Kibiru Tuke Pinto Bean trading

1. Back ground Information

The business is based on the idea that to increase Pinto bean procurement capacity to expand
Market share through competitive pricing and consistent quality. The intended business
Is initiated and owned by Kibiru Tuke.
1.1. Brief history of the Promoter
Kibiru Tuke Pinto Bean trading has been providing customers with the finest quality
Pinto Bean for the last 5 years. We purchase a large volume of Pinto bean, from individual
farmers and some collectors/small traders to resell to processors, consumers etc. This allows us
to collect from the finest selection of pinto beans available anywhere in surrounding areas.
Sometimes, we purchase grains from neighboring Werda (Dore bafeno), to complement
and balance our stock especially during the shortage of production or in dry seasons.
2. Executive summary
 The present business plan is developed to secure company funding of birr 4.9 Millionloan to
finance business growth.
 This funding will be used to purchase grains for the first three months of operation. The
company seeks to increase its effectiveness and efficiencies in grain procurement and sell
these to markets at competitive prices, in a manner that generates fair and equitable returns
for owner, and superior value to our customers.
 To this regard the managerial, marketing and financial study of the business has been
undertaken in this document. Kibru Tuke has planned to purchase Pinto Bean in bulk in order
to fulfill still unsatisfied demand of grain to his customers.
 The growth of procurement capacity is expected to contribute substantially to the growth of
revenues and profitability. According to the projected income statement, the project will start
generating profit in the first year of operation.
 Important ratios show an increasing trend during the life-time of the business. The cash flow
statement showed that the business is able to generate positive cash flows and sufficient cash
reserves and also expected to maintain a healthy financial position over the operation years.
It is therefore concluded that the proposed business is financially viable. The demand for
quality Pinto Bean is strong and growing, situations that will ensure sufficient return to
owner
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3. Business Objectives
 Establish grains trade as the leader in selling cereals and other grains in the region.
 Increase the number of our customers buying grains trade by 15%
 Establish a yearly continuous availability of food Pinto bean for customers that will
build customer loyalty.
Given the increase of demand, we are planning to expand our storefront and sell direct to the
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. Hence he got a strong & trustful network as well as a committed team to
achieve the business objectives.
4. Purpose and Amount of the loan required

In order to expanding his operations, increasing its efficiencies and enhancing trade efficiencies
through procurement of quality grain, the bank loan Birr 4,900,000.00 is required to purchase
pinto bean and others operational costs.

5. Description of company products

Kibiru Tuke Pinto Bean trading is specializes in Pinto bean buying, aggregation and
marketing. The company will procure Pinto bean from the farmers and private assemblers and
sell the grains for Ethiopian consumption and wheat for food industry. We will clean and
package our teff and wheat in 50 and 100 kilogram. The owner will rely on customer feedback,
suggestions and sales reports to improve our grains quality and packaging sizes and distribution
networks

SWOT Analysis

Kibru Tuke is well informed that there are several grains traders both large and small in the
country which is why our business following the due process of establishing a
business so as to compete favorable with them.

The company conducted SWOT analysis to be able to position the business to

maximize its strength, leverage on the opportunities that will be available, mitigate its risks and
 Kibiru Tuke Pinto Bean trading

be welled equipped to confront its threats. This is the summary of the SWOT analysis that was
conducted for Kibru Tuke trade;

STRENGTHS

High experience of the business owner, Kibru Tuke has been in grains trading business for
more than two years, and more especially he understands very well the market in the country.
Hence he got a strong & trustful network as well as a committed team to achieve the business
objectives this will lead our capacity and experience to do so .Our business also, proximity to
one of the largest grains marketing area in the country– Hawassa, our large national distribution
network and of course our excellent customer service culture will definitely count as a strong
strength for the business.

 availability of high quality Pinto bean

 Availability of communication mean’s Tel phone accesses
 Availability of low cost labour
 Wide range of target market

WEAKNESSES

 Shortage of working capital to purchase grain

 Less capacity in collection of pinto bean food since it is a seasonal operation

OPPORTUNITIES

 Growing number of population has also increased demand of food items.

