AKSUM UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

Entrepreneurship (Business plan)

ENTRPRNERSHIP

GROUP-1 SECTION- B
Name I.D
1. Awot mengesha ......…………………..…..1100839
2. Habti Dires…………………………….....…1538/12
3. Mahalet Desalgn………………………….1953/12
4. Solomon Habte…………….……………...2864/12
5. Haymanot Enyew…………….……….…..1639/12
6. Habtam Dagne ………………………....1512/12

Submitted: Instructor Ashenafi debasi

ENTRPRNERSHIP
 TABLE CONTENTS

1 Executive summary..................................................................................................................1

2 Introduction..............................................................................................................................3

2.1 Name and address of the company...................................................................................3

2.2 Name and address of the co-owner (owners)....................................................................3

2.3 Statement of financial requirement (startup- capital).......................................................5

2.4 Source of capital................................................................................................................5

2.5 Company summary...........................................................................................................6

2.6 Mission..............................................................................................................................6

2.7 Start up summary..............................................................................................................6

2.8 Type of business................................................................................................................6

3 Industry analysis.......................................................................................................................7

3.1 Future outlook and trends.................................................................................................7

3.2 Analysis of competitors....................................................................................................7

3.3 Strength of competitors.....................................................................................................8

3.4 Weaknesses of competitors...............................................................................................8

3.5 Customer of the BUSINESS.............................................................................................8

4 . Description of business..........................................................................................................9

4.1 Products.............................................................................................................................9

4.2 Location of the business....................................................................................................9

4.3 Back ground of the enterprises........................................................................................10

5 Production plan.......................................................................................................................11

5.1 Source of fund.................................................................................................................12

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 5.1.1 Name and address of creditor..................................................................................12

5.1.2 Name and address of creditor..................................................................................13

5.2 Debt service.....................................................................................................................13

5.2.1 Staff cost..................................................................................................................14

5.3 Yearly (quarterly) sale plan.............................................................................................15

5.4 Operation cost.................................................................................................................15

5.4.1 Office equipment and personnel..............................................................................15

5.4.2 Needed physical material.........................................................................................16

5.4.3 Raw materials and machinery..................................................................................16

6 Marketing plan place..............................................................................................................17

6.1 Distribution (PLACE).....................................................................................................17

6.2 Promotion strategy..........................................................................................................18

6.3 Market segmentation.......................................................................................................18

6.4 , Market positioning........................................................................................................19

6.5 Legal form of the business..............................................................................................19

6.6 The future capacity..........................................................................................................19

6.7 , SWOT ANALYSIS.......................................................................................................20

6.7.1 Strength....................................................................................................................20

6.7.2 Threats.....................................................................................................................20

6.7.3 Opportunity..............................................................................................................20

6.7.4 Weakness.................................................................................................................20

7 Organizational plan................................................................................................................21

7.1 Forms of owner ship.......................................................................................................21

7.2 Organizational structures................................................................................................22

7.3 Roles and responsibility..................................................................................................22

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8 Risk assessment......................................................................................................................24

8.1 Weakness of the business................................................................................................24

8.2 Effects of change.............................................................................................................24

8.3 Contingency plans...........................................................................................................24

9 Financial plans........................................................................................................................25

9.1 Foretasted income statement for the next three years.....................................................25

9.1.1 Fore casted income statement..................................................................................25

9.2 Foretasted balance sheet for the next 3 years..................................................................26

9.2.1 Foretasted balance sheet..........................................................................................26

9.3 Fore casted cash flow for the next three years................................................................28

9.3.1 Statement of for casted cash flow............................................................................28

10 . EXIT STRATEGY...........................................................................................................29

11 MONITORING...................................................................................................................29

12 APPENDIX.........................................................................................................................30

1 Executive summary
Honey Production Company shall be established as a private limited
company in Aksum by partners Yehualashet Zenebe, Habtie
Dires,Mahalet Desalgn, Solomon Habte,Haymanot Enyew , Habtam
Dagne, and the type of business is merchandise. The capital required to
start the business shall be acquired through bank loan, families and
partner .The starting capital for investment and working capital is
600,000.

