baht x 22 hours 19,800 19,800 19,800 19,800 19,800 19,800 19,800 19,800 19,800 19,800 19,800 19,800
OVERHEAD
Flue Cost of martial 23,000 23,000 23,000 23,000
Training Cost 10,000
Bonus 5,000
Cleaning supplies 2,000 2,000
Total overhead 33,000 23,000 2,000 23,000 23,000 2,000 5,000
TOTAL OPERATING COST 394,920 283,749 205,578 161,574 62,403 60,403 83,403 60,403 60,403 83,403 62,403 433,923
91
COST OF OPERATING YEAR 2

DIRECT METERIAL
Beginning materials inventory 57,048 723,498 327,575 48,909 168,662 107,758 46,853 167,410 106,506 45,601 715,151 654,246
Add: Purchases of materials 1,179,630 - 297,915 - 181,462 - 730,454 -
Materials available for use 1,236,678 723,498 327,575 346,823 168,662 107,758 228,315 167,410 106,506 776,055 715,151 654,246
DIRECT LABOR
OVERHEAD
Flue Cost of martial 23000 23000 23000 23000
Training Cost
Bonus 5,000
Total overhead 23,000 23,000 2,000 23,000 23,000 2,000 5,000
92
COST OF OPERATING COST YEAR 3

DIRECT METERIAL
Beginning materials inventory 40,561 929,162 401,265 29,710 189,381 108,175 26,969 187,712 106,506 25,300 918,033 836,827
Add: Purchases of materials 1,572,840 397,219 241,949 973,939
Materials available for use 1,613,402 929,162 401,265 426,929 189,381 108,175 268,918 187,712 106,506 999,239 918,033 836,827
DIRECT LABOR
OVERHEAD
Flue Cost of martial 23000 23000 23000 23000
Training Cost
Bonus 5,000
Total overhead 23,000 23,000 2,000 - 23,000 23,000 2,000 5,000
93
4.5 Organization expense (Cost)
4.4.1 Salary
Salary Total Salary

Employee Unit
(baht per month) (baht per month)
1 Top manager 1 12,000 12,000
2 Accountant 1 8,000 8,000
3 Sale and marketer 1 8,000 8,000
4 Production specialist 1 8,000 8,000
5 Driver 2 180 baht per day 7,920
Total Payment 6 43,920
4.4.2 Bonus
Bonus Total Bonus

Employee Unit
(baht per year) (baht per month)
1 Top manager 1 1,000 1,000
2 Accountant 1 1,000 1,000
3 Sale and marketer 1 1,000 1,000
4 Production specialist 1 1,000 1,000
5 Driver 2 1,000 2,000
Total Payment 6 6,000
4.4.3 Office Supplies

Approximated payment for office supplies as 2,000 per year
4.4.4 Electricity supply
HedPhan Farm calculates the electricity on the rate of The Provincial Electricity
Authority, base on real situation, calculating from the number of equipments, electrical
appliances, lights in every room and the front area, and in inventory room, and also use in
production activities.
For perform o a business enterprise, business enterprise cum residence, industrial and
state enterprise or the alike, including its compound, with a maximum 15-minute integrated
demand of less than 30 kilowatt through a single Watt-hour meter. The electronic rate show
in table
94
Time of Use Tariff (TOU tariff)
Electricity Charge Service Chart

Normal Rate
(baht/kWh) (baht/month)
2.1.1 Energy 22- 23 kV. 2.2649 228.71
2.1.2 Energy below 22 kV. 40.90
150 first unit (unit 0-150) 1.8047
250 next unit ( unit 151-400) 2.7781
Over 400 next unit (unit 401 more) 2.9780
Calculate Electricity expense per month with full time usage ( December-April)
22 meters pressure in the normal rate

Estimate use of electricity 500 unit x 2.4649 = 1,232.45 baht
Add. (+) Service expense = 228.17 baht
Total Electricity expense / month = 1,460.62 baht
Note except during December to April the usage will reduce 50%
4.4.5 Water Supply

Water supply is mostly used for production activities and washing equipments.
Regulation (14th issue) B.E. 2009

Water Rate
Level of water used
Small Business
cum./month
Baht/cmu. Satang/Liters
Low level Rat 100 liters
0-10 11.45 1.145
11-20 14.20 1.420
21-30 15.45 1.545
31-30 16.45 1.645
51-50 16.85 1.685
81-100 16.95 1.695
101-300 17.05 1.705
301-1,000 17.15 1.715
1,001-2,000 17.25 1.725
2,001-3,000 17.35 1.735
>3,000 17.45 1.745
95
Calculating water supply expense with full time usage (December-April)
Water supply 45 x 16.45 = 493.5 Baht / per month

