MuhabaHassen Business Plan

Industry Overview

Beverage production companies in basically engaging in packed Water and soft drink into flour and
then package and sell them to wholesale distributers, grocery wholesalers or other food related
business . they purchase wheat grain inputs from wholesalers or directly from growers.

The main fact that Beverage Products provide goods that is considered diet steeples, the industry
whileremain relevant in the years to come. The revenue and profit generated from this industry will
depend on the price and production of wheat .as companies vertically integrate and merge
operations to take advantage of economies of scale revenue will rise.

According to airport related by IBISWORLD, the Beverage industry of which Packed water and soft
drink production line of business is a part of is characterized by a low level of market share
concentration. The report 2019, the top three players are expected to account for less than 43
percent revenue.

While the industry exhibits low concentration , the industry is expected to approach moderate
concentration over the next

Executive Summary

MuhabaHassen Was a starting business located in the SNNPR ofDilla Town. The company
specializes in the Supplies and Trade of Beverage , specifically Packed water, Soft drink and
Juice Etc.

MuhabaHassenWill Retail a wide Range of Packed water and Soft drink at affordable prices
from different brands and manufacturers both form Ethiopian and other countries and
around of Dillaarea Apart from retailing the goods and products of top brands in
theindustry, my customer care is second to be known in the whole of Dillatown and
woredas around the town. I know that my I will go the extra mile to get them satisfied when
they visit store and also to become my loyal customers member and ambassador

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We recommend using LivePlan as the easiest way to create graphs for your own business
plan. This is the sole proprietorship business that is owned by my legal Agent
MuhabaHassen. I have well over 5 year of experience in this Business industry

1.1 Objectives

MuhabaHassen is in the construction materials retail trade store industry and I ensure I will
go all is a growth-oriented business. Its ten year goal is to become a regional leader in
Construction material Sales, with store in the Dilla andEnvironments area. With this in
mind, the objectives over the next three years for MuhabaHassenBeverage Tradeare the
following:

 Achieve steady growth in sales revenues by year three.

 Achieve local market share (in the Dilla area) of approximately 20% by year five.
 Expand product line to include authorized Beverage Product consumption sales.

1.2 Mission

The mission of MuhabaHassenBeverage Tradeis to provide high quality, convenient and

comprehensive Cement, Nail, Tin, paint and other material preparing at a low cost. The most
important aspect of our business is trust. It is the goal of our firm to have 100% customer
satisfaction in regards to product, and time to completion, and discover new ways to exceed
the expectations of our customers while doing so at the lowest possible cost.

1.3 Keys to Success

In the Raw material preparation a company builds its client base one customer at
a time and mostly through established marketing practices. With this in mind, the
keys to success for

MuhabaHassenBeverage Tradeare:

 High-quality work.
 Attention to professional appearances at all times.

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  Knowledgeable Employees that are friendly, customer oriented, and will take the time to
explain to customers the intricate nature of our business and our work.
 Maintaining a highly aggressive managerial oversight on costs to provide our services at the
lowest price.

Company Summary

MuhabaHassenBeverage Tradeis envisioned to be the low cost leader in Construction

Material industry Manufacturing Product for the Dilla area that will also be able to
eventually provide Construction material sales/servicing and raw Material sales, making it
the local leader in comprehensive construction material sales/services.

The company will be a sole proprietorship registered in the state of SNNP and owned by Mr.
MuhabaHassenThe initial facilities will contain a sales area, repair room in the back of the
shop, office space and storage for parts and inventory.

The company is seeking a loan in order to finance the one year of operations for the
company. The owners will be putting up additional capital of their own as equity.

2.1 Start-up Summary

The data obtained for the opening table comes from research done in the Dilla area with
other small raw material warehouse who have started their own business, in addition to
Mr. MuhabaHassenprevious experience within thebusiness. Inflation has been taken into
account between the estimates of these fellow business owners (and when they started) and
the current prices for expensed items. Much of the product to go into the facilities such as
tools, are currently owned by Mr. MuhabaHassen

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own business plan.

Business and Services

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MuhabaHassenBeverage Tradeoffers a wide range of services as outlined in the detailed
sections below. It is ultimately the goal of the company to offer a one-stop facility for all
Building material Consumption needs, including both sales and servicing. In this way the
company can offer greater perceived value for the customer than many other Storewhich
only offer sales or services.

