School of mechanical and industrial engineering

ENTERPRENURSHIP
PROJECT 1: AYAT HONEY BUSINESS PLAN
GROUP MEMBERS
1. HAILEMARIAM WELDEGEBREL ______ATE/9170/09
2. ZELALEM MAMO_________________ATE/3673/09
3. ENDALEMAW EIGU_______________ATE/3471/09
4. MIKYAS DEGEFU_________________ATE/4974/09

SUBMITTED TO: MR. MIKAEL G.

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Contents
Business Plan Confidentiality Agreement ............................................................................................... 4
Applicable Law ........................................................................................................................................ 4
Executive summery ................................................................................................................................. 5
Unit one: business description................................................................................................................ 6
Mission ................................................................................................................................................ 6
vision ................................................................................................................................................... 6
Value statement.................................................................................................................................. 6
Business overview ............................................................................................................................... 7
Product and service ............................................................................................................................ 7
Unit two: Market Analysis Summary ...................................................................................................... 8
Market Segmentation ......................................................................................................................... 8
Target Market Segment Strategy ........................................................................................................ 8
Swot analysis ....................................................................................................................................... 8
Strength........................................................................................................................................... 8
Weakness ........................................................................................................................................ 8
Opportunity..................................................................................................................................... 8
Threat .............................................................................................................................................. 8
Unit three: Competitive assessment ...................................................................................................... 9
Competitor’s profile ............................................................................................................................ 9
Direct competitors .......................................................................................................................... 9
Indirect competitors ..................................................................................................................... 10
Competitive advantage ..................................................................................................................... 10
Unit four: Marketing plan ..................................................................................................................... 11
Product and service .......................................................................................................................... 11
Pricing................................................................................................................................................ 11
Distribution ....................................................................................................................................... 11
Promotion ......................................................................................................................................... 11
Unit five: operating plan ....................................................................................................................... 12
company ownership and management ............................................................................................ 12
Resource and production .................................................................................................................. 12
Legal issues........................................................................................................................................ 12
The legal structure of your business ............................................................................................. 12
Trademark ..................................................................................................................................... 12

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 Licenses ......................................................................................................................................... 12
Relevant health and safety laws ................................................................................................... 12
Insurance ....................................................................................................................................... 12
Confidentiality and Non-Disclosure Agreements.......................................................................... 12
Unit six: financial plan ........................................................................................................................... 13
Company summary ........................................................................................................................... 13
Capital requirement .......................................................................................................................... 13
Breakeven Analysis ........................................................................................................................... 13
Projected Profit Loss ......................................................................................................................... 13
Start-up summary ............................................................................................................................. 13
Start-up Requirements...................................................................................................................... 14
Start-up Asset.................................................................................................................................... 14
Start-up Funding ............................................................................................................................... 14
Liabilities and Capital ............................................................................................................................ 14
Liabilities ........................................................................................................................................... 14
Capital ............................................................................................................................................... 14
Operating Cost .................................................................................................................................. 14
Payroll ........................................................................................................................................... 14
Rent ............................................................................................................................................... 15
Utilities .......................................................................................................................................... 15
Advertising .................................................................................................................................... 15
Conclusion ............................................................................................................................................. 16
Reference .............................................................................................................................................. 17

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Business Plan Confidentiality Agreement
The undersigned reader of AYAT HONEY. Business Plan hereby acknowledges that the information
provided is completely confidential and therefore the reader agrees not to disclose anything found in
the business plan without the express written consent of AYAT HONEY.

It is also acknowledged by the reader that the information to be furnished in this business plan is in
all aspects confidential in nature, other than information that is in the public domain through other
means and that any disclosure or use of the same by the reader may cause serious harm and or
damage to AYAT HONEY.

Upon request this business plan document will be immediately returned to AYAT HONEY. This is a
business plan. It does not imply an offer of any securities.

Applicable Law
This contract shall be governed by the laws of the County of ____ in the City of____ and any applicable
Federal-law.

