ABYSSINIA Shoe

The company logo

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• Table of Contents
• Executive Summary,............................ 4
• Section one ........................................7
• 1. Description of the venture ..................7
• 1.1 Mission statement ...........................7
• 1.2 Objectives. ....................................7
• 1.3 The Venture Products. ....................7
• 1.4 Background of the entrepreneurs. ....8
• 1.5 Office Equipment’s......................... 8
• Section two........................................... 9
• 2. Industry analysis .........................9
• 2.1 Overall market .........................9
• 2.2 Specific market..............................10
• 2.3 Competitor Analysis ...............11
•
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• 6.2 Financial resource ........................22

• 6.3 Financial strategy .......................22
• 7. Assessment of risk and contingencies
...........................................................23
• 8. Scheduling and milestone............... 23
• 9.Appendx. ...................................23

• Executive Summary
• My venture manufacturing , Abyssinia shoes is a
business enterprise which produce a men shoes (an
outer covering for your foot that usually has a stiff bottom
part called a sole with a thicker part called a heel
attached
• to it and upper part that covers part or all of the top of your foot ) and Upper
part that covers or all of the top of your foot is produced from a leather
products and the sole of the shoes is produced from a tyre (a rubber
cushion that fits around a wheel) product .Why i interested in this product is
the demand for shoes product is increasing from time to time and the
product enter into market has low durability and quality. Through this
innovative product I am going to get a high market share, fair profit and
continue to exist in the market and contribute to the leather product industry.
My venture manufacturing is organized by single professionals with a
business background, I will in a better position to succeed.
• The number of participants in the shoes producing industry is increasing
from time to time. Specially, the number of Micro Enterprise producing
leather product is surprisingly increasing. However, these Small Micro
Enterprises are not efficient and competitor in the market because they
have lack of capital, market place and good management. The big
producers of this product in the market are ANBESA SHOE,
PEACOCK, .etc..Since these big producers of shoes are located in Addis
Ababa and their main focus is in the foreign market and also my business is
located in Debre Berhan i can’t be my competitors.
• The Leather shoe is an outer covering for the foot with a stiff sole and
usually not reaching above the ankle. Leather shoes can be man-made
synthetic type or natural leather shoes. The natural leather shoes have a
 opportunity and set minimum price and new design. Strategically, we plan to
increase manufacturing business enterpcost i will hope to minimize this
problem and successfully penetrate the market by using the problem as good
rise to share company and then diversify my product and coming with new
design additionally sell. My product to foreign market and becoming branded

