MODEL BUSINESS IDEA

PROPOSAL OF
ENJERABilu

26/11/2005 E.C

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 EXECUTIVE SUMMARY

Name of the business: EnjeraBILU P.L.C

Legal form: cooperative

Contact address: Dire Dawa, SabianKebele 02

Tel: O921092696

Type of business: Manufacturing

Fax:

Brief description of the business idea

Products: Providing Enjera product to customer

Customers: To all society, hotels, restaurant,UNIVERSITY and others ,

Owners is Cooperative

No Name Qualification Function or Relevant

position in experience
the business
1 MANYAZEWAL MESELE DIPLOMA SUB MANAGER
2 ZELALEM ESHETU DIPLOMA ACCOUNTANT
3 SEBLE HASSEN DEGREE CASHER
4 FIKADU GIRMA DIPLOMA MARKET
COORDINATOR
5 ARIST MESFIN DEGREE MANAGER
6 MEKDES TARIKU DIPOLEM SALES PERSON

Business Idea and Market

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Products: Providing enjera product to the customer in affordable price that
considered the low level income society. And we provided the product distribution
center about two selected center to our customer

Market: the market highly needs our product and most society has the problems of
getting such quality products in according to their wants.

Customer:For people that have no chance to prepare the products, especially in

terms of time, energy, place and others factor.

Description of the market

 Main center of our products is Dire DawaSabian around Seido building that
more favorable to sell our product, but we provide other sub-work place
according to the market demand.
 Any parts of the society like individuals and hotels, restaurant, cafeterias
UNIVERSITY and other.
 According to our business research our products have more market coverage
or acceptable, because our business in new and no more competition in the
market that is good opportunity to get enough market demand

Market plan product

Detailed description of the product or product range

Product/service type

 Preparing Enjera

Specialabout the product or the unique characteristics of the product

Prepared from grade one white Teff(Magna)

Specification of the product

 21 inch and standard thichness, white, high quality

Marketing Plan Price

How much are customers willing to pay

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Highest:

Average: 3.00 birr

Lowest:

How much are competitors’ price?

Highest:

Average: 3.00 birr

Lowest:

How much is your price?

Highest:

Average: 3.00 birr

Lowest:

What are the reasons for setting your price?

 To penetrate in the market and to get more customer

 Considering the income of the society, especially, lower income and
government civil servant
 We profitable because providing mass production to sells.

Production/service Types (1)

Enjera Highest:
Average: 3.00 birr
Lowest:

Margin for discount?

Marketing plan place

Location of the business

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Description of the planned location for the business

Our business center is located at a place called sabiansaido building.

We choose this site because of the following reasons.
- It is the center of east dire dawa
- It is near to DDU
- Accessible to transportation
- High population
- Most people are single (bachelor)

Reaching the customer by selling to

 Retailer and wholesaler

 Because we have enough capability of employee for distribution; and also

distribution center is accessible for our entire customer
Marketing plan promotion

 We used printed information and poster accordingly

Legal Form

COOPERTIVE

Because it is governmental direction; all members are strongly known and they are
from different educational background; it is easy to start the business and
minimum legal procedure.

1.1. Start-Up Capital

Estimation of start-up capital Amount
INVESTMENT
Land
Building

5
 Equipment/tool 22,390

Total Investment 22,390

WORKING CAPITAL
12 months of staff costs 36,000
12 months of operational costs 203,750
Over head cost .5000
Total working capital 244,750
TOTAL START-UP CAPITAL 267,140

1.1.1. Sources of Start-Up Capital

Sources of funding

Type Source Conditions(duration/interest Amount

)
Equity capital √Own savings 20% 53,428
􀂉 Partner
Loan 1 􀂉 Family
􀂉 Friends
􀂉 Money lender
Loan 2 √ Credit cooperative 80% (10% within 1 years) 267,140
􀂉 Government scheme
􀂉 Bank loan
TOTAL FUNDING
Information about funding sources

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 Loan 1
Name and address of creditor or credit institution
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------

Credit agreement 􀂉 under discussion 􀂉 finalized

 Money available on (date) ________

Loan 2
Name and address of creditor or credit institution
Oromiya Saving And Credit Association

Credit agreement √ under discussion􀂉 finalized

􀂉 Money available on (date) ________

1.1.2. Debt Service

Repayment 1 2 3 4 5 6 7 8 Amount 9 10 12
Amount Amount 1
period Amount AAmount Amount
mount
mount mount mount mount Amount
Loan 1
Installment/prin 22,261.66 22,261.66 22,261.66 22,261.66 22,261.66 22,261.66 2 22,261.66 22,261.66
cipal 2,261.66 2,261.66 2,261.66 2,261.66
Interest 26714 24,487.834 22,261.668 20,035.50 17,809.33 15,583.17 13,357,004 11,130.838 8,904.672 6,678.506 4,452.34 2,226.174
2 6
Loan 2
Installment/
principal
Interest
(10%)
Debt service 48975.66 42,297.16 40,070.99 37,844.83 35,618.664 33,392.498 31,166.332 28,940.116
Sum of 46,729.49 2 6 6,714.00 4,487.7
4,523.328
Installments

