BUSINESS PLAN

( Name of Business)

Prepared by

Name :
ID.No :
Year :
Department :
Date :
EXECUTIVE SUMMARY

Introduction

The Introduction is the readers’ first impression of the business and should cover the following
areas briefly but informatively:

 the business name

 the business structure
 key personnel and their relevant experience
 description of the product and/or service
 its current market position and the potential for growth
 the business’ objectives both in the short and long terms
 the reason the business will be successful
 financial projections
 funds sought and usage.

Name of business : XYZ

Legal Form
The legal form of the business will be:

□ Sole proprietorship √ partnership □ limited company □ Corporation

Reason for choosing this legal form

1. Easy to form
2. Low costs to start
3. Added capital sources
4. Shared management
5. Possible tax advantages

Contact address Holota

Tel. _____________________

E-mail________________________
Fax.____________________

Type of business

Manufacturer Service provider

 Retailer Wholesaler

Brief description of the business idea:

Write a short notes on it

Products or services

XYZ enterprise produces and sales a product called food cart, which is used to
make, transport and sale fast foods to respective customer group.

Target Market

Our target market will be Micro and small business enterprises, as well as
individuals who are qualified and interested to prepare and sale fast food on the
street.

Owner(s) profile

No Name Address Qualification Function in relevant

the business experience
1 XXX woliso GMFA General 2 years
L(II) Manager
2 YYY Woliso GMFA Operation 0
L(II) Manager
3 ZZZ Woliso GMFA Finance 0
L(II) Manager
Whether Projects contribution to the economy ?

Write a short notes on it

Description of the market

(Geographical area, town, type of customers, size of total market, description of

competitors, market share for the new business, etc.)

As we have conducted a market survey we have identified a high demand for our
product in Holota town and the neighboring towns like Ginchi ,Ambo, Menagesha,
Addisalem etc.

As far as our survey is concerned we have no competitors yet in the market.

Marketing Plan Product

Detailed description of the product or product range or service

Product/service type

Our food cart will serve the purpose of making and transporting fast foods as well
as with a slight modification it will also be used to move foods and beverages in
the Hotel, Restaurants; medical equipments in the Hospitals, books in the library.

What is special about the product/ the unique characteristics of the product?

Our product serves different purposes so that we can have as many customers as
possible

Specification of the product

The project is made up of stainless steel sheet 0.8 mm thick and different metal
structure. It has four wheels and driven manually, inbuilt with cooking kerosene
burners, top cover made up of collapsible materials frame RHS, shield material is
made up of cloth, food warmers/shelves is protected by glasses in order to maintain
temperature and food safety to avoid direct contamination of food, equipped with
compartment or cabinet for waste segregation. It is more economical,
environmentally and customer friendly.

After sales service

We will give the following after sales services:

1. Warranty for six months.

2. Maintenance service.
3. Coaching and consulting.
Marketing Plan Price

How much are customers willing to pay?

 Highest _____
 Average ______
 Lowest _____
How much are competitors’ price?
 We have no competitors yet.
How much is your price?

 Highest _____
 Average ______
 Lowest _____
What are the reasons for setting your price?

We set our price based on the purchasing power of customers.

Is there discount on bulk purchase? If yes / No. ( say in %)

Marketing Plan Place

Location of the business (description of the planned location of the business)

The planned location of the business will be woliso town

Reason for choosing the location the business

Demand for our product is high in Holota area, we can get sufficient working place
and there are no similar project in the area.

How to distribute the product to customers?

Directly to customers / Through retailers or wholesalers

Reason for choosing this way of distribution

We decided to deliver the product directly to the customers to avoid unnecessary

price increment which will affect the purchasing power of our customers.

Marketing Plan Promotion

We promote our product through printed materials like brochures, posters and also
we use personal selling. We will not use electronic media because of its cost.
Competition and competitive advantage (short note on it)

 List three of your major competitors.

 Make a realistic assessment of their strengths and weaknesses.
 How will you address their strengths and capitalise on their weaknesses?
 How many staff do you have?
 How long have they been in business?
  What position do they have in the market? (E.g. quality, price, service).
 Do they have a waiting list for their product/service?
 Indicate why you think people would change their current buying habits to become
your customers.
 How will your competitors react when you enter the market?
 Will your business have any adverse effect on other competing businesses?
 What is your competitive advantage?
Price strategy

 What pricing technique will you use? Explain why.

 What are your prices? Include a list of prices.
 Classify your goods and services (ie, GST taxable supply, GST free or input taxed)
Advertising and promotional strategy

 List the methods you will use and the cost of bringing your product/service to the
attention of prospective customers, e.g. in which publication will you advertise.
 What promotional literature will you be developing, i.e. flyers, etc.
 What other promotional tools will you use?
Market research

 Details of the results of your market research produced from primary and secondary
resources.
 Include details of any surveys/questionnaires used.
Insurance

 Provide an estimate of applicable insurance requirements for your business.

Quotations from an insurance company can be included as an appendix.
NB: Workers’ compensation insurance is compulsory if you employ staff.

NB: A householder’s insurance policy will not cover business assets, unless specifically
indicated as an addition to the policy!

Commencement date

 When will you start the business?

