Introduction

Mushrooms are a type of fungi, which are consumed as food. Mushroom consumption and cultivation are old practices that started some thousands of years ago. It is known that mushroom is often viewed as an edible object right from the very life of human. It is classified as a chlorophyll-free plant and meat in vegetables and is present in loads of varieties with over 2000 variant categories of edible mushrooms.

Mushrooms have gained recognition in the food chain because they contribute nutrient supplements to the food and high medicinal value. Weather is a crucial factor driving the rise of mushrooms.

Generally, the span of crop production is done from mid-February to mid-May and from September to November by maintaining a temperature range of 22-25 Celcius. The compost preparation should begin in the first week of January and the second crop at the end of July.

Button mushrooms, oyster mushrooms, milky mushrooms, etc are grown to fit the climate of India. The button mushrooms are grown for business reasons. Milky and pink mushrooms are at the top in terms of taste, smell, protein, and medicinal properties in food products.

The ideal mushroom has high-quality proteins, nutrients, and a good share of vitamins. It’s the healthiest diet to shield the heart and nervous systems. Mushrooms are an effective and useful meal for all regardless of age. It is an appropriate tonic for anemia, particularly for pregnant women and children.

Scope of the project

The demand for mushrooms increases day by day, as the awareness of its benefits spreads among the educated. Starting your own business growing oyster/milky mushrooms for profit is fairly easy. Due to increased recognition of its medicinal and nutritional values, coupled with the realization of the income-generating potential of fungi through trade, the demand for mushrooms has been on the rise. The edibility of mushrooms depends on the absence of poisonous content and its desirable taste and aroma.

Being a rich source of nutrition and being fat, cholesterol, and gluten-free, and very low in sodium content; mushrooms are gaining popularity among health-conscious consumers. The global market for mushrooms was valued at $29,427.92 million in 2013. This market is projected to grow at a CAGR of 9.5% from 2014 to reach $50,036.12 million by 2021. Mushrooms have great export potential also.

Producing your own can be cheaper in the long run, but the start-up costs can be high. As there is a huge gap between demand and supply of mushrooms, its demand will not diminish and hence, the scope of the project is naturally high. The monsoon season is suitable for oyster mushrooms, the summer is good for the Milky mushroom. Lots of training centers, both in the public and private sectors provide training for the cultivation of mushrooms and their value addition at affordable cost.

Product / Services & process

The proposed products are: Spawn packets & Mushrooms

Mushroom Spawn

Mushroom spawn is the seed of mushrooms. It is any substance inoculated with mycelium used to grow mushrooms. The substances may be sterilized paddy grains, wheat, or maize. The spawn is usually packed in a polythene cover and a packet weighs 200-250 gm and costs Rs.30/- -Rs.40/-.

Oyster Mushroom

Pleurotus ostreatus, the oyster mushroom, is a common edible mushroom. The mushroom has a broad, fan or oyster-shaped cap spanning 5–25 cm; natural specimens range from white to gray or tan to dark-brown; the margin is inrolled when young, and is smooth and often somewhat lobed or wavy. The flesh is white, firm, and varies in thickness due to stipe arrangement. The gills of the mushroom is white to cream and descend on the stalk if present. It can be sold in retail and wholesale. Retail packets vary from 100gm to 500 gm. 200 gm packet is the most popular.

Milky Mushroom

Milky mushrooms (Calocybe indica) are warm loving mushroom species suitable for the subtropical and tropical climate types. Milky mushroom, otherwise known as summer mushroom, is a long-sized, white and attractive mushroom of India. It has some advantages over oyster mushroom as it is attractive in shape and colour. It is having a long shelf life of around one week, while the oyster mushroom usually perishes after one day at normal temperature.

Raw materials / Consumables

Paddy
Paddy straw
Spawn
Calcium Carbonate
LPG for sterilisation
Mother spawn
Spawn for milky & oyester mushrooms
PP cover
Formalin
Bavestin
Packing cover
Compost for casing
Dettol, stapler, pin, twain etc

Plant & Machinery / Equipments

Many equipments and machinery are required for the spawn and mushroom production. They include cooler, humidifier, inoculation chamber etc.

