JIMMA UNIVERSITY

COLLEGE OF BUSINSS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

HONEY BEE PRODACTION BUSSINESS PLAN

Group members ID NO

1. Abere Melaku.................................……..RU/1114/13

2. Abdulaziz Jebal…………………………RU/3883/13

3. Ayehush Alemu…………………………RU/1170/13

4. Choul Ruach.................................. …….RU/2055/13

5. Ismeal Jihad..............................................RU/

6. Nuru Jemal……………….........................RU/1675/13

Submission to Instructor Tsion

Submission date February 2022

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Table of content

Content. Page

1. Introdaction................................................................................................................4

Name and address of the company.......................................................................4

Name and address of the owner............................................................................4

Start up capital.......................................................................................................5

Source of capital.....................................................................................................6

Company summary........................................................................................................6

Mission ............. ......................................................................................................6

Background of the enterprise................................................................................6

Type of business......................................................................................................6

2. Executive summary.....................................................................................................7

3. Industry analysis........................................................................................................8

Future outlook and trends...................................................................................8

Competitors analysis............................................................................................8

4. Description of business................................................................................................8

5. Production plan...........................................................................................................9

Product and sales plan...........................................................................................10

6. Market plan place.......................................................................................................12

Market promotion and distribution place...........................................................15

Market segmentation and positioning...................................................................16

SWOT analysis.........................................................................................................17

7. Organizational plan.......................................................................................................18

Organizational structures,roles and responsibilities..................................,……….19

8. Risk assessment...............................................................................................................20

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9. Financial plan........................................................................................................20

Forecasted income statement........................................................................21

Forecasted balance sheet.................................................................................21

Forecasted cash flows........................................................................................22

10. Exit strategy.............................................................................................................23

11. Monitoring...............................................................................................................24

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1. Introduction

This business plan is aimed to create as new venture and job opportunity on members (partner’s
contribution and bank loan). The business will be needed to run a good product of honey and
distribute to local markets.

Name and address of the company

The name of the company named as ADDIS HONEY PRODACTION COMPANY around
Jimma city.

Legal form: - General partnership

Contact address: Jimma

Tell: 011-05-95-06-21

Type of business: merchandise

Name and address of the co-owner (owners)

1. Abere Melaku
Address------------------------------------------------------------Gojam
Qualification-------------------------------------------------------Degree (BA)
Function on the business-----------------------------------------Seller
Experience------------------------------------------------------- Accountant
Tell----------------------------------------------------------09 29 88 88 00

2. Abdulaziz Jebal

Address---------------------------------------------------------------Jimma
Qualification-----------------------------------------------------------Degree (BA)
Function on the business---------------------------------------------Secretary
Experience--------------------------------------------------------------Secretary
Tell-----------------------------------------------------------------------09 45 87 71 15

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3. Ayehush Alemu

Address------------------------------------------------------------------Debre markos
Qualification------------------------------------------------------------Degree (BA)
Function on the business-------------------------------------------- Advertising manager

Experience--------------------------------------------------------------Manager
tell----------------------------------------------------------------------------09 22 64 55 90

4. Choul Ruach

Address------------------------------------------------------------------------Gambela
Qualification------------------------------------------------------------------Degree (BA)
Function on the business---------------------------------------------------General manger
Experience----------------------------------------------------------------Accountant
Tell --------------------------------------------------------------------------09 36 32 55 90

5. Ismeal Jihad

Address------------------------------------------------------------------------Agaro
Qualification----------------------------------------------------- - - - - - - - - - -Degree (BA)

Function on the business----------------------------------------------------Purchasing

manager

Experience-----------------------------------------------------------------------Manager

Tell------------------------------------------------------------------------------- 09 45 63 53 78

6. Nuru Jemal

Address------------------------------------------------------------------------Wollo

Qualification------------------------------------------------------------------Degree (BA)

Function on the business---------------------------------------------------General manger

Experience----------------------------------------------------------------Accountant
Tell --------------------------------------------------------------------------09 45 54 90 37

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 Statement of financial requirement (startup- capital)

the business will be statement with the saturated capital of 600,000 and 400,000 birr use for
investment as land equipment and machine and 200,000 birr used for working capital employees
operation cost.

