2016

Business Plan
NENEX INNOVATIONS
START
Team UP COMPANY

Sujan Chaudhary – Ideator, Hardware

Engineering/Product Designer

Miraj Basnet – Management

Rumesh Udash– Web/app developer, Ux/Ui

Designer
Table of Contents
1 Executive summary ............................................................................................... 3

2 Business Description ............................................................................................... 3

Mission Statement ....................................................................................... 6
Vision ......................................................................................................... 6
Objectives .................................................................................................... 6

Company Locations and Facilities ................................................................ 6

3 Products .............................................................................................................. 6
Product Description ...................................................................................... 6

4 Market Analysis ................................................................................................. 7

Industry Analysis ...........................................................................................................7

Market Segmentation ........................................................................................... 7

Target Market Strategy ................................................................................. 8

Competitor’s Analysis ......................................................................................... 8

5 Marketing Strategy ...........................................................................................8

Distribution Strategy ............................................................................................ 9

Pricing Strategy .................................................................................................... 9

Promotion strategy ............................................................................................... 9

6 Strategy and Implementation Summary ..................................................... 10

7 Organization and Management ................................................................. 12

8 Financial Projections .................................................................................... 13

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1. Executive summary

Contact Information: Agrimetrics

Name: Sujan Chaudhary Agrimetrics aims to optimize food productivity using Internet of
Title: Ideator/Founder things and android application featuring advisory dashboards on

Address: fertilizer, diseases control, crop management etc. It controls and

advices required needs of plants such as water, fertilizer etc.
Midbaneshwar, Kathmandu
Vision
Phone Number :
9843666504 Our vision is to be a prominent diversified agro business
through higher quality irrigation product, higher standard of
Email:[email protected]
service, creating values for the Nepalese economy.

Industry:
Problem
Agriculture IT
Nepal is an agro-based country whose 68% citizen still relies on
the agriculture as the major source of income but Nepal still
Development Stage:
struggles to produce an adequate supply of food for its citizens .
Start-up, Prototyping Nepal is an agrarian country but it has been able to irrigate
merely 38% of its total cultivable land. Traditional system does
Year founded: 2016 not help in proper growth of plant as nutrients value, water
required and other factors are not checked properly.
Funding Opportunity: Today, there are more than 7 billion people on the planet. By
[Rs. 3,375,500.00] 2050, we will need to feed more than 10 billion people,
requiring a 70% increase in global food production according to

Use of Proceeds: Food and Agriculture Organization.

Solution
[ 45% product development
In order to address these challenges our proposed solution
5% sales and marketing
optimizes the food production by using smart irrigation system.
10% operations
The irrigation system and smart phone app helps farmer to
40% other] remotely access the irrigation and monitoring of the farm. Our
app also helps farmers to make include when and how much to
irrigate a field, based on soil moisture data, weather predictions,
and crop health; and planting and harvesting decisions, based on
yield data or weather.

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 Business Model

Implementation Roadmap: How our business model works:

Idea Incubation Key partners: Irrigation Companies, National and

International companies working on development of agriculture
sector.

Key Resources: Design Engineer, Electronics Engineer and

Computer/IT Engineer, Agriculture Experts,Finance Manager.

Key activities: Application development, Product design and

manufacturing, packaging and marketing.

Customer segments: Commercialized Farmers and Home

Gardeners
Distribution channel: Agriculture Machinery Dealers,
Company website, Online stores, Social marketing.

Cost structure: Cost of raw materials, assembling cost,

packaging cost, hiring and marketing cost, app development
cost and website management

Revenue Streams: Sales of system, Subscription charge, Ad

revenue and premium features

Product & Technology

We will be a smart irrigation system based on Internet of

Things (IoT) which optimizes productivity by monitoring soil
moisture. We will also develop mobile app to display the status
of field.

Marketing and Sales Strategy

Partnership with irrigation companies.

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 Online and social media platform.
Promotion from Companies working on Agriculture sector.

Competition
The market has automation on irrigation system but none of
them utilize the Internet of things for controlling and
monitoring. Thus, there is very low competition.

Team
Sujan Chaudhary – Ideator/Hardware & Product designer
Miraj Basnet – Financial management
Rumesh Udash – Web/app developer , Ux/Ui designer

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2 Business Description
Nenex Innovations is a start-up company that will provide smart irrigation system. Nenex
Innovations will be a partnership, owned and operated by Sujan Chaudhary, Rumesh Udash and
Miraj Basnet. Mr. Chaudhary, Mr. Udash and Mr. Basnet are undergraduate students of Electronics
and Telecommunication Engineering, IT and BBA respectively.

Mission Statement
Our mission is to provide innovative, cost effective eco-friendly products, and services to the
market through a committed workforce and the adaptation of leading technologies.

Vision

Our vision is to be a prominent diversified agro business through higher quality of product, higher
standard of service, creating values for the Nepalese economy.

Objectives
 To optimize food productivity using proper irrigation system and providing Fertilizer
Advisory and Crop disease management.
 To provide personalized agriculture service to Nepali people.
 To gain customer loyalty by delivering high quality of product and services.

