BUSINESS PLAN PROJECT RICE STRAW BUSINESS DRINK HUT JOINT STOCK COMPANY

DRINK HUT DUY TAN UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION      BUSINESS PLAN PROJECT RICE STRAW BUSINESS DRINK HUT JOINT STOCK COMPANY Instructor Joan S Gorospe, Ph D Nguyễn Tố Quyên Class[.]

FACULTY OF BUSINESS ADMINISTRATION

    

BUSINESS PLAN PROJECT: RICE STRAW BUSINESS DRINK-HUT JOINT STOCK COMPANY

Instructor: Joan S Gorospe, Ph.D

Nguyễn Tố Quyên Class : MGT 406 E

Member : Trương Thị Ngọc Oanh-0973

Trịnh Thị Thanh Phương-9574 Phan Thanh Mỹ Duyên-1178

Lê Thị Quỳnh Như-2551

Hồ Phương Thảo-5961 Phan Thị Ái Nhi-5963

Table of Contents

Appendix 3

I Introduction 4

1 Nature of the start-up business 4

2 Product Description 4

II Management plan 5

1 Form of business organization 5

2 Business model 5

3 Management structure 7

4 SWOT 10

III Marketing plan 11

1 Product strategy 11

2 Pricing strategy 12

3 Promotion strategy 12

4 Distribution strategy 13

IV Financial plan 13

1 Income statement projection 13

2 Balance sheet projection 14

V Operational plan 15

1 Process flowchart 15

2 Capacity 16

3 Location and lay-out 16

4 Waste disposal management 18

5 Development Timeline 18

Table 1 Financial resources 5

Table 2 Physical assets 5

Table 3 Costs of goods sold 6

Table 4 Operating cost 6

Table 5 Job qualification and job description 7

Table 6 Staff salaries 8

Table 7 Price 12

Table 8 Income statement 14

Table 9 Balance sheet 14

I Introduction

1 Nature of the start-up business

Our company:

- Full name: Drink-Hut Joint Stock Company

- Abbreviation: DH., JSC

- Headquarter: Da Nang

- Reason for establishment: We are inspired by anti-plastic trend after coming

acrosss hundreds of articles on the contamination caused by plastic-based

products, which leads to oceanic pollution throughout the world Moreover, there

have been shocking videos about plastic substances existing inside sea creatures’

bodies which died and drifted onto seashores or along the coastline about

Drink-Hut, we are a business that aims to promote a sustainable lifestyle: a planet that is

balanced, healthy and truly cares about the earth’s blue ocean

Mission statement:

“By using there rice-bored shaw, we are heading towards the act of

transforming agricultural produce into products that have great moral value

contribute to improve living environment”

2 Product Description:

- DH imports raw materials directly without intermediaries Especial, the main

raw materials are nice and additives for coloring and flavoring manufactured

from reputable establishments passed inspection

- Edible straws

- This product helps people ensure own health, minisize the harmful effects of

plastic products to people and our living enviroment

- These days, health should be everyone’s top priority so that organic products

like DH’s rice-based straws will meet customers demands on healthy foods and

products

- Expiration date: 9 months (at the right temperature environment)

- Properties: Stable in hot and cold water When served with drinking water at

the temperature of about 10°C, DH’s straw only show plasticity, not softening,

disintegrating or cracking Can with stand 4-6 hours in cold water and 2-3 hours

in normal water

- One–time usage only

- Environment friendly: Users can eat the straw after use There can be also be

used as organic fertilizers for green plants because of their ability to self-destruct

in the natural environment after 90 days after use

II Management plan

1 Form of business organization

Joint Stock Corporation

2 Business model

 Customer value position:

Rice-based straws made from 100% natural ingredients including rice flour

and tapioca; absolutely no additives or harmful chemicals affecting the health of

consumers

 Key resources:

- Financial resources:

Table 1 Financial resources

- Physical assets: Cost of factories, machinery and equipment include

Table 2 Physical assets

(unit: million VND) Expenses for building factories,

offices and showrooms

5,000

Office equipment (cabinets, tables

and chairs, air conditioners,

computers…)

1,000

Kitchen equipment (kitchen utensils, refrigerators )

500

Production equipment (power mixed, dryers, forming machines )

5,500

 Profit formula:

- Revenue model:

Products are sold at physical stores, distributed to sales agents, wholesales

and retailers

- Cost model (Duration: 1 year)

