Professional Documents
Culture Documents
Department of Economics
NAME ID No
1. Dessalegn Tsega--------BER/3422/08
2. Ayitegeb Addis-----------BER/744/08
3. Daniel Negash-------------BER/7805/08
4. Birhan Arega---------------BER/6584/08
5. Asamino Mulugeta-------BER/5111/08
6. Amnuale Alemu-----------BER/7008/06
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EXECUTIVE SUMMARY
Our soap is prepared from fat (Mora) and sodium hydro oxide .varies row
materials are sodium hydro oxide, potassium hydro oxide and fat. Starting a soap
business is one of those rare home business opportunities that actually can work.
We really can easily start a soap making business and make some extra income.
There really is a huge market for natural soaps. We think any people like
handmade soap and like to buy it from the maker
.
The target market gives my business an advantage. Due to the large population of
Ethiopia and the surrounding towns, my business will be able to take conduct a
large amount of sales. The average people in Ethiopia makes around 90,000,000.
Aimed respectively at day care facilities decision maker, students and society who
uses this facilities we will create a push factor by effectively convincing the
decision level managers within organization that our product provides an ideal
solution to the hand washing compliance
Sales Literature
In order to sell our product while creating familiarity and a positive brand image, it
will be necessary to develop brochures and literature to emphasize the safety and
beneficial attributes of fading dye soap, many of which may not be readily
apparent to an interested party. These will be delivered both in person during a
sales presentation and by direct mail.
Technology
The technology of our fading dyes will be pivotal in the success of our company.
The interactions between fading dyes and antibacterial or anti-microbial bases
suitable for use in restaurants or hospitals are more complicated than the
interactions with the glycerin or lotion soaps utilized in the CHILD assure line. As
soon as cash flow permits, projected to be in 2014, will employ a professional
chemist with experience developing dye products to further the research into
technological innovations that may produce antibacterial and anti-microbial
versions of the soap to address additional markets.
Future Products
Additional soap products, manufactured to comply with regulatory minimums for
strength and effectiveness in their respective target markets will be developed to
address restaurants and hospitals. These soaps will be trademarked under the
names FOOD assure and HEALTH assure, respectively.
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Perhaps the most promising future market opportunity for fading dye soap is
the retail market. This product line will include soaps using the same or similar dye
colors as the day care to encourage children to wash their hands more often at
home. This will be a top priority when the company develops the financial
resources enough to mount a national advertising campaign and distribution
system. A complete line of fading dye products could potentially be developed,
including floor, counter and body cleaning products that use fading dyes to indicate
places on a surface that may not have been cleaned.
Company form
The company will be denominated as soap Information Service. In the future
operation it will be also used to not only for hand washing hand but also used as
for washing the all part of our body.
Philosophy
Our philosophy is to provides the customers to keep their health and beauty by
manufacturing different kinds and size of soaps, and also it used for washing their
closes and other materials.
❖ Description of the venture
✓ The mission statement
The mission of fat (Mora) soap manufacturing is to produce the better quality of
natural soap.
Our mission is to create value for customer and shareholder by continually
improving and reducing preventable illness through the use of our soap.
Quality is the major key in this business because customers tuned to natural
product due to their disappointment with chemical product or synthetic product.
Distributors would be tasting the quality of the product at each batch.
Patient protection to defend our time sensitive dye and product concept from
competitor.
Complimentary relationship with organization interested in increasing hand
washing compliance.
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✓ The objective of company
The objective of soap manufacturing are as follows:
● Achieve the seals goal of at least 100,000 during first year of operation.
Achieve regular customer base of natural shop during the first year operation,
Increase the product by 40% during the second year of operation.
SWOTS
Strengths
My strengths will be implemented into the business. Some of my strengths include
the ability to absorb knowledge, make quick changes when needed, being able to
talk to people, being smart and having a lot of knowledge and just wanting to help
people with what they need.
Weaknesses
Though I have many an abundance of strengths, I also have an abundance of
weaknesses that will affect the company, but with my will, I will overcome them.
Some of my weaknesses are that I have a lack of knowledge of the soap business,
limited amount of funds and I’m going up against big companies that also sell
natural soaps.
Goal
Some of my goals will be to have the website go into a store. This goal will be
achieved with the investor’s ability to trust our company. In our company, we feel
that animal testing is wring and we want to build our company round both all
natural and no animal testing. The last long-term goal is to have the business enter
the stock market when it achieves success. This will be the ultimate goal for my
company and will be the one that seals the deal.
