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Adigrat University

College of Business and Economics,


Department of Accounting and Finance

Assignment on
Developing Business Plan for a Company
Case Study: King ICT Center

Name: Tirhas Kiros


Id No: 0245/06
EXECUTIVE SUMMARY

King ICT center was formed in the year ------- as a business offering ICT trainings for
community development and in a bid to market its services. It is locally recognized and
registered with in the city. It is located in Adigrat city, kebele 02.

The objectives of the center include: To have a community aware of ICTs as a tool to
economic development; To have a community accessing ICTs for their own economic
development needs; Capacity building; and Community development participation
through enhancement of ICTs knowledge in the rural community.

Contribution of the project to Local economy


This business has several benefits to the local economy. It offers low cost and fast ICT
services to the community. The area is in need of the facility / service as there are
teachers, lecturers, students and businesspersons.

SECTION ONE
MARKETING PLAN

1. Description of the Product

The services offered at the King ICT Center include: Computer training and Secretarial services
(Micrsoft word processing, Excel, Power Point).

We will provide core curriculum designed to train individuals from basic computer skills
to certification competencies. Students will be retained through Step-Level Based
Training indicated below:

i. Basic/Level 1 consists of students who have had little or no computer training.

ii. Advanced/Level 2 consists of students who have had at-home or on-the-job


experience with the majority of software packages.

iii. Intermediate/Level 3 consists of certification training of students in


preparation for the Microsoft Office User Specialist Certification Test.

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2. Market Areas: The business covers the whole community of Adigrat population,
particularly kebele 02.
3. Target Customers: The target group are students, teachers, business people, lecturers,
pupils,
4. Comparison of the Product wit Competitors: The center differs from other similar
services in the following ways
Training fee is low which makes the center preferred by customers
The class size is small. The center believes that by having smaller classes
(no more than 8 students) the trainer can be more attentive to the majority
of the students' needs. It focuses on quality training, not quantity.
5. Total Demand: The center enrolls 50 trainees per semester.
6. Market Share: The are not many TCT centers in the area. There are only 3 similar centers.
The market share of King ICT center is 75%.
7. Selling Price: the center offers service with a training fee of 150 birr per student per month.
One training program takes 3 months.
8. Promotional measures: to attract more customers we use the following:
Brochure
Business Cards
Flyers
9. Marketing Strategy
Our success of market depends on the way we advertise our services. We advertise our
products with brochures, business cards and flyers. We also use recommendations of
our graduates. We also use Social Media like facebook to advertise our services.
10. Marketing Budget: the budget for this purpose is estimated to be 200 birr.

SECTION TWO
PRODUCTION PLAN

2.1. Production Process

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The programmes being conducted by the centre are advertised regularly in the community. The
selected candidates are guided by our employees for the course suitable for them depending on
their background. They are also provided with the detailed programme indicating content of the
course, duration, course fees, etc. The course material will be given the center will also provide
additional computer time for undertaking projects. The centre may also offer placement
assistance to the students in various corporate sectors. Besides the training, the centre can also
undertake separately data processing work.

The center can offer 4 to 12 weeks duration short term courses and long term courses like
Certificate Course in Computers, Diploma in Computer Applications, Advanced Diploma in
Computer Science, Post Graduate Diploma in Computer Science, etc.

2.2. Fixed Capital


Computers ( 5): 65,000 birr

Desks:

Chairs:

Total: 77,000

2.3. Life of Fixed Asset: the computer room will last for 30 years and the computer
equipment will last for 10 years.
2.4. Repair and Maintenance: to improve our services, maintenance is done every 3
months.
2.5. Source of Equipment: Materials required for the training center are available
in the local market. We can get all necessary spare parts at reasonable costs.
2.6. Planned Capacity: the planned capacity is to serve 300 trainees per year.
2.7. Future Capacity: the center is working hard to expand its services and its
future capacity will accommodate 70 trainees per day. To realize that the center will open
branches in other kebeles.
2.8. Terms of Condition of Purchase Equipment: we employ strict follow-up to make
sure that equipment are delivered based on our specification and agreement.
2.9. Raw Material Availability: required raw materials are available in abundant in the
local market.
2.10. Labor: three employees are required: 1 secretary and two trainers.
2.11. Cost of Labor:

Secretary: 700 birr


Manager: 1500 birr

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Trainers (2): 3000 birr
2.12. Labor Availability: the labor availability is good. We can hire trainers from Adigrat
unievrsiy, from TVET or graduates from other universities or colleges.
2.13. Labor Productivity: our employees are hardworking and efficient.

