6/15/2021

BUSINESS IDEAS
AND
OPPORTUNITIES

Group Members: Instructor:

Nitesh Adhikari Asst prof. Bibhu Ratna Tuladhar
Arjun Baral
Sachin Dhakal
Santosh Kumar Mahato
Subrat Subedi
Ayush Subedi

Department of Civil Engineering

TABLE OF CONTENTS

1. Hamro Pharmacy ..................................................................................................................... 2

2. Wedding Planner ..................................................................................................................... 3

3. Coffee Production and Distribution......................................................................................... 4

3.1 Description of Business ....................................................................................................... 4

3.2 Objectives ................................................................................................................................. 5

3.3 Coffee Value Chain Analysis.................................................................................................... 5

3.3.1 Sub-Sector Analysis ........................................................................................................... 6

3.3.2 Value Chain Analysis ......................................................................................................... 6

3.3.3 Upgrading Strategy ............................................................................................................ 6

3.4 Challenges of Coffee Production .............................................................................................. 8

3.4.1 Pests and disease ................................................................................................................ 8

3.4.2 Climate change ................................................................................................................... 8

3.4.3 Price volatility .................................................................................................................... 8

3.5 Lessons for our Business ..................................................................................................... 8

3.6 Strengths, Weakness, Opportunities and Threats ..................................................................... 9

3.6 Strategy and Marketing ...................................................................................................... 11

3.7 Finances ............................................................................................................................. 12

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Based on the discussion among group members on 11th of June about the business ideas, we came
up with many business ideas. But after looking at needs, feasibility and possibilities we came to
find out three major business ideas. They are:
1. Hamro Pharmacy (e-Pharmacy)
2. Wedding Planner
3. Coffee Production and Distribution

1. Hamro Pharmacy

The internet has taken over the world in all aspects. Not sparing any field, it is not surprising that
even pharmacies have gone online. In context of Nepal, online pharmacies are very less and with
this in mind we have come to an idea of an ecommerce platform for selling pharmaceutical
products giving our company name Hamro Pharmacy. It is a pharmacy that operates over the
internet by selling drugs, medicines & sending them to the customers. Internet making all the
things easy & convenient.
“Bringing the medicine at your door.”
How does an Hamro Pharmacy model works?
1. Mobile-based application for consumers to upload the scanned copy of their prescriptions and
place requests for medicines.
2. Every order that is received to be verified and checked by a team of registered pharmacists.
3. The registered pharmacists to forward the validated prescriptions to the pharmacy store from
where the medicines are dispensed
4. The web or mobile-based platform act as a platform to facilitate connection between consumer
and pharmacy store

Pros of Hamro Pharmacy

• Convenience: It is easy to order online medicines with prescription. Individuals who live
great distances from a terrestrial pharmacy, the elderly, disabled persons, and those whose
daily schedule includes additional hassles, all can benefit from the easy and fast purchasing
of medicines online. Additionally, shipping charges are often less than the expense incurred
from travel costs associated with a visit to a traditional pharmacy.
• Private & Confidential: This is particularly helpful to people who find it hard to speak
face to face with doctors & pharmacists. It is also helpful to people who feel as if they have
very embarrassing or shameful situations like erectile, disfunctioning, acne, STD’s, hair
loss etc. They can order their products without feeling embarrassed or judged.
• Range of Choices: Hamro Pharmacy offers a great variety of options. They usually have
larger stocks of drugs than a physical pharmacy.

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2. Wedding Planner

Weddings are likely the most challenging and satisfying events to plan. It is one of the most
important and memorable thing in everyone’s life so everybody wants it to be perfect. Weeding
planner is one of the growing business in the whole world. In the context of Nepal, there are fewer
numbers of such planner as it requires ability to design, plan and manage the wedding. So, it
becomes easy to escalate the business rapidly as there is dearth of competition.

Our business includes the budget convenient to the client, exceptional design and decorations,
scouting locations photoshoots and managing programs in an organized way. To me more precise,
only a few planner organizes the wedding in top quality plus the wedding plan in Nepal is not of
better quality. Also, planning a wedding involves endless details, deadlines, family drama, and far
too often enough stress to make you want to just elope. Keeping this in mind, we’ve planned to
manage the wedding in an appropriate and commendable way. It’s a bit tough to organize a
destination wedding where the documentation and paperwork can be complicated. Despite of this,
our wedding planner gives the best service even in destination wedding. Regarding destination
wedding we’ve planned to help and prepare legal documentations and translations.

