ADAA INJERA Baking Enterprise

BUSINESS PLAN

2014

Address of the Business:

Sub_City: Addis Ketema
Wereda: 11
House No: 505

Prepared by: 1.

Jan, 2021
Content

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 Page
Introduction . …………………………… ..................................................................... 3
Executive Summary ......................................................................................................4
Section one: Marketing Plan
Description of the Product . …………………………… .............................................. 5
Comparison of product with competitors. …………………………… ..........................6
Location. …………………………… .......................................................................... 6
Market area . …………………………… ..................................................................... 6
Main customers ................................................................ ……………………………..7
Total demand................................................................................................................... 7
Market share ....................................................................................................................7
Selling price......................................................................................................................7
Sales forecast....................................................................................................................7
Promotional Measures…………………………… ................................................. 8
Marketing Strategy…………………………… .................................................... 8
Marketing Budget…………………………… ....................................................... 8
Section Two: Production Plan
Production Process…………………………… ...................................................... 9
Fixed Assets…………………………… ............................................................... 9
Life of Fixed Assets…………………………… .................................................... 10
Maintenance and Repairs…………………………… ............................................. 10
Sources of Equipment…………………………… ................................................. 10
Planned Capacity…………………………… ........................................................ 10
Plant Location and Layout…………………………… ........................................... 10
Raw Materials Needed…………………………… ............................................... 11
Raw Materials Availability…………………………… ......................................... 11
Labour…………………………… ..................................................................... 12
Cost of Labour…………………………… .......................................................... 13
Labour Availability…………………………… .................................................... 13
Start-up capital…………………………… ...................................................................14
Specification of investment items…………………………… ......................................15
Sources of start-up capital…………………………… .................................................. l5
Section Three: Organization and Management
Form of Business…………………………… ................................................................16
Organisational Structure…………………………… ............................................. 16
Section Four: Financial Plan
Monthly Sales Plan …………………………… ............................................................17
Monthly Operational Cost Plan …………………………… .........................................18
Profit Margin (Monthly Estimation of Net profit) …………………………… .............19
Cash flow Plan (Monthly) …………………………… ..................................................20
Opening Balance…………………………… .................................................................21

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Business Plan
Introduction
Planning is a vital tool for an organization as it is used to guide the organization to attain its
goals and objectives in the short run or long run. It is frequently stated that fail to plan is plan
to fail. Thus, we have generated a business idea and set plan to establish and run an enterprise for
baking injera and sell it to get profit for our investment.

Injera is the well known delicious food in Ethiopia. It is made up of Teff. As its name implies,
Adaa means a place where Teff is produced that we use as a raw material to produce Injera.

I. VISION

Our vision is being the leading Enterprise in Addis Ababa dedicated to bake quality Injera and
preferable by customers.

II. MISSION
Our mission is to bake high quality injera which are preferable by its size, weight, colour,
number and the variety of products to supply for the potential customers.

III. Objectives of the enterprise

 Availability of important machine for baking quality injera for all potential customers in
all selling round about.
 Wise utilization of the existing resources of the enterprise.

 Building modern customers habit of buying baking injera instead of stay away from
electrical power and time consuming homemade prepared injera.
 One of the enterprise objectives is employment creation for people who need and want to
work.
 Providing the right quality of Injera with reasonable price.

IV. Operational objectives.

The enterprise concern is with short-term goals for one year associated with the
tactical plans. These plans are more detail and we based on tactical goals.

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EXECUTIVE SUMMARY

1. Brief Description of the Project

Name of business: ADAA FRESH INJERA Baking Enterprise

Legal Form: PARINERSHIP
Contact address: ATO GIRMA ZELEKE, Addis Ketema SUB-CITY, Wereda
11, Merkato
Tel. NO: 0911126822 E-mail Address: girmazh@yahoo.com
Type of business: MANUFACTURING ENTERPRISE

2. Brief Profile of the Entrepreneur

Name Function in the Experience Qualification Tell No

Business
1. Girma Zeleke Manager 5 Diploma 0911126822

2. Nebyou Abebe Supervisor 4 Diploma 0910803785

3. Eshetu Mintesnot Seller 4 Diploma 0911190992

4. Getu Seboksa Accountant 3 Diploma 0911461813

5. Mubarek Nasir Purchaser 2 Diploma 0911185099

3. Project's Contributions to the Local/National Economy

The fundamental economic function of business is to make and distribute the products and
services that people want. One of the business goals is employment creation for people who need
and want to work. Also, our business provides an income base to its stakeholders in terms of
salaries, wages, profits and taxes.

