apihoney business plan integra1

8/19/2019 ApiHoney Business Plan Integra1

1/21

"Honey is not just ApiHoney’s business, it is our life and your fulfillment. ” 1

EXECUTIVE SUMMARY

NATURE OF THE BUSINESS

ApiHoney is a commerce and production company, its object being Romanian honeybee products.We collect, produce, pack, sell and deliver to domestic and external markets high quality honeybee

products. The processes of producing and bottling are conducted in up-to date facilities equippedwith necessary machinery, managed by skilled staff, in compliance with all appropriate sanitary andhealth regulations.

Our quality assurance procedure guarantees we only produce and distribute from our partner- beekeepers, first-class honey. Each type of honey is carefully stored and distributed on the market.

MISSION

ApiHoney’s mission is to enable beekeepers in Scornicesti area and Olt County sell their honeybee production by offering an opportunity to sell it at a fair price. The beekeepers will be encouraged to

continue their activity and grow their production in order to offer them a profitable business.We are aiming to create wealth for the community we are living in and promote local image on thenational and international markets. We focus on creating jobs for the local inhabitants, especiallyyouth.

OBJECTIVES

ApiHoney’s objectives are:- to produce and collect quality honeybee products from the Romanian beekeepers,

distributing up to 55 tones in 3 years on domestic and external markets

- to create jobs for Bircii inhabitants- to breakeven in the 2nd

year of activity

OPPORTUNITY

Honey is a healthy product that is used worldwide. Changes in this industry have revealed anopportunity for Romanian honey producers to deliver high quality products to external markets. Themarkets in Western Europe are importing large quantities of honeybee products and lately, largeexporters like China have suffered a decline in their preference due to using pesticides. TheRomanian honeybee products are ecological and well seen on those markets.

On the other hand, we consider there’s a good opportunity on the domestic market, as Romaniansare coming to know the benefits of consuming healthy products, such as honey. As the livingstandard will hopefully grow in following years, the domestic market will absorb more and morehoneybee products.

The Romanian consume of honey in the last three years1 is very low (100 grams/ inhabitant),

compared to EU Countries (Germany - 1,5kg / inhabitant). Romania exports in EU countriesaccount for 80% from its honey production.

1 www.google.com


2/21


MARKET

As regression in different markets has shown up, especially where China was exporting, the potential markets are Great Britain and other European Union countries as well as the domestic one.We will concentrate on the EU countries. Only the German market accounted for 92,749 tones2, 80% of it coming from imports. German imports of Romanian honeybee products accounted only for5.5 %

3 of their total imports, in year 2000, 40 % more compared to 1998.

ApiHoney’s target market consists of EU honey importing countries, especially Germany which is astrong and growing market for pure and genuine honey, Great Britain being another targeted market.

MARKETING

ApiHoney will hire a distribution company that will market its products under their brand name, allover Romania. For exports it will contact several food importers that will market the products undertheir brand.

The anticipated production is 3 tones within the first 12 months and further expansion as the numberof customers increases; production in the 3

rd year being three times more. During the first 2 years,

emphasis will be given to export sales, which is expected to absorb an increasing proportion of thecompany’s output.

PRODUCT

ApiHoney will offer to the domestic market and for export high quality honeybee products such as:honey (extracted, comb and chunk), wax and bee glue.

The products will be packed and delivered in different formats from 200 liters metal drums to 200ml jars for honey and 25 ml bottles for bee glue. The product we offer, can be used in many ways,such as: diet supplements, as raw material in the cosmetics industry (lotions, skin creams, lip balms),

furniture industry (polishes) and food industry (cookie recipes), etc.

The main element of the product strategy will be the development of a reliable supply chain andconsistently high quality production. This will sustain our competitive advantage over our localcompetitors.

OPERATIONS

Honeybee supplies will be collected from partner beekeepers and produced internally, handled and packed by professionals, being delivered on time. Exports of honey will be in DDU or ExW terms,as the external customer requires. On the domestic market a food distributor will be contracted, thus

enabling us to deliver to an increasing number of counties each year.

