Entrepreneurship business plan on Enjera production

HAWASSA UNIVERSITY

INSTITUTE OF TECHENOLOGY

DEPARTMENT OF CHEMICAL ENGINEERING

COURSE; ENTREPRENEURSHIP

BUSINESS PLAN PROJECT ON INJERA PRODUCTION

TEGEGNE TIRUNEH

ID NO 1709/08

SECTION III

Submitted to Mr.Mulugeta .K

Submission date 30/03/2013E.C

Hawassa university (IOT) Ethiopia Dec 2020

Entrepreneurship business plan on Enjera production

1 EXCUTIVE SUMMARY

The primary mission of this business venture is to maximize the long-term value and interest
of customers through baking and delivering a high quality enjera. The primary objective of
this business venture is to produce high quality products to different institutions like
universities and industrial parks that have higher number of end users and become one of the
popular bakery plc in the city with in short period of time. Major equipment’s required
includes one mini Van, electric bakers (locally named as Mitad), plastic packaging materials,
plastic storage tankers for storing teff flours, cartons, plastic teff flour mixers, large plates,
chairs and tables. Furthermore, a permanent store, which will also be used as place where
enjera will be baked, may be obtained on a rental basis.

Although the demand for a high quality enjera from the institution societies is growing high,
only few suppliers are engaged in this business area and as they have no a good competitor
the quality of the enjera is very poor, small in size and is not a pure teff product, rather it is a
mixture of different crops that lowers the quality of the enjera. The suppliers are many locally
available bakeries in the city. Regarding the overall market destinations, Hawassa University
and the Hawassa industrial park are the major customers of enjera followed by the city hotels
and restaurants. Specific market destinations include Hawassa University, (Main campus,
Technology institute campus, Agriculture campus and Referral campus) and Industry Park.

Enjera baking production process will be carried out in Hawassa in the vicinity of piyasa sub
city to minimize the transportation problem and to simplify raw material access from the
market since it is centre place for all destinations on average. Regarding to human resources
required for the business, 50 enjera bakers, 1 quality assurance head, 1 store keeper, 1 driver,
1 accountant, 1 secretary and 1 guard will be hired on permanent basis. The general manager
will perform duties related to managing, transportation and take comment from end users. To
start the business, 1.5 quintals of teff will be purchased and milled. But a total of 45 quintals
teff will be used during the first month order to prepare 360,000 enjera.

Furthermore, securing a reliable bakery place and store is one of the most detrimental factors
to start the business. Thus, a three room house ( i.e one room for store, the other for baking
and the last for bath room) will be acquired on a rental basis. As to quality assurance, one
employee will be hired to execute inspection of the quality of the enjera products. This
quality controller will be accountable to the general manager.

Hawassa university (IOT) I Ethiopia Dec 2020

Entrepreneurship business plan on Enjera production

Thus, before starting the business formal contact will be made with customers and contractual
agreement will be signed. The main marketing strategy is to deliver enjera products to our
customers’ destination. The general manager is the one who is responsible to design
marketing strategies and execute marketing and transportation processes.

Regarding pricing strategies, prices of end products will be determined based on the current
market prices of raw materials, our product quality and our competitors’ price. Thus, the
profit margin will be set based on current market prices of raw materials and our
competitiveness. Promotion is very crucial in order to be successful in this business. Thus,
mass media promotion i.e. social Medias like FM will be executed.

The first phase of this enjera sale business is three months. Thus, the expected sales during
the first three months is 360,000 enjera (12, 000 enjera per day). Assuming that a single
enjera will be sold at a price of 5.00 ETB, then a total of 60,000 ETB (12,000 * 5.00 = 60,000)
per day.

Regarding the financial resources, the major portion of the financial resource to execute this
business will be secured from loan while 30 % of the total capital is contributed by
shareholders (owner equity).