The business is highly competitive with suppliers having a great deal of power in setting and
negotiating the prices of their products and services to selling store. In addition, because the
customers see the service as undifferentiated and a “commodity” with little value separation
between competitors, buyer power is also very high. Finally, the barriers to entry are
moderately low, and the large number of competitors in this field, including substitutes
(such as do-it-yourself work) means that the pricing for such sales is very competitive. The
only way to have an advantage in thisbusiness is a low cost leadership principal applied
aggressively or to create higher switching costs through the building of strong business-to-
customer ties. It is the aim of MuhabaHassenBeverage Tradetocreate a competitiveadvantage
through both the low cost strategy and by offering greater value through its broader
product and service line.

3.1 Product and Service Description

MuhabaHassenBeverage Tradeprovides a wide range of home Building Consumption services.

These include:

 Beverage of home and home drink .

 selling and Distribute of Beverage Consumption .
 Sale of Packed Mineral Water Soft drink and Juice .
 Face to face contact and free transport and delivery.

Future products and services that MuhabaHassenBeverage Tradewill prepare to institute

include Cement Tin, Paint, Nail and MDFs .Supplies and servicing, sales of building Material

3.2 Sourcing

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MuhabaHassenBeverage Tradewill be obtaining most of its parts through established dealers
and directly through the supplies of the relevant Materials. As part of the wholesales low
cost strategy, the merchandise will seek to purchase parts in large quantities whenever
possible to take advantage of volume discounts. In addition, the company will aggressively
seek to procure its parts from local suppliers in order to start forming close relations with
such organizations. It is the ultimate aim of Sultan abdi to form strategic partnerships with
such organizations in order to lower overall costs of goods.

A large part of MuhabaHassenBeverage Tradeenhanced services will be free transport and

delivery of construction material to a person’s Building Site .

3.3 Competitive Comparison

The Contraction material is highly competitive. Each organization within this field has high
labor costs, low margins, and a high intensity of competition.Suppliers have a great deal of
power in setting and negotiating the prices of their products and services to Seles shops.
This is due to the fact that the suppliers who absorb the greatest amounts of cash from Seles
shops are large Construction material supplies companies such as Sale of Cement Tin,
Paint, Nail and MDFs etc. These organization are more consolidated than the trade industry,
have deeper pockets, an almost limitless number of substitute customers, and finally they
are the single most important supplier to the raw food preparation organization . Therefore,
these companies can set whatever price they wish to. Furthermore, labor is the single most
important expense in this Organization , and salaries for such individuals are well known
and not very flexible.

In addition, because the customers see the service as undifferentiated and a “commodity”
with little value separation between competitors (if they offer a suitable level of quality)
buyer power is also very high. Additionally, the costs of our product are cheap, and buyers
are willing to search for the most favorable combination of price and acceptable service.

The barriers to entry and exit are moderately low in this industry. Switching costs are
virtually non-existent and the costs to entry and exist the market are low. The large number
of competitors in this field including substitutes mean that pricing for such products are

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very competitive. The only way to have an advantage in this organization is a low cost
leadership principal applied aggressively to all aspects of the business or to build up
customer relations to a point where the switching costs are raised.

Based on this analysis, MuhabaHassenBeverage Tradewill pursue a low cost leadership

strategy as its primary competitive advantage. Furthermore, the organization will
simultaneously build up its product and service line to take advantage of
thelimited opportunity to create higher switching costs through enhanced value creation
and to spread out costs.

3.4 Future Business and Services

Future products and services that MuhabaHassen Beverage Trade will prepare to institute
include Cement Tin, Paint, Nail and MDFs Factory and servicing, sales of new Building
Finished material and /sale of Construction material . Mr. Muhaba also investigating the
possibility of offering a new product line of Building material cabinets at some future date.

MuhabaHassenBeverage Tradewill start implementing these new products or services in the

following time periods:

The capital investment needed for such expansion will primarily come from the company’s
accumulated operating cash account. It is anticipated that some of these product/service
expansions that require significant inventory, such as new sales, may require additional
cash inflow such as loans. The organization will be preparing business plan for various
lending institutions in anticipation of this need.Our Request Bank loan.The Following
Merchandise Inventory MuhabaHassenBeverage TradeProposal.

Presently the product that is really driving the preparation building finishing material
market is good activity. While MuhabaHassen not currently positioned to take advantage of
this situation, it is the long-term goal of MuhabaHassen Beverage Trade Supplies services
within the company. Once the firm is able to generate enough cash to retain the services of a
Building material Consumption supplies Seles , the organization only will evaluate the

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viability of such a move. It is anticipated that this service will be offered sometime after
3rdQtr 2015.

