DEBRE BERHAN UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTEMENT OF ECONOMICS

Business plan

TITEL; DEBRE BERHAN BARBER SHOP

Course Code: mgmt 4146

Group Members Id NO
1. ………L……………………………………..….1401/07
2Tilahun Worku… ......,......................2709/08

3.…………………………………………….1942/07

4. Abebe Berihun…………………………………………………..…1477/07

5.Abrham Missa……………………………………………244/06

6.Gizachew Mogessie.................................................

Submitted To Instructor:Dagm

Submition Date . 04/05/2010 E.C

Contents
1. Introduction.........................................................................................................................................1
2. Executive Summary.............................................................................................................................1
3. Name of the Business..........................................................................................................................1
4. Type of Business..................................................................................................................................1
5. Owner of the Business.........................................................................................................................2
6. Start-up capital....................................................................................................................................2
7. Source of capital..................................................................................................................................2
8. Company summary..............................................................................................................................2
9. Management summary.......................................................................................................................3
10. Organizational and Staff..................................................................................................................3
11. Business idea and market................................................................................................................4
12. Description of Market......................................................................................................................4
13. Marketing Plan Product...................................................................................................................4
14. Marketing plan price........................................................................................................................4
15. Marketing plan Promotion...............................................................................................................5
16. Market Segmentation......................................................................................................................5
17. Positioning strategies.......................................................................................................................5
18. Legal form........................................................................................................................................5
19. SWOT Analysis.................................................................................................................................6
20. Monthly Operational Cost Plan........................................................................................................9
21. Cash Flow Plan.................................................................................................................................9
22. Market Analysis.............................................................................................................................10
23. Risk Analysis...................................................................................................................................10
24. Exit Strategy...................................................................................................................................10
25. Monitoring.....................................................................................................................................10

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1. Introduction
This small business will provides different service to the customer. The service will be delivered
in different style like normal, ferase, french, nani, balatoli, afro style etc.
The firm’s immediate goals are as follows:
 In three months – to have renovated the facility to have a more relaxed environment
 In one year – to be side by side with competitors
 In three years – to continue this service efforts to get more customers through the door
and increase profitability

2. Executive Summary
Since, Debre Berhan town contain many peoples currently. peoples need barber house. Even
though there is barber shop service in Debre Berhan town, and around it people are not satisfied,
due to the price, availability and quality of the current services. To overcome these just we focus
on this creative business plan .The financing needed for our business plan is basically on our
equity and the rest we get from banks, as loans and deal with them to return after three years of
our launched business plan.
Finally, the successfulness of our business is service type which we give to customer, cost
reduction, quality service relative to competitors.

3. Name of the Business

The business will be known as"shimels barber shop”

Contact address
Phone No: +251973112104

4. Type of Business
Our business is service providing business.
Service

The purpose of our business is to give the special services to our customers. Most of our
customer is Debre Berhan town peoples.

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5. Owner of the Business
The business will be formed as a profit making enterprise with six partners having equal
individual paid in capital. We all are volunteer to work with together for our success. The formal
charter and the agreement accordance with the law of Debre Berhan and will be drawn up by the
authorized body.

Name Address Qualification Function in relevant

the business experience
Simeneh Wubetu 0927356145 ECONOMICS Manger 2 year
Bezaw Bayu 0934690966 Barber 1 year
Gorfinesh Asfaw 0945665544 Management barber 1 year

Abebe Berihun 0935674513 Management cleaner None

Abrham Missa 0945654323 management barber 1 year

6. Start-up capital
Investment 70,000 birr
Working capital 50,000birr
Total 120,000 birr

7. Source of capital
The source of our start-up capital is from own saving and bank loan.
In order to accomplish the lone we have borrowed from commercial bank of Ethiopia in Debre
Berhan.

8. Company summary
The barber shop opened in collection of different partners to see the customer need doesn’t get
full service around that area and build this company proper service for the customer.
Mission Statement

 Our Mission is to provide a better service for our customers need.

 To provide many kinds of services for all customers with satisfactory costs,
particularly to students and the resident in Debre Berhan university. Creating
accessibility of all necessary services at the area with affordable price to solve our
customer’s costs, time, and money.
 Increasing service profit of the owner of the business by the higher rate.
 Be the first and most competent supplier of the barber shop service in Debre Berhan
University.

