CHAPTER 1: BUSINESS DESCRIPTION

1.0 Business Ownership

Murutsva Biogas is a Sole Proprietary company that builds/constructs biogas

digesters for rural and urban homes; farms, hospitals, and any establishments
hoping to use biogas for cooking lighting and heating. It is a company that has been
inspired by the price increases in gas that we have experienced in Zimbabwe along
with the global drive towards 0 emissions and a green lifestyle by reducing the
burning of fossil fuels, which release carbon into the atmosphere. It will be
registered at the Registrar of Companies in Harare on the 15th of August 2022.
Operations are yet to commence in mid-September of the same year.

1.1 Industry Analysis

Murutsva falls in the energy industry. The Biomass Power industry is a thriving
sector of the economy of countries like Germany, Japan, China, South Korea,
France, The United Kingdom, and the United States of America. In the U.S., the
industry generates over $908 million annually from more than 122 registered and
licensed biotechnology companies. However, in Africa, namely Zimbabwe there is
very little knowledge of the existence of this market and the positive impacts it has
on the economy and the environment. It can act as an alternative for LPG for
cooking gas, a replacement for natural gas in tanks for use in combustion engines
for cars and trains, in the production of electricity to mitigate some of the shortages
faced by Zimbabwe, and many other uses still under research.

Since Zimbabwe is still in the adoption phase, there is a lot of room for market entry.
Now there is only one competitor WHO constructing digesters in Zimbabwe,
however at a rural level and not at commercial scale but for the purpose of research
and development.
Currently those active within the industry in Zimbabwe are only involved in the
construction of biodigesters for rural communities and homes where the raw
materials are readily available, and electricity is not widely accessible. This presents
a perfect gap to penetrate the market, constructing digesters in urban areas and
providing some of the raw materials that might not be readily available such as cow
dung.

Future developments that the company can venture into in future is the production
of biogas at a commercial scale for compression and refill into storage tanks which
can be sold like LPG. With the use of bio-diesel generators, we can also venture into
power generation which can greatly impact our country’s power shortages while
dealing with our nation’s sewer and landfill pollution issues without impacting the
ozone layer while producing tons of useful organic fertilizer as a bi-product for resale
to farmers.

Due to an interest in cattle farming, I came across the possibility to produce energy
from animal waste and how it is being adopted by poor communities in Zimbabwe,
which got me thinking about the urban community that is suffering from power cuts
and could use a great innovation like this to light their homes and cook their food
using their own kitchen waste.
1.2 Idea Conception

Due to the issues of load shedding and power cuts in Zimbabwe, many people have
turned to other sources of cooking and lighting for their homes namely solar,
generators, Liquid Petroleum Gas (LPG), firewood, and so on. All these means are
great and vary on location, family size and family income. Since we do not have our
own petroleum reserves in Zimbabwe, we resort to importing all petroleum bi
products like petrol, paraffin, diesel, LPG, etc. which means if the international
market price goes up, many Zimbabweans are forced to pay higher prices for these
essential commodities.

Even in rural areas where the major source of fuel for cooking is fired wood, the
effects on the climate have been devastating due to large amounts of trees being
cut down without any replenishing action.

The solution to expensive gas is the use of biogas. Murutsva, is a company that will
provide biogas digester construction for rural, urban, and commercial use. Due to
the inexpensive requirements for producing biogas (cattle manure, sewage, kitchen
waste, etc), the price for the gas sold in tanks will be cheaper than LPG. We will also
be providing biogas equipped burners/stoves and equipment as well as tanks,
technical support, advice, and installations. Installations will be done for both fixed
dome digesters which are built from brick or moveable digesters, constructed using
plastic drums or tanks and cater for any size from tiny homes to large hospital
requirements. The slurry produced from the digesters are a good source of manure
and fertiliser which can be sold to farmers.
1.3 Vision

To provide access to affordable clean renewable energy

1.4 Mission

Our mission is to construct safe, efficient biogas digesters for homes and businesses
that will promote sustainable livelihoods in and around Zimbabwe.

1.5 Values

Customers First:
We put our customers first in everything we do, and we consistently earn our
customers’ satisfaction by providing excellent value.

Trust:
We work together to create an inclusive culture built on trust, respect, and dignity
for all.

Success and Contribution:

We strive for excellence in all we do; each person’s contribution is critical to our
success. Teamwork: We believe in group efforts and work collectively to find more
efficient ways to serve our customers.

