MAKERERE UNIVERSITY

MAKERERE UNIVERSITY BUSINESS SCHOOL

FACULTY OF ENTREPRENEURSHIP AND BUSINESS ADMINISTRATION

DEPARTMENT OF ENTREPRENEURSHIP

BUSINESS PLAN ON MAKING DECORATIVE FASHION & DESIGN PIECES

FROM WASTE CLOTHING MATERIALS

A BSUINESS PLAN SUBMITTED TO MAKERERE UNIVERSITY BUSINESS

SCHOOL IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE
AWARD OF A BACHELORS DEGREE IN ENTREPRENEURSHIP
AND SMALL BUSINESS MANAGEMENT OF
MAKERERE UNIVERSTIY

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 Table of contents

Table of contents.........................................................................................................................................ii
Executive summary.....................................................................................................................................v
Company overview......................................................................................................................................1
1.0 Introduction.....................................................................................................................................1
1.1 Opportunity.....................................................................................................................................1
1.2 Vision..............................................................................................................................................2
1.3 Mission statement............................................................................................................................2
The plenty of choices of house dressing fashions made from waste materials from tailoring workshops
and sold at relatively low prices..................................................................................................................2
1.4 Objectives........................................................................................................................................2
Product/service description..........................................................................................................................3
2.0 Introduction.....................................................................................................................................3
2.2 Product/service features...................................................................................................................3
2.3 Product/service benefits...................................................................................................................4
Table 1: Features and benefits.....................................................................................................................4
Market and industry analysis.......................................................................................................................5
3.0 Introduction.....................................................................................................................................5
3.1 Market size and growth...................................................................................................................5
3.2 Target market...................................................................................................................................5
3.3 Industry structure.............................................................................................................................6
3.3.1 Threat of new entrants.................................................................................................................6
3.3.2 Threat of substitute products or services......................................................................................7
3.3.3 Bargaining power of customers (buyers).....................................................................................7
3.3.4 Bargaining power of suppliers.....................................................................................................8
3.3.5 Intensity of competitive rivalry....................................................................................................8
There is limited rivalry within this industry. There are many companies concentrating on satisfying
unique market segments with majority diverting towards clothing and textile sectors. This partly
explains why there are a number of tailoring workshops for example around market centres. There
are only two companies that make decorative fashions but not from waste materials. in addition,

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 there are a number of similar products present in the country being imported from foreign countries.
Some of these include house carpets, door mats and pillows, etc........................................................8
Competitor analysis.....................................................................................................................................9
4.0 Introduction.....................................................................................................................................9
4.1 Competitive environment................................................................................................................9
4.2 Competitor profile...........................................................................................................................9
4.3 Competitive advantage..................................................................................................................10
4.3.1 Competitive advantage matrix...................................................................................................10
Marketing plan..........................................................................................................................................12
5.0 Introduction...................................................................................................................................12
5.1 Target market strategy...................................................................................................................12
5.2 Product/service strategy.................................................................................................................12
5.3 Pricing strategy..............................................................................................................................13
5.4 Positioning.....................................................................................................................................14
5.5 Communication strategy................................................................................................................14
5.6 Channel strategy............................................................................................................................14
5.7 Sales strategy.................................................................................................................................15
5.8 Revenue model..............................................................................................................................15
Operations plan..........................................................................................................................................16
6.0 Introduction...................................................................................................................................16
This section of the business plan covers the Input factors, Production/service delivery process, Quality
control, Record keeping and procedures and Billing and collection policies and procedures....................16
6.1 Input factors...................................................................................................................................16
6.1.1 Raw materials and suppliers......................................................................................................16
6.1.2 Equipments................................................................................................................................16
6.2 Production/service delivery process...............................................................................................17
6.3 Quality control...............................................................................................................................19
6.4 Record keeping and procedures.....................................................................................................21
6.5 Billing and collection policies and procedures...............................................................................21
Management plan......................................................................................................................................22
7.0 Introduction...................................................................................................................................22
7.1 Company organization...................................................................................................................22

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7.1.1 Staff structure/organization chart...............................................................................................22
7.1.2 Board of advisors.......................................................................................................................22
7.1.3 Company ownership..................................................................................................................23
7.2 Management team..........................................................................................................................23
7.3 Reward structure............................................................................................................................23
Financial plan............................................................................................................................................24
8.0 Introduction...................................................................................................................................24
8.1 Investment requirements................................................................................................................24
The initial investment cost of the business is Uganda shillings 15Milion to start on a small scale and
provide for the fixed capital requirements, pre-operating expenses and working capital...........................24
8.2 Financing plan...............................................................................................................................24
8.3 Financial assumptions and projections...........................................................................................24
The business has made a number of assumptions and financial projections as shown below;...................24
8.3.1 Financial assumptions................................................................................................................24
8.3.2 Financial projections..................................................................................................................25
8.4 Financial sustainability strategy.....................................................................................................25
8.5 Risk and opportunity......................................................................................................................26
8.5.1 Risk and opportunity matrix......................................................................................................26
Development plan......................................................................................................................................28
9.0 Introduction...................................................................................................................................28
9.1 The implementation plan...............................................................................................................28
9.2 The Gantt chart..............................................................................................................................29
Appendices................................................................................................................................................30
Appendix 1: Legit Pieces Product Samples...............................................................................................30
Appendix 2: initial investment cost...........................................................................................................31
Appendix 3: initial investment cost...........................................................................................................32
Appendix 4: sales projections....................................................................................................................33
Appendix 5: depreciation schedule............................................................................................................34
Appendix 6: salaries projections................................................................................................................35
Appendix 7: general expenditures.............................................................................................................36
Appendix 8: working capital schedule.......................................................................................................36
Appendix 9: Income and Expenditure Account.........................................................................................37

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Appendix 10: income statement................................................................................................................37
Appendix 11: balance sheet.......................................................................................................................38
Appendix 12: Net Present Value...............................................................................................................38

Executive summary
Legit pieces is a sole proprietorship business organization located in Luzira – a suburb of
Kampala city. It is famous for its scintillating display of unrivaled fashion variety ranging from
respectable door mats, house carpets, pillows, nice decorative clothe pieces, wall hangings, rags,
and small bags made out of waste materials/clothe pieces from tailoring workshops. According
to KCCA, Kampala city generates 800tons of waste per day, 73.8% of which comes from market
centres. Tailoring is one of the major dominant economic activities in market centres. it was
introduced in Uganda in the eighteenth century by the Europeans, Arabs and Asians and since
then it has employed a number of people. In the markets of St. Balikudembe (Owino) market,
Nakasero market, Wandegeya market, Nakawa market, Kalerwe market, Down town Kampala,
Kasubi, Ntinda, Kitintale, Luzira, Nakulabye and Nabutiti; tailors make, repair, or alter clothing,
after which they usually collect and dump the wasted materials that remain unused or cut from
the clothing material.this provides an opportunity to recycle these wastes into something to save
the environment from pollution.

The initial products that will be made will include door mats, house carpets, pillows, nice
decorative clothe pieces, wall hangings, rags, and small bags by collecting wastes, washing and
drying the materials, sewing and weaving to make products, and embroidering the products
according to its design or customer specification. At growth, the business will acquire an
advanced textile machinery to introduce embroidery, sweater knitting and garment making to its
existing products and services.

