Efrem, Merga and their friend’s partnership Business plan

1 Contents
1. STATEMENT OF PURPOSE ............................................................................................................ II
2. Executive summary ............................................................................................................................. 1
3. Back ground ........................................................................................................................................ 2
4. Goal and objective .............................................................................................................................. 2
4.1 Objectives ..................................................................................................................................... 2
4.2 Goal ............................................................................................................................................... 2
4.2.1 Short term goal ....................................................................................................................... 2
4.2.2 Long term goal ....................................................................................................................... 2
4.3 The enterprise has identified three keys to its success. ............................................................. 2
5. Form of Ownership ............................................................................................................................. 3
6. Product and Service will provide ........................................................................................................ 3
7. Legal requirements.............................................................................................................................. 4
8. CAPITAL REQUIREMENTS ............................................................................................................ 5
8.1 Manpower Requirements .............................................................................................................. 5
8.1.1 Direct Labour ......................................................................................................................... 5
8.1.2 Indirect Labour and Administration ....................................................................................... 6
8.1.3 Other Labour Costs ................................................................................................................ 7
8.2 Outside Services............................................................................................................................ 7
8.3 Equipment & Materials Expense .................................................................................................. 8
8.4 Summary of financial plan .......................................................................................................... 10

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 Efrem, Merga and their friend’s partnership Business plan

1. STATEMENT OF PURPOSE

This report is designed to provide a general picture of requirements and costs involved in
establishing and operating Efrem, Merga and their friend’s partnership small-scale metal
Work enterprise in Bole sub city Wereda 15 Addis Ababa, Ethiopia. It should provide
sufficient information to help businessmen and other leaders determine whether the potential
deserves more detailed attention. Plans for actual development and installation of a plant will
require additional engineering and financial advice.

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 Efrem, Merga and their friend’s partnership Business plan

2. Executive summary

The business will be formed as a corporation with five owner stockholders. Each stockholder
will own equal amount of percentage and responsibility. The enterprise provides quality of
any metal product Manufacturing services to the ever expanding need for reduced work load.
The Centre focuses on providing full services on Manufacturing and assembling any metal
products from office & home items to construction building rafter or truss , scaffolding
,handrails, tent and others manufacturing & assembling procedure and as well as it will
transfer to produce Trailer board, stands and Isuzu Vans and versatile products will produce
in our fabrication shop as long term plan. The enterprise is also planned to carry out activities
including adoption of existing technologies of light duty machineries of various products,
fabrication of such process machineries and manufacturing products demanded in the local
market. Marketing Plan which clearly addressees the best strategy approaches. Financial Plan
describing Cost of starting the business and maintaining it, the financial plan also briefly
explains projected operating expenses, projected cash flow and Initial balance sheet
performed for the company, The Organization, Management, and Staffing Plan part contains
all the information necessary for identifying the number and responsibilities of employees.

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 Efrem, Merga and their friend’s partnership Business plan

3. Back ground

Efrem, Merga and their friend’s partnership is a start-up organization in Addis Ababa Bole
sub city Wereda 15. We are engaged in manufacturing and supplying a wide range of metal
products that are highly demanded by various companies & industries as well as individual
consumers. Owing to the high quality standards, these are successfully meeting the
requirements our customers.

4. Goal and objective

4.1 Objectives

The objectives for Efrem, Merga and their friend’s partnership enterprise are:
1. To be viewed as first-class metal fabrication enterprise to the country.
2. Maintain a developmental and high gross profit business firm through time.
3. Maintain a modest, steadily growing net profit margin.

4.2 Goal

4.2.1 Short term goal

 Construct profitable and self-independent business firm
 Becoming number one metal fabrication business firm from Addis Ababa.

4.2.2 Long term goal

 Open many standard sister business firms around the country.
 Establish high scale vehicle assembling & Trailer manufacturing centre.
 Establish national brand car manufacturing centre.

4.3 The enterprise has identified three keys to its success.

 Only offer solutions which are based on market demand.

 The products provided by the company would have long-term economic values and
should make sense of environmental considerations.

