EXECUTIVE SUMMARY

Introduction

Basiatu Delicious Bakery is a start-up bakery retail establishment that is located in the
western part of Freetown at Lumley. The Basiatu Delicious Bakery will be an innovative
retail bakery in Lumley, Aberdeen with the mission to service Wilberforce and the entire
Western Area with high quality baked goods in a modern and creative way. We will sell
freshly baked breads and desserts made from the highest grade of ingredients, filling Western
area‘s need for a classic bakery.

Basiatu Delicious Bakery expects to catch the interest of a regular loyal customer base with
its broad variety of bread, pastry and sweet products. The company plans to build a strong
market position in the town, due to the partners' industry experience and mild competitive
climate in the area.

Basiatu Delicious Bakery values having great customer service, keeping up-to-date with
technology to remain as competitive and customer friendly as possible, and contributing to
the local community through non-profit organizations, through donating some of our two
day-old baked goods among other things. In each of these three categories, our bakery plans
to improve upon continuously.

Basiatu Delicious Bakery aims to offer its products at a competitive price to meet the demand
of the middle-to higher-income local market area residents and major offices and government
buildings.

Our commitment to excellence in the craft and artistry of baking will enable us to deliver
high quality products that look superb, delight the customer and make celebrations a moment
to cherish. Our product wills possess that certain something that others do not have.

In order to attract a cross section of population, a combination of 2 outlets, one in a low-

income area and another in a posh area, is used in this study. Project Capacity cannot be
based on machinery capacity, as the same oven will be having different capacities for
different products. This business segment is labour intensive. The proposed bakery outlet will
be working from 6.00 a.m. morning to 10.00 midnights. Number of working days has been
taken as 355 with average 2 shifts per day.
The Company

Basiatu Delicious Bakery is incorporated in the Republic of Sierra Leone. It is equally owned
and managed by its owner Ms Basiatu Kamara.

Basiatu Kamara has extensive experience in catering, sales, marketing, and management, and
with a first degree qualification in Business Administration (BSc. Business Administration,
IPAM).

The company intends to hire two full-time pastry bakers and one sales executive at the start
of business (during the first year of business) to handle customer service and day to day
operations.

Products and Services

Basiatu Delicious Bakery will provide freshly prepared bakery and pastry products at all
times during business operations. Six to eight moderate batches of bakery and pastry products
will be prepared during the day to assure fresh baked goods are always available. The main
types of baked products that will be produced by Basiatu Delicious Bakery include:

• Biscuits/cookies

• Breads

• Cakes

• Doughnuts

• Pastries

Basiatu Delicious Bakery will bake hand-made, naturally fermented bread, and distribute it
throughout Freetown. Our bread will be sold to high-end markets, restaurants, offices,
schools, and directly to the consumer. Our product will be packaged, labeled and branded
consistent with the regulatory requirements for food. Basiatu Delicious Bakery will be
engaged in its community, and will be dedicated to educating its consumers and bakers about
every aspect of bread. Future opportunities include expansion into other towns in Sierra
Leone.
The Market

The retail bakery industry in Sierra Leone has recently experienced rapid growth.

Basiatu Delicious Bakery wants to establish a large regular customer base, and will therefore
concentrate its business and marketing on local residents, which will be the dominant target
market. This will establish a healthy, consistent revenue base to ensure stability of the
business. High visibility and competitive products and service are critical to capture this
segment of the market.

We believe that we are coming into the retail bakery industry at an optimal time, despite the
not-so-perfect economy of today. There are no significant bakery shops near the far end of
Western area, giving us a big break into the industry. The only competition Basiatu Delicious
Bakery predicts to have is the bakery sections at the large supermarkets – such as Delicious
Hype Market that are now baking their own products and squeezing smaller and emerging
bakeries out of business. Such supermarkets with in-house bakery facilities will be our
greatest threat. Fortunately, the economy has not hurt bakeries – as indicated by recent
positive trends in the growth of the retail and wholesale sector‘s contribution to the Sierra
Leone GDP. We will remain successful in our industry by keeping alert to customer trends
such as health, convenience, and pleasure.

Our target market will be the higher-end of middle class workers and above, however effort
will be made to give lower incomes opportunities to buy our products, such as through our
day-old bread section. Our prices will tend to be higher than those of our local competitors,
mainly for the reason that we strive for higher quality in our products. We would like to see
daily somewhere from 800 to 1,000 customers varying in age groups but focused on our
target market.

The selection and number of outlets would totally depend upon the mix of target population.
For example if we were to start this venture in bigger towns, one might select more
sophisticated outlets with the emphasis on best decor and interior design. But in case of
smaller towns, one would prefer to go for a mix, which has more traditional products. Any
big town with a total population of over 20,000 inhabitants is the ideal location for the
project. Bakery and confectionery business is emerging as one of the good business ventures
in Sierra Leone as it provides varieties of bakery and pastry items. This phenomenon grew
rapidly; and today hundreds of bakeries exist throughout Sierra Leone. Over the decades, the
bakeries have evolved even further.

Management Strategies and Marketing Plan

Basiatu Delicious Bakery will maintain a focus on Quality product with bottom-line growth
through cost reduction and optimal performance. We also focus on technology and
innovation to make sure employees will have extensive training to perform proper technique
and equipment operation. Maintain 100-percent honesty between employees, customer and
management. As a team input will be collected, analyzed and put into practice. Team
meetings weekly will motivate and forecast growth and annihilate potential difficulties.

Initial competitive advantages will include:

• A unique recipe that will be highly rated in terms of consumer taste tests;

• Hiring and retaining a professional baker; and

• Having an experienced management team with a successful track record in branding

and marketing.

Our prime marketing strategy will be to target the Basiatu Delicious Bakery bread and pastry
products to large formal retail supermarkets/chain stores and our own distribution network for
smaller outlets and kiosks using a 50:50 sales ratio. This kind of balance in product
distribution/sales helps in building our product brand identity quickly through the formal
retail supermarket chains (though they may take longer to pay) while generating the much-
needed cash sales from smaller retail outlet sales.

Marketing and branding of Basiatu Delicious Bakery and sweet products will play a key role
in the mobilization of targeted number of customers. Major marketing options will include:
newspaper advertisements, cable TV ads, flex banners and handbills among other traditional
marketing channels. We also hope to contact our customers through business cards and
product brochures that provide our menu and product selection, a window display that will be
a direct artistic appeal. Positioning of the product, cost of developing and manufacturing the
product, cost of competitive products and condition of the economy will determine price of
the product.
Financial Considerations

Basiatu Delicious Bakery expects to raise over Le 75 million of its own capital (in form of
savings and existing assets), and to borrow Le 25 million guaranteed by the chosen banks on
a five-year loan. This provides the bulk of the current financing required.

Business Plan Corporate Document

Basiatu Delicious Bakery anticipates sales of about Le 150 in the first year (PY 2), Le 250
million in the second year, and Le 500 million in the fourth year (PY 5) of the plan. Profits
for this time period are expected to be approximately Le 50 million in PY 1, Le 150 million
by PY 2, and Le 350 million by PY 3. The company does not anticipate any cash flow
problems.

We will require Le 75 million for start-up cost, which will be partially placed fully on the
money raise by the owner, and 10% of it to be placed on the bank loan, but we predict that
the debt will be paid after five years. The medium-term loan will be used to 1) buy kitchen
baking machinery &equipment; and 2) provide working capital. In the beginning we will only
need two minimum-wage workers aside from the owner participating in the business plan to
run the bakery but more may be added as finances allow it and demand requires it. The total
project cost is estimated at Le 100 million. While Basiatu Delicious Bakery has the potential
for high growth, the first three years will be spent establishing company financial stability
and increasing market share.

Mission

Basiatu Delicious Bakery aims to offer high quality and good tasting bread and pastry
products at a competitive price to meet the demand of the middle- to higher-income local
market area residents and travellers in the entire Western areas, while increasing the number
of people enjoying the health benefits of a higher grain diet.

Vision

Vision Statement: In the future we enhance our competitiveness through marketing and
technology adaptation in order to sustain our business cutting edge so as to be as customer-
friendly as possible and provide the best products in our field. We also plan to continue to
invest in our community through partnerships with other businesses and non-profit
organizations.
Core Values

Serve... Sustain... Contribute...

Service: We work hard to provide an inviting environment for our customers and serve them
in the best and most efficient way possible.

Sustainability: We wish to use technology to connect with the people of the advancing times,
working with our customers to produce their own inspired creations and update as the
technology around us advances.

Community Contribution: We are committed to contributing to non-profit organizations

active in Western areas through our products and funding, and increasing our involvement in
other opportunities.

Keys to Success

Keys to success for Basiatu Delicious Bakery will include:

Providing the highest quality bread and pastry products with personal customer service.

