Charles Darwin University: BUS502 Organic Food Business Plan

This business plan outlines the establishment of an online organic food store with a focus on delivering fresh produce to customers within 24 hours. The plan includes a business concept, vision, mission, and an analysis of the operational environment using PESTLE and Porter's Five Forces models. It details the operational, organizational, and human resource plans, including marketing strategies and financial analysis with initial investment, sales, operational costs, and profitability projections. The plan also addresses goals and risk considerations and provides appendices with financial statements and start-up costs. The business aims to capitalize on the growing demand for organic products in Australia, focusing on health-conscious consumers and efficient online operations.

Running head: BUSINESS PLAN
Business Plan
Name of the Student
Name of the University
Authors Note
Course ID

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Table of Contents
Business Concept.......................................................................................................................3
Vision.....................................................................................................................................3
Mission...................................................................................................................................3
Operational Environment...........................................................................................................3
PESTLE Analysis...................................................................................................................4
Porter’s Five Force Model.....................................................................................................5
Operational Plan.........................................................................................................................6
Organizational plan and Human Resource.................................................................................6
Organizational Structure:.......................................................................................................6
Management Team:................................................................................................................7
Management team gaps:.........................................................................................................8
Human resource plan:............................................................................................................8
Recruitment planning:............................................................................................................8
Employee training and development:.....................................................................................9
Marketing Plan:..........................................................................................................................9
Strategy Pyramid....................................................................................................................9
Marketing 4ps:.........................................................................................................................10
Targeted consumer segments:..............................................................................................11
Financial Analysis....................................................................................................................12
Initial Investment.................................................................................................................12

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Sales Analysis......................................................................................................................13
Operational Costs.................................................................................................................13
Variable Costs......................................................................................................................13
Fixed Assets.........................................................................................................................13
Profitability..........................................................................................................................14
Goals and Risk Considerations................................................................................................14
References:...............................................................................................................................15
Appendix..................................................................................................................................17
1) Profit and Loss Statement................................................................................................17
2) Balance Sheet...................................................................................................................18
3) Start-Up Costs..................................................................................................................19

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Business Concept
The business plan aims to establish a business which would be digital store and
offering organic farm produce and delivering the same to the customers. The operations of
the business would be focused on online operations and thereby the customers need to order
the food or vegetables from applicable or online website which would be delivered within a
time frame of 24 hours. The Australian market is influenced with organic products and
consumers nowadays are more health conscious which makes the business quite viable (Yeo,
Goh and Rezaei 2017). The management of the organisation is confident that the business
would be successful judging from the nature of operations of the business (Matson, Sullins
and Cook 2013). The main reason for such an expectation is that the organic food market is
growing globally with a 10% rate which suggests that the market would further achieve
higher growth rate in future thereby providing an opportunity to the business to expand the
operations of the undertaken business.
Vision
The vision for the new start-up business is to set up a online system for delivering
food products to the customers which are of high quality and fresh. The same would be
delivered within a period of 24 hours so that the customers are able to order on a regular
basis.
Mission
The mission of the company is to ensure that quality and time frame is maintained in
terms of delivery of foods products to the customers (Pan et al. 2017). The management of
the company intends to serve more customers and also retain them so that the new venture
business is able to make profits from the operations of the various segments of business.

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Operational Environment
The operational environment refers to the external environment in which the business
would be operating for the purpose of generating the base for revenue. In order to analyse the
external environment and different factors that can particularly have an impact on the overall
operations of the business and are particularly demonstrated with the help of PESTLE
Analysis.
PESTLE Analysis
Political Factors: The political factors refer to the stability in the market in terms of pattern
which is followed by consumers (Zeng et al. 2017). The people of Australia are more focused
on healthy food and this would be helping the business to generate more revenue from the
operations of the new venture business. The political factors also include the support of the
government towards such a undertaking and the regulations which are established in the
country pertaining to online food business.
Economical Factors: The economic factors include factors such as inflation which can have
an impact on the value of the currency and thereby also impact the prices which is paid to the
farmers. This can thereby increase the cost of operations and impact the overall revenue
which is made by the business (Oraman 2014). The price of the supplies would be increased
due to inflationary affect and thereby affect the demand for the products.
Social Factors: The analysed and undertaken social factors refer to the various taste and
preference pattern of the consumers and how the same impact the demand for the products of
the business. The organic food market in Australia is on rise and thereby it can be said that
the demand for the products would be high in the market.
Technological Factors: The technological factors involve the application of modern
technology so that the business is able to maintain efficiency in the operations of the business

