Business Proposal for Milki Baltina and
Spice Shop
Project Promoter: Milkaina Micro & Small
Enterprise
Manager: Ms. Habtamuwa Fikire
Project Location: West Guji Zone, Abaya
Woreda, Ganguwa Town
Sene, 2017 E.C
Abaya, Ethiopia
Table of content
1. Executive summary---------------------------------------------------------------------------------4
2. Business description--------------------------------------------------------------------------------6
2.1. Owner description---------------------------------------------------------------------------------6
2.2 Mission of business--------------------------------------------------------------------------------6
2.3. Visions-----------------------------------------------------------------------------------------------6
2.4 Objective----------------------------------------------------------------------------------------------7
2.4.1 Short term objective----------------------------------------------------------------------------7
2.4.2 Long term objectives---------------------------------------------------------------------------7
3. Service description----------------------------------------------------------------------------------7
3.2. SWOT Analysis---------------------------------------------------------------------------------------8
3.2.1. Strength of the competitors------------------------------------------------------------------8
3.2.2. Weakness----------------------------------------------------------------------------------------8
3.2.3 Opportunity---------------------------------------------------------------------------------------8
4. Marketing plan---------------------------------------------------------------------------------------9
4.1 Pricing-------------------------------------------------------------------------------------------------9
4.2 Promotional mix------------------------------------------------------------------------------------9
4.3 Place of operation----------------------------------------------------------------------------------9
4.4 product type-----------------------------------------------------------------------------------------10
6. The Business budget----------------------------------------------------------------------------------10
7. Management plan-----------------------------------------------------------------------------------13
8. Financial Plan----------------------------------------------------------------------------------------13
8.1. Start-up Funding----------------------------------------------------------------------------------13
8.2 Financial documentation------------------------------------------------------------------------13
8.2.1 Profit and Loss Statement--------------------------------------------------------------------13
8.2.2. First year Balance sheet statement of the business-------------------------------------------------------14
9. Break even analysis--------------------------------------------------------------------------------18
10. Conclusion……………………………………………………………………………...……19
11. APPENDEX…………………………………………………………………………………20
1. Executive summary
Milki balitena & Spice shop will be start as a partnership between three domestic individuals
(Partners: Ms. Habtamuwa Fikire and Mr. Kasahun Hayilu). The shop will provide qualitative
cereal domestic consumption product such as shero, lentil, pepar, bean, pea, and bulla, beso,abish
and different spices for domestic customer of the societies of West Guji Zone Abaya Woreda of
Ganguwa town and around in order to make the healthy in their life. Our initial statement to
Investors and Financial Lenders, this balitena and spices business plan is a candid disclosure of
the Habtamuwa and Kasahun business proposal - my intent is to set realistic business
expectations, and reduced any questions about the profitability of this business venture.
Entrepreneurs have a tendency to paint the Milki baltina and spices shop business plan with a
very optimistic brush, highlighting strengths and camouflaging the risks.They, as a business
owners, have a vested stake and financial commitment in the success of this baltina. My intent is
to have a definitive business, financial, and marketing plan that not only serves our need for
capital financing, but also is utilized as our daily business roadmap. We have taken all
precautions to validate or success our business and financial models, focusing on realistic
projections. Our beginning capital is about 22340 birr for the purchasing of fixed assets and for
the operation of different works our business need 20461 birr with a total birr of 42801. From
this amount we get 34240 amounts from Sinke Bank through loan and its loan repayable over
three years. As owners, our commitment is to take personal accountability for all financial debt.
We will take the necessary precautions to ensure the business is fully capitalized with in three
year, and have addressed all financial shortfalls to ensure a successful business start-up.