Market Analysis Summary

There are approximately 332,500 households in the greater Dillaarea, which includes
suburbs such as Green Valley, Ina, and South Dilla. Virtually all of these households have
Cement, Tin Paint MDF’s etc. Dilla Construction Material segments its market into product
categories that reflect the estimated number of each Building material Consumption
currently being used in the greater Dillaarea, since each of these Food material may fail at
any time and require our product. In addition the growth rate of each product emplaced in
the home is based on the current sales growth of each product. Presently, the fastest
growing product, in terms of sales, is the Cement . It is anticipated that the Cement will
replace the product the next three to five years as movie Whole sales stores replace their
existing with Cement. The largest segment is the home segment, since usually a household
has more than one of these systems. The wholesale will be focusing on selling all of these
systems, and not focusing on one over the other.

4.1 Market Segmentation

MuhabaHassenBeverage Tradethe households in the Dilla area as follows:

 Provide with Society.

 provide without Retailer
 Retired people.
 Yang living in multi-unit housing.
 Single people living consumption.
 Single people living with Construction material consumption.

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plan

4.1.1 Market Trends

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The market demand for Construction material consumption has been relatively stable over
the past decade. With the advent of Cement the market is seeing more highly trained Seles
Man needed. As technology progresses, long-term planners within this market expect to see
new opportunities for soft drink and water consumption quickly arise. Such Inventory as
cellular telephones, andother food products may have a role to play in the people who have
a broad vision in this field.

4.2 Service Business Analysis

Much of the analysis is contained in the competitive comparison section. However, the key
points are that the industry is highly competitive and that most firms have little power to
affect the forces that influence them or to affect the price levels that the market determines.
In essence, MuhabaHassen operates in a purely competitive environment where the
demand curve is horizontal. In other words the organization is discounts tosalesBeverage
Product maximum capacity without effecting the price or demand for its services. With this
type of environment and with customers seeing such services as a “commodity” the only
strategy open to companies in this field is the low cost leadership approach.

The low cost leadership strategy will not be simple to achieve. Realistically speaking,
because of the fragmented nature of the wholesale, Sultan Construction materialwill only
seek a low cost leadership in the South region for the first seven to ten years of operations.
In order to capture this position and achieve its benefits of high market share and
profitability, the company is expected to have higher provide costs and lower profits within
the first few years as the company invests in better and more efficient facilities and product
than most competitors and engages in aggressive pricing to capture market share. The
organization will rigorously evaluate every aspect of the company to improve efficiency and
lower costs. Once in operation, management will concentrate on developing established
procedures that will create the most effective sales experience. Finally, as part of this low
cost leadership strategy, the company plans to vertically integrate to include original sales
and broad services that will spread costs and serve all major customer types so as to build
volume.

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4.2.1 Competition and Buying Patterns

Customers traditionally purchase services in this industry because of effective advertising

and reputation. The customers wish to be reassured that they will receive prompt
andreliable service and have an understanding service representative will listen to their
problems and seek to solve them in a fast and professional manner. Therefore image during
the entire service experience is crucial to maintain word-of-mouth marketing and keep a
low corn rate. Currently the largest problem that faces small firms is product/service
awareness.

4.2.2 Business Participants

As stated before, the Construction material is highly deprivation . In fact, there are so many
small providers that any company in this industry is facing a purely competitive
environment. Approximately 2,900 Construction Material firms exist in the country today.
Firms within this field range in sizes from the “mom and pop” outfits such as Packed Water
and Soft drink Seles in downtown Dillato regional companies like Wonago supplying and
the national chains such asDillaCity. Not all of this organizationis purely sales outfits. In fact
all of the larger firms make the majority of their revenue in original sales. It is these
companies that have the largest market share and have the opportunity to compete by
differentiating on customer sales or product/sales range.

5.1 Pricing Strategy

Muhabaexists in a purely competitive environment where each firm must be a price taker.
In other words, the firm has no ability to affect the market price of its services, regardless of
how many Packed Water and soft drink it Seles. In this case, therefore, marginal revenue
(the revenue incurred by producing or servicing one more unit) is equal to the price
charged.Furthermore, because the demand curve is essentially horizontal, Beverage Trade
at total capacity without effecting the price.What all of this means for the company is that
the we must seek to charge our clients at the market price (or lower). Research has
shownthat the average price is approximately Birr755 per Construction Material . As long as
marginal costs do not exceed revenues, the company’s method to maximize short-run

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 profits is to service the various home consumption at maximum provided. This means that
Beverage Tradematerial can expect anshort–termPacked Water of approximately 14%.

