COSMOS CHILI EXPORT BUSINESS PLAN
Table of Contents
Industry Overview 3
Mission Statement 4
Business and Organizational Structure 4
Market Analysis 7
Market Trends 7
Technical Analysis 9
Description of Production Process 9
Machinery and Equipment 9
Modes of Transportation 9
Financial Analysis 9
Sources of Revenue 9
Expected Cash flow Statement 9
Sustainability and Expansion Strategy 9
Industry Overview
Chili or pepper is a vegetable that is used mostly as a spice all over the world. Many types of chili come about after combining chili with other spices. The vegetable is common because apart from its seasoning properties, it also has nutrients, vitamins, and minerals. It is a rich source of vitamin C with even a higher amount than oranges. Among the spice segment, chili is the most crucial cash crop due to its popularity worldwide. Chilies can either be green or dry that are used in the making of spices.
The major world producers of chili include India, Mexico, Spain, and China. Chili farming is highly lucrative due to its popularity and ability to thrive in most climatic conditions. Its ability to be stored for long periods is another motivating factor of the vegetable. The popularity of chili as a vegetable spice to be used in various cuisines across the globe is another encouraging factor that has given the vegetable popularity. With the increase in popular demand all over the world has soared over time. The results are that many small farmers that initially engaged in small farming of pepper to expand to large scale farming of chili.
The largest market for chili is within the European countries as china and the USA are large producers of the commodity. The major European specific countries are the United Kingdom, France, Netherlands, France, Spain, Germany, and Romania. While most of the imports initially originated from large producers due to supply certainty, attention is shifting fast to developing countries. Some of the countries that have benefited from this rising import of chili to the European market include Uganda, Macedonia, and Kenya. This lead to an increase in chili imports to about 50tonnes a year from developing countries.
Executive Summary
The Kenyan chili export industry has experienced phenomenal growth, increasing the global market for chilies produced in the country. This, combined with reasonable terms of trade with European partners, a high amount of chili produced in the country, and organic production techniques, has led to the industry’s flourishing. With many farmers with available cultivation land embracing chilies’ farming, the industry is set for great success.
Cosmos Chili exporters is a registered commercial exporting company based in Nairobi, Kenya. The company specializes in the cultivation and exporting of some of the best chilies to the European market. Feasibility studies and market research show a lot of potential in the industry. The land has been located for leasing for planting the best varieties of chilies. Both organic and inorganic chilies will be grown in the land.
Chili farming has immense potential, and we are planning on leveraging the opportunities available in commercial growth and export of the produce. This will contribute significantly to the economy through national food production, export gain, and profit for the business. Cosmos chili exporters are one of the leading chili exporters from Kenya due to their management and quality standards. To enable us to achieve this feat, the company has engaged some of the best professions in the field, which will, in turn, provide value. The company has also equipped itself with top-notch machinery used in the cultivation of chili.
Cosmos Chili Exporters is a partnership between six people who have contributed the same amount towards financing and will share the business equally. All the founding members have experience in farming and export business, making decision-making swift and more accurate.
Product Description
Product offering
Cosmos Chili Exporters will be solely engaged in the growing and marketing of chilies. The pepper will be grown in greenhouses. The company will also buy chilies from other individual farmers who meet the company’s quality standards and do the marketing for them at a fee.
Vision Statement
Cosmos Chili Exporters’ vision is to become one of the leading chili brands that offer the world’s best quality chilies.
Mission Statement
The mission of Cosmos Chili Exporters is to venture into large scale chili farming and export business to provide quality chilies for consumption in the world.
Business and Organizational Structure
Cosmos Chili Exporters is a commercial chili grower and exporter based in Nairobi that is set to grow and compete globally. In line with this goal, the company is set up as a limited liability company, which will have various benefits on the business’s operations. We are aware a solid business structure is essential for the kind of organization we want to build. As such, we aim at creating an organizational structure that will enable us to streamline our operations. For this reason, Cosmos Chili Exporters will only hire a seasoned and competent workforce to build its business model. The company will be run by a board of eight members who will include all the six investors in the business. Other positions to be filled in the company will include the Chief Operating Officer, Logistics Manager, Company Accountant, Farm Manager, Marketing Manager, Human Resource Manager, and other junior staff. The responsibilities of each will be as mentioned below.
CEO
- Advising the board as well as seeking consultations from them one key issue.
- Leading, guiding, and evaluating the other staff.
- Implementing the organization’s vision and mission and ensuring everyone adheres to it.
- Developing and implementing the overall organization strategy.
- Participating in industry-related associations and events that will enhance their leadership skills and help the organization.
- Representing the company in any civic or professional association at the community or national level.
- Overseeing the complete operations of the organization in line with the established goals and strategies.
- Signs and approves expenditures and hiring of staff.