Sl No	Item	No
1	Mushroom storage cooler 300 liter-1	1
2	Rack 6' × 10' -5 Nos	1
3	Humidifier	1
4	Auto clave 175 lit	1
5	Thermo hydro meter	1
6	Inoculation Chamber	1
7	Inoculation Cabin-Fix Glass with frame + Labour charge-99 × 200	1
8	Door with glass 21 × 250	1
9	Inoculation needle	1
10	Table	1
11	Chair	LS
12	Gas stove	LS
13	Test tube	LS
14	Water tank-1	1
15	Motor .5 horse power –‘ Kera’	1
16	Shed wall covering with tarpaulin sheet & sack	LS
17	Container for sterilizing paddy straw	1
18	Collar for inoculation cabin	1
19	Exhaust fans -4 Nos.	4
20	Plumbing & Wiring including labour Charge	Ls
21	Sink	1
22	Rope	LS
23	Stump for hanging bed(Kattadikazha)	LS
24	Plastic drum 200 liter 4 Nos.	4
25	Sprayer 2 Nos.	2
26	Hose - 2 Nos	2
27	Harvesting Bucket 2 Nos.	2
28	Compost sterilizing for casing milky- cooker 15 liter	LS
29	Pot for boiling paddy 2 Nos	2
30	Net(Kannappa) 3 Nos	3
31	Tray for mixing calcium Carbonate 5 Nos.	5
32	Gas lamp for inoculation	1
33	Sealing Machine 10' -1	1
34	Compost tank 20' × 15'	1

Market potential & Strategy

The global mushroom sector size is projected to reach $50 billion within the next 7 years due to the massive demand for mushrooms from the past years. Mushrooms are expected to be proficient for nutrition as they produce minimal sodium and gluten material. Low fat and cholesterol quality is expected to result in increased customer perception of mushrooms.

Main mushroom products comprise shiitake, button, oyster as well as other items including paddy mushrooms, milky mushrooms, reishi mushrooms, and winter mushrooms. Oysters and milky mushrooms get a strong domestic demand.

The market could be additionally divided by its usage, which involves dried and refined groups. The demand for mushrooms in the processing industry has increased considerably in recent years. Processed mushrooms are sold as canned, dried, and frozen. Apart from these types, processed mushrooms could include pickled mushrooms, dried mushrooms, and mushroom sauces.

Marketing Strategy

The Oyster and Milky mushroom have very much demand in the domestic as well as export market. As the public is highly aware of the nutritional and medicinal value of mushrooms, the rate of consumption has incredibly increased. The availability is the only problem. The promoter has a clear strategy to market the products through the following means:

Distribute in all vegetable shops in 200 gm packets
Distribute in supermarkets in attractive packets
Sale in government offices and schools
Sale through online web portals
Sale through exhibitions

The spawn can be sold to the small-scale mushroom cultivators in the district. Quality spawns have always a demand in the market.

Project at a glance

Name & Address of Unit

Mushroom Farm

Address

Details of unit

Email	:	[email protected]
Phone	:	00000
Constitution	:	Proprietership
Total project cost	:	*******
Fixed Capital	:	*******
Working Capital	:	*******
Total Bank loan	:	*******
Promoter(s) contribution	:	*******
Term loan	:	*******
Working capital loan	:	*******

Name & address of promoter(s)

Name		: Your name
Address		: Address
Phone		: 00000
Designation		: proprietor
E-mail		: [email protected]

Project Feasibility Ratios

Debt Service Coverage Ratio (Average)

:1.87

Current ratio (Average)

:2.63

	Year 1	Year 2	Year 3	Year 4	Year 5
Current ratio	1.53	2.06	2.62	3.19	3.76
Quick ratio	1.13	1.56	2.10	2.64	3.18
Interest coverage ratio	3.87	5.55	7.00	9.48	14.71
Debt equity ratio	2.863	2.080	1.528	1.020	0.542
TOL/TNW	3.02	1.45	0.79	0.43	0.21
DSCR	1.65	1.86	1.90	1.94	1.97
Gross profit Sales Percentage %	29.23 %	28.54 %	28.18 %	27.86 %	27.50 %
Net profit Sales Percentage %	10.84 %	10.56 %	11.10 %	11.57 %	11.90 %
BEP in % of installed capacity %	49.90 %	27.12 %	27.12 %	27.12 %	27.12 %
BEP in sales of Rs	2,620,800.00	1,840,695.65	1,972,173.91	2,103,652.17	2,235,130.43
Return On Capital Employed	0.26	0.34	0.34	0.33	0.33

