Zeyede Asifaw Bekele Grain

sales Business Plan

April 2023
Contents
1. EXCUTIVE SUMMERY..................................................................................................................1
2 .Background and Description of the Business....................................................................................1
2.1 EXTERNAL TRADE REVIEW...........................................................................................................1
2.2 THE TRADER.................................................................................................................................2
2.3 Background..................................................................................................................................2
3. Management profile...........................................................................................................................3
4. Marketing Plan..................................................................................................................................3
4.1Target Market...............................................................................................................................3
5. MARKETNG PLANING DETAILS.................................................................................................4
5.1. Planning......................................................................................................................................4
5.1.1 Zeyede Asifaw Bekele Grain sales.........................................................................................4
5.2 Pricing strategy............................................................................................................................5
5.3 Operations Plan...........................................................................................................................5
5.3.1 Methods of collection...........................................................................................................5
5.3.2 Quality Control......................................................................................................................5
5.3.3 Customer Service..................................................................................................................5
5.3.4 Assumption and basis...........................................................................................................6
5.4.2 Financial Results..................................................................................................................6
5.4.3 Projected Profit and loss statement.....................................................................................7
5.4.4 Break Even Analysis..............................................................................................................8
5.4.5 CASH FLOW PROJECTION......................................................................................................9

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1. EXCUTIVE SUMMERY
The market for agriculture in Ethiopia is projected to register a CAGR of 5.6% during the
forecast period (2022-2027).
Due to the COVID-19 outbreak, the Ethiopian agriculture sector faced major challenges,
including the harvesting process, labour scarcity, which affected the supporting infrastructure
around the agricultural sector, heavily restricted movement across state borders, which
blocked the movement of Agri-produces and consequently affected the sales of the produced
Agri-commodities, lockdowns in major economies causing delays and backlogs in supply
chains, exports facing transport and logistics problems, and more stringent customs
restrictions.
The favourable government policies encouraging the private sector and the favourable agro-
climatic conditions are the two major drivers of the market’s growth. Agriculture in Ethiopia
is the largest component of its economy and employs most of the Ethiopian population,
accounting for 40% of GDP. The majority of these are smallholder farmers practicing
subsistence farming on less than one hectare of land. These farmers, whose output is
predominantly cereal crops, account for 95.0% of the agricultural production in Ethiopia.

2 .Background and Description of the Business

2.1 EXTERNAL TRADE REVIEW

Agriculture is the foundation of Ethiopia's economy. Around 80.0-85.0% of Ethiopians are
engaged in agriculture, mainly in subsistence and rain-fed farming and livestock production.
Principal crops grown are coffee, pulses, oilseeds, potatoes, sugarcane, and a few vegetables.
Coffee is the largest foreign exchange earner. Favourable Government Policies are
encouraging the Private Sector The key component of Ethiopia’s Agriculture Policy is
expanding the primary and processed agricultural products. As a result, the government of
Ethiopia has identified two of its crucial areas, which are increasing the productivity of small-
holder farms and expanding the large-scale commercial farms. To spur the economic growth
of Ethiopia in the future, the government has initiated the Second Growth and Transformation
Plan (GTP II) to make the agro-processing sector a single entity by encouraging private
sector investments within the country. The government of Ethiopia has started working with
international partners to enhance agriculture productivity by collaborating with different

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private sectors in many possible ways. The government of Ethiopia has established the
Agricultural Transformation Agency (ATA) to address the problems of the agricultural sector
in Ethiopia. In 2021, the government of Ethiopia (GOE) embarked on a 10-year economic
development plan (2021-2030) where agriculture is the top priority sector, and enhancing
agricultural production and productivity is one of the major strategic pillars. The 10-year
development plan also aims at boosting agricultural export revenues and substituting imports
by reducing production costs. To achieve this, the GOE seeks to leverage developing huge
unutilized arable land, modernizing production systems, and improving technology uptake.
Production of cereals accounts for the second-largest share of the economy from the
agricultural sector in Ethiopia. More than 80.0% of agricultural land is used to produce
cereals, which makes use of 60.0% of the rural workforce. Cereals are an essential part of the
Ethiopian diet. As per the International Trade Administration report, over 50% of the daily
caloric intake of an average household is from wheat, sorghum, Teff and corn. Households
spend an average of 40% of their total food budget on cereals. The government has allocated
USD 5.98 million to establish agricultural machinery rental service centres in grain-
producing regions to capacitate and increase the efficiency of farmers

