Titles page

1. Introductory page…………………………………………………………2
1.1. Background…………………………………………………….2
2. Executive summary……………………………………………………….2
3. Environmental and market Analysis…………………………………….3
3.1 Market Demands…………………………………………….....3
3.2 Legal Concerns…………………………………………………4
3.3 Analysis of Competitors………………………………………..4
3.4 Market Segmentation………………………………………….5
4 Description of the venture………………………………………………..5
4.1 Vision……………………………………………………………..5
4.2 products/Service………………………………………………....5
4.3 equipment and personnel …………………………....................6
4 .4 size of the business………………………………………………………............7
4.5 back ground of the entrepreneur…………………………………………………….7
5. production/Operational plan………………………………………………….8
5.1 PREPARATION OF JUICES………………………………………………………..8
5.2 Physical building & Location of the venture………………………………8
5.3 Furniture and equipments……………………………………………9
5.4 Raw materials and utilities…………………………………………....9
5.4.1 Availability of raw materials…………………………………………..9
5.4.2Annual requirement and cost of raw materials and utilities………….10
6. Marketing plan………………………………………………………………10
6.1 Promotion plan......................................................................................11
6.2 Pricing strategies…………………………………………………………11
6.3 Goals/objectives......................................................................................12
7. Financial plan…………………………………………………………………12

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 1. Introductory page
Name of the company: Abraham juice bar
Address: Belay Zeleke sub city, Bahir Dar Ethiopia
Legal form of the business: sole proprietorship
Tell-0937428372
-0926715859
E-mail: abrsh gere @ gmail.com
Type of business: a bar which serves customers through delivering drinks
Made from freshly squeezed fruit
Amount of finance; the business needs birr 600,000, and the source of finance
will be owner contribution and bank loan.
Summary: This business plan is aimed to increase the availability of juice drinks for customers
especially for Bahir Dar university students at good price and with favorable quality and to
satisfy the needs of customers.
1.1 Background
Now a day juice has become one of the essential drinks being consumed by people of urban
areas. Due to its multipurpose uses the number of customers who consume these kinds of drinks
has been growing fast. Especially Juice is favored by youths for its health and beauty related
purposes though it is also consumed by all part of the society. In addition economically it is cost
effective for consumers when we compare it to other kinds of related drinks.

2. Executive summary
Abraham juice bar will be a one of the well known juice houses located in the newly constructed
market center building in BahirDar city, Belay zeleke subcity around BahirDar university peda
campus.

This business plan profile deals with establishment of juice bar in Bahirdar city. The bar is well
appointed with overstuffed leather chairs and glass tables which will have a very attractive

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appearance. WIFI service is planned to be available for customers. The main findings of the
study are presented as follows.

Demand projection shows that the local demand for juice is substantial and is increasing with
time. Accordingly, the planned bar is set to produce 27375 liters yearly. In addition to cash sales
the bar is expected to deliver a service on credit for special customers with their signature on the
credit customers’ format if they fulfill the necessary requirements. Student customers are
especially expected to be users of this credit service.

The total investment of the business which is supposed to be 600,000 is expected to create work
opportunity for 10 permanent employees and other temporary or daily workers which will be
added as the business and demand for products increase.

In the first year of its operation the business is expected to generate a net income of birr 107514.
Based on the market demand analysis it conducted, the demand for juices is expected to grow by
40%. The bar measures its financial success in terms of increased market share and in earnings.

The keys to success will be the ability to offer its products sustainably, producing many kinds of
products, serving the customer both in a modern and cultural way, and using its small size to
obtain higher returns. Because of its small size, the bar can enjoy larger margins in the form of
lower over head. The bar planned to follow cost plus pricing strategy which ensures coverage of
costs. Using its different promotion techniques which are cost effective it planned to attract many
customers.

3 Environmental and market Analysis

3.1 market demands
The future demand for juice is expected to increase substantially given the present demand for
local market. Accordingly, it is expected that an annual increase of 40 percent in demand due to
increase in number of residents, per capita income of the society as well as increase in tastes and
preferences of the people. Therefore, a three years projected demand for juice is projected as
shown in table 1 below.

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Table 1: market demand for juice (in liters)

Year Industrial demand

2008/09 25375
2009/10 35525
2010/11 49735

According to table 1 demand for juice substantially increases in the coming years. In 2011 the
level of demand is expected to reach about 49735 liters. As a result, it can be briefly assumed
that the projected demand stated in the above table adequately reflects the future trend of demand
for juice drinks.