Logistics Manager
- Manage the inventory of the warehouse, transport of inventory as well as other logistical processes.
- Partner and communicate with suppliers, farm managers, and marketing team on the critical dates of transport.
- Train and manage the logistics staff.
- Ensure quality and safe handling of products from the farm to the destination of consumers.
- Perform metrics and data analysis to determine opportunities for process improvements.
- Develop logistics that will streamline the process and reduce costs.
Company Accountant
- Maintain proper books of accounts in a manner required by law to calculate the financial position at the end of the accounting period.
- Audit the company books to ensure the information represents an accurate and fair view of the entity’s financial position.
- Budget for various business transactions and activities way before they take place.
- Manage the entity’s tax matters by filing returns and settling any tax liabilities stipulated under various laws.
Marketing Manager
- Identify, seek, and reaches out to new partners that the business can conduct business with.
- Identifies development opportunities and follows them up to ensure they work effectively.
- Conducts business research and market surveys that the business can engage in.
- Represents the company in strategic meetings and helps to grow the company in terms of sales.
- Negotiates the sale and fees to be paid for the product with the buyers on behalf of the company.
Farm Manager
- Responsible for planning, management, and coordination of farm activities in the various greenhouses.
- Provide advice to management regarding farming activities.
- Ensure that compliance is done to the set farming standards set.
- Carry out a risk analysis of the produce on-farm.
- Oversees the costing and accounting of inputs used in the growing of chilies.
- Describes the job positions for recruitment to the human resource manager.
- Responsible for training, evaluation, and assessment of employees at the farm.
- Liaises with the marketing team on the progress and growth of chilies.
Human Resource Manager
- Manages the recruitment and selection of employees.
- Plan and coordinate the human resource function to best utilize the employee’s talents.
- Support the company’s human capital needs by developing, motivating, and engaging the employees.
- Address the demands and grievances of employees by creating a good relationship between them and management.
- Ensure legal compliance is followed in the recruitment of human capital.
- Create and manage an appraisal system that drives the high performance of the employees.
Other Junior Staff
- The junior staff will have varied roles as they will be placed under a manager depending on their skills.
- Their role will be to follow the instructions issued by their respective managers or by the human resource manager.
- They include farmworkers, office clerks, accounts assistants, receptionists, cleaners, and secretaries.
Market Analysis
Market Trends
According to a report by the Center for the Promotion of Imports from Developing Countries (CBI), the European Union is the second-largest importer of chili peppers globally, accounting for 40% of global imports. The market is not concentrated, and opportunities for penetration are readily available. Prices in the European market are very favorable compared to other markets internationally. Quality and sustainably produced chilies can attract a constant and massive demand in the European market.
Cosmos Chili Exporters will use greenhouse farming to grow their chili to maintain quality and abide by production standards. Greenhouse farming is gaining a lot of popularity due to the ease and efficiency of using them. Using a greenhouse, one can control various inputs required for growing chilies such as humidity, fertilizer, lighting, irrigation, and temperature. This guarantees to farm all year round even when the climatic conditions are not favorable for the crop. This ensures there is low no downtime in supply; hence demand needs can always be met.
Another trend influencing the increase in consumption of chilies is the increased health awareness among people. There has been a growing health consciousness among consumers due to the myriad of diseases caused by unhealthy nutrition. Chili has been proven to one of the healthy vegetables that should be consumed hence its increasing demand. With increased consumption, both small scale and large scale farmers have increased their growing chilies to meet demand needs.
Target Market
Our target market is the end consumers of chili who are based in the European Union. Those who benefit from the chili export industry’s business value chain also stand a chance to gain. We aim to produce quality raw or processed that will satisfy the taste of millions of consumer households.
Competitive Advantage
Export Companies are typically created to supply some of the most demanded agricultural products in the world. When agricultural produce has constant demand, such as chili, large commercial farmers are encouraged to grow it for food and export to other countries. Even governments encourage commercial farming as this increases their balance of trade and the supply of food. When it comes to commercial chili growers and exporters, there is plenty of competition worldwide, as many companies have embarked on the business. Cosmos Chili Exporters are aware of the many competitors in the chili industry. They have conducted thorough research to know how to take advantage of the available markets in Europe.
As a new business, we have taken the necessary steps to ensure the business thrives despite heavy competition. One of our advantages is our seasoned professionals who have a wealth of experience in growing and exporting chilies. The personnel is key to the business apart from bringing in the required skills; they also have important contacts in the job. In addition to this, the company has invested in ultra-modern farming techniques and state of the art machinery. These features ensure that Cosmos Chili Exporters consistently produces high-quality products. Our quality products will enable us to take advantage of the available market by selling our products at competitive prices. A good network and relationship created with our customers is also another advantage that should see us compete favorably. In addition to all this, the company will maintain its employees by adequately taking care of their needs. This will enable them to be more than willing to build our brand and maintain loyalty to it.