Our employees will professionally act in order to enable this system to grow profitable from year toyear. The capacity of delivery in the 1

st year will be up to 7.5 tones of honey, all three years together

being 52 tones, from which 18 tones from internal production. 80 percent of this will be exports, theremaining 20 being delivered to the domestic market.

2 Foreign Agricultural Service: www.fas.usda.gov 3 Foreign Agricultural Service: www.fas.usda.gov


3/21


FINANCING AND COST

The total investment would be up to 21,000$ and it’ll breakeven in the 2nd year. The initial cost ofincorporation is 500 USD, in the first year investments of 7,870 USD being made. The two streamsof revenue are the external and the domestic markets. The weight of exports will be 80 %. The firstrevenues are expected in 7 months after operations start.

The funds available from Integra will be used as follows. The total need of capital accounts for up toUSD 16,500 in three phases, as follows:

1st phase – first month (year I)

- USD 5,000 personal investment- USD 5,000 equity grant offered by Integra (no reimbursement required)

2nd phase – fourth month (year I)- USD 5,000 matching loan offered by Integra (assumed 3 years loan)

3rd

phase – eight month (year II)- USD 1,500 bank loan (one year loan)

In this way a smooth running of the business will be provided, detailed calculations are available inthe Appendix.


4/21


THE COMPANY

NATURE OF THE BUSINESS

ApiHoney is a specialty honey production, processing company, located in the southwestern part ofRomania. We also deliver carefully selected honey from our partner beekeepers. Our focus is on providing a high quality natural product, at a fair price, delivered on time. ApiHoney’s floral sourcespecialty honey is sold in consumer-oriented packaging, gift packs and bulk containers.

We will operate on the domestic market and on the external one, too.

COMPANY’S MISSION

ApiHoney’s mission is to enable beekeepers in Scornicesti area and Olt County sell their honeybee production by offering an opportunity to sell it at a fair price. The beekeepers will be encouraged tocontinue their activity and grow their production in order to offer them a profitable business.We are aiming to create wealth for the community we are living in and promote local image on thenational and international markets. We focus on creating jobs for the local inhabitants, especiallyyouth.

COMPANY’S OBJECTIVES

In the first year of activity ApiHoney will focus on sales to external customers. Exported quantitiesgrow from year to year (see the financial forecasts) as we collect and produce more high qualityhoneybee products. The productivity growth is a result of our experienced employees’ dedicatedwork.

Another objective is to become profitable in 2 years of activity, the main revenue stream being theexternal market. We will operate on the domestic market, also; the quantities delivered encounter aslow growth as the honey consumption per capita is improving from year to year.

Socially, ApiHoney’s objective is to create wealth, and also create jobs for Bircii’s inhabitants.During the three years projected up to 5 people will be full time employed and several seasonal.

Another objective is to distribute up to 55 tones of honey in three years, being promoted on theinternational and domestic market, under customer’s brand.

COMPANY’S OPPORTUNITY

Honey is a healthy product that is used worldwide. Changes in this industry have revealed anopportunity for Romanian honey producers to deliver high quality products to external markets. Themarkets in Western Europe are importing large quantities of honeybee products and in the last time, big exporters like China have suffered a decline in their preference due to antibiotics found in the product’s composition. The Romanian honeybee products are ecological and well seen on thosemarkets.


5/21


Key markets:

! The EU: represents a market of close to 200,000 tones of honey per year, most of which issupplied by European producers. The EU market will be considered as our main target market.Germany will be the first to be targeted.

! Japan: is also a good market for honey and it is supplied by both local producers and numerousoverseas suppliers. The total market is over 100,000 tones per year, but with a smaller market sharefor organic honey. Japan’s imports4 of honey surged from 30,000 tones in 1998 to 45,000 tones in2002.

! USA: is a larger total market for honey than the EU, but this market is supplied predominantly bylocal producers. There would, however, be potential to export into niche markets in the West Coastwhere the market for natural organic products is growing rapidly.