1.1 COMPANY PROFILE
Company name: Milki baltina and spice shops
Abbreviated name: MBSS
Contact person: Ms.Habtamuwa Fikire(manager)
Tel number: 0919685853
Types of ownership: Small & Micro Enterprise type of Business ፡
Small Scale Enterprise on baltina and spices shops
Fixed capital of 2013: 22340
Products: pepper, peas, shiro lentil, bean kik, onion, bula kimem tikur kimem, beso, abish
CONTACT PERSON
Name position phone no
1.Ms. Habtamuwa Fikire manager 0919685853
2.Mr. Kasahun Fikire cashier 0929418540
2. Business description
The name of this business is Milki baltina and spices shops which will start as a business in Ganguwa
town, Birbirssa kebele. As I observed in this area there are some competitors who supply both
qualitative and quantitative baltina and spice products for individuals, relatively small and medium
hotels, also I assume that most of the customers of this business will be the above I mentioned. Also in
this area we observed that most of the community’s population of this kebele is collage students and
the other includes those who did not marry (Wonde late). So such types of individuals highly need the
product of our baltina and spices keeping competitors constant.
2.1. Owner description
The ownership of the partnerships are named as; Habtamuwa and Kasahun. The product /service we
provide for our customers (individuals, hotels) are that a qualitative and well prepared domestic cereal
baltina products to keep them from preparing baltina and spices products in boring and tiresome ways
as well as to keep their life healthy.
The aims of our business is to fill a clear gap in the market and cater for growing customer demand for
high quality, healthy premium of family finished baltina consumption products.
2.2 Mission of business
Employee welfare, participation, and training are equally important to our success. The vision is to have
not only profit maximization of the owner of the business, but also efficient and superior service -
customer satisfaction is our paramount objective. Milki baltina will be the choice for all a mature and
adult crowd, couples and singles, young and old, male or female.
2.3. Visions
Our concept combines variety, ambiance, entertainment and a superior staff to create a sense of 'place'
in order to reach our goal of overall value in the dining/entertainment experience. We offer fair profits
for the owners and investors, and a rewarding place to work for the employees. Everyone is treated
fairly and with the utmost respect. Our employees will feel a part of the success.
2.4 Objective
Our business has two main objectives for the first three years of operation include:
2.4.1 Short term objective
Solving the market problem of the area by addressing or supplying of better and quality
products to the customers.
Providing a better quality of finished baltina product to increase our customers.
Achieving the average estimated sales per year.
Reduction of the inflation of finished balitena products and spices as much as possible
2.4.2 Long term objectives
Expanding our marketing and advertising in Ethiopians neighboring country to increase our
customer base from abroad.
To generate the maximum profit by assuming any risk and challenges.
To improve equality and performance of our employees
To create better job opportunity for people
To expand the existing business area and starting another similar business in a unique Midtown
destination of other areas in side our country.
3. Service description
3.1 Market research and analysis
Instead of building a business around a preconceived concept, we conducted market research and built
a concept around our consumers. According to survey and observation we have conducted, people
which are around Abaya area are densely populated and some of them (self- employed and investors)
run their own business and government employees those who are not run their business such as a
university lectures, bankers, private college lecturers, Doctors and Health .Therefore, there are a great
competition between them especially the investors and self- employed workers. Those competitors
have their own strength and weakness.
3.2. SWOT Analysis
It shows the strength, weakness, opportunity and threat of the business.
3.2.1. Strength of the competitors
Our competitors have an experience in this market (baltina) since they are worked for a long period of
time than us. The other strength of our competitor has greater financial services because of most of the
relatives of our competitors were in western countries. In addition, they have a greater access of
information about the market activities.
3.2.2. Weakness
The main weakness of our competitors are they did not well known spices which are produced in well
agricultural places that are used for the increasing of the flavor and quality of the baltina products. But
we will prepare the product with highest quality by adding different spices in order to increase its flavor
and to attract our customer. The other weakness is they sold their product with highest price for their
customers as equal as the other individual did. However, our main concern will satisfy our customers by
supplying our product with sound price.
3.2.3Opportunity
High demand of the customers to wards these balitena products.
The status of using the standard technology to grow our productivities.
There are low number competitors at the areas.
There will be shortage of suppliers
Suitability of the areas for trading such materials
3.2.4. Threats
The high increment of rent of house
Will there be inflation
Will there be increasing of tax.
4. Marketing plan Product /service
Generally we provide domestic consumption services for our customers with sound price, better ethics,
at right place with right time but we add some features for competitive advantage and for the quality of
product, we bring out. In addition to this, we will also provide some training for the best customer how
to run such types of business. In general, our market business consists the 4PS, which are price, product,
place and promotion.