Project Feasibility graph

Net profit Sales %

Quick ratio

Revenue v/s Expense

Expense Splitup

Project Cost

Sl. no	Item	Amount Rs
1	Building set up	*******
2	Cooler & humidifyer	*******
3	Machineryfor spawn production	*******
4	Electrification	*******
5	Preliminary expenses	*******
6	Working Capital	*******
	Total	*******

Working Capital Computation

Sl. no	Item	Amount Rs
1	Consumables / stock in hand	*******
2	Work in progress	*******
3	Finished goods	*******
4	Working expense.	*******
5	Receivables/Sundry debtors	*******
6	Payables	*******
7	Total working capital	*******
8	Own Contribution	*******
9	Working capital loan	*******

Annual Sales / Revenue

Sl. no	Item	Rate		Quantity	Unit	Total Rs
1	Oyester mushroom	*******	X	840	Kilogram	*******
2	Milky mushroom	*******	X	1560	Kilogram	*******
3	Spawn sales	*******	X	3000	Kilogram	*******
	Total					*******

Total Yearly Expense

Sl. no	Item	Amount Rs
1	Electricity	*******
2	Raw materials	*******
3	Wages	*******
4	Marketing commission	*******
5	Marketing/Advertisement	*******
	Total	*******

Application of Fund

Sl. no	Item	Subsidy %	No.	Rate	Amount Rs
1	Building set up	*******	1	*******	*******
2	Cooler & humidifyer	*******	1	*******	*******
3	Machineryfor spawn production	*******	1	*******	*******
4	Electrification	*******	1	*******	*******
5	Preliminary expenses	*******	1	*******	*******
	Total Investment				*******
	Total Subsidy				*******
	Net Investment				*******

Means of Finance

Sl. no	Item	Amount
1	Term Loan	*******
2	Working capital Loan	*******
3	Total loan	*******
4	Term Loan contribution	*******
5	Working capital contribution	*******

Profitability Statement

		Year 1(!*)	Year 2	Year 3	Year 4	Year 5
Revenue from operation
Sales	15.93	*****	*****	*****	*****	*****
Add :
Closing stock		*****	*****	*****	*****	*****
Total		*****	*****	*****	*****	*****
Less :
Opening stock		*****	*****	*****	*****	*****
Stock purchase	7.20	*****	*****	*****	*****	*****
Salary	3.60	*****	*****	*****	*****	*****
Repairs and maintenance charges	0.24	*****	*****	*****	*****	*****
gas	0.12	*****	*****	*****	*****	*****
ELECTRICITY bill	0.12	*****	*****	*****	*****	*****
Total		*****	*****	*****	*****	*****
Gross profit		*****	*****	*****	*****	*****
Less :
Rent	0.12	*****	*****	*****	*****	*****
Telephone/Postal &internet charge	0.12	*****	*****	*****	*****	*****
Total		*****	0*****	*****	*****	*****
Depreciation		*****	*****	*****	*****	*****
Interest on TL		*****	*****	*****	*****	*****
Interest on WC		*****	*****	*****	*****	*****
Total		*****	*****	*****	*****	*****
Profit before tax		*****	*****	*****	*****	*****
Income Tax		*****	*****	*****	*****	*****
Profit after tax		*****	*****	*****	*****	*****

