TABLE OF CONTENTS

EXECUTIVE SUMMARY...................................................................................................................................4
CHAPTER ONE................................................................................................................................................6
1.0. BUSINESS IDEA..................................................................................................................................6
1.1. Name of the business.........................................................................................................................6
1.2. Produce the following products.......................................................................................................6
1.3. Provide the following services...........................................................................................................6
1.4. The customers will be.......................................................................................................................6
1.5. The business will sell in the following way......................................................................................7
1.6. The business will satisfy the following needs of the customers.....................................................7
1.10. SWOT ANALYSIS...............................................................................................................................7
1.11. Strengths of the cosmetic enterprise..............................................................................................7
1.12. Weaknesses......................................................................................................................................8
1.13. Opportunities..................................................................................................................................8
1.14. Threats.............................................................................................................................................8
1.10. VISION, MISSION, GOALS, AND OBJECTIVES...................................................................................9
1.11. Vision statement.............................................................................................................................9
1.12. Mission statement..........................................................................................................................9
1.13. Goals................................................................................................................................................9
1.14. Objectives........................................................................................................................................9
1.10. BUSINESS STRATEGY.....................................................................................................................10
1.11. Communication strategy...............................................................................................................10
1.12. Competitive strategy.....................................................................................................................10
1.13. Marketing strategy........................................................................................................................10
1.14. Human resource management strategy.......................................................................................10
1.15. Supplier relationship strategy......................................................................................................11
CHAPTER TWO.............................................................................................................................................12
THE MARKETING PLAN............................................................................................................................12
2.11 Market research..............................................................................................................................12
2.12. competitors....................................................................................................................................12
2.13 Assessment of competitor’s strengths and weaknesses...............................................................12

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 PRODUCT PLAN.......................................................................................................................................14
2.10. PRODUCT PLAN FORM...................................................................................................................15
2.20. PRICE...............................................................................................................................................16
2.21. PRODUCT PRICE FORM..................................................................................................................16
2.30. PLACE..............................................................................................................................................18
2.31. The marketing plan (place) form...................................................................................................18
2.30. PROMOTION...................................................................................................................................19
2.40. promotion section of this business plan (form)............................................................................19
CHAPTER THREE...........................................................................................................................................21
3.10. FORM OF BUSINESS........................................................................................................................21
3.11. The form for business....................................................................................................................21
CHAPTER FOUR............................................................................................................................................22
4.10. STAFF..............................................................................................................................................22
4.11. Staff form........................................................................................................................................22
CHAPTER FIVE..............................................................................................................................................24
5.10. LEGAL RESPONSIBILITIES AND INSURANCE...................................................................................24
5.11. Legal responsibilities and insurance form.....................................................................................24
CHAPTER SIX.................................................................................................................................................26
6.10. PRODUCT COSTING........................................................................................................................26
6.11. Calculate direct material................................................................................................................26
6.11. Calculate indirect costs..................................................................................................................29
CHAPTER SEVEN...........................................................................................................................................31
7.10. FINANCIAL PLANNING....................................................................................................................31
7.11. A SALES AND COSTS PLAN.............................................................................................................31
7.11. CASH FLOW PLAN...........................................................................................................................32
CHAPTER EIGHT............................................................................................................................................33
8.10. REQUIRED STARTUP CAPITAL........................................................................................................33
8.11. What capital investment do i need?.............................................................................................33
8.11. Decide on which equipment I need...............................................................................................34
8.12. What working capital do i need....................................................................................................34
8.13 Startup capital form........................................................................................................................35
CHAPTER NINE.............................................................................................................................................36

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9.10 TYPES AND SOURCES OF STARTUP CAPITAL..................................................................................36
9.10. Source of capital form....................................................................................................................36

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EXECUTIVE SUMMARY
This plan is to set up a cosmetic shop in the name of " Briox Cosmetics Enterprise ", which will
be located in Easy View Arcade Garage street Mbarara. The cosmetic shop will be a sole
proprietorship owned by Akampurira Brian. I will use startup capital of 52,380,000 Uganda
shillings. UGX 34,380,000 will be owners’ equity and the remaining UGX 18,000,000 will be a
bank loan which will be secured from centenary bank at 10% interest rate.

The key personnel at the cosmetic Enterprise will include Senior manager, buying inputs and
overall supervisory work, operations and production staff, sales and marketing staff, skin therapy
and hairdressing staff, record keeping and accounting, stock control and direct selling staff

The key objective of the cosmetic shop will be to provide fresh quality cosmetics to our clients to
enable them improve their general skin beauty, to obtain maximum customer satisfaction through
continued quality production, to obtain continuous production and supply of our products to the
customers, to create customer loyalty to our products such that they become well pronounced in
the customer minds.

