This the business plan for the mushroom industry in Sri Lanka. This have how innovate new idea and the how develop a new business successfully.

1. 7/30/2014 Mushroom
Farming
ENTREPRENEURSHIP BBA 303
3rd
year
1st
Semester
1st
Assignment
Name-: K.T Liyanage
Reg. No.-: A/10/BBA/148
Lec. Name-: Ms R.M.C Kumari

2. 1
Contents
1 Introduction.............................................................................................................3
2 About the Business..................................................................................................4
3 Details of the Business:...........................................................................................5
3.1 The Details about the Business ..........................................................................5
3.2 Details about the product charactericts ..............................................................6
3.2.1 Products: ...................................................................................................6
3.2.2 Process of Production: ..............................................................................7
3.2.3 Location: ...................................................................................................8
3.2.4 Workers:....................................................................................................8
3.2.5 Photos of the Work Place..........................................................................9
4 Business Plan for a Startup Business....................................................................10
4.1 The usefulness of business plan .......................................................................10
4.2 The Benefits of using Business plan ................................................................10
5 Marketing Strategy................................................................................................12
5.1 Marketing mix ..................................................................................................12
5.1.1 Product ....................................................................................................12
5.1.2 Price ........................................................................................................13
5.1.3 Place........................................................................................................13
5.1.4 Promotion................................................................................................14
6 Human Recourse Strategy.....................................................................................14
7 Financial Strategy .................................................................................................15
7.1 Initial capital investmemt .................................................................................15
7.2 Projected income statement..............................................................................16
7.3 Balance sheet for the year 2013 .......................................................................17
7.4 Break Even point..............................................................................................18
7.5 Payback period .................................................................................................18
8 Innovation Strategies ............................................................................................18
8.1 Entrepreneurial Characteristics ........................................................................18
8.1.1 Commitment, Determination and Perseverance: ....................................19
8.1.2 Creativity and Innovations:.....................................................................19
8.1.3 Resourcefulness: .....................................................................................19
8.1.4 Risk Taking:............................................................................................19
8.1.5 Tolerance for Failures:............................................................................19
8.1.6 Visionary:................................................................................................20

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8.1.7 Optimism: ...............................................................................................20
8.1.8 Integrity and Reliability:.........................................................................20
8.1.9 Knowledge about the Market and All- around knowledge: ...................20
8.1.10 Flexible and able to Adopt:.....................................................................20
8.1.11 Energetic and Hard Working:.................................................................20
9 Sales Forecast........................................................................................................21
9.1 Sales Forecast...................................................................................................23
10 The important of Creativity and Innovation ideas to the Success the Business...24
11 Environmental Factors to Success the Innovation................................................25
12 Conclusion ............................................................................................................26

4. 3
1 Introduction
Entrepreneur is one who undertakes to organize, manage, and assume the risk of a
business. Today, an entrepreneur is an innovator or developer who recognizes and seizes
opportunities and converts those opportunities into marketable ideas.
This assignment is based on a Research on an entrepreneur. I interviewed the
entrepreneur and collected details about his business, creativity and innovation…etc.
Then that information are summarized and presented through this assignment. I selected
the entrepreneur who is doing a concrete industry.
Firstly I collected details about the nature of the business then I collect the details
about his business plan after that I made some questions before meeting the
entrepreneur. I could understand his entrepreneurial characteristics when I talk with
him. And I could see his products and collect details about those. Then I considered how
the creativity and innovation are important to his success and how does he encourage
an environment of creativity in his business.
Also I consider about his Marketing Strategy, Human Resource Strategy, Financial
Strategy and Innovation Strategy. Also I get the progress of business in last 3 year.

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2 About the Business
About the Entrepreneur:
Name of the Entrepreneur : K.T.M Karunarathne
Address : No. 225, Muruthalawa Raod, Puwakgahakumbura,
Peradeniya.
Telephone : 071 4683367 / 077 8102515
Age : 41 Years
Gender : Male
Civil Status : Married
Educational Qualifications : Passed (G.C.E) O/L
Awards : Winner of the Star Awards for the Best
Entrepreneur of Central Province in 2012