Moreover, we’ve planned to layout our event i.e. wedding indicating the location of the dance
floor, buffet points, tables, chairs, lounges, etc. We are also coordinating wedding day, conference
and pre-event assembly follow-up. Above all, we’ve planned to have a backup plan even if the
event is disaster. Most importantly, we’ve planned to identify the venues for events such as hotels,
party house, ceremony, church, temples etc. according to the desired place of client. We’ve
planned to give the foremost services/deliveries on the wedding day. Similarly, event briefing for
all suppliers (by contacting the wedding week vendors for details and schedules). Any country
where a wedding is held requires different procedures depending on the nationality of each the
bride and the groom. Depending on it we’ve planned the best procedures for the wedding.

Wedding plan Procedures:

To sum up, here are some procedures of wedding plan which we will be following:

➢ Conducting initial consultations with the clients to discuss the type of wedding desired and
their wedding budget.
➢ Conferring with clients to discuss wedding details, including venue option as well as
entertainment, catering, and decoration preferences.
➢ Making payments of selected vendors and scheduling the clients to meet with vendors.
➢ Arranging the necessary wedding supplies and equipment to be transported to the wedding
venue and ensuring that the wedding programs are timely managed and place cards are
printed on time
➢ Evaluating all wedding day activities to ensure that everything runs smoothly.

Accordingly, we have detail-oriented, methodical and creative planner which will preordain that
our wedding plan is going to burgeon after the business gets started.

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3. Coffee Production and Distribution
In Nepal, coffee has become a major cash crop as its demand continues to increase in the domestic
and international market as Himalayan specialty coffee. The major cultivar grown in Nepal is
'Arabica' (Coffea arabica). It is grown in regions 800-1600 m above sea level, which is a higher
altitude than the world's geographic latitude, known as the coffee belt. The climate of Nepal is
balanced; ideally hot during summer and cold during winter. These factors work together to create
an ideal environment for coffee farming. Due to this ideal conditions, the coffee produced in Nepal
is considered to be highest standard coffee beans in the world.
Coffee is one of the important cash generative crops in the mid hill regions of Nepal. It is estimated
that Nepal consists of around 1 million hectares of land ideal for coffee farming in Nepal, but
somehow, only a small percentage of it is in use. Only around 1753 tons of coffee cherries are
grown in Nepal currently, in 1911 hectares of land area. This clearly suggests that we are way
below our capacity when it comes to coffee production and the use of available land area. The
reason could be the lack of personnel involved in the coffee industry in Nepal, including the ones
who have technical knowledge, or the inability of the numerous governmental and non-
governmental organizations to properly convert this huge resource into coffee farm. Presently,
coffee is cultivated in around 40 districts, but it has been producing commercially in about 20-22
hill districts. Some districts like Gulmi, Palpa, Argakhanchi, Lalitpur, Tanahu, Kavre,
Sindhupalchowk, Lamjung, Kaski, Gorkha, Syangja, Parbat, Baglung are successfully growing
and producing Coffee beans and is increasing gradually. The total production of coffee in Nepal
is 429.4 metric ton from total area of 1911 hectares.
Coffee is grown in Nepal with almost no use of inorganic fertilizer and pesticide. It could be an
important occupation in the rural economies with massive participation of marginal, poor and
down trodden class of rural communities. In addition, it could be an important means for soil
conservation, bio-diversity maintenance and watershed balance in the mid-hills of Nepal. Coffee
cultivation has an enormous potential to income generation opportunities as Nepalese coffee has
high demand in International market. Coffee is high value low volume cash crop which is nearly
three times more profitable as compared to cash crops and five times than other cereal crops.
Among the various cash crops for commercialization, coffee is emerging as a likely agro-enterprise
with great potential to provide farm employment and income generation opportunities in the mid
hills of Nepal.
After the thorough discussion among the group members we decided decided to take Coffee
Production and Distribution for further business model as it seems so demanding and promising
in the present context of Nepal.

3.1 Description of Business

Nepal contributes very nominal to the world coffee production. Nepal has to make much long way
to reap benefit from coffee. So for the our business we will take the coffee cultivable land in leese

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and grow the coffee plant by using the modern method of farming since 95% of coffee production
in Nepal has been done in traditional style. In order to improve the farming and productivity there
requires an increased support on organic plantation methods, management of orchard,
strengthening of producers’ ability to organize and manage coffee farming, strengthening of
cooperatives and to educate farmers on quality and market concept so that they produce the coffee
beans as per the market requirement. We prepare the top standard quality of coffee and take them
to our factory residing in different location for making coffee beans by purifications and roasting.
After that the coffee beans will be distributed to various companies, restaurants and dealers for the
further process. One day our customers will seek this product as it will provide them with a point
of differentiation to specialty roasters.