________________ _____________________________
Signature Printed Name

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Executive summery
AYAT HONEY is a start-up honey retail establishment located in Addis Ababa, Ethiopia. AYAT HONEY
expects to catch the interest of a regular loyal customer base with its broad variety of pure and natural
honey products. The company plans to build a strong market position in the city b/c of the wild
competitive climate in the area. AYAT aims to offer its products at a competitive price to meet the
demand of the middle- to higher-income local market area residents and tourists. Awareness of high-
quality honey is on the rise. Pure and natural honey is a rare combination of nutrition, convenience,
and luxury. Today's consumer having hard time finding a pure and natural honey, but increasingly
appreciates the nutritional and sensory benefits it provides. Pure natural honey provides fiber and
carbohydrates in a convenient, low fat form that is portable and delicious. Honey is the only food that
contains all the substance necessary for life including minerals, vitamins, enzymes and water.

AYAT HONEY is incorporated in Addis Ababa. It is equally owned by four partners in which The
Company is being founded by HAILEMARIAM WELDEGEBREL, a bee keeper currently working on his
own, Addis Ababa. ENDALEMAW EJIGU, a great wood worker who will be producing a modern BEE
hive. Also, MIKYAS DEGEFU and ZELALEM MAMO both have a great skill in sales and promotion work.
Together they bring a wealth of practical experience and a realistic market sense to the company. The
company intends to hire one well-experienced cashier, two full-time sales people to handle customer
service and day to day activity, and five part-timers to handle honey purification and inspection and
also packaging.

AYAT HONEY offers a broad range of honey products, all from high quality Ethiopian export standard
honey.

The retail honey industry in Ethiopia has experienced rapid growth. The easily availability of the honey
and the large demand for the product throughout the year. AYAT HONEY wants to establish a large
regular customer base, and well therefore concentrate its business and marketing on local residents,
which will be the dominant target market. This will establish a healthy, consistent revenue base to
ensure stability of the business. In addition, tourist traffic is expected to comprise approximately some
percent of the revenues. High visibility and competitive products and services are critical to capture
this segment of the market.

AYAT HONEY main competition includes five honey providers and three supermarkets in the Addis
Ababa. Its advantage lies in the high quality of its products due to purity and variety of the product.
The main marketing focus will be an eye-catching sign, the scent of fresh pure honey wafting out of
the storefront, and periodic printed advertisements. The company will sample its products liberally.

After establishing the operation, the company will explore the possibility of making takeout
sandwiches. Delivering wholesale tej and birz goods to area restaurants and specialty retailers will also
be considered.

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Unit one: business description
Mission
AYAT HONEY’S mission is to provide high quality of honey and honey products at a competitive price
to meet the demand of the middle to higher income local residents and tourists.

vision
The vision for the first three years of operation include: -

• To create a service-based company whose primary goal is exceeding customer`s expectations.

• To develop a sustainable start-up business.

• To increase the number of clients served through good service.

Value statement
• Quality – what we do, we do well.
• Family, friendship and trust
• Openness - we are committed to a culture of teamwork and collaboration.
• Passion: Passion is at the heart of our company. We are continuously moving forward,
innovating, and improving.
• Integrity: We are honest, open, ethical, and fair. People trust us to adhere to our word.
• Customer Commitment
• Accountability: If it is to be, it’s up to me
• Integrity: means we are consistently open, ethical, honest and genuine.

Existing problem
• We Ethiopian didn’t use our biggest treasure.
• Farmers sell their honey with cheap price but when it reaches to the city it’s become expensive
because of dealer’s chain.
• Price is too expensive
• Hard to find pure honey
• Most of the people would like to buy pure honey but they didn’t find nearby

Solution
• We eliminate long chain market by direct connection with farmers.
• Providing honey with affordable price.
• Because of our direct connection with the farmers, we provide pure and healthful honey.
• Increasing honey availability by expanding our branches.
• Provide call center for the farmers.

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Business overview
Honey is a highly viscous golden substance produced and collected by bees in their hives. Honey is
widely used as a sweetener owing to its broad range of medicinal benefits. The viscous substance is
composed of carbohydrates, proteins, iron, calcium, water, and antioxidants such as avonoids and
phenols.