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The business targets residential household with its plenty of designs with abstracts to nature, art
and illusionary designs carefully blended into harmonious designs that portray personality, style
and tranquility. The business desires to be the market leader by offering quality customized
products that fuses both African, Arabic and European designs.

Our competitive advantage is derived from the most advanced technology in embroidery and
fashion designs, producing products at the lowest cost in the industry because we do not buy our
major raw material, and Access to highly trained and skilled personnel human resources who
have been recruited from an array of professional educational disciplines like Entrepreneurship
and small business management, Garment construction, Fine art, Basic design and marketing.
They bring to the venture variety of skills in weaving, garment construction, sewing, and
business management skills.

The business seeks Ushs15Million to start on a small scale and be able to generate incremental
revenues worth Ushs79Millions in first year of operation, Ushs91M, Ushs115M, Ushs160M and
Ushs250Millions in the second, third, fourth and fifth year respectively.

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vii
Company overview

1.0 Introduction

Legit pieces is a sole proprietorship business organization. It is famous for its scintillating
fashion designs. It may not match the trendy spots favored by Kampala's affluent, but it presents
an unrivaled display of fashion variety ranging from respectable door mats, house carpets,
pillows, nice decorative clothe pieces, wall hangings, rags, to small bags, among others. Many
Ugandans will for ages come from far and near to Legit Pieces to fill their fashion prescriptions.
Here, men, women and children will combine to quench the country's fashion thirst and
increasing need for affordable fashions and designs made out of waste materials/clothe pieces
from tailoring workshops. Legit Pieces is located in Luzira – a suburb of Kampala city, just
along the port bell road.

1.1 Opportunity
The emergence of market centres around major strategic places in Kampala city has attracted a
lot of economic activities, notable among them is tailoring. Kampala is the largest city and
capital of Uganda. The city is divided into five boroughs that oversee local planning: Kampala
Central Division, Kawempe Division, Makindye Division, Nakawa Division and Lubaga
Division. Every division has its own markets and each market owns an army of tailors. The most
important and crowded of such markets have been St. Balikudembe (Owino) market, Nakasero
market, Wandegeya market, Nakawa market, Kalerwe market, Down town Kampala, Kasubi,
Ntinda, Kitintale, Luzira, Nakulabye and Nabutiti market among many other markets. Tailoring
was introduced in Uganda in the eighteenth century by the Europeans, Arabs and Asians and
since then it has employed a number of people. Common thing with tailors in these markets is
one; when they make, repair, or alter clothing, they usually collect and dump the wasted
materials that remain unused or cut from the clothing material. Kampala city council authority
charges them for waste disposal yet they could reuse these wastes to make various products.
According to KCCA, Kampala city generates 800tons of waste per day, 73.8% of which comes
from market centres with the rest being tree cuttings, glass, metals, and paper.

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As an alternative of having to suffer the unending plight of environmental downfall because of
the poor disposal of tailoring waste albeit other garbage wastes, I am introducing products made
from recycling tailoring waste. All the waste generated, instead of being dumped will be used to
make fashionable house decorative pieces.

1.2 Vision
An ample supplier of the country's house dressing demands.

1.3 Mission statement

The plenty of choices of house dressing fashions made from waste materials from tailoring
workshops and sold at relatively low prices.

1.4 Objectives
i. To establish a state of the art textile technology for all textile needs by 2020
ii. To expand market share by 50% within 2016
iii. To reduce waste from textile industry/garment making by 10% within 2015
iv. To ensure sustained growth of 20% within a year
v. To train 500 young men and women on garment making from wasted pieces so that they
can create their own jobs within 5 years.

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Product/service description

2.0 Introduction
This section of the business plan covers the product/service features and benefits. This is as
described below;

2.2 Product/service features

The product is fashionable materials made from wastes collected from tailoring workshops. The
initial products that will be made will include door mats, house carpets, pillows, nice decorative
clothe pieces, wall hangings, rags, and small bags. At growth, the business plans to acquire an
advanced textile machinery to introduce embroidery, sweater knitting and garment making to its
existing products and services.

The products will highly be appreciated for the impeccable finish and stylish look. The
variegated designs, shapes and sizes will attract the attention of the fashion conscious youth.
Further, we shall provide customized designs as per the specifications of our clients at a
competitive market price. Example of such designs may include writings like ‘’welcome’’, ‘’I
love you’’, ‘’home is best’’, drawings of animals etc.

The products will be durable. They will be made from original materials using the best and most
advanced textile technology transferred from China. Once made, the products will be used for a
very long period of time (depending on the frequency of use and care by the owner).

The products will have alluring and attractive colours. Each item will be made using a
combination of colours, well aligned along or across stripes. There are plenty of designs with
abstracts to nature, art and illusionary designs. These and more can be carefully blending into
harmonious designs that portray personality, style and tranquility.

The products will be branded to differentiate it from those of competitors. Two branding options
standout that is Standardized branding- with company details (logo, brand name, symbols, catch
word, contacts…) and, Customized branding, having information of the buying
companies/organizations/individuals well designed on the products.

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Our future services to be launched include; Training in the field of textiles and garment
construction that encourages entrepreneurial activity. Extensive course portfolio is offered
continuously. Advisory Services on business improvement can be obtained from skilled trainers
and business owners, who are available for one-on-one consultation. Production Facility, which
can be rented, allows entrepreneurs to manufacture their products utilizing state of the art
equipment. Raw Materials sought after equipment and spare parts can accessed from a network
of suppliers at competitive prices. Research Facility, including an extensive library of books and
current periodicals, allows entrepreneurs to gain inspiration on new designs and current trends
and Joint Retail and trade show participation allows for products exposure to wide ranging
customers.

Samples of the products can be found in appendix 1.

2.3 Product/service benefits

The benefits of the products are summarized in the features and benefits table below.

Table 1: Features and benefits

Features Benefits
Variety of Variety of uses; ensuring that the whole house is well dressed up. door mats at
products the door, carpet in the rooms, pillows on beds, nice decorative clothe pieces
covering tables and chairs, beautiful hangings on walls, rags, and small bags
well designed.
Best quality Durability and appearance. The materials will be woven carefully using the
best technology to make attractive and durable products which can last the
taste of time.
Innovativeness Recycling waste. Instead of being left to get wasted, burnt or dumped, the
wastes will be brought to best use making usable fashionable products for use.
Branding Identification and differentiation. To standout among the crowd, one has to
stand up. Our products hence have to be different from the current offer, for
us to not only become known but to be recognized as a brand-the new face of
entrepreneurs in the country.
Low prices Ease of affordability. We do not want to make products and keep. Rather we
want to make and sell now, sell more the next day and much more in future.
Additional Every business starts with a hope of growing. Once it grows, customers also
services increase numbers and needs. The business will therefore add to its existing
business embroidery, knitting and garment making as well as trainings to
meet the needs of customers.

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Market and industry analysis

3.0 Introduction
This section of the business plan covers the market size and growth, target market and industry
structure.