Company Locations and Facilities

The company will be set up in a rented house in Khumaltar, Lalitpur. There are a lot of agriculture
centers and farms in and around the Khumaltar area. This will help us keep our finger on the pulse of
agriculture sector of the country easily and conveniently.

3 Products
Nenex Innovations will sell smart irrigation systems and the agriculture productivity optimizing
technological solutions.

Product Description

Our major product will be Agrimetrics which is a smart phone controlled irrigation system.
It features Monitoring, Forecast, Smart Irrigation, Fertilizer Advisory, Diseases Control, and
Remote Control. We also have a timer automated irrigation system, which allows the user to
regulate the irrigation activity by means of a timer controller.

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 Benefits:

 Increases up to 30% of productivity with adequate irrigation and nutrition programs.

 Saves resources like water, energy and fertilizers.

 Continuously monitors your crop's conditions and avoids unnecessary visits to the
field.

 Helps you become more eco-friendly improving the product quality.

 Reduces de risk of production loss because of diseases and bad weather.

 Saves time and money, gives you comfort and safety.

4 Market Analysis

We divided our market group into two large groups. Those groups are commercialized
farmers and individuals. And one being smart phone user and non-smart phone user. 68% of
the population of Nepal are engaged in farming. We will be targeting commercial farmers
who have a smart phone and internet access. 11.25 million Population of Nepal are using
internet services.

Industry Analysis

Agriculture is a key sector in the Nepalese economy with about 68% of Nepal’s population
employed in the agriculture and forestry sector, accounting for 34% of GDP. It is a blooming
industry with demand for agriculture products increasing at increasing rate. In order to meet
this requirement a need has been felt among the farmers to have an advanced technologies in
agriculture sector. There has been a gradual increase of late in the number of companies in
the industries which are trying to deliver newer technological solutions to the existing
agriculture problems. Some of them are Nimbus pvt .ltd, Nepal Thopa Sichai Pvt .Ltd,
MAHA Agriculture Pvt. Ltd etc

Market Segmentation

Market segmentation for our product has been done based on the following two criteria.

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1. On the basis of Topography

We seek to reach out to those places of Nepal where there is an acute shortage of water.
Mainly the hilly and the mountain regions of Nepal where the inherent geographical
features make irrigation difficult will be our main target markets.

1. On the basis of Demography

We are also targeting those places where a significant percentage of the total population
is engaged in commercialized agriculture. Dhading, Chitwan, kavre, Lalitpur, Bhaktapur
etc are some of our target markets on the basis of percentage of population involved in
agriculture.

2. On the basis of Internet users

The internet users make the major part of the customer base for our product. Our product
is aimed at all those farmers who are familiar with the use of internet. Moreover the
people who needs automation farming system make our target market.

Target Market Strategy

First of all, we will be targeting two districts Lalitpur, Bhaktapur and Kavre. There is large
numbers of growing commercialized farmers in these districts. This target market strategy
will let us serve the large size of the market and there is prospect of growth in the market
size in the near future.

Competitor’s Analysis

Nepal drip irrigation Pvt. Ltd, Nimbus Pvt. Ltd, MAHA Agriculture Pvt. Ltd, G-seven
Agriculture pvt.ltd etc are our direct competitors. They are all well established companies
spread in different parts of Nepal through branches and possess a big share of the market.

Marketing Strategy
We prefer one to one to one marketing in order to build substantial relationship with
customers. We will assign our ad on reputed websites of agriculture companies, growing
agriculture smart phone apps. Similarly, we will promote our product though different
NGO’S who are working for development in agriculture sector.

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SWOT Analysis

 Continuously monitors your crop’s

conditions and avoids unnecessary
visits to the field.  Expensive on installation.
 Controlled irrigation system.  Import of technical equipment.
 Fertilizer, Disease advisory
dashboard.
 In line with Sustainable
development goals of UN.

S W
O T
 Growing number of
commercialized farmers.
 Availability of Internet users.
 Subsidy’s from government of
 Customer’s adaptability.
Nepal.
 Novel concept of Farming.  Security problems.
 Dedicated team.  Market competitors.
 Saves resources like water, energy
and fertilizers.

Distribution Strategy
We will be distributing our product from our own website, Facebook pages, direct sales,
Agriculture machinery dealers, and wholesalers.

Pricing Strategy

Nenex Innovations will deliver following products:

 Agrimetrics in RS.8000

 Timer Controlled Irrigation in Rs.3500

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 Promotion strategy
We will assign our ad on reputed websites of agriculture companies, growing agriculture
android/ios apps. Similarly, we will promote our product through different NGO’S who are
working for development agriculture system.

5 Strategy and Implementation Summary

Marketing Plan

Current demand in target market: When we discussed our idea to a few Agriculture experts and
scientist on our recent visit to the Nepal Agriculture and Research Center(NARC),Khumaltar,
Lalitpur. They seemed positive about the idea and also encouraged us to implement it as soon as
possible. We also discussed our idea with a few commercialized farmers and they were also equally
positive about our idea.