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8
Debt service

Repayment 7 8 9 10 11 12
period Amount Amount Amount Amount Amount Amount
Loan 1
Installment/principal
Interest
Loan 2
Installment/ principal

Interest (10%)
Debt service
Sum of Installments
NB: The debt was considered per year

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 1.2. Organization and Staff
Staff costs

S. No. Position Qualifications Salary Per Social security Total staff

month cost
1. General Manager 500 -

2. Operation Manager 500 -

3. Financial Manager 500 -

4. Promotion & Seller 500 -

5. 500

6. 500

Total per month 4100 - 0

1.3. Organization of business premises

Onion seed production site lay out

100m

Nursery area

Store house

Processing and packaging area Guard house and resting room

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 Production field

1
00m

Entrance

1.3.1. Monthly Sales Plan

All products, product range or services

Month 1 2 3 4 5 6 7 8 9 10
Product Price 3 3 3 3 3 3 3 3 3 3
Quantity 88,20 88,20 88,20 88,20 88,200 88,200 88,20 88,200 88200 88200
0 0 0 0 0
Turnover 264,6 264,6 264,6 264,6 264,60 264,60 264,6 264,600. 264,600 264,600.00
00.00 00.00 00.00 00.00 0.00 0.00 00.00 00 .00
Product P
Quantity
Turnover
All Turnover 264,6 264,6 264,6 264,6 264,6 264,60 264,6 264,600. 264,600 264,600.00
00.00 00.00 0.00 00.00 00 .00
product 00.00 00.00 00.00

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 s

1.3.2. Monthly Operational Cost Plan

Planning is based on the monthly sales plan

Mo 1 2 3 4 5 6 7 8 9 10 11 12
nth
Pro Quant 88,20 88,2 88,20 88,20 88,20 88,2 88,20 88,20 88,20 88,20 88,20 88,20
duct ity 0 00 0 0 0 00 0 0 0 0 0 0
1
Mat All 2
erial costs 201,60 201,6 201,60 201,60 201,60 201,6 201,60 201,60 201,60 201,60 201,60 01,600
s 0 00 0 0 0 00 0 0 0 0 0
Pro Quant
duct ity
2
Mat All
erial costs
s
Mat Total 201,60 201,6 201,60 201,60 201,60 201,6 201,60 201,60 201,60 201,60 201,60 2
eria costs 0 00 0 0 0 00 0 0 0 0 0 01,600
ls
+ Total 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000
Staf costs
f
+ Total 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000
Oth costs
ers 5000
Ope Total 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000 8000
rati costs
on 8000
Insta Montl 2
22,2 22,2
llem y 2,261.
22,261 61.6 22,261 22,261 22,261 61.6 22,261 22,261 22,261 22,261 22,261
ent 66
.66 6 .66 .66 .66 6 .66 .66 .66 .66 .66
+ Intere 2
15,5 1
Cap st 26,71 4,45
ital (10% 4
24,487.834
2,261.6 0,035. 83.1
7,809.336
3,357.001,130.8 ,904.6 ,678.50
2.34 ‚226.1
cost ) 68 502 7 4 38 72 6 74
Depre 60 60 60 60 60 60 60 60 60 60 60 60
ciatio

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 n
= Gran 344 3 3 322234
d 46835. 609. 42383. 40157. 37930. 35704.83
33478. 31252. 29‚026 26800. 24‚574.00
7.834
Total 66 5 328 162 996 664 498 .332. 166
costs

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 1.4. Cash Flow Plan

1.4.1. Monthly Cash Flow Plan

Month Pre 1 2 3 4 5 6 7 8 9 10 11 12
operati
on
Cash 293,178.0 322,314.00 353‚876.17 365,202.84 3 394,534. 412,539. 432,771.19 506,822.
0 2 78,755.68 686 856 2 55,228.694 79,912.362 196 35958.196
beginnin 2
g of
the
month
+ Equity 53,428.0
0
+ Loans 267,140.
00
+ Sales - 264,600.0 264,600.00 264,600.00 2 264,600.00 264,600.00 264,600.00 264,600. 264,600.
0 64,600.00 64,600.00 64,600.00 64,600.00 00 00

+ Any
other
I: Total 557,778. 586,914.00 618‚476.17 629802.84 643355.6 659134.6 677139.8 697371.19 719828.69 744512.36 771422.1 800558.1
00 2 82 86 56 2 4 2 96 96
cash in 20,568.00
+ 22,390.0 -