Source of capital

From the total capital of 600,000 the capital of business contribute from (partner, 200,000),
(family loan, 150,000) and (bank loan, 250,000). From this 33.3% is equity, 66.7% from debt.

Each partner contributions for the establishment of the project are presents in the following:

Partners ‘investment:

No Partners name ETB contributed to the project

1 Abere Melaku Br,40,000(40℅)
2 Ayehush Alemu Br,25,000(25℅)
3 Choul Ruach Br,20,000(20℅)
4 Abdulaziz Jebal Br,20,000(50℅)
5 Ismeal Jihad Br,30,000(30℅)
6 Nuru Jemal Br, 45,000(45%)
Total Br, 200,000

Company summary

Mission

The mission of this business plans is producing high quality of honey for the purpose of
attracting and satisfying the customer’s needs and wants in return getting reasonable profit.

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Startup summary

The business plan started January 1-2022E.c and partner will start the operation in September 1/
2022 E.C, and will create job opportunity to the society

Type of business

The type of business is merchandise activity.

2. Executive summary

Honey Production Company shall be established as a private limited company in Jimma by

partners are Abere Melaku, Abdulaziz Jebal, Ayehush Alemu, Choul Ruach, Ismeal Jihad,
and Nuru Jemal and the type of business is merchandise. The capital required to start the
business shall be acquired through bank loan, families and partner .The starting capital for
investment and working capital is 600,000.

The honey production shall to sale high quality of honey products have a capital of a
1,510,370 Birr with operation cost of 55500. The competitors have no high quality products
strong business network. The primary product of the business will be honey products. The size
of the business will be medium at the beginning but certain year when it gets more profit the size
will be large size. The business operation shall require some personnel.

The entrepreneurs of the business have rich experience about honey production in which will
significantly contribute to the success full establishment and operation of the business .The
partner shall carefully monitoring and adjusting the business products prices and change made on
a weekly, monthly or yearly and use different promotional strategy.

Easy available, convenient to the customer and affordable price makes the store popularity in
that area. The business form is general partnership.

The company distribute the product to all target market to satisfy increase the customers and
the quality of the product through direct and indirect means. The customer of the business is
hotel, restaurant and retailer because this business activity needs honey products for preparation
of wine.

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 3. Industry analysis

Future outlook and trends

In the last five years the introduction of honey production is highly known and more
expanded and many peoples are also participating but the method of producing them. The
marketing strategy and many things are done in traditional way and using their in adequacy
knowledge.

Due to this the total sales from this production are not much more enough and qualitative.so,
when those partners starts the business, they tries to evaluate and identify the failures in the past
few years and as much as possible change this failure totally to success by fulfilling the
accessory, this is to meal realization way and skill full mind to become profitable with satisfying
the customers after some years ago the business expands the capacity of production and
increasing the numbers of partners with the distribution of products at everywhere and every
time if possible.

Analysis of competitors

Recently the available competitors in Jimma and around that area are high, but the bad thing is
that, there is no much more competitor available in the area local marketing who produce the
product in that way of production system. This leads or intercede these partners to the group and
at the same time to aware the society about the method of production by using skill man power
and system of market strategy to become successful. The available competitors are not present
only Jimma. That means there may be a competitor who have a high capacity and provide
qualified products in different itself so, to become the wiener, the company should eliminate the
carelessness of honey production and these problems associated with the loss of bee`s to increase
productivity and to produce qualified producers. Otherwise, they may be high competitors in the
market and leads for risk.

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Strength of competitors

the Strength of our competitor are the way of financing mistakes /problems in our products and
the way of trading a solution or mechanism to serve the problems, there is also strong business
network and high quality of products the competitors know the effect of little mistake on the
market structure. That is a onetime mistake takes long period do of time to change the market
situation, our competitors effective or storing in the protection or avoidance of mistakes in the
quality products.

Weaknesses of competitors

The weaknesses of competitors are high production and transportation costs, which results larger
prices and also their approaches to the customers are dominant weakness.

Customer of the BUSINESS

The product of the business is providing an optimum honey and the potential customer is hotel
and restaurant and the other is retailer and whole seller.

