NAME OF ENTREPRENEURS SIGN

1. Lenco Umer ______________________________________

2. Nasir Ahmedin ___________________________________
3. Saanii Abdela_____________________________________
4. Ermiyas Mulu_____________________________________
5. Anuar Usman _____________________________________

June 5, 2022
 Rift VALLEY UNIVERSITY CHIRO CUMPUS

Table of Contents
List of Tables .................................................................................................................................. III
List of figures .................................................................................................................................. III
Executive summary ......................................................................................................................... 1
a) Brief Description of the project ............................................................................................... 1
b) Brief profile of the Entrepreneur ............................................................................................ 1
Chapter 1 ......................................................................................................................................... 2
Sales and Marketing Plan ............................................................................................................... 2
1.1 Description of the Product .................................................................................................... 2
1.2 Comparison of product with its competitors ........................................................................ 2
1.3 Business Location .................................................................................................................. 2
1.4 Market Area........................................................................................................................... 2
1.5 Major Customers ................................................................................................................... 3
1.6 Estimated Total Demand ....................................................................................................... 3
1.7 Estimated Market Share ........................................................................................................ 3
1.8 selling price ............................................................................................................................ 3
1.9 sales forecast ......................................................................................................................... 3
1.10 Promotional measures ........................................................................................................ 4
1.11 Marketing Strategy .............................................................................................................. 4
1.12 Marketing Budget ................................................................................................................ 4
Chapter 2 ......................................................................................................................................... 5
Production Plan............................................................................................................................... 5
2.1 Production Process ................................................................................................................ 5
2.2 Fixed capital ........................................................................................................................... 5
2.3 Life of fixed Capital ................................................................................................................ 6
2.4 Maintenance and Repairs ...................................................................................................... 6
2.5 Source of machinery .............................................................................................................. 6
2.6 Planned Capacity ................................................................................................................... 6
2.7 Future Capacity...................................................................................................................... 7
2.8 Terms and Conditions of Purchase of Machinery ................................................................. 7
2.9 Production site Location and Layout ..................................................................................... 7
2.10 Raw materials needed ......................................................................................................... 7

Entrepreneurship, Final project Page I

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

2.11 Cost of raw material ............................................................................................................ 7

2.12 Raw Materials Availability ................................................................................................... 8
2.13 Labor .................................................................................................................................... 8
2.14 Cost of Labor........................................................................................................................ 8
2.15 Labor Availability ................................................................................................................. 9
2.16 Labor Productivity ............................................................................................................... 9
Chapter 3 ....................................................................................................................................... 10
Organization and Management plan ........................................................................................... 10
3.1 Form of Business ................................................................................................................. 10
3.2 Organizational Structure ..................................................................................................... 10
3.3 Business Experience and Qualifications of the Entrepreneur ............................................. 10
3.4 Pre-Operating Activities ...................................................................................................... 11
Chapter 4 ....................................................................................................................................... 12
Financial Plan ................................................................................................................................ 12
4.1 Important Assumptions ....................................................................................................... 12
4.2 Break-even Analysis............................................................................................................. 13
4.3 Projected Profit and Loss ..................................................................................................... 13
4.4 Projected Cash Flow ............................................................................................................ 14
References ..................................................................................................................................... 16

Entrepreneurship, Final project Page II

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

List of Tables

Table 4. 1 General Assumptions .................................................................................................... 13

Table 4. 2 Profit and Loss............................................................................................................... 14
Table 4. 3 Cash Flow ...................................................................................................................... 15

List of figures

Figure 3. 1 Organization Chart....................................................................................................... 10

Entrepreneurship, Final project Page III

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

Executive summary
a) Brief Description of the project
Kush S.C Hollow concrete Block Production will register with the countries small
industries office in 2022 as a sole proprietorship and is located in Oromia region Chiro
city near the Besha sefer. It aims to Produce good quality Hollow concrete Block with
less prices.

The total project cost amounts to Birr 2,500,000 and we propose to finance this capital
requirement by a loan birr 1,750,000 or 70% and the balance of Birr 750,000 by our own
capacity.

b) Brief profile of the Entrepreneur

The business is owned by Kush S.C. we were motivated to go into the production of
Hollow concrete block after hearing many complaints from Contractors about the inferior
quality of existing Hollow Concrete Block.

We gathered information and studied the process of HCB production from several Books
and we decided to take training on practical work from Chiro TVET.

We will be graduate of 2025 in Survey Engineering from Rift Valley University,

Department of Surveying. We have studied to determine the Commercial, technical and
financial viability of the Project, that is producing and marketing good quality HCB for
local contractors.

c) Project’s Contributions to the local economy

The project will employ 35 employees, excluding members of the entrepreneur.

