Entrepreneurship

Abstract

We have created a marketing strategy to better understand our target markets and customers to effectively advertise our products. We can better align our products and the way we market and sell them thanks to the information provided in our marketing plan about our core products and key customers. Our marketing strategies, market size, and forecasts are all covered in our marketing strategy. To prepare for the company's potential future expansion, we outlined our future finance strategies and the breakdown of how money will be used.

1 Background

The productivity and health of farm animals have become a growing concern because of the global farming industry's quick expansion, particularly in China. In the past, antibiotics were frequently abused on farms to speed up animal growth and to cure and prevent disease. However, this practice has resulted in two significant issues: first, it has left antibiotic residues in meat, egg, and milk products, potentially endangering the health of consumers; and second, it has encouraged the growth of antibiotic-resistant microorganisms, a serious risk to both human and animal health. Considering this, experts believe that shikimic acid, a naturally occurring molecule with antibacterial properties, offers a possible alternative to antibiotics. A large variety of harmful bacteria can be efficiently inhibited by shikimic acid [1]. This means that the farming sector can minimize the hazards to human health outlined above by using shikimic acid to ensure animal health while simultaneously using fewer conventional antibiotics.
From the perspective of market demands, consumers grow increasingly concerned about food product safety and quality. Consumers not only focus on taste but also whether the product contains harmful substances, such as antibiotic residues. Thus, replacing antibiotics with shikimic acid can satisfy the consumers’ needs for healthy, pollution-free products, as well as an effective marketing strategy to provide better reputations and higher economic benefits. In conclusion, shikimic acid as a substitute for antibiotics provides great significance in both ensuring animal health and satisfying market demands. It is hoped that in the future, the farming industry will focus more on sustainable development and ecological balance, reduce dependence on antibiotics, and increase the use of natural and safe alternatives such as shikimic acid.

2 Primary good

A. shikimic acid microbial fermentation powder: through specific microbial fermentation techniques, shikimic acid is produced and processed into a powder form that can be easily stored and used.

B. multifunctional feed additive: by combining the powder with other probiotics and prebiotics, a multifunctional feed additive is produced which is designed to improve animal health, strengthen the immunity system, and reduce dependence on traditional antibiotics.

C. custom fermentation technology service: providing custom technology and consulting to other biologic companies, helps customers enhance and optimize their product lines.

3 Mission

Using innovative bio-manufacturing technology, we provide a safer, more efficient, and more environment-friendly product to promote sustainable development of the global breeding industry.

4 Values

A. Sustainability: we are committed to produce our products through environmentally friendly methods and avoiding dependence on natural resources.

B. Quality: we ensure that our products consistently meet the highest standards and quality.

C. Continuous innovation: we will keep on investing in research and development to pursue the forefront of our technology and product.

D. Win-win cooperation: we can build long-term, mutually beneficial relationships with our partners, customers, and communities.

5 Business objectives

A. Market shares: to become the leading supplier of shikimic acid microbial fermentation products in the feed additives market and achieve sales of more than $50 million in the next 5 years.

B. Research and development: to develop a minimum of 1-2 new microbial fermentation products or technologies every year.

C. Expansion: to reach the markets of other major countries in Asia in the next 3 years

D. Partners: to form strategic partnerships with at least 10 large animal feed manufacturers and farms.

E. Education and publicity: to host at least 20 training courses and seminars regarding the breeding industry annually, and to advertise microbial fermentation and its use in animal feed to raise public awareness of alternatives to antibiotics.

6 Company structure

The organizational structure and main departments of a start-up company that develops microbial fermentation technology may be straightforward, but research and market development should be given top priority. A potential core departmental and organizational structure is as follows:

A. Executive:

CEO: tasks with leading the senior management team, developing the company's overall strategy, and acting as a company representative.

COO: oversees day-to-day business operations and makes sure all business processes are running smoothly.

CFO: responsible for the company’s finances, budgeting, and capital financing.

B. Research and development(R&D):

CSO: responsible for leading the team and determining research directions and projects

Researcher: conducts laboratory research and develops new microbial fermentation products and technologies

Lab technician: responsible for maintenance and management of lab equipment and assisting researchers in conducting experiments.

C. Production and quality control:

Product manager: responsible for the management of production processes

Quality control team: responsible for products meeting quality standards.

D. Sales and marketing:

Marketing manager: leads the sales team and develops marketing strategies.

Sales team: builds relationships with customers and sells products.

Product manager: responsible for product packaging, positioning, and promotion

E. Customer service and technical support:

Customer service team: handles customer inquiries and feedback.

Technical support team: provides technical support and consultation for customers.

F. Administration and Human Resources:

HR manager: responsible for employee recruitment, training, and welfare, and other HR matters

Admin team: responsible for daily office matters, equipment procurement, and maintenance

This is only a basic structure and may change as the company grows. Additional departments might be necessary such as a supply chain department, international business department, etc. Furthermore, this structure could be altered and adapted to the specific needs of the company.