In short, Contribution of entrepreneurs to Economic Goals includes:

 Increase of the quantity of productive resources

 Improvement in the quality of resources
 Employment creation:

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  Utilize local resources,
 Decentralization and diversification of business:
 Promotion of technology
 Promotion of an entrepreneurial culture:
 Greater efficiency, etc.

Section 1
MARKETING PLAN

1.1 Description of the Product

Injera is currently sold in every place where densely populated area of addis ababa.The size and
weight of each piece of injera produced according to customers’ needs and what they can afford.
the size and weight of injera produced in our enterprise is 30 cm diameter and 200
grams per piece respectively. Depending on the type of teff used in making the injera, the
colour can range from white to dark brown.

Product: Injera

a) Specification (size, color, quality) -Moderate or Medium size with white in color and
with the right quality
b) After sales service -Delivering to their home by order
-Giving advice how they use it

1.2 Comparison of the Product with It’s Competitors

Although there are few number of enterprises or Competitors that produce and
supply Injera, they are not providing the right quality of Injera with reasonable
price. In addition to this, they are not satisfying the increasing demand of Injera to
the operation area of Merkato. Thus, our business enterprise produce sufficient
Injera for the potential customer; hotels, restaurants, individuals, and different
types of companies with reasonable price and pure teff injera.

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Competitive Analysis of Product

Product/service Injera

How much are customers willing to pay? Average

Competitors price Highest

My price Reasonable that consider the purchasing

power of the customers

 To be competent
 The purchasing power of the customer
Reasons for setting my price
 The ability of the customer
Margin for discount Yes (2 %) Those who order more than 100
will get 2% discount

Table 1: Competitive analysis of product

1.3 Location
Our business location will be in Addis Ketema SUB-CITY, Wereda 11, Merkato area. Merkato

is the hub of city where it is highly densely populated, more comfortable area for
transportation to distribute the product in every direction. In addition to these,
there are several hotels, restaurants, cafes, and residents. Furthermore, all resources
that are needed for the production of Injera are also available in the area.

1.4 Market Area

The enterprise intends to distribute this product to Addis Ketema SUB-CITY, Wereda
11, Merkato area where there are several hotels, restaurants, cafes and individual

residents. The enterprise expected to cover the unsatisfied need of customers in the
above mentioned area.

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1.5 Main Customers

The main buyers of injera are individual households, hotels, restaurants, cafes and and retnd
retailers. The enterprise expected to cover the unsatisfied need of customers. Providing its
quality is at least as good as what the competitors are selling now. Our customers are demanding
better quality Injera.

1.6 Total Demand

Our enterprise produced 3,000 per day and 90000 injera every month. Based on our marketing
research the total demand of injera in the Merkato area exceeds more than the above mentioned
amount.

1.7 Market Share

A sample survey of competitors in the area indicated that there are several producers selling
injera to the hotels, restaurants, cafes and individual residents. The competitors are high
in size and the quality of their products is inferior to what is planned by the project.

1.8 Selling Price

The selling price is based on "Cost-Plus Method". Our enterprise feels that a profit mark up of
8% over the total product cost is very reasonable and competitive especially at this initial stage.

Unit product cost is estimated at birr 2.75 Adding the 9 % profit mark up, our price is birr 3.00
whether delivered or walk-in.

1.9 Sales Forecast

The total demand injera of Addis Ababaas per the market survey conducted is 4,000,000 per day
However, for practical purposes, only 7.5% of the projected market size will be considered for
sales forecast, that is, 3,000 injera x 30 =90000 per month, or 1,080,000 in a year.

Our enterprise believes that the market is expanding quite rapidly as the expansion of hotels,
restaurants, cafes and individual residents in the city. Conservatively, we projects that
his sales volume will increase by 10% every year.