3.1 Market size and growth

The business is competing for the fashion and design market with emphasis on fashion
accessories for homes like door mats, carpets, wall hangings, etc. The world is very receptive to
designs and fashions from all over the world. It is the fastest growing industry with many young
inspired designers and the legendary ones playing in one market to satisfy the client. There are
fashion designs inspired by cultures from all over the world, lifestyle and the like. A fresh look
to your home is simple way of portraying style and class and there is no better way to earn this
plus than getting interior decoration. Interior designing is an art of using art pieces, prints and a
variety of items to make rooms look elegant. Uganda provides a large market size for interior
decorations. There are more than 30 large scale interior designers in Uganda with the most
outstanding being Nina Interiors, Biplous (U) Ltd, Symbion Uganda Ltd, Decor Plus Ltd,
butterfly creations, Esprit Interio ltd, C’Mona decorators, homes ltd, Habitat interiors limited,
Interio complex, and Flex impressions among others. Uganda’s population is on the rise.
According to the new vision article published on June 23 2013, Uganda’s total population has
grown to 37.5 million, translating to about 7.5million households. This therefore provides a large
market size for the house decorations.

3.2 Target market

The business’s primary target market is residential households. These customers need plenty of
designs with abstracts to nature, art and illusionary designs, carefully blended into harmonious
designs that portray personality, style and tranquility.

The secondary target market is interior designers. They need unique designs of art pieces, prints
and a variety of items to make rooms for their clients look elegant.

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3.3 Industry structure
The fashion and design (decorative designs) industry has a number of players in different sub
sectors. Some are in interior designing, textile and fashion, art and craft, and clothing and
textiles.

Using micheal porters five forces model, the attractiveness of this industry can be described as
follows. Porter five forces analysis is a framework for industry analysis and business strategy
development. It draws upon industrial organization economics to derive five forces that
determine the competitive intensity and therefore attractiveness of a market. Attractiveness in
this context refers to the overall industry profitability. An "unattractive" industry is one in which
the combination of these five forces acts to drive down overall profitability. A very unattractive
industry would be one approaching "pure competition", in which available profits for all firms
are driven to normal profit. This analysis is associated with its principal innovator Michael E.
Porter presently at Harvard University as of 2014.

3.3.1 Threat of new entrants

This industry can attract a lot of entrants. This is because it is very profitable. Every product
made is sold, be it now or in future and the products are long lasting. There is freedom of entry
and exit. Any firm can enter the industry, make profits or losses and exit easily. There is a low
capital requirement for this industry. The materials that are used are almost free of charge
because they are considered waste. If sold, they can be so cheap that just shs50,000 can buy as

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much material as possible. They technology used to make the products is also relatively cheap
with the most advanced costing not more than shs5million. There is however high switching
costs because if a producer changes line of business, all customers will be lost. There is brand
loyalty to established brands. Quality producers always make the best in terms of attracting and
retaining more customers.

3.3.2 Threat of substitute products or services

There are many substitute products made locally by other entrepreneurs like Texda, etc, and
those industrial products imported from countries like China. The existence of products outside
of the realm of the common product boundaries increases the propensity of customers to switch
to alternatives. Door mats, pillows, wall hangings, carpets and others have been made by other
companies like Stella atal, textile development agency, and others are imported. Standardization
and uniqueness can therefore help young entrepreneurs to beat competition from such products.
Making quality and standardized brands can help a business acquire brand recognition and
loyalty, which cannot be easily affected by the presence of substitute products.

3.3.3 Bargaining power of customers (buyers)

This industry has many buyers of all age groups. A young boy in the village can decorate his
grass thatched house with wall hangings, carpet and door mat; a school going child can grab a
pillow; a hostel student at university and any other person can grab a few or more of the products
that can be made using waste materials from textile workshops. These buyers can therefore be
categorized into local buyers within Uganda and international buyers in case the product is
imported. Products from Uganda is easily traded with neighbouring countries like south sudan,
and quality hand made products are very attractive to foreigners/tourists who visit the country.
These customers however demand for quality products, best customer service and cheap prices.
They are very sensitive to prices and the presence of a cheap substitute can easily attract their
attention. Their other major determinants of the market demand are the consumer preferences
and the related manufacturing costs. A garment company being profitable depends on its
operational efficiency plus the ability to make good business deals with the marketers of fashions
including those that are in the whole sale or the retail cloth selling business. So as to effectively
compete in this industry the business requires skilled as well as intensive labor so as to out
compete larger companies in the industry.

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3.3.4 Bargaining power of suppliers
The bargaining power of suppliers is also described as the market of inputs. Suppliers of raw
materials, components, labor, and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes. This industry however has a lot of suppliers
of not only machinery, but also labour and the raw materials. The raw materials (waste from
textile workshops) for instance can be given out free of charge and in case it is sold, it can attract
a very low price. There is a possibility of forward integration where the producing firms can
bring textile workshops on board for quick and reliable supply of raw materials.

3.3.5 Intensity of competitive rivalry

There is limited rivalry within this industry. There are many companies concentrating on
satisfying unique market segments with majority diverting towards clothing and textile sectors.
This partly explains why there are a number of tailoring workshops for example around market
centres. There are only two companies that make decorative fashions but not from waste
materials. in addition, there are a number of similar products present in the country being
imported from foreign countries. Some of these include house carpets, door mats and pillows,
etc.

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Competitor analysis

4.0 Introduction
This section of the business plan covers the competitive environment, competitor profile and
competitive advantage.

4.1 Competitive environment

The fashion and design (decorative designs) industry has limited competition, with notable firms
including;

The Textile Development Agency (TEXDA) Stella Uganda Uganda

Plot 9/11/13 Corporation Rise, Bukoto Off Green African Art & Fashion Studio.
New Kiira road, at Radio Simba stage P.O. Box 12259 Kampala (Uganda),
P.O. Box 6346, Kampala Uganda Plot 474 Old Kiira Rd Kamwokya,
Tel: +256-414-505 958 Tel. +256-312-291655.
Mobile: +256-713-438 732 Mob: +256-772-468131.
email: texdauganda@gmail.com
www.texdauganda.net

4.2 Competitor profile

The business has no direct competitors but a few indirect competitors that satisfy customer’s
needs with similar products. They include Texda and stella Uganda. The competitor profile
matrix below shows the comparison of our offer with those of the competitors.

4.2.1 Competitor profile matrix

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Attributes Legit Pieces The Textile Atal Stella
Development Uganda
Agency Great
(TEXDA) African
Art
Studios
Waste recycling 5 3 2
Product range 5 5 5
Standard & customized designs 5 5 5
Quality (Durability) 5 5 5
Attractiveness 5 5 5
Future plans (product/service expansion, etc) 5 4 4
Market size 3 5 5
Location 5 5 5
Prices 4 5 5
Target market 2 5 5
Distribution channels 3 3 3
Management team 5 5 5
Operation costs 2 5 5
Strategic alliances 4 4 4
Company size 1 4 4
Profitability 5 5 5

4.3 Competitive advantage

The business derives its competitive advantage as shown in the competitive advantage matrix
shown below.

