Rice brokerage firm

strain componentage tighten firm firmIntroduction and historical background d stark(a)ing description of proposed entrepreneurial fortuityThe enter into affection is a sift brokerage firm which is a service providing firm regarding marketing and stomach of sift to and from different traders and sift manufacturing plant owners. This firm pull up stakes serve as a middleman and do not require cloakment in purchasing sieve but this firm pull up stakes charge 0.5% mission from severally clouder and seller for a single transaction. The above said commission leave alone be charged on account of providing work to sift traders and strain submarine sandwich owners.Context of the organizationThe worry of sieve brokerage firm lies in the service constancy. The nature of sift brokerage firm is to facilitate stack related to strain assembly line to search for vendees and sellers of rice. This firm is aimed at providing best aim of service to the clients while pr oviding them nurture in wholly service they be seeking for. there is a huge demand of rice in Pakistan and solely around the world, and Pakistan produces enough rice to proper domestic rice needs and is able to export as intimately. Rice is an essential part of Pakistani meals, thats why consumer preferences is lock in at that place and they atomic number 18 ready to buy rice at prices that were never before. It is obvious that rice line of descent and its pains allow not end-up soft despite soaring rate of inflation. If domestic people eliminate rice from their lunch or dinner menu or switch to an opposite commodity, the global demand will still be in that location because people around world like Basmati which is a product of Pakistan. This means that origin of rice inwardly Pakistan seems to be a still growing business with profitable opportunities for entrepreneurs.To bear a start-up in the rice business, becoming a rice broker is a good option because trad e facilitator are ever at the safest edge of both business with a minimum investment of PKR 10,000/- (in this side).Brief history of the indus take heed dish industry is always there since the very start of every business in any industry. My firm is excessively in the service industry because this firm facilitates the clients transaction in same commodity, which is rice, to get information and availability of rice in the commercialize. When rice tarry owners process the rice obtained from landlords in raw form to the finished product, it is accordingly required to be supplied to wholesaler and other traders. To lessen the gap of conversation and to ease the supply of rice to different ends of the chain brokerage firms are required. And, much(prenominal) operate are demanded by many such like businesses to minimize overhead exists of different distribution convey.information virtu onlyy economy and different trendsRice is vital cash crop and is one of the major(ip) exp ort items of Pakistan. It accounted for 5.9 per centum of value added sector and 1.3 percent of GDP in FY09. Pakistan grows ample quantity of rice to meet its domestic requirements and also export the high tone of voice rice around the world. The production soared by a commendable 25 percent that helped Pakistan earn coatable foreign exchange revenue. Rice exports accounted for nearly 11.21 percent of total export receipts FY09 and growers have achieved a bumper production of rice (6.4 million tons) so far in this crop year. Rice harvest was signifi passeltly higher(prenominal) than estimated domestic consumption of 2.5 million tons as growers were encouraged by higher rice price in international market undermentioned imposition of ban on rice exports by competing countries.Current status of the rice brokerage firms either year Pakistan produces a decent quantity of rice and it contributes to major part of our country exports. Taking into consideration this fact, there are more and more people entering into this business because this business tin can be started with an investment of less than PKR 10,000/- and it is within the r each(prenominal) of common man nowadays. Another reason for the still growing business of rice brokerage is that there are wonderful growth opportunities and diversification of business in the field of exporting commodities to different parts of the world and there are examples of such happy people too in the present market have started from a commission agent to a successful rice exporter and rice mill owners, and hence successful entrepreneurs. So, people found this business very a good deal profitable and closely of people are still entering into this business.Aim of the serviceIt is reasonable to plead here that everybody in rice business expects to purchase and sell rice at his/her doorstep and there is a need to provide the service of brokerage firm to follow through that need. Most of the eras, it is difficult for ri ce mill owners to go into the market to search for buyers and it incurs a cost to that mill owners, so they prefer to fill brokers like us to search for buyers because those brokers have already contacts of buyers and their requirement in the market accordingly. This approach saves time and cost of every person involved in this business from rice mill owners to buyers to exporters.In crop to provide up-to-date information close to market prices of rice to traders and mill owners and to ease the process of clear-cut for buyers and sellers is surmised by me as a good opportunity to start a business with a ofttimes lesser investment and greater growth opportunities.List of services to be provided Up-to-date information astir(predicate) prices of rice to clients Quality check-up of rice existence bought and sold by client by randomly checking samples from the ring Making rice available to clients at best pricesSWOT analysis of rice brokerage businessStrengths dispirited inves tment Easy to operate ROI is highWeaknesses Ease of submission High competition Low sustainability No consonanceOpportunities Diversification