It aims to raise the quality standard of the HCB. It will also result in healthy Competition
by forcing existing HCB producers in the Area to improve their product quality.

Entrepreneurship, Final project Page 1

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

Chapter 1

Sales and Marketing Plan

1.1 Description of the Product
Hollow concrete is one of the most common masonry units it consists of hardened cement
contains single multiple Hollows. It made from Conventional Cement mixed which
include Cement, Sand & Pumice

The HCB are lightweight Size of 40x20x20, 40x15x20 and 40x10x20.They are made
from Conventional Cement mixes include cement, sand, and pumice the products have
different Classes such as Class A, Class B and Class C.

1.2 Comparison of product with its competitors.

We observed that the quality of HCB currently sold in the market is poor& expensive
and we have the desire to produce good quality HCB and sell the product at a reasonable
price on time. We improve the quality by using a good quality row material for the
Production and Continuously Check the quality of the product through laboratory tests
that fulfill compressive strength of HCB.

1.3 Business Location

The business will be located in Oromia region Chiro city near Besha sefer. This location
has chosen due to The Production row material nearest and operation can easily have
supervised by the owner. It is close to its targeted markets and it is easily accessible to the
customers as it has access road to the production site.

1.4 Market Area

We distribute our products for the Contractors sites there are many Construction sites in
the areas around & they needs a great deal of HCBs for the Construction and HCB
production site situated at a place, which is easily an accessible to customers.

Entrepreneurship, Final project Page 2

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

1.5 Major Customers

The main customers are mainly private and government contractors, which are working
at different sites in the nearby localities, as well as individuals who engage in private
construction.

1.6 Estimated Total Demand

The Customers need approximately 80,000 pieces of HCB monthly.

1.7 Estimated Market Share

A sample survey of competitors in the area indicated that there are only Five
manufacturers in the area. The Competitors are small in size and the quality of Their
products is inferior to what is planned by the project Because the number and size
suppliers is small, market share of about 25% is estimated as being reasonable. In the
initial stages of production, operating 100% capacities cannot be expected. There are
bound to be initial Operating problems, raw material shortages, distribution difficulties
etc. Due this only 75% of projected to be served in the first year.

1.8 selling price

The selling price based on “cost-Plus Method”. We feel that a profit of 9% over the total
product cost is very reasonable and Competitive especially at this stage.

Unit product cost is estimated at 17Birr/piece Adding the 10% profit, our wholesale price
is 18.7 Birr/m3. At this price, it is well below the price of the two manufacturers.

1.9 sales forecast

If the total demand is 80,000pices/month and the projected market share is 25%, the
project’s potential market site is 80,000*(25/100) or 20,000 per month. However, for
practical purpose, only 70% of the projected market will be considered for sales forecast,
the 80,000pices*(75/100) or 60,000pices month. We believe that the market is expanding
rapidly as infrastructure investment in the area is high. Conservatively, the project sale
volume will increase by 10% every year and attain 100% of the projected market share
by the third year.

Entrepreneurship, Final project Page 3

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

1.10 Promotional measures

In order to secure the goodwill of the customers, one-month credit will be extending to
these who regularly buy in bulk. Other promotional measures to help in marketing the
product will be free delivery for volume purchases, through oral of mouth advertisement
by satisfied clients, use of posters, and regular and prompt supply by the manufacturer.

1.11 Marketing Strategy

The project market strategy based on the following strategies:

a) Product strategy - it has a better product

b) Pricing strategy - its retail price is lower than other products.

c) Promotion strategy – free delivery

- Prompt Continuous and efficient service &

d) Distribution strategy –in the production sites.

1.12 Marketing Budget

Kush S.C Hollow concrete Block Production will have very modest cost to promote and
distribute its product. It will rely mostly on word-of-mouth promotion by satisfied
customers as well as endorsement by the customers of the product because of its superior
quality. Hence, the only cost it will incur will be occasional posters advertisement for a
total monthly.

Entrepreneurship, Final project Page 4

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

Chapter 2

Production Plan
2.1 Production Process
The Production Process of HCB is as follows

1. Cement, sand & pumice are mixed with water in ratios based on the classes of
HCB

2. The mix will have molded by HCB molding machines in different sizes.

3. Drying the molded HCB’s using natural sun light.

4. The HCB’s will have cured periodically until attaining the required strength.

5. Then the HCB will be ready for sale.

2.2 Fixed capital

Per month (Birr)

Land ………………………………… 2000

Office ……………………………… 1200

The equipment needed for producing should have a capacity of 2500 pieces per day or
60000 pieces per month, assuming 24 Hours working days & producing in a single batch
each day

Entrepreneurship, Final project Page 5

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

Equipment

2 mixers… …………………………………… 76800

4 HCB molding machines ………………… 115200

1 dump trucks …………………………………… 76800

Hand tools …………………………………… 750

Total =195950

2.3 Life of fixed Capital

The life of the equipment is 10 years, because of its regularly contact with cement, sand
& water. The depreciation change will be 15% on equipment and 5% for office.