 Good volume of production of grains food in the region;
 Government’s policies that reinforce the Crop intensification
 Conducive government policy and support

THREATS

We are quite aware that just like any other business, one of the major threats that weare likely
going to face is economic downturn. It is a fact that economic down turn affects purchasing
power. Another threat that may likely confront us is the arrival of new grains traders in same
location where ours is locate
 Kibiru Tuke Pinto Bean trading

6. Market Analyses

6.1 Market Overview

Pinto bean remains at one of Ethiopia food consumption. Pinto bean consumption is
witnessing a steady growth across the country owing to the rising demand for fast food products
among different classes of consumers. The increasing number of cafes and food restaurants in
Ethiopia is driving the crop market

The rise in the consumption of fast food and meal continuous increase in population, and
increased spending on food due to rise in per capita income are some of the major drivers of the
pinto bean market. Currently there are growing businesses in food products; our business also is
among these businesses. Based on the reality that the market is growing rapidly thus it creates
favorable environment for attainment of the stated objectives of our business

7. Demand and Consumption Pattern of Pinto bean

The total pinto bean distribution on demand in the country may have different driving forces.
Large proportion of the domestic consumption from the total supply was demanded
by household agricultural producers and consumers for their household consumption
and also food processing industries have a large volume of pinto bean demand,

.The demand pattern also shows that there has been an increasing trend. The number of
establishment for manufacture of macaroni and spaghetti also increases this increment in the
number of establishment causes increment in input demand

8. Competition

The major competitors for the products of the company are grains traders located at Derara
town and around and industry in the country. Though there are grains food
warehouse in the nearby town, first of all they are not sufficient and given un predicted
population growth, they cannot succeed to grow at the same pace. 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
 Kibiru Tuke Pinto Bean trading

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 Kibru Tuke Pinto bean market to sell more. The major difference
between products supplied by the company and those supplied by competitors is that the product
supplied by our company will be well managed, with good quality demanded by customers and
les cost. The Company will put more efforts in creating awareness among the customer and
design or developing appropriate promotional strategies. Therefore, the ultimate
competition of the market is purely based on product quality and cost.

Business Plan for Grains Trading Generally, the company seeks to establish a
competitive edge in its target market segment by increasing level of customer contact and
services that other competitors seem to often time lack.

9. Pricing Strategy

Kibru Tuke Pinto bean Trading will offer the same or better quality Pinto bean than other
suppliers in the market. The company will charge significantly less for its grain than other
companies because of its lower overhead expenses and fewer employees it will engage.

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.

10. Capital Requirements and Use of Funds

Dinka Debela Cereals Grain Trading is seeking 4,900,000 in debt financing to expand his
cereals retailing business. The funding will be dedicated towards securing the service volume by
increasing the procurement volume cereals grain. Funding will also be dedicated towards six
months of overhead costs to include payroll of the staff, rent, and marketing costs. The breakout
of the funding is below:
 Kibiru Tuke Pinto Bean trading

 Planned investment of the business is estimated to have a total investment cost including working capital Birr
13,927,932.43 for annual requirement
 Out of this required investment capital Birr 6,948.132.43 (35.4%) part of the fixed asset the remaining birr
6,979,800 (64.6%) required for working capital for the business
 The fixed capital Investment has 100% covered by the promoter by fixed capital assets that
consume in the production process. Plus, they can be used multiple times in production and
giving of the service. Some of the types of such assets include property, furniture, fixtures,
equipment, and infrastructure, etc.
 Out of the given total working capital requirement of the current fiscal year Birr 2,979,800 (27.18%) is
covered by from owner equity which source from the available working capital of the business
 The Remaining balance of working capital requirement Birr 4,900,000 (82.35 %) sourced from Bank loan
which is 100% serves the purpose of operational activities of the business.

11. Our Short Term loan Plan

This business in cash intensive business due to that we need a short term loan that is obtained to
support a temporary business capital need.

As it is a type of credit, it involves repaying the principal amount with interest by a given due
date, which is usually within two years from getting the loan

The key is to monitor and regularly update the planned short-term cash flow so that a possible
shortage of cash can be addressed in advance. The owners of the business that successfully resist
financial adversity agree on this. Daily or weekly monitoring and forecasting are suitable for
effective cash management in the current situation.

Thanks to a prepared statement, it is possible to get an idea of a possible lack of cash in the
perspective of short-term cash flow, say two to up to three months in advance. As the market
situation is constantly evolving and the conditions that have been valid up to now may often no
longer apply despite all the good will of those involved, it is necessary to update the prepared
forecast – either daily or at least weekly, depending on the severity of the impacts of the crisis
on the company.