To achieve our objective, the cosmetic shop will employ strategies such as: Offering quality,
body skin lotions, oils and herbal cosmetics that help fight the skin diseases made from fresh
fruit and vegetable which are nutritious through adequate research and proper mixture of the
lotions, oils and herbal ointments to meet the standard skin contents and characteristics of
customers in the market through advertisement by use of sign posts, direct selling and radio
stations, offering special incentive to our regular clients, offering our cosmetics at relatively
lower prices for market penetration, creating a conducive environment for our clients, employing
people who understand the meaning of customer care and meaning of quality by giving them
samples for use as a way of expanding our markets especially among the young children, youth
and women. All this encompasses our strategies that include, communication strategy, supplier
relationship strategy, marketing strategy, competitive strategy and human resource strategy.
The vision of the cosmetic shop will be ‘To be the leading suppliers of quality, fresh and health
skin booting cosmetics product’

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Our mission will be, dedicated at improving the skin health and body look and appearance of our
client. "We seek to become the recognized leader in our targeted local and international market
for carrying a diverse line of in demand cosmetics including perfumes, makeup, and other
accessories that will have a competitive edge towards customer satisfaction and retention at
attractive prices.

Our major customers will be corporate employees, students, market vendors, tourists and
retailers who will be consuming a range of our products including; Perfumes 1st class, Lemon
body lotion, Hair relaxer cream, Avocadoes body cream smoother and Hair glow.

Our forms/ ways of distribution will include, through Retailers, distributors and wholesalers who
will buy and sell in bulk to our final customers which we cannot sell to directly we shall also sell
directly to the customers because we have a high customer traffic at our main outlet in Mbarara.
We shall as well be using a van that will be leased to distribute to our customers who order in
large quantities.

In terms of our legal responsibilities, the following taxes apply to our business, sales tax,
employees’ income tax, national social security fund and Mbarara Municipal Council Tax and
other licenses like trading license, and Uganda National Bureau of Standards license. We shall as
well need to the insurance for our business and also carry out other social responsibilities like
corporate social responsibility, being environmentally friendly, and ensuring cleanliness of
Mbarara town.

Our products are costed and priced after comparison with our major competitor’s prices and
costing information acquired through market research. We have as well carried out cash flow
estimates to ensure that our business does not run out of cash.

Our startup capital has been allocated to what we intend to start our business with that is renting
building for two months, buying machines for mixing the inputs, Machines, leasing van, buying
furniture and fittings, massage equipment, cloths and uniforms and other necessary things to start
with including the employee salaries for the first two months.

This plan will be effective on 1st January 2018 and that is when my business will begin in
Mbarara Easy View Arcade.

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 CHAPTER ONE
1.0. BUSINESS IDEA
1.1. Name of the business
Briox Cosmetics Enterprise
1.2. Produce the following products
Briox Cosmetics Enterprise will provide different kinds of cosmetic products ranging from body
lotion to hair relaxers with potentials of using local fruits, both rare and common fruits as key
primary ingredients in the production of body oils and lotions. This will be intended to improve
the general skin health as well as boosting the beauty skin of our clients especially ladies. Among
the fruits we will use to extract include grapes, Chew cumber, palm fruits, avocadoes, lemons,
oranges, among others to produce body lotions that moisturizes and smoothens the skin for
healthy attractive look of the boy and hair.

Our business will also provide moisturizing creams, body lotions, hair lotions of various types
and varieties to our esteemed customers.

Our product will be offered to the young, the youth and the old, who will need to improve their
general health and skin beauty.

1.3. Provide the following services

We will also offer the cosmetic products to our esteemed customers while providing consultancy
advise inform of skills for mixing and using the oils for their own benefit

We will provide free consultancy services about lotion use, making and maintenance and caring
for the skin especially mostly by the ladies and young girls who our major customers and advise
them on maintaining a healthy balanced diet which include fruits and vegetables.

1.4. The customers will be

Other businesses that deal in cosmetics, retail shops, supermarkets all over the country, in
foreign countries in East Africa like Kenya, Rwanda, Tanzania, and Burundi and other customers
will be buying from our company directly and from our mobile distributors and they will be both
the young children, men and mostly women.

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1.5. The business will sell in the following way
Distribute to our national and international distribution centers, supermarkets, retail outlets, our
agents all over the countries in East African regions and some customers will buy directly from
our company main outlet in Mbarara.

1.6. The business will satisfy the following needs of the customers
Briox cosmetics will offer reliable cosmetics, lotions, and jerrys intended to improve the general
skin health as well as boosting the beauty skin of our clients especially ladies, skin treatment,
cure skin rashes, and ensure all time beauty of our clients.

1.10. SWOT ANALYSIS

The Cosmetics industry is one of the growing industry in the country with a number of industries
Unisex beauty cosmetics with many branches, and other small businesses which have joined the
industry. Despite the increase in the Cosmetics industries, customer’s demands are not fully met
due to the increasingly growing population and poor delivery of the cosmetics to the customers,
Briox cosmetics Enterprise is therefore aiming at filling this gap. The industry has shown a great
interest for investment. The industry has earned great reputation due to the increased differences
in customer requirements like skin colors, hair styles by different hair cosmetics and customer
general beauty.

