Smart Business Group

QUEENS COLLEGE

Postgraduate Program
Department of Masters of Business Administration
Group Assignment Two
Business Policy & Strategic Management
Submitted By
Number Name ID Section
1 Senaiyt Bekele GSR/MBA/0228/14 J

2 Frehiwot Getachew GSR/MBA/0192/14 J

3 Wubalem Asfaw Dubale GRS/MBA/0457/14 J

4 Worknesh Kifle GRS/MBA/0145/14 J

5 Ayahlushm Mulugeta GRS/MBA/0043/14 J

Submitted to:
Submission date: October/2022
Table of Contents
Executive summary..................................................................................................................................1
Description of the new venture...............................................................................................................2

Mission.......................................................................................................................................................2

vision..........................................................................................................................................................2

Objective....................................................................................................................................................2

General objective....................................................................................................................................2

Specific objectives..................................................................................................................................2

The size, scope and location of the business..............................................................................................3

The product................................................................................................................................................3

The construction material, personnel and office equipment needed......................................................3

Profile of the entrepreneurs........................................................................................................................5

Environmental analysis...........................................................................................................................5
The marketing plan..................................................................................................................................6

Market strategy..........................................................................................................................................6
The Production Plan................................................................................................................................7
Organizational and Human Resource Plan.........................................................................................10
Financial Plan.........................................................................................................................................11
Assessment of risk..................................................................................................................................13
References...................................................................................................Error! Bookmark not defined.

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 Executive summary
Smart Business Group is a partnership business which will establish this year in 2015 by five
business women. The business intended to provide poultry product for the local market. The
company aimed to produce poultry meat and fresh quality egg to the community, to promote
implement and to contribute to the national economy by producing and distributing poultry
products, and also introducing new technology and modern way of poultry production.
Furthermore, it will create job opportunity for skilled and semi-skilled labor.

The company’s production and main sales office is intended to be located at Burayu town (in the
most well-known industrial zone of Oromia region 15 kilometer in the west side of Addis
Ababa) and also it will have four different sales office. Since the demand for poultry product is
increasing locally as well as in the foreign market the company has the aim of providing high
quality product and making profit through customer satisfaction.

The company is run by the all of the owners who took responsibility based on their professional
backgrounds the first owner is the managing director of the company, the second owner deal on
production marketing manager, the third owner execute the human resource and finance task of
the business, the fourth deals with man power and general service and the fifth owner is work on
secretary. The man power composition of the business is going to be 15 peoples on starting
phase, among which five is skilled man power and the rest is semi-skilled. This management and
staff profile shows it is more than enough to handle customers and to run the business
successfully.

The starting capital of the company estimated around 500,000 birr (five hundred thousand birr).
The capital includes manufacturing machine, office equipment and overhead cost. The capital is
acquired from the entrepreneurs and bank loan. The estimated study indicates that annual profit
increases every year by 10% and first year profit is expected to be 50,000 before tax.

The company may face financial risks since at initial phase 1/5th of the capital is bank loan.
However, if the borrowing is not possible the company may not pursue operation. And as a

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solution they will bring additional partners. The second probable risk is technological risks, in
case when the competitors import advanced technologies and machines.

The possible marketing risk is, at the time of Christian fasting the market demand will be less.
At this time reducing the production of Christian poultry and increasing the others. The other
one is lack of sales office to be rented in the main marketing area (like Mercato, piazza etc…)
and to solve this problem we use car delivery on open space.

On the process of poultry production, the company may face risk of not getting adequate
quantity and quality input materials from local supply. To overcome this problem the
entrepreneurs intended to breed and raise animal.

By providing appropriate training on poultry production, it is possible to minimize the risk of loss.

Description of the new venture

Mission
The mission of the business is to supply quality poultry product for the domestic and the international
market.

vision
The vision of the business is contributing to the national economy by introducing new
technology and modern way of poultry production in the whole country and promoting poultry
market.

Objective
General objective
The general objective of the business is to support the national plan in developing regional
economy through boosting poultry production.
Specific objectives
The specific objectives include:

 To open and promote employment opportunity for the citizen.

 To promote and to contribute for poultry and poultry product marketing.
 To export poultry and poultry products their by increasing GDP.
 To fulfill its social responsibility by providing donations and supplying poultry product

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with the lower price for the community.

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 The size, scope and location of the business
Since, as mentioned earlier the business will establish by five entrepreneurs with equal paid up
capital. The rest of the initial capital of the business filled up by borrowed money from the bank.
The main production, sales and distribution area of the business is located around Gefersa River
in Kebelle 01 on five hundred square kilometer which is taken from the city administration on
the lease agreement for 50 years. The proposed business sub sales offices are located in Asco,
Wingate, Mexico and Megenagna as per office rental agreement made with private lease.

The product
The major product type of the business venture is egg, chicken and poultry meet.

The construction material, personnel and office equipment needed

Material required for the construction of farm with its value.