Hawassa university (IOT) II Ethiopia Dec 2020

Entrepreneurship business plan on Enjera production

Contents
1 EXCUTIVE SUMMARY................................................................................................................ I
2 COMPANY DESCRIPTION.......................................................................................................... 1
2.1 Mission Statement....................................................................................................................1
2.2 Summary of Activity to Date...................................................................................................1
2.3 Product or service.................................................................................................................... 1
2.3.1 Description.......................................................................................................................1
2.3.2 Benefits to Customers......................................................................................................1
2.3.3 Differences from current offerings.................................................................................. 1
2.4 Objectives................................................................................................................................ 2
2.5 Keys to success........................................................................................................................ 2
Feasibility.................................................................................................................................................2
2.6 Technical feasibility.................................................................................................................2
2.6.1 Location and facility........................................................................................................ 2
2.6.2 Entry Barriers...................................................................................................................3
2.6.3 Supply and Distributions................................................................................................. 3
2.6.4 Technological Factors......................................................................................................3
2.6.5 Seasonality....................................................................................................................... 3
2.7 Market feasibility.....................................................................................................................3
2.7.1 Definition of overall Market............................................................................................ 3
2.7.2 Customer Characteristics................................................................................................. 4
2.7.3 Customers’ Needs............................................................................................................ 4
2.7.4 Purchasing Decision Process........................................................................................... 4
2.8 Financial feasibility..................................................................................................................5
2.8.1 Products Offered.............................................................................................................. 5
2.8.2 Pricing..............................................................................................................................5
2.8.3 Distribution...................................................................................................................... 5
2.8.4 Promotion.........................................................................................................................5
2.8.5 Sales Forecast.................................................................................................................. 6
2.9 Management and Organization feasibility............................................................................... 7
2.9.1 Development team........................................................................................................... 7
2.9.2 Development cost............................................................................................................ 8
2.9.3 Development risk.............................................................................................................8
2.9.4 Quality assurance.............................................................................................................8
2.9.5 Human resource plan....................................................................................................... 9
2.9.6 Facilities...........................................................................................................................9

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Entrepreneurship business plan on Enjera production

3. CONCLUSION..................................................................................................................................10
3 REFERENCE.................................................................................................................................11

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Entrepreneurship business plan on Enjera production

2 COMPANY DESCRIPTION
2.1 Mission Statement
This proposed business plan is primarily concerned in producing (baking) a high quality
enjera for the customers. The principal mission of this business venture is to deliver high
quality enjera and satisfy its ultimate customers through baking, and delivering high quality
and fresh enjera products to their destinations. The business is fully customer – oriented in
such a way that regular contacts with customers will be made in order to collect feedback and
do some improvements regarding to quality and quantity of our enjera products. Beside this
business idea, there is also job opportunity for the local women who are in lower economical
level.

2.2 Summary of Activity to Date

Till now the business venture is in ideal progress in such a way that to get

2.3 Product or service

2.3.1 Description
The only product of our business venture is enjera. The enjera is produced from teff powder
and is of two types, in local names, tikur (black) enjera (prepared from red teff, locally called
“sergegna teff”) and nech (white or normal) enjera which is prepared from “magna teff”. The
former product is not familiar with the peoples as compared to the latter one; the most
ordinary type of enjera in the society. So, as it is shown from the practical market our
business venture is delighted to produce the latter product. Unless it is ordered from the
customers, we will not produce the former type of product.

2.3.2 Benefits to Customers

Because of our business idea aim is to satisfy customers wish and keep their need through
produce high quality and quantity of enjera make them happy by using our product. Also, this
business venture receive comment from end users and take appropriate response to the
comment to improve our business and keep customers use product all a time with great
satisfaction.

2.3.3 Differences from current offerings

All company have their own target and aim to expand their business and keep their customer
work with them. According to our business plan it unique from others through producing
high quality and quantity of enjera using only teff as row material. Also packing and transport
this quality enjera to customers destination using our transportation (minivan).

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Entrepreneurship business plan on Enjera production

2.4 Objectives
The general objective of this business venture is to produce a high quality enjera for higher
institutions (Hawassa University and industrial parks) though fulfil customers wish and
become a popular enjera supplier over the city within five years.

2.5 Keys to success

This is the analysis of plans that have to be implemented by the business venture to get the
best position of the competition. So, as our business venture is new and there are many
competent that are very familiar with this business idea, we have to be unique by supplying a
high quality enjera with an optimum price. In addition to this, there are some key ideas that
help to lead our business venture in the way success. These are: -

 Work for continuous improvement of the product (enjera) in terms of quality and
quantity
 Advertisement
 Building a strong line of communication with the customers (feedback)
 Statistical control of the business venture i.e. collecting the numerical value of the
sales per a certain amount of time to estimate the coming production.
 Build a specialized and smart management system in the business venture
 Legislate rules and regulations for the workers
 Special discounts and sponsoring in some special cases i.e. Holly days

Feasibility
2.6 Technical feasibility
2.6.1 Location and facility
Here we need to describe where we want to locate the site of our enterprise and what
facilities are needed. So, as our customers are at all directions of the city, we have chosen our
location at the centre of customer’s destinations of the product. This place has many facilities
such as; 24 hours of electricity, water, transportation, grinding- mill and availability of raw
materials (near to the market) but more of, the market area and the transportation simplicity
leads the selection of the location to be at piyasa.