1.11. Strengths of the cosmetic enterprise

 Availability of startup capital,

 Ability to make cosmetic products from local available fruits
 Strategic location in the Easy View Complex which has a high enough space.
 High level of customer care that we shall portray
 We shall operate on a daily basis 24 hours to meet our customer needs which will ensure
constant supply.
 We shall do skin therapy to our special customers based on appointments at an affordable
price which will gain fame amongst corporate women.
 High quality and exceptional packaging material which are environmental friendly that
we shall offer.
 Operating from the cleanest environment
 Offering free training and consultancy services to our customers.

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 1.12. Weaknesses
 Limited nature inputs like fruits and vegetables to our business.
 Low supply of skilled labour that will assist in mixing the right quantities for the inputs
 Low levels of knowledge about the cosmetic business
 Low capital inputs to start up with in establishing the plant and expanding the business
operations to other regions.
 Do not have enough record keeping mechanism.
 Inadequate experience in the market due to few months of operation than our competitors
 Few workers in company which delays production

1.13. Opportunities.
 Briox Cosmetics Enterprises is growing and new cosmetics dealers are setting up which will
increase the market base.
 The competitors of Briox Cosmetics Enterprises do not know about the new emerging ideas in
the global markets like new product development techniques to suit customer demand.
 The competitors of Briox Cosmetics Enterprises do not know how to efficiently manage their
supply chain and distribution channels like Unisex group of companies.
 Financial boost from banks for service expansion and facility improvement.

1.14. Threats
 The customers are used to buying from already established cosmetic industries like Movit
and Samona who can easily adopt to rapidly changing techniques of production and
global competition which is hard to adopt to for us
 Constant changes in customer demands which impact on our level of satisfaction to our
customers and changing economic environment.

Evaluate my business idea

Number of strength…09
Number of weaknesses07
Are there more strengths than weaknesses?
Number of opportunities03 Yes No

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 Number of threats…02
Are there more opportunities than threats?Yes
No
I therefore decide to continue with my business idea since there are more strength and
opportunities than the weaknesses and threats.

1.10. VISION, MISSION, GOALS, AND OBJECTIVES

1.11. Vision statement
The vision of the cosmetic shop will be ‘To be the leading suppliers of quality, fresh and health
skin booting cosmetics product’

1.12. Mission statement

It will be, dedicated at improving the skin health and body look and appearance of our client.
"We seek to become the recognized leader in our targeted local and international market for
carrying a diverse line of in demand cosmetics including perfumes, makeup, and other
accessories that will have a competitive edge towards customer satisfaction and retention at
attractive prices.

1.13. Goals
 To be leading supplier of quality, fresh and health skin beautifying cosmetics
 To expand to the other markets across East Africa.
 To exploit opportunities in the market including the gaps left out by already established
firms like Movit and Samona.

1.14. Objectives
The Enterprise is dedicated to achieving maximum customer satisfaction at the lowest possible
cost and therefore has the following objectives.

 To obtain maximum customer satisfaction through continued quality production

 To obtain continuous production and supply of our products to the customers
 To create customer loyalty to our products such that they become well pronounced in the
customer minds.
 To efficiently publicize our products to create awareness among the customers

9
  To provide high quality products to the clients through use of quality and standard in puts
that is natural inputs.
 To use our experience to operate at lowest costs possible.
 To establish a strong and reputable relationship with the stakeholders of the Enterprise.
 To come up with new products in the Cosmetics industry.

1.10. BUSINESS STRATEGY

This will include the communication strategy, marketing strategy, supplier relationship strategy,
promotion strategy, Human resource management strategy and competitive strategy.

1.11. Communication strategy

One of the most important aspects of a successful launch is a positive publicity for our cosmetics
products. We will develop awareness campaigns to promote our product through several
avenues. Our management team will fiercely have pursued positive perception through societal
endorsement promoting the benefits of our product by actively seeking local news and media
coverage to help on awareness.

1.12. Competitive strategy

Position of the business in the heart of Mbarara and the whole of Uganda and also being near the
high market area makes the product easily accessible by our customers. An aggressive
advertising campaign will be undertaken so that we create much awareness of our product than
our competitors through our highly skilled management team and employees that will be highly
in contact with our customers.

1.13. Marketing strategy

Briox Cosmetics Enterprises plans to communicate through outdoor advertising and television
advertising to generate sales. This will be spearheaded by our marketing team to manage the
marketing campaign. The key message associated with our products is high quality beautifying
cosmetics and skin care.