Ethiopia has high potential of producing honey. It stands first in Africa and tenth in the world in honey
production. The country is endowed with varied ecological and climatic conditions and it is also home
to some of the most diverse flora and fauna in Africa. Its forests and woodlands contain diverse plant
species that provide surplus nectar and pollen to foraging bees. The ideal climatic conditions and
diversity of floral resources allow the country to sustain around 10 million honeybee colonies, which
is the largest honey bee population in Africa.

With the large honey bee population and the favorable ecological and climatic conditions for honey
bees in Ethiopia, the country has an annual honey production potential of 500,000 tons. However, the
actual annual honey production of Ethiopia is about 50, 000 tons, which is only about 10% of the
country’s annual honey production potential. The prevailing low actual honey production is linked to
poor extension and credit services, poor use of and access to improved honey production
Technologies, and poor honey marketing.

Similar to the annual low honey production capacity of Ethiopia, the annual honey export capacity of
the county is also low. According to the CSA and ECC data the average annual honey export volume
was only about 11% of the actual average annual honey production of the country during the period
2011-2018. The range of variation of the percent share of the annual honey export from the annual
honey production was between the lower of about 2% in 2018 and the highest of about 17% in 2013.
Traditional beekeeping, which is dominantly practiced in the country and characterized by low supply
and quality of honey, high local price of honey and lack of legality in the domestic honey market have
been reported to negatively influence the Ethiopian honey export.

AYAT HONEY sees this potential of the country and want to make business we are planning to solve
the above problems with high quality honey for the market and modern bee hive and bee keeping
technology plus the for better quality and quantity production we have to educate the bee keepers in
other word our suppliers.

Product and service

AYAT offers a broad range of honey and honey-based products, all from high quality Ethiopian bee
keepers of different kind. AYAT HONEY caters to all of its customers by providing each customer honey
and honey-based products made to suit the customer.

The bee keepers provide different kinds of pure and natural honey and we process the honey to birz,
tej and pure honey packages. Six to eight moderate batches of birz and tej products are prepared
during the week to assure fresh prepared goods are always available.

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Unit two: Market Analysis Summary
AYAT`s focus is on meeting the demand of regular local resident customers base, as well as a significant
level of tourist traffic from abroad.

Market Segmentation
AYAT HONEY focuses on the middle- and upper-income markets. These market segments consume
the majority of honey and honey-based products.

Target Market Segment Strategy

The dominant target market for AYAT is a regular stream of local residents. Personal and expedient
customer service at a competitive price is key to maintaining the local market share of this target
market.

The honey business in Ethiopia has recently experienced rapid growth. Almost all of the people know
the huge advantage of using honey, so the demand is very high also there is a huge competition.
However, the high competition AYAT HONEY will position itself as a place where customers can get a
pure and natural honey without the fear of getting low quality or bad impure product. We are all about
trust and customer satisfaction.

Swot analysis
Strength
• We have direct connection the farmers currently ayat mar working with gonder farmers.
• We provide call centre for the farmers so they can directly contact with us.
• We provide mobile app for our customers

Weakness
• it is hard to deliver honey from the farmer to Addis Ababa.
• We don’t have the capital to produce world class honey.

Opportunity
According to studies the honey market in the world grows by 11% from 2016 to 2017 and also the
market is expected to grow at a CAGR of 4.8% by 2026.

As well as there is a big market in the country also in neighboring country that need pure honey
with affordable price.

Threat
The market has a big brand like haile natural forest honey who has a lot of capital for advancement
and promotion.

Since the customer has been through reputed betrayal by merchants that provide a low quality and
impure honey it is hard to create trust.

