Debre Tabor University

Faculity of Business and Economics

Department of Accuonting and Finance

1 INTRODUCTION
1.1. Name and Address of the Industry..................................................................................3
1.2. Name and Address of the Principle.................................................................................3
1.3. Nature of the company.................................................................................................... 3
1.4. Statement of Financial Need........................................................................................... 4
1.5. Statement of Confidentiality of Report............................................................................4
1.6. The company with its service..........................................................................................5
1.7. OBJECTIVE................................................................................................................... 5
1.8. MISSION........................................................................................................................ 5
1.9. KEY SUCCESS.............................................................................................................. 5
2. EXCUTIVE SUMMERY.......................................................................................................6
3. INDUSTRY ANALYIS......................................................................................................... 8
3.1. Future outlook and Trends...............................................................................................8
3.2. Market Segmentation...................................................................................................... 8
4. DESCRIPTION OF VENTURE.............................................................................................9
5. PRODUTION PLAN............................................................................................................11
6. MARKETING PLAN...........................................................................................................12
6.1. Pricing........................................................................................................................... 12
6.2. Distribution................................................................................................................... 12
6.3. Promotion......................................................................................................................12
7. ORGANIZATIONAL PLAN...............................................................................................13
7.1. Form of ownership........................................................................................................ 13
7.2. Roles and Responsibility of Members of the Organization...........................................13

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8. ASSESMENT OF RISKS.................................................................................................... 14
9. FINANCIAL PLAN............................................................................................................. 15
9.1. PRO-FORMA INCOME STATEMENT.......................................................................16
9.1.1. Salary expense....................................................................................................... 16
9.1.2. Depreciation Expense.............................................................................................16
9.1.3. Miscellaneous Expense..........................................................................................17
Pro-forma income statement as of year 1..............................................................................17
Pro-forma income statement of year 2..................................................................................17
Pro-forma income statement of 3rd year...............................................................................18
Cash flow statement for year 1.............................................................................................18
Cash flow statement for year 2.............................................................................................18
Cash flow statement for 3rd year..........................................................................................19
Operating Balance sheet....................................................................................................... 19
Pro-forma Balance Sheet at the end of 1st year.....................................................................19
Pro-forma Balance sheet as the End of 2nd year..................................................................19
Pro-forma Balance sheet as the end of 3rd year....................................................................20
Break-Even Analysis for 1sr year.........................................................................................20
Breakeven Analysis for year 2.............................................................................................20
Breakeven Analysis for year 3..............................................................................................21

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 1 INTRODUCTION

1.1 Name and Address of the Industry

The name of the enterprise is FAST ME. Cosmetics. The reason that I assigned this name to the
company is to show the name of the owner and quickly providing of services. business.cosmetics
is located in DebreTabor town .This location is a great opportunity to get different kinds of
customer.

1.2 Name and Address of the Principle

NAME NATIONALITY REGION TOWN
Fikrte Ethiopian SNNP Shashemenie
Abebaw Ethiopian Amhara Feres biet
Shambel Ethiopian Amhara Debre work
Tekebaw Ethiopian Amhara Motta
Mandefro Ethiopian Amhara Gonder
Eyerus Ethiopia Addis Ababa Bolle

1.3 Nature of the company

As the name of the company indicates the initial focuses on providing different types of high
quantity and quality cosmetics to the people who come from different area. FAST ME cosmetics
providing enterprise is established to overcome the challenges of the environmental weather
condition facing the society at large and students from different area of the country. The
company also strives to create awareness concerning the usefulness of cosmetics product in our
day to day life. The customer are coming to purchase are either for whole sale, retail or
consumption activities. Since the nature of the company is not only providing cosmetics but also
gives whole sale and retail service.

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 1.4 Statement of Financial Need
FAST ME cosmetics providing enterprise planned to construct and establish a company with
capital of 230000 birr. The business requires means of acquiring this initial capital by borrowing
from financial institution, personal capital and from close relatives.

