RIFT VALUE UNIVERSITY COLLEGE JIMMA BRANCH DEPARTMENT OF

ACCOUNTING

ASSIGNMENT ANSWER SHEET ON COMPONENTS OF MISSION OF A FIRM (T.M.T

INTERPRICE, PLC) IN JIMMA TOWN

BY: ETAGEGNEHU TEMESA

JUNUARY, 2016
JIMMA, ETHIOPIA
BUSINESS PLAN FOR T.M.T INTERPRICE, PLC IN JIMMA TOWN
(MISSION STATEMENT)

Contents
A. Executive Summary
B. Summary of Background
C. Business Environment
D. Business Background
E. Operations
F. Go to Market Plan
G. Investment
H. Cash Flow Forecast
MISSION STATEMENT

The T.M.T enterprise mission is to provide quality and fresh tomatoes for supply to Jimma
buyers. We shall endeavor to provide our fresh tomato in door to door delivery and cost-
competitive manner, while providing our customer care advantage.

EXECUTIVE SUMMARY

The T.M.T is a registered cooperative which has 5 paid up members who will constitute the
owner of the enterprise. The project will supply tomatoes throughout the year from December
2009.

The T.M.T is a new tomato harvesting enterprise being made available to small businesses, self-
employed, owner-based businesses, and individuals in the jimma Market area. The owner, of
The T.M.T enterprise, has extensive agricultural development agent over 5 years' experience in
a deferent position of agriculture office of Ethiopia. Since 200 they have been concentrating in
the plant production and agricultural marketing requiring position, in agricultural
development .The share holder received their diploma in agricultural profession and know
studying B.A jimma University. Desiring to start our own business, we established BAD
Accounting plc, to provide accounting service in 2006.

The foundation for the plan is a combination of primary and secondary information from their
experience at their previous work experience, upon which the marketing and production
strategies are built. Discussions and interviews were held with a variety of individuals and small
businesses trader of tomato to understand why and how they consider the market of tomato.
Relevant data from governmental and house hold consumer of potato were consulted to develop
the market potential and competitive situation.

Initially, the T.M.T enterprise will start operation at dado ber to produce tomato calti in arada
by the three share holder. Keeping low overhead in the start-up phase the T.M.T enterprise.
Shall specialize in individual and private limited customers. As growth warrants, additional
staffing assistance and/or branch office location can be realized.

INTRODUCTION

In today's highly competitive environment, formal business planning is an essential element in

achieving business success. A well-written business plan is primarily a communication tool to be
used in obtaining financing. In certain instances, particularly with our early stage, this business
plan also serves as a strategic plan for our tomato production. This business plan describes
our story and how we intend to grow with our customer satisfaction. The T.M.T enterprise, share
holder has made an in-depth analysis of its opportunities and weaknesses and it has concluded
that their intended business has an excellent chance to succeed.

C. Capital contribution
Initial finance will inject into the company by each of the owner. Tamene Mohamed, mulgeta
urga,tigst germma,cheru eshetu and Sheriff jemal contributed 50,000 birr each 10,000 birr.
In addition there is group loan from oromia credit and saving association amounting 100,000.
Totally the T.M.T enterprise, establishment capital will be 150,000 birr.
D. Business Background

As can be seen from the section above, we have several new initiatives which will shortly add to
our existing income streams
Market SWOT Analysis

Strengths
 The share holder and worker are well experienced more than five years in RADA as
member of government agricultural office.
 Thorough knowledge of their DA practice, an understanding of emerging technologies,
and an appreciation of the agri business skills required by tomato production. .
 The government regulation on tax and provision of affirmative action and support for
small business in agriculture. Have a strong and expanding client base.
 Skills transfer capabilities.
 The member understanding of the agricultural practice and experience will make
competent.
Weaknesses
 We do not have adequate working capital to develop and expand the business.
Opportunities
 We would have many years of agricultural expertise, enabling us to be at the forefront of
our competitor.
Threats
 We need to give at less price continually until to keep abreast of competitors

E. Operations
The T.M.T enterprise will have on its staff for production of tomato;-
  A manager who works with marketing and on all technical aspects of their consultancy.
And who manages all marketing and financial aspects of the company and seeks New
Business opportunities.
 A tutor or trainer who delivers skills transfer and quality control of production of
tomato.
 A team of production and harvest collection of tomato.