Growth potential and opportunity for business: With growing penetration of internet and
smartphones in large cities as well as in the rural setup of the country, their use in the agriculture
sector can be expected to grow exponentially. Rough estimates show that more than half of Nepal’s
population will be living in urban and peri-urban areas by the year 2020. With increasing population,
traditional agricultural systems in urban and peri-urban areas are changing and agriculture in and
around the urban areas is becoming more market oriented compared to subsistence oriented rural
agriculture.

Barriers for implementation

 High installation costs

 High Minimum Viable Product (MVP) cost
 Shipping cost

The following can be done in order to overcome the barriers:

 We would start accumulating funds from friends and family. Considering the capital cost is
rather high, this source may not fully meet the capital requirement and we would use other
sources of financing like investments, loans, etc.
 An effort would be made to minimize the shipping cost through negotiation with the Indian,
Chinese manufacturer and suppliers.

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Marketing Mix

Product Promotion
Features and Benefits We will be using gorilla marketing strategy
 Controlled Irrigation System in our starting phase through means of:
 Wi-Fi Enabled  Online marketing via Facebook,
 Real time status of your field Twitter, YouTube
 Disease and Pest Management, Crop  International and national
Management organization working on agriculture
sector
 Partnership with irrigation companies
 Recommendation by
NARC,PACT,DADO etc

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6 Organization and Management

Nenex Innovations will be a partnership, owned and operated by Sujan Chaudhary, Rumesh
Udash and Miraj Basnet. We need two sales and marketing person to promote our business.

CEO

Production Marketing Financial

Department Department Department(1)

Engineers Software Sales and Research &

(2) Developers(1) Marketing(2) Development

Figure 1: Organization and Management

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8 Financial Projections

Sales Revenue at 100% Capacity

Product unit sales rate total
Agrimetrics Pc 3000 8000 24,000,000.00
Timer control Pc 3000 3500 10,500,000.00
Total 6000 34,500,000.00

Total Capital Investment

Fixed asset
1,400,000.00
Working capital
1,975,500.00
Total investment
3,375,500.00

Means of Finance
Promoters contribution
1,547,750.00
Short term loan @ 12 % interest
987,750.00
Long term loan @12% interest
840,000.00
Total
3,375,500.00

Plant, machinery and Office Setup

Description Quantity Rate Total

Soldering machine 1 200,000.00 200,000.00

Etching maching
(PCB) 1 100,000.00 100,000.00

Tools 1 100,000.00 100,000.00

Office equipment 1 1,000,000.00 1,000,000.00

Total 1,400,000.00

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 Salary and Wages (per Month)
Designation Salary No. Total
General Manager 1
35,000.0 35,000.0
technical sub engineers 2
25,000.0 50,000.0
software developers 1
30,000.0 30,000.0
Admin and Finance Officer 1
20,000.0 20,000.0
Officer (procurement, Sales) 4
20,000.0 80,000.0
Office Assistant 1
10,000.0 10,000.0
Total
225,000.0

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Raw Material (per month)
Particular Quantity Rate Total
IOT modules 5000
250.0 1,250,000.00
micro controler 500
500.0 250,000.00
wires 15
500.0 7,500.00
product cover 25
500.0 12,500.00
nut plug 100
500.0 50,000.00
solding wire (kg) 10000
4.0 40,000.00
Glue 15
200.0 3,000.00
cupper sheet 300
125.0 37,500.00
packaging material 40
500.0 20,000.00

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Income Statement

year 1 year 2 year 3 year 4 year 5

Particulars at 100 % capability
capacity Utilization 30% 50% 90% 90% 90%
Sales revenue per year 34,500,000.00 10350000 17,250,000.00 31,050,000.00 31,050,000.00 34,500,000.00
Expenses
Raw material 20,046,000.00 6013800 10023000 18041400 18041400 20046000
Utilities 60,000.00 18000 30000 54000 54000 60000
Salaries and Wages 2,700,000.00 2,700,000.00 2700000 2700000 2700000 2700000
Other Contingent Expenses 900,000.00 900,000.00 900000 900000 900000 900000
Total Expenses 23,706,000.00 9,631,800.00 13,653,000.00 21,695,400.00 21,695,400.00 23,706,000.00
Gross profit 10,794,000.00 718,200.00 3,597,000.00 9,354,600.00 9,354,600.00 10,794,000.00
Depreciation 350,000.00 350,000.00 350,000.00 350,000.00 350,000.00 350,000.00
PBIT 10,444,000.00 368,200.00 3,247,000.00 9,004,600.00 9,004,600.00 10,444,000.00
Interest @12% 219,330.00 219,330.00 219,330.00 219,330.00 219,330.00 219,330.00
Net Profit before tax 10,224,670.00 148,870.00 3,027,670.00 8,785,270.00 8,785,270.00 10,224,670.00
Income Tax @25% 2,556,167.50 37,217.50 756,917.50 2,196,317.50 2,196,317.50 2,556,167.50
Net Profit After Tax 7,668,502.50 111,652.50 2,270,752.50 6,588,952.50 6,588,952.50 7,668,502.50
2,382,405.00 8,859,705.00 13,177,905.00 14,257,455.00