Competitive pricing

Project Brief/Business Description

Bread is one of the oldest prepared foods, and it is eaten by almost everyone. The proposed
project presents the business planning and operational aspects of setting up a bread &
confectionery business. Major products in this case will be biscuits and cookies, cakes,
doughnuts, pastries, breads and general items. In order to attract a cross section of population,
Basiatu Delicious Bakery will sell its bread and pastry products to the existing formal retail
supermarket chains so as to build and gain brand recognition quickly, while also establishing
its own product distribution network to supply the smaller retail outlets and kiosks using a
50:50 product distribution ratio to generate quick cash flow. In that case, our naturally
fermented, handmade bread is sold to markets, restaurants, and directly to the consumer.

Our team has decided that what Lumley and Aberdeen needs is a hometown‖ bakery
and the exciting experience that can be gained there. We do recognize that there is a slight
risk trying to open a bakery, especially in a location far from the main CBD where bakeries
have tried and not been successful before. The start up with a business such as ours is risky
because it does require certain equipment that other businesses do not. Other obstacles
include the permits and licenses that we would need to get in order to sell food but once we
have passed these beginning challenges, we believe that our business will head in a positive
direction. A luxury and high quality bakery doesn‘t seem to fit in the current economic status,
but with our target market of the middle and low-income classes playing a pretty prominent
role in the largely Lumley area and the need for a more personal bakery in central town, our
business has the ability to not only stay open, but be successful. This leads us to our biggest
priority, providing customers of the Basiatu Delicious Bakery with quality baked products
and an experience to take away from our shop.

Basiatu Delicious Bakery will be making food products but we don‘t want to consider
ourselves a sit and eat restaurant. We predict that this bakery will be a place where people
stop and pick up items that they may want on a whim, or where they have come to pick items
that they have specially designed or ordered. Despite the fact that having a place to sit and eat
is not our top priority we do want to offer some convenience to our customers by making a
seating area available with a few tables and chairs. It‘s our goods we are selling, but our
service that will assist with attracting consumers.

As with many businesses there will be a fairly simple routine of things that happen during the
business week. We will make the bread during the night and early morning in order for our
products to be made fresh and ready to serve customers throughout the day. We hope to open
our doors at 6:00a.m. Monday through Saturday, and run through a business day until we
close shop at 2:00 p.m. Monday through Thursday and 5:00 p.m. on Friday and Saturday.
Throughout the day we expect customers to swing by on their way to work, enjoy a quick bite
during lunch breaks, or place special orders either by phone, or by the in-store design area.
Our employees will be serving our customers by helping them make decisions, assisting in
the case that something is wrong with our technology, or just being present and able to
answer questions or concerns that customers may have. As the business day comes to an end,
all the baked goods that are not sold during the day that are baked fresh on a daily basis will
be moved to an area for things that are a day old to be sold the next day for half price. If the
next day our half-priced items are not sold, we plan on giving them to local non-profit
organizations that would want our products such as the existing charity organizations and
NGOs active in the Lumley and Aberdeen areas. This routine would then be repeated during
the business week.
We want to take pride in the products we make, and ultimately in the business in its entirety.
What will make the Basiatu Delicious Bakery successful is its uniqueness, creativity inspired
focus, and our more personal level of doing business compared to our competition with the
bigger supermarkets.

Project Capacity & Rationale

Project Capacity cannot be based on machinery capacity, as the same oven will be having
different capacities for different products. This business segment is labour intensive. The
proposed bakery outlet will be working from 6.00 AM morning to 10.00 in the evening. The
Basiatu Delicious Bakery bread distribution outlets will determine the factory timing for
production. It is proposed that 2 shifts are necessary for production. The interesting fact is
that these two shifts include only 3 or 4 pure working hours. Main plant & machinery
includes oven in which different items are baked with different temperatures and different
baking timings. Industrial ovens are easily available in market.

Number of working days has been taken as 355 with average 2 shifts per day.

Initial Capacity of the Bakery & Confectionery is calculated on the basis of total expected
sales of items. Maximum sales are expected during the festive season period of March, April
and December. However, in order to calculate average monthly sales, potential revenue is
estimated by using the potential demand estimates. The estimated combination of sales is as
given below:

 50% sales to own distribution outlets

 50% sales to formal retail supermarkets

It is expected that annual increase in sales would be 10%. Although due diligence is carried
out in estimating these numbers, the final outcome will vary depending on the selection of
location, pricing, product mix and the marketing strategies.
Project Investment

Total cost of the project worked out is in the table below:

Table 1-1: Project Costs (Le)

Capital Investment 75,000,000

Working Capital Requirement 25,000,000

Total Investment 100,000,000

Table 1-2: Project Financing (Le)

Debt 25,000,000

Other Funding Sources 75,000,000

Total Project Investment 100,000,000

This Business Plan is developed for a project based on a production plant along with a
number of product distribution outlets and outside sales with a mix of city areas. The
selection and number of distribution outlets would totally depend upon the mix of target
population. For example if we start this venture in the central areas of Freetown, one might
select more sophisticated outlets with the emphasis on best decor and interior design. But in
case of the more peripheral (Eastern) areas, one would prefer to go for a mix, which has more
traditional products. It is also recommended to change the mix of both bakery and general
items according to sale trends of a particular outlet. In this study it is assumed that 30% sales
will be consisting of general items but this combination would be different in different outlets
and according to consumer behaviors.

Project Location

Basiatu Delicious Bakery will set up its storefront bakery at Lumley – which is located at
only about 15 kms from the Central Business District – Freetown. Lumley is conveniently
located on one of the busiest highways in Sierra Leone. The storefront bakery is situated only
200 metres away from the main road and has plenty of parking in addition to being easily
accessible from the main road.

Lumley is a prime location and a growing Western area residential town for most of the
employees of the nearby western district businesses. The bakery will sell different varieties of
Bread and other health specific breads, pastries, cakes to the area and other surrounding
communities and districts six days a week Monday through Saturday. The close proximity of
Basiatu Delicious Bakery to Central Town – which is the largest commercial and industrial
hub of Sierra Leone, makes it an ideal location for a new enterprise or business.

We believe the optimum location of the Basiatu Delicious Bakery at Lumley town along the
Western end of Western Area highway puts it in a prime position where we could easily be
spotted by everyday passer-bys and also conveniently located relatively close to the middle of
Western Area. By placing ourselves in the middle we believe we have a better chance of
competing with the wide range of other baked goods producers that have recently sprang up
in Western and Eastern Areas. Marketers need to determine where the product will be sold
and methods of distribution including transportation and storage.

Opportunity Rationale

The opportunity of setting up the Basiatu Delicious Bakery & confectionery business can be
linked with the eating habits of the people. People in Sierra Leone enjoy the traditional food
very well but recently well-known regional food chains and supermarkets have brought
cultural change to Sierra Leone. Now people are ready to eat junk food, while closely
observing the trends, a bakery & confectionery chain can play an important role in this new
era as it is the only source which provides not only traditional bakery items but also new lines
and varieties of confectionery items.

Key Success Factors/Practical Tips for Success

Some of the Key Success factors that will determine the success of this project include:

 Products range selection and introduction of sitting areas.

 Quality and Innovation in products
  Selection of location
 Pricing strategy
 Understanding of target customers, alternative availability (product differentiation).
Launching time
 Hygienic conditions
 There should be regular and sustained marketing through fliers distribution and Cable
TV/FM Radios
 The store should have an ample space for customer car parking. It is advisable to
maintain a parking space whereby around 15-20 cars can be parked
 The staff hired should be well-mannered and well-trained in dealing with the
customers.
 Customers free gift schemes and surprise gift, valuable customer dinner can be
additional success factors.

Strategic Recommendations

Marketing

Marketing and branding of bakery & confectionery products will play a key role in the
mobilization of targeted number of customers. Major marketing options include, newspaper
and site advertisement, cable TV ads and handbills among other traditional marketing
channels. Before launch of the project, it is recommended that a research on understanding
the dynamics of the targeted market should first be carried out, to design the products as well
as the promotional strategy. The basic principle of marketing is to sell the right product, at the
right price and promote it in the right place to the right people. The job of the marketer is to
control these 4Ps.

However, there are other socio-economic factors, which also affect the production, selling
and consumption of foods. The success of marketing is often determined by the extent to
which various socio-economic factors are considered. Market research is a useful tool for
assessing the attitudes and behavior of potential consumers.
Pricing

The following factors determine the price of the product:

 Positioning of the product

 Cost of developing and manufacturing the product
 Cost of competitive products.
 Condition of the economy

New Products development

 Food manufacturers develop new products to maintain and improve their market
position. New products can include:
 New varieties and flavors - these are called ―line extensions‖ where different
varieties or flavors of the same product are produced.
 Quality improvement of an existing product, either functional or nutritional
 Copying a competitor's product
 Developing a new, innovative product resulting from new ingredients, new packaging

SWOT Analysis

A SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or business venture. Strengths and
weaknesses are internal to the company. Opportunities and threats originate from outside the
company. A SWOT analysis is usually performed early in the project development process,
and helps organizations evaluate the environmental factors and internal situation facing a
project.