SECTION THREE
ORGANIZATION MANAGEMENT
3.1. Organization Structure: the ICT center has the manager at the top. Under the
manager, there is a secretary.
3.2. Pre-Operating Activities: the following assessments were made prior to opening of the
training center.
Market Need Assessment: for two months
Location Identification: 3 days
Preparation of Business Plan: 2 days

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Room Construction: months
Equipment Installation: 2 days
Labor Assessment

SECTION FOUR
FINANCIAL PLAN
4.1. PROJECT COST/CAPITAL INVESTMENT
Preliminary & Preoperative Expenses 1000 birr
Machinery and Equipment
5 Computers 13,000 birr each 65,000
7 Chairs 300 birr each 2,100
7 desks 600 birr each 4,200
Total Project Cost 71,300
4.2. MEANS OF FINANCE
S.No Description Sal/mon. Amount
, birr
1 Owner 56,300
2 Loan 15,000
Total 71,300

4.3. OPERATING EXPENSES


i. Rent (per month)
400 birr

ii. Salaries & Wages (per month)


S.No Description Nos. Sal/mon. Amount,
birr
1 Manager/Entrepreneur 1 700 700
2 clerk 1 600 400
3 Attendant 1 300 300
4 Software trainers 2 600 1200
Total 2600

iii. Consumable Raw Material (per month)


S.No. Description Unit Qty Unit Cost Amount,
birr
1 CD pcs 105 10 100

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2 Chalk packet 1 30 30
3 Marker packet 1 100 100
4 Duster packet 1 20 20
Total 250

iv. Utilities (per month)..Overhead Cost


S.No. Description Unit Amount, birr
1 power LS 70
2 telephone LS 50
3 water LS 20
Total 140

v. Other Expenses (per month)


S.No. Description Amount, birr
1 Transportation Expenses 50
2 Advertisement Expenses 100
3 Repairs and maintenance 50
Total 200

vi. Summary of Total Operating Expenses (per month)


S.No. Description Amount, birr

1 Rent 400
2 Salaries and Wages 2600
3 Raw Material 250
4 Utilities 140
5 Other Expenses 200
Total 3,590

vii. General expenses (per year)


S.No. Description Amount, birr
1 Administration expenses 1000
2 Depreciation (10%) 7130
3 Interest expense (15%) 2250
4 Taxes 600
Total 10,980

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Income Statement
C. Revenues (per year)
Training course fee 50 per semester 150 birr/student =50*150*12=9000
0

Costs of services
Software purchase 3000 birr/year
viii. Total Cost per Year
S.No. Description Amount, birr
1 Total Operating Cost 43080
2 Depreciation (10%) 7130
3 Interest expense (10%) 2250
4 Taxes 600
5 Total 53060

INCOME STATEMENT

Total Revenue 90,000

Cost of Software Purchase 3000

Gross Profit 90000-3000=87,000

Operating Expenses
Salaries 400
Rent 2600
Raw Material 250
Utilities 140
Other Expenses 200
Total per month 3590
Total per year =3590 * 12 = 43080

General Expenses
Depreciation (10%) 7130
Interest expense (10%) 2250
Taxes 600
Total 9980

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Gross profit = net sales cost of goods sold = 87,000 Birr
Operating profit = gross profit total operating expenses
= 87,500 43080 = 44,420 Birr
Net profit = operating profit taxes interest
= 44,4209,980= 34440 Birr