International trade opportunitiesThreats Forward and backward integration by major players in the industryEase of entry into the business and competitor analysis on that point is a lot of competition in rice trade business because there is no barriers to entry this business. There is strong competition among all players in this business who provide brokerage services to rice traders as this can be through with(p) by anyone who can just coordinate between his/her clients. The only thing that matters in this area is trust and relationship piddleing. This can only be made stronger by providing credible services and delivering on promises you have made to your clients because this will be the only differentiating factor that will set you isolated from the competitors.However, there is a lack of value added services in the offerings of cur rent brokers in the market of rice business which creates a gap in the area of this business which can be filled by smart entrepreneurs by putting creative destruction into work. This could be a challenging as well as insecurityy task to stand out in competition in such business where most of the major players run their organization in typical solidifying-way, but when there is a risk there is an opportunity and if it is seen as an opportunity indeed an entrepreneur has through with(p) almost half of its work. cathexisTo serve rice buyers and sellers by continuing efforts in bringing clients the very best which is available forthwith and ease their process of prospecting. Providing them value in our services by satisfying their requirements of rice, meeting deadline of lead time, consulting them nearly changing business environment and placing emphasis on trading properly and making capital for clients. quite a littleTo become a leader in commodity brokerage firm business an d earn committedness of our clientele base by assisting them in becoming more successful in their commodity trading through continuous improvement in our services by first appearance, professionalism and integration.Management considerations ain expertiseStrengths bother seeker/ proactive Experience Believe in black and white Leadership skills Communication skills negotiator Ability to make fun oriented environment Straight prior Multi linguisticWeaknesses Cant hold Taking too much time in evaluating alternatives Do not socialize Straight forwardOrganizational designThe proposed design for the venture is organic because of the smaller size and continuously changing out of doors environment. This is so because the success of the business depends upon the person who is at front end with the client and that person should be given freedom to customize services according to clients needs coping up with the challenges of uncertain outside environment.Organizational culture Innovati on and risk taking is very high and it will enable us to outperform others in the present market situation There will be a high degree of emphasis on attention to detail to get work perfectly done because a little mistake can lose out our credibility High degree of outcome predilection is entailed within organizations culture to achieve objectives, milestones and vision People orientation will be optimal because ease up of this organization will be at front face from the very start of this business to build and maintain the customer base Team orientation is highly appreciated to carry out operations smoothly A blend of cooperative and competitive strategies will be used to sustain and win into the industry while embedding a bit of higher level of aggressiveness within organizations culture stableness within the organization will be optimal will be taking into account innovation and progress in order to imply a proactive approachStaffing requirementsA lawyer will be hired on annual basis for filing sales tax and income tax returns at the end of each fiscal year. Apart from this, a quality control checker will be employed at a monthly salary of PKR 10,000/- whose responsibility will be to check quality of rice being bought and sold by our clients and to assure them for timely delivery of that quality of rice as demanded by the clients.Operational management issuesThe quality of services offered to the clients should be maintained to avoid any letdown and shrinkage of customer base. Following dimensions of service quality are taken into consideration to maintain the consistency in our services Timeliness meeting deadlines of all clients Courtesy giving clients a wow fix Consistency same and even better quality of service every time Convenience providing all services at clients doorstep Completeness taking feedback after successful completion of each job verity never making client unhappy by doing and providing non professional servicesInventory management me thodsThere is no inventory management in the proposed venture because this venture provides no-goods services and do not invest in purchasing commodities, hence there is no inventory.Equipments requiredBasic equipments required for this venture are in the flesh(predicate) computer, printer, fax machine and telephone set.Marketing considerationsMarketing planIn the commodity brokerage business, there is a high need of marketing to let people know that a untested venture is established in this industry providing value added services other than the core activity of assisting and facilitating clients in buying and selling process of rice. The marketing of this firm focuses more on relationship building, communicating value and delivering on trustworthy promises to clients.Segmentation approachesDemographicIndustry typewriteThere are no barriers to entry in the rice industry because it is a commodity market which comes into the market every year with no limitations on purchasing and s elling this commodity. It is a still growing industry and people are still coming into this industry to settle their business. There are very least government restrictions on this industry because rice contribute to major part of our country