Rubber SAP Middleman in Thailand

Rubber SAP Middleman in Thailand

Business Plan: Rubber SAP Middleman in Thailand

Business Opportunity and Vision

My business idea is to establish an intermediary (agency) business in rubber. The business will see the buying of sap from the farmers, treat the sap so that it can be stored, and finally sell it to the market when at a good market price. The opportunity that the business seeks to take is to store sap until when the market prices are good and sell the sap at a profit. The market projections indicate that the sap industry has been expanding although the farmers have suffered due to extortion by low prices. The competitive advantage of this business model is the presence of land will add up other capital resources to build the business. In addition, this business model is unique in the region making the business has a high prospect of success.

Introduction & Overview

A. Introduction & Overview of the Plan

My business idea is to establish an intermediary (agency) business in rubber. The business will facilitate the buying sap from the farmers, treat the sap so that it can be stored, and finally sell it to the market when it is at a good market price. Because Thailand has a strict law on cooperatives, the business model will be an agency one. The operation of this proposed business will involve the purchasing the sap from the farmers, storing, and selling it to the market when the market is ripe. The farmers will then be paid in two installments, a deposit of the sap upon delivery, and a final pay after the sap has been sold to the market.

This business plan has a number of benefits. First, the business will be run in the rural area of Thailand where I have land. This land will facilitate the storage of sap before it is sold to the market. This business plan does not make it necessary for me to own a rubber plantation. This is an advantage to the business because I am not an expert rubber farmer: it takes long to mature a rubber plantation and rubber trees only produce well for seven years. The other advantage is that the company is an agency company, and not a cooperative; this helps the business to run smoothly since cooperatives are subjected to strict laws in Thailand. The other advantage of this business plan is that it provides relief to the farmers who sell their sap at a cheaper price, for they cannot store the sap until when market prices mature. Finally, I also benefit from the Thai Amity Treaty, which offers unique business advantages to Americans than to other experts (Hopkins, 2005).

III. The Company, Industry, and Product(s) and/or Service(s)

A. The Company

The (Rubber Sap Agency Company (RSAC) is an agency profit making company involved in the purchase, storage, and sell of sap to the target markets. The proposed company will act as an intermediary between the farmers and the market buyers of the sap. The company will involve itself in the purchase of sap, its storage and sell later when the market is offering a good buying price of the product. Besides, the company will be involved in making profits through by purchasing the sap from the farmers at a relative low price, and sell the sap when the price of sap in the market is good. This will allow the proposed business to make profits within the period of purchasing the sap, and selling the sap to the market. In other words, the company will add value to the sap by offering treatment and storage of the sap until when the sap can be solved at a good price.

B. The Industry

This business will run under the rubber production industry. Thailand is one of the countries that are involved in the rubber plantation. This one industry serves many people especially the farmers and the locals in the industry. Most of the farmers benefit from rubber plantation farming by selling the harvested sap to the market. A significant number of workers also benefit from rubber plantation by providing labor and earning income from the industry. Most of the farmers in the industry use the income from farming to take care of the family and run other business ventures. This industry also involves other players like the Government, which has put regulation on the marketing and sell of the sap. The industry also involves sellers and buyers of sap. Besides, the buyers of the sap include other companies that process sap while the original sellers of the sap are the farmers who grow rubber. In most cases, the beneficiaries of sap trading are the companies that purchase the sap from the farmers after it is harvested (Newman, 2009).

C. The Product

The product of rubber farming is sap. The business will mainly be involved in the purchase and sale of this product to the market. Sap is one of the most valuable products because of the many utilities that it has. The value of sap product has attracted many farmers to engage in a rubber plantation farming regardless of the difficult situation of growing and maintaining the rubber trees. Handling sap is difficult for many farmers because of the high cost of its storage, and the urgency that the farmers need the money to meet their needs. Sap is used to make Latex Rubber, which is used for many purposes.

The main uses of the rubber product are industrial uses and household applications. Rubber is widely used in the making of tubes and tires. It is also used in making other rubber goods, such as in flooring, making of medical gloves, matting, and hoses. Rubber is also used in making adhesives used in many products in industrial applications. There are others hundreds of uses of rubber: this makes the plan a good one that stands the test of time. The diversity of uses of rubber makes the product very marketable in the local and international markets. This makes this plan stand a good chance of selling in many markets thus the success of the business (Newman, 2009).

D. The Services

This business will involve the company running a number of services. One of the services for the company will be seeking out the markets to purchase sap after it is harvested. In this case, the managers of this proposed business would conduct market research to establish the sap available after farmers have harvested. The company will also search for other local and international markets where the sap may be sold at a time when its prices are favorable. In addition, my proposed business will also offer treatment and storage services of then sap that is bought from the farmers. The treatment and storage services are among the most significant services that the business will conduct. This is because this service will add value to the sap, by allowing the market prices of sap to adjust before it is sold. During harvesting, the prices of sap will be relatively lower: storing it will allow the business to sell the rubber sap when the markets are ripe. This has significant business value to the business because the company can make profits through this avenue.

