Professional Documents
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AD Business Plan
AD Business Plan
PREPARED BY:
NAME ID NO
June, 2019
Gondar, Ethiopia
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BUSINESS PLAN
Address: GONDAR
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TABLE OF CONTENT
Title Page
1 EXCUTIVE SUMMERY.......................................................................................................................5
2 INTRODUCTION...........................................................................................................................6
2.1 Name and Address of the Industry...............................................................................................6
a. Name and Address of the Principle..................................................................................................6
b. Nature of the company.....................................................................................................................6
c. Statement of Financial Need............................................................................................................7
d. Statement of Confidentiality of Report............................................................................................7
e. The company with its service..........................................................................................................8
f. OBJECTIVE....................................................................................................................................8
g. MISSION.........................................................................................................................................8
h. KEY SUCCESS...............................................................................................................................8
3 INDUSTRY ANALYIS.......................................................................................................................9
3.1 Future outlook and Trends...........................................................................................................9
3.2 Market Segmentation...................................................................................................................9
4 DESCRIPTION OF VENTURE........................................................................................................10
5 PRODUTION PLAN.........................................................................................................................12
6 MARKETING PLAN........................................................................................................................12
6.1Pricing..............................................................................................................................................12
6.2Distribution.......................................................................................................................................12
6.3 Promotion..................................................................................................................................12
7 ORGANIZATIONAL PLAN............................................................................................................13
7.1 Form of ownership.....................................................................................................................13
7.2 Roles and Responsibility of Members of the Organization........................................................13
8. ASSESMENT OF RISKS......................................................................................................................13
9. FINANCIAL PLAN..................................................................................................................................14
10. PRO-FORMA INCOME STATEMENT...................................................................................15
10.1 Salary expense.......................................................................................................................15
10.2 Depreciation Expense............................................................................................................15
10.3 Miscellaneous Expense..........................................................................................................16
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Pro-forma income statement as of year 1...........................................................................................16
Pro-forma income statement of year 2...............................................................................................16
Pro-forma income statement of 3rd year............................................................................................17
Cash flow statement for year 1..........................................................................................................18
Cash flow statement for year 2..........................................................................................................18
Cash flow statement for 3rd year.......................................................................................................19
Operating Balance sheet....................................................................................................................19
Pro-forma Balance Sheet at the end of 1st year..................................................................................19
Pro-forma Balance sheet as the End of 2nd year................................................................................20
Pro-forma Balance sheet as the end of 3rd year.................................................................................20
Break-Even Analysis for 1sr year......................................................................................................21
Breakeven Analysis for year 2...........................................................................................................21
Breakeven Analysis for year 3...........................................................................................................21
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1 EXCUTIVE SUMMERY
MNNSS cosmetics enterprise business will be run as partnership among, Fekadu Nasir, Girma
Yalew, and Ashenaf Abate. The MNNSS cosmetics enterprise offer high quality and quantity
cosmetics for users and customers. The product of the business will be available for sale at home
and also sold to wholesalers and retailers who sells in other markets. The price set by the
business, is fair market price or it should not exploit customers or should not annoy customers.
So that customers are willing to pay. Cosmetics providing enterprises will provide its product at
market price by identifying and listing each type of cosmetics with their fair prices. The activities
included in this business are purchasing high quality and modernized cosmetics and preparing
store houses where cosmetics stored whenever there is excess supply of cosmetics, auditing daily
sales of business, etc. The overall objective of the business is to provide high quality and
quantity cosmetics in order to get the expected profit and to satisfy the consumer and to achieve
and exceed sales forecasts to enable us to be operating at capacity, we would also have a claim
to create job opportunity, providing complementary and with cosmetics and plans to expand the
business in different area and also to expand the initial business in size. In the first year the
business forecast a profit of birr 22,028. In the second year and 3 rd year we expect and predict
that there will be increment of profit due to further increases in sales. The overall objectives of
the business are firstly to achieve and exceed sales forecasts to enable the business to be
operating at capacity, so that the business extended the number of types of modern cosmetics
that enables the business to meet (supply) the market demand. We would also claim to be able to
employ to have in future and expanding the existing one. The MNNSS business cosmetic
providing enterprise will require loan of birr 30,000 to be repaid over six years. The
contribution made for the business is equal for each partner and share of profits and loses also
can be equally shared. With fund (debt) the business will cover, house. (Store house), shelf, bulk
containers advertising and selling costs. The MNNSS cosmetics is also available on
www.hycosmos.com always and ready to accept its customer’s comments, suggestions and
questions regarding the quality f its products and services.
