1.

0 Executive Summary

Introduction

Privately owned and operated by Legesse Chirfa, cereal crop wholesale

company is a newly established retail store. Supplying consumers, with
variety of cereal crop such as sorghum, maize, wheat and barley with
affordable prices at different target level.

Located in the Sidamma Region Hawassa city Legesse Chirfa will have the
advantages of the accessibilities of the product directly from the farmers.
Since the Region is known for growing cereal crop such as sorghum, wheat,
barley and maize.

After having established a successful and growth-oriented business, we look

to expand our branches in Addis Ababa, Sodo and Shashemene during our
third year of operation. This additional business channel will allow us to
reach a broader customer base as well as expand the level of customer
service and personalized services we are able to offer the consumer.

It is the purpose of this business plan is to get a loan for the foundations of
the company's vision, philosophy and strategy to the firm's principal
investors and debtors and to align the various elements of the company to
create a coherent system of sustainable customer satisfaction and profits.

The Company

Legesse Chirfa cereal crop wholesale company located in the Sidamma

Region Hawassa City. the area is located at a distance of 275 km away from
the capital city Addis Ababa With great access of suitable roads which
enables the buyers to ship and transport where ever they want. Sidama
Regional State is region for its suitable climate to grow cereal crops and
attracts shoppers from many parts of the city. As a destination shopping
area, consumers come here because of the diversity of farm products
available.

Legesse Chirfa is the general manager and founder of Cereal crop wholesale
and construction machinery rental company. His success as a Agricultural
institute employee combined with his formal business training makes him an
ideal community leader and business owner.
The Market

Cereals are the major sources of food intake in Ethiopia accounting for
about 70% of calorie intake, out of which two-third is accounted for by teff,
wheat and maize alone. Among cereals, maize, wheat and teff are most
traded commodities in Ethiopia. Based on a survey conducted in 2008,
reported that nationally the proportion of maize, wheat, sorghum and teff
sold by smallholders was about 30, 31 and 28% of production,
respectively, and the proportion of total cereal sales (maize, teff, wheat,
barley, sorghum, and millet) from the 2008 main season was about 26% of
total cereal production. The same data source indicated that about 78% of
cereal crops was marketed, indicating that cereal crops are produced
mostly for the market. Wholesale and retail trade on grain suppressing
private grain marketing. The greater determinant of the demand for cereal
crop is the ever growing number of the population of the country. Since it
is the basic components of household consumption the availability of the
market is non questionable. Therefore our company would like to deliver
the products toward densely populated cities of the southern region with
affordable price which is less of the competitors. This is our marketing
strategy in order to penetrate and advance in supply of the products which
in turn help us to achieve our objective which is high ranking wholesale of
cereal crops in the region. Our two main target markets are Retailers, and
The small mill factory. We predict that the number of both targets will grow
faster.
1.1 Objectives

The objectives of Legesse Chirfa's are:

1. To repay a loan on the first four years.

2. To concentrate our efforts on several selected market sectors that

have been researched and found promising.

3. To be one of the best supplier of cereal products in the region .

1.2 Mission

Legesse's mission is to supply certain market niches for maize, wheat,

sorghum and barley items which are, for a variety of reasons, not well
served by the large sellers. The owner of the company experience in the
cereal crops market, as well as his contacts in the region to deliver the
product to the needs of these market niches.

1.3 Keys to Success

The keys to success in Legesse's business are:

1. Offering products which are healthy and high grade crops to

consumer. This is essential for maintaining the market sectors
mentioned in the mission statement.
2. Reliable and timely deliveries and must make good on its delivery
promises. Because of the nature of doing business in the Region,
this requires long-range planning in scheduling orders, taking into
account the region business practices.

3. A reliable administration that is ready to serve customers, prepare

accurate billing, follow-up on orders and other documentation, and
maintain a close watch on expenses and collection of accounts
receivable.
Located in the Sidama Region Awassa citiy Legesse Chirfa will have the
advantages of the accessibilities of the product directly from the farmers.
Since the Region is known for growing variety of cereal crops.