4. Description of business

Products

The products of our company should be

1. Honey products

2. bee`s available for sale

In addition to these the companies will be expand its honey production business in various
regions and sell much amount of honey products for the society who needs it for another
preparation of wine and consumption purpose. The company has a great of increases there
production of honey in the future, this plan should be not only the plan for our company but, also
for other, since improving the capacity of production from day to day time by doing each and
every actives according to the session effectively is the first issue for every business office. So,

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in the future our productions capacity will be impounded we will able to get potential customers
and retailers who sells our products for their own profit

Location of the business

The honey production and processing takes place in Ajip, Jimma Zone 310km far from Addis
Ababa there is also alias ion office of or place which we use not for the exchanges of information
among different organizations or companies about the situations of the market or sharing
experience in the system and method of production addiss Ababa and chacha. The reason for
choosing the location is because of the area is the center of Ethiopia and easily transport to Addis
Ababa, which is high restaurant and hotel in the area.

Back ground of the enterprisers

The partners have enough knowledge which helps them to operate the production system easily.
They also have experience on how to mobile and operate the business mainly with the
adjustment of their marketing source giver though they can easily identify the competitor and
have the ability to win the market with successful profits and the partners were degree
qualification.

5. Production plan

Before any things have been started this partner is agreed to solve each and every situation can
fulfill the business in peace full mark up. Then the partner decided the following things by
keeping their formula steps.

How much capital needed for honey production?

How many kilo of honey should be available for sale?
What kind of things (e.g. Hive) must be fulfilled for production?
Which one is that must emphasis to improve the capacity and quality of products in the
future also?

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Estimation of startup capital amount

Description Amount

Investment:

Land 100,000

Building 280,000

Equipment 20,000

Total investment 400,000

Work capital

Staff cost 80,000

Operation cost 12,000

Total working capital 200,000

Total startup capital 600,000

Source of fund

Fund is crucial core point in our business .therefore our source of fund is equity and debt.

Type Source Interest (5%) Principal amount

Equity capital Partner 0 200,000

Loan 1 Family loan 5% ,4 year 150,000

Loan 2 Bank loan 5%, 7 year 250,000

Information about funding source

Débt1: family loan

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Name and address of creditor

Name-------------------------Haile Teshome

Address----------------------------------------A.A

Credit agreement: under discussions

Debt 2: bank loan

Name and address of creditor

Name: commercial bank of Ethiopia

Address:-Jimma, Main branch

Credit agreement: under discussion

Debt service

As we see before the initial capital distributed from partners, family and bank loan explain
briefly. Payment is made in installment based with interest the amount of the loan was birr
400,000 with 5% interest family and for bank.

Repayment period Jan. 2023 Jan.2024 Jan. 2025 Jan. 2026

Family loan Installment 20,000 30,000 40,000 60,000

Interest 7500 6500 5000 3000

Total 27500 36500 45,000 63000

payment

Repayment period Y1 Y2 Y3 Y4

2023 2024 2025 2026

Bank installment 50,000 60,000 65,000 75,000

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loan

Interest 72,500 10,000 7000 3750

Total payment 122,5000 70,000 72,000 78750

Staff cost

Position salary per month

General Manager.....................................5000
Seller………………………….......................…1500
Accountant...............................................2000
Inventory ship.........................................1500
Secretary..................................................400
Price bargainer........................................1000
Adverting manger ..................................2000
Sale manger.............................................2000
Price receiver..........................................1000
Purchase manager..................................2000

Total staff cost..........................................18400

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 Yearly (quarterly) sale plan

Product Quarter one Quarter tow Quarter three Quarter four

Honey Price per killo 100 110 110 100

Killo 400 450 450 500

Turn over 40,000 49,500 49,500 50,000

Bee Interms of hive 3 3 10 10

Price per hive 600 600 700 700

Turn over 1,800 1,800 7,000 7,000

Total 41,800 51,300 56,500 57,000

Operation cost

Office equipment and personnel

The company’s operation require some the equipment and personnel.

Required office equipment and machinery

No Description quantity Unit price Total price

1 Guest chair 5 100 500

2 Hive clothes 16 100 1600

3 Personnel computer 1 10,000 10,000

4 Hive ( material) 50 500 25,000

Total 72 37,100

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So our companies require 37100 birr for office equipment and machine

Needed physical material

Popularly forming should consist of the following factices

√ Bee`s shelter which is confer table for them

√ Storing rooms
√ Miscellaneous materials like, knifes

Raw materials and machinery

The needed raw materials for production of honey are:

Good shelters of Bee (freeform any dangerous conditions for bee) knife, and other
materials which used to storing honey products.