2.2 THE TRADER

1. Profile
 Name of the trader: zeyede Asifaw Bekele
 Address: A.A /K/K Woreda 09 tel-09-61287129
 Register capital :945,000
 Form of business: sole proprietorship
 Trade Licence no: AA/KK/09/01/0001837/2012
 Main business stream: Grain & cereal whole sales/retail trader

2.3 Background
Zeyede Asifaw Bekele Grain sales company has been providing customers with the finest
quality cereals and other grains for 10 years, from 2005. He has more than 10 years in the
business of the food wholesaling. The business is primarily local produced food wholesale to
different customers; Schools, retailers in Addis Ababa, Restaurants, etc. We purchase mainly
Wheat, Corn and Teff from local farmers in south and Northern Ethiopia. This allows us to
collect from the finest selection of cereals and grains available anywhere in these two Areas.
Given the increase of demand, we are planning to expand our storefront and sell direct to the

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public. In our expanded market, we will bring our commitment of quality, freshness and great
prices to the public. By purchasing in large quantities we are able to pass the savings on to
our customer. To realize this noble mission, we have an idea to expand our sales store in
Addis Ababa & northern Ethiopia. The planned Business expansion will cost 4.900.000.
Additional service staff will be hired to assist customers Zeyede Asifaw Bekele Grain, the
business owner, expansion also want secure a 4.900.000 Birr Short term loan.
Vision
 To become zeyede Asifaw Bekele Grain sales company as the leader in selling cereals and
other grains in Addis Ababa.
Objectives
 Increase the number of our customers buying from zeyede Asifaw Bekele Grain sales
company by 25% over the next two years.
 Establish a yearly continuous availability of food grains for customers that will build
customer loyalty.
Mission
The mission of zeyede Asifaw Bekele Grain sales company is to offer customers the best
grains food prices with the highest quality.
Values
Honesty, fairness and
Acting responsibly.

3. Management profile
The management profile showing educational Qualification, and position in the business is
presented below.

Name position Education experience

General
zeyede Asifaw Bekele Manager 12 complete 13 years

Kalkidan Casher 10th complete 6 years

4. Marketing Plan

4.1Target Market

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This business targets Addis Ababa City as market. Addis Ababa, with a Prediction population
of more than 7 million (2014), is the capital and largest city of Ethiopia. The City of Addis
Ababa, one of the most active and progressive& capital City of Africa, aspires to see Addis
Ababa develop as a competitive, safe and clean modern city. Given the above information it
is a high opportunity to start a food warehouse around Addis Ababa City.
4.2 Competitive Position
Though there are grains food warehouse in Addis Ababa, first of all they are not sufficient
and given unpredicted population growth, they cannot succeed to grow at the same rhythm.
Furthermore, their system to collect the grains food seems to be highly classic, whereby they
wait the Farmers to bring their production. For us, we have a modern method to collect the
grains food in very fresh conditions; we work hand in hand with the farmers, whereby we
accompany them from the beginning of the crop season until the harvest. We understand their
needs to produce more. We help them to get all the Requirements at time, in order to produce
more. Hence, to be equipped with such method it will have a competitive advantage that will
allow zeyede Asifaw Bekele Grain sales company to sell more

5. MARKETNG PLANING DETAILS

5.1. Planning
Marketing Strategy with the experience we dispose in this business, there are several
individual farmers and retailing points we already contacted and agreed to work with our
business project distribution chain. These individuals will be considered as direct partners
and exclusive dealers of our product in their respective areas. As these customers accepted to
resell our products they will be able to communicate to all their customers of the quality
products we have, and they will also be asked of other marketing tools we can use to outreach
as many customers as possible. Individual shops and kiosks owners in Addis Ababa and
within the surrounding City will be contacted personally by the business marketing agents.
Market retention will be accomplished by providing a friendly atmosphere and a quality
product. Integrity and honesty when dealing with people will greatly help to retain customers.