Internal Strengths

 Family business with contented workforce

 Low operational costs
 Strategic location
 Home-made recipes
  Reasonable prices
 Own premises and which can easily be expanded to at least double capacity

External Opportunities

 Easy availability of resources (manpower/salesmen)

 Growing population
 Expanding Lumley and Aberdeen areas
 Rising income levels, i.e. increase in purchasing power of consumers
 High bakery items consumption habits of people in Sierra Leone
 Rising consumer goods spending
 Desire for healthier lifestyles
 Niche market in urban areas
 Untapped rural market
 Large target market area
 To produce a wide range of products

Internal Weaknesses

 Inexperience
 Production semi-automated
 Products only sold in one region of the country (Central)
 Promotion tends to be word-of-mouth
 No representatives

External Threats

 Government polices
 Heavy taxes in the form of sales tax and income tax on retail business
 High competition
 Credibility factor in the initial phase, as suppliers do not give credit to newly entrants
  Increasing costs of raw material
 Large national bakeries are expanding their supplies into the area
 Large supermarkets making their own products using in-house bakeries
 Slowdown in rural demand
 Tax and regulatory structure

DESCRIPTION OF COMPANY

Basiatu Delicious Bakery is a bread and pastry bakery managed Ms Basiatu Kamara. Ms
Kamara represent sales/management and finance/administration areas, respectively. She will
provide funding from her own savings, which will cover start-up expenses and provide a
financial cushion for the first months of operation. A five-year bank loan will cover the rest
of the required financing. The company plans to build a strong market position in the
Lumley, Aberdeen area, due to the partners' industry experience and mild competitive climate
in the area.

The bakery will offer a variety of high quality, African, European and American style artisan
breads and pastries, baked fresh in its storefront bakery at Lumley from which it will also
distribute and sell whole loaves of bread packaged in cellophane and branded with the
company logo to top-tier retail stores around Lumley, Aberdeen area. Basiatu Delicious
Bakery will also negotiate supply contracts with some of the leading supermarket chains in
Sierra Leone including Game Stores, Capital Shoppers, Quality Supermarkets, Checkers
Supermarkets, Sub Shops Supermarkets, etc.

All regulatory requirements have been met for both baking operations and labeling. The most
valuable asset of the company is its proprietary, internally developed recipe.

Objectives

The company's immediate goals are to achieve start up within the first six months of project
finance acquisition. It will start with the proprietor, Basiatu Kamara, as baker and manager
with the help of two part time employees. The company should gross over Le 150 million in
its first year. Long term goals include the addition of several wholesale and bread and pastries
retail distribution outlets in various strategic locations around Lumley to the storefront and
wholesale bread sales within one year.

Our main objective is to establish a first class bakery and patisserie with a café in the
storefront at Lumley. We hope to develop the strong presence in the community needed to
support our sales goals. It is our goal to develop our products by rolling them out gradually in
the first year of operation.

Company Ownership& Legal Status

Basiatu Delicious Bakery is owned by Basiatu Kamara.

Basiatu Delicious Bakery is a company incorporated at the Registrar of Companies through

the foresight and vision of Basiatu Kamara. Basiatu Delicious Bakery was incorporated in the
Republic of Sierra Leone on 12th May, 2021.

Though relatively new, the directors realize their Company's vast potential market and
opportunity for growth given implementation of the appropriate strategies, aided by the
necessary finances.

Basiatu Kamara, the proprietor and baker, is the creator of Basiatu Delicious Bakery. Basiatu
has gained extensive experience in catering, sales, marketing and management from the
diverse range of private sector companies that she has worked for in Sierra Leone over the
last four years including NASSIT. Basiatu brings a sense of production realities and technical
savvy to the company. Besides, Basiatu has strong passion and interest in pursuing bread and
pastry baking as a business career. She holds a Bachelor of Business Administration from the
Institute o Public Administration and management IPAM (University of Sierra Leone).

Project Costs and Financing

The total project cost for a full-scale turnkey industrial project establishment of the proposed
bakery & confectionery enterprise is estimated at Le 100 million. Out of this total amount,
UShs 67,182,500will be used to purchase, install and commission bakery plant equipment
and machinery lines from regional and local machinery plant equipment suppliers.
Products and Services

 Baked goods include:

 Cookies& Biscuits
 Peanut Butter, Sugar, Choc Chip, Choc Chunk, Biscuits (various types) and Buns
 Cup Cakes
 Breads
 Morning Rolls
 Doughnuts
 Meat |Chicken|Vegetable Pies
 Wedding Cakes, Anniversary Cakes, Birthday Cakes, Graduation Cakes, Cup Cakes,
Queen Cakes, Chocolate Cakes, Chorley Cakes, Sculptured Cakes, Lemon Cake,
Carrot Cake, Strawberry Short Cake, Pineapple Cake.

Products are made from all natural ingredients, obtained from a distributor who specializes in
natural and organic products. Ingredients are available in ample quantity however prices
fluctuate seasonally. Hedging strategies will be employed to ensure that changes in the cost
of our raw materials will not affect the prices we charge to our customers.

Future Plans

Based on customer requests, the company plans to provide a half-kilo loaf package in the
future, which will appeal to those on a lower budget. Plans also include adding a single
serving roll to the product line for use in sandwiches and snacks.

Future plans also include adding new breads to the line, including sweet bread with raisins
and breakfast bread with nuts.

Basiatu Delicious Bakery also plans to add a fruit juice packaging line and ice-cream making
parlour to its bread and pastry enterprise after the first three years of business when it will
have firmly established its product brand name on the market and built up an extensive
product distribution network in Lumley and other major towns of Sierra Leone.
Overview

Despite growing at a relatively sluggish pace, baked goods still continues to offer growth
opportunities for manufacturers and retailers alike in Sierra Leone. Catering to indulgence
trend in the some of the fastest growing markets in Sierra Leone, pastries stand out as the
biggest contributor to sector growth. Factors fuelling market expansion include convenience,
affordability and health benefits of baked goods products. Demand for healthier fortified
baked products has also driven sales.

Demand for baked and pastry goods is also being driven by changing lifestyles, which leaves
little time to prepare meals. Busy consumers are increasingly quick to buy convenient baked
snack foods such as wraps and sandwiches.

The baked goods industry, encompassing products such as bread, cereals, cakes, biscuits,
pastries and scones, is represents good market potential in Sierra Leone as western lifestyles
and eating habits continue to be adopted.

Key Segments

Bread and rolls represent the leading market segment in the baked goods industry. Companies
continue to focus on product innovation to adapt to evolving consumer needs. Demand for
both healthier options and more indulgent products continues to rise together, with consumers
opting for both healthy products and premium-priced baked goods such as cakes, pastries,
filled sweet biscuits and luxury breakfast cereals.

Market Outlook

Demand for baked goods has been changing to reflect evolving consumer lifestyles and
eating habits. Satisfying both health concerns and indulgence, consumers are opting for
whole grain baked goods free of trans-fats with more butter, high-quality chocolate spread
and creamy icing, according to authoritative industry reports.

Demand for baked products promising functional and health benefits will continue to climb
as consumers opt for products with low-carbohydrate, organic and natural ingredient
products. Gluten-free products are one such range benefiting from rising demand from
gluten-sensitive consumers. Moving forward manufacturers will likely adapt their products to
remove trans-fats, include more natural ingredients, and limiting the amount of additives and
synthetic products used. Other innovations keeping in line with evolving consumer
preferences include changes in packaging, with smaller size packs in particular proving
popular.

• The majority of growth will come from pastries

Pastries are the fastest growing category among baked goods, accounting for almost 80% of
absolute volume growth over 2018-2020. Product innovation and increased penetration are
the main drivers of this increase.

• Health and wellness is key to adding value to bread, whilst indulgence and
affordability spurs growth in cakes and pastries

To boost bread sales volumes, manufacturers are looking into merging taste and health
through adding fibre and vegetable or a mix of protein and fibre. Demand for pastries and
cakes are being driven by indulgence and flavour innovation, with affordability remaining a
key concern, particularly in the emerging world.

• Traditional grocery retailers are still the most important channel but supermarkets and
discounters gain share

Although the majority of people still buy baked goods from independent stores, the numbers
are falling, mainly due to the rise of in-store bakeries offered by supermarkets and
hypermarkets. In-store bakeries are gaining importance both due to their lower prices and the
convenience of one-stop shopping trips.

The Bakery Industry in Sierra Leone

The bakery industry is important in Sierra Leone. Bread is a staple part of the diet for many
people, and, as living standards grow, more and more people are buying cakes. Bakery
products are usually made from imported wheat, and fluctuations in raw material prices can
be a problem. Another challenge is that the products have a very short “shelf-life”. Bread
only keeps well for a day or two, after that it goes stale. If bakers misjudge the market and
make more bread than they can sell, then they waste money. If a small baker has regular
customers it is easier to plan production.

