Florex as an exporting company, we had to mainly concern about the aspect of ‘production cost’ and it was a real challenge for us in our business. As we know the production cost cannot be explained or identified in minor scale because, it plays the main role of any business. In our business, the production consists of growing (cultivating) and marinating the stability of the production. Not like other businesses our business needs special attention and participation to take care of our products, especially ‘seeds, on growing stem flowers, etc.’
As we planned in our business, we would use our own inherited land for our main office in Battaramulla which creates easy transporting methods as it is located near to Colombo Harbour etc. Further, that land and the building would be a great advantage for us in managing our limited resources and it saved our investment on another building and land for our main office..
Land Cost Moreover, our next challenge would be to select and buy a land which would be appropriate for cultivation. As to fulfil that aspect, we decided to buy the land for building the nursery in hill country, where there has a good climate conditions, high water supply and the soil which suits for the floriculture.
We have identified that it’s essential to buy a land which has an elevation about 1300m and the temperature should be around 10*c - 17*c in all 12 months of the year. We also found that there should be a humidity around 40% - 70%. It was really tough task for us to find a land which consists fulfil those requirements. But, after a long survey we could find a great location for our nursery in Uva Province. The exact place was in Boralanda area in Badulla District.
Why we chose the land in Boralanda for our nursery:
· It’s located in the hill country where has a cool climate around 13*c-17*c.
· The humidity is around 45% - 75%.
· The exact land was pre-cultivated land
· The soil is 100% matching with our purpose.
· The land consists of spring water
· The land is near to Bandarawela – Haputale main road which makes transportation more efficient.
Estimations for the land We have decided to buy the land with 160 perch and it would be equal to 1 acre in land. This space would give us a great opportunity to build our nursery by using the spare space too. Because, our nursery would build only within 150 acre of land and the rest would use to build a moderate ware house.
Price per perch in Boralanda Rs: 40,000
1 acre = 160 perch
Rs: 40,000 * 160 = Cost per acre
Rs: 40,000 * 160 = Rs: 6,400,000/- Nearly 6.5millions
Land cost total – Rs: 6.5 million
Other costs
The Snap & Grow 6’ x 8’ small greenhouse system
As we are focusing on cost effective methods in our flower productions, we have identified that it’s cost effective and timely effective to use separate greenhouse shelving systems instead of using one large green house construction. This would save our cost on construction process and this would create great space for our labourers to cultivate our products in separately without any trouble.
The Snap & Grow 6’ x 8’ model is the perfect small greenhouse for us as for our study in the international market. And with its compact size, it won’t take up room that is needed by flowers and other plants. The 6’ x 8’ greenhouse is assembled with a simple system that makes it easy to put it together. There are no complicated tools needed, and the window panes themselves come already assembled. With the durable, all-weather materials that make up this Snap & Grow greenhouse, there is no worrying about the effects of heavy rain, frost or even what will happen to the greenhouse during a storm as we located in hill country weather conditions. Also the polycarbonate panes won’t break like glass. That makes the greenhouse a worry-free place to our business even in the worst weather conditions.
This 6’ x 8’ model provides an enormous amount of free room inside. This greenhouse’s nearly 50 square feet of space is more than enough room for the free Galvanized Potting Bench that we are planning to use inside the green houses and it provides plenty of room for thousands of flower plants. And with 6’ to 8’ of free room inside, it provides a roomy interior for even for the tallest flowers to grow freely. There is plenty space for tools, pots, seeds and all of the small gardening tools that our labourers needs to be able to access easily when the gardening arises. So, they won’t have trouble or collusions regarding the flower cultivation because, they will have separate tools, seeds and other accessories for separate greenhouse shelving’s.
In addition, we would use potting benches to use inside our greenhouse shelving system and it would create a well-organized growing space. Also, that would create a good chance to take the maximum use out of the land instead of cultivating 10 stem flowers in 2m*2m square meter space. In this system we assume that we would be able to use 2*2 square meter space to grow 100 stem flowers in potting benches.
Potting tables are suspended from the steel frame of the shelving system itself. This means that the Potting Table does not reduce the amount of growing space inside the shelving system. In addition the table itself is hinged which means when ‘potting up’ or ‘pricking out’ type work is completed in the spring the table can be hinged up so the ground below can be fully cultivated.
The table itself is 1.94m x 0.7m (6’4’’ x 2’3’’) and is made from a steel galvanized frame with wooden inserted slats.