SWOT Analysis
| STRENGTHS | WEAKNESS |
| – Ready available market for our product in the European market.
– Modern farming and cultivation techniques in farming chilies. – Experienced and competent human resource ready to work. – The strong capital base for running the business. |
– Lack of experience in the chili industry.
– Lack of enough product to market to other markets in the world. – Lack of product range by the company creates risk in case chilies business fails. – The high cost of production compared to competitors. – Ready and available markets for the produce. |
| THREATS | OPPORTUNITIES |
| – Competition from rivals who may adopt a model similar to ours.
– An economic downturn might influence the purchasing power of the consumers. – If many people embarked on the business, it would create oversupply, which would bring the prices of the chilies down. – Currency fluctuations might bring about a loss after exchanging the currencies. – Imitation and low-quality chili peppers might damage their reputation. – If high demand is affected by any event, it might affect the Cosmos profitability. |
– More and more people eating chili expand the market further.
– Better farming techniques and chili varieties will bring higher revenues. – It is possible to increase market share by focusing on the quality of the produce. – Embracing e-commerce to target online customers. |
Technical Analysis
Source of Product
Chilies for sale at Cosmos will be of the highest standards obtained from our own farms and other farmers who undertake the requirements required for our export chilies. We shall have a demonstration farm where various people will be taught how to go about the chili planting business. Only small changes might be recommended to enhance their productivity for those already engaging in the farming of chilies.
Description of Production Process
Since the company is involved in marketing other farmers’ produce and their own, the production process will begin with the growth of the chilies. Chilies require sandy or loamy soils with a ph of 5-6 to do well. A month before planting, we shall apply compost manure at the rate of 4kg/m2. For the five hectares leased by the company, the total manure required will be 200tons (4kg X 10000 X 5). Seeds of a germination rate of 95% and above will be selected for planting. After four weeks of germination, the seedlings will be transported to the field, having met the criteria of four true leaves. Even though spacing will vary with the variety, we shall aim at having an average of 30,000 plants/ha.
During transplanting, a nitrogenous and phosphorous fertilizer such as NPK will be used to boost the plants. After two weeks, a top dressing of the same fertilizers will be done to promote fast growth. Potassium nitrate will be applied at the flowering stage to boost the flowering. Foliar rich in boron will be applied at a regular frequency. Ammonium sulfate will be applied after every harvesting period to prolong the harvest period of the chilies. Mulching, irrigation, and weeding practices will be done at regular intervals to improve the plants’ nutrients. Pest control will be managed by pesticides where possible, while rotation of agricultural practices will break the life cycle of pests. In addition to this, seeds free from diseases will be utilized in planting.
Chilies must be harvested at the right stage to ensure that quality is maintained throughout the production process. Depending on the type of chili, they could be harvested while still green, while others have to wait until the chilies turn red for them to be harvested. If the chilies are left to ripen for a long time, they lose their crunchiness and fresh taste. After harvesting the chilies, they could be maintained fresh by drying, freezing, or preserving them. Cosmos Chili Exporters utilizes all the preservation techniques to ensure their clients receive quality produce.
Machinery and Equipment
Various machinery is required in the production of chilies. The machines could be bought or hired out depending on the frequency of use. Cosmos will utilize some of the most sophisticated and deficient machines to ensure the production process runs as expected. The machines utilized include.
- Tractor
- Soil cultivator
- Plough
- Harrow (e.g., Spike harrow, Drag harrow, Disk harrow)
- Stone/Rock/Debris removal implement (e.g., Destoner, Rock windrower/rock rake, Stone picker/picker)
- Broadcast seeder (alternatively: broadcast spreader, fertilizer spreader, or Air seeder)
- Planter
- Plastic mulch layer
- Sprinkler system irrigation
- Mower
- Sickle
- Wheel Barrow
- Truck
Modes of Transportation
Chili from the farm should be transported safely and securely that will retain the chili at the right quality. For this reason, Cosmos will hire an independent transporter who will ferry the chilies from the farm to the warehouse or airport on a given schedule. For other farmers for whom marketing will be done, they will be given the option to deliver the chilies, or transport could be arranged with the company to be delivered.
Financial Analysis
Sources of Revenue
Cosmos Chili exporters is a profit-making venture, and as such, it has explored all the available revenue streams within the industry for the business to flourish. The main sources of income for the business will be:-
Sale of Chili – different types of chili peppers will be sold both locally and internationally.
Consultancy services – Cosmos will be involved in advisory services for other farmers who want to venture into the chili farming business.
Marketing services – Since Cosmos is planning to export more than its own chili, it will also market chili from other farmers at a selected fee.