4.3.1 Competitive advantage matrix

Main Their strengths over my Their weaknesses over My competitive advantage over
compe business my business competitor
titors
TEXD They manufacture the High costs of operations: New technologies. We are
A highest quality hand- they incur huge amounts introducing the most advanced
woven fabrics, garments of cost in making the technogy that will enable us to make
and interior designs. products because they large quanitities of products to
Their range of superb buy raw materials satisfy our target market.
products includes home expensively.
decorative items like Cost Leadership: our products are to

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 curtains, tablecloths, They take too long to be created at the lowest cost in the
cushion covers, napkins make products. This is industry (we obtain raw materials
and placemats, to because they use cheaply or free of charge), sold at
mention a few. Of rudimentary methods of lower prices to generate larger sales
particular note is the production. margin.
weaving of kikoy from Differentiation: provide a variety of
long strand organic products, services, or features to
cotton. consumers
Stella They have Original and Limited production Access to highly trained and skilled
Studio creative pieces of capacity. They cannot personnel human resources. We
s products and artifacts and mass-market a new have recruited the best human
have set up show room at product because they resource who will innovate and
their headquarters in cannot meet a large introduce completely new or notably
Kamwokya-a Kampala demand. better products or services.
suburb. Operational Effectiveness: quickest
customer service and advanced
distribution network

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Marketing plan

5.0 Introduction
This section of the business plan covers the Target market strategy, Product/service strategy,
Pricing strategy, Positioning, Communication strategy, Channel strategy, Sales strategy and
Revenue model.

5.1 Target market strategy

We shall originally sell to individual households; everyone who wants to decorate their rooms or
houses; after which we look for interior designers who may use our products to do their jobs. The
product is catering to the fashion taste buds of the young, teenage and old generation. Thus, the
target market would be based on the age group ranging from 14-45 years of age. These groups
shall be low to middle bracket individuals who cannot afford the expensive industrial products
imported into the country; most of whom live in Uganda.

For long, our target customers have been waiting for new innovations different for what they
have been buying. Something African, half western but blended in African cultural designs with
stylish finish, looks and colours, something that is environmentally friendly. These customers
make buying decisions basing on the nearness to the product outlet. We shall therefore increase
the number of stores, where customers can come to the nearest outlet and shop. In future, we
intend to include to our existing customer segment, knitting and garment construction for ladies,
children and men. This is because they are a large buying segment of such offers.

5.2 Product/service strategy

What makes my works different from the rest of the signers is the simplicity of the designs that
makes them attractive. I do hand prints on them which is my trademark and that will make my
label "legit pieces" famous in Uganda for many years to come. All products have original
African hand print, which makes them appealing to all types and class of people. Some of these
products have a western style but with an African finish. I would like to open a one-stop center
for art, fashion and interior designing in my capital city-Kampala where all customers can find
all our products.

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Our initial product offer will include; door mats, house carpets, pillows, nice decorative clothe
pieces, wall hangings, rags and small bags. Within five years, we shall launch embroidery,
knitting and garment making to young men and women because they are a large market for
creative designs.

5.3 Pricing strategy

Our pricing strategy is introductory low price to get customers to use. We shall set at a price
lower than the eventual market price, to attract new customers with the expectation that
customers will switch to the new brand because of the lower price and raise the prices later once
the market share is gained.

As a result, our pricelist will be as follows;

Product Door mat Wall Carpet Rag Pillow Decorative Small bags
hanging clothe
pieces
Prices 2000 1000 20000 500 2000 1000 2000

Our pricing strategy makes our products cheaper than those of competitors. The table below
shows comparison of our prices and those of competitors

Product Door mat Wall Carpet Rag Pillow Decorative Small bags
hanging clothe
pieces
Legit 2000 1000 30000 500 2000 1000 2000
pieces
Texda 4000 3000 50000 1000 5000 5000+ 5000
Atal 4500 4000 50000 1000 5000 5000+ 5000
Imported 7000+ 5000 100000+ 1000 10000+ 10000+ 15000

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5.4 Positioning
We are here to quench the country's fashion thirst and increasing need for affordable fashions
and designs made out of waste materials/clothe pieces from tailoring workshops. We
manufacture the highest quality hand-woven fabrics, garments and interior designs. Our range of
superb products includes home decorative items like door mats, house carpets, pillows, wall
hangings, table hangings and placemats, to mention a few. To see our fashion designs is to fall in
love with them. Our designs, an explosion of colours, unique fabrics, prints and symbols are
artistically and visually stimulating. If you want to look unique, fashionable and African, Legit
pieces is the way to go. We want to be a recognizable figure on the Ugandan and international art
and fashion scene.

Our name is Legit because we shall be formally registered to operate in our line of business, and
pieces represent the wasted pieces of clothes that we shall assemble using our advanced
techniques, skills, creativity and innovation to make fashionable products.

5.5 Communication strategy

The goal of our communication strategy is to increase market share by 50% within a year of
operation. The customers will be informed about the availability of our offer through the
following means. Outdoor advertising using posters and vehicles, and cinema; we shall organize
events like the fashion week and also participate in exhibitions and conferences. We shall
struggle to build our brand name and make it known above the rest of competitors.

5.6 Channel strategy

Our products will reach the customers through personal selling and through distributors,
wholesalers and retailers. We shall negotiate with Craft shops like Uganda crafts 200 limited,
Afriart Gallery, Kampala Uganda, Aid child Gallery, Kampala Uganda, Banana Boat, Kampala
Uganda, Classic African Art, Kampala, Uganda, Tulifanya Art Gallery, Kampala, Uganda,
Kreations Unique Gifts N Baskets Kampala Uganda, Crafts Village - National Theatre Kampala
Uganda, Banana boat among others to be our channel partners and or stock or display our
products for customers who visit their premises. We shall also do personal selling at our
workshop in Luzira where the customers will come on daily basis to do their shopping.

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5.7 Sales strategy
We shall sell our products through personal selling by the company sales force. We shall
generate leads through; creating a Web site that can capture leads. It will be easy to navigate and
have information about your company and its products or services. We shall capture customer
information through a form that asks them questions about their needs; promote our business on
social network sites like facebook, twitter, skype, etc. Social networking sites are popular with
many different types of people. These sites are where people go to connect with others. we shall
create a page on these sites to promote our business. When a customer "friends" you or "becomes
a fan," all of the people in their network can learn about the company; we shall also promote our
business on news sites. We shall write a press release concerning our business and post it on
news sites that allow linking to our website. We shall participate in trade shows and fashion
shows to showcase our products to potential clients, advertise on local news papers, radio
stations and billboards, encourage customer referrals to promote the word of mouth of satisfied
clients and look for opportunities to speak at trade shows, conferences and industry events. The
sales team will be recruited on merit, trained and compensated according to their efforts.

5.8 Revenue model

The business’s revenue model is shown below;

LEGIT PIECES'
Sales projections
(Amount in UGX)
Price indicators Year 1 Year 2 Year 3 Year 4 Year 5
Annual price growth rate 5% 10% 15% 20%
Door Mats & Pillows 2,000 2,100 2,310 2,657 3,188
Wall hangings & Decorative pieces 1,000 1,050 1,155 1,328 1,594
Volume indicators Year 1 Year 2 Year 3 Year 4 Year 5
Annual volume growth rate 10% 15% 20% 30%
Door mats & Pillows 26,400 29,040 33,396 40,075 52,098
Wall hangings & Decorative pieces 26,400 29,040 33,396 40,075 52,098
Annual Sales Year 1 Year 2 Year 3 Year 4 Year 5
Door mats & Pillows 52,800,000 60,984,000 77,144,760 106,459,769 166,077,239
Wall hangings & Decorative pieces 26,400,000 30,492,000 38,572,380 53,229,884 83,038,620
Total sales 79,200,000 91,476,000 115,717,140 159,689,653 249,115,859

15
Operations plan

6.0 Introduction

This section of the business plan covers the Input factors, Production/service delivery process,
Quality control, Record keeping and procedures and Billing and collection policies and
procedures.

