Wolayita Sodo University

Collage:Engineering and technology

Group:1(one)

Course code:

Title:

Business plans of liyu Baltena and shop

NAME OF STUDENTS Student ID

1 MADI MOHAMMED. ................................................. 0804/12

2 MEGERSA ASHIRAF.................................................. 0823/12

3 MEGERSA AHMED.................................................... 0822/12

4 MEFTADIN AWOL..................................................... 0820/12

5 MEGERSA MOHAMMED............................................ 0824/12

6 MAKO YUYA............................................................... 0806/12

7 LEYLA KEDIR.............................................................. 0799/12

8 KENENI KEDIR............................................................ 1047/12

9 KEYRADIN AWOL ...................................................... 0787/12 W.Sodo,Ethiopia

Contents
1. Executive summary ---------------------------------------------------------- 4

2. Business description ---------------------------------------------------------- 5

2.1. Owner description .............................................................................................................................. 5

2.2 Mission of business ............................................................................................................................. 5

2.3. Visions ............................................................................................................................................... 5

2.4 Objective ............................................................................................................................................. 6

2.4.1 Short term objective ............................................................................................................................ 6

2.4.2 Long term objectives ........................................................................................................................... 6

3. Service description ----------------------------------------------------------- 6

3.1 Market research and analysis .............................................................................................................. 6

3.2.1. Strength of the competitors................................................................................................................. 7

3.2.2. Weakness .......................................................................................................................................... 7
3.2.3 Opportunity.......................................................................................................................................... 7
3.2.4. Threats ................................................................................................................................................ 7

4. Marketing plan ---------------------------------------------------------------7

4.1 Pricing................................................................................................................................................. 8

4.2 Promotional mix.................................................................................................................................... 8

4.3 Place of operation The Liyu balitena shops will be located in sod town. The shop will operat
during peak service time to take advantage over other competitor............................................................... 8

4.4 product type ........................................................................................................................................ 8

5.Production plan -------------------------------------------------------------8

6.The Business budget-------------------------------------------------------9

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7. Management plan -------------------------------------------------------- 12

8. Financial Plan ------------------------------------------------------------ 12

8.1. Start-up Funding .............................................................................................................................. 12

The following sections lay out the details of our financial plan for the next four years......................... 12

8.2 Financial documentation ................................................................................................................... 12

8.2.1 Profit and Loss Statement..................................................................................................................12

8.2.1. Income statement of Tokuma balitena and spices business plan for year 1 .....................................13
8.2.2. First year Balance sheet statement of the business ...........................................................................13
8.2.3. First year cash flow statement of liyu balitena and spices business plan for year 1..................14

9. Break even analysis -------------------------------------------------------- 17

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1. Executive summary
United balitena shop will be start as a partnership between four partners: bekele,Abebe,
Bereket,and Robel). The shop will provide qualitative cereal domestic consumption
product such as shero, lentil, pepar, bean, pea, and powder pepper and different spices for
domestic customer of the societies of Wolayita Sodo and around in order to satisfy their needs.

Our initial statement to Investors and Financial Lenders, this balitena and spices business plan is
a candid disclosure of Belete, Abebe, Bereket and Robel business proposal - our intent is
to set realistic business expectations, and to answer societies questions about the profitability
of this business venture.

Entrepreneurs have a tendency to shade the SODO balitena and spices shop business plan with a
very optimistic brush, highlighting strengths and camouflaging the risks. We, as business owners,
have a vested stake and financial commitment in the success of this balitena. Our intent is to
have a definitive business, financial, and marketing plan that not only serves our need for capital
financing, but also is utilized as our daily business roadmap. We have taken all precautions to
validate or success our business and financial models, focusing on realistic projections.

Our beginning capital is about 42340 birr for the purchasing of fixed assets and for the operation
of different works our business need 40,160 birr with a total birr of 82,500. From this amount we
get 75000 amounts from Oromia credit and institution through loan and its loan repayable over
three years. As owners, our commitment is to take personal accountability for all financial debt.
We will take the necessary precautions to ensure the business is fully capitalized with in three
year, and have addressed all financial shortfalls to ensure a successful business start-up.

Owner profile

Business Owner: Belete,Abebe,Bereket & Robel.