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3 Details of the Business:
The business is mainly focusing mushroom cultivation of the Smallholder
Plantation. Entrepreneurship Programme illustrates how best public and private
stakeholders can get together to launch small but commercially viable. The project
provided a group of women interested in engaging in mushroom cultivation with
technical, financial and management assistance backed up with a strong market linkage.
The „mushroom project‟ started in 2009 with 2 beneficiaries. This expanded to three
other sites involving 5 beneficiaries in 2010. All beneficiaries were provided with
technical training such as mushroom hut construction, preparation of growing bags,
filling of bags, sterilization, and preparation of spawns.
The resource persons were drawn from provincial agricultural agencies.
Furthermore, two successful female entrepreneurs who pioneered the project in 2009,
joined the training team to train newcomers in 2010 and 2011.
Apart from technical training, the Smallholder Plantation Entrepreneurship
Programme has established marketing linkages with reputable private companies to sell
the produce.
3.1 The Details about the Business
Name of the Business : Nimasha Mushroom Dealers.
Address : Nimasha Mushroom Dealers Horagasmulla, Divulapitiya,
Srilanka
Telephone : 0714683367 / 0778102515
Commencement : 11th
of June 2014
Reg. No. : IDACP / 00120

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3.2 Details about the product charactericts
3.2.1 Products:
He is a supplier and manufacturer of following products.
 Mushroom 50g packets
 Mushroom 100g packets
 Mushroom Jam products

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3.2.2 Process of Production:
There are six steps to growing Mushroom.
1) Making Mushroom Compost
This phase of compost preparation usually occurs outdoors although an enclosed
building or a structure with a roof over it may be used.
2) Finishing the Compost
There are two major purposes to Phase II composting. Pasteurization is necessary to
kill any insects, nematodes, pest fungi, or other pests that may be present in the compost.
And second, it is necessary to remove the ammonia which formed during Phase I
composting. Ammonia at the end of Phase II in a concentration higher than 0.07 percent

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is often lethal to mushroom spawn growth, thus it must be removed; generally, a person
can smell ammonia when the concentration is above 0.10 percent.
3) Spawning
Mushroom compost must be inoculated with mushroom spawn (Latin expandere =
to spread out) if one expects mushrooms to grow.
4) Casing
Casing is a top-dressing applied to the spawn-run compost on which the mushrooms
eventually form.
5) Pinning
Mushroom initials develop after rhizomorphs have formed in the casing. The initials
are extremely small but can be seen as outgrowths on a rhizomorph.
6) Cropping
The terms flush, break, or bloom are names given to the repeating 3- to 5-day harvest
periods during the cropping cycle; these are followed by a few days when no mushrooms
are available to harvest.
3.2.3 Location:
The home and the land of the work place are nearly located and close to the,
Divulapitiya Road. There is a small hut in the work place. Stocks of products are stacked
on the land floor and a side of the road.
3.2.4 Workers:
He has one permanent worker and several temporary workers. The proprietor also works
in the site.

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3.2.5 Photos of the Work Place

11. 10
4 Business Plan for a Startup Business
4.1 The usefulness of business plan
The business plan consists of a narrative and several financial worksheets. The
narrative template is the body of the business plan. This business is using Business Plan.
It contains more than 150 questions divided into several sections.
The real value of creating a business plan is not in having the finished product in
hand; rather, the value lies in the process of researching and thinking about the business
in a systematic way. The act of planning helps Entrepreneur to think things through
thoroughly, study and research if he is not sure of the facts, and look at his ideas
critically. It takes time now, but avoids costly, perhaps disastrous, mistakes later.
This business plan is a generic model suitable for all types of businesses. However,
this Entrepreneur is using and modify it to suit to his particular circumstances. It also
has tips for fine‐tuning his plan to make an effective presentation to investors or bankers.
4.2 The Benefits of using Business plan
There are 10 benefits of using business plan for the Nimasha Mushroom Dealers.
They are;
1. The company will stay on strategy.
It's hard to stick to strategy through the daily routine and interruptions. Use a
business plan to summarize the main points of his strategy and as a reminder of what it
both includes and rules out.
2. Business objectives will be clear.
Use your plan to define and manage specific measurable objectives like web visitors,
sales, margins or new product launches. Define success in objective terms.
3. The Entrepreneur’s educated guesses will be better.

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Use the Business Plan to refine his educated guesses about things like potential
market, sales, and costs of sales, sales drivers, lead processing and business processes.
4. Priorities will make more sense.
Aside from the strategy, there are also priorities for other factors of Mushroom
business like growth, management and financial health. Use his plan to set a foundation
for these, then to revise as the business evolves.
5. The Entrepreneur understand interdependencies.
Use a plan to keep track of what needs to happen and in what order. For example, if
you have to time a product release to match a testing schedule or marketing to match a
release, this business plan can be invaluable in keeping the entrepreneur organized and
on track.
6. Milestones will keep Entrepreneur on track.
Use a business plan to keep track of dates and deadlines in one place. This is valuable
even for the one-person business and vital for teams.
7. You'll be better at delegating.
The business plan is an ideal place to clarify who is responsible for what. Every
important task should have one person in charge.
8. Managing team members and tracking results will be easy.
So many people acknowledge the need for regular team member reviews and just as
many admit they hate the reviews. The plan is a great format for getting things in writing
and following up on the difference between expectations and results with course
corrections.
9. The Entrepreneur can better plan and manage cash flow.