3.2 Objectives
Our business venture is to build brand awareness and customer service excellence,
while increasing sales. We intend to utilize the following strategies to achieve these objectives:

➢ Develop a high-quality menu of different coffee blends.

➢ Provide an excellent service experience, anticipating the needs of the customers and
delivering the best service.
➢ Leverage the old traditional Italian roasting methods to increase market penetration with
the finest product available.

We’ve also identified several keys which will be instrumental for our successful venture:

➢ Develop the finest product

➢ Exceed customer expectations
➢ Employ strict financial controls
➢ Know the existing business ventures
➢ Market concept, branding and coffee preparation methods

3.3 Coffee Value Chain Analysis

All food items possess specific characteristics. These are their state, appearance like weight,
volume, size, shape, color, solubility, moisture content etc. Coffee is no exception. From a tree to
a cup, the various physical characteristics of coffee in its different forms play an important part in
the way it is treated and in the design of equipment to process it.
Sub-Sector Analysis

Value Chain Analysis

Upgrading Strategy

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3.3.1 Sub-Sector Analysis

The sub sector approach suggests reviewing to as "systems" which focuses to quantitative analysis
(economic and financial) activity within sub sector. Coffee sub sector underlines to the
interdependence of cost centers of input supply, production, processing, marketing and trading as
well as knowledge dissemination etc. Such interdependence in the coffee sub sector plays Central
role in understanding to dynamics of sustainability, competitiveness and change. The coffee
subsector analysis also provides for comparative analysis; examining to the implications of
alternative development and alternative policy changes or project interventions for short, medium
and long-term perspectives. The creation of a product from its beginning as a seedling, "as a prime
raw material" until it ends to cup of coffee as finished product in the hands of consumers. Stated
movement comprises to a progression through a production, several steps of processing, logistics,
and distribution system.

3.3.2 Value Chain Analysis

In the coffee sub sector, value chain comprises both to a set of interdependent production activities
and to a group of vertically linked value (economic) agents, focusing with the production of a
primary commodity "cherry"; ends with the consumption of the final product-a cup of coffee. It
includes all the economic activities undertaken between these phases such as: input supplies,
seedling production, orchard management, processing, delivery, grading/sorting/packaging,
wholesaling, and retailing. Actors received such ancillary activities in erratic in nature by the
stakeholders from government, private sector and including international development partners.

3.3.3 Upgrading Strategy

The upgrading strategy targets to the entire coffee sub sectors' sustainable development and
competitiveness. It does firmly believe to the understanding and assembling of experience on how
far coffee sub sector has come in the past, and where it wishes to go to in the future. Upgrading
means improvement and introducing to start of art knowledge/technology to address issues and
problems in the occurrence areas of the sub sector. It further advocates realizing the efficiencies
in primary and supportive areas of coffee sub sector.

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 Plantation

Cultivation

Harvesting

Coffee Cherries Handling

Collection

Processing (Includes cleaning drying, roasting and

removing parchment from coffee beans)

Packing

Storage

Dispatch

Figure: Chain Flow Process of our Business

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3.4 Challenges of Coffee Production

3.4.1 Pests and disease

Insects, pests and diseases are constant threat to coffee production. The occurrence of pests and
diseases are common to all producing countries- the difference is only in time and scale. Infestation
of white stem borer, coffee leaf rust and coffee stem borer is some of the major threats for coffee
production.

3.4.2 Climate change

Climate change is one of the unprecedented threats to agriculture. Recent studies on coffee indicate
that climate change and its forecasted impact will have huge impact on the livelihoods and poverty
in the producing countries. Climate change will disrupt the complex agro-ecosystem of production
with a shift in current production areas. There will be major challenges of pests and diseases as
coffee is sensitive to these problems thus resulting into reduction in production, quality and price.
One of the doable and a likely solution to this problem is introduction of shade trees as these can
mitigate by creating a buffer to the micro climatic extremes.