In addition, we have a long range plan that is after five years we wish to export our production to
the foreign countries especially to near east and far east Arab countries. Also, if our injera is
preferred and demanded by western countries we are likely very glad to export it as they need.

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Table 2 Projected Sales by Year, Sales Volume and Amount.

Year (E.C.) Sales Volume (units) Sales Amount (birr)

2006 1,080,000 3,240,000

2007 1,188,000 3,564,000

2008 1,306,800 3,920,400

1.10 Promotional Measures

We plan to promote the product in different way. Depending on the nature of our product,
geographical coverage, and capacity of the owners, our promotion will focus on printed
information, brochures, posters and words of mouth, etc...

1.11 Marketing Strategy

The project's marketing strategy is based on the following strategies:
a) Product strategy - it has a superior product.
- it has an appealing brand name ‘ADAA FRESH
INJERA Baking Enterprise’’
b) Pricing strategy - its retail price of birr 3.00 is lower than the most
competitors (birr 3.50-4.00)
c) Promotion strategy - printed information, brochures, posters and
words of mouth, etc...
d) Distribution strategy - Reaching the customer by selling to
 Individual  Retailers  Wholesalers  Others

Reason for choosing this way of distribution

The reason that we choose this way of distribution is to address our product for different
areas or places. We will distribute our products to our customers through wholesaling,
retailing and directly to the individual customers. We select this means of distribution
channel because of the nature of our product and customers preference. In addition to
this, the by pass residents may also use our products
1.12 Marketing Budget
ADAA FRESH INJERA Baking Enterprise will have very modest cost to promote and distribute
its product. It will rely mostly on word of mouth promotion by satisfied customers as well as
endorsement by the retailers of the product because of its better quality. Hence, the only cost it
will incur for printed information, brochures, posters for a total yearly or annual marketing
budget of birr 500.

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 Section 2
Production PLAN

2.1 Production Process

The production process of making injera is as follows:

1. Teff will be purchased, cleaned and grinded.

2. The powder is mixed with water in a container and stored for 3 to 4 days.

3. The dough is mixed with Absit and water and kept for 30 up to 40minutes and
finally baked by using electric stove.

2.2 Fixed Assets

Table 2.2-A List of Machinery, Number, Specifications and Purpose

Machines, Tools and Fixtures Number Specifications Purpose

Injera Baking Machine (Electrical) 3 Electrical operation Baking Injera

Injera Baking Machine (Manual) 3 Manual operation Baking Injera

Powder Mixer 1 Electrical Mixing the powder

with water

Table 2.2-B List of Machinery, Suppliers and Price

Machines, Tools and Fixtures Suppliers Price Per No. of Total Terms of
Unit Units Cost Purchase

Injera Baking Machine (Electrical) Local 1200 3 3600 Cash base

Injera Baking Machine (Manual) Local 800 3 2400 Cash base
Powder Mixer Local 10000 1 10000 Cash base

Total Cost: 16000

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2.3 Life of Fixed Assets

The life of the Baking Machine and Powder Mixer are 5 years and for the equipment, because of
its regular contact with heat cold 2 years. The depreciation charge will be 10% on Baking
Machine and Powder Mixer. The annual depreciation cost, assuming no scrap value, will
therefore be:

10% of 10,000 (Powder Mixer) Birr 1,000

10% of 6,000 (Baking machine) Birr 600
Annual depreciation cost: Birr 1,600
or monthly depreciation cost: birr 133.3
2.4 Maintenance and Repairs

Estimation for Maintenance and Repairs Amount

Machine Installation 800

Water ,Electric, Telephone Connection 1000

2.5 Sources of Equipment

The machinery and equipment will be locally manufactured on the factory site with local
craftsmen. No transport charges will be incurred for the equipment

2.6 Planned Capacity

The Enterprise has a production capacity of 3000 pieces of injera per day of operation.
The Enterprise will initially operate 3000 pieces of injera per day for 30 days in a month.