Potting Benches/Tables
Material Cost Per Unit/ Rs Total Units Total Costs
Snap&Grow kit Rs. 60,000 200 Rs.1,200,000
Potting Benches/ Rs.17,000 100 Rs.1,700,000
Tables
Seeds costs & wholesale buying cost As for our business plan we are focusing on buying wholesale flower products from other companies and that would help us to identify and get a clear understanding about the market structure. Our main aim of this is to get an understanding about the demand factor. We suppose that would help us to produce the flowers in future more effectively and efficiently.
According to our plan, within the first six months, we are going to buy the flower categories which are “cut flowers, stem flowers and potted flowers” from other companies like “ Hayley’s agriculture and Ramya Floriculture”. Our main market would be the local market in first six months and while that we would try to export to our target market which is the Melbourne market. So, within the first quarter of our business, we we would buy product and sell them with competitive price and our main achievement would be to establish in the market while creating a well recognition for our FLOREX brand.
In that process we would, export a quota of flower products to Melbourne once a month and our established dealer would distribute them to the Melbourne flower market. This would be a real market study for us and we would decide which product out of “foliage, stem flowers, cut flowers or potted flowers” would have the greater demand.
At the end period of our first six month period, we would plant our products by using the imported seeds and it would be the most cost effective way for us in regards this. Why we chose to import seeds is that, the other companies “Hayley’s agriculture and Ramya floriculture” etc. would not supply us the most productive seeds as we will become another competitive company for them. Moreover, we don’t think that they would supply us the ‘quality’ seeds for us and it would be the most concerning aspect of our future business. As we are planning to cultivate most efficient and quality flowers, what we need at first is to maintain a good seed bank with ourselves. As a strategy to avoid less quality seeds from local companies, we decided to import high quality seeds from well-recognized Singaporean company and they have already agreed with us to supply the seeds without any shipping cost. Moreover, their cost per seed quota is cheaper than the other companies and this would be a great advantage for us in targeting cost effective business methods.
As for agreement with “Cheap seeds pty Ltd” in Singapore, they would send us 1200 of seeds from each of the 10 flower varieties which we are planning to cultivate in our nurseries. The transport time would be 2 weeks and we would order the seeds at the end of first week of the 5th month after we start our business.
Quantity Price
· 1000 Seeds Rs: 480
· 2100 Seeds from
each 10 category Rs: 1,008,000
· Additional 5000 seeds
for emergency cases Rs: 2400
TOTAL COST Rs: 1,010,400 /- (maximum)
As we planned in our business, we would use our own inherited land for our main office in Battaramulla which creates easy transporting methods as it is located near to Colombo Harbour etc. Further, that land and the building would be a great advantage for us in managing our limited resources and it saved our investment on another building and land for our main office..
Land Cost Moreover, our next challenge would be to select and buy a land which would be appropriate for cultivation. As to fulfil that aspect, we decided to buy the land for building the nursery in hill country, where there has a good climate conditions, high water supply and the soil which suits for the floriculture.
We have identified that it’s essential to buy a land which has an elevation about 1300m and the temperature should be around 10*c - 17*c in all 12 months of the year. We also found that there should be a humidity around 40% - 70%. It was really tough task for us to find a land which consists fulfil those requirements. But, after a long survey we could find a great location for our nursery in Uva Province. The exact place was in Boralanda area in Badulla District.
Why we chose the land in Boralanda for our nursery:
· It’s located in the hill country where has a cool climate around 13*c-17*c.
· The humidity is around 45% - 75%.
· The exact land was pre-cultivated land
· The soil is 100% matching with our purpose.
· The land consists of spring water
· The land is near to Bandarawela – Haputale main road which makes transportation more efficient.
Estimations for the land We have decided to buy the land with 160 perch and it would be equal to 1 acre in land. This space would give us a great opportunity to build our nursery by using the spare space too. Because, our nursery would build only within 150 acre of land and the rest would use to build a moderate ware house.
Price per perch in Boralanda Rs: 40,000
1 acre = 160 perch
Rs: 40,000 * 160 = Cost per acre
Rs: 40,000 * 160 = Rs: 6,400,000/- Nearly 6.5millions
Land cost total – Rs: 6.5 million
Other costs
The Snap & Grow 6’ x 8’ small greenhouse system
As we are focusing on cost effective methods in our flower productions, we have identified that it’s cost effective and timely effective to use separate greenhouse shelving systems instead of using one large green house construction. This would save our cost on construction process and this would create great space for our labourers to cultivate our products in separately without any trouble.