E. The Growth Plan

The growth plan for this proposed business plan has a simple approach. In this case, I look forward to beginning with a humble beginning and use the available resources. The business project team of four will be involved in propelling the proposed company to expand. The growth of the company will pick from a humble beginning. We intend to use my farm in the rural areas to create a treatment plant for the sap and a storage location. This will act as an advantage to the business because we would not be pushed to incur the huge cost of purchasing land. The business will then employ five workers who will be involved in the process of treatment and storage of sap. The management of the company will involve four American-Thai couples. The company will expand on an annual basis because the business will have to increase the labor force, and the amount of sap that is bought, stored, and sold every year. Every year, the strategic management team comprising of the four couples will make decisions on how the company to grow.

IV. Thailand Market Analysis

The success of this proposed business plan depends on the market conditions in Thailand, vis-a-vis Rubber production industry. The success of this plan significantly depends on the market choice decision that the management will undertake to make the plan a success. The first thing that is noted about Thailand is that the country provides a good atmosphere for rubber farming. This is because of the good weather and soils that allow the rubber trees to grow. Thailand has been renowned for rubber plantation farming.

A. Thailand Market Size and Trends

Thailand has a good market for sap. One of the benefits that Thailand market offers to this business plan is the many farmers who engage in rubber farming. This implies that the proposed business will have a good market to source its sap. Secondly, Thailand's market also offers a good platform for the proposed business model. Farmers have previously had to get less money from rubber farming: they have been forced to sell their sap quickly at a lower price because they cannot store the product. This business model promotes the growth of the business.

B. Target Customers in Thailand

The target customers in Thailand are the commercial businesses purchasing sap for industrial use. The business will supply sap to these ventures at a cost when the market allows the business to make some profits. The business will also be supplying the sap to other private companies that may demand the sap. The competitions that the business will face include the dominant companies, which have previously engaged in the sap industry.

V. Marketing and Sales Plan

A. Marketing Strategy

The success of this business plan will significantly depend on the marketing strategy that will be employed by the business. This is because the business seeks to make profits and expand. The two depend on the volumes of sales of sap that the business will make. Consequently, employing an effective marketing strategy is paramount to ensure that the business can sell more sap to the identified sap markets. It is important for the management team of this business plan to employ effective marketing strategies that will ensure that the stored sap, which is ready for sale, gets good market and sells at a good price. This will play a critical role in ensuring that the business remains in the course of sustaining its profit margins.

For this business, the main purpose of the marketing strategy is to promote the sale of sap to the ripe markets. The marketing strategies to be employed include undertaking promotional activities such as advertizing in the media about the quality sap that is available to the market. This will play a critical role in maintaining an informed market, thus boosting the demand for sap from the business. The other strategy that will be employed is branding the sap sold by the business. Besides, the sap will be well packaged, named, and advertized as a good product for the markets. Branding will play a critical role in pushing up the demand for sap in the markets.

B. Pricing

Pricing will also play a critical role in ensuring that the proposed business plan is a success. This is because the proposed business is involved in the purchase and sale of sap into the markets when the market is ripe. In other words, pricing plays a critical role in both the buying and the selling processes of management. Good and market sensitive pricing mechanisms would play a critical role in ensuring that the business is not only making profits, but is also able to sustain the profits in the industry. It will make the business effective in conducting its trade transactions on sap while operating optimally on a good profit margin. This is critical for the success of this plan.

One of the pricing strategies that will be employed by the management of the proposed business plan is pricing the sap for purchase according to the prevailing market conditions. Moreover, the management of the business has a critical role of ensuring that the prices of the sap that is purchased and sold is at a given market rate. Sometimes, this is not an easy process because various market changes occur. However, the management has still to consider the aggregate figures of pricing sap at various seasons so that the business can make profits.

For instance, in the last about five years, the figures for the sap industry that may determine the pricing of sap are as follows. First, one Rai may hold an estimated 100 trees and 100 trees may offer an approximate 16.66 kilo a day. For about 20 days, the trees may offer 333.2 kilo of sap. The farmers often sell a kilo of sap at 60 baht: a farmer has to be paid an estimated 19,992 bahts per month according to these calculations. The proposed business may purchase this amount of sap from various farmers. This means that the management team has to negotiate good buying prices for the sap, and sell the sap at a higher price when the market is ripe.

C. Sales Plan

The sales plan for this proposed business plan is a critical aspect of business that has been well addressed in this plan. The sales plan of this business is such a critical aspect of business by the nature of business that the company will engage. The proposed company is an agency business that seeks to enable the farmers to market their sap effectively at a good price and enable the proprietors to make profits. All this has significant implications from the sales plan for the success of the business will depend on the sales volumes of sap that the company will sell to the market.

The sales plan of this proposed business captures the persons, and entities involved in the business transactions of the company. Besides, these people have been entrusted with the task of ensuring that right purchases for sale are made, and the right sales are effective. The proposed business has a management team of four couples who would directly be involved in the purchase and sale of the sap. Besides, they will participate in trading sap and ensuring that the business makes good sales in all seasons.