4.1 Pricing
The price we have setting depends on the price of our competitors but we will have made some
modification in order to cover some of our costs. we will try to discount the prices of the product in
order to attract our customers, if it doesn’t have much effect even if it have some losses in our business
flow of cash.
4.2 Promotional mix
In order to be advertising our product that we produce we have assumed to follow the following
methods depending on market demand. The promotion method will be:
I. We will use postures, and business cards in order to advertise
II. We will advert our products by participating on different exhibition and bazaars
III. Also we will use poster in local notice areas tapela in front of our business area, bill boards in
some public places.
4.3 Place of operation
The Milki baltina and spices shops will be located in Abaya woreda of Ganguwa town. The shop will
operate during peak service time to take advantage over other competitor. The market branch operated
on all days in a week. But, especially on Tuesday & Saturday - Market brunch exercise at all time due to
different reason. The main reason that we select this area is;
a) The presence of wide market on the town and its round.
b) The availability of raw materials and machines for the facilitating of the methods production. For
example, the availability of plastic for packing of the products.
c) Relatively it is preferable on the availabilities of infrastructure in order make the customer can
get the product at any time.
4.4 product type
The main product that we will assume to produce includes prepared pepper, peas, shiro lentil, bean kik,
onion, bula kimem tikur kimem, beso, abish and other special spices.
5. Production plan
No Types of Product Amount in Kg Unit Total Selling Annual
price/Month price/Month selling price
1 Lentil 200 30 6,000 72,000
2 Bean kik 250 15 6,250 75,000
3 Pea kik 150 15 8,250 99,000
4 Pea shiro 100 38 3,800 45,600
5 Prepared pepper 100 65 6,500 78,000
Grand Selling 30,800 369,600
6. The Business budget
The following tables that shows the amount of capital that we invested on raw materials for the success
of our business. Starting capital of the business.
No Investment Cost
1 Place of Production
2 Production House 20,000
3 Manual production Machine 2,340
Gross Investment 22,340
Expense for Operating
4 One worker job fee per month 1,000
5 Expense of raw material per month 19,461
Different expense per month
Total operating expense 20,461
Total working capital 42,801
No.
Investment
List of investment conditions
No Kind of Investment Identification Measurment Quantity Unit Price Total price
1 Place production
2 House production Container 1 20,000 20,000
3 Tishet 4 150 600
4 Safa 4 35 140
5 Kinda 50 22 1,100
6 Plastic 10 40 400
7 Mabeterya 4 25 100
Gross investment 22,340
Raw materials, which are necessary to conduct our business.
N Kinds of RM Measurement Amount Unit Price Total Price
o
1 Prepared pepper 100 36 3,600
2 Peas shiro 100 12 1,200
3 Lentil 200 21 4,200
4 Bean kik 150 10 2,500
5 Onion 5 13 65
6 Bula kimem 5 15 75
7 Tikur kimem 5 50 250
8 Avocida 4 20 80
9 Abesh 3 14 42
10 Salt 40 4 160
11 Water 300
12 Light 20
13 Special expenses 500
14 Total raw material 19,461
15 Labor force 2 500 1,000
Total 20,461
Grand starting capital 5,000
Source of capital
No Kind Source Ratio Amount in Birr
1 Own capital Saving 10% 100,000.00
2 Credit (Bank Loan) Sinke Bank 90% 900,000.00
Gross capital 100% 1,000,000.00
The amount we get the loan from Sinke bank will paid over three years (36 months) with an interest rate
of 17%. The following table shows the annual repayment of loan.
paym ent Intere st
Total
Organization of human labor force
No Level of Work Responsibility Level of Education Monthly payment Total payment
1 Technician Producer monitors Diploma 500 500
2
Let tax rate is 10% of gross profit
7. Management plan
Milki baltina and spices shop is a partnership organization; a micro and small enterprise. Ms.
Habtamuwa Fikire and Mr. Kasahun Hayilu is the founder of Milkayina micro and small enterprise. The
Ownership owned and operated by two persons. The enterprise, being small in nature, requires a simple
organizational structure. Implementation of this organizational form calls for the entire owner, to make
all of the major management decisions in addition to monitoring all other business activities. Thus, Ms.
