Yardstick International College

College Of Business and Economics

Department of Business Administration

Masters (MBA) Program

Assignment o1

Business Plan for: Fruit juice Processing Enterprise

Prepared By: Takele Abate

ID No: MBAO/2405/14B

Submitted To: Ram Kumar Midde (Ph.D.)

July, 2022

Addis Ababa, Ethiopia

 TABLE OF CONTENTS
Content Page

TABLE OF CONTENT………………………………………………………..I
1. Executive Summary………………………………………………………………………………...................1
2. Company Description……………………………………………………….1
2.1. General Business Overview……………………………………………………………………1
2.2. Structure of the Business……………………………………………………………………….2
2.3. Key Personnel of the Business……………………………………………………………….3
2.4. Goals of the Business…………………………………………………………………………….3
2.4.1. Short Term Goals……………………………………………………………………………..3
2.4.2. Long Term Goals………………………………………………………………………………3
2.5. Environment Analysis…………………………………………………………………………….3
2.5.1. Strength…………………………………………………………………………………………..3
2.5.2. Weakness…………………………………………………………………........................4
2.5.3. Opportunities…………………………………………………………………………………..4
2.5.4. Threats…………………………………………………………………………………………….4
2.6. Mission and Vision of the Business………………………………………………………..5
2.6.1. Business Vision Statement……………………………………………………………….5
2.6.2. Business Mission Statement…………………………………………………………….5
3. Products and Services………………………………………………………………………………….5
3.1. Analysis of competitors……………………………………………………………………….5
3.2. Competitive Advantages……………………………………………………………………..6
3.3. Keys to Success……………………………………………………………………………………6
4. Marketing Plan…………………………………………………………………………………………….7
4.1. Demand and Supply Analysis………………………………………………………………..7
4.1. Our Target Market……………………………………………………………………………….7
4.2. Pricing Strategy……………………………………………………………………………………7
4.3. Distribution Strategy……………………………………………………………………………7
4.4. Promotion Strategy……………………………………………………………………………..7
4.5. Market Segmentation………………………………………………………………………….8
5. Operational Plan………………………………………………………………………………………….8
5.1. Personnel Plan……………………………………………………………………………………..8
5.2. Production Cost……………………………………………………………………………………9
5.3. Office Equipment………………………………………………………………………………….9
5.4. Assessment of Risks……………………………………………………………………………..10
6. Financial Plan………………………………………………………………………………………………10
6.1. Cash Flow Analysis……………………………………………………………………………….10
6.2. Profit and Loss Statement…………………………………………………………………….12
7. Fund Requirement…………………………………………………………………………………......12
7.1. Startup Capital……………………………………………………………………………………..12
1. EXECUTIVE SUMMARY

Fruit Juice Processing enterprise will be run as a sole proprietorship. The enterprise offers a high quality Juice
at a market price for the customers. Juice will be available for sale at wholesalers and retailers. The price is
affordable should not annoy or exploit customers so that customers are willing to pay. The enterprise will
provide its product at market price by identifying and listing each type of fruit Juice with their fair price. It
provides a high quality Juice for the beloved customers.

The main Objective of the Business us to provide quality of Juice in order to get the expected profit and to
satisfy the customers, have claim to create job opportunity, providing complementary and with fruit and plans
to expand the business in different areas and also to expand the initial business in size. The main job in this
business is purchasing and processing quality Juice, preparing warehouse to store the product, monitoring and
auditing sales the business.

The overall and general objectives of the business are mainly to achieve and exceed sales forecast to enable
the business to be operating at capacity, so that the business extended the types of fruit Juice that enables
the business to meet the customer’s need. In the beginning year the business forecast some profit. In the
second year and third year I expect that there will be increment of profit due to further increases in the
number of customers and get recognition and acceptance.

2. COMPANY DESCRIPTION
2.1 GENERAL BUSINESS OVERVIEW
Best fruit Juice processing enterprise has special roles for its customers. It serves the customers by quality
juice to the customers as per their preference. Come up with new service is not available previously.
Business Name: Best Fruit Juice Processing
Owner’s Name: Takele Abate and Silenat Semagn
Types of Business: Sole Proprietorship
Business Address: Chilga Woreda, Aykel Town
Main Activities: Processing and producing fruit juice and provide Quality service
2.2. STRUCTURE OF THE BUSINESS
Best fruit juice processing enterprise is a sole proprietorship at this stage of the planning. The owner will
pursue the expense associated with becoming Limited Liability Company (LLC) to determine if this structure is
an option for the business. But I want to have four workers in addition to me and my wife.
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 The organizational structure of the Business is depicted in the following chart

G/manager(Takele
Abate)

Book Keeper
(to be hired)