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No business can afford to mismanage cash. And simple profits are rarely the same
as cash. A cash flow plan is a great way to tie together educated guesses on sales, costs,
expenses, assets you need to buy and debts you have to pay.
10.Course corrections will keep your business from flopping.
Having a business plan gives the entrepreneur a way to be proactive or not reactive
about business. Don't wait for things to happen. Plan them. Follow up by tracking the
results and making course corrections. It's a myth that a business plan is supposed to
predict the future.
5 Marketing Strategy
5.1 Marketing mix
In this phase, we have developed marketing mix in which all the 4 Ps were
consistent. These 4 Ps easily adopt any market changes. These Ps are
1. Product.
2. Price.
3. Place.
4. Promotion
5.1.1 Product
This Entrepreneur are going to sell his product which is mushrooms. After
cutting, the mushrooms are ready for before delivery, it is segregated them into three
categories.
“A” Category: The mushrooms included in this category are properly weighted and
their color is also good. Mostly the oyster mushrooms with light brown colour are
included in this category and the size of the flower is 5-7 inches.
“B” Category: The mushrooms included in this category are smaller in size than the A
category mushrooms. But some full size mushrooms were also included in this category
due to their color. The color of such mushrooms didn’t match the A category
requirement and thus they are included in this category.

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“C” Category: The mushrooms included in this category are spoiled or these include
the mushrooms that attain their maturity level. These mushrooms are broken sometimes
from centre and hence are included in this category
5.1.2 Price
They are try to capture higher market share so they set their prices at a level that
are affordable by their customers. As the price of canned mushroom is very high, so to
capture market, they reduce their price. Canned mushrooms are available in market at
price of 800-1200 per kilogram depending upon the quality. So they set our prices
according to our product categories.
CATEGORY PRICE PER
KILOGRAM
“A” Category 500
“B” Category 350
“C” Category 250
5.1.3 Place
Mushroom will be marketed locally through a free market system. As we know
that the main market of mushroom is pizza parlors, restaurants and shopping malls. But
initially this Entrepreneur is mainly targeting just the shopping malls target market,
pizza parlors and the restaurant. This is because the trend of fresh pan pizza is raising a
lot. And customers they are targeting are used of dining outside a lot. And in the next
six months, they assumed to also provide fresh mushrooms in big shopping malls like
Cargills, Kells Super and Arpico super center.

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5.1.4 Promotion
As their knowing that their customer is well aware of the taste of the mushrooms.
To introduce the nutritional aspect of mushroom, they use brochures for their promotion.
Moreover, they should also take part in food festivals to promote our product.
6 Human Recourse Strategy
When it comes to optimal HCM, HR leaders need to understand how technology
can minimize or eliminate the costs with paper processes and the associated
inefficiencies. HR executive for the Nimasha Mushroom Dealers. “There are significant
dollars tied to reporting errors, redundancies, and the inability to retrieve vital workforce
information with on-the-spot access.
When it is evaluated their return on investment, including both hard- and soft-cost
savings, they had a real moment. They couldn’t afford not to take advantage of
functionality. In addition to controlling and cutting costs, they have revitalized HR and
impacted their overall business.
Hiring managers have become more accountable, and employees are taking more
control of their financial lives because they now can conveniently access their ongoing
income and retirement plan details.
Because employee metrics are stored in one single, easy-to-manage platform that is
available to the entire HR team, managers, and employees, the National Mushroom’s
information accuracy has improved significantly. With reliable, centralized, and secure
information, as well as instant, configurable reporting, the HR team is well-positioned
to reduce risk and vulnerability to legal issues and noncompliance.
To get a seat within the executive circle, Osunsade recommends HR practitioners
leverage technology to automate processes, convert workforce metrics into business
results, and establish credibility as corporate strategists. She also believes in the power
of relationships with her HCM provider.
To prosper in today’s business environment, HR executives must focus on finding
and trusting the right HCM business partner,” said Osunsade. “More than a technology
company, Ultimate has been establishing long-standing, collaborative relationships with