✓ background of entrepreneur
the entrepreneurs are a group of aids Ababa university and students of accounting
and finance in BA program. The entrepreneurs have no past experience about the
soap production business but now they collect information about the overall
business and familiar.
❖ Industry analysis
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✓ Market Analysis
My business is part of the soap industry. This industry allows me to have a wide
target market. Since most of the people in Connecticut care about how they look,
my business will be able to offer them the best natural soap that they need. My
target market includes both the female and male young adults, teens, adults, and
the elderly . This target market gives my business an advantage. Due to the large
population of Ethiopia and the surrounding towns, my business will be able to take
conduct a large amount of sales. The average people in Ethiopia makes around
90,000,000. The families in Ethiopia are different but they do present themselves
as an extended family with children and parents living together. People in Ethiopia
enjoy spending their time either rural area, or hanging at some of the restaurants
and stores that are scattered around the town. In Ethiopia there are various jobs, but
in the town, working for the town, or working in stores. The lifestyle of the people
who live in Ethiopia is that they live in their means but that they do like to go
shopping and have fun at local spots. Due to the fact that people in this town go out
and enjoy themselves, it is helpful to the fact that the natural soap business can be
fun and interesting. During summer, winter and fall the business is booming and
due to the fact that there is a constant need for soap and keeping clean, my business
should do well in the industry.
In my business there are a lot of factors that can affect the sales that I may obtain.
One of them is demographic shifts. This shift can be both positive and negative on
my business. With a higher population, there will be more sales but if the
population declines, there will most likely be a decline in sales. Another factor that
can affect my business is the introduction
of more natural soap stores in the area and if other stores get bigger. Due to the fact
that my small business is going up against multimillion companies, it would hurt
the business if even more competition came into our project area. Due to Ethiopia
being a town where small business can thrive, this could lead to more business
pooping up in the area that work in the industry. Other factors that come into in my
business will be new government regulations and laws. If they implement
regulations that can affect how and what is ell in my business, this can lead to my
business being affected by these laws. Though this can be a negative against me I
could in the future use this into my advantage my making my business work
around these laws. One positive affect that could happen in the cosmetic business
is trends. If there is a huge trend in a certain type of scent, my business will be able
to use this as a stepping stone in the new products that would be sold due to this
trend. So in all the market that I’m in is looking profitable and can help my
business grow.
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✓ Competitive Analysis
When we starts up as a business, there will be competitors who I will have to
compete against. Some competitors Beauty Supply will challenge my company
when I first start up. I also have to worry about big name companies that sell online
natural soap products. There are various other small companies that will challenge
our business. Though all of these companies challenge our business in some way,
there is still an opportunity for our to gain ground. My big name competitors serve
to their customer's well-known brands and they themselves are well known
companies. With starting up, each of these businesses offers something that we
might not be able to offer. For a fact we know that businesses. They offer rewards
cards and due to the newness of my business that will be something that we won’t
be able to offer at this time. The small soap stores that we compete with will have
the benefits of that they are able to offer their customers cheaper products with
cheaper prices. This is we due to the fact that they are small local business and they
are also competing with the big name brands. With these competitors trying to
conquer the market and become the best, my company will compete with these
companies and even though they may offer something that we can’t offer, we can
always find a way to offer something that will catch the eyes of the customers.
Our business will compete with these big name brands by offering my customers
the service of giving out customer appreciation gift bags. When a customer buys a
product and eventually signs up for an award card, our business will award points
to my customers. With these points, the customers will be able to buy sample
products that will eventually be coming out in the upcoming season. With my
service there are multiple ways for people to receive incentives from the reward of
buying. This is kind of what GameStop does with its business as it offers a great
rewards system where you’re able to buy items or to have certain amounts of
discounts. We will offer an easy access to my website and what is great about the
internet and owning a website, we can make money off of advertising. My website
will also offer support for the customer with reviews on the natural soap that they
are looking for and that my website will give reviews on the products that we are
selling. In this case, if someone is buying the wild lavender scented soap, the
person will be able to look at reviews about the products and they can vote on how
many stars they want to give the product (0-5). This solves the problem of people
feeling sketchy about buying the soap product online and allows them to see what
other people think about the product. Our website will also have a direct link to
Face book and Twitter. This connection will allow customers to see other people’s
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reviews and they will be able to see the support that our business has when they
see the likes and amount of friends or followers. This plan of offering our
customers support when buying will help our compete with my competitors. This
will also distinguish our from both the small and big name brands. Like all big
name brands, they had to start out small. Though small and unknown, they kept
going and eventually made it even though they faced big name brands. This is the
success that we will try to create for our business and will do this by competing
with our competitors both the small and big name companies.