In recent years it has become harder for small bakers to survive. Many people in the towns
buy bread from supermarkets, who buy from factory bakeries. These large enterprises
produce huge quantities of bread every day. The cost of each loaf they produce is low due to
the economies of large-scale production. This means they can sell at low prices, which
undercuts the prices charged in small bakers‘ shops. The problem is that one loaf of bread is
very much like another, so shoppers don‘t mind which one they buy. Although they might
prefer a fresh, hot loaf from a local bakery if they can get there at the right time.

Demand for Processed Foods in Sierra Leone

The demand for processed foods in Sierra Leone is very difficult to quantify, as reliable data
do not exist. Import statistics for processed food and beverages and government production
statistics are listed in categories that are too broad to be useful. Market intelligence data do
not exist to record actual demand.

From the experience of the consultants, it is helpful to categorize the market into consumer
groups:

Well-off urban population (plus the small number of wealthy rural people)

People in cities and rural towns with average incomes

People living in rural areas with low-to-average incomes

Tourists and expatriates

Restaurants and snack bars

Other food processing companies

Some of these categories can be further sub-divided into categories based on age, sex, foods
for religious or ceremonial occasions, foods for office workers, etc. Processed foods can
similarly be grouped according to demand by each of the above categories. This
categorization of markets can help in assessing specific segments in the market for placing a
product.
In general, the demand for processed foods is low compared to industrialized countries. Rural
populations have little disposable income and mostly purchase staples such as flour, cooking
oil and sugar. However, the large numbers of rural poor mean that even if each family only
buys a small amount occasionally, the total market is larger than would be expected from
casual observation. Demand in urban is larger, particularly in Sierra Leone where economic
activity and disposable incomes are higher.

Bakery products

Medium-scale bakeries are rapidly getting established in the major cities in Sierra Leone in
response to a growing demand for bread from all sections of the population in country-wide.
Their economies of scale mean that micro- and small-scale producers find it hard to compete
in terms of price, and therefore develop alternative, smaller niche markets. These include
biscuits, cakes (especially celebration cakes in Sierra Leone), doughnuts, and flour
confectionery products. Although the demand for these is restricted to wealthy urban
populations, expatriates and tourists (including cafes and some hotels), it is a highly
profitable subsector and there is considerable competition. Competition from imported
products is found only with biscuits, as other baked products have a short shelf-life.

Distribution Channels and Marketing

There are different types of distribution systems for processed foods, depending largely on
the scale of operation of the processor. At a large or medium scale of operation in Sierra
Leone, brewers, distillers, millers, bakers and oil processors have their own transport for
delivery to depots in urban centres, and sell products from these to wholesalers, retailers,
market sellers and street vendors. Wholesalers distribute the products to shops in rural areas,
and market stallholders buy from these shops. Some street vendors, market sellers and kiosk
owners in urban areas purchase products from retailers.

Small- and micro-scale urban producers may sell directly from their production unit to
consumers, market sellers or kiosk vendors, or they may arrange periodic deliveries to a
relatively small group of retailers with whom they have established links.
In general, production activities are adjusted to the size of the local market, and many
producers are unwilling to sell to wholesalers as this would reduce their profits. There is also
a lack of knowledge and trust between producers and wholesalers which further limits
expansion. The market share of individual producers may be falling as a result of competition
from other producers, and due to competition from imports for some products. This reduces
their production and serves as a disincentive for investment or expansion of the enterprises.

Marketing in Sierra Leone is done mainly by social median platforms, Radio/TV

advertisements and posters. Advertising is frequently perceived negatively by some
producers and consumers, the implication being that products are of lower quality if they
need to be advertised. In Sierra Leone there are no clear policies to promote internal trade or
export of processed foods. There is no marketing assistance or market information available
to producers.

The main constraints to improved marketing are:

Finance - poor in businesses, little disposable income to spend on advertising (a major

constraint especially for new products).

Attitude - little market orientation among entrepreneurs, who do not see the value of active
marketing, poor relationships with customers and retailers, no feedback, demand-led
distributor mentality.

Knowledge and skills - information on consumer requirements is not sought, information is

not sought from retailers, lack of specialist marketing skills to design and organize marketing
campaigns.

Infrastructure and materials - poor storage, refrigeration and distribution systems,

problems of acquiring attractive packaging

Market trends in Sierra Leone include increased demand for flour, bakery products, soft
drinks, dairy products, fruit juices, cooking oils, snack foods and convenience foods
(including supplies to restaurants and fast-food outlets in Lumley), and bottled water.
Potential for Improved Product Quality and Diversification

In the case of staple foods, such as cooking oil and cereal flours, there are few opportunities
for diversification. In many other cases producers have the opportunity for diversification that
depends, to a large extent, on the existence of well-off urban consumers and their taste for
processed foods. The expanding economy in Sierra Leone has generated an increasingly large
number of such consumers, and there are already many examples of different types of snack
foods, dairy, fruit and bakery products. It is likely that this trend will continue.

Problems of inadequate product quality are found in all subsectors, and there is considerable
room for improvement through training and technical support in appropriate quality
assurance for small-scale processors.

Overview

Basiatu Delicious Bakery is a bakery that produces and sells quality bread and other pastries.
We want to target the high-end and middle-end segments of the market (since they have more
disposable cash to purchase bakery products), maintain the quality of our products but also
keep the prices reasonable. Our strategy will therefore focus on serving the general populace
and a niche market with quality goods. Our primary aim is to become the best bakery in
Lumley and the neighbouring areas of Lumley. We will strive to make our food something
that our customers enjoy, but supply an even greater experience by incorporating technology.
We are determined to become part of the community –an establishment that becomes as
much of the community as a church or local grocery store. To achieve these goals we will
provide the following:

 Quality baked goods for everyone to enjoy at a fair price

 Friendly, neighbourhood feel atmosphere
 Special diet menus in relation to the advice of doctors and other healthcare providers

a) Meeting Customer Needs

Our customers require fresh quality coffee and pastry on the go. Our system for establishing
customer needs is based on the product offering of our competitors. We will maintain honesty
and request input. We will allow customers to take monthly surveys in exchange for
discounts on doughnuts and pastries. This will give insights into what customer’s desire and
create customer loyalty.

b) Quality vs. Quantity

Sierra Leoneans on the go tend to compromise with respect to quality unless it has to do with
top quality bread and pastry products. Hot and fresh sells. Therefore quality is everything.
Baking staff will be trained regarding quality preparation, food service, storage and holding
equipment with a view of producing a superiorly prepared fresh product consumers will come
back for time and again.

c) How We Will Sell

Word of mouth advertising via quality output will be our strongest selling point. Advertising
in local papers and glossy local magazines. Occasional community donations and product
gifts to active community figures. We will take the product to the consumers and let them
sample the product to help create brand awareness. We will establish high visibility by means
of location along with drawing local public support via samples, mailed coupons and menu
distribution.

d) Ability to Penetrate Market

Our 4 years‘ experience in baked goods preparation and quick delivery along with a fine
reputation for high quality products will answer the demand for a fast, fresh, and tasty bread
and pastry products. Our ability to deliver solutions to meet special and unique cake design
requests will enable us to penetrate new market segments while holding niche positions.

Pricing

Our prices will be slightly higher than those of our local competitors, mainly for the reason
that we strive for quality in our products. This goes hand-in-hand with the market that we
plan to target that of the upper middle class, and our higher income consumers. On the
actually cost of the particular products, they will vary according to each product. Overtime
our prices may fluctuate along with the rises and falls of the raw resources as well as trying to
remain close with our competitors and not allow the gap between quality and price become
too large.
Sales/Sales Strategy

Basiatu Delicious Bakery's products will be truly unique in the marketplace. The look, feel
and taste of its breads, when compared with the competition, will underscore their quality and
value. Basiatu Delicious Bakery will also actively encourage customer satisfaction. Our
product line will react to the needs and desires of the customer, thereby encouraging repeat
and word-of-mouth sales. As a small hands-on facility Basiatu Delicious Bakery will have the
freedom to react quickly and accurately to changes in the market. Due to its uniqueness and
convenient location, Basiatu Delicious Bakery will become a destination for food lovers.

As described above, it is also our plan to sell first to retail stores throughout Lumley and the
outlying Western areas in Freetown, focusing on high and middle portions of the market and
then expand into other suburbs. Because our product is new, consumers will have to be given
an opportunity to taste the product before they are expected to buy, especially since it will be
priced approximately 15% over store brands. We will focus first on building a distribution
network comprising of 35 select stores, providing them personal service and delivery,
obtaining feedback from store management as we go, and perhaps most importantly, doing
in-store demonstrations of our product where consumers will have an opportunity to taste it.

We will monitor the results of in-store demonstrations by measuring sales trends between
store demonstrations to know if consumers are seeking out our product rather than just
buying it when they get a taste. When turnover is adequately high between demonstrations in
the first 35 stores we will then begin to add additional stores to the base until we reach our
ultimate goal of 100 stores.

Our budget for advertising is limited but we will take advantage of low cost in-store literature
and newsletters. We will also create signage for the bread rack to draw attention to the
product and outline its benefits.

Food service business will be created by marketing direct to caterers, restaurants, Fast food
and others who will use our product as part of their ready-to-eat offering. This will be done
through personal marketing efforts and by appearing at special niche trade shows where these
users shop.