•
shoe producer s
• When my company established it requires Birr 2,711,961.6 as start
up. start up capital is subjected cost like raw materials, machinery,
office equipment, human capital, rent, utilities, and training
requirement cost. The sources of financial requirements are from
family, relatives and crowd funding websites. The profit I get from
this business in the first year of production is 15,784,429.96 and the
fifth year of production is 26,045,774.38.
 Section one
1. Description of the venture
Under this section i should be describe about my venture in the detail and
this section makes my business plan meaning full and easy to understand .
1.1 Mission statement
The purpose of my business is to raising profit and creates my own
business and also satisfying my customers by producing new and durable
product with a fair price.My business is targeted to customers who live
around the main industrial area, such as Addis Ababa, Adama, and Debre
Berhan this makes me advantageous to extract the market.
1.2 Objectives.
The main objectives of my venture manufacturing is creating the
organization, to be sustainable in the business, and increasing profitability.
I have a short term and long term goals. My short term goal is producing
the product and reaching to my customer with new products and also
advertise my product using different social media, banners, and exhibition
(bazaars ) . This raises my sales and this result in increasing the
profitability of my enterprise. I also have a long term goal i gone to achieve
• producing enterprise is comes with new products this makes it differ from its
competent firms.I also sales my product with fair price to satisfied my
customer and being competitive with my competitors.
• To recap, my aim is giving my customers new, durable, and fashioned
products and then increasing the loyalty of my product.
• 1.4 Background of the entrepreneurs.
• Mr bekalu the co-founder and executive managers of the enterprise, he is
20 years old and graduated from debrebrehan university in management
and also he is experienced in the whole and retail sales shop from 2012 -
14 , he is interested with reading different books like fiction, philosophy,
psychology, and also interested in discussing with his friends speacialy
ideas related with business. Mr Dawit and Mr Abel. D, Mr Habtamu. S,
zewudalem.T, kidanemariyam G. All are also the co-founder of gebremeskel
shoes producing enterprise. They are also taking their BA in debrebrehan
from debrebrehan University. As they are the member of managing
department they are delegated to take management training in specific
responsibility area.
• 1.5 Office Equipment’s
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nd export market the following assumptions are used. - Recent three years`
average of domestic production plus import and minus export is assumed to
reflect the effective demand for the year 2015. Hence, the effective domestic
demand for the year 2016 is estimated at 1.154 million (domestic production of
1.33 million pairs plus import of 284 thousand pairs minus export of 460
thousand pairs).
To arrive at the present (year 2012) effective demand a 5% growth rate is
applied by taking year 2015 estimated demand as a base. Accordingly, current
(year 2015) domestic effective demand for leather shoe is estimated at 1.212
million pairs. For the export market, the recent three years average
performance, which is 460 thousand pairs, is taken as the export level for the
year 2014 and then a 15% annual average growth rate, which is much below
the observed trend in the past, is then applied to arrive at the year 2016 export
demand. Accordingly, current (year 2016) export effective demand for leather
shoe is estimated at 529 thousand pairs.
Now the demand for leather product in local market is increasing. I am going to
share from the growing demand for leather product especially for shoes product
in both domestic and foreign market.
.increase from 453 thousand pairs in the year 2017 to 1.420 million pairs and
2.686 million pairs in the year 2022and 2023respectively.
• The place my product produced is Debre Berhan and i prefer Debre Berhan
because of many reason such the house rent is less than Addis Ababa and
also nearest city to Addis Ababa. I also have sales and distributions shop in
Debre Berhan, Adama, and Addis Ababa I prefer this area because of the
main industry area of country and also my customers are people live in this
area. They income is mainly from government organization, plc, agriculture,
and trade activities. After reaching to my customers live in this area I.was
planned to distribute other part of the country as well as foreign market.

• 2.3 Competitor Analysis

• The potential shoe manufacturers in Ethiopia are Anbesa Shoes Share
company, Ethio-lather Cluster, Gelila Shoe Factory, Gamba Shoe Trading
&Industry, Jamica Shoe Factory, Kangro Shoe Factory, MeleseTeka Shoe
Factory, Peacock Shoe Factory, Ramsie Shoe Factory, Pu Pvc Leather
Shoe and Sole Factory, Ras Dashen Shoe Factory, Tikur Abay Shoe s/c,
Wallia Shoe Factory, Park Shoe & Leather Product etc. They produce
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• The SWOT analysis of leather manufacturer is as follow: strength easily

trained labour, considerable resource base. Weaknesses: lack of skilled
man power in leather technology, market intelligence, etc. lack of high
technology, lack of waste treatment plants, low productivity, efficiency.
Opportunities: investment opportunity, priority sector well recognized by
government, hides & skin, leather& leather products highly significant in the
global trade.
• 2.4 Macro-environmental influences
• My venture uses PEST analysis. The political effect on my business
enterprise is both negative and positive effects. The positive effect is
government encourage business enterprise specially leather product
industry. However, there is also discouragement from government side such
as late allowance of trade licence and lack of good governance.
Economically, my product is efficient because it uses raw material and man
power from local market and contributes to country by reducing
unemployment and generates foreign currency. Kenenisa shoe use the
recent technology available in the country and come with new design and
fashioned product. The customers use my product is live in densely
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• pper. Various edge treatments are also done onto the leather for giving an
attractive look to the finished upper. At this stage only, the eyelets are also
inserted in order to accommodate the laces in the finished shoes.