The Romanian honeybee products are ecological and well seen on those markets. Romanians know

the benefits of healthy products consumption, such as honey, and as the living standard willhopefully grow in next years the domestic market will absorb more and more honeybee products.

Another opportunity is the experienced beekeepers that we have. In this way, we cut the trainingexpenses that we would have had to provide for our employees.

External demand for honey grew lately, and the Romanian potential for exporting honey isascendant (only in 2000, were exported 8000 tones of honey.), these becoming other opportunitiesfor our company.

The Romanian consumption of honey in the last three years5 is very low (100 grams/ inhabitant),

comparing with EU Countries (Germany - 1,5kg / inhabitant). Our country’s exports to EU countriesaccount for 80% of its honey production.

Existing emailed offers received from German companies – such as B & K Agrarmarketing GmbHand Honig–Wernet GMBH - consists of honey delivered in DDU terms (see operations). The priceswere considered in the financial calculations. To be noted that from last year’s offers prices went up10%. The newest offer is taken into account and calculations are up to date.

4 www.fas.usda.gov/gainfiles/200307/1459853522.pdf 5 www.google.com


6/21


MARKET PROFILE

TOTAL MARKET

World’s honey market productioncapacity increased over years, asobserved in the graphic depicted on theright side. In 2001 it accounted for1,263,000 tones of honey. The trend isascending. Romania produces only0.8% of the total world’s honey production.

The European market, especially the EU accounted for 135,000 tones only in imports from differentcountries. The biggest EU importer is Germany. German imports rise up to 60 % of all the Union’simports.

Other big importers of honey arethe United Kingdom, Italy andSpain. China, Argentina andMexico are the main suppliers ofhoney supplies, Romania being the

7

th

in this hierarchy.

Romanian total honey production isincreasing over years as the depictedgraphic shows. In the year 2000Romanian beekeepers produced11,746 tones, that represent a 16%growth compared to 1998.

The southwest region of Romania,where ApiHoney will be located had produced 17% of the total honey production. The number of beehivesin Olt County represents 15 % of thesouthwest region’s total. Graphics are shown in the Appendix A.


7/21


TARGET MARKET

Germany has the biggest imports among all EU countries, approximately 60% of the total EU honeymarket. Germany imported in 2000 up to 92,000 tones; Romania provided 5.5% of the honeysupply.

The graph depicted on the right sideshows the sources of honeyGermany imported from, in the year2000. Argentina is the biggestexporter to Germany, Romania being the 4th with up to 7,500 tones,representing 7.5% of all imports.The Romanian exporters enjoy agood position and a large marketshare. In the year 2001 the situationchanged, Romania losing some market share. There is a good opportunity to continue exports toGermany, as the products are perceived as high quality.

Romania has exported honey supplies to Germany in 1999 up to 4,900 tones, the following yearrising up to 7,500 tones, as shown in the graph analysis (Appendix B) utilizing the month periods oftime. The peak is in October, when in only one month Romanian exporters sold honey in quantityof 1,700 tones.

As for the beginning the German market is targeted and when quantity for export and the skillsincrease other markets will be entered, such as UK, which is the second largest European honey

importer.

On the other hand, there’s a good opportunity on the domestic market, as Romanians are coming toknow the benefits of consuming healthy products, such as honey, and as the living standard willhopefully grow in next years the domestic market will absorb more and more honeybee products.

The Romanian consumption of honey inthe last three years6 is very low (100grams/ inhabitant), comparing with EUCountries (Germany - 1,5kg / inhabitant).Romanian export to EU countries

represents 80% of its total honey production.

The domestic market absorbsapproximate 2,300 tones of honeyannually.

6 www.google.com


8/21


COMPETITION

EXISTING COMPETITORS

The market for generic honey is highly competitive. Honey for the most part is marketed as an

undifferentiated product without specific separation, other than the grading required by the HoneyGrading Regulations. For most consumers honey is honey and as a result, price became the mostimportant issue. However, great potential exists for product identification and differentiation.