Add. (+) VAT 7% = 34.54 baht
Total water expense/month = 528.05 baht
Note except during December to April the usage will reduce 50%
4.4.6 Telephone
The company has installed one telephone in the office room to use for the business,
such as ordering products and contacting customers. The amount of telephone usage is
estimated to be 200 times per month, with telephone fee for 3 Baht per one call.
Calculating telephone expense

Telephone usage 200 x 3 = 600 Baht
Add. (+) VAT 7% = 51.81 Baht
Add. (+) Service Chart = 100 Baht
Total = 751.81 Baht/per year
4.4.7 TOT Internet
TOT internet and telephone expense/month with Hi speed Internet 3BB 4M.
Calculating Internet expense

Internet expense = 590 Baht
Add. (+) VAT 7% = 41.31 Baht
Add. (+) Service Chart = 100 Baht
Total = 731.3 Baht
4.4.8 Car Insurance
HedPhan company have to purchase car insurance through Viriyha Insurance which
is Insurance 3 plus. Our limited protection that will get is 1,000,000 baht. The total of
insurance car plus enactment car free is 5,800 baht per year. It is a fix cost, we have to pay in
the beginning of every year.
96
4.4.9 Drinking Water
We shop order drinking water from the nearest supplier from the shop name
NumPhan enterprise which provide to customers and employees. The consumption of water
is calculated to 400 liters per month, a 20 liter bottle is 15 Baht per bottle, which will be 30
bottles per month, according to the number of employees and the forecasting number of
customers.
Calculating drinking water expense
Drinking water 30 X 15 = 450 Baht/per month
4.4.10 Borrowing
Borrow 2,000,000 baht

Interest rate 12%
Period 5 years
Payment per month 44,489 baht
97
Table 4.17 Organization Expense

ORGANIZATION EXPENSE OF YEAR 1
Expense Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Salary 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 527,040
Bonus 9,000 9,000
Office Supplies 0
Water Supply 528 528 528 528 264 264 264 264 264 264 264 528 4,488
Electricity supply 1,461 1,461 1,461 1,461 730 730 730 730 730 730 730 1,461 12,413
Telephone 752 752 752 752 730 730 730 730 730 730 730 730 8,847
Internet 590 590 590 590 590 590 590 590 590 590 590 590 7,080
Car Insurance 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 69,600
Drinking Water 450 450 450 450 255 255 255 255 255 255 255 450 4,035
Total 53,500 53,500 53,500 53,500 52,289 52,289 52,289 52,289 52,289 52,289 52,289 62,479 642,504
Table 4.18 Organization Expense year 2

Salary 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 527,040
Bonus 9,000 9,000
Office Supplies 1,000 1,000
Water Supply 528 528 528 528 264 264 264 264 264 264 264 528 4,488
Telephone 752 752 752 752 730 730 730 730 730 730 730 730 8,847
Internet 590 590 590 590 590 590 590 590 590 590 590 590 7,080
Car Insurance 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 69,600
Drinking Water 450 450 450 450 255 255 255 255 255 255 255 450 4,035
Total 54,500 53,500 53,500 53,500 52,289 52,289 52,289 52,289 52,289 52,289 52,289 62,479 643,504
98
Table 4.19 Organization Expense year 3

Salary 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 527,040
Bonus 9,000 9,000
Office Supplies 1,000 1,000
Water Supply 528 528 528 528 264 264 264 264 264 264 264 528 4,488
Telephone 752 752 752 752 730 730 730 730 730 730 730 730 8,847
Internet 590 590 590 590 590 590 590 590 590 590 590 590 7,080
Car Insurance 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 69,600
Drinking Water 450 450 450 450 255 255 255 255 255 255 255 450 4,035
Total 54,500 53,500 53,500 53,500 52,289 52,289 52,289 52,289 52,289 52,289 52,289 62,479 643,504
99
4.6 Conclusion
HedPhan Farm provides the spawn of straw mushroom bag or called

mushroom seed to straw mushroom cultivation both a cultural mushroom and mushroom
house cultivation. The product contain plastics bag size 6 ½ x 12 ½ niches weigh 500 grams
and sell at 10 baht per unit. The main spawn substantial composes of rodeo 30%, residue
soybean 30%, cotton west 30% and lotus west 10% and also adding supplement to make
good quality.
Farm located 123, Thungphaw village, Muang Kham city, Phan district Chiang Rai
province. Placed near entrance to the sides street which connect with Phathon Yothin Road
far 500 meters attractions nearby Phan hospital and far away from Phan transportation 5
kilometers.
The process need to produce under cleanness and careful to avoid the bacteria or
infect which effect for mycelium. Their products are produce under 6 processes, the process
of plugging or putting mother spawn on the bag that worker need to be careful most. Farm
also set the rule to cleaning production building every 6 month and the worker have to be
training before work. At the moment we hire only 5 workers that enough for all production
even in the future we may hire only part-time later.
In organization, there are 4 people to work in office that effort with sale and
marketing, account and operation plan. As we shipping product by door to door we need to
hire 2 divers help together to distribute product to customer. As mention, the high volume
demands are during December - April which this period the expense will be high or full
expense such as electricity, water supplies that use in production process.
For production and operating process, farm use outsource from Jongjareng company
to purchase raw material such as lotus west and cotton west which less cost and the less time
spending. However, to pick up some material especially in Chiang Rai farm use own pick-up
car. The most expense farm spends for purchase material and inventory cost.
100
Chapter 5: Financial Analysis
5.1 Income Statement