5.1.1 Zeyede Asifaw Bekele Grain sales

The trader will purchase of the following Grain &^Cereals and sales for his client
 Teff
 Wheat

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  Maize
 Corn

5.2 Pricing strategy

Initially the pricing strategy is to capture major market players by negotiating with them and
giving slightly discounted rates. The focus will also be on smaller market players and helping
to service their needs. Most of the large customers will be identified and new customers will
also be won through competitive pricing. However, the prices will be competitive to other
grains food wholesalers

5.3 Operations Plan

5.3.1 Methods of collection

Our methods of collection are based on the outreach to the farmers, we dispose the collection
Points in every negotiation centres in Eastern and Northern Provinces, whereby the grains
food are collected before there transported to our main warehouse.

5.3.2 Quality Control

In order to ensure proper quality, zeyede Asifaw Bekele Grains Market will take proper
Precautions including: making sure not to stock un-dried grains food; sifting all Grains to
remove all rubbish before stocking; cleaning the premises every day; and ensuring that
workers are clean, wash hands regularly, and wear aprons; and packing grains in clean
material. The manager will supervise and inspect quality daily and address any issues that
arise.

5.3.3 Customer Service

Customer service is highly considered as crucial to the success of this business. We will need
to maintain a good understanding of customer wants and needs. Some ideas that will assist in
this are to put a suggestion box to collect customers inputs, make sure to serve first customers
first, be very kind to customers (this includes using respectful language), give tokens to big
customers (i.e. discounts and offer basic courtesies), meet with large customers frequently
and ask them what the company is doing that they like, what it’s doing that they don’t like,
and what it is not doing that they would like to see.

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5.3.4 Assumption and basis
The planning period is three years.
The base for the following assumption is the forgoing business experience of the trade
himself.
Additional working capital 4.9 million will be available from the bank in the form of term
loan.
Revenue, all cost and expense are assumed to increase by 5% per annum for the 2 nd year and
10% for the last year.
All admin & general expense are assumed to Increase by 5% per annum than the preceding
period taking proportionally.
Interest on loan is computed at 14.8% per annum
Purchase Plan
To achieve the targeted sales the following gross purchase must be made during the first
year
purchase Projection
Year 2015 2016 2017 2018

QTY OF Teff IN Quintals 354 372 409 450

Unit Price 7200 7,560 8,316 9147

2,548,8 2,812,3 3,401,2 4,116,1
Total Cost
00 20 44 50
QTY OF Corn IN Quintals 376 395 434 477
Unit Price 3,000 3,500 4,000 4400
1,128,0 1,382,5 1,736,0 2,098,8
Total Cost
00 00 00 00
QTY OF Wheat IN Quintals 306 321 353 388

Unit Price 4000 4200 4620 5082

1,224,0 1,348,2 1,630,8 1,973,3
Total Cost
00 00 60 41

** To achieve its business plan Zeyede Asifaw Bekele Grain sales will need 4.9 million
during the first Year.
Annual sales plan
Annual sales Projection From April-2015 up to mar-2018
Year 2015 2016 2017 2018

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 QTY OF Teff IN Quintal 354 372 409 450
Unit Price 9500 9950 10,895 11,984.50

Total sales 3,363,000 3,701,400 4,456,055 5,393,025

QTY OF Corn IN Quintal 376 395 434 477

Unit Price 4500 4700 5120 5632

Total sales 1,692,000 1,856,500 2,222,080 2,686,464

QTY OF Wheat IN Quintal 306 321 353 388

Unit Price 5,500 5,725 6,198 6,817.25

Total sales 1,683,000 1,837,725 2,187,718 2,647,138

The trader planned to sale commodities worth of total birr 6.7 Million Birr during the
first year

5.4.2 Financial Results

5.4.2.1 Total investment plan

This plan outlines the amount of money Zeyede Asifaw Bekele Grain sales will need to cover
both its start-up and operating costs, and how much income the business expects to generate
after sales of its first batch of grains.. The total establishment and first Year operational
costs of Zeyede Asifaw Bekele Grain sales will amount to 4,900,000 as summarized in the
following table

ITEM COST COST  

ADMINISTRATIVE
   
CHARGES
Rent expense 8,622  
cash register service 1,107  
depreciation expense 793  
maintenance expense 23,507  
utility expense 15,664  
Total   49,692
GRAIN PURCHASE COST
   
(VARIABLE COST)
Purchase of 354 Quintals
2,548,800  
Teff per 7,200
Purchase of 376 Quintals
1,128,000  
Corn Per 3,000