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 Start-Up Summary

The cost to open the barber shop is 120,000. The majority of the expenses are in full
filling the necessary material and equipment totally 80,000. And the working capital to
continue current capital on work is 40,000 and will require approximately 50 days to
complete. 50,000 of the start-up costs will be funded by the owners. The owner’s source
of funds is a combination of liquid assets and marketable securities, primarily from their
existing catering business.

9. Management summary
The business will be in compliance regarding the rule and regulations of Debre Berhan town and
also with countries’ business laws. The owner will obtain the required operating license issued
by the North Shewa Zone Trade and Industry Bureau and the work permission granted.
Contractual agreements and other legal services will be provided by the law of Debre Berhan
town ordinary court with representative
Location and Hours of Operation
The proposed business will be located in the Debre Berhan town. This area will be a good
location that may invite a large amount of customers towards and services. The reason why we
select the area is that there is the accessible road that is favorable and center to all customers to
go to the service. The Service will not be closed except in a day of New Year, Christmas’s,
Easter, Ramadan, Arefah and Meskel

10. Organizational and Staff

Debre Brehan expects to hire at list 6 employees. We’ve adopted an effective interview process
designed to this service with highly qualified people for each position. Each applicant will be
rated and evaluated according to a pre-defined set of standards designed for each position.
Background checks will be utilized for designated positions. Recruiting efforts will always
center on referrals.

Position Task ,responsibility and Qualification

Manager A person has at list diploma ,qualified management, who can manage
The all day to day activity, and look how the service are go on.

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Barber A person who can skill, and responsibility to give service to customer.

Cleaner A person who can responsibility to clean the house.

11. Business idea and market

Even if there are one barber shop around this town which can deliver service for the needs of
the customers, our barber shop aimed at providing services as match as possible in fair price and
high quality.

12. Description of Market

This barber shop service is going to be opened in Debre Birhan town around Tebase in the Debre
Berhan town. Reaching the customer by providing services to get more profit.

13. Marketing Plan Product

Our barber shop offers the services stated above.

 Since it gives the better service ever with fair price customers choose to come to our
barber shop service.
 It offers the most advanced services on time.

14. Marketing plan price

Service/ Normal French Nani Balatoli Afro style Fuliferzz

product
How much are 4.50 6.50 birr 7.00birr Highest=10 Highest=10 Highest=10
birr Average=7.5 Average=8 Average=8
customers
willing to pay Lowest=5 Lowest=6 Lowest=6
6.00 8.00 birr 8.50 birr Highest=12 Highest=12 Highest=11
Competitors
birr Average=9 Average=9 Average=9
price
Lowest=5 Lowest=6 Lowest=7

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 our price 4.50- 6.50-7.00 7.00-7.50 5-10 birr 6-9 birr 8=9 birr
5.00 birr birr
birr
Reason for We set this price in order to provide the better service to our customer. By
setting my considering the compotator price and we try to decide lower price as much
price as possible by based on current market condition

15. Marketing plan Promotion

We found it better to promote our Barber shop service by using different posters, opening
ceremony, distributing fliers and through putting barber’s pole and also advertising through
university adverting board etc.

16. Market Segmentation

DB town barber shop service will appeal to a broad base of consumers in both the residential and
business community. The location selected for DB town barber shop was chosen primarily to
appeal to the growing number of peoples.

17. Positioning strategies

We position the service in a suitable manner for our work as well as the customer. The customer
can get service in our barber shop. Since our target customer are DB town people.

18. Legal form

Our business company is formed by six individuals who have different ideas and starting capital.
Therefore, its legal form is partnership. We choose this legal form because of the following
reasons.

Since it is difficult for single person possessing adequate capital, technical skill. Knowledge and
managerial experience. So to solve these problems two or more individuals having their own.
Capital, technical skill, knowledge and managerial experience for contribution of the developing
our business together.

• Financial resources and talent are pooled from all the members of the partnership.
• Simple and inexpensive to form. Registration fee and taxes become easy because each
owner contribute actively.
• It is often easier for a partnership to obtain capital than other formsbusiness ownership
because the financial resources of all the partners can be used as security.
• SWOT Analysis

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 The environmental analysis of the business consists of both external and internal aspect of
the environment. From external, opportunities and threat will be analyzed while internal
environment contains analysis of strength and weakness of barber shop service in its working
time periods.

These all analysis is called as SWOT analysis.

a/ Strength:The strength of this project marketing, finance, manufacturing and organizational

structure .it includes the positive attributes of the people involved in the business their
knowledge, available capital, established customers, etc..