Projected Revenues
Revenues for the business will majorly be centered on the company’s amount of chili sold and marketed. With adequate farming and marketing strategies in place, the company is optimistic about surpassing their set targets. The business will be profitable from the first year going onwards. The projected revenues assumed that there would be no major natural disaster, such as weather or epidemic of a disease. It also assumed relative peace in the country as well as a stable government and economy. The projections for three years are as follows:-
| Year | Amount ($) |
| 1st Year | 80,000 |
| 2nd Year | 100,000 |
| 3rd Year | 130,000 |
Capital Expenditure
To start the Cosmos business venture, we shall require to make some one-time purchases for the required things. The prices of the items might vary slightly, but the amounts given are the standard market prices. As we can see from the breakdown, $30,000 will be enough for the business to set the ball rolling.
| ITEM | BREAKDOWN | TOTAL (US $) |
| Incorporation fee of a business in Kenya. | 1 | $300 |
| Lease of land | 5ha | $2,500 |
| Farm preparation | 5ha | $2000 |
| First chili seeds | $800 | |
| Company website | 1 | $600 |
| Rent of office/warehouse | 2 | $7000 |
| Salaries for workers first 6 months | 8 | $6000 |
| Advertising and branding | $2000 | |
| Office furniture | $1500 | |
| Accounting system | $1000 | |
| Computers, printers, and other office equipment. | $3500 | |
| Total | $ 27, 200 |
Operating Expenses
Away from the capital expenditure, there will be some expenses that will be recurring along with the business. This is expenses that, even if they are paid during one season, they will still require to be paid during the next one. They include: –
| ITEM | TOTAL (US$) |
| Seedlings | $800 |
| Land preparation | $1500 |
| Utilities (electricity, water, etc.) | $500 |
| Insurance | $350 |
| Maintenance & Repair | $200 |
| Depreciation | $400 |
| Total | $3,750 |
Marketing Expenses
For Cosmos Chili Exporters to grow beyond its start point, it requires both conventional and non-conventional techniques to marketing the business. Strategies that will increase brand awareness and identity for the company will be used. The marketing plan will be costly in the first years in order to penetrate the market. Consequent years will have less expense for advertising. Some of the platforms that will be utilized to advertise the business include:-
- Wearing branded apparel by our workers.
- Market our website by pulling a lot of traffic to it online through advertisements.
- Put up posters as well as print fliers for distribution.
- Sponsor community activities and events.
- Utilize social media platforms to engage with potential customers directly.
- Organize exhibitions to showcase our products and the benefits of chilies.
- Place adverts in both electronic and print media.
Source of Funding
No matter how good an idea is, it is impossible to accomplish it without a source of funding. Resources are required so that the necessary steps needed to be undertaken can continue in a smooth manner. Cosmos Chili Exporters is a partnership between six partners who will contribute equally towards the venture. The six investors who will also act as directors of the company will invest $4,000 each into the business. In addition to this, a loan facility with one of the commercial banks of $10,000 is in its final stages of completion, which should see the business run without any budget limitations.
Expected Cash flow Statement
Cash flow statement for Cosmos Chili Exporters for the Year Ended December 31, 2021.
| Cash flow from Operating Activities | |
| Cash receipts from customers | $80, 000 |
| Cash paid for expenses | ($45,000) |
| Cash paid to suppliers | ($12,000) |
| Cash generated from operational activities | $23,000 |
| Cash flow from Financing Activities | |
| Cash received from owners | $24,000 |
| Cash received from the bank loan | $10,000 |
| Cash paid back to the bank | ($1,500) |
| Cash paid to owners | ($6,000) |
| Net cash flow from financing activities | $26,500 |
| The net change in Cash for the year | $49,500 |
| Cash at the beginning of the period | $0 |
| Cash – December 31, 2021 | $49,500 |
Sustainability and Expansion Strategy
The future of any profit-making business depends on how long they can continue to produce efficiently in a way that they break even. If a business is not able to meet its costs of production over several years, it could be headed for closure in the near future. For this reason, a profit-making venture should have an investment strategy and business structure that will stand the test of time. Management of a company plays a very vital role as it is the one that provides guidance on what direction the business should take. Cosmos Chili Exporters has done well in this regard and has invested so much in the competence and expertise of employees so as to avoid disappointments in their course of work.
One of the wishes of any venture is to build a business that will survive on its own without requiring a capital injection from external sources. One way of winning competitors and remaining a good market share is by maintaining the chilies’ quality and quantity levels. Cosmos strives to do this by employing the highest production technology skills and constantly learning from recent developments in the industry. In terms of sustainability, Cosmos strives to use the recommended inputs that are not hazardous to the environment. The company plans to expand to other regions within Kenya and later to other neighboring countries that experience good weather for chilies’ growth.
