KEBE CAKES AND BAKERY

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 MEMBERS DECLARATION

We hereby declare that this project paper entitled KEBE CAKES AND BAKERY is our original

work carried out from December 2023 G.C. Department of Project management Queen’s

College, Ethiopia.

Project team: Id.No. Signature Date

1. Zertihun Beyene GSR/MPM/#####/15 ............................ ...................

2. Natinaeal Alemu GSR/MPM/#####/15 ............................ ...................

3. Mintesinot Befikadu GSR/MPM/#####/15 ............................ ...................

4. Amanueal Darge GSR/MPM/#####/15 ............................ ..................

5. Girumkal Zenebe GSR/MPM/#####/15 ............................ ..................

6. Minilik Getaye GSR/MPM/0125/15 ............................ ..................

This is to certify that the above statement declared by the project team is correct to the best of

my knowledge and believe. This project is submitted for examination with my approval.

Name of the Teacher Signature Date

D.r Abdella Hussen ------------------------------------ ------------------

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Table of contents
1. Executive summary………………………………………………………. 2
2. Industry Analysis
2.1 Future outlooks and trends …………………………………… 3
2.2 Analysis of competitors …………………………………………. 3
2.3 Market segmentation ……………………………………………. 4
2.4 Industry forecasts ………………………………………………… 4
3. Description of venture
3.1 Products and Services …………………………………………… 4
3.2 Size of business …………………………………………………… 5
3.3 Office equipment and personnel ………………………………. … 5
3.4 Background of entrepreneurs …………………………………. 6
4. Production Plan
4.1 Manufacturing Process ………………………………………… 6
4.2 Physical plant ……………………………………………………. 7
4.3 Machinery and equipment ……………………………………. 7
4.4 Names of suppliers of raw materials ……………………….. 8
5. Marketing Plan
5.1 Pricing ……………………………………………………………… 8
5.2 Distribution ……………………………………………………….. 8
5.3 Promotion ………………………………………………………….. 9
5.4 Product forecasts ………………………………………………… 9
5.5 Controls ……………………………………………………………. 9
6. Organizational Plan
6.1 Form of ownership ………………………………………………. 10
6.2 Identification of partners of principal shareholders …………. 10
6.3 Authority of principals ………………………………………….. 10
6.4 Management-team background ………………………………. 10
6.5 Roles and responsibilities of members of organization ….……… 10
7. Assessment of Risk
7.1 Evaluate weakness of business ……………………………….. 11
7.2 New technologies …………………………………………………. 11
8. Financial Plan
8.1 Pro forma and income statement …………………………….. 12
8.2 Cash flow projections ……………………………………………. 13
8.3 Pro forma balance sheet ………………………………………… 14
8.4 Break-even analysis ……………………………………………… 15

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 1. Executive summary
Awareness of high quality baked goods is on the rise. Good baked goods are combination of
nutrition, convenience and luxury. Kebe cakes and bakery is a confectionery company in Around
Addisu Gebeya, Addis Ababa that produces and sells high-end baked goods to retail and
wholesale customers. We will sell pre made as well as made-to-order breads and cakes. The
business also offers cakes for wedding, anniversary, birthday and other occasions with
astonishing decoration.
The enterprise will focus on European and American style, naturally leavened breads and
baguettes made from high quality ingredients. Breads and cakes will be baked and sold at the
storefront facility using 3 desk.
In Around Addisu Gebeya, currently no high-end bakeries. This provides Around Addisu
Gebeya with a unique experience and opportunity to add Cakes and Bakery to the market place.
Kebe cakes and Bakery will serve retail of 33,000 potential customers and a wholesale market of
a 15 restaurants, cafes, supermarkets etc.
Kebe cakes and Bakery’s main competition includes two supermarkets and one pastry. Its
advantage lies in the high quality of its products due to specialization and artisan manufacturing.
The main marketing focus will be an eye catching sign, the scent of fresh cakes and breads
wafting out of the storefront and periodic printed advertisements.
Kebe cake and bakery will be providing the community with high-end baked products make for
local supplies cake and bakery customer value proposition is to provide individual and business
customers in Around Addisu Gebeya with baking good s based on fine quality, supermarket
taste, and unique and original design, as will as decorating instructions. As a differentiated
product and service provider cake and bakery will be positioned at a higher price point.
Cake and bakery founder will self-fund 150,000 birr in seed capital. And additional 300,000 birr
investment will be sought from family and friends. A loan of 250,000 birr will be obtained from
a bank. The projected revenue by the end of the third year of operation is 450,927 birr. The loan
will be paid off in full by year 5. In 4 year Kebe Cakes and Bakery may seek additional loans to
expand from its original location into new markets
Objectives
 To attract a minimum of 350 regular customers per day in the first year of operations;
 To generate positive cash flow operations, and at least 10 percent net profits to sales