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 Purchase of 306 Quintals
1,224,000  
Wheat Per 4,000
4,900,80
Total  
0
4,950,49
Grand Total  
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5.4.3 Projected Profit and loss statement

The projected profit or loss statement prepared for the following three years is presented
below. The traders will Earn 1.8 Million Gross profits per year on average
Projected Profit and Loss statement.
for the year ended 2015-2018
Description/year end 2015 2016 2017 2018
Teff 3,363,000 3,701,400 4,456,055 5,393,025
Corn 1,692,000 1,856,500 2,222,080 2,686,464
Wheat 1,683,000 1,837,725 2,187,718 2,647,138
Total sales/Revenue 6,738,000 7,395,625 8,865,853 10,726,627
Teff 2,548,800 2,812,320 3,401,244 4,116,150
Corn 1,128,000 1,382,500 1,736,000 2,098,800
Wheat 1,224,000 1,348,200 1,630,860 1,973,341
Total C.G Purchase 4,900,800 5,543,020 6,768,104 8,188,291
Admin &gen exp        
Rent expense 8,622 9,053 9,505.26 9,980.52
cash register service 1107 1,162 1,220.47 1,281.49
depreciation expense 793 832 873.97 917.67
maintenance expense 23,506.97 24,682 25,916.43 27,212.26
utility expense 15,664.00 16,447 17,269.56 18,133.04
Total Admin &gen exp 49,692 52,177 54,786 57,525
Total Gross Profit 1,787,508 1,800,428 2,042,963 2,480,812

5.4.4 Break Even Analysis

As regards revenue Zeyede Asifaw Bekele Grain sales intends to clean and sell up to 1,036
Quintals of grains in the first Year of operation.

Sale of grains for the First Year

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 Sale of grain Amount
sales of 354 Quintals Teff per 9,500 3,363,000
sales of 376 Quintals Corn Per 4,500 1,692,000
sales of 306 Quintals Wheat Per 5,500 1,683,000
Total 6,738,000

On the basis of Yearly purchased cost of 4,900,800 Zeyede Asifaw Bekele Grain sales will
earn a profit of equivalent to a margin of 27%.
Break Even Point= Total Cost
Contribution Margin
BEP=4,900.800
5,600,000
=3 Quintals
The analysis above shows that Zeyede Asifaw Bekele Grain sales needs to sell a total of
about 3 Quintals of grains such that the revenue from sales equals exactly the total costs
incurred. The planned number of bags to be sold need to be increased to achieve the target
combined output level of 3 Quintals of grains.

5.4.5 CASH FLOW PROJECTION

The cash flow is planned on the basis of operational plan of Zeyede Asifaw Bekele Grain
sales for the three Year of operation.
Projected cash Flow Statement  
For The Year 2015 -2018  
Item 2015 2016 2017 2018
Total Inflow 5,818,733 6,109,670 6,720,637 7,392,701
Beg cash Bal 86,073 90,376 99,414 109,355
Total out Flow 414,914.76 435,660.50 479,226.55 527,149.20
cost of G.sold 5,489,891 5,764,385.55 6,340,824.11 6,974,906.52
Stock at hand (171,275) - 179,838.75 - 188,830.69 - 198,272.22
Admin& gen exp 49,692.24 52,176.9 54,785.69 57,524.98
profit tax 79,727.68 83,714.06 87,899.77 92,294.76
Total Current Liability 31,556.61 33,134.44 34,791.16 36,530.72
Term Loan (4,900,000)
Closing Balance 1,334,415. 1,401,135.75 1,541,249.33 1,695,374.26

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Zeyede Asifaw Bekele Grain sales will record and present all its financial transactions in
suitable and acceptable manner that will be used for monitoring and control. Account
statements will be prepared periodically to measure performance in terms of profit or loss
that is being generated and what actions could be taken. A forecast profit and loss account for
Zeyede Asifaw Bekele Grain sales at the end of the first Year indicates a good profit of
1,800,000 from its operations. The cash flow forecast analysed based on the first month of
operation shows cash balance of 11,334,415..these statements show that Zeyede Asifaw
Bekele Grain sales will have more than sufficient cash that will be required to put its planned
operations into effect and to also meet its capital needs.
Long term credit reimbursement schedule
Zeyede Asifaw Bekele Grain sales planned on Get 4.9 Million Loan with Midterm Loan with
semi Annual Loan Repayment Schedule.

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