The Annual description costs assuming no scrap value will therefore

Equipment (15%) = 40320 Birr

Office (10%) = 60 Birr

Monthly depreciation cost= 40380 Birr

2.4 Maintenance and Repairs

Because of the simplicity of the machineries do almost all services & repairs on the
production site.

2.5 Source of machinery

The machinery & equipment will locally have manufactured on the factory site with local
Crafts men.

2.6 Planned Capacity

The factory has a production capacity of 2500 pieces per day of operation the factory will
initially operate at 80% Capacity, 2000 pieces per day for 24 days in a month.

Entrepreneurship, Final project Page 6

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

2.7 Future Capacity

Extra Capacity is available & will used only when demand is sufficiently large to justify
working Overtime.

2.8 Terms and Conditions of Purchase of Machinery

The machineries will have paid at the time of installation.

2.9 Production site Location and Layout

The production site will be located in Oromia region Chiro. The total size of the
production site is 10000sq.m. The land is owned sub city and has a lease cost of
1700birr/month.

2.10 Raw materials needed

For a daily Production level of 2500 Pieces per day, the following raw materials are
required.

Fuel …………………. 150 liters

Water …………………… 1000 liter

2.11 Cost of raw material

Fuel ………………… 40 Birr per liter.

Water ………………0.5 Birr per lit.

Raw materials Cost per month will be:

Fuel = 150*40*24 = 144000

Water = 1000*0.5*24 = 12000

Total = 156000 Birr. Per month

Entrepreneurship, Final project Page 7

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

2.12 Raw Materials Availability

The most essential raw material for HCB production is fuel. The availability of fuel
varies from season to season. The most frequently used fuel for the Mixer is benzene.

We have contacted a number of small suppliers of fuel in the town vicinity, and because
the requirement for this project is not large, regular availability will have assured. So, we
have however, made a provision to keep a regular stock of fuel equivalent to one-month
production to ensure continuous production. This will mean 150 lit. Per day x 24 days in
a month or 3600 lit. Of fuel, stocks are required to run the production continuously.

2.13 Labor
Our self-participate during our internship time in management of workers. To make easy
workflow one full-time assistant or Foreman will be hired to help in production and to
supervise the production operation. In addition, 25 daily laborers and 1 storekeeper as
well as 1 guard will hired.

2.14 Cost of Labor

Direct Labor
25 workers at birr 700 = 17500

Indirect Labor
1manager = 4,500
1 fore man = 3,000
1 secretary = 1,000
1 store keeper=1000
2 guard = 2000
Total Labor Cost = 29,000 Birr

Entrepreneurship, Final project Page 8

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

2.15 Labor Availability

Workers for this type of industry are available throughout the year, even in seasons of
peak agricultural activity. No foreseeable problems will have expected, as most of the
work requires no previous skills.

2.16 Labor Productivity

Wages to the workers will be paid on a productivity rate basis, i.e., on the volume of
Aggregate products. Tea will have served free during break time lasting 15 minutes

Entrepreneurship, Final project Page 9

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

Chapter 3

Organization and Management plan

3.1 Form of Business
The business will have registered under the name "Kush Hollow concrete block
production S.C". It will have its business address located at Chiro city

3.2 Organizational Structure

General Manager, personnel manager and production manager will manage the business.
According our ability, we will have assisted as a production Foreman who will be in
charge of production in the absence of the entrepreneur, marketing manager as well as
treasurer.

3.3 Business Experience and Qualifications of the Entrepreneur

The entrepreneurs are graduate of the, 2025 in Survey Engineering.

Figure 3. 1 Organization Chart

Kush Hollow concrete production S.C project

General
Manager
(Leencoo Umer )
Secretary

(Saanii Abdela)
(Endale)

Marketing Production Marketing Manager Treasurer (Anuar

supervisor Supervisor (Nasir (Ermiyas Mulu) Usman)

(Lencoo Umer) Ahmedin)

Foreman (to be hired)

Daily Laborer (to be hired)

(to be hired)
Entrepreneurship, Final project Page 10

9
 Rift VALLEY UNIVERSITY CHIRO CUMPUS

3.4 Pre-Operating Activities

We have listed down the following activities to be undertaken before we can operate our
business:

1. Registering the business - 3day

2. Preparing the business plan - 3 weeks

3. Applying for a loan and approval - 3 weeks

4. Contacting machinery suppliers - 1 week

5. Installing machineries - 4 weeks

6. Hiring labor - 2 days

7. Purchasing raw materials - 2 days

8. Trial production - 1 week

Aim to start our operation approximately three months after our loan application, or six
weeks after release of our loan.