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(Perera 2017). The business would be developing new application and the same would be
investing significantly in innovation. The technological factors play a vital role in the online
store business.
Legal Factors: The business which are operating in Australia are required to follow certain
rules and regulations and such factors can have an high impact on the overall operations of
the business. The business needs to adhere to Corporation Act 2001 and taxation regulations
that are particularly applicable on the business. The business also needs to adhere to licensing
requirements in the business.
Environmental Factors: The environmental factors incorporate the environmental
regulations which are applicable to a business. The business needs to ensure that no activities
affect the environment in which the business is operating.
Porter’s Five Force Model
1. Bargaining Power of the Customers: The management of the company intends to
retain customers and therefore customer satisfaction is very important. There are lots
of substitutes available in the market such as supermarkets and retail stores for
purchasing food products. It is therefore for such reasons that the bargaining power of
the suppliers would be high for the business.
2. Bargaining Power of the Suppliers: The suppliers of the business are the farmers
who grow the products and handle livestock’s. The farmers only grow organic
products which is a speciality for the business and therefore the bargaining power of
the supplier would be high. The products are organic and therefore the prices which is
set by the suppliers would be final.

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3. Threat of New Entrants: The idea of an online organic store which would be
supplying food products is quite new in the market and therefore the threat of new
entrants is quite low at present but the same can be a promising idea in future.
4. Threat of Substitutes: There is a constant threat of substitutes for the new business
as the consumers always have the offer to go to super market or retail store for
purchasing the product. The consumers can also get organic products from super
markets which makes the threat of substitutes quite high.
5. Rivalry in the Market: The rivalry among the supermarkets and retail stores is quite
high in the food industry. The new online store which the management is planning to
establish would also be facing such competition and therefore such a factor needs to
be considered in decision making process of the business.
Operational Plan
The operational plan of the business is to offer the best quality of products to the
customers so that the new venture business is able to generate maximum revenue and also
retain the customers in the business. The plan of the management is to launch an application
or website which would allow the customers to order online (Haakon 2014). The business
would be aiming to deliver the products within a period of 24 hours so that the customers are
able to get their orders without any delay. The business would be offering fruits, vegetables,
organic eggs, organic meat and organic herbs among many other products on offer. The
business would be focusing on customers who are health conscious and thereby ensure that
the products which is offered by the business are of best quality for meeting their
expectations.

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Organizational plan and Human Resource
Organizational Structure:
The business will be completely under the ownership and operations of the
proprietors. The owners would usually be involved in the activities of administrative and
accounting functions. This would usually involve the computation of planting, gardening and
seeding cost of the crops that will be harvested (Saaty and Kearns 2014). The company will
also hire an additional apprentice farmer for each of its additional acre on which the crops
will be harvested. Over the passage of time, the business will also look forward to hire the
part-time delivery drivers and bookkeepers as well.
Figure 1: Figure representing organizational structure
Source: (As created by Author)
Management Team:
The owners will be accountable for active management of the business and farms. The
farm management duties would usually involve the detailed plantation and formation of
living soil (Serrat 2017). Only appropriate and organic farming methods will be employed by

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the owners and there will no reliance on the inputs relating to off-farming, chemicals,
pesticides and fertilizers. The growing methods would comprise of rotation of crops, planting
of crops, application of finished compost and promoting the beneficial insects. The owners
would play a vital role in discharging their responsibility for preparing the detailed
accounting records for their tax accountant.
While the owners would actively participate in the management of the crop during the
busy months of summer. While upon the onset of slower winter months the owners would
actively engage in the online activities of promoting their products and supplementing their
revenues (Namada 2018). The owners would also actively market the company’s business
idea by communicating in the local civic group, providing farm tours and drafting up the
weekly newsletter.
Management team gaps:
The company would usually place their reliance on the tax accountant to help the
company in reporting within the business norms.
Human resource plan:
Personnel Plan:
Personnel No. of. staffs
Cashiers 2
Production staff 2
Apprentice 1

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Recruitment planning:
The business looks forward to an external sources of recruitment as this help in
searching for the prospective candidates that are available externally in the job portals. The
recruitment planning of the company is;
Employment agencies:
The company will be advertising its vacancies in the private employment agencies
that are engaged in matching the demand and supply of personnel (Carnevale 2018). Popular
consultancy will be approached to look for experienced personnel.
Campus recruitment:
The owners will be visiting the educational institutes and would conduct interview
with the final year students. Following interview suitable candidates will be selected on the
basis of academic records and intelligence.
Employee training and development:
The company would establish an employee need analysis where a specific KSA
(knowledge, skill and attitudes) of the employees will be identified and improved. It will help
in bridging the gap among the employee and would also help in improving the employee
performance based on the company’s fixed standards. The company will also set up both on
and off the job training method which will include training about the job instruction,
apprenticeship, and lecture and programmed based instruction will be provided to the
employees.