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2 INTRODUCTION
MNNSS cosmetics is located in Gondar, Gondar town. This location is a great opportunity to get
different kinds of customer.
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c. Statement of Financial Need
MNNSS cosmetics providing enterprise planned to construct and establish a company with
capital of 111520 birr. The business requires means of acquiring this initial capital by borrowing
from financial institution, personal capital and from close relatives.
It is believed that various kinds of business run in each and every aspect our country or other side
of the world and this comes with interaction of countries with other countries in all aspects of
their socio-economic and cultural dogmatism with the beginning of MNNSS cosmetics
globalization. This may be because of comfort ability of various kinds of environment which
assist or help people to lead people to lead their life in a luxurious manner and encourage beating
standard of excellence in their life as well.
Due to this the members of this work plan owners expect something which help us to reach or
future or planned life.
To do this (to achieve our goal), now grouped with each other to propose business plan paper
related to the thing which we want to specialized on.
It may be propounded as a new venture which is controlled by the group members (Accounting
2nd year students the site of this business enterprise is Gondar University. The primary purpose of
this business plan is to provide qualitative and quantitative amount of various types of a
cosmetics at affordable price.
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e. The company with its service
The MNNSS cosmetics enterprises has special passion for its customers these are helping the
customer or users to swim in the cosmetics then to use the cosmetics more frequently and keep
smooth their body as much as possible.
f. OBJECTIVE
To maximize cosmetics supply in general and satisfy consumers consumption
requirement in particular
To him consumers expenditure for transportation cost (not to go outside of Gondar.
To creating employment opportunity to the surrounding community
To provide the customer with high quality and quantity cosmetics
g. MISSION
Utilizing available resources, and providing the society wit due service
Adopting to the dynamic environment throughout the operation
Providing affordable living standard to its workers
Supplying high quality cosmetics suitable for bodies.
h. KEY SUCCESS
It uses different types of incentives (promotional), or inducement mechanism to attract
other customers
Continuous auditing of our sales and adjusting our expenditure accordingly
It stands for the welfare and common good of the society for instance, cost minimization
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3 INDUSTRY ANALYIS
It is in this respect that our business provided a lot of opportunities for the community of the
campus and surrounding peoples ( Gondar people) by enabling them to use modern cosmetics
and simply adapt freshman students and as well as gussets who are not familiar with the water of
the area.
Cosmetics providing enterprises business in well organized, licensed by the name cosmetic
providing business, growth oriented, gradually involves in the production of different services
and when involved in new services by creating backward and forward linkage.
As we have stated out previously, the competitors house lack of structure and organization lead
them into in efficient and have declining sales. They are also not well organized and structured,
no further expansion and shortage of materials that is they depend in cease and need assistance of
finance and qualified managers.
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4 DESCRIPTION OF VENTURE
Cosmetics providing business enterprise provide each type of cosmetics from Bahir Dar. It sells
the product to consumers and other small industries which interested in it. It also sells the
product to service rendering firms such as Barberry and Beauty Salons business.
The product of our business is industrial product. So, any firms who has the potential and
licensed by the government can undertake the activates. The brand of the business is designed to
be cosmetic providing enterprise, it is named so because it will have good attitude on society, it
doesn’t affect the natural environment (pollution) and initiate people to purchase the product and
as it is new.
The location of the business is Amhara regional state, the building of the state. The building of
the business includes one office, sentry box and ware house.
The business need to hire some labor force out carry out operation properly there is no need of
pre- requisite of higher educational achievement. But there are some criteria such as
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pens, papers reams and pencils
The above mentioned equipment will be purchased. The manager of the business has mush
experience in the field the age of student’s entrepreneurs is between 22 and 24. The special
ability of the manager possess is that he can work with others strongly. The reason for going to
setup this new business is
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5 PRODUTION PLAN
The aim of the business is to provide high quality and quantity modern cosmetics in order to get
the predicted gain and to satisfy the cosmetic the business is fully responsible for all part of the
operation. The first starting point of the business is identifying which type of cosmetics that the
consumers are in need of and then purchasing or providing those cosmetics at minimum possible
pick that doesn’t heart any one. The equipment is needed for immediate uses are the following
To start the business activity the business starts with 20 different types of costs. Totally the cost
of the business includes the following:-
With the growth of the business additional ware houses will be needed.