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 The honey production shall to sale high quality of honey prod acts
have a capital of a 1,510,370 Birr with operation cost of 55500. The
competitors have no high quality products strong business network. The
primary product of the business will be honey products. The size of the
business will be medium at the beginning but certain year when it gets
more profit the size will be large size. The business operation shall
require some personnel.

The entrepreneurs of the business have rich experience about honey

production in which will significantly contribute to the success full
establishment and operation of the business .The partner shall carefully
monitoring and adjusting the business products prices and change made
on a weekly, monthly or yearly and use different promotional strategy.

Easy available, convenient to the customer and affordable price

makes the store popularity in that area. The business form is general
partnership.

The company distribute the product to all target market to satisfy

increase the customers and the quality of the product through direct and
indirect means. The customer of the business is hotel, restaurant and
retailer because this business activity needs honey products for
preparation of wine.

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2 Introduction
The business plan is aimed to create as new venture and job
opportunity on members (partner’s contribution and bank loan). The
business will be need to run a good product of honey and distribute to
local markets.

2.1 Name and address of the company.

The name of the company named as ADDIS HONEY PRODACTION
COMPANY Around Aksum town.

Legal form: - general partnership

Contact address: aksum

Type of business: merchandise

2.2 Name and address of the co-owner (owners)

1. YEHUALASHET ZENEBE

Address------------------------------------------------------------Debre Birhan
Qualification---------------------------------------------------Under graduate
student
Function on the business-----------------------------------------Seller
Tell----------------------------------------------------------0926639590
2.HABTIE DIRES
Address-------------------------------------------------------------Debre markos

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Qualification------------------------------------------- Under graduate student
Function on the business---------------------------------------------Secretary
Experience--------------------------------------------------Secretary
Tell------------------------------------------------------0941688228
3. MAHALET DESALGN

Address--------------------------------------------------------------Bahir dar

Qualification------------------------------------------- Under graduate student

Function on the business-----------------------Advertizing manager
Experience---------------------------------------------------Manager
Tell----------------------------------------------------- 0930975841

4. SOLOMON HABTE

Address--------------------------------------------Debre Markos
Qualification----------------------------------- Under graduate student
Function on the business-----------------------------General manager
Experience-------------------------------------------------Accountant
Tell--------------------------------------------------0967770567
5. HAYMANOT ENYEW

Address----------------------------------------------------------- Debre
Markos
Qualification---------------------------------------------- Under
graduate student

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 Function on the business--------------------------------Purchasing
manager
Tell-------------------------------------------------------0921617095

2.3 Statement of financial requirement (startup- capital)

the business will be statement with the saturated capital of 600,000 and
400,000 birr use for investment as land equipment and machines and
200,000 birr used for working capital employees operation cost.

2.4 Source of capital

From the total capital of 600,000 the capital of business contribute from
(partner, 200,000), (family loan, 150,000) and (bank loan, 250,000).
From this 33.3% is equity, 66.7% from debt.

Each partner contributions for the establishment of the project are

presents in the following:

Partners'investment:

No Partners name ETB contributed to the

project
1 YEHUALASHET ZENEBE Br,50,000(50℅)
2 HABTIE DIRES Br,30,000(30℅)
3 MAHALET DESALGN Br,40,000(40℅)
4 SOLOMON HABTE Br,50,000(50℅)
5 HAYMANOT ENYEW Br,30,000(30℅)

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 Total Br,200,000

2.5 Company summary

2.6 Mission
The mission of this business plans is producing high quality of honey for
the purpose of attracting and satisfying the customer’s needs and wants
in return getting reasonable profit

2.7 Start up summary

The business plan started February 29-2012E.c and partner will start the
operation in December 3/ 2013 E.C, and will create job opportunity to
the societ

2.8 Type of business

The type of business is merchandise activity.