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Marketing Plan:
The marketing plan are as follows;
Strategy Pyramid
Strategy: Creating awareness that business is delivering wide range of quality and healthy
food products on a constant basis.
Tactics: Developing a specific, in depth planning guide, planting numerous times regarding
th growing season.
Programs: The Company will be posting fliers and broachers at the local restaurants and
stores that are owned locally and operating in the natural items (Chernev 2018).
Strategy Tactics: The business will be promoting a community of awareness so that it can
think internationally and act domestically.
Programs: The business will look forward to host events relating to organic farm products
during the special times such as harvest time and earth day.
Marketing 4ps:
Product:
The company will be offering a range of products. This would include fruits,
vegetables, organic eggs, organic meat and organic herbs amongst numerous other products
on offer.
Price:
The business will be making use of fair pricing strategy as value for money. The
company will be lowering its price to penetrate in the market and this could work as
attraction for the new buyers.

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Positioning:
The business will be acting as the premier organic company in the county by
providing a wide range of products ranging from fresh vegetables to fruits. The business will
be positioning itself as the most delicious and mouth-watering organic vegetables that will be
available in the local grown area (Baker and Saren 2016). It will also develop exceptional
relations with community and planet.
Promotion:
The best source of promotional strategy is the word of mouth advertisement. The
company will be placing its broachers with the other businesses particularly the locally grown
organic bakery and neighbour dairy farm (West, Ford and Ibrahim 2015). The business will
also make use of social media and website to provide additional information relating to
marketing.
Competitive comparisons:
The business will be facing competition from the locally owned farm that provides
organic fruits and vegetables. Some of the competitors that represent direct competition to the
business are as follows;
a. Elbert’s Acres: This farm commenced in 2011 and provides wide range of similar
vegetables as the subject. It also provides door-to-door deliver to customers.
b. Springdale Bounty: This is a 22 acre family grown farms and sells organic fruits and
vegetables. It also sells organic eggs and poultry and the business has mixed reviews
from customers.
These firms acts as the direct competition for the company due to the similarity of
products sold by them.

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Targeted consumer segments:
The business will be targeting households that have the income of more than $50,000.
The business will especially focus on the members and would provide service that would
exceed the anticipations of the customers (Kerin and Hartley 2015). The business will be
targeting the young customers that are health conscious. It will also be targeting the tech
savvy and online customers that essentially demand more online activity.
Financial Analysis
The financial analysis will be done for the Organic Farm Food Company with the help
of financial projection that has been planned out for a set of three years whereby relevant
sources of income and expenses have been taken into consideration. The financing sources
that the company would be deploying for the purpose of obtaining relevant source of
financing will be primarily equity and debt sources. It is very important to assess the financial
viability of the business and the same will be well done with the help of financial projection
developed for the business operations that the company will be undertaking. It is important
that the market penetration for the company be well defined for the company given set of
growth that the company expects for the various business operations that is undertaken by
company.
Initial Investment
The initial investment that would be required for financing the business operations of
Organic Farm Fresh Foods will be around $500,000 and the same would be well financed
with the help of both equity and debt source of finance by the company. In order to well
utilize the various sources of finance the company expects to utilize both the equity and debt
sources in an adequate manner so that the same does not affect the operations of business. It
is crucial to note that high weightage or significant weightage to debt finance can increase the
financial risk of the company. Therefore, in the context of above points the Organic Farm

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Food will be financing with 70% equity finance that is around $350,000 would be coming
from equity sources and the rest of $150,000 would be coming from debt financing. While, at
the same time it is important to note that the interest rate that would be applicable for the loan
amount would be around 10% and the same would be charged on the loan amount of the
company (Stewart 2017).
Sales Analysis
The total amount of sales that the company expects to generate from the first year of
operations would be around $350,000 in the first year of operations and the market
penetration that the company would be seeing in the due course of business operations
projected will be around 10%.
Operational Costs
The operational costs that the company would be incurring for the various business
operations would be in the form of rent, salaries, sales and marketing expenses, market
survey expenses and various other operational expenses. The total operational expense that
has been taken into consideration for the first year of operations for the company will be
around $82,850. The rise in the operational expenses for the company will be taken at 5% on
an yearly basis and the same has been well considered keeping in view the rising costs for
operations due to increasing inflation and various other factors that would ultimately be
increasing the operational costs (Burns and Dewhurst 2016).
Variable Costs
The total variable costs that the business would be observing in their operations would
be around $245,000 and the same is expected to be around 70% of the total sales that would
be done by the company (McKeever 2016).

