HONEY CENTER

BEEKEEPING FARM PROJECT PROPOSAL FOR DONOR FUNDING

Prepared by:

Mr Raymond Amani Kyara.

Sept, 2016.

Dar es Salaam.
1.0. Executive summary
Business description
Honey center is in the honey business industry, the honey center has developed a
unique business model which enables its customers to get different products from
the same honey center. The products differentiation of the products avoids the
disturbance of customers moving to different place to look for bee products.
Product
Honey center will provide products with high quality based on customers’’ needs
and uses. The products includes;-
 Honey
 Nectar
 Bee wax
 Bee pollen
Market analysis
The market for Honey center is largely segmented. The business has targeted the
local market to be 60% of its customers; this is mainly due to changing behavior
where due to health concerns people has change their attitude on artificial medical
dependency to natural medicine . 40% of the customer base will be based on
export.
Competitors
Currently the honey industry has not yet developed as competitive one, but there
are multiple NGO’s who are directly supporting small beekeepers in exchange of
buying their products. But since we are determined to provide our customers with
high quality products we are confidently to compete with any other competitor and
gain a large market share enough to keep our business to grow.
Objectives
i. To provide quality products to customers so as to create a customer
base services
ii. To become one of the top honey suppliers
iii. To establish other honey business in different regions
iv. To establish recognized brand through honey center products’
v. Attaining high gross margin in five years to come
 Mission

Honey centre aims to be a cornerstone in the community creating a

neighborhood atmosphere where customers feel comfortable and become
instant regulars. We are sensitive to the often population of people with special
need and cater to their needs. We seek fair and responsible profit, enough to
keep the honey center financially healthy for the long term and to fairly
compensate owners and investors for their money and risk.

2.0. Business Background

2.1. The owner’s
The idea has been developed by Raymond Kyara and will be the key project
manager.
Our plan is to intensify the honey industry products by providing variety of
product of bee according to the demand and uses which will serve and satisfy our
customer’s needs in the rapid growing world and attracting more customers. This
will help to fasten the returns to the investors and more profit that will enable us to
expand our investments.
In order to meet all this we are seeking the financing of Tsh

2.2. Legality

I /We owners are Tanzanians by origin and we do not need trading permission.
The business has all necessary documents to start operating.
2.3. Purpose of the investment
The purpose of investment is to create new brand of products through obtaining
working capital for purchases and expansion of extra products and services that
goes hand in hand with the honey business.
2.4. Business summary
Honey center will be located in Dar es Salaam. This place is very popular
destination with high population and easy accessibility; it is also a prime location
for the business person, customers surrounding businesses. The business will
provide honey products.
3.0. Economic aspects

3.1. The honey industry in Tanzania

Honey industry is one of rapidly growing industries here in Tanzania in terms of
awareness and increasing investment in the industry despite very low contribution
in the economy of the country. There are numbers of investment in the honey
industry, and there are regions and districts which have been into production and
beekeeping activities like Tabora, Moshi, Pwani, which are suitable for beekeeping
activities though the quality and content of honey vary with location where the
keeping activities belong. Different types of vegetation contribute to the quality
and content of honey.
Honey center will compete in the Honey and beekeeping industry with other honey
producers and beekeepers. For the share of the customers honey center is most
concerned with competitors by differentiate our services and products with quality
and affordable prices.
The per capital spending habit mostly range from Tshs. 5000 to 150,000 for
customers

4.0. Technical aspects

4.1. Location and Description of the investment area

The honey centre site will be located at Maragoro, Mkuranga which is about 35km
from Dar es Salaam. The site location is permanently accessible by road throughout
the year. The honey centre will be capable of serving the demand and shorten the
deficits of Bee products.

4.2. Honey centre development

The area to be used to set-up the business is not yet developed, however, soon after
acquiring financing the set-up will start immediately which includes building
shades, acquisition of implements used in production of honey products. So far the
honey centre has invested 2,571,600 in developing 75 beehives which will be used
for starting the business.
 5.0. Financial aspects

5.1. Investment Costs

The proposed investment cost is Tshs 12,000,000/= out of which Tshs

2,572,000/= will be owner’s equity and the remaining Tshs 10,000,000/= will
be through financing.

5.2. Operating cost

This will include cost of transport cost of finishing the behives, cost of
installing the behives, costs of maintaining the site. The cost will amount to
Tshs 7,845,000/= and operational cost Tshs 2,155,000/=

5.3. Working Capital

A total of Tshs10,000,000/= is required during the first year of investment so

as to support the honey centre.