5.2 Cash Flow
5.3 Balance Sheet
5.4 Project Analysis
5.5 Conclusion
101
HedPhan Company Limited

Income Statement
For Year End December 31, 2011
SALE 677,764 522,902 368,039 235,300 80,438 80,438 80,438 80,438 80,438 80,438 80,438 810,503 3,177,570
MANUFACTURING COST
Cost of Product 394,920 283,749 205,578 161,574 62,403 60,403 83,403 60,403 60,403 83,403 62,403 433,923 1,952,564
Add: Depreciation 7,208 7,208 7,208 7,208 7,208 7,208 7,208 7,208 7,208 7,208 7,208 7,208 86,490
Total Manufacturing cost 275,637 231,945 155,254 66,518 10,827 12,827 (10,173) 12,827 12,827 (10,173) 10,827 369,372 1,138,516
ADMINISTATION EXPENSE
Marketing expense 3,660 3,660 3,660 2,960 1,960 1,960 1,960 1,960 1,960 1,960 3,210 2,960 31,870
Administration expense 53,500 53,500 53,500 53,500 52,289 52,289 52,289 52,289 52,289 52,289 52,289 62,479 642,504
Add: Depreciation 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 145,339
Total Cost of Operating 69,272 69,272 69,272 68,572 66,361 66,361 66,361 66,361 66,361 66,361 67,611 77,550 819,713
Net Operating Income 206,365 162,673 85,982 (2,054) (55,534) (53,534) (76,534) (53,534) (53,534) (76,534) (56,784) 291,822 318,803
EARNING BEFOR INCOME AND TAX

Less interest expense 22,000 21,775 21,548 21,319 21,087 20,853 20,616 20,378 20,137 19,893 19,647 19,399 248,651
Net Income before tax 184,365 140,898 64,434 (23,372) (76,620) (74,386) (97,150) (73,911) (73,670) (96,427) (76,431) 272,423 70,152
Less tax expense 55,309 42,269 19,330 - - - - - - - - 81,727 198,636
NET INCOME 129,055 98,629 45,104 (23,372) (76,620) (74,386) (97,150) (73,911) (73,670) (96,427) (76,431) 190,696 (128,484)
RETAIN EARNING 29,055 227,684 272,788 249,415 172,795 98,409 1,258 (72,653) (146,323) (242,750) (319,181) (128,484) 242,013
102

Income Statement
SALE
1,016,646 784,352 552,059 352,950 120,656 120,656 120,656 120,656 120,656 120,656 120,656 1,215,755 4,766,355
MANUFACTURING COST
Cost of Product
555,979 415,723 298,467 220,961 82,704 80,704 103,704 80,704 80,704 103,704 82,704 638,485 2,744,546
Add: Depreciation
3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 44,200
Total Manufacturing cost
456,983 364,946 249,909 128,306 34,268 36,268 13,268 36,268 36,268 13,268 34,268 573,586 1,977,609
Marketing expense
12,960 4,460 2,960 2,960 1,960 1,960 1,960 1,960 1,960 1,960 3,210 2,960 41,270
Administration expense
54,500 53,500 53,500 53,500 52,289 52,289 52,289 52,289 52,289 52,289 52,289 62,479 643,504
Add: Depreciation
12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 145,339
Total Cost of Operating
79,572 70,072 68,572 68,572 66,361 66,361 66,361 66,361 66,361 66,361 67,611 77,550 830,113
Net Operating Income
377,411 294,874 181,337 59,733 (32,092) (30,092) (53,092) (30,092) (30,092) (53,092) (33,342) 496,036 1,147,496

Less interest expense
19,148 18,894 18,638 18,380 18,119 17,855 17,589 17,320 17,048 16,774 16,497 16,217 212,479
Net Income before tax
358,263 275,979 162,698 41,353 (50,211) (47,947) (70,681) (47,412) (47,140) (69,866) (49,839) 479,819 935,017
Less tax expense
107,479 82,794 48,809 12,406 - - - - - - - 143,946 395,434
NET INCOME
250,784 193,186 113,889 28,947 (50,211) (47,947) (70,681) (47,412) (47,140) (69,866) (49,839) 335,874 539,583
RETAIN EARNING
122,300 315,485 429,374 458,322 408,110 360,163 289,482 242,070 194,930 125,064 75,225 411,098 3,431,623
103