1.5 Statement of Confidentiality of Report

The owner of FAST ME cosmetics spends money, time, resources, and experience also different
things from thinking up on preparing this business plan. Therefore the owners would like to
announce to all that this business plan which is the result of all partners effort for this reason that
should not be transferred or copied to another individual or company. If anyone fails to does this
owner have responsibility to the individual or the company to bring them in front of the law. “All
Rights are reserved”

It is believed that various kinds of business run in each and every aspect our country or other side
of the world and this comes with interaction of countries with other countries in all aspects of
their socio-economic and cultural dogmatism with the beginning of FAST ME cosmetics
globalization. This may be because of comfort ability of various kinds of environment which
assist or help people to lead people to lead their life in a luxurious manner and encourage beating
standard of excellence in their life as well.

Due to this the members of this work plan owners expect something which help us to reach or
future or planned life.

To do this (to achieve our goal), now grouped with each other to propose business plan paper
related to the thing which we want to specialized on.

It may be propounded as a new venture which is controlled by the group members, the site of
this business enterprise is Debre Tabor University. The primary purpose of this business plan is
to provide qualitative and quantitative amount of various types of a cosmetics at affordable price.

1.6 The company with its service

The FAST ME cosmetics enterprises has special passion for its customers these are helping the
customer or users to swim in the cosmetics then to use the cosmetics more frequently and keep
smooth their body as much as possible.

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 1.7 OBJECTIVE
 To maximize cosmetics supply in general and satisfy consumers consumption
requirement in particular
 To him consumers expenditure for transportation cost (not to go outside of bhr dair town
 To creating employment opportunity to the surrounding community
 To provide the customer with high quality and quantity cosmetics

1.8 MISSION
 Utilizing available resources, and providing the society wit due service
 Adopting to the dynamic environment throughout the operation
 Providing affordable living standard to its workers
 Supplying high quality cosmetics suitable for bodies.

1.9 KEY SUCCESS

 It uses different types of incentives (promotional), or inducement mechanism to attract
other customers
 Continuous auditing of our sales and adjusting our expenditure accordingly
 It stands for the welfare and common good of the society for instance, cost minimization

2 EXCUTIVE SUMMERY
FAST ME cosmetics enterprise business will be run as partnership among
Fikirte,Abebaw,Shambel,Tekebaw,Mandefro & Eyerus.

The FAST ME cosmetics enterprise offer high quality and quantity cosmetics for users and
customers. The product of the business will be available for sale at home and also sold to
wholesalers and retailers who sells in other markets. The price set by the business, is fair market
price or it should not exploit customers or should not annoy customers. So that customers are
willing to pay. Cosmetics providing enterprises will provide its product at market price by
identifying and listing each type of cosmetics with their fair prices.

The activities included in this business are purchasing high quality and modernized cosmetics
and preparing store houses where cosmetics stored whenever there is excess supply of cosmetics,
auditing daily sales of business, etc.

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The overall objective of the business is to provide high quality and quantity cosmetics in order to
get the expected profit and to satisfy the consumer and to achieve and exceed sales forecasts to
enable us to be operating at capacity, we would also have a claim to create job opportunity,
providing complementary and with cosmetics and plans to expand the business in different area
and also to expand the initial business in size.

In the first year the business forecast a profit of birr 4500.The reason for obtaining such positive
gaining or profit can be mainly attributed to

 The profitability of the industry

 The presence of good market price
 Absence of strong competitors due to economies of scale
 Usage of few permanent workers
 Absence of payment for suppliers ( transportation cost)

In the second year and 3rd year we expect and predict that there will be increment of profit due to
further increases in sales. The overall objectives of the business are firstly to achieve and exceed
sales forecasts to enable the business to be operating at capacity, so that the business extended
the number of types of modern cosmetics that enables the business to meet (supply) the market
demand. We would also claim to be able to employ to have in future and expanding the existing
one.

The FAST ME business cosmetic providing enterprise will require loan of birr 30,000 to be
repaid over four years. The contribution made for the business is equal for each partner and share
of profits and loses also can be equally shared. With fund (debt) the business will cover, house.
(Store house), shelf, bulk containers advertising and selling costs.

The FAST ME cosmetics is also available on www.hycosmos.com always and ready to accept its
customer’s comments, suggestions and questions regarding the quality of its products and
services

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 3 INDUSTRY ANALYIS

3.1 Future outlook and Trends

It is obvious that the environmental condition especially weather condition,is cold air conditions
so that individual is in need of some cosmetic (body lotion), the environment is protected,
maintained and remain suitable so that there will be expansion of the business at an alarming
rate.