3.2 legal Concern

These kinds of businesses:
 Create forward and back ward linkages,
 Generate sufficient amount of tax,
 Not capital intensive,
 Not high-tech,
 Create a large scale employment opportunity, and
 Are environmental friendly.
Because of these reasons the government is eager to support and give trade licenses for who want
to participate in these businesses. Small and micro enterprises have a great priority by the
government since they are the springboards for the development of large businesses.

3.3 Analysis of Competitors

Abraham juice bar which will serve the society through delivering fresh juice drinks for the
society will enter direct competition with a number of existing bars which are providing the same
services. There are a number of juice bars which are located in different areas of Bahirdar city.
However when we observe the number of competitors in Belay zeleke sub city, they are very few
due to the uneven distribution of bars. As a result of this, the analysis of competitors tells us that
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the competition that Abraham juice bar will face is weak and it can easily penetrate the market
and attract huge number of customers. The only two competitors that are operating in the area
that we planned are

 Addis juice house and

 Royal grocery and juice bar, but all of those bars have weaknesses that we will see
below which will be an opportunity for the new bar.

Weaknesses and strengths of existing competitors - even though the existing competitors are
few in number; they have their own strengths which will challenge the bar and weaknesses
which will be opportunities for the bar. The most known weaknesses of the existing competitors
are: they do not produce many kinds of juices, the way they serve their customers is only in a
modern way and there are fluctuations in the delivery of their products due to many reasons. The
only their strength that will challenge the new bar is that they have many customers which they
serve. The new bar planned to solve the weaknesses of existing bars by producing many kinds of
products, serving in the way customers prefer, and delivering juices in a sustainable manner and
attract many customers in a short period time.

3.4 Market segmentation

All part of the society consumes juice drinks which are made from freshly squeezed fruits. Based
on the observation that we have conducted, people who are at different range of ages consume
different kinds of juice drinks. For example people who are above the age of 30 need juices
which are prepared from one kind of fruit such as only Mango or Avocado and they prefer to be
served on the cultural way. However the youngest generation who are below the age of 30 need
juices which are prepared from many kinds of fruits like mango and avocado mixed and they
want to be served in a modern way. As a result it is expected that we will segment the target
customer based on age.

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4. Description of the venture
4.1 vision
Abraham juice bar aimed to be a well known quality juice producer in Bahirdar city.

4.2 products/service
Abraham juice bar will provide a quality service in the business of bar. The bar will provide
many numbers of products which the society needs to be produced. We can generalize the
products in the following items of juices.

 Mango juice  Lime juice

 Avocado juice  Pineapple juice

 Orange juice  Papaya juice

 apricot juice  Prune juice

 apple juice  Pear juice

 Grape fruit juice  Lemonade

 Guava juice  Banana juice

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 4.3 Equipments and personnel

The business will start its operations having 10 employees which will increase through time with
the growth of the venture and number of customers to be served. Among those 10 employees 5
will be waiters who serve the customer directly, 3 will be who operate the juicer and the remaining
will be casher and manager of the business. During seasonal increase in market demand for juices,
additional temporary workers will be hired.

At the start of the business many equipments or furniture and machineries are needed. 2 computers
for the manager and casher, cash register machine, 6 chairs and 2 tables, a shelf and a cupboard
are needed for the administrative wing of the venture. The annual expense of employees can be
summarized as follows:

No. of Jobs/Duties/Responsibilities Monthly salary Total monthly Annual

Employees payment payment
3 Juicer operator 600br 1800 21600
1 manager 800br 800 9600
5 waiters 400br 2000 24000
1 casher 500br 500 6000
Total expenses 61200
As shown in the table the above annual salary expense for the first year of operations is supposed
to be br.61200. The total cost of machineries and equipments to be purchased at the start of the
business can be shown in the following table

Equipments No. Of Equipments Cost Per Unit Total

computer 2 5000 10000

chair 6 200 1200

table 2 300 600

shelf 1 1000 1000

 cupboard 1 3000 3000

total 15800

For the bar to start its operations it is supposed to spend br15800 to acquire furniture and
equipment of the office or administrative part of the bar.