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its customers for more than two decades. I can attest that Ultimate is the real deal. Now
with UltiPro supporting us, we are being proactive and improving the quality of what
we provide to our business and to our workforce.”
7 Financial Strategy
7.1 Initial capital investmemt
Products Cost
Purchase of raw material 300000
Building rent 25000
Iron Shelves 30000
Supplies (office and operation) 10000
Cutting equipment 5000
Utilities 30000
Generator 120000
Humidity controller 10000
TOTAL 530000

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7.2 Projected income statement
Particulars 2011 2012 2013
Sales 1440000 1800000 2400000
less: Cost of goods sold
Cotton Waste 44800 61600 80500
Spawn 24000 30000 37500
Plastic Bags 9600 12000 17500
Labor 224000 300000 375000
Total CGS 302400 403600 510500
Gross profit 1137600 1396400 1889500
Less: Operating expenses:
Administrative exp
Salaries
Electricity
Traveling
240000
120000
48000
264000
132000
50000
290400
144000
52000
Marketing exp
Advertisement
Telephone
120000
24000
100000
25000
100000
27000
Total Operating Expenses 552000 571000 613400
Earnings before income tax 585600 825400 1276100
Tax deduction: (5% on sales) 72000 90000 120000
Net income 513600 735400 1156100

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7.3 Balance sheet for the year 2013
Particulars Debit (Rs.) Credit (Rs.)
Current Assets:
Cash 1000000
Inventory (F/G, Material) 56800
Total Current Assets 1056800
Fixed Assets:
Land & Building (25000/month rent) 300,000
Machinery (30,000) 27000
Less: accumulated depreciation (30,000 @
10%=3000)
Total Fixed Assets 327000
TOTAL ASSETS 1383800
Current Liabilities:
Estimated income tax 72000
Total current Liabilities 72000
Stockholders’ Equity:
Common stock 776600
Retained earnings 535200
Total stockholders’ equity 1311800
TOTAL LIABILITIES & STOCKHOLDERS
EQUITY
1383800

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7.4 Break Even point
=Total Fixed Cost/ (selling price per unit-variable cost per unit)
= 832800/ (500-5)
= 832800/495
= 1682 units
7.5 Payback period
=Investment/Retained earnings
=1000000/535200
=1.87 years
=1 year, 10 months and 13 day
8 Innovation Strategies
8.1 Entrepreneurial Characteristics
Mr. Karunarathne had started his business on 11th
July 2002. Today, it is a
successful and strong business. He had worked in a hardware shop and a private
company after his A/L before starting this business. Although, he says “he didn’t like to
work under an employer and he dreamed his own business from his school age.
When he started the business he had 245 rupees on his hand. He had to borrow
some money from a relative and also applied for the bank loans. He had made concrete
bricks very firstly. Then he had started to make other items with the growth of his
business.
There are many characteristics of a successful entrepreneur. When I interview Mr.
Karunarathne, I Could found special characteristics through his story of business life. I
can list those characteristics as follow.

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8.1.1 Commitment, Determination and Perseverance:
Mr. Karunarathne also had to face so many problems when he was starting his
business. First of all he had to find money. Then he had to find necessary knowledge
about the industry. He says some people do not tell the tips and secrets. Therefore he
has to find these things through his experience. He had not machine for making concrete
bricks. Though, he had to do it in energy of his hands. There had a legal issue of his
land. So he had stacked his products in a side of the road, but his determination was not
going down. Now he has big space for his work. Today he is a successful businessman.
8.1.2 Creativity and Innovations:
When creating a business idea, many entrepreneurs have to be very creative. I
could understand the creativity of this person when I see his work. He started his
business with making concrete bricks, but the varicose creative items now there. (Colour
paving blocks, Concrete Fence Posts and other ornaments). He stacks his products in a
creative way. He is very innovative person. He seeks new designs for his molds and
tries to make a unique product. Therefore the creativity and innovation is a secret of his
success.
8.1.3 Resourcefulness:
He stocks his products to satisfy the customer needs. He has enough resources for
meet evenly unexpected orders. Though he has one permanent worker, if he has to
complete huge order he can find workers any time.
8.1.4 Risk Taking:
When he started business he has to borrow money from different parties. He has
to pay that credits through the income of his business. It was difficult, but he took that
risk and success his business.
8.1.5 Tolerance for Failures:
Entrepreneurs use failing as a learning experience. Mr. Karunarathne says “bricks
and pots were broken at the beginning, but he didn’t give up his goal”. He found new
methods and tips for that through his experience.