6.1 Input factors

The business requires a number of raw materials, equipments and machinery as well as suppliers
of those items. This is as shown below.

6.1.1 Raw materials and suppliers

Raw materials Description Suppliers

Waste materials (clothe All clothe waste from Market centres
pieces) tailoring workshops
Natural fibres (cotton) Threads for weaving the Nytil, etc
fashion designs
Natural textiles (cotton) Quality varieties Nytil picfare ltd, Nyanza textile
industries ltd, pamba textiles ltd, etc.

6.1.2 Equipments

Equipments Description Suppliers

Embroidery machine Computerized Indian shops in Kampala
Computer Dual core Computer Giant, Computer World, etc.
Sewing machine Computerized Several shops in Kampala
Weaving equipment Full set Texda, etc.

Premises

The business requires a small room that can accommodate the production unit, storage store
which can double as show room, and administrative department.

16
6.2 Production/service delivery process
Our production process is continuous and includes the following.

1. Washing and drying raw materials. After the waste materials are collected from the
workshops, they will be washed using soap and detergents to ensure they are clean, and
dried both naturally through the sun or through a drying machine.
2. Sorting to varieties: after the materials are dry, they are sorted to identify those fit for
certain products. For example, the very tiny/small pieces will be put in the category of
those for making pillows.
3. Weaving & sewing: Weaving is a method of fabric production in which two distinct sets
of yarns or threads are interlaced at right angles to form a fabric. Some products like the
carpets, wall hangings and door mats will be woven. The weaving process involves;
Winding threads on the warping board, removing the threads by chaining them for
portability, the warp is spread and looped around the lease stick for “beaming on” to the
loom. The lease stick is pulled around the beam by a hand crank. Warp threads are
threaded through heddles and then through a reed used for beating, Beaming onto the
back beam or wrapping onto the back beam, Threading through the heddles, Threads
inserted in the reed, the weft is the fiber which passes through an open shed and across
the warp by shuttle. The shed is open and closed by the lifting of harnesses, Shuttle with
bobbin wrapped with weft threads, Foot treadles which operate the harnesses to go up or
down, Harnesses are lifted by the treadles they are tied to and by how they are threaded to
create patterns. Handlooms can have 4 to 24 harnesses. As the warp shed is closed, the
beater pulls the weft thread into place, Harnesses rise which lifts threads and gives a
"shed" for the shuttle to pass through, and the beater places the weft in position. The final
woven product will bear the beautiful look as shown below.

17
Other products like wall hangings, small bags and cushion/pillow covers will be sown using the
sewing machine.

4. Embroidering: the final sewed and woven products will the undergo embroidery to
produce the very final products. The embroidery process is possible using an embroidery
machine. Its process includes the following.
i. Artwork Stage: During this stage of the embroidery process, our artists go to
work creating innovative custom designs to fit each client's needs. They size the
artwork to fit the desired garment, and then the client is contacted to finalize the
design size, colors, and overall appearance. Once finalized, the design is sent to
the embroidery department.
ii. Digitizing : The embroidery process begins with an idea or a piece of artwork.
That artwork then has to be "digitized" which is the specialized process of
converting 2 dimensional artwork into stitches or thread. Contrary to popular
opinion, you cannot take a particular format of art such as a jpeg, tif, eps, bmp,
and convert it to an embroidery tape. The digitizer has to actually recreate the
artwork using stitches, meaning, the digitizer is programming the sewing
machine to sew a specific design, in a specific color, with a specific type of
stitch. This is the process known as digitizing. Also, because embroidery is 3
dimensional, some exciting effects can be included to "spruce up" a normally flat
piece of artwork.

18
 iii. Production: Once the artwork has been digitized, it is then ready to be put into
production. Production embroidery is a very hands on process. Before the sewing
can begin, specific thread colors must be loaded by hand into the machines. A
spool of thread for each color for each sewing head must be loaded. The machine
itself is programmed by the operator to sew the design in a particular color
sequence and a particular sewing speed. The garments must then be "hooped"
individually, again by hand, and then loaded into the machine. Once the design
has completed sewing, the garment is taken off the machine, un-hooped, and then
sent to the next step in the production process and
iv. Finishing: After the garments have been sewn, they go through the finishing
process. During this step, the garments are inspected for quality, individually
trimmed of excess backing material and excess threads, then folded and packaged
ready for the end user.

The production process can be illustrated as shown below;

Washing & Sorting Weaving & Embroidery Final

drying sewing product

Recycling

6.3 Quality control

Legit pieces intend to ensure that its products maintain the highest level of quality through the
following;

Use of affordable but high quality raw materials (waste materials) obtained locally in markets
like Owino, Nakawa, etc. these materials will be cleaned, washed and sorted to make sure they
are of good grades.

We shall Use of advanced machinery for quality production. The company will acquire an
embroidery machine which will be imported from India. This machine

19
Employ relatively cheap but highly skilled, knowledgeable, experienced and qualified team of
young entrepreneurs with hands on skills training in fashion design, industrial fine art, basic
designing, technical drawing, marketing and business administration.

Regular supervision of the production process to ensure that all processes function properly,
encouraging specialization and rotations of workers during the operations of the processes as and
when needed,

Inspection of finished products to ensure that every product is examined visually to fine detail
before the product is sold into the external market. Inspectors will be provided with lists and
descriptions of unacceptable product defects such as cracks or loose clothe finishes, etc.

Ensure general cleanliness of the workplace by assigning tasks to cleaning officers to regular
sweeping and dusting of the production place and furniture , washing hands off the dyes and
pigments after each use,

Regular repair and maintenance of production machinery, tools and equipments through
servicing, greasing, repair and replacement of worn out parts…

Making quality one of core values pinned along with other wall hangings where they can be read
easily by the workers. To produce quality products, we shall base on one principle ‘’have we
liked what we have made’’, ‘’would we buy it if we didn’t make it’’, etc.

Proper handling and storage of raw materials and finished products in a well aerated/ventilated
and moisture free rooms.

Recycling of damaged products to make better ones and Benchmarking on competitors products
so as to continue improving ours.

Put in place the best customer service mechanism. We shall carryout customer acceptance
sampling. Surveys and questionnaires will be used to obtain such feedback and also identify
areas of improvement.

20
6.4 Record keeping and procedures
The Accountant will maintain and update the records. These may include records of employees,
customers, suppliers, taxing authority, invoices, bank statements, taxes, receivables, payables,
among others. The Accountant prepares the monthly financial statements and forwards it to the
Executive Director for approval. This may take not more than two days. These will be prepared
monthly and kept until the final year financial statement is extracted. Payroll is processed semi-
monthly and is run and distributed by the 19th and 4th of each month. The Executive Director
forwards approved timesheets to the Accountant at the end of each period.

6.5 Billing and collection policies and procedures

Sales will be recorded as revenue in the period received or the period in which a pledge is
received. Purchase requisitions may be generated by anyone in the office. The requisitions are
turned in to the General Manager for approval and given to the office assistant for order
placement. The approved purchase requisitions are given to the Accountant and filed in the open
order file. When the goods or services are received, the Accountant pulls the purchase requisition
and compares the order received to the packing slip and the purchase requisition for accuracy.
The packing slip is attached to the purchase requisition and returned to the open order file until
the invoice is received.

