Our CBBO keeps asking for a business plan and the bank wants a project report. We do not know what to put in it. What should a real FPO business plan actually contain?
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A good FPO business plan answers one question clearly: how will this FPO earn money and repay any loan. Keep it concrete, not a wish list. Include: 1) About the FPO, your members, villages, crops grown and the area, and your share capital. 2) The business activity, pick the main one or two (say input supply plus produce aggregation), and explain exactly what you will buy and sell and to whom. 3) Market and buyers, who will buy your produce or use your services, names of likely buyers, and the prices and margins involved. 4) Volumes, realistic quantities you can aggregate based on your members and acreage, not inflated numbers. 5) Financials, expected purchases, sales, gross margin, running costs (CEO/staff salary, rent, transport, interest), and the net surplus, with month wise cash flow showing when you need money and when it comes back. 6) Funding, how much you need, from share capital, grant, and loan, and a clear repayment schedule. 7) Risks and how you handle them, price fall, payment delay, member apathy. The two things banks and CBBOs really check are realistic volumes and a believable cash flow that shows repayment. Avoid copy paste plans with round numbers; ground every figure in your own members and your own market. Your CBBO is meant to help you build this, so use them.
The cash flow month by month is what got our loan approved. The bank wanted to see when we pay members and when the buyer pays us. Showing that gap honestly built trust.
Do not inflate volumes to look big. Our first plan had numbers our members could never supply. The CBBO caught it. Use real acreage figures.