Income Statement
SALE
1,355,528 1,045,803 736,078 470,600 160,875 160,875 160,875 160,875 160,875 160,875 160,875 1,621,006 6,355,140
MANUFACTURING COST
Cost of Product
727,039 547,697 391,355 280,348 103,006 101,006 124,006 101,006 101,006 124,006 103,006 843,047 3,546,529
Add: Depreciation
3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 44,200
Total Manufacturing cost
624,805 494,422 341,040 186,569 54,186 56,186 33,186 56,186 56,186 33,186 54,186 774,276 2,764,411
Marketing expense
12,960 4,460 2,960 2,960 1,960 1,960 1,960 1,960 1,960 1,960 3,210 2,960 39,270
Administration expense
54,500 53,500 53,500 53,500 52,289 52,289 52,289 52,289 52,289 52,289 52,289 62,479 643,504
Add: Depreciation
12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 145,339
Total Cost of Operating
79,572 70,072 68,572 68,572 66,361 66,361 66,361 66,361 66,361 66,361 67,611 77,550 830,113
Net Operating Income
545,233 424,350 272,467 117,996 (12,175) (10,175) (33,175) (10,175) (10,175) (33,175) (13,425) 696,726 1,934,299

Less interest expense
15,934 15,648 15,360 15,069 14,775 14,477 14,177 13,874 13,568 13,259 12,946 12,631 171,719
Net Income before tax
529,299 408,702 257,107 102,928 (26,949) (24,652) (47,352) (24,049) (23,743) (46,434) (26,371) 684,095 1,762,580
Less tax expense
158,790 122,611 77,132 30,878 - - - - - - - 205,228 594,639
NET INCOME
370,509 286,091 179,975 72,049 (26,949) (24,652) (47,352) (24,049) (23,743) (46,434) (26,371) 478,866 1,167,941
RETAIN EARNING
781,608 1,067,699 1,247,674 1,319,724 1,292,774 1,268,122 1,220,770 1,196,721 1,172,978 1,126,544 1,100,172 1,579,039 14,373,824
104

Statement of Cash Flow
Cash flow from operation activity
Cash received
cash received on cash sale 677,764 522,902 368,039 235,300 80,438 80,438 80,438 80,438 80,438 80,438 80,438 810,503 3,177,570
total cash received 677,764 522,902 368,039 235,300 80,438 80,438 80,438 80,438 80,438 80,438 80,438 810,503 3,177,570
Cash paid -
cash paid for raw material (837,069) - - (211,401) - - (128,766) - - (483,777) - - (1,661,012)
cash paid for labor (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (237,600)
cash paid for overhead (33,000) - - (23,000) (2,000) - (23,000) - - (23,000) (2,000) (5,000) (111,000)
cash paid for marketing (3,660) (3,660) (3,660) (2,960) (1,960) (1,960) (1,960) (1,960) (1,960) (1,960) (3,210) (2,960) (31,870)
cash paid for
(53,500) (53,500) (53,500) (53,500) (52,289) (52,289) (52,289) (52,289) (52,289) (52,289) (52,289) (62,479) (642,504)
administration expense
cash paid for income tax (116,909)
cash paid for interest (22,000) (21,775) (21,548) (21,319) (21,087) (20,853) (20,616) (20,378) (20,137) (19,893) (19,647) (19,399) (248,651)
total cash paid (969,029) (98,736) (98,508) (331,980) (97,136) (94,902) (246,431) (94,427) (94,186) (600,719) (96,946) (109,637) (2,932,637)
Net cash flow from
(291,265) 424,166 269,531 (96,680) (16,698) (14,464) (165,994) (13,989) (13,748) (520,281) (16,509) 700,866 244,933
operation activity
Cash flow from investment activity
cash paid for investment
(1,687,858) (1,687,858)
on operation
Cash flow from financing activity
Cash received
borrowing cash 2,200,000 2,200,000
Cash paid
cash paid for borrowing (22,489) (22,714) (22,941) (23,170) (23,402) (23,636) (23,872) (24,111) (24,352) (24,596) (24,842) (25,090) (285,215)
Net cash flow from
2,177,511 (22,714) (22,941) (23,170) (23,402) (23,636) (23,872) (24,111) (24,352) (24,596) (24,842) (25,090) 1,914,785
financing activity
Net increase/decrease in cash 198,388 401,452 246,590 (119,850) (40,100) (38,100) (189,866) (38,100) (38,100) (544,877) (41,350) 675,776 471,860
Beginning cash - 198,388 599,840 846,430 726,579 686,479 648,379 458,513 420,412 382,312 (162,565) (203,916) 4,600,851
Ending cash 198,388 599,840 846,430 726,579 686,479 648,379 458,513 420,412 382,312 (162,565) (203,916) 471,860 5,072,711
105