Our Strategy also focuses on building a loyal customer base by providing good customer
experience. With the addition of the café bar and lunch menu within the first six months of
opening the bakery, we hope to have customers make the bakery their one stop destination for
breakfast or lunch. We hope to advertise the bakery in local newspapers and radio stations.
We will also consider the distribution of flyers/Leaflets in the neighbourhood. We will also
employ sales agents/representatives on a performance-related payment scheme to
continuously find new customers by visiting Schools, offices, Hotels and Restaurants to
inform them of our presence and products. Our account managers will also be responsible for
increasing sales, by reaching out to current customers, and making sure their needs are met.

We expect to have a fully functioning web-site by 2022. At that time we will use social media
and viral marketing to get word out, hopefully with endorsements from the medical
community.

Management also intends to plough back all profits at the initial stages into the business to
help increase its capital base for a sustained growth and business expansion.

Sales Forecast

The proposed bakery will be offering a large variety of quality products at competitive prices.
The product line will be including different types of bread,dry cakes, dry cakes, cookies,
doughnuts, buns, biscuits, rolls, etc. As the production will depend on the sales potential, the
sales are estimated depending upon the industry norms.

Sales are expected to rise 10% annually during the five-year business plan. Direct costs for
the items are a low percentage of the total prices, and refer to the costs of ingredients and
packaging given to customers.

Distribution

Basiatu Delicious Bakery products will be distributed through markets, restaurants, offices,
small independent shops, cafes, schools and to major catering organizations lying in our
designated distribution area. Select supermarkets will be our starting point, as they provide
valuable food traffic and awareness of our product. Restaurants and sandwich shops (take-
aways) will provide additional distribution locations, and also to increase our brand
awareness. For distribution to catering organizations, we will utilize the couriers to some
extent, but will also send the bread directly with the deliveries for Basiatu Delicious Bakery.
Our costs will be around Le 30,000 per loaf and Le 100,000 per roll.

Our second target for distribution is directly to people in their homes. By getting people to
sign up as Bread Customers, we obtain their address, as well as all necessary contact
information. By building a custom database, we will be able to efficiently plan daily
deliveries based on neighborhood.

Distribution directly to the consumer will be done daily by the couriers who will receive their
route and transportation options. We aim to have a large share of our customers within
walking distance of the bakery but have bikes available for longer distances. In some cases,
the courier may use a car, or the company delivery van. Each courier will be able to carry up
to 500 loaves per trip, and will be expected to make three trips per day. With customers
receiving an average of 1 loaf every 6 days, we can service 1200 Bread Customers per
courier. The courier would be receiving around Le 5,000 per loaf delivered.

The third distribution strategy for our products would be through our store-front shop.
Hopefully, in the future we will be able to offer catering services, but during start up we will
work out of our own facilities. Customers will be able to walk in and buy our baked goods, as
well as set and/or send orders by telephone, online, or through a direct in-store appointment.
We will set up a small sitting area to be used by our customers who will enjoy a convenient
coffee & tea drink, and the general atmosphere of the store. Because the majority of our
products will be baked fresh daily, we will provide for the expected customer estimate of
200-500 customers per day and specialty cakes will be made after an order is placed. At the
end of the day, we will move all of our not purchased goods into an area for ―Day Old‖
bread where people will be able to buy the not fresh bread for half the price of what we
would normally sell it for. Customers who target this as their opportunity to purchase from us
may not be given the advantage of our variety but will receive the opportunity for lower
priced goods. By the second day if the products are still not sold we plan to deliver them to
the charity organizations, or other not-for-profit organizations that may benefit from our
products.

Deliveries will be based on our customers‘ requirements and will be tailored to suit the size
and individual requirements of the establishments concerned. Some customers require
deliveries once or twice a week, whilst larger companies will require a daily delivery service.
Time of delivery will also be an important factor for many of our customers and we will do
our utmost to accommodate their requirements as much as we possibly can.

Promotion

We will start with excellent products at a competitive price, but then make our service
exceptional by delivering directly to our customer at no extra cost. In order to get visibility of
our offerings, we will use a variety of advertising channels and promotions.

Printed advertisements, which will run during the opening week, will highlight bread as an
everyday product, to be purchased fresh on a weekly or daily basis. More printed
advertisements will run during the Easter and Christmas seasons. Costs for these
advertisements will be approximately Le 50,000 each.

Marketing Materials

 Marketing materials for Basiatu Delicious Bakery will include the following items:
 Business cards geared towards customer referrals
 General business cards
 Tri-fold brochure/menu
 Business referral program brochure
 Basiatu Delicious Bakerys website
 Print advertisements in newspapers such as the New Vision and the Daily Monitor
 Cable TV advertisements
 FM Radio station advertisements
 Poster ads on mass transit

We will incorporate business cards and brochures that provide our menu and product
selection, a window display that will be a direct visual appeal, and in the beginning use
advertisements in the newspaper to introduce our new business. We hope that our idea to sell
―Day Old‖ bread for half price will promote our products, although we want to be known as
a bakery that sells our fresh baked bread and pastries. If allowed we may also try to go to
other local coffee shops and small business to post flyers to promote the Basiatu Delicious
Bakery. We also expect that our valued community involvement will also work as a
promotion by improving the public view of our business and advertising to the individuals
involved with the organizations we work with.

In order to promote our products in the markets, we will also provide sample bread, and offer
demos to engage with customers. We will also participate in food events throughout the city
to sample bread and educate our customers.

Leads for Basiatu Delicious Bakery will be generated through the following means:

 Customer referrals to other customers via a business card promotion at checkout

 Business referrals from area businesses via a six month introductory promotion
marketed directly to these companies
 Print advertising in the local language dailies
 Alternative advertising through posters on City buses which serve Lumley and
Central Business District

Referrals

Customer Referrals:

Basiatu Delicious Bakery will have business cards available at the counter which offer a free
baked good with any purchase on the back. The checkout clerk will encourage the customer
to pass this business card on to someone else so that they can redeem it for the free baked
good. Some may choose to use it for themselves, but it is hoped that many will give it to
someone else, as they will be told that is the purpose of the card.

Business Referrals:

Basiatu Delicious Bakery will seek referrals from the Lumley and Aberdeen area businesses
who share its environmentally-conscious mission. These include "Mark Group" firms and
environmental consultants. Basiatu Delicious Bakery will offer a six month promotion to
individuals from these firms (when they show ID) which grants them Basiatu Delicious
Bakery Club deals without having to sign up for the Club. We hope that these firms will pass
on the information about this deal to their employees, as it is in keeping with their own
mission and an additional perk they can offer to their staff
Critical Numbers

Critical numbers will be tracked by the business software, including the point-of-sales
system, which interfaces directly with a CRM system that can track loyalty club members (as
their information is entered directly into the system), testimonials, and PR mentions (found
via Google alerts and scanning newspapers). Marketing expenses are tracked by the
accounting software which interfaces with the POS software to provide a full financial
picture of the business.

Competitive Analysis/Competitive Edge

Basiatu Delicious Bakery competes in the Food Industry which is highly saturated with a
fairly competitive landscape. In addition to competing with other bakeries, it competes with
all restaurants, delis and supermarkets for a share of its bread and baked products.

There are no other retail bakeries in Lumley town or the surrounding towns to be in direct
competition with our business, however baked goods items produced and sold by the major
Lumley-based bakeries [e.g. Lumley Bakery, Fast Food, Freetown Bakery and Three
Brothers Bakery] are regularly distributed and sold in this small town. These big four will be
Basiatu Delicious Bakery’s greatest competitors. Fortunately, the strengths of these four
bakeries are all the same and typical of commercial food product businesses, allowing our
bakery to more easily stand out. Companies are characterized by three major traits: price,
quality, and service. Lumley Bakery, Fast Food, Freetown Bakery and Three Brothers Bakery
all focus on low prices and some service. In contrast, our bakery would value higher quality
baked goods and personal service. Our prices may be slightly higher, but our products would
be from better quality of ingredients and would still be very reasonable priced for the
industry.

The major weakness our bakery has when stacked against these four bakeries and
supermarkets is convenience. Our products would be fresher and of higher quality, thus
superior to the goods of these mass produced bakeries‘, but the supermarkets have the
advantage that the shoppers will already be entering the stores for their necessary groceries.
Buying baked goods in bulk then would seem to be more convenient than at a different
location.
However, as mentioned in the industry product development, pastries are mostly not bought
in the same, regulated manner as groceries, but are bought on a whim. So long as a customer
is not already grocery shopping when he or she craves our competing products, it would be
just as convenient to enter a bakery, if not more, than a grocery store. The possible customer
would have to walk farther in a grocery to buy baked goods than by simply stepping into our
bakery.

TECHNOLOGY AND PROCESSES

The proposed project will be using a mix of imported and local machinery. Local machinery
and installations are quite competitive in price in comparison to the foreign equipment and
installations. Some of the bakery equipment that will be imported from oversees include:
commercial oven, dough mixer, bread slicers, prover and deep fryer.