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Entrepreneurship business plan on Enjera production

2.6.2 Entry Barriers

The entry barriers for this business are:

 Financial budget
 Comfortable site location area
 License
 Experts in the business are also one of the entry barriers in terms of their well-known
enterprise name.
 Initiative to work

2.6.3 Supply and Distributions

The designed supply capacity of the enterprise is 12,000 enjera per day. And this amount
of enjera is distributed to the proposed destinations using a transportation system (i.e. the
minivans). The distribution is based on the demand of the destination sites or customers
that is first set as an agreement to accept daily by the destination.

2.6.4 Technological Factors

Nowadays, technology is the back bone for almost every activity in the society directly or
indirectly. For our business venture technological factors have a great role by means of
different activities. We use the products of technology like;

 Mixer
 Grinding mill
 The electric bakery and
 Even the transportation

2.6.5 Seasonality
As the selected sites for the destination of the enjera product are having a constant consumer
the supply of the product does not influenced by the seasonal variations. i.e. in the campuses
there are regular and summer students and in the park the workers stay at the site throughout
the year.

2.7 Market feasibility

2.7.1 Definition of overall Market

Although the demand for a high quality enjera from the end users is growing high from time
to time, only few experts are engaged in enjera supply as an enterprise in the city and as there
is no a good competent, the quality for their enjera is very poor. This decreased number of

Hawassa university (IOT) 3 Ethiopia Dec 2020

Entrepreneurship business plan on Enjera production

competent is because of lack of awareness about the business venture and due to the fact that
enjera is highly perishable in which its shelf life lasts only for two to three days. Hawassa
University and the Hawassa industry Park are is the leading customers of enjera suppliers
followed the city Hotels. Specially, since there are more than 25,000 of students in Hawassa
University, it is the main market destination for the business. Satisfying the ultimate demand
from the users in the University will make a given enjera supplying enterprise more profitable
and increasing the satisfaction of the end users makes the enterprise lead the market.

2.7.2 Customer Characteristics

At the time being as we are also among the end users and we are the day to day customers for
the current suppliers we know about the characteristics of the customers more than the
current suppliers. So, as we are addressed by the university, it needs a good quality of enjera
with an optimum price. And also, as they need a large number of enjera, they are sensitive for
a minimum discount on the price.

2.7.3 Customers’ Needs

The customers need: -

 Continuous supply
 Lowered price
 Increased quality and quantity
 Transportation service
 Special discount and Partial sponsorships in some cases i.e. holly days

2.7.4 Purchasing Decision Process

To make the enterprise a strong competent in the market, the purchasing decision plays a
great role in increasing the competency of the enterprise. So, the purchasing must be
performed by dealing the overall market. At the beginning few years of the enterprise the
purchasing of the raw materials like teff will be from teff distributers in the city performed by
dealing the market and by having a well determined contract agreement on a discount basis
based on our increased number of quintals of teff. But after the enterprise have a well-
developed economic potential and stay good in the market share it will have its own rural
branches to purchase teff products from the source at a lowered local price and transport by
its own transportation.

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Entrepreneurship business plan on Enjera production

2.8 Financial feasibility

2.8.1 Products Offered

The only product offered by the enterprise is teff enjera. Under this product we may prepare
two types of teff enjera; the white and black types of teff enjera prepared from the locally
named “Magna teff and black teff”.

2.8.2 Pricing
In the competition of the market the price is one of the key factors that can widen the market
share of the enterprise in addition to the quality and quantity of the product. But the price
must be optimum between the customers and our enterprise cost of total production. The
customers need is a lowered price with a better quality and our enterprise wants a high profit
gain. So, to optimize this variation we decided a price of 5.00 ETB with a better quality to
satisfy the customers need and to maximize the profit level we decided to increase the
quantity of products.

2.8.3 Distribution
The go on the distribution line up to the customers’ destination on time.

2.8.4 Promotion
 Advertisement and publicity
As we are new in the market competition, we need more advertisement and publicity.
To complete this promotion, we have to choose mass-medias and involving in some
social and humanitarian activities.
 Trade shows
This is by itself one of the characteristics of the marketing competency. This is to
show ourselves that we can provide a better product and service other than the rest
competitors in the market. And we are well prepared to apply the qualities listed
above.
 Discounts and incentives
As we have discussed before, to be a strong competent we set a special discounts and
partial sponsorships in some case for our customers.

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Entrepreneurship business plan on Enjera production

2.8.5 Sales Forecast

The expected sales during the first three months is 360,000 enjera (12, 000 enjera per day).
Assuming that a single enjera will be sold at a price of 5.00 ETB, then a total of 60,000 ETB
(12,000 * 5.00 = 60,000). The total cost of production is expressed in the table below.