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 2. Industry Analysis
There is a high demand in bakery in Around Addisu gebeya community. It will be crated to serve
the community by exploiting the need for good baked products. Furthermore there is a prevailing
culture of taking a cake and other bakery products as a gift for a loved one in different occasion
especially on birthdays and holidays
2.1 Future outlooks and trends
After establishing the operation, the company will explore the possibility of takeout fast foods
and beverages (coffee, tea, macchiato, and soft drinks).
2.2 Analysis of competitors
Supermarkets and cafes dominate the cake and baked goods market in Around Addisu Gebeya .
These include Abdadir and Maleda. The products are often mass produced at an outside location
and have short shelf life. The ingredients are processed, thus lowering the quality and taste of the
product in order to sell the item for a low cost,
Small coffee and Bakery serves as competitions because of the cookies and other small treats
that are sold in their café. These largely undifferentiated confections are only a small portion of
their businesses and therefore would not act as a large threat. The pastry is also represented as
our competitor in the pastry area. The pastry delivers the products in the café as well as takeout
service. The primary focus of the pastry is on high quality and expensive meals. On the side, the
occasionally produces and sells wedding and birthday cakes and other desert Kebe cakes and
Bakery is set apart from the competition in four main ways.
 In an era when food is becoming chemistry, Kebe Cakes and Bakery will focus on raw,
natural and organic and local ingredients o create its product, thus, our products taste
better.
 Each of our products contains extra detail to set it apart from the competition. We ensure
that our products appeal to the eye as well as to the stomach.
 The sky is the limit when developing a pastry design. We will cater to the wants and
needs of our customers in every way possible. When customers want detailed or shaped
cakes, we will match the picture or the design that they provide.
 Customers service is our number on priority. We will ensure that each customer is treated
with kindness, respect, and a warm welcome on each visit to Kebe cakes and Bakery.

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 2.3 Market segmentation
Retail
The market segmentation for the retail is divided into two psychological groups: celebrators and
routine customers. The groups represent people sharing similar behavioral patterns and reasons
for supporting Kebe Cakes and Bakery. These groups purchase either pre made or made-to-order
products, celebrators are people that have reasons to do just that, celebrate! Birthdays,
Anniversaries, Graduation, Valentine’s day, and Christmas are just a few of the many holidays or
special occasions that families and loved ones choose to celebrate with Kebe Cakes and Bakery.
This market encompasses a variety of people including the young,
middle aged and old, and both men and women. The routine customers encompass all those
families and its members who use products of our bakery in their day to day living. Kebe Cakes
and Bakery serves as a place where families feel both welcome and comfortable.

Wholesale
Our wholesale customers will be successful businesses in the food industry. We will focus our
attention on the supermarkets, coffee shops, and café restaurants and hotels customers and then
expand to a broader list as the company grows.
2.4 Industry forecasts
The bakery business is extremely seasonal. Various products and sold in greater volumes
depending on the season or nearing holiday. For example, breads sales is high especially on
weekdays when the workers around Addisu Gebeya in their way to home. So the sales are rather
relatively low on weekends for breads. Weddings are also exemplifying the seasonality of the
business for cake as most weddings occur on Tire and Miazzia and Gimbot. In order to
counterbalance this extreme seasonlity, Kebe Cakes and Bakery offers a wide verity of products
and focuses not only on seasonal celebrations but also events that happen year round such as
birthdays and anniversaries.
3. Description of venture
3.1 Products and services
Kebe Cakes and Bakery sells a wide range of high-quality breads, Cakes, cupcakes, pies and
cookies. Its products will stand out from the competition due to their uniqueness and outstanding
quality, each item is made from scratch using all natural ingredients sourced from largely local
suppliers. These supplies involve no preservatives to provide for high-end and pleasant flavor
and taste. It is important that our items not only taste delicious, but also look appealing and
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attractive to the eye. Therefore, we add the extra little touch to every product, whether it is a
sparkling sugar daisy on a chocolate cupcake or a buttery harvest leaf on a pie. These extra
touches are added to enhance the elegant experience for our customers.
Kebe Cakes and Bakery will also provide exceptional sourdough bread which baked without
adding yeast, fat or sugar. This method imparts a rich flavor as well as toothsome inner crumb
and a crust. This bread has also extended shelf life, remaining fresh and health for days the use of
preservatives. This bread is remarkable aimed for a people with gastric upset induced by yeast
and also for the people who have medically advice to be on low fat diet like dyslipidemias and
hypertensive patients. Customers may purchase pre-made or made-to-order products. Kebe
Cakes and Bakery specializes in fine desserts coupled with remarkable customer service in a
comforting atmosphere. Our location is designed in a way that customers are able to enjoy a
setting that is as pleasant as the product they are consuming. Customers may also delight in our
product by taking it to-go
Wholesale: The products that our wholesale customers order are of very high quality. Just as
with the retail portion of the business, the products in the wholesale is made with quality
ingredients and properly prepared. While a few of products will be the same at the retail and
wholesale locations, certain items will be specifically made for particular wholesalers depending
on customers’ orders. Kebe Cakes and Bakery will manage delivery to wholesale customers
when the company stretched its service in coming years.
It will provide service for customers Sunday through Saturday 9:00 AM until 6:00 PM.
3.2 Size of business
Kebe Cakes and bakery is going to be small scale business according to legal procedures of the
country. Due to capital and other requirements our operation will be limited in one branch
operation for first years
3.3 Office equipment and personnel
There will be 3 desks to displays the baked products, comfortable seats on the side of the room
where customers wait for their order to be ready.
During the first months of operation, Minilik and his friends will be the only baker and there will
be one employee who will work on the counter and assist with the store maintenance during the
peak hours. Beginning December of the first year, an additional two employee will be added in
order to meet the needs to the busy holiday and wedding season. The fifth employee will join the