1.14. Human resource management strategy.

Briox cosmetics Enterprises will start up with its experienced members in various fields that are
useful in the business to form competent team of trustworthy staff for efficiency and effective

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operations and goal oriented. Provision of favorable working conditions to maintain a high
degree of personal development and satisfaction of both employees and employers and ensuring
that our employees are constantly trained where need arises.

1.15. Supplier relationship strategy.

Briox Cosmetics Enterprises will ensure a close working relationship with our suppliers and
where necessary undertake supplier development programmes that is providing improved
varieties of agricultural inputs for example grapes, Chew cumber, palm fruits, avocadoes and
lemons and tools that will ensure constant supply of our core inputs.

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 CHAPTER TWO
THE MARKETING PLAN
2.11 Market research
Briox Cosmetics Enterprise intends to maintain an extensive marketing campaign that will
ensure maximum visibility for the business in its targeted market. This will be achieved through
market research on our customers, competitors, competitor suppliers, their products and their
pricing.
2.12. competitors
Our major competitors are KK shop, Dan cosmetics and Baby Face Organic that sell the same
cosmetics. Below is the analysis of our major competitors’ strength and weaknesses.

2.13 Assessment of competitor’s strengths and weaknesses

Competitors Strengths Weaknesses

name

 Extensive research  High prices for their products

 Huge capital investment  High costs of operation
KK shop cosmetic
dealers  More experience in this business  Weak skills (leadership, interpersonal,
 Customer loyalty communication, teamwork)
 Limited work experience.

Dan cosmetics  Has many customers who buy  Limited financial resources for startup.
in bulk  Lack of own premises to capitalize the
 High advertising rates concentrate all activities in one place.
 Strategic location  Limited marketing expertise.
 Creative and  Poor sanitation
innovative
management

12
Baby Face Organic  Low operating costs
 Wide distributional channels
 Dedicated, competent and
flexible work force
13
 Un reliable supply
 Un experienced staff
 High Labor intensive operations
 Limited product and service lines.
 Un motivated staff
  Emphasis is on high quality and
quantities

The results of the market research are summarized below.

I used the information gathered from the potential customers and came up with the following
information

MARKET RESEARCH

Needs and preference of Competitors

Customers customers
Product

Perfumes 1st class Corporate employees they need unique scent that is
packed in luxurious containers
and can last long when used.
Must be available in time and
in recognizable supermarkets
and shopping malls
Low quality perfumes that
are not unique
Does not always have
knowledge of the latest
products
Inconsistent supply and so
shortages in the market

Lemon body lotion Students Wide range of differently High prices and limited
colored and flavored lotions varieties not consistently
offered at relatively low prices. supplied.

Different sizes and shapes. Low quality and unattractive

colours and shapes.

14
Hair relaxer cream Market vendors Hair softeners with reliable Unreliable supply and un
supply in all corners of the defined distribution channels
country availed to all vendors that affects constant supply.
in time.

Avocadoes body Tourists High quality products availed Low quality lotions with less
cream smoother in recognized shopping centers moisturizing content
and malls

High level of skin moisturizing

and smoothening.

Hair glow Retailers Reliable supply at the right Delays in supply and un
time and place in right coordinated supply chain and
quantities. distribution channels.

PRODUCT PLAN
We will specialize majorly in cosmetic products and manufacturing of locally made cosmetic
products to treat the skin illness such as fungal diseases using locally produced vegetables and
fruits as ingredients in the manufacture of these cosmetics

We will offer free consultancy services to our clients, free cold water, and warm water for
washing our hands. We will employ people who are easily accessible, customer oriented,
efficient and effective. We will provide customized services like skin therapy and hair dressing
to our most esteemed customers during the weekends when we are not very busy so as to meet
their demands and needs by being agile.

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 2.10. PRODUCT PLAN FORM
Products, services or range of products offered

Perfumes Lemon Hair Avocadoes Hair Skin consultancy Hair

1st class body relaxer body glow Therapy and dressing
lotion cream cream customer
smoother advise

Quality High Basic Basic High Basic N/A N/A N/A

quality for quality to quality to quality for quality
corporate keep prices create the tourists
customers relatively customer and the
low loyalty rich

Color Purple, Yellow, Green, Green Green and N/A N/A N/A
blue, blue, green yellow and blue
green, and blown blue
orange
Size Large Large Large Large Large N/A N/A N/A
600ml, 500ml, 600ml, 500ml, 600ml,
medium medium medium medium medium
450ml and 350ml and 450ml and 350ml and 450ml
small small 50ml small small 50ml and small
150ml 150ml 150ml
Packaging Metallic Plastic Plastic Plastic Plastic N/A N/A N/A
containers containers containers containers containers
and tubes and tubes and tubes and tubes

Smell N/A N/A N/A N/A N/A N/A N/A N/A

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 2.20. PRICE
The different sizes of our products will be charged different prices and my basis of pricing will
be based on the total costs incurred, competitors’ prices and how much my customers are willing
to pay.