Invoices are paid on the 1st and the 15th of each month. Prior to generating checks, a pre-check
report is generated which lists all outstanding payables with the due dates and amounts. Late
payments are not tolerated and incentives are given to entice early payments.

21
Management plan

7.0 Introduction
This section of the business plan covers the company organization and the management team.

7.1 Company organization

7.1.1 Staff structure/organization chart

ADVISORS

GENERAL
MANAGER

PRODUCTION ACCOUNTS MARKETING

MANAGER ASSISTANT MANAGER

DESIGNERS SALES TEAM

7.1.2 Board of advisors

The company will hire two advisors who will be on its board. They will be distinguished persons
with adequate experience, skills and knowledge on clothing and textiles to ensure that the project
is carried out in a professional and ethical manner. The business owner is still head hunting these
two persons. Their role will include among others; meet periodically to offer advice and
direction to a company, to guide them on sensitive issues, assist research teams and other groups,
offer useful suggestions based upon research and experience, Advise and assist the business in
shaping its goals, strategies, and priorities and assessing its programs and progress in relation to
established goals, priorities, and criteria.

22
7.1.3 Company ownership
The company will be owned by one person, the founder Ms. Rhonete Agasha.

7.2 Management team

1. Business owner/General Manager
The business General Manager will be the owner of the business; Ms. Ronete………..
Her duties will include among others;
2. Production managers.
a) Garment construction
b) Fine artist/Basic design

7.3 Reward structure

The organization intends to put in place one of the best reward systems that will build a better
employment deal, hold on to good employees and to reduce turnover. This will include Extrinsic
rewards like Bonuses, Salary raise, Gifts, Promotion and Other kinds of tangible rewards, as well
as intrinsic rewards like Information / feedback, Recognition, Trust, Relationship and
Empowerment.

The business’s salary structure is shown in appendix 6.

23
Financial plan

8.0 Introduction
This section of the business plan covers the Investment requirements, financing plan, financial
assumptions and projections, financial sustainability strategy and Risk and opportunity.

8.1 Investment requirements

The initial investment cost of the business is Uganda shillings 15Milion to start on a small scale
and provide for the fixed capital requirements, pre-operating expenses and working capital.

8.2 Financing plan

The investment requirements will be financed by personal savings and contributions from friends
and family, sharing 60:40 contribution ratios respectively.

8.3 Financial assumptions and projections

The business has made a number of assumptions and financial projections as shown below;

8.3.1 Financial assumptions

General assumptions are shown in appendix 2.

Capital expenditures: the company will acquire a number of fixed assets for its operations
including among others machines, tools, and equipment. See appendix 3 for more details.

Funding: the funds are from both equity sources. See appendix 3 for more on such sources of
funds.

Revenue forecasts: The revenue forecasts for the business will consider 265 working days,
production target of 26,000 door mats and pillows as well as 26000 wall hangings and decorative
pieces per year as shown in appendix 4.

Depreciation plan: with the assets above, we intend to follow straight line depreciation policy
and depreciation rates as follows; 20% for building, 20% for machinery and equipment, 25% for
motor vehicle, 12% for furniture and 33% for computer. See appendix 5 for more details.

24
Salary: very attractive Salary projections have been designed to attract and retain quality human
resources. See appendix 6.

Other expenses: the company has extracted a list of other expenditures (indirect costs of
materials, labor, and so on). See appendix 7.

Working capital: the company’s extracts of inventory, accounts receivable, and accounts payable
have also been shown in appendix 8.

8.3.2 Financial projections

Income & expenditure a/c: Our projections show a surplus for the next five years of business
operation, growing at an annual rate of 5%. See appendix 9.

Cash flows: The Company’s cash balances (cash at hand) are sound and promising. See appendix
10 for more information.

Financial position: The projections show an annual financial strength of the company, which
stretches throughout the five years and beyond. See appendix 11for more details.

Break even analysis: the business breaks even in the fourth month of its operation. See appendix
12 for details.

8.4 Financial sustainability strategy

Setting revenue target: the business will set itself to generate at least shs100, 000 per day on sale
of its products. This will enable it to take care of its expenses and remain with substantial
amounts of profits.

Reinvesting profits: the profits that will be accumulated will be reinvested in the business to
expand branches, add units, repair and maintain the equipments, or even replace the worn out
equipments.

Expansion to diversify income: the business will diversify its sources of income by introducing
activities like trainings on embroidery, designs and knitting. This is expected to generate a lot of
money which can enable the business to survive for long.

25
Events: the business will organize events like community cleanups, charity runs, donation drives,
etc which will attract sponsors. This can enable the business to earn some money.

Request for subsidies from government: since we are helping to implement government
programme of environmental conservation, we stand a chance of getting donations and subsidies
like tax holidays, among others.

8.5 Risk and opportunity

Like any other business, Legit pieces is susceptible to a number of risks as well as quiet a
handful of opportunities. This is shown in the risk and opportunity matrix below;

8.5.1 Risk and opportunity matrix

Risk/opportunity Potential Prevention/capitalizing

impact
Risks
Competition from imported products Extreme
from countries like china, India and
Kenya. Some of these products are
second hand products which are so
cheap.
Customers belief that artistic designs High
made locally are expensive
High taxes on young entrepreneurs and High
their products, some of which do not
consider the size of the business and the
level of profitability
Artist’s rights were being violated by Extreme
business people and because most artists
don't have money to pay lawyers.
Equipment and machinery break down, High
due to over use, end of useful life, etc.
Lobby for government support of the
fashion industry designers. This can be
by restricting entry of products that are
locally available.
We shall inform them that they are
buying something original and of
quality.
Request the government to reduce taxes
on fashion accessories that are not
available in Uganda yet they help in the
production. Also lobby for tax holidays
and subsidies from the government.
Suing company (ies) that used and
duplicated our works and sold them to
the market without our permission.
We shall purchase advanced machinery
that have been tested for good results
and for long working hours;

26

High costs of operations like costs of High
labour, staff welfare, transportation, fuel,
advertising, etc.
Failure to reach sales and revenue Low
expectations
Opportunities
Indigenous knowledge on clothing and Extreme
textile in Uganda. Clothing and textile is
something that has been practiced by
even our forefathers.
Large number of interior designers, more High
than 30 in Uganda
Presence of tertiary institutions offering Extreme
courses on textile and garment
production. Like Kyamb ogo university
Government bodies trying to ensure High
environmental sustainability
Availability of business experts from Extreme
Makerere University Business School for
instance the entrepreneurship centre, and
Department of Entrepreneurship.
accompanied by a guarantee from
manufacturers.
Cut costs on areas that do not bring in
enough revenue and avoid unnecessary
costs unless it is so relevant.
Revive our advertising strategies,
reduce prices and stimulate our
distribution mechanisms.
Innovate our products basing on the
already existing knowledge and blend it
with the techniques of western world to
make fashionable products.
Partner with them to supply them with
our products
Solicit for technical and professional
support so as to produce quality
products.
Partner with them to conserve the
environment. This include KCCA,
NEMA, etc.
Tap into their wealth of knowledge,
information and experience to succeed.
Ask for opportunities to show case our
products in events organized by them. S

Development plan

9.0 Introduction
This section of the business plan covers the implementation plan and the Gantt chart.

27
9.1 The implementation plan
The business’s action plan is broken down using the work breakdown structure as shown below;