Address : SODO

Tell.of work place:0903597564

Type of Business ፡ Small Enterprise on balitena shop

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2. Business description
The name of this business is liyu baltena shops which will start as a business in sodo town. As
we observed in this area, some competitor which supplies both qualitative and quantitative
balitena products for individuals, relatively small and medium hotels. Also we assume that most
of the customers of this business will be those who mentioned above. Additionally, in this area
we observed that most of the communities of this towns are collage students and etc. So such
types of individuals highly need the product of our balitena shop which makes us competition

2.1. Owner description

The partners of this Beltane are Belete,Abebe,Bereket and Robel. All the owner
ship of the partnerships was born in w.sodo, (in 1983, 1989, 1982 & 1987 respectively. We
graduate from Haramaya University in business management. Partnership also will start the
business in sodo town.

The product /service we provide for our customers (individuals, hotels) are that a qualified and
well prepared domestic cereal balitena products to keep them from preparing balitena products in
boring and tiresome ways as well as to keep their life healthy.

2.2 Mission of business

The aims of our business is to fill a clear gap in the market and cater for growing customer
demand for high quality, healthy premium of United finished baltena consumption products

2.3. Visions

Our vision is not to have only profit maximization, but also efficient aim superior service -
customer satisfaction. Liyu balitena will be the choice for all a mature and adult crowd,
couples and singles, young and old, male or female.

Employee welfare, participation, and training are equally important to our success. Everyone is
treated fairly and with the at most respect. Our employees will feel a part of the success of our
business .

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Our concept combines variety, ambiance, entertainment and a superior staff to create a sense of
'place' in order to reach our goal of overall value in the dining/entertainment experience. We
offer fair profits for the owners and investors, and a rewarding place to work for the employees.

2.4 Objective
our business has two main objectives for the first three years of operation.

2.4.1 Short term objective

 Solving the market problem of the area by addressing or supplying of better and quality
products to the customers.
 Providing a better quality of finished balitena product to increase our customers.
 Achieving the average estimated sales per year.
 Reduction of the inflation of finished balitena products and spices as much as possible

2.4.2 Long term objectives

 To expand the existing business area and starting another similar business in a unique
Midtown destination of other areas in side our country.
 To create better job opportunity for people
 To improve equality and performance of our employees
 To generate the maximum profit by assuming any risk and challenges.

3. Service description
3.1 Market research and analysis
Instead of building a business around a preconceived concept, we conducted market research and built a
concept around our consumers.

According to survey and observation we have conducted, people which are around Bule hora area are
densely populated and some of them (self- employed and investors) run their own business and
government employees those who are not run their business such as a university lectures, bankers, private
college lecturers, Doctors and Health Officers Therefore, there are a great competition between them
especially the investors and self- employed workers. Those competitors have their own strength and
weakness.

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3.2.1. Strength of the competitors
Our competitors have an experience in this market (balitena) since they are worked for a long
period of time than us. The other strength of our competitor has greater financial services
because of most of the relatives of our competitors were in western countries. In addition, they
have a greater access of information about the market activities.

3.2.2. Weakness
The main weakness of our competitors are they did not well known spices which are produced in
well agricultural places that are used for the increasing of the flavor and quality of the balitena
products. But we will prepare the product with highest quality by adding different spices in order
to increase its flavor and to attract our customer (the spices for example qundo berbare, hell,
demblal, tikur abusada ,kirfund, ginger etc).The other weakness is they sold their product with
highest price for their customers as equal as the other individual did. However, our main concern
will satisfy our customers by supplying our product with sound price.

3.2.3 Opportunity

 High demand of the customers to wards these balitena products.

 The status of using the standard technology to grow our productivities.
 There are low number competitors at the areas.
 There will be shortage of suppliers
 Suitability of the areas for trading such materials

3.2.4. Threats

 Will there be increasing of tax.

 Will there be inflation.
 The high increment of rent of house

4. Marketing plan
Product /service- Generally we provide domestic consumption services for our customers with
sound price, better ethics, at right place with right time but we add some features for competitive
advantage and for the quality of product, we bring out. In addition to this, we will also provide

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some training for the best customer how to run such types of business. In general, our market
business consists the 4PS, which are price, product, place and promotion.

4.1 Pricing

The price we have setting depends on the price of our competitors but we will have made some
modification in order to cover some of our costs. we will try to discount the prices of the product
in order to attract our customers, if it doesn’t have much effect even if it have some losses in
our business flow of cash.