exports.Company sizeDue to fewer barriers to entry, everybody heedless of what capital s/he has in the pocket can enter in this industry and can trade rice. Based on this fact, there are too many variations in company size. There are firms which supply rice to small scale retailers and there are firms which are rice mill owners and thumping scale exporters. The company size may vary from PKR 100,000/- to PKR 100 million worth of firm. mendAlmost all rice traders do their business in the area of New Chaali (behind I.I Chundrigarh road) and some of them are in Jodia Bazaar. Rice mills are situated throughout the province of Sind but they fulfill the requirements of nigh areas. The rice mills in the area of Gharo and Hyderabad are major supplie r of rice to Karachi. Most of the mill owners have offices in Karachi at the above said areas.Operating variablesTechnologyThere is no such technology employed as standard in the rice industry but different firms in this industry are using computer software to maintain their books of records, accounting, billing and other related activities. For a private limited company it is necessary to employ software to maintain operational and non-operational activities. For the rice mill owners, new mills are being set up with latest improved technology equipments/machinery to do rice processing in a more efficient and cost effective manner.client capabilitiesCustomer capabilities vary from customer to customer. The trade volume varies from 0.5 metric tons to tens of metric tons of rice. get approachesPurchasing segmentSome large scale rice trading firms have separate purchasing department which have a huge annual turnover as compared to others, while small scale traders do not have separate purchase department. Most of the firms in rice industry are seth owned and they run their business in a typical seth way. They are responsible for all buying and selling activities. However, accounting activities are assigned to other employees but activities such as purchasing, negotiation, making payments and collecting payments are done by seth himself.Purchasing policiesAlmost all buyers purchase rice on credit, there are very few who purchase on cash. In Pakistan rice industry, rice buyers make payments to the suppliers/sellers within 30 days but on an average the credit period may extend to 45 days.Purchasing criteriaThere is no specific purchasing criterion for buying rice. Rice is being bought and sold in the market in a much simpler way, just make a phone call to a broker, s/he will note down buyers requirements, the broker will arrange rice for the client and negotiate on payment terms and conditions with the buyer, receives advance amount of money to conform the deal, fi nalize the deal and supply the rice to buyers warehouse.Situational factorsUrgencyFor rice exporters, the concerned bank personnel, through which international letter of credit (ILOC) is opened and maintained by importer sitting abroad, checks the quality of rice being exported to assure whether the quality of rice meets the requirements of the importer. If those quality controllers reject the rice for not meeting the required quality, then in order to avoid disappointed customers and delayed shipments exporters rush to the rice market and rice brokers to fulfill the order of the importer. At this instance, targeting such exporters who make mistakes in performing quality control check of rice may be profitable for rice brokerage venture.Size of orderIf rice market locomote short of rice then every trader will buy rice to stock it and then sell at higher rates to make more profits. This is very critical moment in the market and most of the traders want to take advantage of such oppo rtunity, but such decision are based upon environmental scanning and quantity of rice exported versus domestic consumption and availability. In such scenario the size of order increases from normal orders that rice traders used to place for purchasing rice in normal situations.Personal characteristicBuyer-seller similarityThere are a lot of similar characteristics among the traders in the rice industry. A buyer wants to buy and a seller wants to sell and the business goes on. The basic similarity among them is that everybody has to agree upon a specific on going market rate.Attitude towards riskThere is no higher level of risk involved in the rice trade business because this is a commodity business. The rates of rice do fluctuate on daily basis but not at a higher level. The major increase in rates of rice occurs due to higher exports local/domestic market fall short of rice. Risk is involved when rice is sold at credit and buyer becomes defaulter in making payments to the supplier /seller. All rice traders are aware of risks involved in this business but they believe that trust is the key driving factor of this business and they trust each other despite of having knowledge of all risks involved.LoyaltyThere is no brand involved in the rice business to which lealty can be associated. Business people in this industry are loyal to traders who are providing best services to their clients rather than just selling rice which can be done by providing value in their services.Target market selection strategyThe rice brokerage venture will adapt full market coverage strategy to meet the needs of all traders of rice because no such customer group is identified in the market that do not want or need to buy or sell rice to run their business.Marketing mix strategiesService descriptionThe service to be provided by the proposed venture is to facilitate buyer and seller to look for each other, to fulfill their business needs of rice and making rice available for them at bes t prices so that they may run their business profitably. The service charges are 0.5% of the overall amount of the rice being bought and sold, which will be charged from each client for a single deal transaction. This venture also caters to the rice mill owners by helping them to look for potential buyers of their processed