3.4.3 Price volatility

The history of global coffee trade goes back to early 17th century when Italians introduced it in
their country and with the establishment of first coffee market in 1640 in Amsterdam. Later on
coffee trade spread throughout the Europe and America. Organized coffee market began with the
establishments of New York Coffee Exchange and London Exchange in the late 19th century with
the advancement of transport, communication and other technologies that facilitated the
commodity trade more easily than before. However, coffee trade has witnessed a fluctuation in
coffee world price mainly due to fluctuation in production caused by weather, national policies,
quota and other restrictions imposed on it. The fundamental reason for coffee price fluctuation lies
in the production economics- supply and demand. The record low coffee reached in 2002- 04
whose impact was tremendous even in the macro economy of many Latin American countries, let
alone the producer community.

3.5 Lessons for our Business

Since Nepal being a later comer in coffee production in relation to major coffee producing
countries, We can learn some important lessons from different country cases without reinventing
the wheel. In the following, some of the lessons are drawn and these lessons are attempted to relate
with the broader value chain development issues.
a) For higher production and productivity gain, emphasize on irrigation and shade.
b) adopt proven practices to mitigate the insects, disease and pest control

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c) explore mechanization of harvesting, where possible, in view of the shortages of labor in
agriculture for some years onward
d) improve post harvesting losses by having appropriate processing techniques, equipment and
handling procedures
e) explore and pilot disease resistant varieties
f) create consortium of research and development plans
g) sufficient budget for increasing the plantation, harvesting, post-harvest management and quality
improvement
h) develop quality standards and food safety parameters to safeguard the interest of the consumers
i) organize international coffee buyers visit in the producing areas

3.6 Strengths, Weakness, Opportunities and Threats

1. Strengths:
Production:
➢ Favorable natural conditions for specialty coffee along the mid-hills
➢ Farmers are trained on production technology, mainly organic
➢ Development of resource persons, technical human resources
➢ Availability of proven technologies or innovation
Processing:
➢ Wider use of wet process technology
➢ Pulper operator and producer are linked to vertical chain
➢ DCCU based green coffee bean preparation centres established
Marketing:
➢ Reputation of Nepali coffee and high demand
➢ Growing market linkages – domestic and international level
➢ Producer cooperatives being actively engaged in marketing (mainly fair trade- ensuring
market price and premium)
➢ strengthened capacity in market diversification

2. Weakness
Production:
➢ limited availability and access to improved planting materials
➢ low production leading to supply constraint

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 ➢ low productivity (225 kg/ha/season)
➢ insufficient infrastructure e.g. irrigation, shade
➢ low level of farmers’ motivation
➢ insufficient outreach and follow up due to insufficient numbers of technical human
resources
Processing:
➢ insufficient processing centres for FC
➢ timely delivery of fresh cherry from farm to pulping centre
➢ inconsistent quality and limited capacity to monitor and enforce quality standards
➢ inadequate proper processing centres with necessary equipment causing higher process,
water, storage facilities
➢ process wastage

Marketing:
➢ Unexplored local market
➢ limited and undiversified buyer dependence over few
➢ unfair competition based on raising the price- creating distortion
➢ weak market segmentation
➢ no product diversification for export market
➢ insufficient market information channels and system of information dissemination
➢ lack of knowledge on public and private standards in regulating international food markets
3. Opportunities
Production:
➢ huge amount of land suitable in the mid-hills for organic and specialty coffee production
(~1.19 m ha)
➢ sources of water for irrigation available in much of mid-hills
➢ proven technologies for drip irrigation
➢ Intercropping
➢ On-going national level initiatives to increase coffee production
Processing:
➢ growing use of wet processing leading to higher quality DP
➢ easy availability of the process equipment
Marketing:
➢ sustained demand of coffee in international markets
➢ growing popularity of Nepali coffee, especially organic
➢ Increasing consumption of coffee at domestic
➢ Growing segments of the specialty coffee especially organic, fair trade etc.
➢ potentiality of increasing alternative uses of coffee by-products from coffee husks, leave,
branches and trees

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 4. Threats
Production:
➢ higher incidence of pests and diseases (e.g. WSB, rust)
➢ other competing crops
➢ climate change- causing to shift in altitude
➢ lack of farm management, entrepreneurship
➢ Higher cost of production- shortages of labour, input,
➢ lack of support infrastructures e.g. irrigation, roads to mitigate production problems
➢ eroding trust between producers and buyers
Processing:
➢ erratic delivery of FC (unscheduling)
➢ inferior quality of processing equipment and lack of other required support structures
➢ non-compliance of processing standards
Marketing:
➢ unscrupulous cross boarder supply of coffee
➢ fluctuating world coffee prices and unstable exchange rate
➢ non-compliance of standards (public, private, international, SPS, TBT, IPR)
➢ ever increasing domestic coffee price
➢ over dependence to some (fixed buyer) export destination