Personnel

 Who will fill each position?

Resumes

 Brief resumes of the main personnel( entrepreneur). (Attach this copy)

PRODUCTION PLAN

Production process

List of production steps

1. Prepare working drawing

2. Select raw materials
 3. Transferring the dimension to the work piece
4. Cut and develop the pattern
5. Join the pattern accordingly
6. Assemble the parts according to the drawing
7. Apply coating and polishing

List fixed assets needed and their cost

No. Item Quantity Amount

1 Scriber 1 200

2 Try Square 2 40

3 Shear 1 200

4 Hack saw 1 50

5 Different types of file 3 1500

6 Center punch 1 20

7 Divider 1 100

8 Measuring tools 2 20

9 Wire brush 1 15

10 Paint brush 1 10

11 Hand Grinding machine 1 2500

12 Hand drilling machine 1 1500

13 Hand shearing machine 1 2000

14 GMAW machine 1 1335

15 Rivet Gun 2 2000

16 Spot welding machine 1 3500

Total 15 000
What is the useful life time of each fixed asset?

Investment item Lifespan in years Depreciation (in %)

Buildings 20 5
Simple machines 8-10 12.5-10
Special machines 3-5 33.3-20
Vehicles 5 20
Hand tools 3 33.3

Brief description of production capacity of the project per month:

1st month 20

2nd month 30

3rd month 40

Factory/plant location and layout

List of raw materials needed

No Raw materials DIMENSION QUANTITY UNIT TOTAL

needed per COST COST
month
1 Stainless steel 2000x1000mmx0.8mm 1 200 200
2 Galvanized 2000x1000mmx0.8mm 2 100 200
sheet metal
3 Electrode Roll 0.8 diameter 1/10 1000 100
4 RHS 6000x30x30x1 2 100 200
5 Anti rust pain Gallon ½ 100 50
6 Metal paint Gallon ½ 100 50
7 Sand Paper Standard/reg 2 10 20
8 Glass 2000x1000mmx0.6mm 2 150 300
9 Wheels/tire Ø400mm 4 50 200
10 Rivet Ø10mm box ¼ 100 25
11 Cooking Ø200mm 2 50 100
kerosene burner
Total cost 0
Staff cost

No Position Qualification Salary per Remark

month
1 General manager GMFA L. II 1100
2 Operation manager GMFA L. II 800
3 Finance manager GMFA L. II 800
---------

Total 2700

Factory overhead expenses

No Overhead expenses Amount per month

1 Indirect labor 289
2 Electricity 144
3 Maintenance -----------
4 Depreciation of fixed capital 145
Total Factory overhead expenses per month 578

Production costs of each item to be produced

Raw materials per month 8000.00

Direct labor per month 2700.00

Factory overhead expenses per month 578.00

ORGANIZATION AND MANAGEMENT PLAN

Forms of business

Write a short note on it

Organizational structure

Business experience & qualification of Entrepreneur.

Write a short note on it

Administrative expenses.

Administrative expenses. Amount

1. Allowance ______

2. Supplies _______

3. Communication _______

FINANCIAL PLAN
Capital requirement

Capital requirement/project cost? Amount

Fixed Assets
- Land --------
- Building 10 000
- Equipment 15 000
- Others 3 000
Total Fixed assets 28 000
Pre-operating expense
Working capital
- Operational costs of one months
Raw materials costs 8 000
Administrative expenses ------
Staff cost of one month 2 700
Total working capital 10 700
Total capital requirement 38 700

Profit & loss statement

Annual projected profit& loss statement

For three months

Gross sales 193 000

Less: Returns -----------
Net Sales 193 000
Less: Cost of goods sold 138 936
Gross profit 54 064
Less: Administrative & Selling Expenses ------------
Operating profit 54 064
Less: Interest Expense -------------
Net profit Before Tax 54 064
Less: Estimated Income Tax 11 275
Net profit After Tax 42 789

Cash flow

Projected monthly cash flow statement

Particulars Pre- Month

operatin 1 2 3 4 5 6 7 8 9 1 1 1
g 0 1 2
period
Cash at the beginning 10 700 20 850 37 550
of the month
Cash inflow
Equity 38 700
Borrowings
Cash sales 42 000 63 000 88 000
Collection of A/R
Other income
Total cash inflow 38 700 52 700 83 850 125 550
Cash outflow
operating expense 31 850 46 300 60 750
Purchase of fixed 28 000
assets
Taxes payable 11 275
Total Cash outflow 28 000 31 850 46 300 72 025
Cash at the end of the 10 700 20 850 37 550 53 525
month

Balance sheet

Projected balance sheet

Assets Amount Liabilities Amount

ASSETS LIABILITIES
Current Assets Current Liabilities
Cash at hand and bank 10 700 Current Liabilities
Accounts receivable Accounts payable
RM inventory Taxes payable
WIP inventory Others payable
FG inventory Total Current Liabilities
Total Current Assets 10 700 Long-Term Liabilities
Fixed Assets Loans
Land Others
Building 10 000 Owners Equity 38 700
Equipments 15 000 Capital
Others 3 000
Total Fixed Assets 28 000
Others
Total Assets 38 700 Total liabilities & capital 38 700