rice. The said venture will also provide its services to rice growers and so that farmers and landlords may sell rice to rice mill owners at best rates and after processing the rice will be passed on to different channels for furthering its supply into the market. According to product lifecycle, the rice brokerage business is at growth stage.PricingThe cost of service to be charged from clients is based on going-rate pricing strategy. This pricing strategy is chosen for this venture because all competitors in the rice brokerage service industry are charging same rate of commission from buyers and sellers, therefore premium pricing and other pricing strategies wil l not be feasible for this type of venture. The value that client will get after using our services will help us to build and maintain our clientele base through word of mouth marketing. At the initial stage, the most feasible pricing strategy will be going-rate pricing in order to survive and increase sales growth.PromotionAll the promotional strategies for this venture focus on partnering with clients, value added selling, consultative selling and building long term sustainable relationship with the clients. All advertising will be done by personal visits to buyers and sellers premises so that interpersonal relationships can be strengthened by personal selling.To make promotional activities strategies more effective, efficient and result oriented we will try to concentrate on customers, preparing ourselves for gathering information about competition, convince the clients about our services by providing guarantee and by delivering on the promises, offering benefits to the clients and handle objections of the clients by listening to them about our offered services which will help us to work on our services according to each client needs.PlaceOverall marketing strategyNowadays, business persons have become smart enough to opt for forward and backward integration. Traders buying and selling at large scale do not necessarily engage a rice broker for their trading operations. In such scenario, creating a place in the industry and market place can be a challenging and trivial task. To gain success, following strategies will be implemented for the business of rice brokerage business.Strategy 1Continuous visits to large and small scale rice traders for prospecting and give them information about advantages associated with services offered by a rice brokerage firm while providing them value in each service, cutting down costs in warehousing and storage of rice, making process of looking for buyers and sellers diffused and enabling them to meet each business entity annual revenue targets and turnover goals.Strategy 2Creating a database of all existing and potential clients to keep individuals up-to-date record of all previous transactions, their feedback about services they have received which will enable us to take corrective measures to further improve on strategy and level of service.TacticsRegularly monitoring and evaluating of current market activities and to take actions accordingly in order to survive in the challenging business environment.Legal considerations and business structureType of firmThe healthy form of entrepreneural venture into consideration is sole propreitorship because there are no complex legal requirements of establishing a rice brokerage venture. At the very start of establishing such service providing venture, we need a high level of direct control over operations and processes of business to convince and satisfy our clients about our services.Terms and conditions Goods are delivered at owners risk Seller of rice i snot responsible for any kind of acrid event regarding delivery of rice to buyers destination 50% of service charges, which is commission in this case, will be charged at the rate of 0.5% of trade amount from each party, and the rest will be paying(a) by the parties after successful execution and completion of the deal. Transportation charges are to be borne by the buyer Payment agreement will be carried out according to mutual understanding of both parties The broker itself is not responsible for quality of rice not meeting buyers quality needs and requirements. However, we will try our level best to assure our clients about delivery of rice of reqired quality as decided at the time of finalizing the dealBuyoutA successful entrepreneur is the person who plans for a good profitable future(a) and not forgetting to plan for coping up with challenges due to changing external environment. Therefore, in the worst case scenario if the propreitor end up doing business with heavy losses then it is easy to exit from this business by shutting down the firm. Despite increased effective tax rate, unlimited liability and difficulties in airlift funds, sole propreitorship form of organization still seems to be feasible for this venture.Legal documentsThe basic legal documents for a sole propreitor venture are National Tax take (NTN) Sales Tax Registration Number (STRN)Tax considerationsFinancial considerationsStartup costsSOURCES OF CAPITALOwners Investment (name and percent ownership) PKRRaj Kumar 100% ownership1,635,000 get Investment1,635,000 STARTUP EXPENSES neat Equipment List PKRFurniture (tables and chairs)15,000 Equipment (computer, printer, fax telephone) 18,650 Fixtures (fans and lighting) 7,000 Total Capital Equipment40,650 Location and Admin Expenses PKRterm of a contract15,000 Advance deposit 180,000 Telephone connection charges 600 Mobile phone 1,200 Stationary 2,580 Total Location and Admin Expenses199,380 ad and Promotional ExpensesPKRAdvertising10,0 00 Travel/entertainment 10,000 Total Advertising/Promotional Expenses20,000 Reserve for Contingencies20,000 Working Capital SUMMARY STATEMENTSources of Capital PKROwners investments1,635,000 Total Source of Funds1,635,000 Startup Expenses PKRCapital equipment 40,650 Location/ electric pig expenses 199,380 Advertising/promotional expenses 20,000 Contingency fund 20,000 Working capitalTotal Startup Expenses280,030