B / Weakness: Difficult to expand the barber shop service because of the place that is not much
enough in the present location, shortage of capital, lack of access to skill or technology inferior
service offering in location of the business.
• Recruiting and retaining quality employees
C / Opportunities: customers, it can easily meet demand of different level of customers; it can
provide all the service provide by barber shop service.
D / Threats: Since most of our customer is DB town people, There will be decreased and few
number of customer during summer season.
Production
In our business, we use the modern technology like, modern chair, cosmetics and also hair
machine etc. The source of this device will be from well-known company that can deliver those
devices.
Start-up Capital

This business plan is prepared to obtain supporting in the amount of 250,000 birr The supplemental financing is required
to begin work on site preparation and modifications, equipment purchases, and to cover costs in the first year of
operations.

Estimation of start-up capital amount 250,000

Investment

Land

Rent 10,000

Equipment 50,000

Total investment 70,000

Working capital 50,000

Month of staff costs 15,000

Month of operational costs 10,000

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Total working capital 100,000

Total start-up capital 120,000

Source of start-up capital

Type Source Condition Amount

Equity capital Partner Duration For one year

Loan Bank loan Interest 30%

Total funding 300,000

Information about funding source

Loan:

 Commercial bank of Ethiopia which founds in Debre Berhan

Credit agreement

 Finalized

Staff costs

Position Qualifications Salary Per month Social security Total

staff cost

Manager Degree 3000 DB/0045 2000

Barber Diploma 2500 DB/657 1500

Barber Diploma 1500 DB/035 1500

Barber 10+2 1000 DB/0045 2000

Cleaner 10+2 1000 DB/0225 2000

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Month 1 2 3

Price 40 42 43
perm Quantity 60 65 75

Turnover 2400 2730 3225

Shampoo Price 60 65 70

Quantity 50 70 70

Turnover 3000 4550 4900

Price 15 20 30
jele Quantity 50 60 50
21. Business
Turnover 750 1200 1500

Soft Price 7 8 8.5 Operation

Quantity 100 110 120 and Costs
Turnover 700 880 1020
Monthly
All Product Turnover 6850 9360 10645
Sales Plan

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Month 1 2 3

Perm Quantity 60 65 75

All costs 2400 2730 3225

Shampoo Quantity 50 70 70

All costs 3000 4450 4900

Jele Quantity 50 60 50

All costs 750 1200 1500

Soft Quantity 100 110 120

All costs 700 880 1020

Total costs 6850 9260 10745

Staff Total costs 9000 9000 9000 19. Mont

Others Total costs 2000 2500 2100 hly
Operation Total costs 11000 11500 11100

Capital cost Interest 5000 5500 7000

Depreciation 200 150 400

Total costs 18050 20910 22245

Operational Cost Plan

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20. Cash Flow Plan

Annually Cash Flow Plan

Year 1 2 3
Cash Beginning of the Year 300,000 350,000 400,000

Equity 50,000 170,000 250,000

Loans 100,000 130,000 100,000
Sales 100,000 230,000 330,000
Any Other 20,000 45,000 200,000
Total Cash in 570,000 575,000 832000
Investment 140,000 200,000 240,000
Operational Cost 167,000 100,000 267,000
Interest 10,000 100,000 20,000
Any other 70,000 90,000 80,000
Total Cash out 100,000 101,000 140,000
Cash at the end of the year 470,000 470,000 692,000

21. Market Analysis

The barber shop service is rapidly expanding its services and number of services from time to
time. The barber shop has many visible comparative advantages than its competitor. In terms of
services an overwhelming advantage than the barber shop that is found in the Debre Berhan city
building which is called Alem Barber Shop”. In addition to this, it may have the ability to
provide services with low costs and have capacity to serve the customers appropriately in a better
manner than its competitor.

22. Risk Analysis

Even if we try to open Alem Barber Shop service, there may be a problem besides from what we
expect. It may from our competitors. The material for our service may be increase in price.

10.0 Exit Strategy

By any meansour business may fail. The failure is may occur due to the external factors. Before
our business fail 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.

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10.1 Monitoring
Since the business is formed by partnership all member has the responsibility to monitor all day
to day activity. But most of the time our business is controlled by the manager. Manager should
observe day to day employees activity. In our context he/she should see whether the materials in
our business are used appropriately. And the manager looks all the employee how, they currently
work, and what challenge the employee get. Generally the manager control how the business is
continiue.

Appendix:
Finical Loan from
o Commercial Bank of Ethiopia

Key Word

SWOT:- Strength Weakness Opportunity and Testing

DBU:-Debre Berhan University

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