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team just before the second wedding cake season in April of the second year. Each of the
employees will be paid on a monthly basis.
3.4 Background of entrepreneurs
Minilik and his friends, are the founder of Kebe Cakes and Bakery, Minilik and his friends have
1 years of experience in the bakery industry having worked counter management and the pastry
division at Bernice’s Bakery in Addis Ababa. They had also training at Pioner food institute
They hold diploma in different fields from TVTE and is currently he is a graduating class of
project management at Queen’s College. Minilik and his friends, pride themselves on their
supreme customer service and greeting everyone with a smile. They will bring a wealth of
practical experience and realistic market sense to the company. With such immense practice and
managerial skill, Kebe Cakes and Bakery is sure to gain traction in the community.
4. Production Plan
4.1 Manufacturing process
The production of Kebe Cakes and Bakery will be projected to be open on Tire 20th 2016 E.C.
raw ingredients will be ordered for twice a month delivery from very flour company, shall dairy
products and Belons pastry ingredients wholesaler at which time a two week production
schedule will be drawn by Minilik and his friends, the proprietor and baker. The dry ingredients
will be stored in a dry place and the dairy products will be placed in a refrigerator scheduling
will begin with three times per week pie and cupcakes baking, twice per week making of cakes
and sour breads and one per week production of cookies. Each bake day the baker will bake in a
desk over. The provides intense, even heat and controlled amount of steam injection, allowing a
tremendous control of crust crispiness, everything from soft white sandwich breads to thick crust
dense savory beads to sweet baked products can be perfectly baked in this oven. While breads
are baking, the baker will begin mixing the long fermenting dough to be baked off the next day.
Labor saving equipment including a dough sectional divider and bread molder makes this
possible. Hot breads will begin coming out of the oven by 7:00 Am and all baking will be
finished by 10:00 Am. After this, the made-to-order breads and cakes as requested by the
customers will be ready as the well-timed delivery date. Then the storefront will open at 9:00
AM and closed at 6:00PM Sunday through Sunday.

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 4.2 physical plant

Map of Around Addisu Gebeya

4.3 Machinery and equipment

The required of the equipment are listed on Table. The bakery equipment is chosen with
versatility in mind. In addition to the spectacular and sparkling shop of the bakery, the site is also
furnished with comfortable chairs needed for the operation of Kebe cakes and bakery. Therefore,
it is unnecessary to purchase the large and expensive machinery.
Type Items
Machinery Large mixers (2) Small Mixers (2), Automatic
dough roller, and Dough sectional cutter, bread
molder, refrigerators (2)
Built-In Over, refrigeration compartments, freezer,
flour storage containers, fryer, Range, and
Display cases
Other Equipment Cooling racks (rolling), muffin tins, and
Baking sheets
Specialty Cake pans (various shapes and sizes),
Turn tables, cookie cutters, pie tins, and Cake
decorating tools

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 4.4 Names of suppliers of raw Materials
Our products will be made of high quality flour and baking ingredients from
5. Marketing Plan
The Adisu gebeya community is notorious for supporting local businesses since it is both a place
of work and living. Therefore, Kebe cake and bakery focuses on using. Employees will be
trained in a customers focused manner and to be very knowledgeable of our entire selection of
goods and services.
5.1 Pricing
Due to the high quality of ingredients, made from scratch products, and carefully and at times
customized decorated goods, the pricing at Kebe cakes and bakery will be higher than that of the
typical grocery store bakery. The table below illustrates the initial mark-up of the bakery
products based on the cost of goods sold. Depending on the detail of special orders, the margin
may increase for that specific item.