Cash received
cash received on cash sale 1,016,646 784,352 552,059 352,950 120,656 120,656 120,656 120,656 120,656 120,656 120,656 1,215,755 4,766,355
total cash received 1,016,646 784,352 552,059 352,950 120,656 120,656 120,656 120,656 120,656 120,656 120,656 1,215,755 4,766,355
Cash paid -
cash paid for raw material (1,179,630) - - (297,915) - - (181,462) - - (730,454) - - (2,389,460)
cash paid for labor (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (237,600)
cash paid for overhead (23,000) - - (23,000) (2,000) - (23,000) - - (23,000) (2,000) (5,000) (101,000)
cash paid for
administration expense (54,500) (53,500) (53,500) (53,500) (52,289) (52,289) (52,289) (52,289) (52,289) (52,289) (52,289) (62,479) (643,504)
cash paid for income tax (81,727) (251,488) -
total cash paid (1,309,038) (96,655) (94,899) (415,555) (94,168) (91,904) (296,099) (91,369) (91,097) (844,277) (93,796) (106,455) (3,625,313)
Net cash flow from
operation activity (292,393) 687,697 457,160 (62,605) 26,488 28,752 (175,443) 29,287 29,559 (723,621) 26,861 1,109,299 1,141,042
cash paid for
(25,341) (25,594) (25,850) (26,109) (26,370) (26,634) (26,900) (27,169) (27,441) (27,715) (27,992) (28,272) (321,388)
borrowing
Net cash flow from
(25,341) (25,594) (25,850) (26,109) (26,370) (26,634) (26,900) (27,169) (27,441) (27,715) (27,992) (28,272) (321,388)
financing activity
Net increase/decrease in cash (317,734) 662,103 431,309 (88,714) 118 2,118 (202,343) 2,118 2,118 (751,336) (1,132) 1,081,027 819,654
Beginning cash 471,860 154,126 816,229 1,247,538 1,158,824 1,158,943 1,161,061 958,718 960,836 962,955 211,619 210,487 9,473,197
Ending cash 154,126 816,229 1,247,538 1,158,824 1,158,943 1,161,061 958,718 960,836 962,955 211,619 210,487 1,291,514 10,292,851
106

Cash received
cash received on cash sale 1,355,528 1,045,803 736,078 470,600 160,875 160,875 160,875 160,875 160,875 160,875 160,875 1,621,006 6,355,140
total cash received
1,355,528 1,045,803 736,078 470,600 160,875 160,875 160,875 160,875 160,875 160,875 160,875 1,621,006 6,355,140
Cash paid
cash paid for raw material (1,572,840) (397,219) (241,949) (973,939) (3,185,947)
cash paid for labor
(19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (237,600)
cash paid for overhead (23,000) (23,000) (2,000) (23,000) (23,000) (2,000) (5,000) (101,000)
cash paid for
administration expense (54,500) (53,500) (53,500) (53,500) (52,289) (52,289) (52,289) (52,289) (52,289) (52,289) (52,289) (62,479) (643,504)
cash paid for income tax (143,942) (3,878)
total cash paid
(1,699,035) (93,409) (91,620) (511,549) (90,824) (88,526) (353,175) (87,923) (87,617) (1,084,247) (90,245) (102,870) (4,381,039)
Net cash flow from
operation activity (343,507) 952,394 644,458 (40,949) 70,051 72,349 (192,300) 72,952 73,258 (923,372) 70,630 1,518,136 1,974,101
Cash paid
cash paid for borrowing
(28,555) (28,840) (29,129) (29,420) (29,714) (30,012) (30,312) (30,615) (30,921) (31,230) (31,542) (31,858) (362,148)
Net cash flow from
financing activity (28,555) (28,840) (29,129) (29,420) (29,714) (30,012) (30,312) (30,615) (30,921) (31,230) (31,542) (31,858) (362,148)
Net increase/decrease in cash
(372,062) 923,554 615,329 (70,369) 40,337 42,337 (222,612) 42,337 42,337 (954,602) 39,087 1,486,279 1,611,953
Beginning cash 1,291,514 919,453 1,843,006 2,458,335 2,387,966 2,428,303 2,470,640 2,248,029 2,290,366 2,332,703 1,378,101 1,417,188 23,465,604
Ending cash 919,453 1,843,006 2,458,335 2,387,966 2,428,303 2,470,640 2,248,029 2,290,366 2,332,703 1,378,101 1,417,188 2,903,467 25,077,556
107