For the German market Romania’s main competitors are shown in the left table, in the other table being depicted some Romanian exporting companies, which we consider being our competitors forexternal markets.

Competitor country (% of German imports)

Argentina 29.54

Mexico 11.02

China 17.65Uruguay 3.88

Hungary 7.32

Cuba 1.84

Chile 3.44

Bulgaria 2.80

Turkey 3.86

Source: FAS

ApiHoney exporting competitors: County:

3 International B. Investment, Inc. Bucharest

Akybud Prod Ltd. Gorj

Complex Apicol, Inc. Bucharest Apis Prod Ltd. Alba

Gicofeny Impex Ltd. Dolj

Golden Nectar Romania Ltd. Bihor

Linpan Impex Ltd. Braila

Romaca Trading Ltd. Dolj

Zaro International Trading Ltd. Bucharest

Source: Romanian exporters database

ADVANTAGES AND DISADVANTAGES OF EXPORTING

ADVANTAGES

! Importers may pay premiums for honey of superior moisture and color! Importers may offer a premium to producers willing to wait for payment as this eases the

buyer’s cash flow needs! Producers have a sense of accomplishment for having found their own market and negotiated a

settlement price

DISAVANTAGES

! If problems arise, it may be too far and/ or expensive to go to sort them out! Paperwork is much greater than any other marketing alternative! Depends on knowledge and skills to market own honey! Requires current knowledge of world honey markets! Freight is typically paid by the seller (prices quoted DDU, buyer’s location)


9/21


COMPETITIVE POSITIONING

Following an appropriate capital injection, ApiHoney will enjoy a number of competitive advantages.

An objective audit of the project’s competitive position is as follows in the SWOT analysis:

On balance, it is seen that the potential strengths of the project are greater than the weaknesses and that

the opportunities outweigh threats.

STRENGTHS! good linkages with the honey suppliers ! consistent supply of good quality

honey

! relatively low prices for the honey

supplies from beekeepers

! an ideal climate for honey production

in the southern regions

! road access to the key regional markets

in Europe

! relatively low local labor costs

! strong practical experience in bee

keeping and honey production

WEAKNESSES

! limited contacts outside of the

Romanian market

! no current local supply of hives, frames

or foundations

! inexperienced management team

! inadequate honey supply at present

(which has constrained the company’smarketing)

OPPORTUNITIES! relatively weak local competition

! excellent overseas market potential for

high quality honeybee products

! domestic distributors that would market

the products all over Romania

! ongoing demand from external markets

! eagerness of local beekeepers to secureadditional cash income

! World Bank support for re-launching

the bee raising and honey production

! existing German offers to importApiHoney’s products

THREATS

! ! CA (Association of apiarists) is

working on disposing comercial honeyintermediares

! possibility of new, efficient competitor

establishing in the Scornicesti area

! inadequate extension services by

ApiHoney that leads to inconsistentsupply or disease/pests in the hives


10/21


11/21


PRICING STRATEGY

The pricing strategy for the domestic market will be based on offering a quality product at a fair price.With the improved packaging and labeling, this will be an attractive offer to the supermarket chains.

Honey sales on the domestic market will be quoted at USD 3.50 – USD 3.60 per kg.. The packagingcosts are included.

Export sales will be quoted on a different basis. While exports will be in bulk quantities, the overseascustomers would be prepared to pay up to USD 3.40 - USD 3.50 per kg. DDU.

Sales to the importers in Europe will be on a 30 days account basis.

K EY SUCCESS FACTORS

The key success factors, that will ensure a successful expansion of ApiHoney’s business in Scornicesti

area and Romania are as follows:

! Ensuring increased and reliable supplies of honey through an extension service to the suppliers

! Developing increased production facilities and the maintenance of high quality assurance procedures

! Introduction of improved retail packaging and labeling

With sufficient financial support and professional management, all of these key success factors can be assured and a profitable long-term business is developed.