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Fixed Assets
The key fixed assets that Organic Farm foods plans to buy as a capital expenditure for
supporting the various business operations of the company would be equipment, vehicles and
plant & machinery (Gummesson 2015). The net investment that the company would be doing
in the capital expenditure or assets purchase would be around $355,000.
Profitability
The profitability that is expected out from the business will be around $30,092 and the
increase in the profitability of the company will be solely based on the various business
operations that the company will be undertaking (Cornwall, Vang and Hartman 2016). On the
basis of assessing the financial viability that can be well judged with the help of return on
equity investment for the company, which will be around 8.6% in the first year, 9.6% in
second year and 10.3% for the third year. Thus, with the stable and consistent financial return
it can be well said that the new venture can sustain well and would be a positive wealth
creation opportunity for the equity shareholders of the company (Bentil and Yeomans 2016).
Goals and Risk Considerations
The key goals that would be set for the company would be primarily in the form of
expansion of business operations for the company. Having a sound customer base for the
company and an increase in the customer base for the company for the defined period of time
will be some of the key aspects that the company would be considering. The other key goals
that the company would be considering would be around bringing operational efficiency in
the form of cost allocation and cost utilisation (Ward 2016).
Risks Consideration that the company should take care at the outmost level would be
particularly around the operational risk that includes increasing costs for the company. It is
accordingly important that the management of the company take important management

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decision that would allow better strategizing of the various business operations that is
undertaken by the company. A risk governance framework that would define the various set
of actions and works that the company can well carry out would help the company in taking
important managerial decisions about the firm.

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References:
Baker, M.J. and Saren, M. eds., 2016. Marketing theory: a student text. Sage.
Bentil, J. and Yeomans, J., 2016. Technical and financial analysis for the implementation of
a sustainable poultry farm in Takoradi, Ghana (No. PG 59 2016).
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan
International Higher Education.
Carnevale, D., 2018. Organizational development in the public sector. Routledge.
Chernev, A., 2018. Strategic marketing management. Cerebellum Press.
Cornwall, J.R., Vang, D.O. and Hartman, J.M., 2016. Entrepreneurial financial
management: An applied approach. Routledge.
Gummesson, E., 2015. Return on Relationships (Ror): Financial Aspects of Relationship
Marketing and Crm in a Business-To-Business Context. In Creating and Delivering Value in
Marketing (pp. 43-47). Springer, Cham.
Haakon, J., 2014. Global Organic Food & Beverages Market to Reach USD 211.44 Billion
by 2020.
Kerin, R. and Hartley, S., 2015. Marketing: the core. McGraw-Hill.
Matson, J., Sullins, M. and Cook, C., 2013. The role of food hubs in local food
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McKeever, M., 2016. How to write a business plan. Nolo.
Namada, J.M., 2018. Organizational learning and competitive advantage. In Handbook of
Research on Knowledge Management for Contemporary Business Environments (pp. 86-
104). IGI Global.

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Oraman, Y., 2014. An Analytic Study of Organic Food Industry as Part of Healthy Eating
Habit in Turkey: Market Growth, Challenges and Prospects. Procedia-Social and Behavioral
Sciences, 150, pp.1030-1039.
Pan, S., Giannikas, V., Han, Y., Grover-Silva, E. and Qiao, B., 2017. Using customer-related
data to enhance e-grocery home delivery. Industrial Management & Data Systems, 117(9),
pp.1917-1933.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
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Elsevier.
Serrat, O., 2017. Building a learning organization. In Knowledge solutions (pp. 57-67).
Springer, Singapore.
Stewart, K.E., 2017. The Business of Dentistry: A Financial Plan.
Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.
West, D.C., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive
advantage. Oxford University Press, USA.
Yeo, V.C.S., Goh, S.K. and Rezaei, S., 2017. Consumer experiences, attitude and behavioral
intention toward online food delivery (OFD) services. Journal of Retailing and Consumer
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Zeng, Y., Jia, F., Wan, L. and Guo, H., 2017. E-commerce in agri-food sector: a systematic
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460.

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Appendix
1) Income Statement

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2) Balance Sheet

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3) Start-Up Costs