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3 Industry analysis

3.1 Future outlook and trends

In the last five years the introduction of honey production is highly
known and more expanded and many peoples are also participate but the
method of producing them. The marketing strategy and many things are
done in traditional way and using their in adequacy knowledge.

Due to this the total sales from this production are not much more
enough and qualitative so, when those partners starts the business, they
tries to evaluate and identify the failures in the past few years and as
much as possible change this failure totally to success by fulfilling the
accessory, this is to meal realization way and skill full mind to become
profitable with satisfying the customers after some years ago the
business expands the capacity of production and increasing the numbers
of partners with the distribution of products at everywhere and every
time if possible.

3.2 Analysis of competitors

Recently the available competitors in jigjiga and around that area are
low, but the bad thing is that, there is no much more competitor
available in the area local marketing who produce the product in that
way of production system. This leads or intercede these partners to the
group and at the same time to aware the society about the method of

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production by using skill man power and system of market strategy to
become successful. The available competitors are not present only in
jigjiga. That means there may be a competitor who have a high capacity
and provide qualified products in different itself so, to become the
wiener, the company should eliminate the carelessness of honey
production and these problems associated with the lost of bees to
increase productivity and to produce qualified producers. Otherwise,
they may be high competitors in the market and leads for risk.

3.3 Strength of competitors

the Strength of our competitor are the way of financing mistakes
/problems in our products and the way of trading a solution or
mechanism to serve the problems, there is also strong business network
and high quality of products the competitors know the effect of little
mistake on the market structure. That is a onetime mistake takes long
period do of time to change the market situation, our competitors
effective or storing in the protection or avoidance of mistakes in the
quality products.

3.4 Weaknesses of competitors

The weaknesses of competitors are high production and transportation
costs, which results larger prices and also their approaches to the
customers are dominant weakness.

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3.5 Customer of the BUSINESS
The product of the business are providing an optimum honey and the
potential customer is hotel and restaurant and the other is retailer and
whole seller.

4 . Description of business

4.1 Products
The products of our company should be

1. Honey products

2. bees available for sale

In addition to these the companies will be expand its honey production

business in various regions and sell Mach amount of honey products for
the society who needs it for another preparation of wine and
consumption purpose. The company has a great of increases there
production of honey in the future, this plan should be not only the plan
for our company but, also for other, since improving the capacity of
production from day to day time by doing each and every actives
according to the session effectively is the first issue for every business
office. So, in the future our productions capacity will be impounded we
will able to get potential customers and retailers who sells our products
for their own profit

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4.2 Location of the business
The honey production and processing takes place in Jigjiga Region 635
km far from Addis Ababa there is also alias ion office of or place which
we use not for the exchanges of information among different
organizations or companies about the situations of the market or sharing
experience in the system and method of production Jigjiga. The reason
for choosing the location is because of the area is the center of Ethiopia
and easily transport to Addiss abeba, which is high restaurant and hotel
in the area.

4.3 Back ground of the enterpriser

The partners have enough knowledge which helps them to operate the
production system easily. They also have experience on how to mobile
and operate the business mainly with the adjustment of their marketing
source given though they can easily identify the competitor and have the
ability to win the market with successful profits and the partners were
degree qualification.

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5 Production plan
Before any things have been started this partner is agreed to solve each
and every situation can fulfill the business in peace full mark up. Then
the partner decided the following things by keeping their formula steps.

How much capital needed for honey production?

How many kilo of honey should be available for sale.
What kind of things (e.g. hive) must be fulfilled for production?
Which one is that lue must emphasis to improve the capacity and
quality of products in the future also?