Serial. No Types of equipment Quantity Unit price Total price

1 Layer house 1 4,000.00 4,000.00

2 Growers house 20 1,500.00 30,000.00

3 Egg storage 12 1,000.00 12,000.00

4 Feed house 20 1,000.00 20,000.00

5 Dead birds burning pit 8 7,000.00 56,000.00

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The business needs to have 25 regular personnel from which the following are the core personnel
that manipulated the business.

Serial. No Position Department

1 General manager G/M

2 Production marketing manager Marketing
3 Human resource and finance manager Finance
4 Secretary G/ manager
5 General service G/M

We have the following office equipment with its value

Serial No Types of Quantity Unit price Total price in

Equipment birr
1 Laptop computer 2 7,000.00 14,000.00
2 Computers 2 4,000.00 8,000.00
3 Office table 8 1,500.00 12,000.00
4 Executive chair 3 1,500.00 4,500.00
5 Swivel chair and 10 750.00 7,500.00
Guest chair
6 Others 4,000.00
50,000.00

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 Profile of the entrepreneurs
Smart Business Group Company is well organized and has various professional partners from
different fields. The members are listed below with their educational background a work
experience.

No. Name Educational background Work experience

1 Senaiyt Bekele BA in Finance and 5

Development Economics and
certificate in IT
2 Frehiwot Getachew BA in Finance and 2
Development Economics
3 Wubalem Asfaw Dubale BA in Finance and 3
Development Economics
4 Worknesh Kifle BA in Finance and 1
Development Economics
5 Ayahlushm Mulugeta BA in Finance and 1
Development Economics

Environmental analysis
The project is going to be initiated in Sebeta town, which have got well developed infrastructures
including: electricity, water supply, transportation, telecommunication, internet service and etc.
moreover, it is located in a very close distance from A.A the main market for poultry products.

Institutions like agricultural and rural development office, small trade industry and investment
promotion, etc., are in place in the area. Services like banking, insurance, etc., are also found in a
near distance and an opportunity to assist the added poultry investment project is very high.

The government is supporting development of modern poultry production through its progress of
national livestock development and urban agriculture strategy in enhance production and
productivity. National development policies, programs and strategies developed for poultry are
key indicators.

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Furthermore, the free market economy and investment policies set by government has created a
conducive environment both for home and foreign investors to get involved in poultry
production, processing and marketing activities with ultimate target of meeting the unaddressed
and ever increasing protein need of the population.

In our country it is obvious that poultry output (product) usable by any members of the
community, so that since out product identical customer group with others, or market strategy
gives more attention to densely populated areas. In the first year we expect 15% share of the total
poultry market and we expect to 10% from the total market. Therefore, our market segmentation
will be the combination of mass and target market.

Computation analysis

The market competition ELFORA and other small and medium enterprises. Currently, ELFORA
is leading the market and the others are the followers. However, still there is a high potential
demand accordingly; our main customer will be wholesalers (Restaurants, Cafe etc.) and
households.

The strength of the plan will be to sale products with minimum price to potential customers and
to introduce the market to the public by satisfying once to our customers through low pricing and
by providing additional services that is different from competitors.

The marketing plan

Market strategy
The aim of the company to insure, understanding, creating, communicating and delivering
customer value and satisfaction are at the very heart of modern marketing thinking and practice.
The essential requirement of new market is that they must satisfy the need of the customers.

 To achieve a specific amount of profit

 To reach a certain sale volume, selling price chickens ranging from 50-80 birr, egg 1.50

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 The Production Plan
In this section we are going to see the type, quantity and costs of inputs required to the proposed
plan.

1. Gathering the main raw material

At this stage, we identify all businesses, which have good quality to produce chicken meet and
egg.

2. Identify construction material and office equipment

 Office equipment
 Laptop computer
 Desktop computer
 Office desk
 Executive chair
 Swivel chair and gust chair
 Construction material
 Layer house
 Growers house
 Egg storage
 Feed house
 Dead birds burning pit
 Fencing

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 3. Marketing

The interdependent task for producing poultry raw material

The project will require the following inputs:

a) Feed

One of the important inputs of the project is feed of pullets and feed of layers. This feed is going
to be purchased from private and government feed processing plants cited in Addis Ababa.

b) Vaccines and Medicaments

The important poultry diseases vaccines and medicaments are also the main required input,
which will be obtained from National Veterinary Institute at Burayu and from Burayu Zonal
Agriculture offices. The trained technician staffed by the project will carry out the application of
this vaccines and medicaments.

c) Buildings

The main building of the project includes a layer house (300sq.m) where the actual production
operation is taking place for 12 months, a replacement stock / rearing house (50sq.m) which is
required to grow pullets for three months for replacement of layer immediately after the removal
of old layer without creating a gap of egg production in the first 3 years production. Other
buildings like office, store and egg selling, changing and toilet rooms, which are needed for
hygienic purpose will also be constructed. Moreover, buildings like guardhouse, burning pit…
etc. are also in place. The poultry house will be constructed in such a way that it is designed to
give comfort for hens and workers.

d) Electric and water

The electrification and water reticulation will be carried out to supply the farm from the nearby
electric and water line. In order to secure the water supply in case of failures water tank with the
capacity of 1500 Lt will be erected on each house.