I have studied the prices of Baby Face Organic who are my major competitor and I think that
selling at lower prices will be one of the most important ways of competing them. A low price is
important especially for students, market vendors and retailers.

I know that customers are willing to pay for my products in different sizes and shapes. I have
studied the costs of production, distribution and marketing for each product that is for Perfumes
1st class all sizes averagely UGX 4,500, Lemon body lotion all sizes averagely UGX 4,000,
Hair relaxer cream all sizes averagely UGX 3,500, Avocadoes body cream smoother all sizes
averagely UGX 45,00 and hair glow UGX 4,000. With these prices in mind, I will fill in the
price section of the business plan.

2.21. PRODUCT PRICE FORM

Products, services or range of products offered

Perfumes 1st Lemon body Hair relaxer Avocadoes body Hair glow
class lotion cream cream smoother

Costs 4,500 4,000 3,500 4,500 4,000

How much 35,000- lowest 10,000-lowest 9,000-lowest, 21,000-lowest, 10,000- lowest,

customers are 40000- highest 12000-highest 10000-highest 25000-highest 12000-highest
willing to pay (corporate (students and (market (tourists and (retailors and
employees and low income vendors and corporate employees) market vendors)
tourists). earners) retailors)

Price 38000 (cooperate 9000(students) 10000(market 25000(tourists) 11000(market

employees), 11000(low vendors and vendors and
20000(corporate
39000 (tourists) income retailers) retailors)
employees)
earners)

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Reason for Relatively high Low price will Relatively low High price is in Relatively low
setting this price price will help us enable us get a price will relation to the high price will
recover the costs wide market ensure a high quality of the ensure a high
incurred in from the low demand from products produced. demand from
production. income our our
earners and intermediaries intermediaries
the students, who can sale at who can sale at a
a profit profit

Discounts will be No discount will No discount vendors and No discount will be vendors and
given to the be given will be given retailers that given retailers that
following buy in large buy in large
customers quantities quantities

Reason for giving N/A N/A Discount will N/A Discount will
discounts be given to the be given to the
vendors and vendors and
retailers that retailers that
buy in large buy in large
quantities quantities

Credit will be vendors No credit will Vendors and Vendors and retailors Vendors
given to the be given retailors retailors
following
customers

Reason for giving To increase N/A To create a To make vendors To create a

credit vendor loyalty to wider market. stop selling our wider market.
our products competitor products.

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2.30. PLACE
Our location is in Mbarara, Easy View Arcade, Garage Street. The location is very good since
they a lot of hair dressers in this arcade hence full of women who potential customers for the
cosmetic products because they want to look good and. The place is chosen due to a boom of
commercial activities, an expected client base from students, tourists, corporate women
employees, and the large population is women as compared to men. The cosmetic shop will have
adequate lighting.

2.31. The marketing plan (place) form

Location.

we plan to rent a place in Mbarara, Easy View Arcade, Garage Street. It is located opposite
Agip Motel near bus park garage street.

The location is chosen because of the following reasons.

It is ideal because there is a high customer traffic

Enough packing space for the clients/ individual customers.

Clean environment and closeness to the main road that is Mbarara- Masaka road.

Method of distribution

Individuals retailer wholesalers distributors

The ways of distribution are chosen because of the following reasons.

Retailers, distributors and wholesalers, will buy and sell in bulk to our final customers
which we cannot sell to directly

Individuals, will be used because we have a high customer traffic and so we shall sell to
them directly at our main outlet in Mbarara.

Distributors, will help to deliver our products to all our customers all over the country and
even outside countries in East Africa in the right time and place.

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2.30. PROMOTION
We intend to invest heavily in advertisement of our products through the use of signposts, face
book, use of radios such as; Galaxy, Vision radio, which have a wider coverage. We also intend
to use a highly skilled marketing manager to market our products; for example; in Kampala town
universities, offices and other local areas around. We intend to also visit personally our general
stores and major wholesalers of our products and use other few methods of promotion.

The objectives of promotion are;

 To create awareness of our products to our customers

 To persuade the customers to prefer our products to those of our competitors
 Communicate to the potential customers about where our products can be found.
 Create a good initial image of our products in the society and our potential customers.

2.40. promotion section of this business plan (form)

Type of advertising Details Costs

A sign on the building The sign will say “Briox Cosmetics 50,000 (fifty
Enterprises” showing the product that we thousand shillings)
offer such that customers can know that there
is a cosmetics in the building

Personal letters We will send personal letters to our vendors, 60,000 (sixty
wholesalers and selected retailors. We will thousand shillings)
introduce the letter that “Briox Cosmetics
Enterprises”

Direct selling We shall sell our product directly to our No costs

customers and share with them information
about our products and why they should use
them.