Key existing staff will be Tamene Mohamed, who have five year experience in deferent position
ARDA. Production and marketing team, mulgeta urga,tigst germma, cheru eshetu and
Sheriff jemal 5 years rural development agent and agricultural marketing experience.
1. BUSINESS IDEA AND CUSTOMERS
The Most Promising Option for Jimma town Vegetable Growers is the ‘Production and
marketing of fresh tomato’ for bulk sell to retailer, hotel, revenue generating enterprise of higher
academic institution colleges and cafeteria.
2. PROJECT DESCRIPTION OR FIRM PRODUCTS
T.M.T INTERPRICE is concerned with the production of high quality tomatoes. It will supply
the tomatoes in bulk consisting of 25Kg per box or create. The 25 Kg boxes will be supplied to
deferent retailers, government cafeteria and higher institution revenue generating enterprise and
other local consumer will be supplied to markets and homesteads. T.M.T INTERPRICE will
have two hectare of land for the growing of tomatoes which will be used in production of the
product. The enterprise produces tomatoes which will be cleaned and pre-processed at the farm
level. All production and pre-processing functions will be carried out by the owner of the
enterprise. The worker will select quality tomatoes which will be delivered to sell the product for
marketing committee who will make ready the tomatoes for supply to the market.

3. MARKETING PLAN

Marketing
(1) Promotion
A product brochure on paper will be produced and distributed to potential buyers. Jimma
community Radio will also be used to promote the product of t. m .t tomato product.
(2) Taking orders from customer
Tomato purchase agreements/contracts will be signed with interested buyers and these contracts
will detail requirements and delivery conditions for the various retailer and institutions.
(3) Transport and delivery method
A truck will be hired for distribution to those retailer and institutional buyers who will be
interested to buy.
(4) Coordination
The chairperson of the t.m.t enterprise will be responsible for communication and organizing
transport whenever it will be required. A marketing committee will be created to ensure tomato
production always have a steady market.

The tomato handling chain from the garden to the consumer is shown below

 Picking of tomato from the farm

 Cleaning ,washing and grading
  Verification of quality and grading
 Packing of tomato in crates for supply.
 Transportation and delivery to clients.

STAFFING STRUCTURE
The T.M.T INTERPRICE will have appropriate human resource including administration,
procurement and management of inputs, financial management, record keeping, production and
processing, transportation, marketing and skills improvement. The persons tasked with these
functions will be the share holder of the enterprise. This position and salary payment will be
reviewed once sufficient funds have been accumulated and T.M.T INTERPRICE is operating
profitably to afford the pay for the member. The first position to be filled is that of the person to
manage the T.M.T INTERPRICE accounts. Management structures for individual position of
the member are not included in this business plan.

4. SALES FORCUST

5. HUMAN RESOURSE PLAN

5.1 EMPLOYEE PLAN

Employee Term of employment Salary for Quantity needed

need individual
Member of 5 Permanent 2000 birr per month 5 throughout the year
staff
Casual 5 Daily ,and monthly 35 birr 5 For eight month, full
laborer time employed on farm
during producing
session.
5.2 ORGANIZATIONAL CHART

6. OPERATIONAL PLAN
The seasonal calendar for the production and market of graded and packaged tomato for the
T.M.T INTERPRICE.

September 2009 October up to January From February up to

January may
Nursery work for First round farming Nursery work for Second round tomato
first round tomato second round tomato production.
Production Production
Supplying the frist
round
Harvest to market.

Production
(1) Variety
The chosen variety of tomato that will be grown is Tengeru as it fits well with the market
requirements.
(2) Source of seed, chemical and fertilizers

 This variety is found in nazret agro-product shops.

 The agrochemicals are found at nazret agro-product shops.
 The fertilizers are sold from the nazret agro-product shops.

(3) Equipment requirement

The following tools (Table 2) will be required to successfully grow Tomato as the Most
Promising Option.
Table 2. Tomato production equipment for producing on two hectare of land

Item Unit Quantity item Unit price

price
Watering can 4
Garden folk 1
Rake 1
Hoe 3
Slasher 1
waterpump
Rental ox

(4) Irrigation water

The decoder intended to grow are endowed with an all year round flowing river of besides the
area being in with area with underground water lying about and convenient for irrigation.
(5) Production cycle
It is hoped that production of the Tomato shall be all year round and therefore the production
will have two production cycles in order to have no interruption in the all year supply of Tomato.
The entrepreneur will be required to have two hectare reserved for Tomato production.
Both hectares will be cultivated throughout the year .As reflected in the seasonal calendar in the
first year of production which is 2009; the establishment of nurseries will be done in the fourth
week of September. By the fourth week of October seedlings will be ready for transplanting.
Tomato harvesting will start by February.
(6) Production Methods
All the member of the t.m.t enterprise will be trained in the best practices of Tomato production
and they are academically supported and have experience. For undertaking best practice the
enterprise will employ one member to carry out the training which will be held at every stage
of production in order to meet all quality criteria and quantity as required by the market.
(7) Post Harvest Activities
Every member will pick, wash and provisionally grade tomatoes. All the team will verify the
grading and pack the tomatoes as required by the buyers to supply for market.
With regard to Coordination, In order to have consistence in the quality and quantity produced, a
committee will be established to monitor the performance of the crop throughout the production
cycle. The appointed member facilitates training at every stage of the production cycle.
7. FINANCIAL PLAN
FINANCIAL PLAN
Financial Plan model for Production and Marketing of the T.M.T enterprise Tomato
The model of the financial plan is based on the core activities being carried out by the 5 members
at their farms while the production A larger portion of variable and fixed costs will be handled
by member.
General Assumptions
The T.M.T enterprise will have 5 fully paid up members. Membership fee is estimated at
establishment 5000 per individual and contribution towards capital investment will be 25,000
from all members. The T.M.T enterprise net profit will be distributed to members at the ratio of
shares held by respective members of the T.M.T enterprise.
Other assumptions are as follows:-

 2 hectare of land will be available for the enterprise given from city administration to
support our entrepreneurship activities .