Continuous Innovation:
We always strive to improve on excellence.

Excellence:
To us “Excellence” means standing out, striving for perfection in everything we do

Honesty:
“Honesty” to us means sincerity, truthfulness, fair & loyal with integrity.

Socially Responsible:
We are committed to care for the society and environment through all our actions.
1.6 Objectives

To achieve a 15% net profit by 31 March 2023.

To achieve a market share of 25% by end of 2024.

1.7 Product/Service Description

Biogas is mixture of gasses and mainly comprises of methane. Methane is gas that is
produced when animal and plant matter decompose anaerobically (in the absence of
oxygen and light). This gas can be a useful and renewable alternative for LPG which
is being widely adopted worldwide especially in developed countries. Methane can
be used for cooking, lighting, powering some vehicles and production of electricity to
power households and factories. Biogas production is one of the most efficient ways
to deal with landfills, dumpsites without much effect on the environment as waste in
dump sites is a good fuel for producing methane. Apart from rubbish, cattle manure
is also an abundant and rich fuel for methane along with sewage from municipal and
septic tanks, kitchen waste, and any food bi products like crop shredlage, etc. Due
to the abundance and cheapness of these resources, it therefore makes biogas not
only a renewable resource but also a cheaper alternative for fossil fuels. It does
require its own equipment to use because methane requires more oxygen for
combustion than LPG.

Biogas is produced in a biodigester that is an airtight, opaque structure, made from

brick, poly plastic, or stainless steel. As Murutsva, we will build brick biodigesters as
well as poly plastic digesters. Poly digesters range from 1 to 10 m3and offer the
advantage that they are portable and smaller digesters can fit on a balcony or corner
of a small yard or apartment. Digesters constructed from brick are more permanent
but offer longer life spans as well as less temperature fluctuations and range
anywhere from 1 to 500m3 in size.

The methane gas outlet is connected to a gas holding rubber tube and another
outlet is connected directly into the area of use (e.g kitchen) through a manifold
system. Biogas can be used to light rooms or for heat for use in chicken brooding,
etc.
Murutsva will also provide biogas stoves, connectors, heaters, and lights.

STRENGTHS WEAKNESSES

Our business idea covers 2 different Our perceived weakness could be the
industries that is the Energy sector and fact it is a new cooking gas plant
the agriculture sector. Currently, there is business which is owned by an individual
low competition in the industry and the (a small family), and we may not have
threat of new entrants is notably low in the financial capacity to sustain the kind
the biogas business. The reason being of publicity that can give us leverage and
that there is very little knowledge of this start operating chains of gas plants in
renewable source of energy and the various cities in the Nigeria as planned.
business is capital intensive to get
operations off the ground, thereby
making new entries very few due to the
complexity of the operations.

Blessed Cooking Gas Plant is centrally

located along one of the busiest areas in
Akoka – Lagos State; our location is in
fact one of our major strength. Aside
from the basic service that we offer, we
also offer complimentary services that
most of our competitors are not offering.

So also, the vast experience of our

management team, we have people on
board who are highly experienced and
understands how to grow business from
the scratch to becoming a national
phenomenon and our attendants are well
groomed to handle various classes of
customers; our excellent customer
service culture will definitely count as a
strong strength for the business.
OPPORTUNITIES THREATS

We are centrally located in one of the One of the major threats that confront
busiest communities in Akoka – Lagos businesses all over the world is economic
State and we are open to all the downturn; when the economy is bad it
available opportunities that the city has affects consumers spending which in turn
to offer. Our business concept also impacts businesses negatively. Another
positioned us to attract people who like threat that we are likely going to face to
service and repair their gas cookers, confront us is the emergence of a new
purchase gas cookers, gas cylinder and cooking gas plant, small gas shop or
accessories. Akoka is one of the densely even a filling station that retail gas within
populated communities in Lagos State the same location where ours is located.
with a handful of higher institutions, and
indeed populations translate to
opportunities.
CHAPTER 2: MANAGEMENT AND ORGANIZATION
2.1 Legal structure
Murutsva Biogas is a sole proprietary company. It is a sole proprietary company as it
ensures a flexible management structure. This structure is advantageous to
maximise control of the company, set policies and reduce initial paperwork,
registration costs and provides more straight forward banking. It is to be registered
to the Registrar of Companies’ Harare on the 15th of August 2022. The company is
into construction of biodigesters, sale of digester substrate(manure), consultants,
repairs and sale of biogas stoves and accessories.