Statement of Balance Sheet
ASSET
Current asset
Cash 198,388 599,840 846,430 726,579 686,479 648,379 458,513 420,412 382,312 (162,565) (203,916) 471,860
Material Inventory 494,949 231,000 45,223 137,850 97,247 56,644 144,806 104,203 63,600 506,774 466,171 57,048
Total current asset 693,337 830,840 891,652 864,429 783,726 705,022 603,319 524,615 445,912 344,209 262,255 528,907
Non Current Assets

Property and Equipment
Land & Building 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550
Machinery and Equipment 915,308 915,308 915,308 915,308 915,308 915,308 915,308 915,308 915,308 915,308 915,308 915,308
Total Property and Equipment 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858
Less: Accumulated Depreciation (19,319) (38,638) (57,957) (77,276) (96,596) (115,915) (135,234) (154,553) (173,872) (193,191) (212,510) (231,829)
Total Non Current Assets 1,668,539 1,649,220 1,629,901 1,610,582 1,591,262 1,571,943 1,552,624 1,533,305 1,513,986 1,494,667 1,475,348 1,456,029
Total Assets 2,361,876 2,480,060 2,521,553 2,475,011 2,374,988 2,276,966 2,155,943 2,057,920 1,959,898 1,838,875 1,737,603 1,984,936
LIABILITY AND EQUITY
LIABILITY
Current Liability
Taxes Payable 55,309 97,579 116,909 116,909 116,909 116,909 116,909 116,909 116,909 116,909 116,909 198,636
Total Current Liability 55,309 97,579 116,909 116,909 116,909 116,909 116,909 116,909 116,909 116,909 116,909 198,636
Non Current Liability

Long-Term Borrowing 2,177,511 2,154,797 2,131,856 2,108,686 2,085,284 2,061,648 2,037,776 2,013,664 1,989,312 1,964,716 1,939,875 1,914,785
Total Long-Term Liability 2,177,511 2,154,797 2,131,856 2,108,686 2,085,284 2,061,648 2,037,776 2,013,664 1,989,312 1,964,716 1,939,875 1,914,785
Total Liability 2,232,821 2,252,376 2,248,765 2,225,595 2,202,193 2,178,557 2,154,685 2,130,573 2,106,221 2,081,625 2,056,784 2,113,420
EQUITY
Retains Earning 129,055 227,684 272,788 249,415 172,795 98,409 1,258 (72,653) (146,323) (242,750) (319,181) (128,484)
Total Equity 129,055 227,684 272,788 249,415 172,795 98,409 1,258 (72,653) (146,323) (242,750) (319,181) (128,484)
Total Liabilities & Equity 2,361,876 2,480,060 2,521,553 2,475,011 2,374,988 2,276,966 2,155,943 2,057,920 1,959,898 1,838,875 1,737,603 1,984,936
108

ASSET
Current asset
Cash 154,126 816,229 1,247,538 1,158,824 1,158,943 1,161,061 958,718 960,836 962,955 211,619 210,487 1,291,514
Total current asset 877,624 1,143,804 1,296,447 1,327,487 1,266,700 1,207,914 1,126,128 1,067,342 1,008,556 926,770 864,734 1,332,076
Non Current Assets

Land & Building 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550
Total Assets 2,317,858 2,568,243 2,705,091 2,720,336 2,643,754 2,569,173 2,471,592 2,397,011 2,322,430 2,224,849 2,147,018 2,598,565
LIABILITY
Current Liability
Taxes Payable 306,115 388,909 437,718 450,124 450,124 450,124 450,124 450,124 450,124 450,124 450,124 594,070
Total Current Liability 306,115 388,909 437,718 450,124 450,124 450,124 450,124 450,124 450,124 450,124 450,124 594,070

Total Liability 2,195,558 2,252,758 2,275,717 2,262,014 2,235,644 2,209,010 2,182,110 2,154,941 2,127,500 2,099,785 2,071,793 2,187,467
EQUITY
Retains Earning 122,300 315,485 429,374 458,322 408,110 360,163 289,482 242,070 194,930 125,064 75,225 411,098
Total Equity 122,300 315,485 429,374 458,322 408,110 360,163 289,482 242,070 194,930 125,064 75,225 411,098
109

ASSET
Current asset
Cash 919,453 1,843,006 2,458,335 2,387,966 2,428,303 2,470,640 2,248,029 2,290,366 2,332,703 1,378,101 1,417,188 2,903,467
Total current asset 1,848,615 2,244,271 2,488,045 2,577,347 2,536,478 2,497,609 2,435,740 2,396,872 2,358,003 2,296,134 2,254,015 2,922,047
Non Current Assets