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Unit three: Competitive assessment
Competitor’s profile
We have 3 direct competitors and 2 in direct competitors

Direct competitors
Haile organic forest honey
Haile organic forest honey is one of the best honey in the market. Haile honey become a brand honey
in the market because of it’s purity and the personal reputation of the entrepreneur Haile Gebreslase.
Even those haile has no prior reputation on the honey market he is very successful in all sort of things
(athletics, park development, car importer and lately car manufacturing).

competitive strength:

• High quality
• Brand name
• Trust of customer
•

competitive weakness

• High cost
• Low supply
• Less variety of product
• Marketing and promotion

Sheger honey
Sheger honey is a honey processing company that supply honey to supermarkets and other retail
venture. Even those we didn’t get much information on them it is clear they are a big competitor
worth mentioning since we see their product in every supermarket we surveyed.

competitive strength:

• Large variety of product

• Big pool of supply
• Marketing and promotion
•

competitive weakness

• Cost
• Quality
• Customer test
•

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Senhon natural honey
Senhon honey is a honey processing company that supply honey to supermarkets and other retail
venture. Even those we didn’t get much information on them it is clear they are a big competitor
worth mentioning since we see their product in every supermarket we surveyed.

competitive strength:

• Cost
• Supply
• Marketing and promotion
•

competitive weakness:

• Quality
• Customer test
• Varity of product
•

Indirect competitors
1. Shewa supermarket: we see Shewa supermarket as both a competitor and as a good
marketing way to sale our product. They sale different brand of honey so we have the plan to
be it the major league.
2. Queens supermarket: we see queens supermarket the same as Shewa supermarket both a
competitor and as a good marketing way to sale our product. They sale different brand of
honey so we have the plan to be it the major league.

Competitive advantage
• Cost
• High quality
• Big supply
• Varity of product
• Marketing and promotion
• Familiarity with customer
• Purity and natural source

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Unit four: Marketing plan
Product and service
AYAT offers a broad range of honey and honey-based products, all from high quality Ethiopian bee
keepers of different kind. AYAT HONEY caters to all of its customers by providing each customer honey
and honey-based products made to suit the customer.

The bee keepers provide different kinds of pure and natural honey and we process the honey to birz,
tej and pure honey packages. Six to eight moderate batches of birz and tej products are prepared
during the week to assure fresh prepared goods are always available.

Pricing
We have planned to use Penetration pricing Strategy. We planned to use this pricing strategy because
it is used as a loyalty-building or market-entry tool and we will be needing the loyalty of our customers.
We will be offering a high-quality product at a much lower than expected price. This combination helps
the business enter a new market even when strong competitors exist, and it builds loyalty with new
customers from the beginning.

The penetration strategy can dramatically increase the lifetime value of customers, because they're
"hooked" with the outstanding first product offering and – assuming future products are just as high
quality – they are more willing to buy additional products from the company long into the future.

Distribution
We will be using a hybrid distribution consists of the following distribution system

1. Direct distribution: we will be selling our honey and honey products directly for the costumers
through our distribution places
2. Wholesale distribution: we will be selling to wholesalers/retailers, supermarkets and other
honey demanding business like catering, cake factories e.t.c.
3. Internet sales: we will be having a free delivery system to our customers. They will order our
product both through our website and android/os application. This will save time and money
for our customers which will build a batter relationship and loyalty with costumers.

Promotion
Our promotion strategy is focused on the product and the helthy advantage of honey. The promotion
will be run through the following midea:

1. Periodic printed ads on magazines

2. Our own website ads
3. Social media promotion (via video, text or pictures)
4. Periodic radio or television ads

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Unit five: operating plan
company ownership and management
AYAT is incorporated in Addis Ababa, Ethiopia. It is equally owned and managed by four partners
whose capital is Br 35,000 each.

Resource and production

AYAT HONEY’s resource is directly from the be keepers around the whole country. Varity of honey is
mainly depending on the environment and ecological factors. We have a large potential in honey
production as a country. We could produce like 500,000 tons of honey.

Processing of the honey starts after random inspection of the honey. Then we can process it to
package honey, tej or birz. The production of tej and birz mainly depends on honey quality.

Legal issues
The legal structure of your business
One of the many important decisions we had to make when starting the business is to decide on the
legal status or structure of our company. What legal structure we chose will affect how we run our
business. It will also have implications on how we pay our taxes and keep our accounts.