• Step three lasting and making department

• The completed uppers are molded into a shape of foot with the help of a
“last”. Last is a plastic shape that simulates the foot shape. It is later
removed from the finished shoe to be used further in making other shoes.
Firstly, an insole to the bottom of the last is attached. It is only a temporary
attachment. Sometimes, mostly when welted shoes are manufactured, the
insole has a rib attached to it’s under edge. The upper is stretched and
molded over the last and attached to the insole rib. After the procedure
completes, a “lasted shoe” is obtained

• Step four finishing department and the shoe room

• The finishing of shoe depends on the material used for making it. If made of
leather, the sole edge and heel are trimmed and buffed to give a smooth
finish. To give them an attractive finish and to ensure that the edge is
 Table 1
Item Raw material Quantity in Price per Total cost Source of
m2/pairs/pieces m2/pairs/pieces suppliers

1
2
3
4
Upper leather
Lining leather
Insole
Rubber sole
10800m2
13500m2
4500m2
90000 pairs
. 15.85
10.91
16
20.6
171,180.00
147,285.00
72,000.00
1,854,000.00
Local market
Local market
Local market
Import
5 Eyelets 90000 pieces 0.1 9,000.00 Local market

• . 6
Total
Shoe cartons 90000 pieces 1.50 135,000.00
2,388,465.00
Local market

2. Utilities and Budget annually

Table 2
Item Utilities Measurement unit Yearly Unit price Birr Total cost Birr
consumption

1 Water M3 150 2.5/ M3 375

2 Electric power KWH 1000 0.4736/ KWH 473.6

Total - - - - 846.6

3. Machinery and Equipment’s

Table 3
Item Fixed asset Required units Unit cost birr Total cost birr
1 Leather sewing machines 2 15,000 30,000
2 Skiving machines 1 18,000 18,000
3 Post bed single needle 1 11,000 11,000

4 Single needle flat bed 1 10,500 10,500

5 Zig zig machine 1 10,000 10,000
Total 6 76,500 76,500

4. Human resource requirement

Table of human requirement
Table 4
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No Authority No persons required Monthly salary (birr) per person Annual salary (birr)

1 General manager 1 8,000 96,000

2 Secretary 1 2,000 24,000

3 Administration & finance 1 4,000 48,000

4 Operatory 6 3,000 102,000

5 Cashier 1 1500 18,000
6 Store keeper 1 25,000 28,000
7 Security 3 1,300 57,000
Total 14 154,800 396,00
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• Section four

• 4.Marketing plan
• 4.1 Marketing strategy
• In order to attain or achieved its goal and objectives my business enterprise
set well-structured marketing strategies. The main objectives of my
business enterprise is being profitable and sustained in the business for a
long time and merge my enterprise with other enterprise producing similar
or substituted product and then makes my business enterprise a big share
company. In order to achieve this and other objectives our business
enterprise uses extensive advertisement, psychological promotion,
seasoned discount, loyal brand, social media and websites, exhibition and
bazars, different grants, word of mouth, photo, flayer, paper and banners.
• 4.1.1 Distribution technique
• My product is distributed to different part of the country and mainly my
distribution is focused on the city located between Debre Berhan and Addis
Ababa. My product place is Debre Berhan and distributed our product to
cities between Debre Berhan and Addis Ababa and I have three main
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• Leather Shoe for the domestic market………….Birr 2200; and

• Leather Shoe for the export market……………..Birr 1700.
• 4.1.3 Advertisement and promotion strategies
• My business enterprise use different techniques of promotion and
advertisement such as social media (Facebook, Twitter, WhatsApp, and so
on), websites, banners, paper or photo, loyal brand, radio, TV channels,
exhibition centre and bazaar, and so on. As the production begun other
method or techniques of promotion will also employed. Such as, word of
mouth, discount, and so on.

• Section five
• 5. Organizational plan
• 5.1 Organizational. Structure
• Cheif Executive manager. Mr Abel
 Section Six
6. Financial plan
6.1 Financial statement
6.1.1 Projection profit and loss statement / Income statement
Table 6

Sales
2029Monthly
2,250,000
.
2020Quarterly
7,500,000
2021Quarterly
9,306,000
2022Annual
40,608,000
2023Annual
43,992,000
Cost of goods 199,038.75 663,462.5 729,808.75 3,184,620 3,450,005
sold

• .
Gross profit 2,050,961.25 6,836,537.5 8,576,191.25 37,423,380 40,541,995
Operating expenses