Land & Building 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550
Total Assets 3,099,309 3,479,171 3,707,149 3,780,657 3,723,993 3,669,329 3,591,665 3,537,001 3,482,337 3,404,674 3,346,760 3,998,997
LIABILITY
Current Liability
Taxes Payable 752,860 875,470 952,603 983,481 983,481 983,481 983,481 983,481 983,481 983,481 983,481 1,188,709
Total Current Liability 752,860 875,470 952,603 983,481 983,481 983,481 983,481 983,481 983,481 983,481 983,481 1,188,709

Total Liability 2,317,701 2,411,472 2,459,475 2,460,933 2,431,219 2,401,207 2,370,895 2,340,281 2,309,360 2,278,130 2,246,587 2,419,958
EQUITY
Retains Earning 781,608 1,067,699 1,247,674 1,319,724 1,292,774 1,268,122 1,220,770 1,196,721 1,172,978 1,126,544 1,100,172 1,579,039
Total Equity 781,608 1,067,699 1,247,674 1,319,724 1,292,774 1,268,122 1,220,770 1,196,721 1,172,978 1,126,544 1,100,172 1,579,039
110
5.5 Conclusion
Income statement of HedPhan Company referred as profit and loss from selling
and operation process with 3 year estimate. The money received from the sale of spawn
straw mushroom bag at 10 baht per unit or called revenue estimate from mushroom grower
spending spawn mushroom. The net income after all revenues and expensed have been
accounted for thought out the year most get profit during season period (December-April)
and get lost in May until November because the number of mushroom house grower is a
few. However, all the year the company still gets profit after deducts cost of goods sold
expense charged against these revenue. We expect profit increase 5 percent per year.
Therefore company loss and profit in there around -128,484, 539,583, and 1,167,941 baht
reparably
Cash flow of HedPhan Company refers to the movement of cash into or out of a
business, a project, or a financial product.
Balance sheet of HedPhan company refer a summary of the financial balances of a

assets, liabilities and ownership equity. At the beginning company borrow money as
2,200,000 baht with 12% of interest rate in 5 year term.
111
Chapter 7: summary
Summary
112
Chapter 7: summary
At moment, some straw mushroom cultivation brings them more money than rice
which straw mushroom cultivation takes just 7-15 days to bring money to them. And
earning return around 50-60% profit that is enough for farmers to continue growing.
Straw mushroom is the most popularly grown in Thailand because Thailand has
ideal environmental conditions for straw mushroom cultivation (30-38 C) and a long
history of mushroom growing since 1940s by farmer. Thai people know that straw
mushroom growing required low cost materials and technologies while offering a high and
quick return on their money, unlike other mushrooms. In addition, straw mushroom
cultivation can use available materials readily to grow.
All region of Thailand can grow straw mushroom which almost at North and
Northeast region. Especially in Chiang Rai, there are 45.45 percent of farmers almost
grow straw mushroom after rice harvested season because they already have their hay
(material to grow straw mushroom) and the return money is also high. (According
Department of Chiang Rai plant research 2009). According Department of Chiang Rai
Rice Research Center, 2010 reordered that Chiang Rai has 110,628 farmer in year 2009
and having 1.3 -1.4 million hectares per year.
Moreover, the farmer can’t produce their own spawn of straw mushroom. They
need to buy from supplier or some middleman or wholesaler who distribute in area.
Mushroom grower in Chiang Rai get spawn mushroom from Bhandoo and almost outside
Chiang Rai such as Payao Lumpang agencies.
According competitor analysis that there is only one supplier of spawn straw
mushroom bag in Chiang Rai name Bhandoo Farm which they sell since 20 years.
Nowadays, many spawn mushroom seller such as Lumpang agencies drive market in
Chiang Rai almost mushroom grower satisfy with their quality product. However farmer
usually grows straw mushroom every year after rice harvested. Also at moment there are
3,750 mushroom houses cultivation in Chiang Rai that grows mushroom thought out the
year (Department of Chiang Rai Plant Research 2009). The total market size both
mushroom house and after rice harvested cultivation has show table next page.
113
Spawn Mushroom Bag Market Size