WORK BREAKDOWN STRUCTURE

ACTIVITY TIME PERSONS RESPONSIBLE
FRAME
Feasibility study & analysis 2 months General Manager
Business planning & documentation 1 month General Manager
Ordering for machinery, tools and equipments 1 month General Manager
Renovation of the premises 1 month Outsourced team
Installation of machinery & equipments, 1 month Outsourced team
furniture, utilities, etc.
Hiring human resource 1 month General Manager
Training human resource 1 month Outsourced team
Register the business 1 month General Manager
Open and launch company website 1 month General Manager
Look for potential distributors, wholesalers and 1 month General Manager
retailers.
Print & distribute advertising items like Continuous General Manager
posters, fliers, business cards, etc.
Sample production & customer feed back 1 month Production manager
Full scale production Continuous Production manager
Customer service, publicity, etc. Continuous Sales force
Acquire a trademark 1 month General Manager

9.2 The Gantt chart

GANTT CHART
ACTIVITY MILESTONES (MONTHS)
Feasibility study and analysis
Business plan
Ordering for machinery, tools and equipments
Renovation of the premises
Installation of machinery & equipments, furniture,
utilities, etc.
Hiring human resource
Training human resource
Register the business
Open and launch company website

28
Look for potential middlemen like retailers etc.
Print & distribute advertising items like posters, etc.
Sample production & customer feed back
Full scale production
Customer service, publicity, etc.
Acquire a trademark
A M Ju Ju A S O N D
pr a n l u ep ct o e
il y g t v c

29
Appendices

Appendix 1: Legit Pieces Product Samples

30
31
Appendix 2: initial investment cost

LEGIT PIECES'
Financial Assumptions
Note 1
Number of operational days in a year 264
Number of months in a year 12
Corporation Tax 30%
Discount Factor 30%
Note 2 Capacity indicators
Capacity (Volume in units) per day/week, etc
Door mats & Pillows 100
Wall hangings & Decorative Pieces 100
Note 3 Depreciation policy
Buildings 20.0% sln
Machinery & Equipment 20% sln
Motor Vehicles 25% sln
Furniture, Fixtures 12% sln
Computers 33% sln
Note 4 Working capital requirements
Inventory purchases 0 days
Debtors - 1 months' revenue 1 month
Creditors 1 month's expenses (Excluding salaries) 1 month
Note 5 Cost indicators % of revenue
Power & lighting 1.20%
Water 2.50%
Airtime, telephone bills 2.30%
Transportation 3.00%
Admin Expenses 4.00%
Business Promotion (advertising, etc) 1.80%
Maintenance & Repairs 3.70%
Cleaning 2.00%
Note 6 Financing
Personal savings 50.00%
Friends & family 30.00%
Underutilised Assets 20.00%
Total 100%

32
Appendix 3: initial investment cost

LEGIT PIECES'
Initial Investment (start up costs)
(Amount in UGX)
Investment Item Amount
Fixed Assets: Year 0
Land & Building (underutilised)
Land & site development 400,000
Total Land & building 400,000
Machinery & Equipment:
Equipment (Weaving, etc) 500,000
Machinery (Embroidery & Sewing)5,500,000
Total Machinery & Equipment 6,000,000
Motor Vehicles:
Delivery Van 5,000,000
Total Motor Vehicles 5,000,000
Furniture & Fittings (donated)
Furniture & fittings 500,000
Total Furniture, fittings & others 500,000
Computers (donated) 500,000 500,000
Pre- Operating Expenses
Plant layout 200,000
Legal costs 300,000
General expenses 100,000
Total pre- operating expenses 600,000
Working Capital 2,000,000
Total Investment cost 15,000,000
Financing structure
Personal savings 50.00% 7,500,000
Friends & family 30.00% 4,500,000
Underutilsed Assets 20.00% 3,000,000
Total 15,000,000

33
Appendix 4: sales projections

LEGIT PIECES'
Sales projections
(Amount in UGX)
Price indicators Year 1 Year 2 Year 3 Year 4 Year 5
Annual price growth rate 5% 10% 15% 20%
Door Mats & Pillows 2,000 2,100 2,310 2,657 3,188
Wall hangings & Decorative pieces 1,000 1,050 1,155 1,328 1,594
Volume indicators Year 1 Year 2 Year 3 Year 4 Year 5
Annual volume growth rate 10% 15% 20% 30%
Door mats & Pillows 26,400 29,040 33,396 40,075 52,098
Wall hangings & Decorative pieces 26,400 29,040 33,396 40,075 52,098
Annual Sales Year 1 Year 2 Year 3 Year 4 Year 5
Door mats & Pillows 52,800,000 60,984,000 77,144,760 106,459,769 166,077,239
Wall hangings & Decorative pieces 26,400,000 30,492,000 38,572,380 53,229,884 83,038,620
Total sales 79,200,000 91,476,000 115,717,140 159,689,653 249,115,859

34
Appendix 5: depreciation schedule
LEGIT PIECES'
Depreciation schedule
(Amount in UGX)
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Building
Opening cost 400,000 400,000 400,000 400,000 400,000 400,000
Additions -
Depreciation 20%
Net Book Value 400,000 400,000 400,000 400,000 400,000 400,000
MACHINERY AND EQUIPMENT
Opening cost 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000
Additions
Depreciation 20% 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000
Accumulated Depreciation 1,200,000 2,400,000 3,600,000 4,800,000 6,000,000
Net Book Value 6,000,000 4,800,000 3,600,000 2,400,000 1,200,000 -
MOTOR VEHICLES
Opening cost 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000
Additions 8,000,000
Depreciation 25% 1,250,000 1,250,000 1,250,000 1,250,000 3,250,000
Accumulated Depreciation 1,250,000 2,500,000 3,750,000 5,000,000 8,250,000
Net Book Value 5,000,000 3,750,000 2,500,000 1,250,000 - 4,750,000
FURNITURE
Opening cost 500,000 500,000 500,000 500,000 500,000 500,000
Additions
Depreciation 12% 60,000 60,000 60,000 60,000 60,000
Accumulated Depreciation
Net Book Value 500,000 500,000 500,000 500,000 500,000 500,000
Computers
Opening cost 500,000 500,000 500,000 500,000 1,500,000 1,500,000
Additions 1,000,000 1,000,000
Depreciation 33% 165,000 165,000 495,000 495,000 825,000
Accumulated Depreciation 165,000 330,000 825,000 1,320,000 2,145,000
Net Book Value 500,000 335,000 170,000 675,000 180,000 355,000
TOTALs
Opening cost 12,400,000 12,400,000 12,400,000 12,400,000 13,400,000 13,400,000
Total Additions - - - 1,000,000 - 9,000,000
Total Depreciation - 2,675,000 2,675,000 3,005,000 3,005,000 5,335,000
Total Accumulated Depr - 2,615,000 5,230,000 8,175,000 11,120,000 16,395,000
Total Net Book Value 12,400,000 9,785,000 7,170,000 5,225,000 2,280,000 6,005,000