Personnel Production Marketing Finance Manager

Supervisor (Takele Supervisor (to be Supervisor (to be (Silenat Semagn)
Abate) hired) hired)

Foreman (To be
hired soon)

Workers (To be hired

soon)

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2.3 KEY PERSONNEL OF THE BUSINESS

Key personnel are an individual who performs essential functions in the business. In this business the key
personnel are the owner of the business are:

1. Takele Abate with B.A Degree in Management and General Manager and Personnel supervisor who
directs all the activities of the business.
2. Silenat Semagn with B.A degree in Marketing Management and the finance supervisor and Supporter
of the workers.
2.4 GOALS OF THE BUSINESS
The business has two types of Goals:
2.4.1. Short Term Goals
 To increase consumption of fruit juice by giving awareness
 Promoting our business
 Increasing quality of juice regularly
 Increasing profit
 To provide work for all members To create job opportunity for local people
 To raise the life standard of the members by paying them a good salary
2.4.2. Long Term Goals
 To increase the number of customers in the local as well as National level
 To buy modernized fruit juice processing
 To expand our business to other place
 To increase the number of employees
 To win wide fruit production farm
2.5. ENVIRONMENT ANALYSIS
SWOT Analysis can help us to challenge risk assumption and to uncover dangerous blind spots about your
organization's performance. It consists of Strength, weakness, opportunities, and Threats of the business
2.5.1. STRENGTH
Strengths are things that our business does particularly well, or in a way
that distinguishes ours from others competitors. Think about the advantages our business
has over other business. These might be the motivation of your

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Staff, access to certain materials, or a strong set of production process
 We are able to give really good customer care, as the current small amount of work means we have
plenty of time to devote to customers
 Our lead consultant has a strong reputation in the market
 We can change direction quickly if we find that our marketing is not working.
 We have low overheads, so we can offer good value to customers
 We have a good promotional tools and business location.

2.5.2. WEAKNESS
Weaknesses, like strengths, are inherent features of the business, so focus on your people, resources,
systems, and procedures. Think about what we could improve, and the sorts of practices we should avoid.
 Our business has little market presence or reputation
 We have a small staff, with a shallow skills base in many areas
 We are vulnerable to vital staff being sick or leaving
 Our cash flow will be unreliable in the early stages
2.5.3. OPPORTUNITIES
Opportunities are openings or chances for something positive to happen, but you'll need to claim them for
yourself. They might arise as developments in the market you serve, or in the technology you use. Being able
to spot and exploit opportunities can make a huge difference to your organization's ability to compete and
take the lead in your market.
 Our business sector is expanding, with many future opportunities for success
 Local government wants to encourage local businesses,
 Our competitors may be slow to adopt new technologies’.
2.5.4. THREATS
Threats include anything that can negatively affect your business from the outside, such as supply-chain
problems, shifts in market requirements, or a shortage of recruits. It's vital to anticipate threats and to take
action against them before you become a victim of them and your growth stalls.
 Developments in technology may change this market beyond our ability to adapt.
 A small change in the focus of a large competitor might wipe out any market position we achieve.

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2. 6.MISSION AND VISION SATEMENT OF THE BUSINESS

2.6.1. BUSINESS VISION STATEMENT

 To solve the shortage of fruit juice service as well as to promote our business internationally by providing

a good quality of fruit juice

2.6.2. BUSINESS MISSION STATEMENT
Providing entertainment service for customers who are in different age categories
Supplying a high quality fruit juice which is very essential for healthy, vitamins, and comfortable for
bodies,
Using the existing resources, and providing for the society qualitative service with affordable price,
Adopting to the dynamic environment throughout the operation
3. PRODUCTS AND SERVICES
Juice is one type of drinking, which is used as the food for human being. It is produced in different place with
different mechanism. Most of the time the juice used in our country is imported from foreign countries.
However, this product which is imported from different countries did not satisfy the need of our nations. So,
since the best raw materials for production of these products are available abundantly in our countries, we
are badgered to establish this small business enterprise in Aykel town.
Features of This Products are:
Semisolid phase
Pleasant flavour
Different colour respective to its raw material
Uses of this product
It uses as the food
It refresh our minds
It builds our bodies
It prevent from different disease of our bodies
It protects our healthy styles
3.1. ANALYSIS OF COMPETITORS
Even if there is no known fruit juice processing in this area, there are some competitors’ who competes with
us. Fruit juice processing business is well known and has good profit in other place. But in our area it is not
recognized this much.

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. Our indirect competitors are:
 Restaurant service in Aykel town,
 Expansion of recreational lounge
The strength of our competitors is:
 They have high initial capital
 They have enough man power,
 They have enough space for producing large number of fruit juice products
The Weakness of our competitors is:
 They do not respect their customers
 They provide poor quality
 Their service of time is limited

3.2. COMPETITIVE ADVANTAGE

The competitive advantages of our business are listed in the following manner
 Proximity to suppliers
 Initiated workers
 We provide quality fruit juice for our customers better than our competitors
 Our business entertain customers who are in different age level
 It addresses customers need with lower price.