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 Efrem, Merga and their friend’s partnership Business plan

5. Form of Ownership

Efrem, Merga and their friend’s partnership enterprise is an enterprise started based on
partner owner ship. The enterprise partners are:

1. Efrem Getachew (B.sc in Electro Mechanical Engineering)

2. Merga G esese (B.sc in Manufacturing Engineering)
3. Heyi Denboba (B.sc in Mechanical Engineering)
4. Daniel Girma (B.sc in Automotive Technology)
5. Abreham Mamuye (B.sc in Mechanical Engineering)

This enterprise will be led by the seasoned management team and all all partners have
graduated & received a B.Sc. degree from different Universities through a combination of
excellent education and good work experience. Therefore the management team will be able
to successfully execute on its business plan properly.

6. Product and Service will provide

The main areas Efrem, Merga and their friend’s partnership enterprise will offer are:

 Any Metal product Production: The enterprise provides quality of any metal product
Manufacturing services to the ever expanding need for reduced work load. like

o Main gates
o Office & home items
o Construction items (Metal rafters (truss), scaffolding, handrails)
o Guard house (for Banks, for modern individuals building and for malls)
o Trailer board, stands for trucks
o Isuzu Vans
o Tents, shades
o Truck chairs, baggage holder frame
o Candle manufacturing machine frame

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 Efrem, Merga and their friend’s partnership Business plan

7. Legal requirements

For any business to start up and get on its own feet the most crucial Performa is being
accepted by the countries governmental body which is responsible for organizing creating
and licensing this type of partnership enterprise. Before obtaining the licence for opening
such enterprise there are legal requirements to be attained by the opening body. Acceding to
our countries contest the legal requirements to be attained for opening such enterprises are:

 The starters of the enterprise should be free from any violence or past records of any
miss conduct.
 Ensuring all stakeholders are job seeker.
 Establishment agreement of the enterprise between the stakeholders.
 Licensing the firm
 The contract agreement between the the enterprise owners and the government
regarding to shade provision.
 A detail and descriptive business plan showing the firms process and market plans
must be provided.

Apart from this we need other legal inputs which includes

 Loan agreement between the enterprise and government financial sectors

 Arrangement of Work order agreement (market linkage) between our enterprise and
demanded customers, factories, industries…

Considering the above requirements and other Performa, legal, financial, personnel and
technical documents that our enterprise has been prepared and has submitted for all the
governing body and we are waiting for Loan permission based on our business plan.

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 Efrem, Merga and their friend’s partnership Business plan

8. CAPITAL REQUIREMENTS

Capital requirements for establishing metal work enterprise plant detailed allocation of the
total needed capital is presented below:-

8.1 Manpower Requirements

8.1.1 Direct Labour

Operation of this enterprise will require 10 direct workers, including about three
metalworkers and two apprentices or helpers. The average wage for all metalworking
production workers is will be roughly least per hour, considerably more than wages received
by workers in other industries in the county but When the plant reaches full capacity, wage
rates in our enterprise should vary from 2500 birr to 3500 birr for the skilled workmen and
from 1500 birr to 2000 birr for the trainees. Annual cost of direct labour would amount to
_______, including approximately 120 hours of overtime at the standard wage rate. The
three skilled workmen should be able to perform all of the manufacturing operations.

S.N wages and salaries Cost/month (birr) Cost/Year (birr)

1 Skilled workmen 1 2,500 30,000
2 Skilled workmen 2 2,500 30,000
2 Skilled workmen 3 2,500 30,000
4 Helper 1 1,500 18,000
5 Helper 2 1,500 18,000
Total amount of birr 10,500 126,000

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 Efrem, Merga and their friend’s partnership Business plan

8.1.2 Indirect Labour and Administration

The size of the projected plant, selected personnel will need to perform more than one
function.
1. Plant manager, for example, should also be an engineer and a liaison officer. His
duties as plant manager include general supervision of the various operations of the
company and accomplishment of some external activities.
2. Sales man, planning for methods and product improvement, responsibility for
purchasing all materials and major supply items, and estimating the quantity of
materials needed for the various custom fabrication jobs.
3. Shop foreman, His duties as an engineer include preparing and supervising the entire
workshop operation and serve as a maintenance guide.
4. Design & Draftsman Engineer, the preparation of shop blueprints and drawings,
estimating costs to be used for bidding on jobs, and preparing purchase requisitions
for special materials required for particular jobs which are not carried in stock. Many
of these duties will also be part of his collaborated with sales man.
5. Resource & Property manager, he is a manager and supervisor of all the property
owned by the enterprise besides controlling resource utilization.