COSMOS CHILI EXPORT BUSINESS PLAN
Table of Contents
Industry Overview 3
Mission Statement 4
Business and Organizational Structure 4
Market Analysis 7
Market Trends 7
Technical Analysis 9
Description of Production Process 9
Machinery and Equipment 9
Modes of Transportation 9
Financial Analysis 9
Sources of Revenue 9
Expected Cash flow Statement 9
Sustainability and Expansion Strategy 9
Industry Overview
Chili or pepper is a vegetable that is used mostly as a spice all over the world. Many types of chili come about after combining chili with other spices. The vegetable is common because apart from its seasoning properties, it also has nutrients, vitamins, and minerals. It is a rich source of vitamin C with even a higher amount than oranges. Among the spice segment, chili is the most crucial cash crop due to its popularity worldwide. Chilies can either be green or dry that are used in the making of spices.
The major world producers of chili include India, Mexico, Spain, and China. Chili farming is highly lucrative due to its popularity and ability to thrive in most climatic conditions. Its ability to be stored for long periods is another motivating factor of the vegetable. The popularity of chili as a vegetable spice to be used in various cuisines across the globe is another encouraging factor that has given the vegetable popularity. With the increase in popular demand all over the world has soared over time. The results are that many small farmers that initially engaged in small farming of pepper to expand to large scale farming of chili.
The largest market for chili is within the European countries as china and the USA are large producers of the commodity. The major European specific countries are the United Kingdom, France, Netherlands, France, Spain, Germany, and Romania. While most of the imports initially originated from large producers due to supply certainty, attention is shifting fast to developing countries. Some of the countries that have benefited from this rising import of chili to the European market include Uganda, Macedonia, and Kenya. This lead to an increase in chili imports to about 50tonnes a year from developing countries.
Executive Summary
The Kenyan chili export industry has experienced phenomenal growth, increasing the global market for chilies produced in the country. This, combined with reasonable terms of trade with European partners, a high amount of chili produced in the country, and organic production techniques, has led to the industry’s flourishing. With many farmers with available cultivation land embracing chilies’ farming, the industry is set for great success.
Cosmos Chili exporters is a registered commercial exporting company based in Nairobi, Kenya. The company specializes in the cultivation and exporting of some of the best chilies to the European market. Feasibility studies and market research show a lot of potential in the industry. The land has been located for leasing for planting the best varieties of chilies. Both organic and inorganic chilies will be grown in the land.
Chili farming has immense potential, and we are planning on leveraging the opportunities available in commercial growth and export of the produce. This will contribute significantly to the economy through national food production, export gain, and profit for the business. Cosmos chili exporters are one of the leading chili exporters from Kenya due to their management and quality standards. To enable us to achieve this feat, the company has engaged some of the best professions in the field, which will, in turn, provide value. The company has also equipped itself with top-notch machinery used in the cultivation of chili.
Cosmos Chili Exporters is a partnership between six people who have contributed the same amount towards financing and will share the business equally. All the founding members have experience in farming and export business, making decision-making swift and more accurate.
Product Description
Product offering
Cosmos Chili Exporters will be solely engaged in the growing and marketing of chilies. The pepper will be grown in greenhouses. The company will also buy chilies from other individual farmers who meet the company’s quality standards and do the marketing for them at a fee.
Vision Statement
Cosmos Chili Exporters’ vision is to become one of the leading chili brands that offer the world’s best quality chilies.
Mission Statement
The mission of Cosmos Chili Exporters is to venture into large scale chili farming and export business to provide quality chilies for consumption in the world.
Business and Organizational Structure
Cosmos Chili Exporters is a commercial chili grower and exporter based in Nairobi that is set to grow and compete globally. In line with this goal, the company is set up as a limited liability company, which will have various benefits on the business’s operations. We are aware a solid business structure is essential for the kind of organization we want to build. As such, we aim at creating an organizational structure that will enable us to streamline our operations. For this reason, Cosmos Chili Exporters will only hire a seasoned and competent workforce to build its business model. The company will be run by a board of eight members who will include all the six investors in the business. Other positions to be filled in the company will include the Chief Operating Officer, Logistics Manager, Company Accountant, Farm Manager, Marketing Manager, Human Resource Manager, and other junior staff. The responsibilities of each will be as mentioned below.
CEO
- Advising the board as well as seeking consultations from them one key issue.
- Leading, guiding, and evaluating the other staff.
- Implementing the organization’s vision and mission and ensuring everyone adheres to it.
- Developing and implementing the overall organization strategy.
- Participating in industry-related associations and events that will enhance their leadership skills and help the organization.
- Representing the company in any civic or professional association at the community or national level.
- Overseeing the complete operations of the organization in line with the established goals and strategies.
- Signs and approves expenditures and hiring of staff.