5.4. Break-even analysis

The business is expected to break even in the first year of sales, in the first year
of sales the business is expected to receive the profit of Tshs 45,000,000/=

Table 1; break-even analysis

Description Year 1 Year 2 Year 3

Sales 60,000,000 60,000,000 60,000,000
Variable cost 7,845,000 6,450,000 5,500,000
Contribution margin 52,155,000 53,550,000 54,500,000

Fixed asset 60,000,000 55,000,000 50,000,000

Break even sales 112,550,000 108,550,000 104,500,000

6.0. Management, human resource and welfare

6.1. Management

Honey centre will be made up of a powerful management team which will be

led by Mr. Raymond Kyara.
 6.2. Technical advice

The entire management will be relying on technical advice such as consultancy

from Bee association consultancy services. Also consultancy relating to
beekeeping and honey production.

7.0. Market Analysis

7.1. Market

Our target market includes mainly local market/customers and export/foreign

market. Also we provide services to people with health problems.

This is an opportunity to honey centre since most of the honey businesses and
beekeepers do not cater to these needy customers.

7.2. Market segmentation

Our target market includes two groups;

(i) Local customers

We have target the local customers due to behavioural change of the
people, behavioural change includes habits like the believe in artificial
medicines, and home uses instead of being used only as natural
medicine also can be used as food supplement.
(ii) Foreign customers
Also we have targeted foreigners as the other segment due to the reason
that they import honey for home consumption and also industrial where
the extract nutrients found in honey.

The table below shows the growth trend of the customers respectively;

Table 2; customer’s growth trend

Potential customers Growth % Year 1 Year 2 Year 3

Local customers 15% 50000 57500 66120
Foreign customers 15% 30000 34500 39675
Total 30% 80000 92000 105795
7.3. Target market

Our main focus is on local customers since they are the most prevalent and
steady of customers. We expect that foreign/export will make portion of our
customer base.

We have not listed other customers as target group since they are customers
who do not fit into our groups due to varied segments but we expect to serve
them accordingly.

8.0. Marketing Strategies

8.1. Product

Honey centre will offer consultancy service, and will offer different products
according to customers’ needs.

8.2. Marketing strategy

The marketing strategy focuses on serving customers with quality products/

services. We intend to become part of the community by providing the best
services with hospitality and best customer care. Will achieve the goals by
doing the following;

 Offer quality products at fair prices

 Special care to the special customers
 Friendly neighbourhood-feel atmosphere
8.3. Sales strategy
Sales strategy focuses on building customer base by providing good customer
experience. In additional to quality products that we aim to supply.

8.4. Pricing policy

Our business will use different pricing policies such as market skimming
pricing policy, where we will use high prices since it is a new business, and
product/service lining pricing policy where a limited number of prices are set
for selected group or line of services. We will also use promotion pricing
policies during special events such as exhibitions, workshops and other
seminars.
8.5. Advertising and promotion

We expect to advertise our business through different media like, TV, internet,
sales journal, yellow pages sales promotion and through network building etc.
the strategies we have chosen to advertise our services will be more effective
in reaching our customers since we expect foreign customers who will get
information through internet, online advertisements, while local customers
through local TV, radio stations, flyers and posters found in the city

8.5.1. Marketing vehicle

In order to generate awareness to our customers from different angles on

different products/services we offer, our main marketing vehicle will be:

 Brochures, flyers, leaflets

 Newspaper, magazine, special publication, yellow pages
 TVs, radio, internet
 Charity events

9.0. Environmental aspect

Through this business, there are no/very low negative impacts that are likely to be
caused are: since the business itself it is environmental friendly and promotes
sustainable development of the environment. Towards these negative environment
impacts the strict measures are going to be taken so as to control these impacts to the
minimum in order to secure environmental protection.

The honey centre will carry out proper environmental practices, and promote the
environmental protection programme throughout beekeepers societies which will be
affiliated with.

Also the business will be concerned about providing environmental awareness

programmes to the surrounding communities so as to awaken the society/neighbour on
environmental conservation issues through conducting seminars and full participation
of the whole management in the environmental activities to the surrounding
environment.
9.0. Risk, recommendations and conclusion

9.1. Risk

The risks that are likely to be involved in this business are as follows,
economic wise the problem of inflation, and other risks like theft.

9.2. Conclusion

The financial and technical analysis shows that it is a viable undertaking to

intensify honey business. It is therefore recommended that a financing of Tshs
10,000,000/= be extended to the promoter enabling intensification of the honey
business.

9.3. Vision

There is big potential business growth due to increase in population in the

expansion of local market especially in the urban centres. The demand of
quality products and products awareness in areas with relatively high incomes
such as Dar-es-Salaam, Arusha, Mbeya and Mwanza is increasing. Also there
is a potential growing market off these product home market and abroad.