Erection & Installation

Erections and installation cost is assumed to be 10% of the total cost of machinery.

Raw Materials and Production Methods

All bakery products are made from basic ingredients, which have the following functions:

Summary of functions of main bakery ingredients:

Ingredient Function

Flour: Proteins in flour combine with water to form gluten, which

contributes to the crumb structure and retains gas in raised

bakery products. Starch in flour forms a paste that is set by heat

during baking. Changes to starch contribute to staling of bakery

products.

Yeast: Produces gas (carbon dioxide) to raise dough, contributes to

dough conditioning and flavour.

Salt: Helps control yeast fermentation, toughens dough by

strengthening gluten, extends dough development and mixing

time.

Sugar: Fermented by yeast, sweetens dough, contributes to

development of golden brown colour of bakery products,

tenderises crumb and extends shelf life.

Shortening (fat): Assists gas expansion during fermentation, tenderises crust,

extends shelf-life.

Milk: Improves the flavour and texture of products

Egg: Gives strength and flavour to products

Baking powder: Produces carbon dioxide to raise dough

Pre-mixes: Reduce dough preparation time; ensure even mixing of minor

ingredients and help to avoid operator errors.

These are supplemented with a wide range of other ingredients that give special flavours,
colours or textures to products.

Bread, buns, pizza bases and doughnuts are produced from hard wheat flour and fermented
using yeast. Biscuits, pastries, cakes and flan/pie casings are made from soft wheat flour
using baking powder as a raising agent and flat breads are made from the same flour without
a raising agent. Each of these products can be made using different ingredients, fillings,
shapes, colours, flavours and sizes.

Wheat flours contain a protein (gluten) that creates the characteristic texture of bakery
products. They are either strong flours with a higher gluten content (made from hard‘ wheat)
or weak‘ flours with less gluten (made from soft‘ wheat).
EQUIPMENT

Before finalizing any layout plan a list of equipment required for the operation should be
drawn up. Allowance should also be made for projected equipment purchases at a later date.

WORK BENCHES

Sufficient work bench space is essential for a good flow pattern in the bake-house.

Bench space has to be set aside as follows:

1. Weigh up area

2. Mixing area

3. Dough resting, dividing and moulding area

4. Batter scaling area

5. Removal from the oven or tipping out area

6. Finishing bench space

These benches should be positioned as conveniently as possible for each area and in some
cases can serve more than one function.

Generally preferred for both hygiene and durability are stainless steel topped benches. The
only disadvantage is that they are very cold and care must be taken during winter that doughs
resting on the bench do not become chilled.

Alternate bench tops include wood, formica or heavy duty linoleum. Wooden benches are
excellent for dividing and moulding yeast doughs and do not damage easily with hot baking
trays or steel scrapers. However they are sometimes unacceptable because of hygiene
requirements. Both formica and linoleum are subject to damage during dough dividing with
metal scrapers or hot tins and trays placed on bench tops straight from the oven.

Under the benches is a very valuable area for storage of ingredients or finished goods. If
ingredient storage space is required shelving can be incorporated. Alternatively heavy duty
drawers can be installed for ingredient storage. Bottom drawers with heavy duty roller castors
can hold 25kg flour, hi ratio, sugar, salt, etc. The middle and top drawers can be made smaller
to hold ingredients used in smaller quantities. Cupboard doors will keep the storage area
clean. For finished goods we suggest that racks for oven trays or cooling wires be
incorporated.

Cleaning of the bake-house is facilitated if the benches are mobile on heavy duty castors,
including benches normally situated against the walls as this will made the job so much
easier.

STORAGE AREAS

Sufficient storage areas for both ingredients and finished articles are essential. The bulk line
of ingredients such as 25kg bags or 20kg cartons are generally best stored on a pallet off the
floor in the main storage area. If there is insufficient space some of these lines can be stored
on shelves under the work benches.

Smaller ingredients are more conveniently stored in cupboards or shelves above the work or
finishing benches. Finished articles can be stored in mobile tray racks in the bake-house or in
storage racks under the benches. Storage racks under the finishing bench are particularly
suitable.

Utilities Requirement

Main utilities would be gas, power and water. Distribution transformer station, loading
capacity averaging 10 KW, 3-phase industrial meter is estimated to fulfil the requirement of
power. B-1 category is advisable for electric consumption. Water supply would be through
the Guma Valley Water Company.

Basiatu Delicious Bakery is primarily a baking company, and the root of the operation is
production of bread. The other two critical components are sales and distribution. To reach
the scale we intend, it will become necessary to include account management, systems
development, administrative, and operational management.

Production
Production of sellable breads is projected to begin within the first six months of project
finance acquisition. Raw ingredients will be ordered for twice a month delivery from the
leading suppliers of bread and confectionery in Lumley, at which time a two week production
schedule will be drawn up by Basiatu Kamara, the proprietor/baker. Ingredients will be stored
in a dry storage area and in a walk in cooler (already on the proposed premises).
The bakery store-front will open at 9:00 AM and close at 6:00 PM Monday through Friday.
Saturday hours will be 9:00 AM to 4:00 PM for sales only. Part time employees will work the
counter and assist with store maintenance during peak hours while the baker is baking. A
beverage cooler and coffee machine will encourage convenience sales at the register.

Basiatu Delicious Bakery will economize on bookkeeping costs by handling its payroll duties
in house. Year-end bookkeeping will be handled by a professional accountant. The company
will use the QuickBooks small business accounting software because of its ease and
convenience of use in keeping finances and bookkeeping all in one place.

Inventory Procurement

In the prevailing market dynamics the individual bakery product retailers are buying their
goods from two sources, one is through the delivery vans of the bakery product
producers/distributors who visit the outlet after a certain specified time. The other mode of
purchasing is done through the traditional wholesale markets like supermarkets and shops
where the retailers purchase their depleted stocks. It is worth mentioning that the delivery
vans of the bakery product producers/distributors do not visit the micro-level bread and
pastry retailers due to the high cost of distribution attached to the transactions.

Product Mix Offered

Managing the bakery products merchandising mix involves decision about what products to
carry, styles, models, colors, sizes, and price ranges, and how many units of each product to
have in inventory. Many customers select one store over another because of the variety or
assortments of bakery products available.

The decision about size and content of any bakery products distribution retail store is largely
determined by the space available. Adequate space to display an assortment of bakery
products is important for customers comfort. Thus, an important decision involves the range
of bakery products that are essential to satisfy the customer’s needs. A small number of
bakery products will probably account for a large amount of sales volume. These bakery
products deserve special attention and need to be stocked. Being out of preferred and highly
demanded goods creates a negative customer impression of the retailer.

In addition to a wide assortment of bakery products on hand, retailers must also have stock
depth, that is, sufficient quantity of each bakery product on hand to support sales.

Pricing Strategies

Pricing decisions are a major challenge for bakery product retail businesses. Price is a major
factor in dealing with competition from other bakery product retailers.

Many lines of merchandise have what is accepted as a market-level price. It is common to

find prices for normal general bakery product items to be based on a standard markup
percentage that is similar for all competitors. Supermarkets often adhere to almost identical
prices so that competitors usually do not have a price advantage.

A bakery products retailer can adopt both a high pricing strategy or a low pricing strategy. In
some cases a bread & pastry store may offer something that permits it to set its prices higher
than its competitors do.

Pricing below market levels is used by bakery product retailers who have decided to focus on
lower expenses, less service, and less ambience. Such a bakery product retail store attracts
customers who are extremely price-conscious but tend to purchase their entire months
grocery from these types of bakery product retail stores.

Bar Code Facility

All products can be entered into a computerized database using specific inventory software.
Bar codes will be issued at each product sku. Two bar code readers and two computers linked
together will be used. Once the data has been properly entered into the database, then every
product must carry a sticker with a barcode. This will increase the performance of cash
counter and organize the inventory in a better and proper form.

The cost of setting up the barcode reading system is estimated at Le 1m This is an additional
option but carries with it great benefits. The first and foremost benefit is that it tremendously
enhances the management‘s ability to track the depleted stocks so that purchase orders can be
placed with the suppliers timely in an effective and efficient manner. Secondly, this facility
also enables the management to trace inventory pilferages. All in all this bar code facility
enables the management to keep a complete overview of the activities of the business.

Distributor Analysis

Distributors play a vital role in transferring the product from the manufacturer to the retailer
and finally to the end-consumer thus maintaining an integral part in the value chain delivery.

Foreign companies considering marketing their products in Sierra Leone may choose to use
the services of local distributors or may develop their own distribution chain. Distributors in
urban areas generally deal on an exclusive basis. Some market consultants estimate that the
services of 100-300 distributors would be required for nationwide coverage. One very large
multinational company (Mega Cola) selling consumer products employs 500 distributors to
reach a significant portion of Sierra Leone‘s towns and small villages.