So, annual indirect labour and administrative cost will be incurred by the plant. Estimated
wages and salaries for those five necessary personnel are as follows:

S.N wages and salaries Cost/month (birr) Cost/Year (birr)

1 Plant manager-engineer 3000 36,000
2 Engineer-salesman & promoter 3000 36,000
2 Shop foreman & mechanic 3000 36,000
4 Designer & Draftsman 3000 36,000
5 Resource control Property manager 3000 36,000
Total amount of birr 15,500 180,000

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 Efrem, Merga and their friend’s partnership Business plan

8.1.3 Other Labour Costs

S.N Company costs Cost/month Cost/Year

(birr) (birr)
1 Social Security
2 Manufacturing supplies and factory tools and supplies
2 advanced maintenance work

4 secretarial duties

5 Contingencies

Total amount of birr

8.2 Outside Services

S.N Requirements Cost/month Cost/Year

(birr) (birr)
1 Power
2 Telephone
2 water
4 postage & social media (telegraph, Facebook)
5 Advertising and printing
6 Administrative and selling travel and related expense
7 Licenses and taxes (except Federal income tax)
8 Dues, and subscriptions around neighbour enterprises
9 Rent some equipment’s for specific task
10 Auditing expense
11 Miscellaneous
12 Training Costs

13 Contingencies
Total amount of birr

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 Efrem, Merga and their friend’s partnership Business plan

8.3 Equipment & Materials Expense

Unit price Total Price

S.N. Production Tools and Equipment Units Quantity
(Birr) (Birr)

1 welding machine Pcs

2 Hack saw Pcs
3 Metal shear Pcs

4 Bending machine Pcs

Basic Big Grinder Pcs
5
Necessaries
6 Small Grinder Pcs
Machines
7 Air Compressor Pcs

8 Metal Drill Pcs

9 Concrete Drill Pcs

10 Pcs

11 Riveter gun Pcs

12 wrench box set

13 Thread make set

14 Files Pcs

15 Metal Hammer Pcs

16 Plastic Hammer Pcs

Auxiliary
17 Rubber Hammer Pcs
Equipment
18 Vernier Calliper Pcs

19 Measuring devices Pcs

20 Canter Punch Pcs

21 Compass Pcs

22 Chisel Pcs

23 some Fixtures Pcs

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 Efrem, Merga and their friend’s partnership Business plan

Unit price Total Price

S.N. Production Tools and Equipment Units Quantity
(Birr) (Birr)

24 Desktop computer Pcs

25 Tables Pcs
Office
26 Chairs Pcs
furniture and
27 Copier Pcs
equipment
28 Printer Pcs

29 Stationary items set

30 Sheet metal Pcs

31 RHS Pcs

32 SHS Pcs

33 Paint Gallon
Pre-operating
34 costs (Raw Electrode Pack

materials) Grinder wheel

35 Pack
consumption

36 Drill bits Pack

37 Sand paper Roll

38 Stracho Kg

39 Safety shoe Pcs

40 Overhall Pcs

41 welding Glove Pcs

Safety
42 Dust mask Pcs
Equipment
43 ear plug Pcs

44 Helmet Pcs

45 welding mask Pcs

TOTAL COST

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 Efrem, Merga and their friend’s partnership Business plan

8.4 Summary of financial plan

 Starting cost (initial capitalization plan): is the sum of direct & indirect Labour
cost, Other Labour Costs, Outside Services, Equipment & Materials Expense

S.N. Description Total cost

1 Direct Labour
2 Indirect Labour and Administration
3 Other Labour Costs
4 Outside Services
5 Equipment & Materials Expense
Total initial capitalization plan

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