After having established a successful and growth-oriented business, we look to

expand our branches in Aleta Wondo, Sodo and Shashemene during our third
year of operation. This additional business channel will allow us to reach a
broader customer base as well as expand the level of customer service and
personalized services we are able to offer the consumer.

STORE LOCATION

The company store will be located in the Hawassa city. Hawassa city is
located at a distance of 275 km away from the capital city Addis Ababa With
great access of suitable roads which enables the buyers to ship and transport
where ever they want. Sidama Region is well known for its suitable climate to
grow cereal crops and attracts shoppers from many parts of the city. As a
destination shopping area, consumers come here because of the diversity of
farm products available.

STORE OPERATION

Legesse Chirfa cereal crop wholesale will be open for operation Monday-
Satarday, closed major holidays. Hours of operation will be 8:00 a.m.-6:00
p.m. Hours will be extended to 7:00 p.m. during the Holidays.

Tesfaye demissie will initially be staffed by three full time employee,

working 40 hours a week and four part-time employee working 30 hours
or less a week. When not traveling or attending to outside business, both
owners will be on site daily and will provide additional sales and customer
support assistance. Additional details on this subject are provided in the
Personnel Plan section.

STORE POLICIES

To most effectively service the customer, Legesse Chirfa will accept the
following forms of payment: cash and check When accompanied by a
sales receipt. A store credit will be granted within 30 days of purchase
with or without a sales receipt.
2.1 Company Ownership

Legesse Chirfa cereal crop wholesale is a sole proprietor business which is

solely owned and administrated by M.r Legesse Chirfa.

2.2 Start-up Summary

The key elements in the expanssion plan for the company are:

Formulation of the strategic business plan.

The establishment of a corporate identity.
The establishment of a location and place of doing business.
Funding of working capital requirements, purchases of other equipment
and assets deemed necessary for the principle operating activities of
the company, and additional capital raising alternatives.
Initiation of Research and Development of existing and future products.

Costs of raising capital through private placement.

Approximately 345,462 birr was raised from the founders of the company
for these purposes. This funding will be available in late 2015 and these
tasks have either been completed successfully or are in the final process
of completion.

These are treated purely as expanssion expenses and initial working capital
by this plan. The 345,462 is treated as cash-on-hand as of the expanssion of
this plan on 2015. The remainder of the expanssion capital required, as well
as capital required, for the continuation of operations will financed by bank
loan which is approximately 4.5 milloin birr.
3.0 Products

Since Legesse’s cereal crop wholesale is a wholesale business, He purchases

from local farmers who are engaged in the production of cereal crops on a
yearly bases and resale to the targeted customers that are at different level.
The following products are our company would like to supply to the market.

1. Barely

2. Wheat
3. Maize
4. Teff

4.0 Market Analysis Summary

Cereals are the major sources of food intake in Ethiopia accounting for about
70% of calorie intake, out of which two-third is accounted for by teff, wheat
and maize alone. Among cereals, maize, wheat and teff are most traded
commodities in Ethiopia. Based on a survey conducted in 2012, reported that
nationally the proportion of maize, wheat, sorghum and teff sold by
smallholders was about 30, 31 and 28% of production, respectively, and the
proportion of total cereal sales (maize, teff, wheat, barley, sorghum, and
millet) from the 2012 main season was about 26% of total cereal production.
The same data source indicated that about 78% of cereal crops was marketed,
indicating that cereal crops are produced mostly for the market.