Entrepreneurship, Final project Page 11

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

Chapter 4

Financial Plan
• Salaries and rent are the two major expenses, while depreciation is another significant
cost that will increase as the company develops.

• We want to finance growth mainly through cash flow. We recognize that this means we
will have to grow slowly.

• It should be noted that the owner of the projects does not intend to take any profits of
the business until the long-term debt has been satisfied.

4.1 Important Assumptions

Key assumptions for our projects are:

• We will sell the Aggregate product on one-month credit.

• We assume the continued popularity of our share company in Chiro and nearby city

• Monthly sales are the largest indicator for this business. There are some seasonal
variations, with the months January through June being the highest sales months.

• We assume access to capital and financing sufficient to maintain our financial plan as
shown in the tables.

Entrepreneurship, Final project Page 12

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

Table 4. 1 General Assumptions

General Assumptions 2022 2023 2024

Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 15.00% 15.00% 15.00%
Other 0.00% 0.00% 0.00%
Calculated Totals
Payable Expense 250,000 birr 365,000 birr 540,000birr
Payroll New Accounts 400,000 birr 450,000 birr 500,000birr
Inventory Purchase 250,000 birr 320,000 birr 400,000birr

4.2 Break-even Analysis

For our break-even analysis, assume running costs of approximately 800,000 birr per
month, which includes payroll, rent, utilities, and an estimation of other running costs.

Based on a 30% margin, we need to sell about 240000birr per month to break even,
according to our assumptions. Our sales forecast indicates that monthly sales will expect
much greater than the break-even point mentioned in the table

4.3 Projected Profit and Loss

The annual estimates are included on the following page. We expect income to hit birr at
the end of the first year of business. It should increase to around 800,000 birr at third year
of our business, its employees, and services become apparent to the local owners. Second
year revenues anticipate the addition of one part-time employee, along with one fulltime
employee in the third year.

Entrepreneurship, Final project Page 13

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

Table 4. 2 Profit and Loss

Pro Forma Profit and Loss 2022 2023 2024

Sales 800,000 birr 850,000 birr 1500,000birr

Direct Costs of Goods 200,000 birr 300,000 birr 800,000 birr
……………………………… …………… ………… …………….
Gross Margin 60,000 birr 96,000 birr 136,000 birr
Gross Margin 30.00% 32.00% 34.00%
Expenses:
Payroll 25,000birr 35,000bir r 60,000birr
Sales and Marketing and Other
Expenses 25,000birr 21,000birr 34,000 birr
Depreciation 2,000birr 4,000birr 86000 birr
Depreciation 1,200birr 1,500birr 3,000 birr
Depreciation 6,000birr 6,000birr 6,000 birr
Depreciation 500 birr 500 birr 500 birr
Insurance 12,000birr 12,000 birr 12,000birr
Rent 20,000 birr 20,000birr 20,000 birr
Depreciation 6,000birr 6,000birr 6,000birr
Payroll Taxes 7,500birr 7,500birr 7,5000birr
Other 0birr 0birr 0birr
Total Operating Expenses 107,000birr 107,000birr 107,000birr
Profit Before Interest and Taxes 96,000birr 96,000birr 96,000birr
48,000birr 48,000birr 48,000birr
Net Profit/Sales
10% 10% 10%

4.4 Projected Cash Flow

Cash flow projections are critical to our success. The following table shows cash flow for
the first three years.

Entrepreneurship, Final project Page 14

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

Table 4. 3 Cash Flow

Pro Forma Cash Flow 2022 2023 2024

Cash Received

Cash from Operations

Cash Sales 100,000birr 350,000birr 500,000birr

Cash from Receivables 0birr 0birr 0birr

Subtotal Cash from 450,000birr 600,000birr 800,000birr

Operations
Additional Cash Received 0birr 0birr 0birr
Non-Operating (Other)
Income

Sales Tax 0birr 0birr 0birr

New Current Borrowing 0birr 0birr 0birr

New Other Liabilities 0birr 0birr 0 birr

(interest-free)

Subtotal Cash Received 400,000birr 450,000birr 550,000birr

Purchase Long-term Assets 0birr 0birr 0birr

Dividends 0birr 0birr 0birr
Subtotal Cash Spent 400,000birr 300,000birr 500,000birr

Net Cash Flow 135,000birr 1700,000birr 2,350,000birr

Entrepreneurship, Final project Page 15

 Rift VALLEY UNIVERSITY CHIRO CUMPUS

References
1. Toolkit, Start and Improve your Business, Addis Ababa, 7/2004
2. Business Plan guide line and examples
3. How to Prepare your Business Plan, UNITED NATION, New
York and Geneva, 2002
4. Google and YouTube.

Entrepreneurship, Final project Page 16