6. Marketing plan place

Distribution (PLACE)

The company distribute the products in the market areas, which is best for profit and better for
themselves. Mainly the company distributes the product to the target market of Addis Ababa also
the company can distribute to other marketing areas depending on the existing situation. The
distribution mechanism will be both direct and indirect channel. The reason is for using direct
channel is that honey is easily combined with sugar and other unnecessary types by dishonest
retailors.

Producer consumer

Producer agent whole seller retailer customer

Pricing strategy is the main consideration of the company. This company uses market penetrators
strategy to introduce its products and to expand itself in different market areas, to penetrates the
market the company must know in what price that the competitor are sold their products. If this
is known marking simply in different on the price of the products create a greet attention for the

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company’s product by many customer. The company sells the products even below its
production cost up to the level where market is penetrated and getting awareness by customers to
the market. Generally the customer may be willing to pay 120 birr per kilo and 800 birr for one
hive bee`s and Our price is 100 per kilo, and 700 birr of one hive bee, the reason is that in order
to increase customer.

Promotion strategy

It is imaginary to think that without promotion of the product the business will be expanded and
profitable that to attract customer promotion of the company’s product is necessary and primary
issue on the targeted market due to this reason promoting company’s prove by using mining
contras (television, radio and networking system like face book, internet) are necessary or
essential, therefore, promoting the products is one best marketing strategy of our company.

Market segmentation

The base of the market segmentation was geographically specially in Addis Ababa because in
this area there are various retailors so, distribute the product any time. The other market
segmentation in Jimma is based on air climate because honey is important in coldest
environment. Generally the market segmentation based on geographical (air condition) and
number of retailor’s base (user status, usage rate and benefit) .therefore, the market for the
company’s products are inside the country which mainly in 4 specific areas: 1.Jimma, 2.Addis
Ababa, 3.Agaro, 4.Welkite.

In all these market areas there is large customers of honey product but the company distributes
the production highly in Welkite, Jimma and Addis Ababa because the company’s near to Addis
Abeba among other marketing areas, so the target market for our products is Jimma and Agaro.
in addition to both areas all the other market areas are suitable to sale our products for instance
Addis Ababa is needs huge amounts of honey products due to the presence of high population
and capital of Ethiopian. So our company can distribute the product other marketing area
depending on the existing market structure.

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Market positioning

On comparative advantage of the business is the way the product is defined by the customer. As
a result of this the business tries to place in the customer mind by biting its competitors through
providing the quality and health products with reasonable prices and improving the brand
uniquely benefit to offer customers. in other word it is said to that positioning the business output
in the customer mind for relatively long period of time.

Legal form of the business

The legal form of the business will be general partnership because all members have a power to
management activity

The future capacity

In the future the company needs huge amount of capital which is necessary to expand its branch
in different regions and areas with a high emphasis of increasing the needed man power also the
busier must have modern equipment for producing honey.

SWOT analysis

Strength

The accessibility of infrastructures high production quality and quantity better promotion of the
products is the strength of the business plan. Better management skill is the opportunity of
strength.

Threats

The threats of business plan may be fluctuation of price of product due to number of retailers and
peoples who requires honey for the preparation of wine.

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Opportunity

The opportunity of our business is increase of the product, demand of the customer, decrease of
the material. Generally the major opportunity of the business is facility of hotel for wine
preparation.

Weakness

The weakness of the business is shortage of honey products due seasonal fluctuation or
unexpected and continuous drought which affects the flower preparation of plant (source of
honey preparation of bee).

7. Organizational plan

Forms of owner ship

Addis honey Production Company should establish or termed as private limited company (terms
of partnership). The partners of the company also as mentioned before are Abere Melaku,
Abdulaziz Jebal, Ayehush Alemu, Choul Ruach,Ismeal Jihad, and Nuru Jemal. We have an
agreement on the ongoing production life and plan of the business. These agreements are try to
carry out different and difficulties facing in the reduction of product in peace full way by
discusser clearly to become successfully.