Wages and salary 17,700 59,000 64,900 283,200 306,800

expense
Rent expense 3,000 9,000 12,000 48,000 60,000
Utility expense 70.55 235.165 258.6825 1128.8 1222.86
Advertising 10,000 10,000 7,000 5,000 5,000
expense

Depreciation 1050 1050 1050 1050 1050

expense(machinery)

Miscellaneous 5,625 18,750 20,625 90,000 97,500

expense
Total operating 37,445.55 98,035.165 105,833.6825 428,378.8 471,572.86
expanses
Earnings before tax 2,013,515.70 6,738,502.335 8,470,357.567 36,995,001.2 40,070,422.12

Tax 708,275.70 2,363,876.442 2,966,737.5 12,948,250.42 14,024,647.74

Net income 1,305,240 4,374,625.893 22,038,627.18 24,046,750.8 26,045,774.38

6.1.2 Projected cash flow

Table 7

Projection cash flow 2016,

monthly
 Cash sale 2,250,000
Total cash collection 2,250,000
Cash disbursement
Investment expense 67,500

.
Operating expense 37,445.55
Cost of goods sold 199,038.75
Total cash disbursement 303,984.3
Net cash flow 1,946,015.7
Beginning cash balance 16,489.45
Cash balance 1,929,526.25

• .
• 6.1.3 Projection balance sheet
Table 8
.
Projection cash flow 2016, monthly

6.1.3 Projection balance sheet 1,949,526.25

Table 8
Inventories 199,038.75
Total current asset 2,128,565
Long term asset 212,400
Capital Investment 47,500
Total asset 2,388,465
Liability and capital
Current liability 0
Total liability 0
Capital 2,388,465
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• 6.2 Financial resource

• My venture start-up costs are 2,711,961.6 and we got this money from our
family, crowd funding websites such as Indiegogo and Kickstarter, and
relatives and this makes our venture free from risk of interest rate and
increase the profitability of my business.
• 6.3 Financial strategy
• The source of finance to operate this business are gotten from My family
and relatives and my venture will planned to merge with other similar shoe
producers and then the capacity of my ventures will increase and also
aimed to get additional source of finance by continuing operation. My
venture will have internal control and monitoring system and also uses
trained professionals to run the management department efficiently and
reduce risk of mis management.

7. Assessment of risk and contingencies

• Unfortunately, there may be a failure in the business because of failure to
product ,developing my organization to share company by merging with other small
business enterprise and microfinance enterprise .To recap, selling and distributing
the product in my r main and branch whole and retail sales shop
• 8. Scheduling and milestone
• After the completion of the organizing a business in September 2014 the next
• .
step will be the completion of production facilities, offices and its equipment
and retail space then ordering of supplies (equipment plantation) and production
materials (raw materials). Then the next work will be beginning the production,
search of orders and make sales and collect payment according to their
respective order.
• 9. Appendixes
• 1.Photograph of product
 .
• . •
2. Sales and profitability for cast annually
No Sales in unit Price per unit Cost per unit Total cost Per unit Total profit
profit

1 90,000 1,700 1700 153,000,000 315 16,112,226.5

6

3. The total demand for shoe was growing at a rate

of 5% in local market according to data collected in
2008. The total demand for shoe in 2009 was
1,212,000 in local market and the total demand for
shoe in 2013 is 1,454,400 in local market and the
total supply is 1,330,000 and we will use this gap or
inequality between supply and demand as
opportunity.
4. Price lists
Selling price Selling price for student Selling price for holidays Selling price for
at discount (20%) at discount (15%) customers order more
than 1000 pair (30%)
1,700 Birr 1,500 Birr 1,600 Birr 1,410 Birr

6. Fixed resource acquisition period

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• .

No Machinery Quantity Acquisition period

1 Leather sewing machine 2 2015

2 Skiving machines 1 2015

3 Post bed single needle 1 2015

4 Single needle flat bed 1 2015

5 Zig Zig machines 1 2015

6 Computers 6 2015
7 Furniture 18 2015
8 Mat 100 M 2
2015
 .

Debrebrehan University asrat weldeyes health

science campus enterpreneurship individual
assignment preparing of business plan department of
comprhensive nursing

No. Student name. , ID

Bekalu Dereje 1501026