4.2 Promotional mix

In order to be advertising our product that we produce we have assumed to follow the following
methods depending on market demand. The promotion method will be:

 Postures and business cards in order to advertise

 by participating on different exhibition and bazaar
 Also we will use poster in local notice areas tapela in
front of our business area, bill boards in some public
places,

4.3 Place of operation

The liyu balitena shops will be located in w.sodo town.shop will operate during peak service time to
take advantage over other competitor.

4.4 product type

The main product that we will assumed to produced includes prepared pepper, peas, shero lentil,
bean kik, normal pepper, ginjer, garlic, lega kibe, onion, coririma, bula kimem, tikur kimem,
abasuda and other special spices.

5.Production plan
Annual selling plan of product
No. Types of Amount(in Unit price per Total selling Annual
product kg) month price per selling price
month

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1 Lentil 200 45 9000 108,000

2 Bean kik 250 40 10,000 120,000

3 Zala pepper 50 145 7250 87,000

4 Pea shero 50 48 2400 28,800

5 Prepared 45 160 7200 86,400

pepper

Grand selling 430200

6. The Business budget

The following tables that shows the amount of capital that we invested on raw materials for the
success of our business.

Starting capital of the business

No. Investment Cost

1 Place of production
2 Production house 35,000
3 Manual production machine 7,350

Gross investment 42,350

Expense for operating

4 One workers job fee per month 1800

5 Expense of raw materials per month 38350

Different expense per month 40,150

total operating expense

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 Total starting capital 79251

List of investment conditions

No. Kind of investment identification Measurement Quantity Unit Total

price price
1 Place of
production
2 House of Container 1 35,000 35,000
production
3 tishet 4 150 600
4 Safa I 4 35 140
5 Kinda 50 22 1100
6 plastic M 10 40 400
7 Mabeterya M 4 25 100
Gross investment 22340
Raw materials, which are necessary to conduct our business.

Kinds of investment Measurement Amount Unit price Total cost

(in killo)
1 Prepared pepper 50 160 8,000
2 Peas shero 60 48 2880
3 Lentil 100 45 4500
4 Bean kik 75 40 3000
5 Zala pepper 75 145 10875
6 Garlic 5 13 100
7 Onion 30 14 420
8 Ginger 25 20 400
10 Korarima 5 130 650
11 bula kimen 5 15 75
12 Tikur kimen 3 50 150

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 13 Avocida 7 20 140
14 Abesh 15 60 900
15 Salt 55 12 660
07 water 50 15 750
18 other expenses 500
19 Total raw material 36,000
Labor force 4 1040 4160
Total 40160
Grand starting capital 82500

Source of capital

No. kind Source Amount

1 Own capital Saving 7,500

2 Credit W.sodo, saving and 75,000
credit institution
Gross capital 82,500
The amount we get the loan from Credit and Institution will paid over three years (36 months
) with an interest rate of 13%.the following table shows the annual repayment of loan.

Payme Season of one year

nt 1 2 3 4 5 6 7 8 9 10 11 12
Interest 812.5 812.5 812. 812. 812. 812. 812. 812. 812. 812. 812. 812.
5 5 5 5 5 5 5 5 5 5
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Total 2895. 289 2895 2895 2895 2895 2895 2895 2895 2895 2895 2895.8
8 5.8 .8 .8 .8 .8 .8 .8 .8 .8 .8

7. Management plan
United balitena and spices shop is a partnership organization.Belete,Abebe,Bereket and
Robel are the founder of liyu balitena and spice enterprise. The Ownership owned and
operated by six persons. The enterprise, being small in nature, requires a simple organizational
structure. Implementation of this organizational form calls for all the owner, to make all of the
major management decisions in addition to monitoring all other business activities. Thus, Mr.,
Belete is the manager of this business, Mr.Abebe is the vise manager,Mr. Bereket is
Accountant,Mr.Robel is cashier of the liyu balitena and spices shop.

8. Financial Plan
The primary element to our financial plan is mantling and improving the factors that create, and
stabilize and increase our cash flow. In addition, helps to treat our variable costs& fixed costs.
The financial plan depends on the assumptions of a strong economy without major recession.

8.1. Start-up Funding

This business plan is prepared on financial amount of birr 82,500 in order to obtain birr
97850.75 of retained earnings in the first year. The supplemental financing is required to begin
work on site preparation and modifications, equipment purchases, and to cover expenses in the
first year of operations.