5.1.1 Promotion Strategy

The company’s promotion strategy will take the form of only face to face Approach, price
discounts, andfree test fresh Construction Material .Cement expects to spend a large
amount on marketing in the first two years in order to build up product awareness and sales
value in the minds of our customers.

5.2 Competitive Edge

Our purchase forecast

Year 1 Year 2
Item Description
U/M Quant U.P Total Quant U.P Total
Dorzon
one Packed water 2 liter 11525 188 2,166,700.00 10167 206 2,094,402.00
e
one Packed water 1 liter 12475 166 2,070,850.00 15675 200 3,135,000.00
Dorzon
one Packed water 0.5 liter 10420 144 1,500,480.00 14234 173 2,462,482.00
e
Dorzon
Coca cola Plastic 1950 298 581,100.00 1975 360 711,000.00
e
Dorzon
Mrinda Plastic 1835 320 587,200.00 2475 387 957,825.00
e
Dorzon
sprite Plastic 2175 287 624,225.00 2350 347 815,450.00
e
Dorzon
Juices 3434 340 1,167,560.00 1760 390 686,400.00
e
Total Sum 8,698,115.00 10,862,559.00

MuhabaHassen competitive edge lies in its ability to provide quality and fast Construction
material supplied at lower cost than any local small competitor. This positioning of the
organization provides protection against the power of suppliers by creating more flexibility
to cope with increasing costs. In addition, this approach will provide returns even during
economic downturns and when other unforeseen problems arise

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 Sales Forecast

The sales forecast is based on the estimated number of Beverage Products the organization
could service that are currently emplaced in the homes in Dilla. This is conservatively
estimated at about two million units. From that number it is assumed that approximately
3% of all those will fail in any year. These two numbers multiplied together give us yearly
market demand for our sales. With an aggressive promotional strategy, a 10% market sales
is assumed by year three and multiplied by the estimated market demand. This is then
multiplied by the estimated price per unit to arrive at the yearly sales figure assumed for
year three (once the wholesale marketing efforts have paid off). This number is then
decreased by a logical amount to estimate the first two years of revenue.We recommend
using LivePlan as the easiest way to create graphs for your own business plan.

Year 1 Year 2
Item Description
U/M Quant U.P Total Quant U.P Total
one Packed water 2 liter Dorzone 14201.3 197.4 2,803,326.75 12775.4 216.3 2,763,308.21
one Packed water 1 liter 16248.8 174.3 2,832,157.13 17508.8 210 3,676,837.50
181.6
one Packed water 0.5 liter Dorzone 11991 151.2 1,813,039.20 14945.7 2,714,886.41
5
Coca cola Plastic Dorzone 2047.5 312.9 640,662.75 2073.75 378 783,877.50
406.3
Mrinda Plastic Dorzone 2241.75 336 753,228.00 2598.75 1,056,002.06
5
364.3
sprite Plastic Dorzone 1233.75 301.35 371,790.56 2467.5 899,033.63
5
Juices Dorzone 2555.7 357 912,384.90 1848 409.5 756,756.00
Total Sum 10,126,589.29 12,650,701.30

7.1 Personnel Plan

MuhabaHasseninitial staffing will consist of Mr.MuhabaHassen, General Manager , and two

part-time sales man trainees. Accounting, bookkeeping, and casher will be outsourced. The
organization intermediate goal is to have four full-time, fully trained Sales man at the
original facility, plus a full-time wholesale owners. However, management has decided to
await future developments before determining the best time to bring on such owner.

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 Financial PlanThe following sections outline the financial plan for MuhabaHassen
Beverage Trade

General Assumptions
Plan Month 1 2 3
Current profit Rate 10.00% 10.00% 10.00%
Long-term profit Rate 10.00% 10.00% 10.00%
Tax Rate 35.00% 35.00% 35.00%
Other 0 0 0
I would need an estimate of bill 2,353,000 to successfully set up my construction material
store in Dilla town but form this I will use saving account and I will require 4,000,000 birr
from interest free financing from CBE Noor Dilla District

Generating Funding For MuhabaHassen Beverage Trade

MuhabaHassen Beverage Trade is private business that is solely owned and financed
byMuhabaHassen and his legal agent AtoMuhabaHassen. they do not intend to welcome any
external business partner which is why he has decide to restrict the sourcing of the start –
up capital major sources