It is in this respect that our business provided a lot of opportunity is for the community of the
campus and surrounding peoples by enabling them to use modern cosmetics and simply adapt
freshman students and as well as gussets who are not familiar with the salty water of the area.

3.2 Market Segmentation

From the very beginning business enterprises, the market for cosmetics is not limited local
market. It has from both internal and external (from abroad), the local market refers to all market
with the national boundary while the foreign market refers to the export of cosmetics to middle
east countries and to some extent to Europe, Asia, etc.

Cosmetics providing enterprises business in well organized, licensed by the name cosmetic
providing business, growth oriented, gradually involves in the production of different services
and when involved in new services by creating backward and forward linkage.

4 DESCRIPTION OF VENTURE
Cosmetics providing business enterprise provide each type of cosmetics from other area
cosmotics campany.It sells the product to consumers and other small industries which interested
in it. It also sells the product to service rendering firms such as Barberry and Beauty Salons
business.

The product of our business is industrial product. So, any firms who has the potential and
licensed by the government can undertake the activates. The brand of the business is designed to
be cosmetic providing enterprise, it is named so because it will have good attitude on society, it
doesn’t affect the natural environment (pollution) and initiate people to purchase the product and
as it is new.

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The location of the business is amhar regions states . The building of the business includes one
office, sentry box and ware house.

The location is preferred for the following reasons

 Different types of raw materials are available

 The hard (cold) weather condition
 There are large number of users in the selected specific area
 Presence of good infrastructure (road)

The business need to hire some labor force out carry out operation properly there is no need of
pre- requisite of higher educational achievement. But there are some criteria such as

 He/she must be able to write hear, see and read

 He/she must be attractive
 He/ she must be confident enough and ability to adopt some changes
 He/she must be knowledgeable and experienced in the area rendering business services
 the office equipment needed would be
 table
 five charier
 one shelf
 resisters ventilator
 pens, papers reams and pencils

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The above mentioned equipment will be purchased. The manager of the business has mush
experience in the field the age of student’s entrepreneurs is between 22 and 24. The special
ability of the manager possess is that he can work with others strongly. The reason for going to
setup this new business is

 To be independent form other authority

 Existence of large opportunity in the business
 The exploit the experience of gained in better manner
 Absence of strong competitor in the market can be raised main reason for the success of
the business or venture

5 PRODUTION PLAN
The aim of the business is to provide high quality and quantity modern cosmetics in order to get
the predicted gain and to satisfy the cosmetic the business is fully responsible for all part of the
operation. The first starting point of the business is identifying which type of cosmetics that the
consumers are in need of and then purchasing or providing those cosmetics at minimum possible
pick that doesn’t heart any one. The equipment is needed for immediate uses are the following

 Two shelves’ on which cosmetics are put on

 The clothing (wearing) for workers
 Calculator
 Different types of cosmetics and etc.

To start the business activity the business starts with 20 different types of costs. Totally the cost
of the business includes the following:-

 The cost of busing different cosmetics

 The cost of house (rent)
 The cost of clothes
 The cost of living permanent employees

With the growth of the business additional ware houses will be need

6 MARKETING PLAN

6.1 Pricing
The basis for our cosmetics prices is the market price and cost-benefit analysis. Therefore, due to
presence of small competitive, the business cannot set high prices. Even if the business operates

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at lower cost it would not price below the market prices just because of the purpose result,
cosmetics providing business enterprise. As a result, cosmetics providing business enterprise set
the price of cosmetics as the market that is it fluctuates over the time with market price.

6.2 Distribution
The distribution of the cosmetics would be in three ways first, the business its self undertake
retail service to consumers and customers at market price. Secondly, by selling the product to the
whole sales and thirdly by selling to both wholesalers and retailer.

6.3 Promotion
The promotion activity will be done once in a couple of month through notices to be posted at
public center and also through

 News paper and magazines

 Radio
 TV

7 ORGANIZATIONAL PLAN

7.1 Form of ownership

Cosmetics providing business enterprises are a type of business in the form of partnership. There
are reasons for the selection of this form of business: these are

 Profitability of the business specially after the first year

 Ease of formation of the business
 Ease to formation of the business

The overall operation or function of the owner would be governed or administered by the owner
there will be only one manager the manger had served for more than four years in this type of
business and have excellent experience in the area with his educational background that enable
him to manage the business successfully.