Investm 0
ent
+ - 203,750.00 203,750.00 203,750.00 203,750. 203,750. 203,750. 203,750.00 203,750.00 203,750.00 203,750. 203,750.
203,750.0 00 00 00 00 00
Operatio 0
nal cost
+ 26,714.00 24287.834 22261.668
200350.50 17809.33
15583.17
13357.00
11130.838 8904.672 6678.506 4452.34 2226.174
Interest 2 6 4

+ Any 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000

other

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Installm 22‚261.6 22‚261.66 22‚261.66 22‚261.66 22‚261.6 22‚261.6 22‚261.6 22‚261.66 22‚261.66 22‚261.66 22‚261.6 2
6 6 6 6 6 2‚261.66
ent
principal
II: 27,390 235,464. 233,037.83 253273.32 251047.16 248820.9 246594.8 244368.6 242142.49 239916.33 237690.16 235464.0 233237.8
00 8 96 3 64 8 2 6 0 34
Total
cash out
I – II 4 455,228.69 506,822.19 535958.1 567320.3
94,534.686 12,539.856 32,771.192 4 79,912.362 6 96 62
Cash at
293,178. 322,314.0 365,202.84 378,755.68
the end 0
353‚876.17
2 2
00
of the
month

1.4.2. Profit Margin

Monthly Estimation of Net Profit

Month 1 2 3 4 5 6 7 8 9 10 11 12
Product 1 Quanti 88200 88200 88200 88200 88200 88200 88200 88200 88200 88200 88200 88200
ty
Turno 26460 264600 264600 264600 264600 264600 264600 264600 264600 264600 264600 264600
ver 0
Product 2 Quanti
ty
Turno
ver
I. Total 26460 264600 264600 264600 264600 264600 264600 264600 264600 264600 264600 264600
Sales 0
operation Total 203,75 203,750 203,750 203,750 203,750 203,750 203,750 203,750 203,750 203,750 203,750 203,750
costs 0
II. Total
Costs

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I – II 60,850 60,850 60,850 60,850 60,850 60,850 60,850 60,850 60,850 60,850 60,850
Profit
60,850
(before
tax)
- Income
tax
(790,046.68
)
Net profit 60,850 60,850 60,850 60,850 60,850 60,850 60,850 60,850 60,850 60,850 60,850 60,850
(after tax)
Note: If income is ≥60,012 * 35% - 7950 = 790,046.68*35% = 276516.338 -7950 = 268,566.338

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 1.5. Opening Balance
Opening Balance of My Business (Date)

Assets Amount Liabilities Amount

ASSETS LIABILITIES
Current Assets Current Liabilities 135793.30
Cash at hand and bank 115441.6 Current Liabilities
Accounts receivable Accounts payable
RM inventory Taxes payable
WIP inventory Others payable
FG inventory Total Current Liabilities 135793.30
Total Current Assets 115441.6 Long-Term Liabilities
Fixed Assets Loans
Land Others
Building Owners Equity
Equipments and tools 50000 Owners’ Capital 33948.32
Others 4300
Total Fixed Assets 0
Others
Total Assets 169741. Total liabilities & capital 169741.6
6

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 1.6. Break-even point
Breakeven Quantity (Bulb) = Total fixed cost
(price per unit - variable cost per unit)
= 59700
( 500-48.7)
= 59700 = 132.28
451.3
Breakeven Quantity (Seed) = Total fixed cost
(price per unit - variable cost per unit)
= 59700
( 50000-1400.9)
= 59700 = 1.23
48599.1
Breakeven point (Bulb) = Total fixed cost x price per unit
(price per unit - variable cost per unit)

= 59700 *500 = 29850000 = 66142.256

500- 48.7 451.3

Breakeven point (Seed) = Total fixed cost x price per unit

(price per unit - variable cost per unit)

= 59700 *50000 = 2985000000 = 61420.89

50000- 1400.9 48599.1
(breakeven sales
level in Birr terms)
Return on investment

Rate of return = Amount received - Amount invested x 100

Amount invested
= (276516.338-169741.6) X100 = 106772.738 = 62.9%
169741.6 169741.6
Price per unit= Cost per unit + profit (25% of unit cost)
Unit cost= Total fixed cost +Total variable cost
Quantity
Unit cost for Bulb= 59700 + 23384 =36316 = 173.09 *25% = 216..36
480 480