The following sections lay out the details of our financial plan for the next four years.

8.2 Financial documentation

8.2.1 Profit and Loss Statement

The most important assumption in the Projected Profit and Loss statements is the gross margin.
We show an adjustment increase in Year 3 as we exit our start-up phase of the business and
move into our expected annual sales forecast. This transition shows the liyu balitena and
spices shop managing through its start-up period, and gaining efficiency and customer loyalty. In

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summary, the business will develop its customer base and reputation and the growth will pick up
more rapidly towards the second and third years of business.

8.2.1. Income statement of Tokuma balitena and spices business plan for year 1
Sale of product..............................................................................................369600

Cost of goods sold ..........................................................................................245532

Gross profit ....................................................................................................124068

Operating expense ..........................................................................................26837.64

Operating income before tax and interest ......................................................95230.36

Interest expense ..............................................................................................1236.47

Income before tax ..........................................................................................93993.89

Tax payment...................................................................................................24813.6

Income after tax .............................................................................................69180.29

Dividends .......................................................................................................12000

Retained earnings ...........................................................................................97,850

8.2.2. First year Balance sheet statement of the business

The following the beginning balance sheet of Tokbalitena Statement of balance sheet
For beginning year 2013

Asset Current asset

Cash....................................................................................................40150

Account receivable.............................................................................1313

Total current ass ................................................................................40150

Fixed asset
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 Housing,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,.35000

Equipment .........................................................................................7350

Total fixed asset ................................................................................42350

Total asset ........................................................................................82500

Liability and owner equity

Liability

Current liability .............................................................................75000

Note payable ..................................................................................0

Total liability...................................................................................75000

Owner equity....................................................................................7500

Total liability and owner equity.....................................................................82500

8.2.3. First year cash flow statement of Tokuma balitena and spices business plan for year 1.
Cash inflow from operating activities

Net income ............................................................................................97850

Depreciation expense ...........................................................................4235

Account payable...................................................................................

Net cash flow from operating activities ...................................106100

The following table shows the income statement at the end of the 1st and 3rd year

Asset 1st year 2nd year 3rd year

Sale of product 369,600 406,560 447,207

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Cost of goods sold 42350 44250 46255

Gross profit 124,068 136,474.8 150,122.28

Operating expense 26,837.64 29521.404 32473.544

Operating income before tax 95230.36 96182.396 105800.64

expense

Interest expense 2895.8 2895.8 2895.8

Income before tax 93993.89 103,393.279 113739.6

Tax payment 24813.6 27294.96 30024.456

Income after tax 69180.29 76098.319 83708.15

Dividend earning 17123 20125 25506

Retained earning 97850 115000 145750

The following table shows that the balance sheet statement at the end of 1st and 3rd year

Asset 1st year 2nd year 3rd year

Cash 40,150 42,570 44,250

Account receivable 0 0 0

Housing 35,000 38,000 40,200

Equipment 7350 8500 9370

Total asset 82,500 89070 93820

Current Liability 75,000 77,500 80,050

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Account payable 0 0 0

Note payable 0 0 0

Total liability 75,000 77,500 80,050

Owner equity 7500 14838.75 23463.75

Total liability and owners’ 82,500 92338.75 103513.75

equity

The following table shows that the cash flow statement at the end of 1st and 3rd year

Asset 1st year 2nd year 3rd year

Net income 97850 115000 145750

Depreciation 0 0 0

Account payable 144513.6 144513.6 11413.6

Net cash flow from 82,500 92338.75 103513.75

operating activities

Sale of equipment 0 0 0

Purchas of equipment 7350 7350 7350

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Net cash flow from 69677.93 76645.723 84310.29
investing activities

Payment of dividends 17123 20125 25506

Note payable 0 0 0

Net cash flow from 17123 20125 25506

financing

Net change in cash 57677.93 63445.723 69790.2953

9. Break even analysis

The break-even analysis show what we need to salary our service for meet cost.

Benefit obtained from the project years

No. Project Cost Income Benefit Discount Net benefit

year factor 5%

1 1st year 245532 57180.29 188351.71 0.23 433220.89

2 2nd year 270055.2 62898.319 207156.88 0.233 48267.55

3 3rd year 297093 69188.159 227904.841 0.234 53075.35

Su 189266.77 534563.79
m

N.P.V={N.B-initial cost) =534563.79-245532=(+)289031.79 in each year

hence the business is profitable

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