20
Radio adverts We shall run radio adverts on vision radio in 200,000 (two
Mbarara and Galaxy FM in Kampala that hundred thousand
will help in persuading the customers and at shillings)
the same time serve to inform them where
they can find our products

Free delivery We shall deliver our products freely to our N/A

wholesalers and retailers selected

Sponsoring public These will be the ones where the target The costs will
shows customers will be converged in large numbers depend on the type
for example music shows. of show

Stickers We shall be giving free stickers to our daily 60,000 (sixty

customers containing the information about thousand shillings)
our products and where they can be found.

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CHAPTER THREE
3.10. FORM OF BUSINESS
3.11. The form for business
The business will operate as;

 A Sole proprietorship

The reasons for choosing this business are;

 Low cost involved in starting the business

 Easy registration process of the business
 Simplicity in starting the business
 Increased level of control over the business
 Easy decision making in the business
 Easy taxation criteria that is business profits

The owner of the business will be

Name: AKAMPURIRA BRIAN

Description of skills:

 Business manager and high selling skills

 Marketing skills and customer care skills
 Sales promotion skills
 Motivational skills
 Leadership and management skills

Relevant experience

 Experienced with mixing appropriate chemicals and natural fruits in making the
cosmetics and perfumes acquired from the three years working with Baby Face
Organic.
 Experience in managing business that is a retail shop already owned in previous years.
 Experience in working with and through people (leadership) and motivational
experience to the employees.

22
 CHAPTER FOUR
4.10. STAF
F
I do not know much about running my own business but I plan to work hard and study to
learn all in need to know. According to my staff plan, I will be responsible for buying inputs
and assume the senior management role.

The business will be small so I will need more few employees to assist in some functions as
follows.

The operations staff will be responsible for manufacturing and mixing the inputs to produce the
cosmetics and all our products and will include three employees with the relative skills as will be
described and one of the three will assume the role of being a supervisor of production and
operations.

Sales and marketing. I will need one employee who will be responsible for marketing
the products and selling at our main out let in Mbarara to our direct customers and will
be responsible for customer service.

Two more employees responsible for offering additional services to our customers that is skin
therapy and hair dressing.

Two more family members will be employed and will assume the roles of stock control, and
selling to the market vendors, retailers and distributors and record keeping role respectively.

4.11. Staff form

Task Required skills and experience Performed by Monthly pay

Senior manager, buying inputs Business management and leadership Akampurira UGX 1000000
and overall supervisory work skills. Brian

Operations and production Skills in mixing different inputs and Three fulltime Each UGX
staff making perfumes and cosmetic products employees 350000

Sales and marketing Skills in customer care and marketing One fulltime UGX 400000
and sales employee

23
Skin therapy and hairdressing Skills in massage/ rubbing, Two fulltime UGX 300000
and hairdressing and women employees

Record keeping and Skills in fundamentals of accounting and One family UGX 350000
accounting record keeping member

Stock control, selling to market Skills in supply chain management One family UGX 350000
vendors, retailers and and personal selling skills member
distributors

24
 CHAPTER FIVE
5.10. LEGAL RESPONSIBILITIES AND INSURANCE.
I have contacted a number of government agencies including, the regional tax office, Mbarara
Municipal council, Ministry of Labour and the National Environmental Authority and I have
found out the legal requirements that apply to my business. I have also contacted the insurance
company that is ICA insurance company to find out the costs of insurance for my business.

LEGAL RESPONSIBILITIES AND INSURANCE

5.11. Legal responsibilities and insurance form
The following taxes apply to the business

Sales tax

Employees income tax

National Social Security Fund (NSSF) Mbarara Municipal Council Tax

The following regulations apply to the employees

Working hour Sick leave

Employee insurance

The business will need the following licenses and permits

cost

Mbarara municipal council trading license worthUGX 100,000

Uganda National Bureau of Standards license worth…UGX 200,000

Shop license worth…UGX 50,000

The business will have the following insurance cost

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Insurance for the stock and equipment.............................................UGX 360000 per year

Medical insurance...............................................................................UGX 100,000 per year

Other responsibilities of the business

Corporate social responsibility

Environmental friendliness through proper waste

disposal Mbarara town cleanliness through reduced

waste disposal

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 CHAPTER SIX
6.10. PRODUCT
COSTING
6.11. Calculate direct material
These are the materials used in production that will become part of the final product. These
include the following. Grapes, Chew Cumber, Palm Fruits, Avocadoes, Lemons, Oranges, and
Others. These will be included in column one of my form

Column two will include the buying costs of one unit of each raw material, column three will
include the quantities needed for each of the raw materials, column four will include the cost per
item that is the multiplication of buying cost with quantity needed, and finally we shall get the
total direct material cost.