2.7 Plant Location and Layout

Description of the planned location for the business

Our business location will be in Addis Ketema SUB-CITY, Wereda 11, Merkato area. Merkato
is the hub of city where it is highly densely populated, more comfortable area for transportation
to distribute the product in every direction. In addition to these, there are several hotels,

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restaurants, cafes, and residents. Furthermore, all resources that are needed for the production of
Injera are also available in the area.

Sketch of planned Office or Work shop

Storage Area Sales management

Quality Controlling Area
Area

Guard

Baking Resource Area

Manager Office
Area
Entry /Exit

2.8 Raw Materials Needed

Estimation of Raw Materials Needed Amount

Raw material (teff) (120Qnt *1300 birr /month) 156000
Water ,Electric, Telephone fee (one month) 2000
Teff grinding and transportation (one month) 6600
Others 5000

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 Total cost of Raw Materials 169600169600

2.9 Raw Materials Availability

The most essential raw material for the production of Injera is Teff. The availability and price of
Teff varies from season to season due to weather condition, increase in demand and the existence
of high inflation.

We will contact local farmers and suppliers of Teff who live in the out skirt of the city to get
better quality raw material at reasonable price. Our enterprise requires 4 quintal of teff per day x
30 days in a month or 120 quintal of teff are required to run the business continuously
throughout the year.

2.10 Labour
Staff requirement

N Position Tasks Responsibilities Qualification

o

1 Manager Coordinating Managing the enterprise Diploma

2 Purchaser Purchasing Purchasing raw materials Diploma

3 Seller Selling Managing Sales Diploma

4 Accountant Accounting Managing finance Diploma

5 Supervisor Supervising Controlling the entire process Diploma

6 Baker Bakery Baking Injera 6 Grade

7 Guard Security Protecting the enterprise 8 Grade

8 Janitor Cleaning Keeping the working environment 6 Grade

clean

9 Carry Boy Delivering Distributing the product to 6 Grade

customers

10 Mixer machine Operator Mixing Operating the powder Mixer Diploma

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2.11 Cost of Labour
Staff Costs

No Position Manpower Qualification Salary per Total staff

required Month Cost

1 Manager 1 Diploma 2400 2600

2 Purchaser 1 Diploma 2400 2400

3 Seller 1 Diploma 2400 2400

4 Accountant 1 Diploma 2400 2400

5 Supervisor 1 Diploma 2400 2400

6 Baker 6 6 Grade 800 4800

7 Guard 1 8 Grade 500 500

8 Janitor 1 6 Grade 500 500

9 Carry Boy 2 6 Grade 400 800

10 Mixer machine 1 Diploma 1200 1000

Operator

Total 16 19800

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2.12 Labour Availability

Workers for this type of enterprise are available throughout the year, even in the day and night
shift activity. No foreseeable problems are expected as most of the work requires no previous
skills.

2.13 Start-up capital

Estimation of start-up capital Amount

INVESTMENT

Injera Baking Machine 6000

Powder Mixer 10000

Machine Installation 800

Water ,Electric, Telephone Connection 1000

License fee 300

Miscellaneous 10000

Total Investment 28100

WORKING CAPITAL

staff costs (one month) 19800

Rent of premises (one month) 5000

Raw material (teff) (120Qnt *1300 birr /month) 156000

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 Water ,Electric, Telephone fee (one month) 2000

Product promotion 500

Teff grinding and transportation (one month) 6600

Others 5000

Total Working Capital 170100

TOTAL START-UP CAPITAL 222100

2.14 Specification of investment items

Investment Item Specification Quantity Unit Price Total Price

Injera Baking Machine Electrical 3 1200 3600

Injera Baking Machine Manual (Lakech) 3 800 2400

Powder Mixer 50 Liters 1 10000 10000

Miscellaneous 10000

TOTAL ACQUISITION COSTS 12000

2.15 Sources of start-up capital

Sources of funding

Type Source Conditions Amount

Equity capital Partner’s Each partners contribute 44,420 birr 222,100

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 Own saving

Section 3
ORGANISATION & MANAGEMENT PLAN

3.1 Form of Business

The legal form of the business is:-_Partnership

The reasons why we choose this type of legal business form are:

1. To raise more capital

2. To start the business easily
3. To have diversified management skills
3.2 Organisational Structure

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 Manager

Supervisor Seller Purchaser Accountant

Guard
Janitor
Carry Boys
Bakers
Mixer machine
Operator

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 Section 4
FINANCIAL PLAN

4.1 Monthly Sales Plan

All products, products range or services

Month 1 2 3 4 5 6 7 8 9 10 11 12

Injera Price 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00

Quantity 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000

Turnove 270000 270000 270000 27000 270000 270000 27000 270000 270000 27000 270000 270000
r 0 0 0

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4.2 Monthly Operational Cost Plan

Planning is based on the monthly sales plan

Month 1 2 3 4 5 6 7 8 9 10 11 12

Injera Quantity 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000

Materials All Cost 201800 201800 201800 201800 201800 201800 201800 201800 201800 201800 201800 201800

Materials Total Cost 201800 201800 201800 201800 201800 201800 201800 201800 201800 201800 201800 201800

+Staff Total Cost 19800 19800 19800 19800 19800 19800 19800 19800 19800 19800 19800 19800

+Others Total Cost 500 -- -- -- -- -- -- -- -- -- -- --

=Operation Total Cost 222100 221600 221600 221600 221600 221600 221600 221600 221600 221600 221600 221600

+Capital Interest ----

Cost

Depreciation 133 133 133 133 133 133 133 133 133 133 133 133

= Total Cost 222233 221733 221733 221733 221733 221733 221733 221733 221733 221733 221733 221733

4.3 Profit Margin (Monthly Estimation of Net profit)

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Month 1 2 3 4 5 6 7 8 9 10 11 12

Product Quantity 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000

Turnover 270000 270000 270000 270000 270000 270000 270000 270000 270000 270000 270000 270000

I. Total 270000 270000 270000 270000 270000 270000 270000 270000 270000 270000 270000 270000
Sales

- Oper Total Costs 222100 221600 221600 221600 221600 221600 221600 221600 221600 221600 221600 221600

ation

-capital Depreciati 133 133 133 133 133 133 133 133 133 133 133 133
cost on

II. Total 222233 221733 221733 221733 221733 221733 221733 221733 221733 221733 221733 221733
Costs

I-II 47900 48267 48267 48267 48267 48267 48267 48267 48267 48267 48267 48267
Profit(Bef
ore Tax)

Income 15% 7185 7240 7240 7240 7240 7240 7240 7240 7240 7240 7240 7240
Tax

Net 40715 41027 41027 41027 41027 41027 41027 41027 41027 41027 41027 41027
Profit(Aft
er tax)

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4.4 Cash flow Plan (Monthly)

Month Pre- 1 2 3 4 5 6 7 8 9 10 11 12
operatio
n
Cash 0 0 41027 82054 12308 164108 205135 246162 28718 328216 369243 410270 451297
beginning
1 9
the month
+Equity 222100 --
+Loans -- --
+Sales -- 270000 270000 270000 27000 270000 270000 270000 27000 270000 270000 270000 270000
0 0
+Any other -- --
I. Total cash 222100 270000 311027 352054 39308 434108 475135 516162 55718 598216 639243 680270 721297
in 1 9
+Investment 222100 --

+Operational 444200 194400 194400 194400 19440 194400 194400 194400 19440 194400 194400 194400 194400
Cost 0 0

+ Any other -- 133 133 133 133 133 133 133 133 133 133 133 133
II. Total 222100 194533 194533 194533 19453 194533 194533 194533 19453 194533 194533 194533 194533
Cash out 3 3

I-II Cash at 0 75467 75467 75467 75467 75467 75467 75467 75467 75467 75467 75467 75467
the end of

21
the month

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4.5 Opening Balance

Opening Balance of Our Business August 1, 2012

Assets Value Liabilities Value

Fixed Assets Equity

Injera Baking Machine 6000 Long Term Liability 0

Powder Mixer 10000 Current Liability 0

Total Fixd Assets 16000

Current Assets

Raw material(teff) 156000

Cash 50100

Total Current Assets 206100

Total Assets 222100 Total Net Worth 222100

(Capital)

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