3.6 Strategy and Marketing

For some years, there are no reported problems of exporting coffee but rather unmet demand for
green coffee beans are reported for both domestic consumption and export. The exporters require
to obtain Certificate of Origin, Organic certification if claimed as such and quarantine certificate.
Major export destination for Nepali coffee are European Union countries, the USA, South Korea,
Japan and to some extent Australia. International market demands for high quality specialty
organic coffee. So, in this regard, niche in organic and specialty coffee provide an opportunity for
Nepal to target. Although the share of Nepali coffee in the international market is still small, but
diversification of specialty coffee market destination is essential to avoid for any market and price
uncertainty as can be seen in some years. For this we can target China and Russia where demand
is growing. Actions to improve brand, packaging and image are essential in the forthcoming years.
Similarly, participation in the international trade fairs mainly the organic fairs and Fair-Trade
exhibitions to popularize and expand export market. Also, organic and fair Trade can have
comparative advantage in order to fetch better prices and premium. Arranging a visit to our coffee
farm for major coffee buyers can build good market relations. Furthermore, it is essential for us to
expand domestic demand. For the domestic expand there are many companies trying to reaching
out coffee farms and production companies for the coffee beans. We can encourage them to buy

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our products by providing the quality coffee beans to them in low price comparing to other
competitor marketers and giving them offers frequently. We can manage several meetings with
them and gather their ideas and suggestions for the qualitative growth of our venture.
Our business will grow only if there is other business like us is operating properly. So, for that
Regular Provision of barista trainings targeting youths and cupping can be another strategy for two
reasons: i. supply of trained human resources for existing café; and, ii. making themselves
entrepreneurs. Cupping involves the application of sensory characteristics to describe the flavor
profile of coffee. Its practice in supporting marketing goals is best appreciated when together,
growers and roaster buyers join to calibrate the flavor profile of a coffee so that there is complete
understanding of the product attributes by both buyer and seller. To advance this capacity among
growers, members of the specialty coffee roaster community have liberally volunteered as cupper
trainers in many settings. installing cupping labs at a regional level and training cuppers at these
regional labs will constitute a major step forward in bringing buyers closer to the producers of the
coffee and will enable washing stations to set and negotiate realistic prices based on coffee quality,
the most important determinant of price in the specialty coffee market.

3.7 Finances

Cost of production
Only variable cost items were included for analyzing the cost of production. The variable cost
included manure cost, cost of organic solution and labor cost for different production activities.
Cost of organic solution was calculated as labor cost required for its preparation.
Gross margin analysis
It is the difference between total value product and variable cost associated to particular enterprise.
The gross margin of the coffee production was calculated as:
Gross margin = Gross return – Total variable cost
Where, gross return= price of fresh cherry*total quantity sold
Total variable cost = Summation of cost of all variable items
Profit analysis
The profit is the difference between total revenue and the total cost incurred. Total cost included
fixed cost and variable cost. Cost accrued to fixed costs included – depreciation in fixed assets like
coffee plant and different implements used for its production. Thus, the net profit can be written
as:
= TR- TC
= TR- (TFC+TVC)
= Py x Y – Pxi x X -K

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Where, ∏ = Net profit TR = total revenue TC = total cost,
TFC = total fixed cost TVC = total variable cost Y = quantity of output
Xi = quantity of ith input Py = price of output Pxi = price of ith input K = fixed cost
Benefit-Cost analysis
For the benefit cost analysis, the total cost of coffee production including fixed cost and variable
cost, and total return from coffee production was used.
Benefit: Cost ratio = Total return/Total Cost
Factors affecting production of coffee
The Cobb-Douglas production function was used to find out the variables that affect the production
of coffee. Mathematically, the model was expressed as:
Y = α X1 b1 X2 b2 X3 b3 X4 b4
In log linear form, the above model can be expressed as follows:
InY =Inα0 + InX1 + InX2 + InX3 + InX4
Where, Y= Total coffee yield X1 = Area under coffee cultivation X2 = Labor used
X3 = Number of productive plants X4 = Manure used α0 = coefficient to be estimated
Marketing margin and producers’ share
Marketing margin is the difference between the farm gate price and the retailer’s price, which was
calculated as follows:
Marketing margin (MM) = Pr –Pf
Producers’ share is the price received by the farmer expressed as a percentage of the retail price,
that is, the price paid by the consumers.
Producers’ share (Ps ) = (Pf /Pr ) ×100
Where, Pf = Producer’s price (farm gate price) Pr = Retailer’s price

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