PRODUCT

THE PRODUCT

Bee keeping has been carried out on in Romania for centuries, but the industry still has a high potential for further development. Initially, honey production was and remains an important sourceof revenue. In the most recent times, the pollination of specific fruits and field crops has becomeincreasingly important; Romania having good locations for maximizing bee’s production potential.

ApiHoney will offer to the domestic market and for export high quality honeybee products such as:honey (extracted, comb and chunk), wax and bee glue.

Honey:

! extracted honey: bottled, liquid honey that has been extracted from the combs. Extracted honeycan be used as a coloring agent, for example bread, or as a dressings fruit beverages, glazes,

spreads and jellies, frozen deserts, baked goods and low – fat snacks.! comb honey: honey still in its natural comb! chunk honey: a bottled combination of extracted and comb.Wax: can be used for candles, furniture polishes, wood finishes, in cosmetics etc.Bee glue: is becoming widely known and accepted as an ingredient in cosmetics, body creams, lip

balms, pharmaceutical product and even as a tonic, etc.


12/21


PRODUCT STRATEGY

ApiHoney’s product strategy will concentrate on the following:

! The maintenance of high quality, pure honey! Development of different retail packaging options (including a clear plastic bottle for the smaller

retailers and jars of 200 to 800 ml (350 grams to 1200 grams)! Provision of 300 kg. metal drums for bulk sales to the commercial customers

A better quality retail pack is required to secure volume sales to the distributor; professional labels beingessential and required, too.

The main elements of the product strategy will be the development of a reliable supply chain andconsistently high quality production. This will sustain our competitive advantage over our localcompetitors.

Honey is composed primarily of the sugars glucose and fructose; its third greatest component iswater. Honey also contains numerous types of sugars, as well as acids, proteins and minerals.

Carbohydrate Composition of Honey

Carbohydrate in Honey Average Range Standard Deviation

Fructose (%) 38.38 30.91-44.26 1.770

Glucose (%) 30.31 22.89-40.75 3.040

Reducing Sugars (%) 76.65 61.39-83.72 2.760

Sucrose (%) 1.31 0.25-7.57 0.870

Fructose/Glucose Ratio 1.23 0.76-1.86 0.126

www.nhb.org

The U.S. Department of Agriculture classifies honey into seven color categories:

! Water white! Extra white! White! Extra light amber! Amber! Dark amber

Color is an important characteristic of which honey is classified by honey producers, packers, andend-users. As this plan considers natural Romanian honey it was considered that average

calculations would be made, without detailing all types of honey ApiHoney will be operating with.


13/21


OPERATIONS

OVERALL OBJECTIVES

ApiHoney’s objective is to develop a reliable system that can permit bee-keeping and bee suppliescollection, processing and distribution, enabling Romanian beekeepers market their production andgrowing profitable from year to year.

THE STRATEGY

ApiHoney will utilize its own production equipment (pavilions with 40 beehives each, extractors,facility etc.) controlled by experienced beekeepers. Also we will collect high quality honeybeesupplies from partner beekeepers offering them a fair price. The internal production and thecollected supplies will be delivered to the target markets in the requested forms.

FLOW OF OPERATIONS PROJECTED

The main operations are that of bee keeping, extracting, collecting, processing, packing, distributingand exporting bee products. A flowchart is depicted in the Appendix.

The products will be packed in the required form (as seen in the products segment). At first no packing machine is utilized, only when the quantity of products to be packed exceeds 5 tones/year,such machine will be purchased. Until that quantity is reached, the operations employee will do the packing manually. He will heat the honey no more than 40 degrees Celsius and then pour it in jarsone by one, weighting them on the electronic scale.The products already packed or bottled will be deposited in the warehouse.

When term of delivery is due the goods will be delivered to the buyer by the hired truck, either to

the importer in DDU terms or to the domestic wholesaler.