6 MARKETING PLAN
6.1Pricing
The basis for our cosmetics prices is the market price and cost-benefit analysis. Therefore, due to
presence of small competitive, the business cannot set high prices. Even if the business operates
at lower cost it would not price below the market prices just because of the purpose result,
cosmetics providing business enterprise. As a result, cosmetics providing business enterprise set
the price of cosmetics as the market that is it fluctuates over the time with market price.
6.2Distribution
The distribution of the cosmetics would be in three ways first, the business its self undertake
retail service to consumers and customers at market price. Secondly, by selling the product to the
whole sales and thirdly by selling to both wholesalers and retailer.
6.3 Promotion
The promotion activity will be done once in a couple of month through notices to be posted at
public center and also through
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TV
7 ORGANIZATIONAL PLAN
The overall operation or function of the owner would be governed or administered by the owner
there will be only one manager the manger had served for more than four years in this type of
business and have excellent experience in the area with his educational background that enable
him to manage the business successfully.
The permanent employees of the business consist of four workers. The three are responsible for
day-to-day activities of the business
8. ASSESMENT OF RISKS
The expected of risk to the business may be loss of income from expired and cosmetics during
operation may happen in the future, hence no one is certain about future, the other expected loss
is attributed to fluctuation of market price (devaluation, inflation, deflation)
The business also don’t use advanced technology whenever there is appropriate technology that
go with operation, is ready to make use.
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9. FINANCIAL PLAN
The business plan is prepared to obtain funds amounting 30,000 birr. The supplementary
financing is required to being work on site preparation, equipment purchases and to cover
expense in the first year of operations. Additional financing has already been secured in the form
of:-
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10. PRO-FORMA INCOME STATEMENT
The sale of revenue of cosmetics is expected to be audited daily and as well as monthly since it is
difficult to predict the price of each type of cosmetics we take the approximation of the sales of
monthly on average to be 7000 birr. Hence there are 12 months in business year total annual
revenue is calculated as follows
This is a salary for these permanent workers per a year plus a salary for the remaining person per
a year
For temporary workers: these temporary workers has an activity like cleaning the office and the
shop once a day he/she earns 5 birr per day or 150 per month
=30000*10%
=3000birr
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10.3 Miscellaneous Expense
Items Quantity Unit price Quantity
Pen 8 2 . 2 5 18
Total 320
Sales-------------------------------------------------------------------------------------84000
Expense
Salary Expense-----------------------------------------------------------45000
Depreciation Expense---------------------------------------------------12852
Freight Expense----------------------------------------------------------300
Interest Expense----------------------------------------------------------3000
Advertising Expense-----------------------------------------------------500
Miscellaneous Expense--------------------------------------------------320
Total Expense---------------------------------------------------------------------------------61972
In the second year of operation it is assumed that the business will increase the provision of
cosmetics and overall sales from 7000 birr/month to 7875 birr/month on average.
Sales-------------------------------------------------------------------------------------94500
Expense
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Salary Expense-----------------------------------------------------------------45000
Depreciation Expense---------------------------------------------------------12852
Interest Expense-----------------------------------------------------------------3000
Miscellaneous Expense---------------------------------------------------------320
Total Expense--------------------------------------------------------------------------61972
In the third year of operation it is assumed that the business will increases the operation of sales
volume from 7875 birr to 9625 birr per month, using full capacity at efficiency. Therefore
Revenue (Sales) annually= 9625*12=115500
Sales-----------------------------------------------------------------------------------115500
Expense
Salary Expense-----------------------------------------------------------------------45000
Depreciation Expense--------------------------------------------------------------12852
Freight Expense---------------------------------------------------------------------300
Interest Expense-------------------------------------------------------------------3000
Miscellaneous Expense-----------------------------------------------------------320
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Cash flow statement for year 1
Cash Budget Total
Operating Expense------------------------------------------61972
With draw-----------------------------------------------------1200
Operating Expense------------------------------------------61972
With draw-----------------------------------------------------1200
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Cash flow statement for 3rd year
Cash Budget Total
Operating Expense------------------------------------------61972
With draw-----------------------------------------------------1200
Capital -----------------------------36520
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Cash --------------------------------50828 Account payable------------------45000
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Break-Even Analysis for 1sr year
Total sales of cosmetics on average-------------------------------birr 84000
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