Table 3 Costs of goods sold

Table 4 Operating cost

Staff salaries 1,264 billion VND

Electricity, water, wifi bills 100 million VND

3 Management structure

 Organization chart

- Job qualification and job description

Table 5 Job qualification and job description

Position Quantity Responsibility Qualifications

all operations throughout the company

Managing, controlling financial affairs

Making decisions

- Bachelor’s or Master Degree

- Good experience in administration and management

- Highly expert, able to handle and making decisions for future company’s growth Accountant 1 Making statistical

paperwork comprising revenue, cost, profit…

Higher Education to Bachelor’s Degree in Accountancy

Marketing staff 2 Market researching

Handling promotional activities, PR,

distribution channels Organizational researching

- Higher Education to Bachelor’s Degree in Marketing/

Public Relations

- Good communication skills

- Creative in new ideas

to come up with efficient promotions Manager 2 Supervising factories - Well-trained in

machinery operations

- Good HR skills

staff machinery operations

Sales staff 2 Searching for customers

and selling products

- High school Diploma and above

- 18 years old and above

- Good communication skills

- Resourceful in product introduction

required

- Male, 18 years old

and above

- Good health

- Able to control and

handle unexpected situations

 Compensation package:

- Salary

Table 6 Staff salaries

(Unit: VND)

Marketing staff 8,000,000

Production staff 5,000,000

Security staff 4,000,000

+) 13th month salary

+) Bonus by day, by contract, by month

+) Fixed salary + Allowance + % of Revenue + Bonus (If any)

+) 4 days off in a month and 1 day off

+) Social insurance, health insurance, 13th month salary, annual leave +

benefits according to state regulations

+) Ideal working space with friendly colleagues, helping you to develop

the best thinking and work orientation

+)Working in a fun, dynamic and professional environment Opportunity

for advancement and development

+) Get 30% off purchase

+) Participating in periodic personnel training courses, improving

knowledge and soft skills

+) Participate in extracurricular activities such as team building,

workshops

4 SWOT

Strength:

- Protecting the environment,

degradable within 3 months,

reducing plastic wastes

- It's a completely new product on

the market

- Safe for the user's health

- Can eat after using.

- Abundant supply: Vietnam is

always in the top 3 largest rice

exporting Countries in the World

- Colors are made from natural

materials

- Variety of sizes, suitable for many

requirements

Weakness:

- Unbranded products

- The sales team is young.

- The process of treating

wastewater is not optimal, not really protecting the

environment

- Competing with similar brands

and product markets: plastics, bamboo, paper, grass, straws

- Easily moldy if not stored

carefully or broken in an air-conditioned room

- Less time to use than other types

of straws: Soft straw, hydrated

- Automatic production line, high

technology, can produce large

quantity

- Storge time and shelf life are quite

long compared to other biological

straws

- Increasing agricultural value of

Vietnam

within 1,5- 2 hours, after that will have to change new straw

- The cost is higher than common

straws, difficult to distribute to small cafes and restaurants

- Cannot be reused

- Affects the taste of drinks,

causes chemical reactions with carbonated water, and soft drink

Opportunities:

- Trends of environmental

protection around the world

- Export opportunities: many

developed countries have issued

orders to limit the use of plastic

Straws

- The Ministry of Natural resources

Environment has launched the

movement “Against plastic waste”

- Large number of potential

customers (users tend to use

products that are safe for health

and protect the environment)

- Rice straws are already on the

market but not very popular, a

potential new market

- Is an indispensable item for dinner

to enjoy drinks, soft drinks

- Suitable for all customers, all ages

Threats:

- Strong competitor

- The world covid-19 pandemic is

still complicated

- Difficult to change consumption

habits and reception of customers

- Is new product in the market, so

there are few references

- Changing consumers’ habits of

using plastic straws takes time

- The are many substitute

products

III Marketing plan

1 Product strategy

 Describe the core product:

Rice straws that varies on size and color and taste

 Create your customer value proposition:

- Difference

Drink-Hut's straws make the difference: the taste which enhances the taste of

the drink, making it unique but suitable for each drink that customers request

Eg Cinamon flavored straws are suitable for herbal drinks

Coffee flavored straws would go well with coffee based drinks

- Edible, Safe for health

Generally, plastic or paper straws would become useless and ready to be

dumped after used Moreover, plastic ones hardly decompose Now, rice-based

straws can be eaten immediately after use Not only Viet Nam but also Korea and

other countries are also becoming fond of this "edible straw"

The reason for the edibility is that our product is made from rice flour,

tapioces starch and natural food coloring and fruit flavor You can also eat them as a

snack without health being affected Drink - Hut's rice straws are extremely safe

without microplastics, preservatives, toxic chemicals and with ultimate hygiene

standards

- Environmental protection:

As an alternative for 500-year-old plastic strays, rice straws are a

breakthrough with its ability to quickly decompose in natural environment

2 Pricing strategy

Drink-Hut to apply a penetration pricing strategy with the price range from

600d – 1200d/straw according to size

Table 7 Price

Type Quantity Unit Retail price Wholesaler(>100boxes

) Bubble tea rice

many color

Smoothies rice

straw(8mm)-many

color

Water/coffee rice

straw(6mm)-many

color

3 Promotion strategy

 Broadcastst media: TV (45 sec)