2.2 Shareholding structure

SHAREHOLDER PERCENTAGE OF CAPITAL INVESTED
NAME SHARES (%) (USD)
Munashe Mudabura 100 5000

2.3 Key Personnel

Murutsva Biogas (Pvt) Ltd is set to become one of the leading biodigester
construction business in Zimbabwe hence the need for us to build a solid business
foundation and business structure that will enable us to achieve our aims and
objectives.

Excellent customer service and efficiency are top priority to us which is why we will
ensure that we look for applicants that match the picture of the business before
hiring them. Although we will provide trainings in areas such as excellent customers
services and safety as it relates to handling cooking gas etc, but we will ensure that
we shortlist applicants that are customer centric.

Chief Executive Officer (CEO) – MUNASHE MUDABURA:

 Recruiting, selecting, orienting, training, coaching, counselling, and
disciplining labour force; communicating values, strategies, and objectives;
assigning accountabilities; planning, monitoring, and appraising job results.
 Creates, communicates, and implements the organization’s vision, mission,
and overall direction – i.e., leading the development and implementation of
the overall organization’s strategy.
 Responsible for fixing prices and signing business deals
 Responsible for providing direction for the business
 Responsible for signing documents on behalf of the company
 Evaluates the success of the organization
  Who will be doing the work?
 How are they qualified?
 What are their skills?

Marketing Administrator

 Evaluating and optimizing marketing and pricing strategies.

 Analyzing market trends and preparing forecasts.
 Generating new business leads.
 Increasing brand awareness and market share.
 Coordinating marketing strategies with the production, financial, and accounting
departments.
 Developing and managing the marketing department's budget.

Finance Administrator

 Evaluating and optimizing marketing and pricing strategies.

2.4 Organizational structure

CEO

Marketing Accounting Gas

Biogas Mason
Administrator Administrator Technician

Accounting
Sales Clerk Plumber Aids Builders
Officer

2.5 HR Requirements
Gas Technician
Biogas Mason
Sales Clerk
 Accounting Officer
Builders
Building-Aids

Gas Technician

 Fabricates Biogas stoves and equipment.

 Repairs biogas equipment
 Modifies LPG appliances to work with biogas
 Constructs PVC bio digesters

Biogas Mason

 Constructs Brick Biogas Digesters

 Inspects site for construction
 Recommends appropriate digester maintenance

Sales Clerk

 Operate the front reception.

 Handle any client queries

Accounting Officer

 Handle payments.
 Handle any financial questions
 Generate monthly reports

Builders

 Construct brick biodigesters.

 Dig pits for digesters
 Plaster digester walls

Building Aids

 Assist builders in construction.

 Mix concrete and cement
 Dig pits for digesters

Plumber

 Assist Construction team in connecting pipes.

 Recommends design for sewer digesters
2.6 Professional support
Attorney
LawyerUp Zim Legal Practitioners
Harare, Zimbabwe
Contact: +263 716 349 076

LawyerUp Zim Legal Practitioners will provide law advice and legal assistance
to the company. They will also help in claiming insurances from insurance
companies.

Accountants and Auditors

Point Guard Group of Auditors
Harare, Zimbabwe
Contact: +263 778 452 900

Point Guard Group of Auditors will oversee the finances and the available
stock of vehicles. They will also prepare financial statements for the
company and take care of financial transactions. They will also take care of
checking the accuracy of financial records and ensure that the company
complies with tax laws.

Bankers
CBZ Bank
Harare, Zimbabwe
Contact: +263 777 450 123

These provide banking services and give financial advice to the company.
They also help the company on issues of savings, investments, loans and
security. Their knowledge and advice will help the company solve financial
problems.

Training
CBZ Bank
Harare, Zimbabwe
Contact: +263 777 450 123

These provide banking services and give financial advice to the company.
They also help the company on issues of savings, investments, loans and
security. Their knowledge and advice will help the company solve financial
problems.
 2.7Anual Salary Budget

The expected grand total per annum is US$ 24000 for salaries.