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❖ Market plan
✓ Marketing strategy
For our initial target market of day care facilities, the company will implement to
parallel marketing efforts,
Aimed respectively at day care facilities decision maker, students and society who
uses this facilities we will create a push factor by effectively convincing the
decision level managers within organization that our product provides an ideal
solution to the hand washing compliance.
Positioning statement
This project is valuable to day care manager who need effective control solution to
ensure frequent child and child care workers hand washing to keep the
environment clear and to minimize preventable illness no other product on the
market serves the hand washing compliance aspect work place safety with such an
affordable, conclusive evidence where every time and employee washes his, or her
hands for only a marginally
Higher cost than traditional shop, and significantly less than gloves or other hand
washing compliance system
Pricing strategy
The value of our product will not be attractive to extremely price sensitive
customers. The market for soap is generally inelastic, but our product offers
significant differentiating benefits over current soaps that justify the price
difference.
Promotion Strategy
One of the most important aspects of a successful launch is positive publicity for
our product. We will develop an awareness campaign to promote our product
through several avenues. Our management team will fiercely pursue positive
public perception through government endorsements promoting the benefits of
our products. We will also attempt to capitalize on the novelty of the solutions
provided by our product by actively seeking local news and media coverage to help
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spread awareness. Buzz will be developed in social hubs by distributing samples to
parties with potential interest. Parental support of the product will be garnered
through free trials, demonstrations, and direct mailings to the day care parent roster
lists, parent groups and PTA's.
At washing stations in client facilities we will spread awareness with stickers
targeted towards children, showing them the process of washing to turn their hands
different colors and emphasizing how fun it can be. Pamphlets will be sent to the
family homes through the day care roster mailing lists, to calm fears regarding a
new product in their child's environment, explain the benefits and encourage the
parents to respond and build feedback for the benefits of the product to further
increase implementation.
Some of the government programs of interest are the various compliance and
workplace hygiene programs supported and funded by the Center for Disease
Control (CDC), the Food and Drug Administration (FDA) and the National Center
for Disease Control (NDIC). Programs such as the Health Protection Research
Initiative implemented by the CDC demonstrate an invested interest by
government programs in increasing the overall health of Americans.
✓ Sales Strategy
Sales strategy will initially address within and outside university managers with
ordering authority for the establishments in that area. The prospective clients will
be supplied with a professional product information packet and moved into the
sales funnel to begin closing prospect, followed up with a direct mail brochure and
a phone call. There will be no initial direct compensation or commission for closed
sales. Proceeds from sales will be invested back into developing and expanding the
business. As the industry begins to increase its initial sales force, commission-
based incentive programs will be implements.
❖ ORGANIZATIONAL PLAN
✓ Organization structure
Two of our strengths are the low cost structure and flexible personnel needs. Sales
people with experience relevant to each new respective target market can be
attained as need dictates, but the initial management team consists of the founders
themselves, with little operational support.
✓ FORMS OF OWNER SHIP
THIS PURE SOAP MANFACTURING IS FORMED BY
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1.Dessalegn = D
2.Ayitegib= A
3.Daniel= D
4.Birhan= B
5.Asamino= A
6.Amnuale= A
====A3D2B===
General manager-
Dessalegn Tsega
Personal Plan
In order to free up enough capital to continue operations and possible expansion,
our executive team will not receive more than a living wage salary until the
product is well into the black. We understand that as a new product we will need
technical support and legal advice; this will be currently outsourced to various
consultants.
All sales for the first year of operation will be closed by the executive management
team. Starting from the second year, we will employ a Sales Associate who will
handle sales transactions. His/her compensation will be a combination of fixed
salary and commission on sales. For the purposes of financial planning, we
combined the Sales Associate's compensation into an aggregate forecast
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❖ Financial Plan
Based on market research, we expect the business to begin growing at 45% per
month for the first 12 months, then at a yearly rate of 90% for the next two
years. Due to our low initial investment costs of 500,000, we can maintain the
operations of the business with the cash will have from start up. In addition, we
will almost immediately have a positive cash flow, allowing us the flexibility to
cover any unforeseen expenses.