Item Margin
Cookies 3x
Cakes 4x
Cupcakes 4x
Pies 4x
Wedding cakes 5x
Breads

5.2 Suppliers and distribution strategies

In order to support local businesses, it is important that we purchase ingredients from locally
growing flour factories when every possible. We use local dairies for our dairy products. Other
ingredients are purchased and delivered from Belons pastry ingredients wholesaler and sholla
diary products. The products are distributed in various ways.
The retail products may be picked up at the retail location by the customers. The wholesale
products will be delivered to the wholesale locations with the fee included in the product pricing.

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5.3 Advertising and promotion Strategies
Word of mouth and public perception are immensely important in the aspects of business. First
of all, customers should understand that our products are make with quality ingredients and thus
taste better than many of our competitors. The word of mouth will be created when someone
taste our products for example, a cake at a party. The cake will be enjoyed by many and thus the
word of mouth seed for the bakery aspect of the portion will be created. In addition, several
times a month Kebe cakes and bakery will place an advertisement in the paper. These ads will be
strategically placed in areas such as the engagement and wedding page during the wedding
season. Specifically, we will partner with wedding planners, photographers, and caters in the
bridal industry where the profit margins are high. A well laid out and user friendly web page is
important for the growth Kebe cakes and bakery. The site will include detailed descriptions of
the products, photos of goods, a description of the company and this philosophy, and contact
information to raise awareness of Kebe cakes and bakery.
Our wholesale customers will be promoting and advertising our product brand in order to
develop further business for themselves. The advertisement will occur in their store through their
menu, display case, Kebe cakes and bakery logo, etc. also, when our wholesale customers
advertise publicly, it is to their advantage and ours to mention that they sell Kebe cakes and
bakery products.
5.4 Product forecasts
Our cake and bread products will be the first choice for those who are in need of quality with
reasonable pricing. After introduction with market, our small scale delivery is expected to reach
high growth for years. As it is basic need for everyone, the demand for food is one of promising
sector for consistent market.
5.5 Controls
Maintenance of quality is must to be secured. For this major concern of our business we will
have strict procedures for ingredient and production quality control.

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 6. Organizational Plan
6.1 Form of ownership
Minilik and his friends are the owner and the principal baker of the Kebe cakes and bakery.
They will regulate the finance and purchase. As stated will on the background of the owner they
have practical experiences in the field and educational background on management.
6.2 Identification of partners or principal shareholders
Our product has been founded and will be led by Minilik and his friends, they received their
diploma from TVTE College. After graduation They worked with different food complex and
other organizations. They spent one year with facility maintenance and production management.
Recognizing that they did not want to spend the rest of their life working for someone also and
recognizing that they did not have a sufficient skill set to start their own enterprise yet. They did
a cost benefit analysis and determined that it would be wise to take on debt and forgo two years
of wages to be able to pursue his dream of opening his own business.
When working for kality food complex he became quite good friends with several of the unit
leaders. It was these relationships that provided them with the opportunity to use cutting edge
technology for this baking skill and knowledge. Their idea of developing a cakes and bakery
business was a marriage of his business skills, their previous experience and their creativity. The
more he thought about it the more they were convinced that this idea would satisfy their need for
a challenging yet enjoyable job/business.
6.3 Authority of principals
For purpose of cost reduction and simplicity of the business the duty of supervision and daily
tasks management will be on the shoulder of the owner of the idea, but after years of operation
the expansion of business will create need of expanding managerial team for marketing, finance
and humane resource managements separately.
6.4 Management-team background
As stated above, the manager of business is well educated and experienced person on food
industry and his friends support from different background filed is backbone of business success.
6.5 Roles and responsibilities of members of organization
There will be one employee at the start of the business who works on the counter. Then on the
highly demanding season additional worker on the counter and assistant baker will join the team.
And part time workers will also be considered based on the workload. Members of the company

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have to be punctual, hard worker and work with colleagues with mutual understanding, respect
and team working spirit. Furthermore, they ought to serve their customer with warmheartedly
welcome, respect and hospitality. The bakers have to work tirelessly to meet the need of the
customers especially ordered items.
7. Assessment of Risk
7.1 Evaluate weakness of business and contingency plans

The major risk to this business retail operation is the seasonality of demands especially for the
cake. So Kebe cakes and bakery will address this problem by opening at the end of the summer
season of this year. This will target to get ready on height of lucrative celebrating season of the
Ethiopian new year and meskelle festival. This will give the company a good supply of working
capital to help with the start-up periods. Unless strong demand shows a need, part time
employees will be eliminated and advertising will minimal on low demand season. And also
since there are primary and secondary schools in around Addisu Gebeya and students are also
aimed customers in academic year. This will create relatively low customer flow on summer.
Nevertheless the company market itself primarily to the year round residents of around Addisu
Gebeya.