Logistics Manager
- Manage the inventory of the warehouse, transport of inventory as well as other logistical processes.
- Partner and communicate with suppliers, farm managers, and marketing team on the critical dates of transport.
- Train and manage the logistics staff.
- Ensure quality and safe handling of products from the farm to the destination of consumers.
- Perform metrics and data analysis to determine opportunities for process improvements.
- Develop logistics that will streamline the process and reduce costs.
Company Accountant
- Maintain proper books of accounts in a manner required by law to calculate the financial position at the end of the accounting period.
- Audit the company books to ensure the information represents an accurate and fair view of the entity’s financial position.
- Budget for various business transactions and activities way before they take place.
- Manage the entity’s tax matters by filing returns and settling any tax liabilities stipulated under various laws.
Marketing Manager
- Identify, seek, and reaches out to new partners that the business can conduct business with.
- Identifies development opportunities and follows them up to ensure they work effectively.
- Conducts business research and market surveys that the business can engage in.
- Represents the company in strategic meetings and helps to grow the company in terms of sales.
- Negotiates the sale and fees to be paid for the product with the buyers on behalf of the company.
Farm Manager
- Responsible for planning, management, and coordination of farm activities in the various greenhouses.
- Provide advice to management regarding farming activities.
- Ensure that compliance is done to the set farming standards set.
- Carry out a risk analysis of the produce on-farm.
- Oversees the costing and accounting of inputs used in the growing of chilies.
- Describes the job positions for recruitment to the human resource manager.
- Responsible for training, evaluation, and assessment of employees at the farm.
- Liaises with the marketing team on the progress and growth of chilies.
Human Resource Manager
- Manages the recruitment and selection of employees.
- Plan and coordinate the human resource function to best utilize the employee’s talents.
- Support the company’s human capital needs by developing, motivating, and engaging the employees.
- Address the demands and grievances of employees by creating a good relationship between them and management.
- Ensure legal compliance is followed in the recruitment of human capital.
- Create and manage an appraisal system that drives the high performance of the employees.
Other Junior Staff
- The junior staff will have varied roles as they will be placed under a manager depending on their skills.
- Their role will be to follow the instructions issued by their respective managers or by the human resource manager.
- They include farmworkers, office clerks, accounts assistants, receptionists, cleaners, and secretaries.
Market Analysis
Market Trends
According to a report by the Center for the Promotion of Imports from Developing Countries (CBI), the European Union is the second-largest importer of chili peppers globally, accounting for 40% of global imports. The market is not concentrated, and opportunities for penetration are readily available. Prices in the European market are very favorable compared to other markets internationally. Quality and sustainably produced chilies can attract a constant and massive demand in the European market.
Cosmos Chili Exporters will use greenhouse farming to grow their chili to maintain quality and abide by production standards. Greenhouse farming is gaining a lot of popularity due to the ease and efficiency of using them. Using a greenhouse, one can control various inputs required for growing chilies such as humidity, fertilizer, lighting, irrigation, and temperature. This guarantees to farm all year round even when the climatic conditions are not favorable for the crop. This ensures there is low no downtime in supply; hence demand needs can always be met.
Another trend influencing the increase in consumption of chilies is the increased health awareness among people. There has been a growing health consciousness among consumers due to the myriad of diseases caused by unhealthy nutrition. Chili has been proven to one of the healthy vegetables that should be consumed hence its increasing demand. With increased consumption, both small scale and large scale farmers have increased their growing chilies to meet demand needs.
Target Market
Our target market is the end consumers of chili who are based in the European Union. Those who benefit from the chili export industry’s business value chain also stand a chance to gain. We aim to produce quality raw or processed that will satisfy the taste of millions of consumer households.
Competitive Advantage
Export Companies are typically created to supply some of the most demanded agricultural products in the world. When agricultural produce has constant demand, such as chili, large commercial farmers are encouraged to grow it for food and export to other countries. Even governments encourage commercial farming as this increases their balance of trade and the supply of food. When it comes to commercial chili growers and exporters, there is plenty of competition worldwide, as many companies have embarked on the business. Cosmos Chili Exporters are aware of the many competitors in the chili industry. They have conducted thorough research to know how to take advantage of the available markets in Europe.
As a new business, we have taken the necessary steps to ensure the business thrives despite heavy competition. One of our advantages is our seasoned professionals who have a wealth of experience in growing and exporting chilies. The personnel is key to the business apart from bringing in the required skills; they also have important contacts in the job. In addition to this, the company has invested in ultra-modern farming techniques and state of the art machinery. These features ensure that Cosmos Chili Exporters consistently produces high-quality products. Our quality products will enable us to take advantage of the available market by selling our products at competitive prices. A good network and relationship created with our customers is also another advantage that should see us compete favorably. In addition to all this, the company will maintain its employees by adequately taking care of their needs. This will enable them to be more than willing to build our brand and maintain loyalty to it.