4.4 size of the business: Abraham juice bar will be formed as one of the small and micro
businesses found in Bahirdar city. The business will start with a capital of birr 100,000.Though it
has an aim to be large business which will employee hundreds of workers; it will start its
operation with 10 employees.

4.5 back ground of the entrepreneur

The entrepreneur of this venture is a person who graduated in accounting and finance
department from Bahirdar University and in management from University of Gondar. He has
worked as a financial manager of delicious juice house for two years and as a General Manager
of ABC fruit trading plc. As a result he knows the demand of customers which haven’t satisfied
by the existing ventures.

5. production/Operational plan

5.1 PREPARATION OF JUICES (the product): preparation of juices passes through some easy
steps or processes which can be generalized as follows:

1. Wash the fruits: for any fruit to be prepared as juice it should be very clean and free of any
unwanted materials so it should be washed well.

2. Cut/chop the fruits in to appropriate pieces: the fruits will be squeezed easily by the juicer if
they are relatively small.

3. Add the fruits and vegetables to the juicer and process those fruits until you have the quantity
you desire.
4. Filter the processed juices

5. Add spices, flavorings, and specially sugars sparingly and add to their appropriate glass
containers.

6. Deliver it to the appropriate customer.

5.2 Physical building & Location of the venture:

The bar will be located in Belay zeleke sub city, Bahirdar. The entrepreneur will start the venture
in a rental house with 3 rooms which are built on the main road. Many share companies are
building lots of buildings which suit for a bar service. Therefore it is planned to rent one of those
strategic buildings and start the operation.

5.3 Furniture and equipments:

Many numbers of furniture and equipments are needed to start and operate the venture. At the start of the
business 30 chairs with their related tables, 60 glasses with related spoons, 3 electric juicer machines, 20
shades for tables located outside, 3 filtering equipments, and some other materials are needed.

We can summarize the need for furniture and equipments and the related cost as follows:

No. Type of equipment Requirement in Cost per unit Total cost

number

1 chair 30 Br.350 10500

2 table 30 Br.400 12000

3 Electric Juicer machine 3 Br.5500 16500

4 spoon 40 Br.3 120

5 glass 60 Br.35 2100

6 Other furniture 10 Br.500(average) 5000

7 Total of items 46220

 5.4 Raw materials and utilities

5.4.1 Availability of raw materials

The main raw materials required in the production of juice are fruits like orange, mango,
avocado, papaya, banana etc, sugar, flavor and spices. These raw materials especially fruits are
available in the local market which the farmers who reside around Bahirdar city like Zege,
Andassa, Meshenti, and Chis abay bring it. The raw material requirement per day is expected to
be 80kg. per day or 29200kg.per year. Since the amount of raw material required per year is too
small when we compare it to the local production of fruits it is expected to be available easily.

5.4.2Annual requirement and cost of raw materials and utilities

For the first year of its operation Abraham juice bar planned to produce 75 liters per day. For the
bar to produce 75 liters per day it requires 150k.g. of fruits on average. The annual requirement
for fruits on average becomes 13687.5k.g. We can summarize the annual requirement and cost
for raw materials and utilities for the first year of operation as follows:

Raw material & Annual Cost per unit Total cost

input requirement

fruits 13687.5k.g 15br 205312.5br

electricity 5000kw 0.50br 2500br

water 120 cubic meter 9br 1080br

sugar 365kg 20br 7300br

total 216192.5br

As we see in the table above the estimated total cost of raw materials or supplies and utilities is
supposed to be br.216192.
 6. Marketing plan

Local demand- now a day the attitude of customers for fruit products has been increasing. The
increasing demand for fruit products and absence of strong bars which deliver such products is
supposed to be a great opportunity for the new bar. In addition to cash sales the bar is expected
to deliver its service on credit for special customers like students and trainees.

6.1Production plan: the plan is scheduled assuming that the business will work 365 days of the
year with its full capacity. To meet the 40% increase in demand the company plans an increase in
capacity of production by 40% which will increase through time with the financial strength of
the bar.

6.2 Promotion plan:

Promotion has a great impact on the volume of sales for a business. Considering its cost and
accessibility Abraham juice bar planned to advert its business using banners which will be posted
on the main street, on the body of vehicles and using brochures. In addition to the above
mechanisms, the bar planned to advertise its products and overall services using the social media
especially face book. It is planned to advert on face book via a page which will be named
‘‘Abraham juice bar’’. The bar supposed to attract many customers using these and other
promotion campaigns.