Estimation of startup capital amount

Description Amount

Investment:

Land 100,000

Building 280,000

Equipment 20,000

Total investment 400,000

Work capital

Staff cost 80,000

Operation cost 12,000

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 Total working capital 200,000

Total startup capital 600,000

5.1 Source of fund

Fund is crucial core point in our business .therefore our source of fund is
equity and debt.

Type Source Interest (5%) Principal

amount

Equity capital Partner 0 200,000

Loan 1 Family loan 5% ,4 year 150,000

Loan 2 Bank loan 5%, 7 year 250,000

Information about funding source

Débt1: family loan

5.1.1 Name and address of creditor

Name------------------------- Belay

Adress--------------------------------------A.A

Credit agreement: under discussions

Debt 2: bank loan

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5.1.2 Name and address of creditor
Name: commercial bank of Ethiopia

Address:-jigijiga, fafen branch

Credit agreement: under discussion

5.2 Debt service

As we see before the initial capital distributed from partners, family and
bank loan explain briefly. Payment is made in installment based with
interest the amount of the loan was birr 400,000 with 5% interest family
and for bank.

Repayment period May. May.2014 May. May.

2013 2015 2016

Family Installment 20,000 30,000 40,000 60,000

loan Interest 7500 6500 5000 3000

Total 27500 36500 45,000 63000

payment

Repayment period Y1 Y2 Y3 Y4

2017 2018 2019 2020

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 Bank Installment 50,000 60,000 65,000 75,000
loan Interest 72,500 10,000 7000 3750

Total 122,5000 70,000 72,000 78750

payment

5.2.1 Staff cost

Position salary per month

General Manager.....................................5000
Seller………………………….......................…1500
Accountant...............................................2000
Inventory ship.........................................1500
Secretary..................................................400
Price bargainer........................................1000
Adverting manger ..................................2000
Sale manger.............................................2000
Price receiver..........................................1000
Purchase manager..................................2000

Total staff cost..........................................18400

5.3 Yearly (quarterly) sale plan

Product Quarter Quarter Quarter Quarter

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 one tow three four

Honey Price per 100 110 110 100

kilo

Kilo 400 450 450 500

Turn over 40,000 49,500 49,500 50,000

Bee Interms of 3 3 10 10
hive

Price per 600 600 700 700

hive

Turn over 1,800 1,800 7,000 7,000

Total 41,800 51,300 56,500 57,000

5.4 Operation cost

5.4.1 Office equipment and personnel

The company’s operation require some the equipment and personnel.

Required office equipment and machinery.

No Description quantity Unit price Total price

1 Guest chair 5 100 500

2 Hive clothes 16 100 1600 17

3 Personnel computer 1 10,000 10,000

So our companies require 37100 birr for office equipment and machine

5.4.2 Needed physical material

Popularly forming should consist of the following fact ices

√ Bee's shelter which is confer table for them

√ Storing rooms
√ Miscellaneous materials like,knifes

5.4.3 Raw materials and machinery

The needed raw materials for production of honey are:

Good shelters of Bee (free form any dangerous conditions for bee),
knife, and other materials which used to storing honey products.

6 Marketing plan place

6.1 Distribution (PLACE)

The company distribute the products in the market areas, which is best
for profit and better for themselves. Mainly the company distributes the

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product to the target market of Addis Ababa also the company can
distribute to other marketing areas depending on the existing situation.
The distribution mechanism will be both direct and indirect channel. The
reason is for using direct channel is that honey is easy combined with
sugar and other unnecessary types by dishonest re tailors .

Producer consumer

Producer agent whole seller retailer customer

Pricing strategy is the main consideration of the company. This company

uses market penetrators strategy to introduce its products and to expand
itself in different market areas, to penetrates the market the company
must know in what price that the competitor are sold their products. If
this is known marking simply in different on the price of the products
create a greet attention for the company’s product by many customer.
The company sells the products even below its production cost up to the
level where market is penetrated and getting awareness by customers to
the market. Generally the customer may be willing to pay 120 birr per
kilo and 800 birr for one hive bee`s and Our price is 100 per killo,and
700 birr of one hive bee,the reason is that in order to increase customer.