✓ Financial projection
Sales
General Assumption
2014(%) 2015(%) 2016(%)
Plan month 1 2 3
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Current Interest rate 45.00 % 45.00 % 45.00 %
Long-term interest rate 30.00% 30.00% 30.00%
Tax rate 5.00% 5.00% 5.00%
Other 20.00% 20.00% 20.00%
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Break Even Analysis
When opening our business, we will have to determine a break even. In our
business the top product will be nail polish. With the main three scents being
honey, lavender and mango Shea, our business will have to ultimately have to sale
500 units of this product. When determining my breakeven point, we will also have
to determine how my customers will react to the pricing and to other competitors.
When determining our price we will focus on penetration, loss leader and
competitive pricing. With penetrating pricing, we will be able to sell our products
cheaper than other stores and this allows our business to enter the market. This will
also allow our business to start in the market on a plus. With loss leader, this will
allow we to offer coupons and other incentivizes to customers when they buy a
product. What this does for our is that it allows our to have regular prices but they
will attract customers. With competitive pricing, we will price our products on
what our competition is pricing its products. This allows we to attract their
customers and other customers.
our business will have 7,500 to spend on the products that we will be selling and
this is our breakeven point as we will have to make this much to ensure that any
money earned after that is profit. When buying the products, we will save 1,500 as
backup in case a product starts to sell really quickly. What this does is provide a
backup plan but makes it easier to hit my breakeven point.
Break Even Point 1= 3,000/ (9-2) =429 products need to be sold to hit breakeven
point Unit Contribution Margin= 7,500-1,800.
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The following fixed costs reflect the relative costs for selling and distributing our
product within the greater Portland metro area, and do not reflect the fixed costs
necessary to expenditure.
The profit and loss forecast (2014-2016)
2014 2015 2016
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Cash flow year balance
Overall, our business is expected to generate sufficient cash flows. Our cash
balance will, among other things, depend on the level of inventory we'll decided to
keep at a rented warehouse. At the moment, our projections in this respect are
preliminary and we expect to fine-tune them as the demand for our products grows.
We expect to secure a 50,000 line of credit in year 3 to finance our receivables,
listed as "New Current Borrowing" in the table below.
In year 5 of operations, we will begin looking at our ability to begin paying back
our initial investors the 250,000. Although the terms of the additionally sought
investment are yet to be agreed upon, we belief that our investors will provide us
with a buffer of some years before expecting a return on their investment, allowing
us the capital and time to expand and grow at an appropriate or desired rate.
Nevertheless, for planning purposes, we have made provisions to start paying out a
modest dividend from the third year of our operations. Currently, we set dividend
payments to be equal to 5% of net profits.
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Server machine 1,000
room rent
Office material 1,000 300
Social expenses 5,000 7,000 7,500
Telephone ,interne 1000 1000 1000
t…
Advertising 8,000 11,000 11,000
Marketing cost
Marketing 700 500 300
research
Media 800 600 500
advertisement
Internet promotion 700 500 300
Personal 700 500 200
promotion
Filers 500 300 200
Total cash flow 22,400 34,000 36,300
out
Deficit 2,600 1000 700
Cash flow in
Sales turn over 400 700 900 1000 1400 1900 2500 3000 3000 3600 3600 3000
Total cash flow in 400 700 900 1000 1400 1900 2500 3000 3000 3600 3600 3000
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Personal (labor)
Server monthly 250 400 400 450 450 450 450 450 450 450 450 450
fee
Server machine
room rent
Office material
Social expense 200 400 450 450 500 500 500 500 500 500 500
Investments
Media 100 90 80 80 70 70 60 50 50 50 50 50
advertisement
Internet 120 65 65 65 65 65 55 55 55 30 30 30
promotion
Fliers 70 50 50 50 50 50 50 50 20 20 20 20
900 1115 1295 795 1245 1295 1255 1245 1215 1180 1180 1190
❖ Risk Assessment
we concur that home made soap exposed to different risk, from those risk-
-Lack of technology
-Lack of finance
-customer unsatisfaction
-Lack of capital
-uncertain things
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-competitors action
To compete with competitors by using cheaper price from our competitor and
advertisement that is appealing and since they might know our market strategies
they could easily copy ours and add yours.
❖ Appendix
production and their price
● body soap 5-8birr
● cloth soap 10-12birr
Refference;
..Dessalegn Tsega,Department of Economics,Addis Ababa University,Ethiopia
..Dessa and et al…..Addis Ababa University,Ethiopia
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