SWOT Analysis
| STRENGTHS | WEAKNESS |
| – Ready available market for our product in the European market.
– Modern farming and cultivation techniques in farming chilies. – Experienced and competent human resource ready to work. – The strong capital base for running the business. |
– Lack of experience in the chili industry.
– Lack of enough product to market to other markets in the world. – Lack of product range by the company creates risk in case chilies business fails. – The high cost of production compared to competitors. – Ready and available markets for the produce. |
| THREATS | OPPORTUNITIES |
| – Competition from rivals who may adopt a model similar to ours.
– An economic downturn might influence the purchasing power of the consumers. – If many people embarked on the business, it would create oversupply, which would bring the prices of the chilies down. – Currency fluctuations might bring about a loss after exchanging the currencies. – Imitation and low-quality chili peppers might damage their reputation. – If high demand is affected by any event, it might affect the Cosmos profitability. |
– More and more people eating chili expand the market further.
– Better farming techniques and chili varieties will bring higher revenues. – It is possible to increase market share by focusing on the quality of the produce. – Embracing e-commerce to target online customers. |
Technical Analysis
Source of Product
Chilies for sale at Cosmos will be of the highest standards obtained from our own farms and other farmers who undertake the requirements required for our export chilies. We shall have a demonstration farm where various people will be taught how to go about the chili planting business. Only small changes might be recommended to enhance their productivity for those already engaging in the farming of chilies.
Description of Production Process
Since the company is involved in marketing other farmers’ produce and their own, the production process will begin with the growth of the chilies. Chilies require sandy or loamy soils with a ph of 5-6 to do well. A month before planting, we shall apply compost manure at the rate of 4kg/m2. For the five hectares leased by the company, the total manure required will be 200tons (4kg X 10000 X 5). Seeds of a germination rate of 95% and above will be selected for planting. After four weeks of germination, the seedlings will be transported to the field, having met the criteria of four true leaves. Even though spacing will vary with the variety, we shall aim at having an average of 30,000 plants/ha.
During transplanting, a nitrogenous and phosphorous fertilizer such as NPK will be used to boost the plants. After two weeks, a top dressing of the same fertilizers will be done to promote fast growth. Potassium nitrate will be applied at the flowering stage to boost the flowering. Foliar rich in boron will be applied at a regular frequency. Ammonium sulfate will be applied after every harvesting period to prolong the harvest period of the chilies. Mulching, irrigation, and weeding practices will be done at regular intervals to improve the plants’ nutrients. Pest control will be managed by pesticides where possible, while rotation of agricultural practices will break the life cycle of pests. In addition to this, seeds free from diseases will be utilized in planting.
Chilies must be harvested at the right stage to ensure that quality is maintained throughout the production process. Depending on the type of chili, they could be harvested while still green, while others have to wait until the chilies turn red for them to be harvested. If the chilies are left to ripen for a long time, they lose their crunchiness and fresh taste. After harvesting the chilies, they could be maintained fresh by drying, freezing, or preserving them. Cosmos Chili Exporters utilizes all the preservation techniques to ensure their clients receive quality produce.
Machinery and Equipment
Various machinery is required in the production of chilies. The machines could be bought or hired out depending on the frequency of use. Cosmos will utilize some of the most sophisticated and deficient machines to ensure the production process runs as expected. The machines utilized include.
- Tractor
- Soil cultivator
- Plough
- Harrow (e.g., Spike harrow, Drag harrow, Disk harrow)
- Stone/Rock/Debris removal implement (e.g., Destoner, Rock windrower/rock rake, Stone picker/picker)
- Broadcast seeder (alternatively: broadcast spreader, fertilizer spreader, or Air seeder)
- Planter
- Plastic mulch layer
- Sprinkler system irrigation
- Mower
- Sickle
- Wheel Barrow
- Truck
Modes of Transportation
Chili from the farm should be transported safely and securely that will retain the chili at the right quality. For this reason, Cosmos will hire an independent transporter who will ferry the chilies from the farm to the warehouse or airport on a given schedule. For other farmers for whom marketing will be done, they will be given the option to deliver the chilies, or transport could be arranged with the company to be delivered.
Financial Analysis
Sources of Revenue
Cosmos Chili exporters is a profit-making venture, and as such, it has explored all the available revenue streams within the industry for the business to flourish. The main sources of income for the business will be:-
Sale of Chili – different types of chili peppers will be sold both locally and internationally.
Consultancy services – Cosmos will be involved in advisory services for other farmers who want to venture into the chili farming business.
Marketing services – Since Cosmos is planning to export more than its own chili, it will also market chili from other farmers at a selected fee.