6.2 Promotion strategy

It is imaginary to think that without promotion of the product the
business will be expanded and profitable that to attract customer
promotion of the company’s product is necessary and primary issue on

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the targeted market due to this reason promoting company’s prove by
using mining contras (television, radio and networking system like face
book, internet) are necessary or essential, therefore, promoting the
products is one best marketing strategy of our company.

6.3 Market segmentation

The base of the market segmentation was geographically specially in
Addis Ababa because in this area there are various retailors so, distribute
the product any time. The other market segmentation in harer is based on
air climate becouse honey is agrate important in couldest
invironment.Generally the market segmentation based on geographical
(air condition) and number of retailors base (user status, usage rate and
benefit) .therefore, the market for the company’s products is inside the
country which mainly in 3 specific areas: 1.Jigjiga, 2.Addis Ababa,
3.dire dawa

In all these market areas there is large customers of honey product but
the company distributes the production highly in Jigjiga, dire dawa and
Addis Abeba because the company’s near to Addis Ababa among other
marketing areas, so the target market for our products is Addis Abeba
and dire dawa. in addition to both areas all the other market areas are
suitable to sale our products for instance Jigjiga is needs huge amounts
of honey products due to the presence of high population and capital of
Ethiopian. So our company can distribute the product other marketing
area depending on the existing market structure.

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6.4 , Market positioning
On comparative advantage of the business is the way the product is
defined by the customer. As a result of this the business tries to place in
the customer mind by biting its competitors through providing the
quality and health products with reasonable prices and improving the
brand uniquely benefit to offer customers. in other word it is said to that
positioning the business output in the customer mind for relatively long
period of time.

6.5 Legal form of the business

The legal form of the business will be general partnership because all
members have a power to management activity

6.6 The future capacity

In the future the company needs huge amount of capital which is
necessary to expand its branch in different regions and areas with a high
emphasis of increasing the needed man power also the busier must have
modern equipments for producing honey.

6.7 , SWOT ANALYSIS

6.7.1 Strength
The accessibility of infrastructures high production quality and quantity
better promotion of the products is the strength of the business plan.
Better management skill is the opportunity of strength.

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6.7.2 Threats
The threats of business plan may be fluctuation of price of product due
to number of retailers and peoples who requires honey for the
preparation of wine.

6.7.3 Opportunity
The opportunity of our business is increase of the product, demand of
the customer, decrease of the material. Generally the major opportunity
of the business is facility of hotel for wine preparation.

6.7.4 Weakness
The weakness of the business is shortage of honey products due
seasonal fluctuation or unexpected and continuous drought which affects
the flower preparation of plant(source of honey preparation of bee).

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7 Organizational plan

7.1 Forms of owner ship

Addi's honey production company should established or termed as
private limited company.(terms of partnership). The partners of the
company also as mentioned before are kebede lema , abebe tamrat,
Asimamaw Demelash, ashenafi Kassahun, and Ali Ahmed. We have an
agreement on the ongoing production life and plan of the business.
These agreements are try to carry out different and difficulties facing in
the reduction of product in peace full way by discusser clearly to
become successfully.

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 7.2 Organizational structures

Secretary Accountant General Manager

Sale manager
Purchasing
Advertising
Marketing manager
manager
manager

Price
Seller
receiver
Price bargainer Inventory ship

7.3 Roles and responsibility

 General Manager: - oversee the general operation of the company
and personnel’s
 Sales manager: - oversees the selling activates of merchandiser he
can see the proper destruction of merchandise in each centers
oversee the bargaining of prices with customers.
 Advertising managers: - contacts the advertising process. he
cheek whether the company advertised prosperity with proper
method or not