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
CEO 600 600 600 600 600 600 600 600 600 600 600 600 7200
Marketing
Administrator 350 350 350 350 350 350 350 350 350 350 350 350 4200
Accounting
Administrator 350 350 350 350 350 350 350 350 350 350 350 350 4200
Gas
Technician 250 250 250 250 250 250 250 250 250 250 250 250 3000
Sales Clerk 200 200 200 200 200 200 200 200 200 200 200 200 2400
Total 1750 1750 1750 1750 1750 1750 1750 1750 1750 1750 1750 1750 21000

All other workers are contracted therefore paid when they are in service and from
the proceeds of their work.
CHAPTER 3: MARKETING PLAN

3.1 MARKET DESCRIPTION

The target market includes all rural and urban households as well as universities, hospitals,
schools, hotels, and restaurants around Harare.
Families, households, and companies have been greatly affected due to load shedding across
Zimbabwe. As a result, not only, rural areas require alternative cooking sources but those in
urban too. LPG is widely becoming an alternative however it is considerably expensive for
others. Another source of fuel is firewood, but it can also be difficult to acquire in urban areas

According to ZERA, Zimbabweans used 13 million kg of LPG in the first quarter of this year
which is a 2 million kg increase from the same period last year and consumption is expected
to increase especially in the winter season. By introducing a cheaper alternative to LPG
which performs at the same efficiency rate, there is great promise of market acceptance.
Currently, there are 42 biogas masons registered in the ZERA database and spread out across
the country, meaning competition is spread out more. it is an attractive and promising
market.

The current trend in the market is that bio digesters are constructed for small scale use only
and mainly in rural households and communities, but there have not been any advancements
towards selling bottled biogas and this innovation will change our country now and into the
future. Biogas has various uses such as cooking, heating in homes and for livestock rearing,
lighting, etc. Going into the future, biogas can be used to generate electricity with the use of
biodiesel generators.

***Alternate providers of this service include Rural Electrification Fund (REF). They help in
constructing and maintaining biodigesters as well as using biogas along with offering
suppliers for biogas stoves and accessories. They also provide training and support with any
biodiesel-related work. We will work with organisations like these for supplies and staff
training.

3.2 CUSTOMER PROFILE

Our target market are people in the urban areas of Zimbabwe especially in medium to high
density. These types of communities are bound to be greatly affected by load shedding and
have higher cooking requirements during the day. Of course, it does not disqualify anyone
who might fall outside this who might require our service. We expect to capitalize on the
national population that are in the civil service. If we manage to capture this market, this can
guarantee a sure and safe market by offering the service in monthly installments that will be
paid off through the bank and the Salary Services Bureau (SSB). We are expecting an
average number of 5000 clients in the first 3 years with an estimated revenue of US$300 per
client.
We want to reach the customer who lives mainly in the high-density suburbs of Harare like
Warren Park, Kuwadzana, High Field, Mufakose, Budiriro, Domboshawa, Haatcliffe,
Chitungwiza, etc. We will be looking at both men and women but with minimum cooking
requirements especially for smaller digesters. Our digesters are portable and can vary in size
therefore our clients can have sallies starting from US150,00.

3.3 COMPETITION
Competition in the library management systems is high due to existence of generic software
companies and other that develop specifically library systems. These companies include
Koha, Evergreen and Ex Libris Alma.
Competitors seem to be better since they offer open-source software that requires no
licencing thereby making it affordable to clients and some of the companies have been in the
market for some time and have gained market share.
Koha
Koha is a free software library automation package. It is used worldwide; it was developed by
a growing community of users collaborating to achieve their technology goals. Koha’s
feature set continues to evolve and expand to meet the needs of its user base. In the
educational institutions it has a market share of 54% all over the world. KOHA offers
cataloguing and circulation of books. It accounts for the mass market constituting of libraries,
educational institutions and museum. Consumers purchase KOHA because it is open source
and doesn’t need any subscriptions thereby affordable to clients. The system offered caters
for most needs but doesn’t allow operations to proceed during power failures. KOHA does
not have a mobile application KOHA utilizes online advertising to promote the system usage
to clients.
Ex Libris Alma

Ex Libris Alma is a secure, scalable end-to-end library software system (ILS) for managing
the acquisition, sharing, cataloguing, and use of all kinds of resources, including physical and
electronic books, physical and electronic periodicals, and digital resources (such as audio,
image, and video files). It has a market share of 26% in the educational institutions all over
the world. Libris Alma offers services such as book acquisition and reports but has an
extension of a cloud-based platform that can be utilised from any smart device. However, it
doesn’t offer a mobile application for library operations. Libris Alma caters for mass market
consisting of city libraries, educational institutions and museum. Consumers tend to purchase
this system due to the cloud-based feature that is not platform dependent. Libris Alma
satisfies consumer needs to a greater extend but has drawbacks such as the security threat
imposed by having only one super user account. It is costly since the system requires internet
for it to work, resulting in high internet costs and ongoing subscription fees.
Ex Libris Alma pricing strategy is based on the number of users e.g., number of librarians,
number of digital resources hosted on the cloud platform and amount of storage occupied.
Ex Libris Alma doesn’t offer credit terms as they require prompt payments upon usage of
their system.