7.2 Roles and Responsibility of Members of the Organization

The role of the manager will be managing the overall activity of the business. That is:-

 Making decision regarding the state of business in the future

 Raising capital contribution
 Evaluating the quality of the products/ cosmetics
 Controlling the performance of workers
 Making decision regarding which types of cosmetics should be purchased

The organization will contain the following members:-

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 1. The management of the business
2. Permanent employees
3. Temporary employees

The permanent employees of the business consist of four workers. The three are responsible for
day-to-day activities of the business

8. ASSESMENT OF RISKS

The expected of risk to the business may be loss of income from expired and cosmetics during
operation may happen in the future, hence no one is certain about future, the other expected loss
is attributed to fluctuation of market price (devaluation, inflation, deflation)

The business also don’t use advanced technology whenever there is appropriate technology that
go with operation, is ready to make use.

9. FINANCIAL PLAN

The business plan is prepared to obtain funds amounting 30,000 birr. The supplementary
financing is required to being work on site preparation, equipment purchases and to cover
expense in the first year of operations. Additional financing has already been secured in the form
of:-

1. Birr 45000 from personal capital and

2. Birr 30,000 from closed relative

10. PRO-FORMA INCOME STATEMENT

The sale of revenue of cosmetics is expected to be audited daily and as well as monthly since it is
difficult to predict the price of each type of cosmetics we take the approximation of the sales of
monthly on average to be 4000 birr. Hence there are 12 months in a business year total annual
revenue is calculated as follows

Total revenue= 4000*12=48000 birr

10.1 Salary expense

For permanent worker: each of the two permanent workers out of the two earn 750 birr and
remaining one person earn 300 birr per month:

Total salary for permanent workers= (750*2*12) + (300*2*12) =25200birr

This is a salary for these permanent workers per a year plus a salary for the remaining person per
a year

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For temporary workers: these temporary workers has an activity like cleaning the office and the
shop once a day he/she earns 5 birr per day or 150 per month

Total annual payment= 150* 12=1800 birr

Total salary expense=43200 + 1800= 45000birr

10.2 Depreciation Expense

The FAST ME cosmetics providing enterprise has some depreciation expense in the form the
cost of expired cosmetics. And it expected to be 12,852 birr.

Total depreciation cost (Expenses)= 12852 birr

Interest Expense= principle*interest rate

=30000*10%

=3000birr

10.3 Miscellaneous Expense

Items Quantity Unit price Quantity
Pen 8 2.25 18
Paper rim 2 80 160
White Piece of cloth - - 70
Total 320

Pro-forma income statement as of year 1

Revenue
Sales-------------------------------------------------------------------------------------84000
Expense
Salary Expense-----------------------------------------------------------45000
Depreciation Expense---------------------------------------------------12852
Freight Expense----------------------------------------------------------300
Interest Expense----------------------------------------------------------3000
Advertising Expense-----------------------------------------------------500
Miscellaneous Expense--------------------------------------------------320
Total Expense---------------------------------------------------------------------------------61972
Gross Profit -----------------------------------------------------------------------------------22028

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In the second year of operation it is assumed that the business will increase the provision of
cosmetics and overall sales from 7000 birr/month to 7875 birr/month on average.

Revenue (Sales) annually 94,500 birr per year 7875*12

Pro-forma income statement of year 2

Revenue
Sales-------------------------------------------------------------------------------------94500
Expense
Salary Expense-----------------------------------------------------------------45000
Depreciation Expense---------------------------------------------------------12852
Freight Expense ----------------------------------------------------------------300
Interest Expense-----------------------------------------------------------------3000
Miscellaneous Expense---------------------------------------------------------320
Total Expense--------------------------------------------------------------------------61972
Gross profit ----------------------------------------------------------------------------32528
In the third year of operation it is assumed that the business will increases the operation of sales
volume from 7875 birr to 9625 birr per month, using full capacity at efficiency. Therefore
Revenue (Sales) annually= 9625*12=115500