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 marketing manager:- rails the marketing plans of the company
and searching information which makes the company power full
competitors
 purchasing manager:- supervise how Mach quantity is returned
to purchase, what price should and unease, what type of
merchandise purchase
 secretary:- the one write any document like receipt check to any
individual
 Accountant :- the one who prepare financial statement
 Seller:- sells the product of accompany in relation to sale manager
 price bargainer:- The one pay the price to the order
 Inventory ships:- Ships the product order come from the
purchasing manager

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8 Risk assessment

8.1 Weakness of the business

In the operation of the business the following problem may occur

√ Low occupation power to economic change

√ Shortage of personnel
√ Competitors reaction

8.2 Effects of change

Completion:-increasing the numbers of competitors to different market
area particular in the stargazed man Nat areas difficulties for our
company.

8.3 Contingency plans

The company shall have the following alternative rule policies to expand
the operation profitable

1. Establishing /conducting research and development

2. Expanding the distribute center to other markets

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9 Financial plans

9.1 Forecasted income statement for the next three years

A honey production Private limited company for casted income
statements for the following three years

Addis Honey production Company

9.1.1 Fore casted income statement

For the next 3 years

Description Year 1 Year 2 Year 3

Revenue:
Sale 230,000 430,000 640,000
Total revenue 230,000 430,000 640,000
Expense:
Office supplies 2000 2000 2,400
Transport 2000 3000 4000
expense
Rent expense 5000 7000 8000
Miss lane ons 1000 1500 600
expense
Income before 220,000 416,500 625000
tax

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Income tax (33,000) (62,475) (93,750)
(15%)
Income after tax 187,000 354,025 531,250

9.2 Forecasted balance sheet for the next 3 years

Honey production P.L.C Company forecasted balance sheet for the next
three years

Addis Honey production Company

9.2.1 Forecasted balance sheet

For the next 3 years

Current asset Year 1 Year 2 Year 3

Cash 245,000 400,000 600,000

A/R 50,000 80,000 100,000

Inventory 205,000 320,000 400,000

Total current 500,000 800,000 1,100,000

asset

Fixed asset

Land 200,000 250,000 130,000

Building (net) 250,000 200,000 100,000

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Equipment(net) 50,000 150,000 120,000

Total fixed 500,000 600,000 350,000

assets

Total asset 1,000,000 1,400,000 1,450,000

Liability and
equity:

Loans 150,000 130,000 200,000

Tax payable 80,000 190,000 130,000

Equity 1,230,000 1,080,000 1,120,000

Total liability 1,000,000 1,400,000 1,450,000

and equity

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9.3 Fore casted cash flow for the next three years
Addis Honey production Company

9.3.1 Statement of for casted cash flow

For the next three years

Y1 Y2 Y3

Cash beginning of 300,000 375,000 445,000

the year

Equity 200,000 350,000 260,000

Loans 150,000 100,000 50,00

Sales 677,500 601,000 837,500

Total cash inflow 1,327,500 1,426,000 1,592,500

Investment 400,000 450,000 500,000

Operation cost 120,000 130,000 140,000

Interest (5%) 7500 5000 2500

Total cash out flow ( 527500 ) ( 585000 ( 642500)

)

Cash of the end of =800,000 =841,000 950,000

the years

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10 . EXIT STRATEGY
Due to any means our business may fail. The failure is may occur due to
the external factors. Before our business fail we made audit in each
month. In the audit, if there is a threat we try to balance it.If it is
impossible we try to out from the business according to our agreement
when we start the business. We should exit from the business before we
lost the original business.

11 MONITORING
The owners of the business that there right to control, distribute and
improve the quality and capacity of their production, the owner of the
company also have the right to operate the business and terminate of the
partner when needed.

12 APPENDEX
√. Our partners will have debit of 150,000 and 250,000 birr

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 From commercial banks and families respectively.

√. The partners gets source of informations from the existing

Company and potential customer.

√. Government encourages small business, then our partner's

Will get license from city administrative.

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