Wholesale and retail grain trade, essentially suppressing private grain

marketing. The greater determinant of the demand for cereal crop is the ever
growing number of the population of the country. Since it is the basic
components of household consumption the availability of the market is non
questionable. Therefore our company would like to deliver the products
toward densely populated cities of the southern region with affordable price
which is less of the competitors. This is our marketing strategy in order to
penetrate and advance in supply of the products which in turn help us to
achieve our objective which is high ranking wholesale of cereal crops in the
region.
4.1 Market Segmentation

Sidama region is known as one of cereal crop producing area among in

Ethiopia. the area mainly produce highland crops such as maize, wheat,
barley and teff.

rapid growth of the population and urbanization is the greater

determinant for the demand of crops for consumption purposes.

Legesse as a wholesaler segmented his market as retail business and mill

processing company.

Table: Market Analysis

Market Analysis
Year 1 Year 2 Year 3
Potential Customers Growth CAGR
Retail Business 25% 35 44 55 25.20%
Small mill factories 30% 52 68 88 29.89%
Total 28.06% 87 112 143 28.06%
4.2 Target Market Segment Strategy

The goal of legesse Chirfa is to serve retailers and mill processing company
which are operate in main cities that have difficulty finding better cereal
products that fit their larger consumers.

4.3 Industry Analysis

As mentioned in the Market Segmentation section, the market areas most

attractive to

Owner’s are:

Retailers

Retail business among the market channels are the one who deliver a product
to final consumers. Based on this market pattern they are one of the customers
to our business. this business are the ever growing business since they don’t
engage on production process but easily conduct research on the behavior and
income level of final consumer. This is the big opportunity for our company to
make chain with these small firms in order to maintain the growth of the
business.

Small Mill Factory

Now days due to urbanization and consumer preferences small mill factories
are increasing in fasting rate. Therefore it requires large area of warehouse to
store and process the mill in order to deliver the consumer at the best of their
interests and demand through out the year. This creates greater opportunities
for our company as best market outlet.

4.3.1 Competition and Buying Patterns

Our clients demand the supply of our products in a convenient location.

Comparison: Legesse Chirfa has placed its stores in urban industrial areas.
Alemayehu Fanta, a wholesaler, implements a similar strategy that draws
the suburban dweller out of the house. This strategy keeps these customers
isolated from the competition.

Quality & healthy products and services are the most important factors
when selling Cereal crops. Such products sell well in stores that maintain a
good selection, good location, and knowledgeable, friendly employees.
Consumer highly prefers to buy institutionally oriented products
5.0 Strategy and Implementation Summary

5.1 Competitive Edge

To further entrench in its niche market, Legesse will utilize its established
connections with the retailers and mill factories, which provide the company
an opportunity to offer quality products in the selected sidama zone markets.
Further, the company will utilize unique industry experience and superb
selling skills of sales consultant, Medhanit Alemayeh, to achieve the desired
sales penetration.

5.2 Marketing Strategy

Our marketing strategy will focus heavily on sales promotion, niche

positioning in the market and customer service with loyalty and retention
in sales.

The marketing budget will not exceed 5% of our gross annual sales. Our
promotions will always stay in tune with our company objectives and
mission statement.
5.3 Sales Forecast

The following table and charts show our projected sales.

Chart: Sales Monthly

Chart: Sales by Year

Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Sales
Sales 5,071,700 5,751,700 6,321,400
Other 0 0 0
Total Sales 5,071,700 5,751,700 6,321,400

Direct Cost of Sales Year 1 Year 2 Year 3

Sales 3,178,000 3,343,700 3,522,050
Other 0 0 0
Subtotal Direct 3,178,000 3,343,700 3,522,050
Cost of Sales

5.4 Sales Strategy

Key to the sales strategy is direct sales calls on all market segments targeted
in this plan with the. These sales calls need to be made by the owner,
Legesse Chirfa, by virtue of his background and knowledge of the products
and competitors. Experience has proven that the more time he devotes to
sales, the more sales result. A full-time team member needs to be found and
added as soon as possible. Without this person, too much of Legesse's time is
deflected away from his major task of selling.