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8.1.6 Visionary:
Entrepreneurs know where they want to go. They have a vision or concept of
what their firm can be. Actually this entrepreneur has a vision where they are go to
what are the developments needed. He plans costs incurred every day and put a note
about that. That is the way he forecasts plans for months and year. Every day he keeps
records neatly beginning of the day end of the day without any knowledge related to the
accounting.
8.1.7 Optimism:
He always thinks positively. He believes that “If I work hard I can get success.
He tells me his business has never failed. It is not practical but his thinking is great as
an entrepreneur.
8.1.8 Integrity and Reliability:
Integrity and reliability are the glue and fiber that bind successful personal and
business relationships and make them endure. He always tries to produce a quality
product to his customers. And also he maintains good relationship with the neighbors
and villagers. He had contributed to the society of welfare (dansal, to the temples).
8.1.9 Knowledge about the Market and All- around knowledge:
He could explain his competitors of his industry. He knows this industry is
developed day by day. So we can get opportunities more and more.
8.1.10Flexible and able to Adopt:
Another concrete work place is launched near to his work place for making
concrete bricks. So he stopped making concrete bricks because of the competitor as well
as it was gained low profit. So he easily adopts this situation while not harming to his
vision.
8.1.11Energetic and Hard Working:
He also works his work place with encourage. He tries his best to achieve his
target. No matter it is day or night. He gives his full energy to his business. When I go
there he was working with his worker.

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9 Sales Forecast
This company will remain with a single client throughout this first year before
expanding in the future. We need to establish history with one client, and we also need
to maintain the constraints on this business as a single hobbyist business.
During the following year, when they have a driver’s license, they can expand to three
clients.

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9.1 Sales Forecast
Year 1 Year 2 Year 3
Sales Initial
client 2,40000 7,20000 9,00000
Other 0 0 0
Total Sales 2,40000 7,20000 9,00000
Direct Cost of Sales Year 1 Year 2 Year 3
Unbilled minor accessories, 48 144 180
Testing supplies, etc
Other 0 0 0
Subtotal Direct Cost of Sales 48 144 180

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10 The important of Creativity and Innovation ideas to the Success the
Business
Most of the entrepreneurs start his business while getting risks on the profits or
income. They borrow money from banks or other parties. Therefore they have to pay
off loans even they earn losses instead of profits. This entrepreneur also faced for these
situations. They earn more and more with innovations and creativity. There are no
innovations or creativity in the business that business will fail. If one be success in his
business or earn more profits the reason will be creative and innovations.
Mr. Karunarathne also started his business making concrete bricks. He says “his
profit from one concrete brick is one rupee”. Unless he innovative he cannot be success
today in this way. He started to make new concrete items and earn profits more and
more. Then those profits are reinvested in the business. The return on the investment of
his business is 23%. He could have found new space for his business, and also he
recruited experienced worker. He attracts customers and endures with long period.

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11 Environmental Factors to Success the Innovation
Some public sector authorities or ministries are appreciated and awarded the
creativity and the innovation of the entrepreneurs. This also is a facet of success. This
entrepreneur also won star award for the best entrepreneur of Central Province from
2005-2009. So we can get an idea about how creativity and innovation help for the
success of a business.
Small or medium scale businesses are conducted with fewer workers. Therefore
proprietor/ entrepreneur have to work in the business. So I think encourage himself for
making creative ideas. In this business has one worker. He trusts him and sometimes
gives responsibility of the work place. He says, “I give forgiveness for the mistakes to
the workers because I also make mistakes”. He takes advices and ideas from his
experienced worker. He says “my worker has experienced and knowledgeable than me”.
And he gets ideas from the supplier of fiber molds about the designs. I can see an
innovative climate is built within the work place. Although the entrepreneur also work
in the place, but he don’t supervised or strictly advised for his workers.
Most of the entrepreneurs create innovative climate himself. This entrepreneur
hopes to start hardware shop and showroom in the Peradeniya Town. Always he tries to
achieve his targets. So, he thinks creative always creative ideas.

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12 Conclusion
The business of entrepreneur is the Mushroom industry. He makes, Mushroom
related products. There are many characteristics of the entrepreneurs. I found many
characteristics while I am talking with the entrepreneurs, like determination, creativity
and innovation, risk taking…etc. Most of the entrepreneurs come up with new ideas
according to their personal interests. Entrepreneurs can earn profits through the
creativity and innovations. And also the entrepreneur encourage creative environment
in the work place.

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