35
Appendix 6: salaries projections
LEGIT PIECES'
Salaries projections
(Amount in UGX)
Number of staff Year 1 Year 2 Year 3 Year 4 Year 5
Category
General Manager 1 1 1 1 1
Production Manager 1 1 1 1 1
Accounts Assistant 1 1 1 1 1
Marketing Manager 1 1 1 1 1
Designers & Driver 3 3 3 3 4
Sales representative 3 3 3 3 5
10 10 10 10 13
Salary rate per month Year 1 Year 2 Year 3 Year 4 Year 5
Annual increase in rate per year 5% 6% 7% 8%
General Manager 750,000 787,500 834,750 893,183 964,637
Production Manager 500,000 525,000 556,500 595,455 643,091
Accounts Assistant 300,000 315,000 333,900 357,273 385,855
Marketing Manager 250,000 262,500 278,250 297,728 321,546
Designers & Driver 200,000 210,000 222,600 238,182 257,237
Annual salary amount

General Manager 9,000,000 9,450,000 10,017,000 10,718,190 11,575,645

Production Manager 6,000,000 6,300,000 6,678,000 7,145,460 7,717,097
Accounts Assistant 3,600,000 3,780,000 4,006,800 4,287,276 4,630,258
Marketing Manager 3,000,000 3,150,000 3,339,000 3,572,730 3,858,548
Designers & Driver 2,400,000 2,520,000 2,671,200 2,858,184 3,086,839
Total annual salary 18,600,000 19,530,000 20,701,800 22,150,926 23,923,000

36
Appendix 7: general expenditures
LEGIT PIECES'
General Expenditure projections
(Amount in UGX)
% of sales
General expenses revenue Year 1 Year 2 Year 3 Year 4 Year 5
Power & lighting 1.20% 950,400 1,097,712 1,388,606 1,916,276 2,989,390
Water 2.50% 1,980,000 2,286,900 2,892,929 3,992,241 6,227,896
Airtime, telephone bills 2.30% 1,821,600 2,103,948 2,661,494 3,672,862 5,729,665
Transportation 3.00% 2,376,000 2,744,280 3,471,514 4,790,690 7,473,476
Admin Expenses 4.00% 3,168,000 3,659,040 4,628,686 6,387,586 9,964,634
Business Promotion (advertising, etc) 1.80% 1,425,600 1,646,568 2,082,909 2,874,414 4,484,085
Maintenance & Repairs 3.70% 2,930,400 3,384,612 4,281,534 5,908,517 9,217,287
Cleaning 2.00% 1,584,000 1,829,520 2,314,343 3,193,793 4,982,317
Total General expenses 16,236,000 18,752,580 23,722,014 32,736,379 51,068,751

Appendix 8: working capital schedule

LEGIT PIECES'
Working capital schedule
(Amount in UGX)

Working capital requirements Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Inventory 13,000,000 17,000,000 23,000,000 33,000,000 50,000,000
Debtors - 1 months' revenue 6,600,000 7,623,000 9,643,095 13,307,471 20,759,655
Creditors 1 month's expenses (Excluding salaries) 16,236,000 18,752,580 23,722,014 32,736,379 51,068,751
Net Working Capital 2,000,000 3,364,000 5,870,420 8,921,081 13,571,092 19,690,904

Incremental Working Capital 2,000,000 1,364,000 2,506,420 3,050,661 4,650,011 6,119,812

37
Appendix 9: Income and Expenditure Account

LEGIT PIECES'
Income and Expenditure Account
(Amount in UGX)
Year 1 Year 2 Year 3 Year 4 Year 5
INCOME
Total Sales 79,200,000 91,476,000 115,717,140 159,689,653 249,115,859
Other income (Training, etc 2,000,000 200,000 2,000,000 2,000,000 3,000,000
Less: EXPENDITURE
Salaries 18,600,000 19,530,000 20,701,800 22,150,926 23,923,000
Depreciation 2,675,000 2,675,000 3,005,000 3,005,000 5,335,000
General expenses 16,236,000 18,752,580 23,722,014 32,736,379 51,068,751
Net profit before interest and tax 43,689,000 50,718,420 70,288,326 103,797,348 171,789,108
Net profit before tax 43,689,000 50,718,420 70,288,326 103,797,348 171,789,108
less: tax 30% 13,106,700 15,215,526 21,086,498 31,139,204 51,536,732
Net profit (loss) after tax 30,582,300 35,502,894 49,201,828 72,658,144 120,252,375
Retained earnings 30,582,300 66,085,194 115,287,022 187,945,166 308,197,542

Appendix 10: income statement

LEGIT PIECES'
Cashflow statement
(Amount in UGX)
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Cash Inflows
Opening cash balance (1,200,000) 60,400,000 132,617,000 221,761,465 346,064,728
Personal savings 7,500,000
Friends & family 4,500,000
Underutilsed assets 3,000,000
2,000,000 200,000 2,000,000 2,000,000
Sales 79,200,000 91,476,000 115,717,140 159,689,653 249,115,859
Total Inflows 15,000,000 78,000,000 153,876,000 248,534,140 383,451,118 597,180,587
Cash Outflows
Pre-operating Expenses 600,000
Capital Expenses 13,600,000
Working Capital 2,000,000 1,364,000 2,506,420 3,050,661 4,650,011 6,119,812
Operating expenses 16,236,000 18,752,580 23,722,014 32,736,379 51,068,751
Loan repayments - - - - -
Total Outflows 16,200,000 17,600,000 21,259,000 26,772,675 37,386,390 57,188,563
Closing cash balance (1,200,000) 60,400,000 132,617,000 221,761,465 346,064,728 539,992,025

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Appendix 11: balance sheet
LEGIT PIECES'
Balance sheet
(Amount in UGX)
Year 1 Year 2 Year 3 Year 4 Year 5
ASSETS:
Non current assets
Net non current assets 9,785,000 7,170,000 5,225,000 2,280,000 6,005,000
Current assets
Inventory 13,000,000 17,000,000 23,000,000 33,000,000 50,000,000
Debtors 6,600,000 7,623,000 9,643,095 13,307,471 20,759,655
Cash 60,400,000 132,617,000 221,761,465 346,064,728 539,992,025
Total current assets 80,000,000 157,240,000 254,404,560 392,372,200 610,751,680
Total Assets 89,785,000 164,410,000 259,629,560 394,652,200 616,756,680
Equity and Liabilities
Equity & reserves
Capital 15,000,000 15,000,000 15,000,000 15,000,000 15,000,000
Retained Reserves 30,582,300 66,085,194 115,287,022 187,945,166 308,197,542
Owners Equity 45,582,300 81,085,194 130,287,022 202,945,166 323,197,542
Current Liabilties
Accruals 27,966,700 64,572,226 105,620,524 158,970,655 242,490,387
Creditors 16,236,000 18,752,580 23,722,014 32,736,379 51,068,751
Total current liabilities 44,202,700 83,324,806 129,342,538 191,707,034 293,559,138
Total Equity & Liabilities 89,785,000 164,410,000 259,629,560 394,652,200 616,756,680

Appendix 12: Net Present Value

LEGIT PIECES'
Net Present Value computation
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Cashflows
Initial Investment 15,000,000
Net Cashflows 60,400,000 132,617,000 221,761,465 346,064,728 539,992,025
15,000,000 60,400,000 132,617,000 221,761,465 346,064,728 539,992,025
Discount factor 30% 1.000 0.769 0.592 0.455 0.350 0.269
Present Value 15,000,000 46,461,538 78,471,598 100,938,309 121,166,881 145,435,552

NPV 507,473,878
IRR 503%

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