SWOT ANALYSIS FOR KOHA AND EX LIBRIS ALMA

KOHA EX LIBRIS ALMA
STRENGTHS
It is configurable and adaptable -Has a unified design
-Translated into many languages -Comprises of a strong suite of analytics
tools.
-No license fees needed -Allows full customization
-Platform independent
WEAKNESSES
-Installation requires technical knowhow -Time consuming to input data into the
of Linux, MySQL and Apache system
-Changes require scripting and Perl - Requires professional help to install and
manage.
-Requires professional help to install and
manage.

SWOT ANALYSIS FOR MURUTSVA

Internal environment
Strengths Weaknesses
-new products like mobile application version -The subscription is a bit lengthy
of the website
-Content that is not customer-centric
-e-library
-online bookstore
-digital data capturing system which is fast
-impressive Global navigation bar
-Easy to navigate through the website
-Attractive banner

External environment
Opportunities Threats
-more customers shifting to digital libraries -Unique app function by competitor
due to easy management of books
-Government’s support in emerging local
markets

3.4 MARKETING MIX

Marketing Objectives

1. To attain a market share of 3% by the end of 2022.

2. To be a regional supplier of library system by end of 2022.
3. To achieve a sales revenue of $1500 by end of 2022.
Marketing Mix Elements
Product

The software comes with a mobile application that can be used even when there is no power
and the information recorded during that period will be automatically updated to the servers
when power is restored. Customers will most definitely be attracted to our services due to this
mobile application. Instead of using cloud storage a local database will be integrated within
the application.

Pricing

Library system costs

Library software $1500 /unit
development and installation
Maintenance and Support $500/month

After consideration of development team wages, website hosting and domain name costs we
arrived at the above prices. YoLibrary incorporates cost plus pricing method which accounts
for costs incurred during system development i.e. a mobile phone ($100). Our prices are
relatively lower than competitor which range from $2 000 to $ 5 000 per system.
Distribution

YoLibrary plan to utilize direct channels to sell the software to clients whereby there are no
intermediators who will resell the software. Direct channels facilitate direct user feedback
which ultimately helps the development process. The direct channel of distribution will
remain the same for the first 3 years since the company intent to retain full system control.
Most competitors use direct channels to have full control of the system, however, some
companies offer software to other software vendors who can resell and redistribute. Profits
can be greatly boosted if channels of distribution are reduced since the main company will be
accounting for all its clients and no competition exists from software vendors who resell the
software.
Advertising and Promotion

YoLibrary plans to use personal selling and advertising as forms of promotion. The software
will be advertised both on the internet and television. This strategy is the most effective in
reaching our target market as television adverts impact almost everyone including members
of institution boards. Again, Facebook ads is another effective way to reach our clients since
we could set ads to show up if terms related to our system are searched for. Television
advertising costs 1000RTGS per ad and internet advertising using organic results if free of
cost. We plan to use different promotional methods as our competitors to stand out from the
competition.
CHAPTER 4 OPERATIONAL PLAN

4.1 LOCATION

Murutsva will have an office/show room located in the CBD of Harare preferably near
Samora Machel and Leopold Takawira, where there is an optimal amount of foot traffic and
some parking space around the buildings for those travelling in cars. The company’s storage
will be in Glen Forest, where I currently stay and has ample space for storage of the
necessary equipment. Apart from the physical location, Murutsva has a relatively strong
digital presence via its website @ https://murutsvagas.co.zw and following social media
platforms: Facebook – MurutsvaGas and Instagram – MurutsvaGas.

4.2 BUSINESS OPERATIONAL TIME

Murutsva Pvt Ltd operates from 0800 hours to 1630 hours from Monday to Friday.

4.3 WORKFORCE
Sales Clerk
-Responsible for feeding biodigesters with bio substrate daily and emptying digester slurry.

-Also responsible for collecting cattle manure from cattle pens.