The Snap & Grow 6’ x 8’ model is the perfect small greenhouse for us as for our study in the international market. And with its compact size, it won’t take up room that is needed by flowers and other plants. The 6’ x 8’ greenhouse is assembled with a simple system that makes it easy to put it together. There are no complicated tools needed, and the window panes themselves come already assembled. With the durable, all-weather materials that make up this Snap & Grow greenhouse, there is no worrying about the effects of heavy rain, frost or even what will happen to the greenhouse during a storm as we located in hill country weather conditions. Also the polycarbonate panes won’t break like glass. That makes the greenhouse a worry-free place to our business even in the worst weather conditions.
This 6’ x 8’ model provides an enormous amount of free room inside. This greenhouse’s nearly 50 square feet of space is more than enough room for the free Galvanized Potting Bench that we are planning to use inside the green houses and it provides plenty of room for thousands of flower plants. And with 6’ to 8’ of free room inside, it provides a roomy interior for even for the tallest flowers to grow freely. There is plenty space for tools, pots, seeds and all of the small gardening tools that our labourers needs to be able to access easily when the gardening arises. So, they won’t have trouble or collusions regarding the flower cultivation because, they will have separate tools, seeds and other accessories for separate greenhouse shelving’s.
In addition, we would use potting benches to use inside our greenhouse shelving system and it would create a well-organized growing space. Also, that would create a good chance to take the maximum use out of the land instead of cultivating 10 stem flowers in 2m*2m square meter space. In this system we assume that we would be able to use 2*2 square meter space to grow 100 stem flowers in potting benches.
Potting tables are suspended from the steel frame of the shelving system itself. This means that the Potting Table does not reduce the amount of growing space inside the shelving system. In addition the table itself is hinged which means when ‘potting up’ or ‘pricking out’ type work is completed in the spring the table can be hinged up so the ground below can be fully cultivated.
The table itself is 1.94m x 0.7m (6’4’’ x 2’3’’) and is made from a steel galvanized frame with wooden inserted slats.
Potting Benches/Tables
Material Cost Per Unit/ Rs Total Units Total Costs
Snap&Grow kit Rs. 60,000 200 Rs.1,200,000
Potting Benches/ Rs.17,000 100 Rs.1,700,000
Tables
Seeds costs & wholesale buying cost As for our business plan we are focusing on buying wholesale flower products from other companies and that would help us to identify and get a clear understanding about the market structure. Our main aim of this is to get an understanding about the demand factor. We suppose that would help us to produce the flowers in future more effectively and efficiently.
According to our plan, within the first six months, we are going to buy the flower categories which are “cut flowers, stem flowers and potted flowers” from other companies like “ Hayley’s agriculture and Ramya Floriculture”. Our main market would be the local market in first six months and while that we would try to export to our target market which is the Melbourne market. So, within the first quarter of our business, we we would buy product and sell them with competitive price and our main achievement would be to establish in the market while creating a well recognition for our FLOREX brand.
In that process we would, export a quota of flower products to Melbourne once a month and our established dealer would distribute them to the Melbourne flower market. This would be a real market study for us and we would decide which product out of “foliage, stem flowers, cut flowers or potted flowers” would have the greater demand.
At the end period of our first six month period, we would plant our products by using the imported seeds and it would be the most cost effective way for us in regards this. Why we chose to import seeds is that, the other companies “Hayley’s agriculture and Ramya floriculture” etc. would not supply us the most productive seeds as we will become another competitive company for them. Moreover, we don’t think that they would supply us the ‘quality’ seeds for us and it would be the most concerning aspect of our future business. As we are planning to cultivate most efficient and quality flowers, what we need at first is to maintain a good seed bank with ourselves. As a strategy to avoid less quality seeds from local companies, we decided to import high quality seeds from well-recognized Singaporean company and they have already agreed with us to supply the seeds without any shipping cost. Moreover, their cost per seed quota is cheaper than the other companies and this would be a great advantage for us in targeting cost effective business methods.
As for agreement with “Cheap seeds pty Ltd” in Singapore, they would send us 1200 of seeds from each of the 10 flower varieties which we are planning to cultivate in our nurseries. The transport time would be 2 weeks and we would order the seeds at the end of first week of the 5th month after we start our business.
Quantity Price
· 1000 Seeds Rs: 480
· 2100 Seeds from
each 10 category Rs: 1,008,000
· Additional 5000 seeds
for emergency cases Rs: 2400
TOTAL COST Rs: 1,010,400 /- (maximum)