Cost of advertisements: though the advertisement that I have selected is cost effective when we
compare it to other promotion techniques, it is supposed to incur br5000 for the first year of its
operations and it is expected to decline as the bar becomes known through time.

6.3 Pricing strategies

Pricing is one of the most important elements of the marketing mix, as it is the only element of the
marketing mix, which generates a turnover for the business. Standing from its objective the bar
planned to follow a cost plus pricing approach. It is a pricing approach which determines the price
of a product by adding the amount of returns the business needs on the production cost of the
product. It ensures that the price covers production costs. Due to this reason it is planned to follow
cost plus pricing approach.
Strengths: Abraham juice bar and fruit products will possess many advantages and opportunities
over the existing bars. One of the strengths of the bar will be its way of serving the customer and
continuous delivery of its products. Producing many kinds of juices or fruit products is also the
other strength of the bar. the bar will deliver its products with minimum marginal profit that taken
to account the purchasing power of customers and generated revenue.

Weaknesses: the main weakness of the bar is it purchases its raw materials from other suppliers,
but it was better to produce the raw materials by it. By producing by itself it can minimize its cost
of input and solve the problem of let arrival.

6.4 Goals/objectives

Abraham juice bar has its own long term and short term objectives to be accomplished in a short
or long periods of time.

Short term goals-the bar’s short term plan is to deliver quality juice at a possible price for residents
of Bahirdar city and generate substantial profit.

Long term goals-the bar planned to expand the scope of the business; strengthen its production
capacity and producing packed fruit products at export quality and to become one of the well
known producers of fruit products in the horn of Africa.

7.4 Financial plan

The financial analysis plans of Abraham juice bar is based on the preceding sections data and the
following information.

At the start of the business the bar will have the following assets and liabilities.

assets amount

Furniture and office 15800

equipment
venture 46220

cash 362,467
 Raw material inventory 2000

Account receivable 200000

liabilities Bank loan 300000

The following data is also available:

Budgeted sales for three years is as follows
Year 1 27375 liters
Year 2 38325 liters
Year 3 53655 liters and
The selling price per unit is expected to be birr 16. Based on the above information the bar has
forecasted the following sales.
Sales budget
Year1 Year2 Year3
Selling price per unit Br16 Br16 Br16
Average cost per unit Br14 Br16 Br16
Mark up per unit Br2 Br2 Br2
Budgeted sales in units 27375 liters 38325 liters 53655 liters
sales 438000 613200 858480

In addition Abraham juice bar expects to incur the following costs in first year of its operations.
Utilities expense…………………………….3580
Cost of goods sold……………………….....205312.5
Selling and administrative expenses……5000
Interest expense…………………………....18000
Depreciation expense equipment………..2000
Salary expense………………………………61200
Rent expense………………………………..20000
In addition, since the bar produces and delivers fresh juice products, no sales will be outstanding
(i.e. no account receivable), all sales are assumed to be on cash basis and collected as they are
earned.

Based on the above forecasted information the budgeted income statement is presented as
follows.

Abraham juice bar

Budgeted income statement
For the first three quarters ended august 30
Sales………………………………………………………………………438000
Cost of goods sold……………………………………………………. (205312.5)
Gross profit………………………………………………………………..............232687.5
Selling and administrative expense………………………………… ….(5000)
Depreciation expense………………………………………………….. (2000)
Rent expenses…………………………………………………………… (20000)
Salary expense………………………………………………………….. (61200)
Operating income………………………………………………………..............144487.5
Interest expense……………………………………………………..... (18000)
Income before tax……………………………………………………………………...126487.5
Tax expense…………………………………………………………………………… (18973.5)
Net income……………………………………………………………………………..107514
Abraham juice bar
Budgeted balance sheet
August 30
Current assets
Cash…………………………………………………….362467
Account receivable……………………………………..200000
Raw materials inventory……………………………2000
Total current assets…………………………………………564467
Property and equipment
Equipment………………………………………………………..62020
Total assets………………………………………………………………..626487
Liability
Bank loan payable……………………………………………300000
Beginning capital……………………………………………..200000
Abraham’s investment……………………………………………18973
Capital……………………………………………………………107514
Total liability and owners equity……………………………………..626487
On the last date of its first year of operation the bar is supposed to report the amount shown
above on its balance sheet. As we have seen before the bar is also supposed to generate a net
income of birr 107514.