Customer Target Market Size
Cultural mushroom grower 2,212,320
Mushroom house 965,250
Total 3,177,570
The market size in this table is calculate from customer behavior which almost use
spawn mushroom bag. The product characteristic that we would like to sell is the spawn of
straw mushroom bag weigh 500 grimes. The main substantial is made from rodeo, lotus
and cotton west and resident soybean. We will sell at same price as distributor in Chiang
Rai as 10 baht per bag. We construct the project under name HedPhan Farm to sell in it in
Chiang Rai and expect loan money as 2,200,000 baht.
In sale forecast, our company forecast the revenue and expense from number of
straw mushroom behavior in three year which it relates with seasoning of rice harvest
season. The marketing communication mixed and quality control of product will run to
attract customers to buy our product and hold on and the objective to maintain customer
base and distribute product area. We forecast sale estimate in three years, the accumulate
sale is approximate 14,299,070 baht in five years. We think first two years our product
could not sale as much as we expect to get market size as 15 percent and set objective to
increase market size 5 percent per year with 3 year.
The significant to maintain existing customer base is the quality product that for
sure mushroom grower want spawn mushroom that can produce more mushroom or high
productivity (good fiber mushroom and spread overall bag). So, we have to control
production process to control quality of product almost.
114
REFERENCE
Straw Mushroom Cultivation. [date 15 Arial 2010]
<http://www.vcharkarn.com/vblog/38061/4>
Kasetporpeang. [date 18 Arial 2010]
<http://www.kasetporpeang.com/>
Thai Biotech. [date 19 April 2010]
<http://www.ifarm.in.th/index.php?>
Department of Agricultural. [date 15 Arial 2010]
<http://it.doa.go.th/refs/index.php>
Department of Land Chiang Rai. [date 16 Arial 2010]
<www.dol.go.th/>
Corporate promote Department. [date 16 Arial 2010]
<http://www.cpd.go.th/cpd/cpdinter/index.html>
Small and Medium Community Enterprise [date 11 Arial 2010]
<http://smce.doae.go.th/ProductCategory/smce_report.php>
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Project Feasibility Study and Evaluation-Hedphan Farm. Aj Chaiyawat Thongintr

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Project Feasibility Study and Evaluation-Hedphan Farm. Aj Chaiyawat Thongintr

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1

Project Feasibility Study and Evaluation

1203302 PROJECT FEASIBILITY STUDY

MEA FAH LUANG UNIVERSITY

- Source of raw material

Chapter 5: Financial Analysis …………………………………………..……………..100

Table 4.17: Organization Expense year 1……………………………………………….. 97

1.1 Background and Significance of the Project

1.1 Background and Significance of the Project

1.2 Project Objectives

1.3 Benefits of Project

 To understand about the situation of spawn mushroom business.

1. Look for information of mushroom market in Chiang Rai

1.5 Time Frame of study

Table1 Time Frame of study, during 29 March – 12 May 2010.

March April May

Chapter 2: Industry Profile

2.1 Nature of Industry

2.2 Situation of Industry

2.3 Product & Service

Chapter 2: Industry Profile

2.1 Nature of Industry

A method of cultivation straw mushroom in Thailand usually cultivates 2 methods.

Figure 2.1 straw mushroom farm/house

Generally, producer usually conducts a mushroom house size 4.00x10.00x2.50

A culture mushroom cultivation is traditional mushroom a long time by farmer.

Figure 2.2: a culture straw mushroom cultivation

Depend on a second occupation; a culture of straw mushroom cultivation from

Table 2.1 calendar of mushroom cultivation

Harvest Current year Next year

Referring : Rice Research Center, Chiang Rai 2010

Tendency of mushroom cultivation in Chiang Rai

 Mushrooms can grow well in temperatures 35-40 degrees, and Thailand is

 There are developed various methods of mushroom cultivation methods. Farmers

Department of Agricultural Extension, Chiang Rai.

2.2 Situation of Industry

History of spawning of straw mushroom culture in Thailand

Spawning of straw mushroom (Pure Culture) in Thailand is discovered by Dr Khan

In year 1970, Thailand Institute of Scientific and Technological Research (TISTR)

1. Producing a pure culture or mother spawn (There are 2 methods)

2. Producing Spawning mushroom

3. Mushroom Cultivation (There are 2 methods)

Figure 2.3 life cycle of mushroom to spawn

Spawn mushroom producer in Thailand

To produce a spawn mushroom need to start with a mother spawn mushroom

At moment, new spawn of straw mushroom can by a mother spawn mushroom of

Therefore the characteristic of the spawn mushroom entrepreneurs have to

2.3 Product & Service

A spawning of Straw Mushroom Pasteurized

A mother spawning of Straw Mushroom

Container glass bottle contained 300 ml

Figure 2.5 A spawning of Straw Mushroom Pasteurized

To become a biggest of spawn of straw Mushroom and provide a good quality

Strategy refers to a plan of action designed to achieve a particular goal of HedPhan

2.6.1 Corporate Level

- Seeking ownership and increase control of a firm’s suppliers by produce a

2.6.2 Business Level

- Experiment and checking before sell to customer.

Mean for achieving strategy

- Outsourcing a scientist or specialist to check a quality produce.

2.6.3 Function Level

Functional level strategy including of marketing management, human resource

Marketing functional is a responsibility to perform marketing effort which

Third marketing, we proud to create logo and branding in attract customer