As a matter of policy, most companies do not provide credit to distributors and distributors in
turn generally sell on a strictly cash basis to retailers. Smaller distributors often do provide
credit to retailers, but the volume of such transaction is relatively insignificant.

It is ideal to get the required merchandise from various distributors. It is also possible to have
different payments arrangement with different distributors, such as, strictly cash, credit, and
bill-to-bill.

Record Keeping

There are four sets of records that should be kept by the owner of a small cereal processing
unit. Keeping records is an investment of time and money and this must be related to the
scale and profitability of the business (the benefits must outweigh the costs).

This means that the processor must understand why the information is collected and what it
can be used for. Processors should also put in place a system of checks to ensure that one
person does not have responsibility for a whole area of record keeping. For example the
person who keeps records of ingredient purchases should be different to the person who
records levels of stocks and manages the storeroom.
Productivity Improvement

Productivity can be improved by:

 Improved efficiency (e.g. lowering operating costs, savings in idle machine time and
reducing waste)
 Better procedures for buying materials
 Improved decision making and communication
 Higher performance by minimizing equipment breakdowns, reducing other causes of
lost time
 Improved organization, better staff morale and co-operation

Improved process efficiency can be achieved by increasing the output of a processing plant
without additional investment. To measure this, an entrepreneur must calculate how much
money it costs to produce one unit. If more units are produced at the same cost or within the
same time frame without affecting quality, then productivity is increased. Productivity can
also be improved by changing the product design or layout of the production facilities,
changing raw materials suppliers or work organization.

Improving efficiency in a process involves reducing wastage of time, materials and space, or
unnecessary movement of foods, staff or equipment. Motivated staff will go a long way to
increasing efficiency by reducing wastage. The layout of a production unit is another factor
that can affect efficiency. When deciding where to fix permanent machinery, care should be
taken to plan the layout to allow for a flow of product through the process, sufficient space to
avoid congestion and to ensure safe operations.

Avoiding waste

Ideally all bakery products that have a short shelf-life should be sold on the day of production
when they are at their freshest. This maximizes the income and avoids wastage which has a
serious effect on profitability. However, unsold products are still edible for a few days
provided that they are stored correctly. They can be used for a variety of other purposes to
generate an income and avoid wastage.
Ideas that can both reduce energy consumption and save processors money include:

Switching off lights and electrical equipment when they are not being used

Solar water heating (e.g. for pre-heating process water or washing equipment)

Building in the flexibility to use alternative energy sources when installing new bakery ovens
so that they can use the most environmentally suitable fuels

Use local block makers rather than using fuel-wood

Use local suppliers of raw materials that can be delivered by bicycle, rather than using a
vehicle to collect them. Similarly, make as few journeys as possible to deliver products to
wholesalers or retailers.

Quality Assurance, Legislation and Regulation

Quality Assurance

The main reason for low quality baked products are faults with the processing room, the
process, ingredients, operators or distribution methods. A Quality Assurance (QA)
programme should therefore comprise:

 Ingredient inspection
 Process control
 Operator training
 Assessing products
 Cleaning schedules
 Control over packaging and distribution.

Baked products are rarely involved in food poisoning incidents because the heat of the baking
process kills most micro-organisms or reduces their numbers to safe levels. However,
products containing meat, fish or vegetables have a greater risk of food poisoning if they are
not handled and stored correctly. The time that these products spend in the temperature
danger zone (10-450C) during processing must be minimized by efficient handling and
effective cooling. Refrigerators for cakes with cream fillings and other cream goods must be
properly maintained and operated at the correct temperature. Pies must either be chilled in a
refrigerator or stored in a hot display cabinet (above 630C).

Legislation and Regulation

There are various laws governing the setting up, registration and operation of bakery in Sierra
Leone. Failure to follow the law may lead to punishment by the authorities or closure of the
business. Bakers should check the local laws with the Sierra Leone Standard Bureau. In
summary the registration of a mill or bakery involves the following:

 Registration of the enterprise with the Ministry of Trade and Industry

 Obtaining a Certificate of Share Capital (for limited companies), or a Certificate of
 Incorporation (for corporate companies)
 Obtaining an Occupational Certificate from Local Authority, or the Planning
Authority in the Land Ministry
 Obtaining a Health Permit or Licence from the Local Authority or Ministry of Health
to allow the premises to be used for food production
 Obtaining a Manufacturing Licence, issued by the Local Authority or Ministry of
Health
 Obtaining Medical Certificates from the Health Authority to certify that workers are
fit to handle food
 Registration with the Revenue Office or Tax Office

Food Regulation and Standards

In Sierra Leone there are both general regulations that apply to all foods and also standards
that are specific to particular types of food. Standard Bureau should be consulted on details of
the general regulations concerning:

 Labelling
 Presentation and advertisements
 Weights and measures and
 Hygiene practices during processing and handling
  Food Fortification Regulations and Standards

Bakers should contact the Ministry of Health or the Ministry of Agriculture, Animal
Industries and Fisheries for details of laws relating to public health, food safety and hygiene
and sanitation in their premises.

RISKS AND MITIGANTS

The development of our products and customer network involve several potential risks:

1. Lack of funding. As we begin to hire more personnel, and increase our costs, it will be
very necessary to monitor funds and progress carefully. During the first two years of
operation, we plan to operate on an extremely limited budget, and could continue to do so for
the subsequent 2 – 3 years of operation; the downfall would be that our plans would progress
at a far slower pace. We however expect to receive significant customer signup and
payments, such that approach the point of being more financially solvent.

2. Sales could grow slower than expected. The business is structured as a variable cost
business so the investment does not have to outpace the revenue stream. A kitchen will not be
built until the order rate is firmly in place and its capacity can be guaranteed to be 65% used.

3. Increased competition: some of the large bakeries which have focused on selling to
the lower end of the market may try to enter the high-end market. More multigrain products
will certainly become available on the market but we expect to benefit from being the first
and having established a known brand. Additionally, taste is the predominant factor in food
purchases and blind consumer taste tests which we have run have rated our product #1.

4. Ingredient costs can vary seasonally. Sources are locked in and supply contracts have
been signed which guarantee prices for a 12-month period.

5. Increase in the price of wheat. Prices have recently gone up, and may continue to do
so. At about 20% of our overall costs, an increase in this ingredient could have significant
financial repercussions. All bakers are subject to any increases that might happen in this
commodity, so if prices do go up, it also affects all of our competitors. This means that the
price of bread may be forced to rise, which would partially decrease demand. However, the
demand for bread is fairly inelastic, so the loss would not be as drastic. Furthermore, we
always have at our potential the possibility of switching to conventional flour if absolutely
necessary. The majority of our competitors use conventional flour, and in doing so they save
almost 50% on flour. We prefer to use organic flour, but it is not a critical element of our
sales or marketing plan, and could be changed if absolutely necessary.

6. Energy prices may fluctuate. Fuel is an important part of the cost of the distribution
system. Driving will be minimized by the fact that our customers will be within a 120
kilometer radius of the production facility. We will also try to avoid supplying shops in
remote locations or which are particularly difficult to get to as a result of traffic patterns.
Delivery days and routes will be carefully planned. To the extent that fuel prices rise
dramatically it is generally expected that the increase can be partially passed on to retailers,
who then pass it on to consumers.

7. Bad debts. We expect to sell only to top-tier and well established customers. We will
monitor the 30-day terms closely to make sure payments are coming in timely, and will not
allow any customer to be greater than 10% of sales.

BAKERY ORGANIZATION AND MANAGEMENT PLAN

Description of Bakery Organization

The bakery section is one of the most important units in a catering establishment. Nowadays
the people are passionate to have fast food and ready-to-eat food items in their diet. The
bakery products are one of the most soled products among them. At the same time bakers
have been convinced to maintain the quality product and to produce new variety of consumer
choice. So it requires that the bakers should have keen interest, so involvement and have
through knowledge in the bakery industry.

The organization of a bakery will vary according to the size and type of the establishment,
customer expectation as well as the variety and size of menu and the type of service given.
Often the quality and quantity of production determine the number of persons required to run
and one or more assistant to get the job done.

Duties and Responsibilities

In a small bakery unit the head chef carries the full responsibilities of the department. He
should have a deep knowledge in bakery products, present market trends, consumer needs,
capable to control and coordinate the staff, to plan the menus, and controls expenditure and
waste to meet the profit percentage required.

The pastry man has to prepare hot and cold products, sweet sauces, pastries, and cakes.

The confectioner needs great skill, experience and artistry. He has to prepare marzipan,
chocolate, pastillage, sugar work, decorative and display items, patties flours, wedding,
birthday, and celebration cakes and ice-cream varieties.

The baker makes all the yeast goods such as bread, rolls and buns, fancy products, biscuits
and cookies. Besides, he has to tend the ovens.

In private sectors, the production manager carries all the production of bakery goods, quality
and quantity control, prevention of wastage of ingredients and losses due to bakery.

The assistant manager has to assist the production manager. The supervisor has to supervise
the production at the various stages of manufacturing. And he has to prepare the daily
production report for the production manager as well as mention any other points which
require attention in or around the plant. His main responsibility is to check the weight of each
product and maintain the same quality throughout the production.