Forty specialty retailers have been identified, as well as 52 mill factory. With
proper geographical planning and appointment scheduling handled by a
competent team member, three or four sales calls could be achieved in a day.
This would mean that Tesfaye could pay a visit to all 60 prime prospects over a
three week period.
6.0 Management Summary

The owner of The believes very strongly that relationships should be

forthright, work should be structured with enough room for creativity, and
pay should be commensurate with the amount and quality of work completed.
The company is young enough that the only manager that this philosophy
applies to the owner.

The Owner will assess the productivity of the two full-time employees and
four part-time employees every six months.

6.1 Personnel Plan

Table: Personnel

Personnel Plan
Year 1 Year 2 Year 3
Sales Cosultant 30,000 36,000 42,000
Accountant 24,000 30,000 38,000
Store Keeper 18,000 24,000 32,000
Marketing officer 36,000 42,000 52,000
Total People 5 6 7

164,00
Total Payroll 108,000 132,000 0
7.0 Financial Plan
Important Assumptions
Nature and Limitation of Projections

This financial projection is based on sales volume at the levels described in the sales forecast section and
presents, to the best of management's knowledge, the company's expected assets, liabilities, capital, and
revenues and expenses. The projections reflect management's judgement of the expected conditions and
its expected course of action given the hypothetical assumptions.

Nature of Operations

The company is in the business of Cereal Crops wholesale. The company has been in operation since
2010.

Revenues

The company's revenue is derived primarily from the sale of Wheat, Maize, and other cereal crops
products.

Expenses

The company's expenses are primarily those of salaries, utilities, and insurance costs. Other expenses are
based on management's estimates and industry averages.

Table: General Assumptions

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 18% 18% 18%
35.5
Current inflation Rate 35.5% 35.5%
%
Tax Rate 35% 35% 35%
Other 0 0 0
7.1 Projected Profit and
Loss

Table: Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales 5,071,700 5,751,700 6,321,400
Direct Cost of Sales 2,758,000 2,839,700 2,912,050
Other Costs of Sales 420,000 504,000 610,000
Total Cost of Sales 3,178,000 3,343,700 3,522,050

Gross Margin 1,893,700 2,408,000 2,799,350

Expenses
Payroll 108,000 132,000 164,000
Marketing/Promotion 42,000 50,400 61,200
Depreciation 45,000 45,000 45,000
Rent 180,000 240,000 240,000
Utilities 26,400 30,000 32,500
loading & Unloading 38,400 62,568 72,000
Salary 114,000 114,000 114,000
Telephone 15,600 19,800 20,190

Total Operating Expenses 569,400 693,768 748,890

Profit Before Taxes 1,324,300 1,714,232 2,050,460

Interest Expense 0
Taxes Incurred 445,505 581,981.2 699,661

Net Profit 878,795 1,132,250.8 1,350,799

Net Profit/Sales 32.35% 34.25% 35.37%
7.2 Projected Balance Sheet

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets

Current Assets
Cash 1,551,890.70 2,365,616.90 3,000,755
Other Current Assets 40,000 40,000 40,000
Total Current Assets 1,591,890.70 2,405,616.90 3,040,755

Long-term Assets
Long-term Assets 120,000 120,000 135,000
Accumulated Depreciation (45,000) (90,000) (135,000)
Total Long-term Assets 75,000 30,000 0
Total Assets 1,666,890.70 2,435,616.90 3,025,755

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Current Tax 445,505 581,981.20 699,661
Other Current Liabilities 0 0 0
Subtotal Current Liabilities 0 0 0

Long-term Liabilities 0 0 0
Total Liabilities 445,505 581,981.20 699,661

Retained Earnings 342,590.70 721,385.70 975,295

Earnings 878,795 1,132,250.8 1,350,799
Total Capital 1,221,385.70 1,853,635.70 2,326,094
Total Liabilities and Capital 1,666,890.70 2,435,616.9 3,025,755

Net Worth 1,666,890.70 2,435,616.90 3,025,755