3.3. KEYS TO SUCCESS

The following conditions are used as key success for this Business:
1. It uses various types of promotional tools to attract other customers.
2. Continuous monitoring of our service and expense.
3. It is by society and for society, provides an affordable cost with a high quality.
4. By reducing the expenditure cost of transportation for the customers
5. Satisfying customer interest by providing quality service.
6. The presence of good market price due to the weakness of Competitors in the area.
7. There are many customers, because there is no other provider that gives the service.
8. It gives service for a long hour.

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 4. MARKETING PLAN

4.1. DEMAND AND SUPPLY ANALYSIS

We have to measure the daily, weekly, monthly and yearly consumptions of the customer and compare with
our products. By carrying out this process we can balance demand and supply. Most of the time demand and
supply do not balance each other. To balance Supply with demand we must do a continuous assessment on
the number of our customer. We must identify the primary need of our customers.
4.2. OUR TARGET MARKET
When it comes to the sales of fruit juice drinks, there is indeed a wide range of available customers .In
essence, our target market can’t be restricted to just a group of people, but all those who love fruit drinks. We
are in the business to deliver a wide variety of fruit flavor to the following targeted group of people:
 Households
 Children
 Corporate Executives
 Business people
 Celebrities
 Sports men and women
 Students
 Tourists and everyone who resides in our target locations.

4.3. PRICING STRATEGY

Actually the price of our product is not below the market price; as a result, fruit juice providing business
enterprise set the price of juice as the markets that are it fluctuates over the time with market price. The basis
for our fruit juice price is the market price and cost-benefit analysis. Even if our competitors have no so much
strength, we can reduce our price in order to attract and get our customers attention; as a result we can
increase our profit from large number of the customers.
4.4. DISTRIBUTION STRATEGY
The distribution of our fruit juice processing to consumers can be distributed in different ways. Like: direct
delivery to consumer’s house, Retail services. Because we will get more profit by this mechanism rather than
wholesales.
4.5. PROMOTION STRATEGY
Our promotion strategies are applied using the following methods:
 Notice
 Sponsorship for short radio programs
 News paper

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  Business card
4.6. MARKET SEGMENTATION
Actually the business enterprise is not limited to local market or internal market rather than external market.
. So our fruit juice processing is comfortable to other areas and woredas. They are profit oriented, gradually
involves in the production of different fruit.
5. OPERATIONAL PLAN
5.1. PERSONNEL PLAN
In order to accomplish the service effectively and efficiently our business hires workers based on
the following criteria:
 Educational level
 Age
 Ability
 Experience
 Health
 Conduct
We will have eight workers in general including the owners of the business. These are listed here under:
 Takele Abate with B.A Degree in Management and General Manager and Personnel supervisor who
directs all the activities of the business.
 Silenat Semagn with B.A degree in Marketing Management and the finance supervisor
 To be hired soon with B.A degree in Business and Marketing Management for Production Supervisor
 To be hired soon with B.A degree in Management or Marketing Management for Marketing Supervisor.
 To be hired soon one secretary (book keeper), one foreman and two workers based on their
experiences.
Suppliers Availability: We have proposed potential suppliers of our raw materials in different part of the
country. This is very essential part of our operational process for our business production.

The location is preferred for the following reasons:

 Different types of raw materials are available

 Weather condition is comfortable.
 The transportation cost is less.
 There is no such business enterprise around this area.
 There are many customers for the service

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Basic equipments we needed are:
 Fruit pulpier
 Processing equipment
 Raw fruit
 Wear (workers uniform)

5.2. PRODUCTION COST

The aim of the business is to provide high quality and quantity fruit juice in order to get the predicted
gain and to satisfy this business is fully responsible for all part of the operation. The first starting point
of the business is identifying the need of consumers, and then supplying this product with minimum
cost that doesn’t heart any one. The equipment and facilities needed for this business is needed is
mentioned as the below.
Generally the cost of business activity includes the following:
 Cost for telephone
 Cost for labour force
 Cost for license
 Cost for different raw fruit
 Cost for house rent
 Cost for water
 Cost for electric power

5.3. OFFICE EQUIPMENT

The materials needed should be:
 Chair
 Pulpier
 Balance
 Refrigerator
 Shelf
 Stainless steel knife
 Spoon
 Fork
 Juice processing equipment