Projected Revenues
Revenues for the business will majorly be centered on the company’s amount of chili sold and marketed. With adequate farming and marketing strategies in place, the company is optimistic about surpassing their set targets. The business will be profitable from the first year going onwards. The projected revenues assumed that there would be no major natural disaster, such as weather or epidemic of a disease. It also assumed relative peace in the country as well as a stable government and economy. The projections for three years are as follows:-
| Year | Amount ($) |
| 1st Year | 80,000 |
| 2nd Year | 100,000 |
| 3rd Year | 130,000 |
Capital Expenditure
To start the Cosmos business venture, we shall require to make some one-time purchases for the required things. The prices of the items might vary slightly, but the amounts given are the standard market prices. As we can see from the breakdown, $30,000 will be enough for the business to set the ball rolling.
| ITEM | BREAKDOWN | TOTAL (US $) |
| Incorporation fee of a business in Kenya. | 1 | $300 |
| Lease of land | 5ha | $2,500 |
| Farm preparation | 5ha | $2000 |
| First chili seeds | $800 | |
| Company website | 1 | $600 |
| Rent of office/warehouse | 2 | $7000 |
| Salaries for workers first 6 months | 8 | $6000 |
| Advertising and branding | $2000 | |
| Office furniture | $1500 | |
| Accounting system | $1000 | |
| Computers, printers, and other office equipment. | $3500 | |
| Total | $ 27, 200 |
Operating Expenses
Away from the capital expenditure, there will be some expenses that will be recurring along with the business. This is expenses that, even if they are paid during one season, they will still require to be paid during the next one. They include: –
| ITEM | TOTAL (US$) |
| Seedlings | $800 |
| Land preparation | $1500 |
| Utilities (electricity, water, etc.) | $500 |
| Insurance | $350 |
| Maintenance & Repair | $200 |
| Depreciation | $400 |
| Total | $3,750 |
Marketing Expenses
For Cosmos Chili Exporters to grow beyond its start point, it requires both conventional and non-conventional techniques to marketing the business. Strategies that will increase brand awareness and identity for the company will be used. The marketing plan will be costly in the first years in order to penetrate the market. Consequent years will have less expense for advertising. Some of the platforms that will be utilized to advertise the business include:-
- Wearing branded apparel by our workers.
- Market our website by pulling a lot of traffic to it online through advertisements.
- Put up posters as well as print fliers for distribution.
- Sponsor community activities and events.
- Utilize social media platforms to engage with potential customers directly.
- Organize exhibitions to showcase our products and the benefits of chilies.
- Place adverts in both electronic and print media.
Source of Funding
No matter how good an idea is, it is impossible to accomplish it without a source of funding. Resources are required so that the necessary steps needed to be undertaken can continue in a smooth manner. Cosmos Chili Exporters is a partnership between six partners who will contribute equally towards the venture. The six investors who will also act as directors of the company will invest $4,000 each into the business. In addition to this, a loan facility with one of the commercial banks of $10,000 is in its final stages of completion, which should see the business run without any budget limitations.
Expected Cash flow Statement
Cash flow statement for Cosmos Chili Exporters for the Year Ended December 31, 2021.
| Cash flow from Operating Activities | |
| Cash receipts from customers | $80, 000 |
| Cash paid for expenses | ($45,000) |
| Cash paid to suppliers | ($12,000) |
| Cash generated from operational activities | $23,000 |
| Cash flow from Financing Activities | |
| Cash received from owners | $24,000 |
| Cash received from the bank loan | $10,000 |
| Cash paid back to the bank | ($1,500) |
| Cash paid to owners | ($6,000) |
| Net cash flow from financing activities | $26,500 |
| The net change in Cash for the year | $49,500 |
| Cash at the beginning of the period | $0 |
| Cash – December 31, 2021 | $49,500 |
Sustainability and Expansion Strategy
The future of any profit-making business depends on how long they can continue to produce efficiently in a way that they break even. If a business is not able to meet its costs of production over several years, it could be headed for closure in the near future. For this reason, a profit-making venture should have an investment strategy and business structure that will stand the test of time. Management of a company plays a very vital role as it is the one that provides guidance on what direction the business should take. Cosmos Chili Exporters has done well in this regard and has invested so much in the competence and expertise of employees so as to avoid disappointments in their course of work.
One of the wishes of any venture is to build a business that will survive on its own without requiring a capital injection from external sources. One way of winning competitors and remaining a good market share is by maintaining the chilies’ quality and quantity levels. Cosmos strives to do this by employing the highest production technology skills and constantly learning from recent developments in the industry. In terms of sustainability, Cosmos strives to use the recommended inputs that are not hazardous to the environment. The company plans to expand to other regions within Kenya and later to other neighboring countries that experience good weather for chilies’ growth.