 Social media:

- Fanpage account, website, Grand Opening Display Ads

- Drink-Hut will hold such campaigns as "trash picking" throughout Da Nang,

then post on social networking platforms like Facebook, Instagram

- Producing short videos with content about product features, environmental

protection on tik tok, youtube shorts, reels…

 Sale promotion:

- On the launch day, Drink-Hut's product will be discounted by 15% across the

company's stores/retail points This will last for 3 days from the date of

launch

- Orders over 300.000d will be gifted a lucky draw to own valuable gifts

- There will be incentives for restaurants/gents/distributors working with

Drink-Hut such as periodic purchase discounts, price incentives for

long-term cooperation

 Personal selling:

- Press conference to introduce the product to launch

- Participate in trade fairs

4 Distribution strategy:

 Channel coverage: Selective

Selected distributors are: coffee (Highland, Starbucks,…) restaurants,

cinemas on average-income segment, supermarkets (Go!, Winmart…)

 Channel members: Retailer / Wholesaler

 Strategic location: Le Duan Street, Da Nang

At starting phase, Drink-Hut plans to allocate our products to official

showrooms in Da Nang, which is also the location of official store and exclusive

owned brand distributor Statistics throughout the first half of the year 2022,

showed the total amount of Da Nang visitors reached over 1,88 million, equivalent

83% more than previous period This means Da Nang is a suitable choice for

everyone to welcome a brand new type of product like Drink-Hut's rice straw

IV Financial plan

1 Income statement projection

 Estimate increases every year:

- Sale: 7%

- Advertising expense: 4%

- Cost of goods sold: 2%

- Rent expenses: 2%

- Salary expenses: 5%

Sale = 150 boxes/day * 50,000d*360days = 2,700,000,000

Table 8 Income statement

Ads expenses

Cost of goods sold

Rent expenses

Salary expenses

150B 155M 750M 114M

156M 158,1M 765M 119,7M

162M 161,3M 780,3M 125,7M

169M 164,5M 796M 132M

175M 167,8M 8,2M 138,5M Gross profit

Less: Expenses

Operating profit

Less: interest

2,545B 1,014B 1,531B 0

2,731B 1,841B 1,689B 0

2,93B 1,068B 1,862B 0

3,144B 1,097B 2,047B 0

3,371B 1,126B 2,245B 0 Net income

Before taxes

1,531B 1,689B 1,862B 2,047B 2,245B Less: tax(20%) 540M 577,8M 618,2M 661,6M 707,8M

Net income 911M 1,111B 1,244B 1,385B 1,537B

2 Balance sheet projection

Table 9 Balance sheet

DRINK-HUT RICE STRAW

Balance Sheet December 31, 2023 Assets

Current Assets

Cash +2B

Account Receivable +300M

Inventories +50M

Prepaid Rent +750M

Total Current Assets 3,1B

Long-term Asset

Leasehold Improvement +200M

Accumulated Depreciation (100M)

Building +2B

Machines +300M

Total long-term Asset +2,4B

Total Asset 5,5B

Liabilities Current Liabilities

Accounts Payable +150M Accrued Expenses +114M Unearned Revenue +236M Total Current Liabilities +500M Long-term Liabilities +0M Total Liabilities 500M

Owner’s Equity Owner’s Equity

Thao +1B Nhi +1B Oanh +1B Nhu +1B Duyen +500M Phuong +500M Total Owner’s Equity +5B Total Liabilities and Owner’s Equity 5,5B

V Operational plan

1 Process flowchart

- Step 1: Selection ingredients

Main ingredients: rice flow, tapioca, coloring veggies (such as beetroot,

butterfly pea, magenta plant, )

- Step 2: Flour mixing

After preliminary treatment, ingredients are added to a mixer simultaneously

with water, all of which are blended and stired until smooth, then put into

trays

- Step 3: Steaming

Put the trays into steamer and wait until cooked Let them cool down

naturally then put into dispenser

- Step 4: Shaping straws

The mixture is pulled and formed into straws Craftsmen then straighten the

straws and air-dry them within 6-12 hours Afterward, long straws are cut

into short

- Step 5: Packing

Selection

Craftsmen categorize, do quality checks and package the products.

Averagely, 1kg of rice flour is made into 50-100 straws, dependent on size

2 Capacity

Estimated maximum volume of production: 150 boxes per day

3 Location and lay-out

 Location:

Nguyen Huu Tho street, Hai Chau district, Da Nang city

 Lay-out:

The company has 2 floors.

The first floor is where the factory is located To the right of the entrance

is the reception area Next is the product display shelf Deep inside is the

production area and the warehouse

The first floor

The second floor is where the employees work To the right of the aisle is

the meeting room, followed by the Director's room To the left of the aisle

is the area for the finance department, the sales department and the staff rest

area