Organizational structures

General Manager
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 Sale manager
Secretary

Accountant Purchasing Advertising

manager manager

Price Seller
Marketing
receiver
manager

Price bargainer Inventory ship

Roles and responsibility

 General Manager: - oversee the general operation of the company and personnel’s
 Sales manager: - oversees the selling activates of merchandiser he can see the proper
destruction of merchandise in each centers oversee the bargaining of prices with
customers.
 Advertising managers: - contacts the advertising process. he cheek whether the
company advertised prosperity with proper method or not
 marketing manager:- rails the marketing plans of the company and searching
information which makes the company power full competitors
 purchasing manager:- supervise how mach quantity is returned to purchase, what price
should and unease, what type of merchandise purchase
 secretary:- the one write any document like receipt check to any individual
 Accountant :- the one who prepare financial statement
 Seller:- sells the product of accompany in relation to sale manager
 price bargainer:- The one pay the price to the order
 Inventory ships:- Ships the product order come from the purchasing manager
8. Risk assessment

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Weakness of the business

In the operation of the business the following problem may occur

√ low occupation power to economic change

√shortage of personnel
√ Competitors reaction

Effects of change

Completion:-increasing the numbers of competitors to different market area particular in the

stargazed man Nat areas difficulties for our company.

Contingency plans

The company shall have the following alternative rule policies to expand the operation profitable

1. Establishing /conducting research and development

2. Expanding the distribute center to other markets
9. Financial plans

Forecasted income statement for the next three years

A honey production Private limited company for casted income statements for the following
three years

Addis Honey production Company

Fore casted income statement

For the next 3 years

Description Year 1 Year 2 Year 3

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Revenue:

Sale 230,000 430,000 640,000

Total revenue 230,000 430,000 640,000

Expense:

Office supplies 2000 2000 2,400

Transport expense 2000 3000 4000

Rent expense 5000 7000 8000

Miss lane ous expense 1000 1500 600

Income befor tax 220,000 416,500 625000

Income tax (15%) (33,000) (62,475) (93,750)

Income after tax 187,000 354,025 531,250

For casted balance sheet for the next 3 years

Honey production P.L.C Company forecasted balance sheet for the next three years

Addis Honey production Company

Forecasted balance sheet

For the next 3 years

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Current asset Year 1 Year 2 Year 3

Cash 245,000 400,000 600,000

A/R 50,000 80,000 100,000

Inventory 205,000 320,000 400,000

Total current asset 500,000 800,000 1,100,000

Fixed asset

Land 200,000 250,000 130,000

Building (net) 250,000 200,000 100,000

Equipment(net) 50,000 150,000 120,000

Total fixed assets 500,000 600,000 350,000

Total asset 1,000,000 1,400,000 1,450,000

Liability and equity:

Loans 150,000 130,000 200,000

Tax payable 80,000 190,000 130,000

Equity 1,230,000 1,080,000 1,120,000

Total liability and equity 1,000,000 1,400,000 1,450,000

Fore casted cash flow for the next three years

Addis Honey production Company

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 Statement of for casted cash flow

For the next three years

Y1 Y2 Y3

Cash beginning of the year 300,000 375,000 445,000

Equity 200,000 350,000 260,000

Loans 150,000 100,000 50,00

Sales 677,500 601,000 837,500

Total cash inflow 1,327,500 1,426,000 1,592,500

Investment 400,000 450,000 500,000

Operation cost 120,000 130,000 140,000

Interest (5%) 7500 5000 2500

Total cash out flow ( 527500 ) ( 585000 ) ( 642500)

Cash of the end of the years =800,000 =841,000 950,000

10. EXIT STRATEGY

Due to any means our business may fall. The failure is may occur due to the external factors.
Before our business fall we made audit in each month. In the audit, if there is a threat we try to
balance it. If it is impossible we try to out from the business according to our agreement when
we start the business. We should exit from the business before we lost the original business.

11. MONITORING

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The owners of the business that there right to control, distribute and improve the quality and
capacity of their production, the owner of the company also have the right to operate the business
and terminate of the partner when needed.

APPENDEX

√. Our partners will have a debit of 150,000 and 250,000 birr from commercial banks and
families respectively.

√. The partners gets source of information from the existing company and potential
customer.

√. Government encourages small business, then our partner’s will get license from city
administrative.

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