-Full time employees

-Wages will be paid per month at us$100/month

-Age:19-45

-Qualifications: non required

Plumber
-Responsible for driving company trucks, tractors, and any other vehicles to transport gas,
slurry, and manure to, from and around the farm.

Full time employees

Wages will be paid per month at us$200/month

-Qualifications: Class 2 Driver’s License and police clearance

Biogas Mason
-Design biodigesters and produce floor plans for constructions.

-Assess structural integrity and recommend the necessary infrastructural changes required for
better performance.

-Supervise construction of biodigesters

-Full time Employee

-Wages will be paid per month at us$1000/month

-Qualifications: Bachelor’s Degree in civil and/or Water Engineering, 2 years work

experience (optional)

Builders
-Work under supervision of the Civil engineer and construct biodigesters for clients.

-Work under contract

-5 main builders under contract and any more will be brought on upon need for a bigger
project

-Wages will be paid per square meter at us$20/m2

-Qualifications: Basic course in building, 5 years’ experience as a builder

Biogas Maintenance Manager

-Work under supervision of the Civil engineer and construct biodigesters for clients.

-Work under contract

-5 main builders under contract and any more will be brought on upon need for a bigger
project

-Wages will be paid per square meter at us$20/m2

-Qualifications: Basic course in building, 5 years’ experience as a builder

4.4 PRODUCTION PROJECTIONS
Biodigesters are built or produced as per order. There are 2 types of digesters, portable
polyvinyl chloride (PVC) digesters and brick digesters. Both digesters are constructed as per
order.

PVC Digesters Brick Digesters

Size Price per unit Size Price per unit

(m3) ($) (m3) ($)

1 450 6 1450

2 600 9 1850

5 1000 13 2150

10 1800 20 2900

4.5 EQUIPMENT AND MATERIALS

 Shovels

 Hoes

 Picks

 Trowel

 100cc MotorBike

 Tape measurex100m

 Spirit Level

 Other Building Utensils

 Drill
 Grinder
 Petrol generator
 Carbon Dioxide Tank
 4.6 SUPPLY REQUIREMENTS
Item Fixed Monthly Other
Asset Expenses Expense

registering the business 750

Legal expenses for obtaining licenses and permits as well as the

accounting services (software, P.O.S machines and other
software) 5000

The cost for insurance (general liability, workers’ compensation,

and property casualty) coverage at a total premium 2400

The cost for payment of rent for 12 months (offices) 20000

Building Workers' housing 10000

Other start-up expenses including stationery ($500) and phone

and utility deposits 2500

Operational cost for the first 3 months (salaries of employees,

payments of bills etC) 10000

The cost for Start-up inventory (building biogas digestrers and

acquiring biofuel products raw materials et al) 100000

The cost for the purchase of furniture and gadgets (Computers,

Printers, Telephone, TVs, Sound System, tables and chairs et al) 4000

The cost for the purchase of distribution tankers / trucks 50000

The cost of launching a website 250

Total 164000 30000 10900 204900

Name of Quantit Unit

Item supplied Total
supplier y Cost
Mbare Shovels 4 5 20
Mbare Hoes 4 5 20
Mbare Picks 4 5 20
Mbare Trowel 4 5 20
Mbare Bricks 1 0.1 0.1
Mbare Cement 1 11 11
Mbare Pit Sand 1 15 15
106.1
4.7 OPERATIONAL FLOWCHART
4.8 INTERNAL POLICIES
The Biodigesters, other products and services provided by Murutsva must achieve and
maintain the following quality standards:

Code of conduct

Dress code – Employees both under contract and permanent should wear company approved
clothes and work suits during work hours.

Reporting misconduct – Any misconduct should not go unreported and whistle blowers will
be protected

Social media - Use of social media to advertise or represent the company by any unauthorised
personnel can lead to prosecution

Recruitment – Staff shall work under contract as either permanent or temporary staff and will
go under strict background checks. Hiring will be done of qualified and trained personnel
with continuous training and development being conducted by the company.

4.10 OPERATIONAL BUDGET

CHAPTER 5: FINANCIAL PLAN

To start the business, a capital of $300 000 is required. The sources of the capital is as
follows: shareholders (US$100 000), Bank Loan (US$200000). The capital will be used to
purchase material to setup biodigester, vehicles and other equipment, pay depot rent and
salaries for employees etc. After a year of operation the business expects an income of
$219000 to be generated from sales.