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 e) Farm equipment: Layer house and pullet house will be equipped with appropriate feeder,
waterier preferably round made of plastic material to have durable and easy to clean for
hygienic purpose.
f) Land

The project requires at least 4,000 to 5,000 sq.m of land for making expansion in the future and
to create a good working condition for the workers. The land is going to be obtained from the
municipality to Burayu. The land for the project site will be at least 300 meters away from
residential areas and 2km far from any other poultry production and preferably will be where a
good air movement is accessed, gently slope and where water doesn’t lodge.

g) labor

The water required for the operation will be from surrounding areas of the project site (from rural
as well as the town). Here, women will get priority since they are very good in poultry managing
and attending. Labor is required for feeding, watering poultry, egg collection, selling, cleaning
equipments and premises.

4. Cost

The pricing policy covers all the costs to set on acceptable profit margin. We considered the
following major costs like transportation, service as indirect costs. All other costs incurred in
running the business such as utilities, salary, costs of the price and so on can be considered as
indirect costs. Therefore, after calculating both indirect and direct costs we can determine the
sales price.

5. Placing

The company opened different outlet shops at different highly populated areas and also it
established as well organized around Mercato area. We have also strategic plan to open
additional outlet shops to different places both in the urban and rural areas.

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 Organizational and Human Resource Plan
Our partnership business is a well-organized and has various employees. All the team members
have common vision and goals to achieve their objectives. Their objectives and they
accompanied their knowledge and finance resources together to stand the business on its feet the
business also created job opportunities for fifteen permanents and ten temporary employees.

Based on the above team members, the business hired both skilled and semi-skilled employees in
permanent and temporary basis to run the business. The management team also strongly believes
that the success of a business will depend on ability, qualification, experience and hardworking
of its staff members so that the team is wise in selecting their own partners with the objective of
the right person at the right position.

Chart of business organization is briefly described below:

General
manager

Secretary

Human resource and finance

Productionand department

marketing General service

department

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 Financial Plan
The following subtopic represents the financial plan of smart business group produces poultry
Product Company.

Smart Business Group

Balanced sheet
January 31/2015, 2016 and 2017

2015 2016 2017

Asset
Cash 300,000.00 398,750.01 50,000.00
Account receivable 75,000.00 42,855.00
Construction material 150,000.00 124,900.00 135,900.00
Office equipment 50,000.00 49,550.00 48,245.00
Total asset 500,000.00 666,200.01 277,000.00

Liabilities
Bank loan 300,000.00 160,000.00 45,375.00
Account payable 7,500.00 30,000.00 5,000.00
Total liabilities 307,500.00 190,000.00 50,375.00

Owners equity
Senaiyt Bekele 38,500.00 41,750.00 45,325.00
Frehiwot Getachew 38,500.00 41,750.00 45,325.00
Wubalem Asfaw Dubale 38,500.00 41,750.00 45,325.00
Worknesh Kifle 38,500.00 41,750.00 45,325.00
Ayahlushm Mulugeta 38,500.00 41,750.00 45,325.00
Total owners equity 192,500.00 208,750.00 226,625.00
Total liabilities and capital 500,000.00 398,750.00 277,000.00

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 Smart Business Group
Income statement
For year ended year from up to 2017
2015 2016 2017

Revenue

Sales 250,000.00 380,000.00 420,000.00

Operating expense

Salary expense 177,000.00 285,000.00 307,000.00

Supply expense 8,200.00 9,175.00 13,800.00

Rent expense 9,800.00 12,550.00 16,800.00

Depreciation expense 2,000.00 3,275.00 5,800.00

Miscellaneous expense 3,000.00 3,380.00 6,600.00

Total operating expense 200,000.00 313,380.00 350,000.00

Net income 50,000 66,620.00 70,000.00

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 Assessment of risk
A) Controllable risk

Poultry need available and quality is one of prevailing constraint in the country in general and
around the project area in particular, thus there will be purchasing quality feed from known feed
processing plants in Addis Ababa. Poultry production requires knowledge and skill, which is one
of the constraints that will be solved by hiring professionals from the market. The project will
consult the agricultural office nearby and will provide appropriate training on poultry production,
urban poultry production, feed and feeding, health care, housing, egg collection, storage, record
keeping and management for non-professionals especially for poultry house workers. The project
believes that women are very good poultry attendant and caretakers in feeding, watering, egg
collection and handling, cleaning equipment and premises. Thus, such a kind of activities will be
run by women, which are done in priority houses.

B) Uncontrollable risk

Disease of various kinds like new castle (NCD), “Fengil”, respiratory diseases and parasites that
causes losses may be found in the project area. Intensive veterinary care supported by efficient
management and vaccination will be carried out by the project during the production period to
prevent the birds from the aforementioned diseases.

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 References
[1] "https://core.ac.uk/download/pdf/97494560.pdf," [Online]. Available:
https://core.ac.uk/download/pdf/97494560.pdf. [Accessed 3 10 2o22].
[2] "https://www.econstor.eu/bitstream/10419/84001/1/768463254.pdf," [Online]. Available:
https://www.econstor.eu/bitstream/10419/84001/1/768463254.pdf. [Accessed 2 10 2022].

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