 There will be river adjacent for cultivating the land.

 The T.M.T enterprise will be legally established by July 2009 g.c

 The T.M.T enterprise will secure startup capital for equipment and tools, seed and other
inputs.

 The T.M.T enterprise will secure a grant or Loan amounting 100,000 from oromia
credit and saving association.

Assumptions for financial statements

 Table. Income statement assumptions.

Income statement Assumption

Annual price increase of tomato 2% in price of 1kg
Annual Increase in Expenses of agricultural 2 % annually
input
Maintenance expenses 3% of sales
Annual Increase in Salaries 3% annually
Increase in rentals 3 %annually
Average increase on production 1%annually

Balance sheet assumptions.

Table 5. Balance sheet
Balance sheet Assumption
Inventories tomato 1% of the total produced tomato.
Account payable 10% of loan
Depreciation expenses 20% for all fixed asset while 5% for labor
home annually.

Investment in Capital Items

Table 6. List and cost of equipment, tools and working capital

Table 6. Agricultural Variable costs for the Nursery and production of two hectare for two
season cultivation required.

Iteam description type Amount required for Total price

two round production
Fertilizer UREA 600kg 13680
DAP 400kg 11840
Seed ROMA 700gm 1400
pestcide CARBARYl 4l 1800
subtotal v,cost 33,720

Table 7. Assumption of Administrative and other operating material required .

Item description Quant/frque Unit Total cost
ncy price
métier For land designing 1 200
kilogram For weighting 1 5,645
Nursery cost For Land,labor,and 2 1800 3600
plastic
Transplantation For each season 2 1000 2,000
cost
salary For 5 Employe 5*12month 2000 120,000
wage For 5 labor monthly 5*30*35=52 5250 42,000
50
Oxen rent For plowing land 2 2000 4,000
kerosene Consumption of 200litir 17 10,000
generator
Car rent For tomato 8 1000 8,000
transportation

195,445

Unit estimated cost

Building or labor house 1 12,000
Power Generator 1 15,000
Land preparation - 5000
Furniture and stationery - 2000
Total 34,000

Capital asset
Depreciation of fixed asset
1 2 3 4 5
Building or labor 5% 600 600 600 600 600
house
Power Generator 20% 3000 3000 3000 3000 3000
Land preparation 20% 1000 1000 1000 1000 1000
Furniture and 20% 400 400 400 400 400
 stationery
Total 5000 5000 5000 5000 5000

7.1 IMPORTANT ASSUPTION

7.2 PROFIT AND LOSS STATEMENT

3. Under commercial farming practice an average 150 quintals yield per ha of tomato is
estimated. Therefore, annually 600quintal of tomato was expected to harvest yearly from two
hectare in two period of growing.
Description Crop Year
1 2 3 4 5
Available land on 2 2 2 2 2
hectare
tomato production 2 2 2 2 2
frequency on the
year
Production per 150 150 150 150 150
Hectare (Quintals)
Annual Production 60,000 60,000 60,000 60,000 60,000
from 2 hectar two
times (in kg )
Total Production 600 600 600 600 600
of tomato
(Quintals)

Financial Projections
There are two financial statement projections made to analyze the financial viability of the
project. These are the income statement projection, the balance sheet projection.The project is
expected to generate a net income of Birr 473,835 at the first year of operation and increase to
Birr 480,960 at the second year of operation and Birr 504,000 at the 5 th year of operation
period which shows that the project is a highly profitable business at its startup stage and
throughout its life. The detail income/loss statement projection is as shown in the table below
Projected Income Statement

Description Project Years

1 2 3 4 5
Revenue 720,000 734,000 748,680 763653.6 778926

Less: administrative
and Operating Costs
Agricultural input 33,720 34,731.6 35772.9 36846 37951
costs for tomato
Administrative and 195,445 201,308.4 207347.6 213568 219975
other operating
expense.

Less: Depreciation 5,000 5,000 5,000 5,000 5,000

expense
Profit Before Interest 485,835
& Income Tax
Less: Interest 12,000 12,000 12,000 12,000 12,000

Net Profit 473,835 480,960 488559.5 496239.6 504,000

4. Agricultural input requirements and cost of material

Description Project Years

1 2 3 4 5

UREA 13,680

DAP 11,840

Seed( romma) 1,400

pesticide 1,800
Agricultural Materials 3000

Cultivation Materials 2000

Total Direct Material Costs 33,720 34,731.6 35772.9 36846 37951