These are the area I intend generating may start –up capital

 Generate part of the start –up capital from personal Saving

 Apply for interest free Financing from Commercial bank of Ethiopia Jezila
branch

We recommend using LivePlan as the easiest way to create automatic financials for your

own business plan.The business the two year projected cash flow statements as follows

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 MUHABA HASSEN BEVEAGE TRADE
PROJECTED STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED JULY 7,2024-25

JULY 07/2024 JULY 07/2025

Revenues
Sales 10,126,589.29 12,650,701.30

Total Revenues 10,126,589.29 12,650,701.30

Cost of Sales 8,698,115.00 10,862,559.00

Total Cost of Sales 8,698,115.00 10,862,559.00

Gross Profit 1,428,474.29 1,788,142.30

Expenses
Leas Rent Expense
Administrative expense 418,600.00 434,220.00

Net Income Before Tax 1,009,874.29 1,353,922.30

Profit Tax 335,456.00 455,872.80
Net Profit Tax 674,418.29 898,049.50

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 MUHABA HASSEN BEVEAGE TRADE
PROJRCTRD STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED JULY 7,2024-25
ASSETS June 30/2024 June 30/2025
Current Assets
Regular Checking Account 506,508.35 621,203.15
Inventory 1,176,549.00 1,152,108.00

Total Current Assets 1,683,057.35 1,773,311.15

Property and Equipment

Building 3,661,374.00 3,661,374.00
Accum. Depreciation - Building (183,068.70) (366,137.40)

Total Property and Equipment 3,478,305.30 3,295,236.60

Total Assets 5,161,362.65 5,068,547.75

LIABILITIES AND CAPITAL

Current Liabilities
Profit Tax 335,456.00 455,872.80
Total Current Liabilities

Total Liabilities 335,456.00 455,872.80

Capital
Paid Up Capital 30,000.00 30,000.00
Retained Earnings 3,786,032.35 3,684,625.45
Net Income 674,418.29 898,049.50

Total Capital 4,825,906.64 4,612,674.95

Total Liabilities & Capital 5,161,362.64 5,068,547.75

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 MUHABA HASSEN BEVEAGE TRADE
STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED JUNE 30,2024-25
ASSETS June 30/2024 June 30/2025
Current Assets

Regular Checking Account 266,098.00 219,240.00

Inventory 876,549.00 952,108.00

Total Current Assets 1,142,647.00 1,171,348.00

Property and Equipment

Building 3,661,374.00 3,661,374.00

Accum. Depreciation - Building (183,068.70) (366,137.40)

Total Property and Equipment 3,478,305.30 3,295,236.60

Other Assets

Total Other Assets -

Total Assets 4,620,952.30 4,466,584.60

LIABILITIES AND CAPITAL

Current Liabilities

Profit Tax 155,130.58 181,619.04

Total Current Liabilities

Long-Term Liabilities

Total Long-Term Liabilities

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 Total Liabilities 155,130.58 181,619.04
Capital

Begging Equity 2,375,816.78 2,375,816.78

Paid Up Capital 30,000.00 30,000.00

Retained Earnings 1,410,215.57 1,308,808.67

Net Income 494,658.79 570,340.11

Total Capital 4,465,821.72 4,284,965.56

Total Liabilities & Capital 4,620,952.30 4,466,584.60

MUHABA HASSEN BEVEAGE TRADE

PROJECTED STATEMENT OF CASH FLOW
FOR THE YEAR ENDED JULY 7,2024-25

July 07/2024 July 07/2025

Cash in Flows
Sales 10,126,589.29 12,650,701.30
Other Income - -
Total Cash inflow 10,126,589.29 12,650,701.30
- -
Cash Outflow - -
Purchase 8,698,115.00 10,862,559.00
Expense 418,600.00 434,220.00
Total cash Outflow 9,116,715.00 11,296,779.00
Net Cash Flow 1,009,874.29 1,353,922.30

8.1 Break-even Analysis

The wholesale break-even analysis is based on an average company’s running costs within
this organization, including payroll, and its fixed costs for such things as rent, utilities, etc.
As MuhabaHassen Beverage Trading as a job-wholesale, with each task unique, customized

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sales, it is difficult to estimate revenue per unit and goods costs. The reader must
understand that there is a high degree of variance within these estimates.

The reader will also note that the organization is not expected to reach its break-even point
until the last three months of sales of the first year.

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