The internal production is described as follows:

! the purchased pavilions (40 beehives each) will be placed in strategic locations in Romania, inorder to offer a proper environment to maximize bees’ potential (areas reach in flowers)

! the pavilions will be taken to the desired locations by a hired truck/tractor! the full time employee (experienced beekeeper) will be responsible for the pavilion(s) during its’

placement! in the extraction period we will hire one seasonal employee in order to help in the extraction

process! at the end of the first extraction period a hired truck/tractor will take the pavilion(s) to another

location and bring the extracted honey to the facility (in 25 liters drums ~ 37.5 kg each)! at the end of the last extraction and placement, the hired truck will bring the pavilion back and

the extracted honey to the facility


14/21


The honey supply collection process is described as follows:! selective advertising in the daily press to promote ApiHoney and its’ operations! honey supplies will be brought to ApiHoney’s facility by its producers in 25 liters drums,

payment being cash or in 30 days

Bottling process:! both internal production and collected supplies will be deposited and bottled at the facility

A chart is found in the Appendix C, it shows the main processes utilized in the company.

FACILITY AND EQUIPMENT PROJECTED

ApiHoney will function in its facility, placed in Bircii. The estimated rent is USD 100 per month,while the set-up for enabling operations will take about 2 months. The operating employee willwork along with the director at the facility. There will be an office with a workstation, fax andtelephone. The costs are up to USD 1,000.

Other equipment required includes 6 equipped pavilions, each having 40 beehives, 2 extractors andsmokers and other bee keeping specific tools. The director will be provided with a mobile phone.

COST OF OPERATIONS

Costs of operation – production, collecting and distribution costs - includes:! employees’ wages for full time beekeepers and seasonal employee as well for the operating

employee! pavilions and beehives! specific equipment! hire of truck/tractor to relocate pavilions! purchase of supplies! packaging, labeling and warehousing! hire transportation to the external customerCost of operations is estimated at 61 % of revenues.

External market:- in the first year, honey is exported in 200

liters metal drums (~ 350 kg.) meetingsanitary and export standards (includinglabels and export papers)

- when the quantity requested by theimporter is met, ApiHoney will outsourcetransportation to a Romanian truckingcompany

- the products will be transported to thecustomer’s store, DDU term

- payment due in 30 days

DDU – Delivered Duty Unpaid – destinationcustoms duty and taxes are paid by thecustomer

Domestic market:- ApiHoney will hire a full time employee

to prepare and pack the honey in jars(200ml, 400ml, 800ml)

- the contracted distribution company will purchase ApiHoney’s products EXW, payment due in 30 days

ExW – Ex Works – the customer will get the products at the point of origin (facility)


15/21


HUMAN RESOURCES

STAFFING PROJECTED

ApiHoney will start with only one employee: the director whom will incorporate the company,locate the facility and purchase equipment along with employing the staff projected. By the end ofthe year ApiHoney will have a director, one operating employee and one beekeeper.

Staff will increase to 4 in the second year, at the end of the third year being 5.

NUMBER OF EMPLOYEES PROJECTED

Year I Year II Year IIIPosition

Q1 Q2 Q3 Q4 H1 H2 H1 H2

Director 1 1 1 1 1 1 1 1

Operating - - 1 1 1 1 1 1

Beekeeper - 1 1 1 2 2 3 3

Seasonal - 1 1 - 2 2 3 3

Total full time 1 2 3 3 4 4 5 5

Total seasonal - 1 1 - 2 2 3 3

JOB DESCRIPTIONS

We will hire only suitable employees. In the following tables we describe the responsibilities andwhat is considered when hiring.

The director

The director may well be a management graduate in Griffiths Management School. It is required ofhim to have demonstrated that he/she has the ability to incorporate, start the business up and run itwith dedication. The graduate should be self-motivating, task and people oriented with abilities inmarketing, communication, accounting, finance and management. Emanuel University of Oradeahave produced successful future business leaders.