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  Glasses with different size and design
 Chopping board
 Table
 Jar (bottle)
The materials mentioned above will be purchased. The special ability of the manager to dominate or have
complete power on others is that he/ she can communicate with others understanding technical problem,
persistent, self-confident and have good conduct. The business manager should be experienced at least in
business and should have knowledge of entrepreneurships.”
5.4. ASSESSMENT OF RISKS
The predetermined or expected risks are:-
Scarcity of raw fruit from farm.
Damage of raw materials from car accident.
Fluctuation of market price (devaluation, inflation, deflate)
Spoilage of juice.
Expiration of fruit juice and contamination.
Loss of income from spoiled and expired item.
Loss of customers.
Natural hazard
6. FINANCIAL PLAN
6.1. CASH FLOW ANALYSIS
The sale of fruit juice is expected to be calculated daily the price of each type of juice we take is 35 Birr one
juice, and on average we have estimated that 5000 juice
will be supplied per month , hence the approximation of the revenue will be 175,000 Birr per month.
Total revenue=5000Juice/month*35Birr / pack =175,000 Birr/month
Our Business will operates 10 months per year, Hence Total revenue =1,750,000Birr
Birr/month*10=1,750,000Birr/year.

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Pro-forma income statement as of year 1
Revenue
Sales-------------------------------------------------------------------------------------1,750,000
Expense
Total Salary Expense-------------------------------------------------------------------453,930
Miscellaneous Expense-------------------------------------------------------------------708
Total Expense-----------------------------------------------------------------------------454,638
In the second year of operation it is assumed that the business will increase the provision of juice by 10%:
Hence, Revenue =1,750,000Birr+0.1*1,750,000Birr=1,925,000
And
Pro-forma income statement of year 2,
Revenue
Sales-----------------------------------------------------------------------------------------1,925,000
Expense
Total Salary Expense----------------------------------------------------------------------453,930
Miscellaneous Expense--------------------------------------------------------------------708
Total expenses-----------------------------------------------------------------------------454,638.
In the third year of operation and its subsequent two years it is assumed that the business will increases by
15% of the second year, using full capacity at efficiency
Therefore, Revenue annually=1,925,000Birr+0.15*1,925,000Birr=2,213,750Birr
For the third year and subsequent two years the increment of total expenses were estimated to increase by
5%
Hence, total expense=454,638Birr+0.05*454,638Birr=477,369.9Birr
We have eight employees out of them, two permanent workers and the remaining four are temporary
workers. Each of the two permanent workers out of the ten earns 5,500 birr and remaining four workers earn
3,000 birr per month

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No of Item of Name Quantity Unit Price Total Cost
Handling materials 22 15 330
Miscellaneous cost - 3000 3,000
Fruit pulpier 3 1200 3,600
Employees 6 (5500*2*12)=132,000
+ =276,000
(3000*4*12)=144,000
Processing Equipment 1 6,000 6,000
Mango fruit 3000KG 25 75,000
Papaya fruit 3000KG 20 60,000
Avocado fruit 2000KG 15 30,000
Total expenses 453,930

7.2. PROFIT AND LOSS STATEMENT

Year 1 Year 2 Year 3 Year 4 Year 5
Income revenue (A) 1,750,000 1,925,000 1,925,000 1,925,000 1,925,000
Cash operating
Expenses (B) 454,638 454,638 477,369.9 477,369.9 477.369.9
Operating Income(C=A- 1,295,362 1,470,362 1,447,630.10 1,447,630.10 1,447,630.10
B)
Gross profit (E=A-B) 1,295,362 1,470,362 1,447,630.10 1,447,630.10 1,447,630.10
Federal Taxes
(35%)(F=35%E) 453,376.70 514,626.70 506,670.54 506,670.54 506,670.54
Net profit
After Tax (G=E-F) 841,988.30 955,735.30 940,959.56 940,959.56 940,959.56
Cash After Tax
Flow(H=G) 843,988.30 955,735.30 940,959.56 940,959.56 940,959.56

7. FUND REQUIREMENT
7.1. START UP CAPITAL
The aim of the business is to provide high quality and quantity fruit juice in order to get the Predicted gain and
to satisfy this business is fully responsible for all part of the operation. The first starting point of the business is
identifying the need of consumers, and then supplying this product with minimum cost that doesn’t heart any
one. In order to achieve this business we have to use our maximum efforts by economically and
technologically. The Business requires means of acquiring this initial capital by borrowing from our core
relatives and NGO’s finance. This fruit juice processing provides enterprise planned to construct and establish
a business company with an initial capital of 600,000 birr.
Financing has already been secured in the form of:

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  Birr 150,000 from our closed relatives
 Birr 150,000 from ourselves.
 Birr 300,000 from NGOs
The supplementary financing is required to being work on site preparation, equipment purchases, and to
cover expense in the first year of operations and the second up to fifth year operations we will generate the
expected and forecasted profit on the business.

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