Table 1: total production cost estimation per day

No. Input/service Quantity/day Single price Total price in

birr
1 Teff 17,00 kgs 20/kg 34,000
2 Workers 50 100/day 5,000
3 Facilities (grinding mill, ----- ------ 3,000
electricity, water) and
other costs
4 For site rent (expressed ------ -------- 1,000
per day i.e. 20,000 per
month)
5 Total overall production -------- ------- 43,000
cost per day

from the above cost estimation, we can conclude that: -

The total profit per day is expressed as

Total sale per day – total production cost per day = total profit gain per day

60,000 birr – 43,000 birr = 17,000 birr per day

For a month

17,000 birr * 30 days = 510,000 birrs.

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Entrepreneurship business plan on Enjera production

2.9 Management and Organization feasibility

The business venture has its own organised management team this management
team have its own right and duties to perform all tasks with a proper manner to
reach desired goal that is become accompany within short period of time.

Members of the team are

 General Manager controls over work flow of enterprise and make

agreement with merchants to receive raw materials to end users of
our product.
 Kitchen workers.
 Accountants and auditor.
 Secretary.
 Guard.
 Driver.

Required skill level

General manager, secretary, accountant and auditor, driver have educational

level of BSC and all are member of company. Whereas kitchen bakeries and guard
grade 4 and 6 respectively.

Since this business venture is an infant business, there is no need to design

organizational structure in details. All employees are accountable to the general
manager. Regarding the form of ownership, is the business will be characterized
as enterprise organized by graduating students.

2.9.1 Development team

As an enterprise there is need of team to achieve desired goal. This development
team coordinate the hierarchy of enterprise from top manager to worker to get
gradual incensement of quality and quantity of the product and customers
This situation is through giving appropriate training to bakery and give payment
for their work.

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Entrepreneurship business plan on Enjera production

2.9.2 Development cost

Every enterprise has its own development cost and mainly target on profit. To start the
business, 1.5 quintals of teff will be purchased and milled. We want 12,000 enjera baked
within a day within 43000ETB expense. And this enjera sold 60000ETB. Then net profit per
day is 5000 ETB. But a total of 45 quintals teff will be used during the first month order to
prepare 360,000 enjera. The price of product is 5ETB per enjera and there is a profit of
0.4167 ETB per enjera. Since 360,000 enjera baking per month so net profit within a month
is

= 36000 enjera/month * 0.1467 ETB/enjera

= 150000 ETB/month.
This profit is very satisfied and leads enterprise diversified become accompany over
a short period of time.

2.9.3 Development risk

Any enterprise has its own product development to success this business
development there is so many challenges and make a proper solution for
challenge. As enjera bakery enterprise may have some risks

 Unexpected increase of cost in raw materials

 Un expected facility unavailability like absence of water and electric
 Loose of customer or end user

Solutions for risk

 One a time purchasing enough amount of raw material that may use for
during inflation of raw materials cost.
 Use locally available energy source like biogas and wood and water
tanker to store water.
 Make an agreement with customers through supply best quality and
high quantity enjera to satisfy their need.

2.9.4 Quality assurance

In order to maintain the quality of the products, a permanent quality
controller will be hired. The main duty and responsibility of this employee

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Entrepreneurship business plan on Enjera production

is to control and inspect the quality of the products regularly. Sustaining

good quality products is one of the major objectives of this business. Thus,
due attention will be given to quality enjera products like on:

 Types of teff
 Ingredient used for the product like absh which is local name.

2.9.5 Human resource plan

General
manager

Kitchen site Security Accountant

Secretary
Transportation and auditor
50 workers 1 guard
1secretariat
1 driver 1 accountant

Figure2.1 Yengna enjera plc human resource

2.9.6 Facilities
Essential facilities need for our business venture is

 Electricity availability full a day

 Enough water
 Transportation.
 Grinding mill

so, this business venture is profitable within a short period of time. Any
entrepreneur wants work with us, can connect with us the following address.

Email address [email protected]

“Run today on the way of entrepreneur to reach forward destination “

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Entrepreneurship business plan on Enjera production

3. CONCLUSION
Yegna enjera is located in the southern region hawassa city piyasa and business plan contains
a marketing plan such as marketing process and identifying of customers and main
competitors to our enterprise.

The employee in this organization will be unskilled and skilled workers but the business
founder will provide self-employee in this organization.

Inorder to facilitate selling of our goods and to get more customers I will use some method
like advertising through billboards, radio, newspaper and also social media like face book by
providing our own website.

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Entrepreneurship business plan on Enjera production

3 REFERENCE
1) A business plan manual for entrepreneur
2) www.slideshare.com
3) www.google.com

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