5.1 FINANCIAL OBJECTIVES

• Maintain an average revenue growth of 20%.
• To achieve return on investment of 40% per annum.
• Obtain 25% or more market share in the biogas industry

5.2 SOURCES OF FUNDS

SOURCES OF FUNDS
Equity - Share Capital $ 10,000.00
Debt - Friends and Family $ 5,000.00
- Bank loan $ 35,000.00
Total Debt $ 40,000.00
EQUITY + DEBT $ 50,000.00
5.3 FINANCIAL ASSUMPTIONS

Assumptions on yearly basis

All Amounts Are In US$
Selling Price to remain at 1500.00
Mobile Phone(installation) 100.00
Sales Revenue growth rate 10%
Cost of Sales growth rate 10%
Advertising decrease 5%
Depreciation - Computers 25%
Depreciation - Office Fittings 1%
Electricity to increase by 5%
Insurance to increase by 5%
Interest on Loan 30%
Office stationary to increase by 2%
Tax 25%
Telephone expenses to increase by 5%
Transport to increase by 5%
Internet - Wi-Fi 3%
Rent and Rates 5%
Professional Support 10%
Business license and Permits 10%

5.4 SALES AND PURCHASES FORECAST

January February March April May June July August September October November December TOTAL

New Clients 2 5 8 10 14 20 20 0 15 18 13 0 125.00

Clients using system
Sales in value 3000 7500 12000 15000 21000 30000 30000 0 22500 27000 19500 0 187500.00

Production Cost 100.00

Cost Of Sales (125*100) 12500

5.5 STATEMENT OF CHANGES IN EQUITY

Statement of Changes in Equity for Year 1 Year 2
Share Capital Retained Profit Share Capital Retained Profit
Balance at 1 January 10000.00 0 10000.00 1960
Total income for the period 6960 16681.125
Dividends Paid 5000.00 5000.00
Balance at 31 December 10000.00 1960.00 10000.00 13641.13

5.6 CASH FLOW PROJECTION

Monthly Projected Cash Flows
January February March April May June July August September October November December TOTAL
Opening balance 14867.50 8450.00 5737.50 7410.00 15217.50 31690.00 48057.50 35240.00 44267.50 58490.00 65267.50
Cash Inflows
Equity and Debt 50000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 50000.00
Sales Revenue 3000.00 7500.00 12000.00 15000.00 21000.00 30000.00 30000.00 0.00 22500.00 27000.00 19500.00 0.00 187500.00
Other Income
TOTAL INFLOWS 53000.00 7500.00 12000.00 15000.00 21000.00 30000.00 30000.00 0.00 22500.00 27000.00 19500.00 0.00 237500.00

CASH OUTFLOWS

Advertising Expenses 500.00 475.00 450.00 425.00 400.00 375.00 350.00 325.00 300.00 275.00 250.00 225.00 4350.00
Wages and Salaries 10000.00 10000.00 10000.00 10000.00 10000.00 10000.00 10000.00 10000.00 10000.00 10000.00 10000.00 10000.00 120000.00
Office Fittings 15000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 15000.00
Transport 1500.00 1000.00 1200.00 500.00 400.00 700.00 900.00 0.00 100.00 50.00 30.00 0.00 6380.00
Office Stationery 110.00 60.00 80.00 20.00 10.00 70.00 0.00 110.00 90.00 70.00 60.00 80.00 760.00
Computers 4200.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4200.00
Electricity 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 1200.00
Telephone Expenses 120.00 120.00 120.00 120.00 120.00 120.00 120.00 120.00 120.00 120.00 120.00 120.00 1440.00
Interest on loan 437.50 437.50 437.50 437.50 437.50 437.50 437.50 437.50 437.50 437.50 437.50 437.50 5250.00
Insurance 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 6000.00
Internet - Wifi 725.00 725.00 725.00 725.00 725.00 725.00 725.00 725.00 725.00 725.00 725.00 725.00 8700.00
Rent and Rates 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 6000.00
Professional Support 1200.00 0.00 600.00 0.00 0.00 0.00 0.00 0.00 600.00 0.00 0.00 0.00 2400.00
Business Licences and Permits 3240.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3240.00
Dividends Payment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5000.00 5000.00
TOTAL OUTFLOWS 38132.50 13917.50 14712.50 13327.50 13192.50 13527.50 13632.50 12817.50 13472.50 12777.50 12722.50 17687.50 189920.00