Responsibilities:

! run the business! take care of all economics and legal issues! implement marketing strategy! manage the employees and facility

To be considered when hiring:

! economics graduate or 3 yearsadministrative experience

! good relational skills

! economic thinking! PC literate! Driving license B! Basic accounting, public relations

knowledge! Strong marketing, HR and finance

knowledge


16/21


The beekeepers

The operations employee

The seasonal employees


! bee keeping experience! passionate in bee keeping! able to lift up to 50 kilograms! available to be away from home up to 4

months yearly ! trustworthy ! proactive attitude and decision making

Responsibilities:

! take good care of beehives and bees! collect honey from beehives! deposit the honey and deliver! direct seasonal employees! be away with the pavilion for up to 4

months yearly


! clean and careful with fragile things! able to lift up to 50 kilograms! trustworthy! able to make tests! decision making! proactive attitude

Responsibilities:

! run day to day activity! melt honey + fill jars up + put labels +

deposit! help downloading the supplies from the

truck! packing and depositing


! able to lift up to 50 kilograms! trustworthy! some experience in bee keeping! eager to succeed

Responsibilities:

! help beekeepers extract honey! be available for the extraction period! upload and download supplies


17/21


FINANCE

GENERAL ASSUMPTIONS

ApiHoney’s financial projections assume a 3 years growth plan, the first revenue stream coming inat the end of the first half of the first year of activity. Sales are constantly growing as the productioncapacity and the quantity collected increase.

The total investment would be up to 21,000$ and it’ll breakeven in the 2nd year. The initial cost ofincorporation is 500 USD, in the first year investments of 7,870 USD being made. The two streamsof revenue are the external and the domestic markets. The weight of exports will be 80 %. The firstrevenues are expected in 7 months after operations start.

ApiHoney will continually invest in production capacity, the second year doubling it and in the thirdyear the increase would be 50 % of the second’s year capacity.

The domestic honey market will gradually come closer to its potential and the external market willcontinue importing high quality honeybee products from other countries, Romania being oneexample.

The purchase price of the honey from partner beekeepers over the first three years will be around 2to 2.2 USD/kg.

Bulk purchases of packaging and labels will be required, enabling the company to meet the projected expenses in packaging.

NEED AND USE OF FUNDS

ApiHoney Ltd. will spend approximately USD 152,000 over the first three years of activity, phasedin USD 27,000 for the first year, USD 49,000 for the second and USD 76,000 for the third year.

Funds will be used in different destinations:

! purchase of equipment! expansion of the production capacity! administrative functioning of the facility and equipment! marketing implementation strategy

The table depicted shows the capital goods and operating capital expenses divided by years:

Category I II III

Capital Goods Expenses 2,341 3,983 4,517

Operating Capital Expenses 24,519 44,925 71,071

Total Expenses 26,859 48,908 75,587

The need for financing is as follows: a total of USD 16,500 would insure the smooth running of thecompany. The need for capital will be phased in three:

1st phase – first month (year I)

- USD 5,000 personal investment- USD 5,000 equity grant offered by Integra (no reimbursement required)

2nd phase – fourth month (year I)- USD 5,000 matching loan offered by Integra (assumed 3 years loan)


18/21


19/21


COST ASSUMPTIONS

The costs incurred in running the business are as follow:

! operations expenses are estimated at 61 % of total revenues! marketing expenses are estimated at 4.5 % of total expenses! administrative expenses are estimated at 4 % of total revenues

! taxes are 1.5 % of the total revenues, regardless of profit or loss

A graphical analysis of the outcomes and results of ApiHoney is depicted below.


20/21


SOURCES OF INFORMATION

Internet:

! www.google.com ! www.honey.com ! www.fas.usda.gov ! http://www.fao.org/docrep/V9631e/V9631e04.htm#a ! www.beemaid.com ! www.agric.gov.ab.ca ! www.beekeeping.com ! www.bloombiz.ro ! www.cnipmmr.ro/legislatie

Other sources:

! Romanian Statistical Book 2001! National Board of Small and Medium Size Enterprises of Romania (CNIPMMR)! Discussions with several Romanian beekeepers! Discussions with one honey collector! Bircii market research! Romanian Exporters Database! Emailed offers from two German honey importers! Apicultura Magazine


21/21

APPENDIX

Appendix A

Appendix B

apihoney business plan integra1

Documents