Pro-forma income statement of 3rd year

Revenue
Sales-----------------------------------------------------------------------------------115500
Expense
Salary Expense-----------------------------------------------------------------------45000
Depreciation Expense--------------------------------------------------------------12852
Freight Expense---------------------------------------------------------------------300
Interest Expense-------------------------------------------------------------------3000
Miscellaneous Expense-----------------------------------------------------------320
Total Expense ----------------------------------------------------------------------61972
Gross profit --------------------------------------------------------------------------53528

Cash flow statement for year 1

Cash Budget Total
Beginning cash balance-------------------------------------30000
Cash collected from customers---------------------------84000
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 Total cash available for need 114000
Operating Expense------------------------------------------61972
With draw-----------------------------------------------------1200
Total cash needed 63172
Cash Excess deficit ------------------------------------------50828

Cash flow statement for year 2

Cash Budget Total
Beginning cash balance------------------------------------ 50828
Cash collected from customers---------------------------94500
Total cash available for need 145328
Operating Expense------------------------------------------61972
With draw-----------------------------------------------------1200
Total cash needed 63172
Cash Excess deficit ------------------------------------------82156

Cash flow statement for 3rd year

Cash Budget Total
Beginning cash balance------------------------------------ 82156
Cash collected from customers---------------------------115500
Total cash available for need 197550
Operating Expense------------------------------------------61972
With draw-----------------------------------------------------1200
Total cash needed 63172
Cash Excess deficit ------------------------------------------134484

Operating Balance sheet

Asset
Cash--------------------------------30000
Fixed asset-------------------------81200
Miscellaneous Expense-----------320
Total asset------------------------111520
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Liability
Account payable------------------45000
Note payable----------------------30000
Total Liability………………..75000
Capital
Capital -----------------------------36520

Pro-forma Balance Sheet at the end of 1st year
Asset
Cash --------------------------------50828
Fixed asset-------------------------81200
Depreciation------------------------12852
Operating Expense------------------3000
Total asset-------------------------122176
Pro-forma Balance sheet as the End of 2nd year
Asset
Cash -------------------------------82156
Fixed asset--------------------------81200
Depreciation-----------------------25704
Operating Expense-----------------6000
Total asset------------------------143,652
Pro-forma Balance sheet as the end of 3rd year
Asset
Cash -------------------------------134484
Fixed asset--------------------------81200
Depreciation-----------------------38556
Operating Expense------------------6000
Total asset-------------------------186128
Break-Even Analysis for 1sr year
Total sales of cosmetics on average-------------------------------birr 84000
Total cost of each cosmetics----------------------------------------birr 61972
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Total liability and capital ---------111520
Liability
Account payable------------------45000
Note payable----------------------30000
Interest payable---------------------3000
Total capital-----------------------78000
Capital------------------------------44176
Total liability and capital-------122176
Liability
Account payable------------------45000
Note payable----------------------30000
Interest payable---------------------6000
Capital-----------------------------62652
Total liability and capital ------143652
Liability
Account payable------------------45000
Note payable----------------------30000
Interest payable--------------------6000
Capital------------------------------62652
Total liability and capital-------143652
Gross profit (GP) ------------------------------------------------------birr22028

Gross profit margin (GPM) =GP/SALES *100=22028/84000*100=26.23

Over head (fixed cost) for first year -----------------------------birr 60,172

Breakeven turn over= overhead/GPM *100

=birr 60172/26.23*100= 71.63%

Breakeven Analysis for year 2

Total sales of cosmetics on average ------------------------------------birr 94,500

Total cost of cosmetics ---------------------------------------------------birr (61,972)

Gross profit (GP) ----------------------------------------------------------birr 32,528

Gross profit margin GPM= 32528/94500*100=34.42%

Overhead (fixed cost) for 2nd year --------------------------------------------birr 60,172

Breakeven turn over=birr 60172/34.42*100=174816.97birr

Break even gross profit margin= 60172/94500*100=63.67%

Breakeven Analysis for year 3

Total sales of cosmetics on average-----------------------------------------birr 115500

Total cost of cosmetics--------------------------------------------------------birr (61972)

Gross profit (GP) ---------------------------------------------------------------birr 53528

Gross profit margin GPM= 53528/115500*100=46.34%

Overhead (fixed cost) for 2nd year--------------------------------------------birr 60172

Breakeven turn over =birr 60172/46.34*100=129848.94birr

Breakeven gross profit margin 60172/115500*100=52.096%

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