7 SWOT analysis

Strengths:

Innovative technology: microbial fermentation is more efficient and controllable compared to traditional extraction methods.

Cost-effectiveness: production costs are lower than traditional methods possibly due to production scale.

Sustainability: reduces dependence on natural resources which is conducive to eco-sustainability

High purity: microbial fermentation can achieve high-purity shikimic acid production. Rapid production capacity adjustment: production scale can be quickly adjusted according to market demands.

Weaknesses:

high initial investment: microbial fermentation technologies development and plant construction require a large initial investment.

Technical barriers: continuous investment in research and development is necessary for maintaining technological leadership.

Market awareness: consumers and industries may have doubts about new technologies as they are unfamiliar with them, indicating raising market awareness is needed.

Opportunities:

Market demand: microbial fermentation has huge market potential as there is an increasing demand for natural and pollution-free products from consumers.

Policy support: governments may provide policy and financial support to promote environmentally friendly and sustainable technologies.

Technology extension: can be applied to the production of other natural products. International markets: additionally, the product can potentially expand into international markets.

Threats:

Market competition: other companies may also be developing similar technologies. Price competition: there may be price competition in the market due to technology popularization.

Raw material availability: raw materials required for microbial fermentation may be affected by price fluctuations and supply disruptions.

Regulatory risks: new technologies and products may be subject to regulatory changes by governments.

8 Principal Clients

Animal husbandry:

Many livestock industries use antibiotic feed additives to increase the rate of animals’ growth and prevent disease. Owing to the concerns about antibiotic resistance, the market for non-antibiotic alternatives is gradually expanding.

Pisciculture:

Like animal husbandry, antibiotics are often used in fish farming. Non-antibiotic alternatives may also be in demand.

Pet food manufacturers:

As pet owners pay more attention to health and natural foods, the pet food market is also likely to take an interest in this alternative.

10 Market size and forecast

The size of the market in 2023, the global feed antibiotic is about 16 billion dollars, including the Chinese market is worth $7 billion, accounting for about 44% of the global market. However, in the international market, some developed countries have gradually restricted the use of antibiotics, and the market pattern of feed additives has changed. In 2013, the State Food and Drug Administration of China promulgated the Catalogue of Feed Additives, which stipulated the use scope and restrictions of different categories of feed additives and strengthened the supervision of feed antibiotics. In 2016, The State Council also clearly put forward the goals of strengthening the management of livestock and poultry breeding inputs, promoting the fine management of large-scale farming, improving the health level of livestock and poultry farming, and further strengthening the management of feed antibiotics. In terms of the international situation, since 2018, the EU has completely banned the use of antibiotics in feed. In the same year, the FDA proposed a plan to reduce the use of antibiotics in animal husbandry, establishing a new antimicrobial monitoring program. In addition, it is important to consider that global trends in meat, dairy, and fish consumption and increasing consumer concern for health and food safety may drive the demand for alternatives to antibiotics. According to statistics from foreign market research institutions, since 2015, the global shikimic acid market has continued to grow, reaching about 320 million US dollars by 2020, and is expected to continue to grow to about 460 million US dollars by 2027, of which the Chinese market size exceeds 200 million US dollars.

11 Financing plan

Before the business can become profitable, we expect to complete three rounds of financing, and the plan is as follows:

Seed round financing (now)

The goal is to raise initial funding to support early development and validation of the product, with a requirement of approximately $350,000. We plan to obtain the funds needed for this stage by self-financing with the founding team.

Angel round financing (next 12 months)

The product had initial technical validation, and funding was used for further research and development and market research, which required about $1 million.

A round financing (next 24-26 months)

When the product begins to enter the market, the funding will be used for production, marketing, and team expansion, which will require about $3 million.

12 Use of Funds

Research and Development

Improve the production process and formulation of shikimic acid feed additive; conduct more laboratory and field trials on the product to prove its effectiveness and safety.

Manufacturing

Renting plant and warehouse, purchasing necessary production equipment and raw materials.

Marketing and Sales

Conduct market research to understand customer needs.

Design packaging and brand image.

Establish sales channels and distribution networks.

Participate in industry exhibitions and seminars.

Administration and Daily Operation

Including office space rent, staff salary, daily office expenses, etc.

Legal & Compliance

Apply for relevant intellectual property protection.

At the seed round stage, the percentage of funds used is:

R&D 70% Administration & Daily operation 15% Manufacturing 15%

At the angel stage, the percentage of funds used is:

R&D 50% Administration & Daily operations 10% Manufacturing 20% Marketing 15% Legal and compliance 5%

At the Series A stage, the funds are used as follows:

R&D 30%, Manufacturing 40% Marketing 15% Administration & Daily Operations 10% Marketing 17% Legal & Compliance 3

Product market access legislation

a.Catalog of Feed Additive Varieties (2013) (Ministry of Agriculture Announcement No. 2045)

b. Measures for the Administration of Production License of Feed and Feed Additives (Revised by Decree of the Ministry of Agriculture and Rural Development No. 1 of 2022 on January 7, 2022)