Unit cost for Seed= 59700 + 22415 =82115 = 5132.1875 *25% = 6415.23
16 16

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 Monthly operational plan

Planning is based on the monthly sales plan

Month   1 2 3 4 5 6 7 8
Product Quantity
45,000 45,000 60,000 60,000 90,000 90,000 120,0 120,00
00 0
  All cost                
Materials All cost
76,500 76,500 102,000 102,00 153,00 153,00 204,0 204,00
0 0 0 00 0
Materials Total Costs              
-
⁺ staff Total Costs 3000 3000 4000 4000 6000 6000 8000 8000
⁺ others Total Costs 2000 2000 2666.7 2666.7 4000 4000 5333. 5333.3
33333 33333
3
Operations Total Costs
83,000 83,000 110,167 110,16 164,50 164,50 218,8 218,83
7 0 0 33 3
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⁺ Capital cost Interest                
  Depreciation 21.7 21.7 21.7 21.7 21.7 21.7 21.7 21.7
= Grand Total
Costs 83,022 83,022 110,188 110,18 164,52 164,52 218,8 218,85
8 2 2 55 5
Month 1 2 3 4 5 6 7 8
Product 1 45000 45000 60000 60000 90000 90000 120000 120000
Quantity
Materials 76500 76500 102000 102000 153000 153000 204000 204000
All cost
+Staff `3000 3000 4000 4000 6000 6000 8000 8000
Total cost
+Others 2000 2000 2666.67 2666.67 4000 4000 5333.33 5333.33
Total cost
Operation Total cost 1 3 3
1 1 1 68666. 2 2 37333 37333.
23500 26500 68666.7 7 53000 53000 .3 3
+Capital cost Interest
21.67 21.67 21.67 21.67 21.67 21.67 21.67 21.67
depreciati
on
= Grand 1 2 2
Total 1 1 1 68688. 53021. 53021. 3 3
Cost 23521.7 26521.7 68688.3 3 7 7 37355 37355

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 Cash Flow Plan

Monthly cash flow plan

Pre
Month Operation 1 2 3 4 5 6 7 8
Cash Beginning ETB ETB ETB ETB ETB ETB ETB ETB
of the Month   102,400 131,900 161,400 201,233 241,067 301,567 362,067 443,233
ETB
⁺ Equity 30,720                
ETB
⁺ Loans 71,680                
ETB ETB ETB ETB ETB ETB ETB ETB
⁺ Sales   112,500 112,500 150,000 150,000 225,000 225,000 300,000 300,000
⁺ Any Other                  
ETB ETB ETB ETB ETB ETB ETB ETB ETB
I:Total Cash in 102,400 214,900 244,400 311,400 351,233 466,067 526,567 662,067 743,233
⁺ Investment                  
⁺ Operational ETB ETB ETB ETB ETB ETB ETB ETB
Cost   81,000 81,000 107,500 107,500 160,500 160,500 213,500 213,500
⁺ Interest                  
ETB ETB ETB ETB ETB ETB ETB ETB
⁺ Any Other   2,000 2,000 2,667 2,667 4,000 4,000 5,333 5,333
ETB ETB ETB ETB ETB ETB ETB ETB
I:Total Cash out   83,000 83,000 110,167 110,167 164,500 164,500 218,833 218,833
I-II Cash At the ETB ETB ETB ETB ETB ETB ETB ETB ETB
End of the 102,400 131,900 161,400 201,233 241,067 301,567 362,067 443,233 524,400
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Month
Profit margin

Monthly Estimation of Net profit

Month   1 2 3 4 5 6 7 8

Quntity 45,000 45,000 60,000 60,000 90,000 90,000 120,000 120,000

ETB ETB
ETB ETB ETB ETB 225,00 225,00 ETB ETB
turnover 112,500 112,500 150,000 150,000 0 0 300,000 300,000
ETB ETB
ETB ETB ETB ETB 225,00 225,00 ETB ETB
I-Total sales   112,500 112,500 150,000 150,000 0 0 300,000 300,000

164,52 164,52
₋Operation Total Costs 83,022 83,022 110,188 110,188 2 2 218,855 218,855
II-Total Costs                  
I-II Profit(before ETB ETB ETB ETB ETB ETB ETB ETB
TAX)   29,478 29,478 39,812 39,812 60,478 60,478 81,145 81,145
₋Income TAX                  
Net Profit(after ETB ETB ETB ETB ETB ETB ETB ETB
TAX)   29,478 29,478 39,812 39,812 60,478 60,478 81,145 81,145

Opening balance
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 Opening balance of my business (Date)

Assets Valu Liabilities Value

e
Fixed assets Equity

 Building Long-term liabilities

 Equipments  Mortgage
 Others  Loans
Total Fixed Assets  Others
Total Long-term Liabilities
Current Assets
 Cash and bank Current liabilities
 Accounts receivable  Accounts payable
 Inventory  Taxes payable
 Others payable
Total current
Total current liabilities

Total Assets Total liabilities and net worth

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