Cash flow statement

Cash Inflow	Pre operative period	Year 1	Year 2	Year 3	Year 4	Year 5
Capital	0.63	*****	*****	*****	*****	*****
Subsidy	*****	*****	*****	*****	*****	*****
Termloan	*****	*****	*****	*****	*****	*****
Profit before tax with interest	*****	*****	*****	*****	*****	*****
Increase in WC loan	*****	*****	*****	*****	*****	*****
Depreciation	*****	*****	*****	*****	*****	*****
Increase in Current liability	*****	*****	*****	*****	*****	*****
Total Cash Inflow	*****	*****	*****	*****	*****	*****
Cash Outflow
Fixed Assets	*****	*****	*****	*****	*****	*****
Increase in Current asset		*****	*****	*****	*****	*****
Interest on TL	*****	*****	*****	*****	*****	*****
Interest on WC	*****	*****	*****	*****	*****	*****
Income Tax	*****	*****	*****	*****	*****	*****
Decrease in Term loan		*****	*****	*****	*****	*****
Drawing	*****	*****	*****	*****	*****	*****
Total Cash Outflow	*****	*****	*****	*****	*****	*****
Opening balance	*****	*****	*****	*****	*****	*****
Net Cashflow	*****	*****	*****	*****	*****	*****
Closing balance	*****	*****	*****	*****	*****	*****

Balance sheet

Liability	Pre operative period	Year 1	Year 2	Year 3	Year 4	Year 5
A. Share holders funds
Capital	*****	*****	*****	*****	*****	*****
Reserve & Surplus	*****	*****	*****	*****	*****	*****
B.Non current Liabilities
Termloan	*****	*****	*****	*****	*****	*****
C.Current Liabilities
Working capital loan	*****	*****	*****	*****	*****	*****
Account payable		*****	*****	*****	*****	*****
Total Liability	*****	*****	*****	*****	*****	*****
Asset
A. Non current Assets
Fixed Assets	*****	*****	*****	*****	*****	*****
B. Current Assets
Inventory	*****	*****	*****	*****	*****	*****
Trade receivables	*****	*****	*****	*****	*****	*****
Cash and cash equivalence	*****	*****	*****	*****	*****	*****
Total Asset	*****	*****	*****	*****	*****	*****

Repayment of Term loan

Year	Installment	Outstanding at the beginning	Principal repayment	Interest	Amount paid	Outstanding at the end
1	1	*****	*****	*****	*****	*****
1	2	*****	*****	*****	*****	*****
1	3	*****	*****	*****	*****	*****
1	4	*****	*****	*****	*****	*****
1	5	*****	*****	*****	*****	*****
\|	\|	\|	\|	\|	\|	\|
\|	\|	\|	\|	\|	\|	\|
5	56	*****	*****	*****	*****	*****
5	57	*****	*****	*****	*****	*****
5	58	*****	*****	*****	*****	*****
5	59	*****	*****	*****	*****	*****
5	60	*****	*****	*****	*****	*****

Debt Service Coverage Ratio

Particulars	Year 1	Year 2	Year 3	Year 4	Year 5
Receipts
a).Net Profit	*****	*****	*****	*****	*****
b).Depreciation	*****	*****	*****	*****	0.30
c).Interest on termloan	*****	*****	*****	*****	*****
Total	*****	*****	*****	*****	*****
Repayments
a).Loan Principal	*****	*****	*****	*****	*****
b).Interest on termloan	*****	*****	*****	*****	*****
Total	*****	*****	*****	*****	*****
DSCR	*****	*****	*****	*****	*****

Depreciation

Particulars	Rate	Year 1	Year 2	Year 3	Year 4	Year 5
Building	*****	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Computers/ Printers /Photocopier/Electronic gadget	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Furniture & fixtures	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Racks & storage/Interior works	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
new item	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
new	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Air-conditioning	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Other investments	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Total less depreciation		*****	*****	*****	*****	*****
Total written down value		*****	*****	*****	*****	*****

Conclusion

The project as a whole describes the scope and viability of the Trading industry and mainly of the financial, technical and its market potential.The project guarantee sufficient fund to repay the loan and also give a good return on capital investment. When analyzing the social- economic impact, this project is able to generate an employment of 5 and above. It will cater the demand of Trading and thus helps the other business entities to increase the production and service which provide service and support to this industry. Thus more cyclic employment and livelihood generation. So in all ways, we can conclude the project is technically and socially viable and commercially sound too.

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