The sales plan strategy for this proposed business plan captures the need to boost the sales volume of the company. The management team will ensure that sap that has been bought, treated, and stored will be sold at a good price. This demands that the management seeks to establish the commercial consumers of sap. This will play a critical role in ensuring that the business not only has sufficient avenues for the sale of sap but the sale to the commercial consumers at a good price.

Finally, this proposed business will also employ other sales strategies to ensure that the company can sustain its sales at various times of the year. First, the management will ensure that there are sufficient reserves of sap for sale by the company for sale. This will ensure that the business can serve the diverse markets. Secondly, the management will ensure that sap is sold only when the market is ripe: the sap will be sold when the demand and prices of sap are favorable. This will ensure that the sap stored by the business will be able to sale off with speed, and at a good price.

D. Advertising and Promotion

Advertizing and promotion are also important aspects for the success of my proposed business. This is critical considering the nature of this proposed business. The proposed business is a profit-making venture involved in the purchase, and sale of rubber sap. The process of purchasing and selling the rubber sap to the target market significantly depends on how the sap will be marketed. Effective marketing process of the sap for sale demands a proactive marketing strategy for the business. In this case, advertising and promotion play a premise role in ensuring that the sap in the proposed business gets favorable markets.

In addition, the proposed business will employ advertising and promotion to reach out to the mass markets and farmers involved in rubber farming. The purpose of adverting and promotion to this proposed business is to create a good market condition that will enable the business flourish. This is because the market will be informed on the offers of the business through the advertizing and promotional activities. The farmers will be informed off the opportunities that the business has offered them. Besides, the potential buyers of the sap will also be informed of the available sap for sale (Planet, 2012).

The proposed business will be involved in advertizing and promotion in various ways. First, the business will employ the mass media avenues to advertise the available sap for sale when the markets are ripe. Besides, the management will employ the use of the radio, television, and print media services to market the sap they have to wider markets. These advertisements will allow the market players to be informed on the opportunities existing in the company. This ultimately will lead the company to sell more sap and register high profit ratios.

E. Channels of Distribution

The nature of this proposed business involved distribution of sap to the buyers, and transportation of sap from rubber farmers to the business premises. The choice of the channels of distribution that will be employed by the business is critical for its success. This is because the choice of channels of distribution of sap will affect the processes of purchases, and sale of the sap. An effective distribution channel of sap will ensure that the business can sell sap into the markets. It will also enable the business to access the available markets resulting in higher profitability for sap.

In this plan, the management will be responsible for selecting the most appropriate channel of distribution for sap from time to time. However, at the start of the business, the farmers will have to bring the harvested sap to the business premise. The business will have to supply the sap to the identified commercial markets for the sap. Besides, the business will seek to find the new markets for sale of its products. The business will supply the sap to the commercial buyers upon finding these markets.

VI. Operating Plan

Effective implementation of this proposed business plan also depends on the operating plan of the business. This is because the operating plan ensures that the business will be run within the laid down constraints of the business. This is critical to this proposed business because it allows managers to run within the laid objectives of the business. Moreover, the operating plan for the business will allow the business to make income and meet its objectives. For the proposed business, the operating plan will capture the following elements.

A. Product Development

The product for this proposed business is sap, which will be employed for commercial and industrial use. The product development process for the business will involve transforming the raw sap that has been harvested by the farmers, treating the sap, storing it and finally selling the sap when the market is ripe. Besides, sap will undergo these processes to ensure that it has a high value at the time for sale. The process of adding value to this product will be as follows.

The business will seek to buy sap directly from the farmers at a fair price. This will reduce the impacts of extortion that the farmers face from sap buyers. The sap bought from the rubber farmers will be treated at the business premises. The sap will then be treated so that it can stay longer in the stores. After treatment, the sap will not be sold immediately: instead, it will be stored to await the market price conditions to adjust and be favorable. The sap will then be sold to the markets when the prices are ripe.

B. The Sourcing & Processing Plan

The entire processing plan of the business will involve three processes: the collection of the sap, treatment of the sap, and sale of the sap when the market is ripe. The business model of processing the sap to be of high quality is an effective means of selling it to the markets. Evidently, the business will capture the markets for the sap will be sold at a good quality and at a time when it sells at a good price. This is critical in ensuring that the company can maintain higher levels of profitability.

The initiative of processing good sap by sorting and treating the sap is a critical process in the proposed business. This is because the success of the business in making sales will depend in the quality of sap that the business will offer to the markets. The process of treating the sap is important because it will be sold much later after the harvesting period when the prices of sap in the market are favorable. This plan allows the company to add value to the sap, and make profits from the sale of sap to the market at a favorable period (Burke & Presser, 2010).

C. Maintenance and Support

The management team will conduct the maintenance and support of the proposed business. They will ensure that the business activities are sustainable. Besides, it will be the duty of the managers of the business to ensure from the onset of the business that all the processes of business are sustainable. In this manner, they will be responsible for giving support to the business. These include the physical, ideological, and financial support to the business. The most critical aspect of business maintenance and support will be ensuring that the business resources are safe and well maintained.