Product costing form for Briox cosmetics Enterprises

Products: cosmetics products

Raw materials Buying costs Quantity per item (kgs) costs (UGX)

Grapes 30 5 150

Chew Cumber 20 4 80

Palm Fruits 30 3 90

Avocadoes 20 3 60

Lemons 30 2 60

Oranges 20 3 60

Total direct costs per item 500

Calculate Direct labour

Briox Cosmetics Enterprises will have nine employees, three of whom will be in production full
time, one in marketing, Mr. Akampurira Brian as the manager, an accountant, sales and
marketing assistant and stock control personnel.

2
 I fill in the labour costs form and I use the information to calculate the direct labour costs for one
cosmetics item.

Labour costs form for Briox cosmetics Enterprises

Direct labour costs Indirect labour costs

Employee Total Total Hours in Pay for Hours not Pay for time not
working monthly production time in in in production
hours pay per month production production
per per month
month

Brian manager 220 1,000,000 ………. ………. 220 1,000,000

Operations staff (3 660 1,050,000 660 1,050,000 ……….. ……….

employees)

Sales and marketing 220 400,000 ……….. ……….. 220 400,000

Skin therapy and 440 600,000 440 600,000 ……….. ………..

hairdressing(2
employees)

Record keeping and 220 350,000 ……… ……….. 220 350,000

accounting

Stock control, and 220 350,000 ……….. ………. 220 350,000

selling

Total 1100 1,650,000 880 2,100,000

2
 Direct labour cost per hour= total pay for time in production

total hours in production per month

=1,650,000/1100

Direct labour cost per hour =1500 shillings per hour

Calculate direct labour costs per item

We estimate that it takes 5 minutes to make each bottle of lemon body lotion or Hair relaxer
cream or Avocadoes body cream smoother or Hair glow.

 Our production personnel know that it takes 5 minutes to make a bottle of the cosmetic
product which is 0.083 hours
 The direct labour cost per hour is 1500 shillings

Therefore, by multiplying 0.083hours and 1500 shillings, I calculate that the direct labour costs
for one bottle of cosmetics is 124.5 shillings. This is how I fill in the product costing form.

Direct labour costs per item

Activity Time per item in minutes

Mixing the materials 2min

Preparing for making the product 3min

Making the product (putting the materials 1min

in the machines)

Total minutes 5min or 0.083 1500 124.5

hours
*
Direct labour cost per item

2
6.11. Calculate indirect costs.
Indirect costs are the other costs that I have for running my business. They are summarized
below in the indirect costs form

Indirect costs form for Briox cosmetics Enterprises

Indirect costs per month Cost (UGX)

Electricity and water 200,000

Rent 300,000

Insurance 30,000

Interest on loan 150,000

Indirect labour 2,100,000

Miscellaneous 200,000

Depreciation 40,000

Distribution and marketing costs 300,000

Advertising and sales promotion costs 200,000

Total indirect costs 3,520,000

Note

1. Insurance costs per month= 360,000/12 months

=UGX 30,000 per month

2. Interest on loan= 10%*18,000,000

=1,800,000/12

=UGX 150,000

2
 3. Depreciation

I will buy machinery worth 4,800,000 shillings, and I expect to use the machinery for 10

years. Depreciation per year will be= 4,800,000/10years

=480,000 shillings

Therefore, depreciation cost per month will be= 480,000/12 months

=40,000 shillings

Calculate the indirect costs per item.

Indirect costs per item=total indirect costs per month (from indirect cost form)

Total hours in production per month (from labour costs form)

= 3,520,000

1100 hours

Indirect costs per item =3,200 shillings

Calculate total costs per item

Total cost per item= direct material +direct labour + indirect costs. It is shown in the form below.
Total cost form

Type of cost Amount (cost per item)

Direct material 500

Direct labour 124.5

Indirect costs 3200

Total cost per item 3,824.5 shillings

3
 CHAPTER SEVEN
7.10. FINANCIAL PLANNING
We shall follow the following steps to plan and monitor the financial situation of Briox
cosmetics enterprise.

1. We Make a sales and costs plan

2. We make a cash flow plan
3. Compare records with both plans every month
4. And we shall take action if anything goes wrong

7.11. A SALES AND COSTS PLAN.

A costs and sales plan shows the sales, costs and profits my business is likely to have each month
and it is made annually.

I have forecasted my sales and costs for the first year in business and I have been helped by my
productions team to develop the forecasts.

Sales and costs plan 2018 (00)

Details Jan Feb Mar Apr. May June July Aug Sept Oct Nov Dec Total

Sales 2000 2500 4000 4000 7000 10000 10000 10000 10000 15000 20000 20000 114,500

Direct 1000 1500 2000 2000 3000 4200 4200 4200 4200 4800 5000 5000 36,900
material
costs

Direct 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24,000
labour
costs

Gross (1000) (1000) 0 0 2000 3800 3800 3800 3800 8200 13000 13000 49,400
profit

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Indirect 2500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 19,000
cost

Net (3500) (2500) (1500) (1500) 500 2300 2300 2300 2300 6700 11500 11500 30,400
profit

7.11. CASH FLOW PLAN

To make sure that I do not run out of cash, when I start up by cosmetics enterprise, I make a
cash flow plan for the first 12 months and below is a sample for the first seven months.