The purchase officer will receive the instructions from the managers of various departments
and will purchase the requirement for the production and maintenance purpose. He has to
check and maintain the stock register for receiving and issuing the ingredients.

The sales manager takes the roll to market their products and create the interest among the
people to buy the products with the help of sales man and canvassers.

The maintenance manager maintains all the major equipments as well as the electricity, water
supply, lighting and ventilation, building repairs and vehicle in correct condition.

Management Team
We recognize the importance of a good and experienced management; we have therefore
assembled a strong management team. The team is led by Basiatu Kamara. Basiatu comes to
Basiatu Delicious Bakery with over 4 years’ experience in management.

Basiatu has a wealth of experience as he has a Bachelor‘s Degree in Business Administration

She has previously worked with the catering section of Total Sierra Leone Limited.

Basiatu Kamara will act as the Chief Executive Officer and will manage and assist in the
baking. Basiatu is organized, confident, and persistent. He has experience in sales and
customer service from his past employment experience. Because of his hard working and
very motivated personality she strives to maintain a solid and stable working environment for
herself and the employees under her. With her previous design experience and powerful
initiative, she hopes to put the Basiatu Delicious Bakery out there to the public and make it
the best that it can be.

Alhaji Daramy will be the Chief Marketing Officer and also act as the primary baker and
cake designer for the business. Along with his abilities in baking and design, Mr. Daramy has
a strong work ethic, great social skills, and a lot of training and experience in leadership. He
will be obtaining all licensing and certification needed for the job.

Basiatu Delicious Bakery is an exciting opportunity that combines fresh baked goods and
healthy option products addressing the recent need for these new products. Demand for these
products is expected to grow exponentially as medical doctors and health professionals
become more and more aware of food allergies Sierra Leoneans are afflicted with.
Profitability is forecasted to occur by month 12. Through a combination of strong
management team, a solid business model, and exciting market demanded products will allow
Basiatu Delicious Bakery to quickly gain market penetration and cash richness.

Training of Employees

Acquiring competent productive and forward looking employees is essential to customer

satisfaction and the growth and expansion of the company. To that end Basiatu Delicious
Bakery will provide extensive training as well as growth incentives with a view to grooming
each employee to discover and reach his or her true potential.

Personnel Payroll Plan

Once the bakery becomes established and the cash flow is steady, we would like to hire one
person for counter help and another assistant baker.

FINANCIAL ANALYSIS

There are two major types of bakeries: in-store supermarket and small retail. With most
revenue coming from in-store bakeries, our company would draw off these sales. We would
specifically target upper middle class to high-class citizens who are willing to pay a little
more for a higher quality product with more specialization and service than that of major
supermarkets.

Basiatu Delicious Bakery expects to raise Le 50 million of its own capital (in form of equity
assets and savings), raise Le 25 million from a diversity of other funding sources, and to
borrow 25 million guaranteed by the Bank as a five-year loan.

Cake, bread, and doughnuts will provide the majority of our income. Their success is vital to
the success of the business. The predicted sales are expected to give us a steady income
needed to continue doing business. These figures are promising and indicate that the loan
could be paid off with the store debt free in 2 years. This is a very average number for a small
business like the one being proposed by Basiatu Delicious Bakery. Even with sales slightly
off pace in this scenario, the company would be debt free in three years.

After the loan is paid off, Basiatu Delicious Bakery will build up its bank account. Bakery
equipment will need to be replaced and updated after around five years of use. After
replacing equipment that needed to be, our next major cost would be opening a second
location. The success of the bakery would determine if a second location could be possible.
Possible locations would be other strategic locations in Lumley and Aberdeen.

Key Assumptions
Key assumptions include:

 Revenue growth is dependent on unit growth and price increases. We expect unit
growth to be 10% per year, with 10% per year price increases.
 Ingredient costs will increase 5% per year, in line with inflation.
 Working capital will grow in line with sales. We will continue with 30-day customer
payment terms but recognize that 38-day average is realistic.
 We start with one van for delivery and add one per year.
 We have a 5-year bank loan of Le 25 million at an interest rate of 11% p.a.
 Our tax rate continues at 30% of profit.

Introduction

For the purposes of this Business Plan we have assumed a medium-term loan of Le 25
million is made available to the Basiatu Delicious Bakery enterprise.

The Business Plan tests the viability/profitability of the project against an interest rate of
11.00%. Repayments will commence after one (1) year grace period – (i.e. in the second year
of the project).

The medium-term loan will cover the cost of acquisition of the Basiatu Delicious Bakery
enterprise plant & equipment.

Start-up Summary

Table 16: Project Start-Up Costs

ID Description Amount (Le)

1 Land (Existing) 5,000,000

2 Machinery & equipment 14,000,000

3 Erection & installation 2,000,000

 4 Furniture & fixtures 3,000,000

5 Vehicles 20,000,000

6 Building re-development 2,000,000

7 Working capital (1 month)

a. Legal 5,500,000

b. Accounting, tax preparation 2,500,000

c. Graphics & Marketing Materials 3,000,000

d. Supplies 5,000,000

e. Cash Reserves 20,000,000

f. Raw Materials 18,000,000

Sub-Total 54,000,000

TOTAL 100,000,000

Project Costs and Financing Plan

Total project cost is estimated at Le 100,000,000 as shown below in Table above in

summarized form.

Loan funds will be required for the purchase of bakery processing equipment and machinery
including a commercial oven (with a capacity of 65 loaves of bread per hour), a dough mixer,
a bread slicer, a prover, a deep fryer, a moulder, a sheeter, and a packing machine. It is
expected that the Basiatu Delicious Bakery will run for 355 days a year on a continuous basis
starting off at a capacity utilization of 50% which will be gradually expanded each
subsequent year with market sales growth.

Land:
Basiatu Delicious Bakery has its own land located at Lumley (approx. 15 kms) along the
Lumley – Aberdeen highway. This plot of land is only 200 metres to the Central of the main
town and has a permanent house in it belonging to Basiatu Kamara. The existing land asset
counts as the largest equity capital asset of the Basiatu Delicious Bakery enterprise with a
significant market value of UShs150 million.

Building Improvements:

The existing house structure on the land will be subject to upgrades and modification
improvements to suit a standard bakery. Improvements that will be made on the existing
house are indicated in Table 12: Land & Covered Area requirement on page 41 of this
Business Plan and are altogether estimated to cost UShs 157,200,000.

Machinery and Equipment:

The requisite bakery plant and machinery equipment will comprise of a mix of imported and
local machinery. The most equipment under the plant and machinery equipment list include a
commercial oven (with a baking capacity 65 loaves of bread per hour/1,000 loaves of bread
per day); a dough mixer(s); bread slicers; a proover; and a deep fryer. Details of bakery plant
equipment and machinery are detailed in Table 7: Machinery Details on page 36 of this
Business Plan. Bakery plant equipment and machinery is estimated to cost UShs 61,075,000
plus a 10% cost for erection and installation of UShs 6,107,500.

Transportation Vehicles:

Basiatu Delicious Bakery requires two vehicle units comprising of a second-hand Toyota
pick-up and one motor cycle unit to start the bread shuttling and distribution runs with. The
two vehicle units are estimated to cost UShs 32 million.

Furniture & Fixtures:

A standard modern bakery requires extensive additions of furniture and fixtures to be

appended to its factory and sales outlets (front shop). Table 9: Details of Furniture and
Fixtures on page 38 of this Business Plan provides a detailed listing of the required furniture
and fixture fittings of the Basiatu Delicious Bakery bakery. The total cost is estimated at
UShs 51,840,000.
Working Capital:

Bread and pastries baking is a business in which cash flow is very high and companies in the
industry tend to generate cash surpluses on a regular basis, most of the breads and pastries are
sold on cash basis on the market. Working capital is mostly required for paying for purchase
of vital production inputs such as raw materials, packing materials, factory repairs and
maintenance, factory utilities, graphics and marketing materials, administrative expenses,
office expenses, advertising expenses, general supplies, motor vehicle repairs and running
expenses, as well as consumables and miscellaneous expenses. The Working Capital
requirements have been estimated at UShs 60,000,000 for the first two - four weeks of
operation. Schedule 02/1: Initial Project Investment Costs on page 82 refers.

Since we are a new company, it is important not to grow too fast and take on more contracts
than we can handle. The projections reflect a slow and steady growth without sudden spikes
that will create havoc with our workload.

We think we can reach break-even point before the end of year one, and begin paying off
start-up costs by the end of year two.

PROJECT IMPLEMENTATION SCHEDULE

It is expected that it will take approximately 10 months to have the Basiatu Delicious Bakery
project put into operation from the day funds for its execution are secured. The preparatory
stage which involves the eventual approval for funding is assumed to take 3 months from the
date of its final submission to project financiers by the project promoters. The follow-on
project implementation activities are expected to take an additional 7 months to completion –
which altogether adds up to 10 months (1 year).