Closing Balance 14867.50 8450.00 5737.50 7410.00 15217.50 31690.00 48057.50 35240.00 44267.50 58490.00 65267.50 47580.00
5.7 PROJECTED INCOME STATEMENT
Projected Statement of Income for 2 years
Year 1 Year 2
Sales Revenue 187500.00 206250.00
Cost of Sales 12500.00 13750.00
Gross Profit 175000.00 192500.00
OPERATING EXPENSES
Advertising Expenses 4350.00 4567.50
Wages and Salaries 120000.00 126000.00
Transport 6380.00 6699.00
Office stationary 760.00 760.00
Electricity 1200.00 1212.00
Telephone expenses 1440.00 1440.00
Interest on loan 5250.00 0.00
Insurance 6000.00 7500.00
Internet - Wifi 8700.00 8700.00
Rent and Rates 6000.00 6300.00
Professional Support 2400.00 2640.00
Business licence and Permits 3240.00 3240.00
Depreciation - Office Fittings 0 150.00
Depreciation - Computers 0 1050.00
TOTAL OPERATING EXPENSES 165720.00 170258.50
Net Income before tax 9280.00 22241.50
Taxation (25% on profit) 2320 5560.38
INCOME FOR THE YEAR 6960 16681.13

5.8 PROJECTED STATEMENT OF FINANCIAL POSITION

Statement of Financial Position

YEAR 1 YEAR 2
COST ACC DPN NBV COST ACC DPN NBV
Non-Current Assets
Tangible Assets
Office Fittings 15000.00 0 15000 15000.00 750 14250
Computers 4200.00 0 4200 4200.00 420 3780
19200 0 19200 19200 1170 18030

Current Assets
Bank 47580.00 46171.50
Total Current Assets 47580 46171.50
TOTAL ASSETS 66780.00 64201.5

EQUITY
Ordinary Shares of $1 each 10000.00 10000.00
Retained Profit 0.00 13641.125
10000.00 23641.125
Current Liabilities
Tax 2320 5560.38
Long term Liabilities
Loan Payable (2 years) 35000 35000
37320 40560.375
47320.00 64201.5
5.9 RATIO ANALYSIS
PROFITABILITY RATIOS

Ratio Year 1 Year 2 Comment

(175000÷ 187500) *100 (192500÷206250) *100 The ratio is constant indicating that the
Gross profit margin business is generating a constant amount
0.9333 0.9333 of money for each dollar of sale

(9280÷187500) *100 (22241.5÷206250) *100

The ratio is increasing indicating that
Operating Profit Margin
the company’s profitability is increasing
0.0495 0.1078

(6960÷187500) *100 (16681.13÷206250) *100 The ratio is increasing indicating that

Net Profit Margin the company’s efficiency at converting
0.0371 0.0809 sales into profit increases

(6960÷30960) *100 (16681.13÷23641.125) *100 The ratio is increasing indicating that

Return on Equity (ROE) the company becomes more effective at
generating profit from existing assets
0.225 0.706

LIQUIDITY RATIOS

Ratio Year 1 Year 2 Comment

Current Ratio = = Ratio is decreasing indicating that
the company decreases its
= capability to pay off current
1.32 1.14 liabilities using current assets.
Working Capital Ratio = =
Ratio is decreasing indicating that
the company does not have the
financial resources to meet all of
= 0.06 0.03
its short term financial obligations.

LEVERAGE RATIOS

Ratio Year 1 Year 2 Comment

Debt to Equity = 68280 64201.5
= 23641.125 Ratio is increasing
Ratio 30960 indicating that the
company has more
liabilities that
Total Assets = 2.21 = 2.72 assets.
=
Onwer s ' equity
ACTIVITY RATIOS

Ratio Year 1 Year 2 Comment

Working Capital 187500 206250 The ratio is
Turnover Ratio 11760 5611.125 increasing
indicating that the
company is gaining
= = 15.94 = 36.76 efficiency and may
Revenue not require
Average Working Capital additional funding.

5.10 CONTRIBUTION FROM EACH UNIT

Number of units sold 125

Sales 187500
Variable cost 9280
Contribution in dollars 178 220

= Sales – Variable cost

5.11 BREAKEVEN POINT

Fixed Costs 19500

Contribution per unit

=
= $1425.76
Break-even point in units

=
13.68

5.12 MARGIN OF SAFETY

Break-even point in dollars 13.68 * 1500

= Break-even point per unit * Selling price
= $20 520
Margin of safety in dollars 187500 – 20 520

= Sales – break-even point = $166 980