CASH FLOW PLAN (000) Jan Feb March April may June July Aug.

Cash at the start of the month 7300 23700 19700 12400 11100 7800 25000 26500

Cash in from sales 2000 2500 4000 4000 7000 10000 10000 10000

Any other cash in 7000 5000 …… …… …….. ……. ……. ……..

Total cash in 16300 31200 23700 16400 18100 17800 35000 36500

Cash out for direct material costs 1000 1500 2000 2000 3000 4200 4200 4200

Cash out for direct labour costs 2000 2000 2000 2000 2000 2000 2000 2000

Cash out for indirect costs 2500 1500 1500 1500 1500 1500 1500 1500

Cash out for planned investment in equip 8000 …… …… …… …… …… …… ……

Loan repayment …… …… 150 150 150 150 150 150

Any other cash out 200 …… …… …… …… …… …… ……

Total cash out 13700 5000 5650 5650 6650 7850 7850 7850

Cash at the end of the month 2600 26200 18050 10750 11450 9950 27150 28650

3
 CHAPTER EIGHT
8.10. REQUIRED STARTUP CAPITAL
This chapter will include the investments that I need which include equipment, Business
premises, and the working capital that I need which will cover stock of raw materials and
finished goods, promotion, wages, rent, insurance and other costs.

8.11. What capital investment do i need?

The capital investment that I will need will be business premises and the equipment. The
business premises will be rented so there is no need to invest in that. The whole floor on Easy
View complex will be rented and rent for the first two months will be paid in cash.

Decide which premises I need for my business

I will

Construct my own premises buy premises rent premises work at home

Because

Renting premises needs less capital investment than buying and building premises.
It is more flexible because it enables me change location in case of unfavorable factors
Saves time spent in looking for the best location to construct my premises.

3
8.11. Decide on which equipment I need
I will require machines for mixing inputs, one van, office furniture, and fittings

Equipment How to obtain it Cost (UGX)

Machines Buy 8,000,000

Van Lease (2 years) 5,000,000

Office furniture Buy 1,500,000

Fittings Buy 1,200,000

Total 15,700,000

8.12. What working capital do i need

I will need working capital that will be used in paying for the expenses that I incur even before I
start production. This working capital will be required to cover for the first two months since
after two months I expect to have started having some reasonable sales.

The working capital will cover;

 Stock of raw materials

 Promotion
 Wages= monthly cost for wages × number of months before sales cover my costs
 Rent= monthly rent × number of months before sales cover my costs
 Leases
 Insurance
 Other costs= other cost per month × number of months before sales cover my costs

3
I worked so hard to estimate how much startup capital I will need to start up Briox Cosmetics
Enterprises. I have reviewed every amount in my business plan after talking to suppliers,
landlords, and they think that it will take two months before sales fully cover the payments for
costs. This is the estimates of how much startup capital I will need.

8.13 Startup capital form

Required startup capital

Investments

 Business premises
Renting of the building/floor..................................................1,200,000
 Equipment
Machines Buy..............................8,000,000
Van Lease (2 years)............5,000,000
Office furniture Buy..............................1500,000
Fittings Buy..............................1,200,000
Massage equip Buy...............................1,500,000
Driers Buy...............................1,600,000
Cloths and uniform Buy...............................2,000,000
Total equipment startup capital….....................................20,800,000
 Working capital
Stock of raw material..................................15,000,000
Promotion...................................................1,000,000
Wages.........................................................7,500,000
Rent..............................................................600,000
Leasing........................................................2,200,000
Insurance......................................................80,000
Other costs..................................................4,000,000
Total working capital….........................................................30,380,000
Total startup capital….............................................................52,380,000

3
 CHAPTER NINE
9.10 TYPES AND SOURCES OF STARTUP CAPITAL
Briox Cosmetics Enterprise will require an initial capital of 52,380,000 million shillings of
which 34,380,000 shilling will be owners' equity and the remaining 18,000,000 will be a bank
loan to be secured from centenary bank payable at a rate of 10% per years. This money will cater
for rent, purchase of cosmetics purchase from the suppliers, employees, design and packaging of
the cosmetics products, purchase and mixture of cosmetics products such as hair glow, relaxers,
and herbal cosmetic research, shelves. Chair, bottles, tables and others.

9.10. Source of capital form

source of startup capital

required startup capital….......................................52,380,000

source of startup capital

owner’s equity...........................................................34,380,000

bank loan…..................................................................18,000,000

total..............................................................................52,380,000

collateral

 personal guarantee by Akampurira Brian

 machine