Taking the above factors in to consideration we decided we will be:

General partnership with all the four-partner equal share and equal managerial involvement.

Trademark
Before selecting the business’s official name, we had to perform a meticulous search online first. Find
out if there is another business operating under the name we’ve come up with for your new venture.
We had to do this to avoid infringing upon another company’s trademark and getting caught up in a
trademark opposition action.

once we’ve selected our official company name, we registered our trading name and logo as a
trademark. This will prevent others from registering their company under the same name.

Licenses
we needed several types of licenses or permits before opening our business. We needed a business
license, trading license, and sales tax permit and we had to register with the local governing body for
food standards and health and safety oversight.

Relevant health and safety laws

As a business owner, we will have to assume several important health and safety responsibilities.
These include ensuring that your employees work in a safe, healthy environment.
also, we have the duty to look after the well-being of anyone including clients and visitors inside,
outside, and near your business premises.
It is highly recommended that carry out a risk assessment to help identify the risks posed to individuals
by the business activities. Then have to mitigate these risks or hazards as much as possible.
Insurance
Confidentiality and Non-Disclosure Agreements

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Unit six: financial plan
Company summary
AYAT HONEY is a honey shop managed by four partners. The partners will provide funding from their
own savings, which will cover start-up expenses and provide a financial cushion for the first months
of operation. The rest will be covered by a five-year loan from microfinance institution. The company
plans to build a strong market position in the area b/c of the large competitive climate.

Capital requirement
AYAT HONEY expects to raise Br 140,000 of its own capital, and to borrow Br 150,000 form
microfinance institution as a five year loan. This provides the bulk of the current financing required.

Breakeven Analysis
AYAT HONEY`s Break-even Analysis is based on the average of the first year for total sales by units and
by operating expense. AYAT should break even by the sixth month of its operation as it steadily
increases its sales.

Projected Profit Loss

AYAT HONEY expects to continue its steady growth in profitability over the next three years
of operation.

Start-up summary
AYAT is a start-up company. Financing will come from the partner`s capital and a five-year loan from
micro finance institution.

Series 1

250000

200000

150000

100000

50000

0
Expense Assets Investment Loan

Series 1

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Start-up Requirements
Start-up Expenses

Equipment Br 70,000

Other expense Br 20,000

Total start-up expense Br 90,000

Start-up Asset
Cash Required Br 120,000

Other Current Asset Br 30,000

Long-term Asset Br 70,000

Total Asset Br 220,000

Total Requirements Br 310,000

Start-up Funding
Start-up Expenses to Fund Br 90,000

Start-up Assets to Fund Br 220,000

Total Funding Required Br 310,000

Liabilities and Capital

Liabilities
Long-term Liabilities Br 150,000

Capital
HAILEMARIAM W/GEBREL Br 35,000

ENDALEMAW ____________ Br35,000

MIKYAS _____________ Br 35,000

ZELALEM MAMO Br 35,000

Total Capital Br 140,000

Operating Cost
Payroll
Two part time employees will be hired to start working on opening day. Employees will be
paid 10 birr per hour, and will work a combined total of 30 hours per week. Wage
expenditures will be 1200 birr a month with additional payroll taxes running 130 birr, for a
total expenditure of 1330birr.
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Rent
Betel Building is currently under consideration rents for 5000birr a month.

Utilities
Heat and Electric bills 1000birr a reasonable estimated monthly average.

Advertising
KAHEF will run an advertisement in the printing, stickers and during opening week will cost
3000birr.

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Conclusion
In conclusion the honey business is very appealing due to the potential of Ethiopia to produce 10 times
more than what we produce today which is 500,000 tons per annum. The lack of pure and quality
honey is to our advantage even thso it will be hard to create trust between us and the customers.

Based on the above given data we would like to say it is very good to be in the business.

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Reference
• We use the power point presentation from our instructor
• Some google support
• Surveying the supermarket
• Interview possible customers

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