7.2 New Technologies

The bakery and pastry is evolving so fast and equipped with the latest labor reducing equipment.
These on-going efforts advance the quality, boost productivity and control costs. We are
planning to update ourselves in regards to purchasing new equipment, getting new trainings and
adding new items to the menu so that to line-up with customers’ demands and expectations.

8. Financial Plan
Important Assumptions
The following table details important financial assumptions
General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current interest Rate 10.00% 10.00% 10.00%
Long-term interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%

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 Other 0 0 0

8.1 Perform and income statement

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales 17,882 90,581 34,145
Direct cost of sales 8,941 45,291 67,072
Other costs of Goods 0 0 0
Total cost of sales 58,941 145,291 167,072
Gross Margin 58,941 145,291 167,072
Gross Margin % 50.00% 50.00% 50.00%
Expenses
Payroll 68,400 83,000 87,000
Sales and Marketing and 2,500 3,000 3,000
other Expenses
Depreciation 996 996 996
Rent 11,000 12,000 12,000
Utilities 3,300 3,600 3,600
Insurance 3,000 3,6000 3,600
Payroll Taxes 10,260 12,450 13,050

Other 1,500 1,800 1,800

Total Operating expenses 100,956 120,446 125,046
Profit Before Interest and (42,015) 24,845 42,026
taxes
EBITDA (41,019) 25,841 43,022
Interest Expense 6,045 5,700 5,120
Taxes Incurred 0 5,743 11,072
Net Profit (48,060) 13,401 25,834
Net Profit/Sales -40.77% 4.61% 7.73%

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8.2 Case flow projections

The following chart and table display projected cash flow.

Pro forma Cash Flow

Year 1 Year 2 Year 3
Cash received
Cash from operations
Cash sales 117,882 290,581 334,145
Subtotal cash from operations 117,882 290,581 334,145
Subtotal cash received 117,882 300,000 334,145
Expenditures Year1 Year 2 Year 3
Expenditures from Operations
Cash spending 68,400 83,000 87,000
Bill payments 80,550 194,234 218,664
Subtotal spent on operations 148,950 277,234 305,664
Additional cash spent
Long-term Liabilities principal repayment 8,400 9,000 10,000
Purchase other current assets 0 0 0
Purchase log-term Assets 0 0 0
Dividends 0 0 0
Subtotal Cash spent 157,350 286,434 318,064

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Net Cash Flow (39,468) 14,147 16,081
Cash Balance 16,932 31,079 47,160

8.3 Pro forma Balance sheet

The following table shows the projected balance sheet.

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Assets
Current Assets
Cash 16,932 31,079 47,160
Inventory 2,702 6,659 7,658
Other current assets 1,500 1,500 1,500
Total current Assets 21,133 39,238 56,317
Long-term Assets
Long-term Assets 5,000 5,000 5,000
Accumulated depreciation 996 1,992 2,988
Total Long-term assets 4,004 3,008 2,012
Total assets 25,137 42,246 58,329
Liabilities and capital Year 1 Year 2 Year 3
Current liabilities
Accounts payable 18,697 21,605 24,253
Current borrowing 0 9,800 7,400
Other current Liabilities 0 0 0
Subtotal current liabilities 18,697 31,405 31,653
Long-term liabilities 56,600 47,600 37,600
Total liabilities 75,297 79,005 69,253
Paid-in capital 15,000 15,000 15,000
Retained Earnings (17,100) (65,160) (51,759)
Earnings (48,060) 13,401 25,834
Total capital (50,160) (36,759) (10,924)
Total Liabilities and capital 25,137 42,246 58,329
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 New worth (50,160) (36,759) (10,924)

8.4 Break-even Analysis

The break-even analysis indicates what will be needed in monthly revenue to reach the break-
even point

Break-even Analysis
Monthly revenue break-even 16,826
Assumptions:
Average percent variable cost 50%
Estimated Monthly fixed cost 8,413

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