Habtamuwa is the manager of this business, & Mr. Kasahun are the seller man of the Milki baltina and
spices shop.
8. Financial Plan
The primary element to our financial plan is mantling and improving the factors that create, and stabilize
and increase our cash flow. In addition, helps to treat our variable costs& fixed costs. The financial plan
depends on the assumptions of a strong economy without major recession.
8.1. Start-up Funding
This business plan is prepared on financial amount of birr 42,801 in order to obtain birr 57,180.29 of
retained earnings in the first year. The supplemental financing is required to begin work on site
preparation and modifications, equipment purchases, and to cover expenses in the first year of
operations. The following sections lay out the details of our financial plan for the next three years.
8.2 Financial documentation
8.2.1 Profit and Loss Statement
The most important assumption in the Projected Profit and Loss statement is the gross margin. We show
an adjustment increase in Year 2 as we exit our start-up phase of the business and move into our
expected annual sales forecast. This transition shows the Milki baltena and spices shop managing
through its start-up period, and gaining efficiency and customer loyalty. In summary, the business will
develop its customer base and reputation and the growth will pick up more rapidly towards the second
and third years of business.
8.2.1. Income statement of Milki baltina and spices business plan for year 1
Sale of product ............................................................................................................................. 369600.00
Cost of goods sold ........................................................................................................................ 245532.00
Gross profit .................................................................................................................................. 124068.00
Operating expense ......................................................................................................................... 26837.64
Operating income before tax and interest .................................................................................... 95230.36
Interest expense .............................................................................................................................. 1236.47
Income before tax ...........................................................................................................................93993.89
Tax payment .................................................................................................................................. 24813.60
Income after tax............................................................................................................................. 69180.29
Dividends ....................................................................................................................................... 12000.00
Retained earnings.......................................................................................................................... 57180.29
8.2.2. First year Balance sheet statement of the business
The following the beginning balance sheet of family baltina Statement of balance sheet For beginning
year 2013
Asset
Current asset
Cash...................................................................................................20461
Account receivable....................................................................................0
Total current asset.............................................................................20461
Fixed asset
Housing...............................................................................................20000
Equipment .......................................................................................... 2340
Total fixed asset..................................................................................22340
Total asset.............................................................................................................................42801
Liability and owner equity
Liability
Current liability..................................................................................34,240
Note payable.............................................................................................0
Total liability...................................................................................34,240.8
Owner equity..................................................................................8,560.20
Total liability and owner equipment .............................................................................................42801
8.2.3. First year cash flow statement of Family baltina and spices business plan for year 1.
Cash inflow from operating activities
Net income............................................................................................57180.29
Depreciation expense...........................................................................0
Account payable...................................................................................11413.6
Net cash flow from operating activities...................................72017.93
Subtract
Cash flow from investing activities
Sale of equipment...............................................................................0
Purchase of equipment .......................................................................2340
Net cash flow from investing.....................................................69677.93
Cash flow from financing activities
Payment for dividends........................................................................12000
Net cash flow from financing activities............................12000
Note payable.....................................................................o
Net change in cash.........................................................................................................57,677.93
The following table shows the income statement at the end of the 1st and 3rd year
1st Year 2nd Year 3rd Year
Sale of product 369,600 406,560 447,216
Cost of goods sold 245,532 270,085.2 297,093
Gross profit 124,068 136,474.8 150,122.28
Operating expense 26,837.64 29521.404 32473.544
Operating income before tax expense 95230.36 96182.396 105800.64
Interest expense 1236.47 1360.12 1496..132
Income before tax 93993.89 103,393.279 113739.6
Tax payment 24813.6 27294.96 30024.456
Income after tax 69180.29 76098.319 83708.15
Dividend earning 12000 13200 14520
Retained earning 57,180.29 62,898.319 69,188.181
The following table shows that the balance sheet statement at the end of 1st and 3rd year
1st Year 2nd Year 3rd Year
Asset
Cash 20,461 22,507.10 24,751.81
A/R 0 0 0
Housing 20,000 22,000 24,200
Equipment 2,340 2,574 2,831.40
Total asset 42,801 47,081.10 51,789.21
Current Liability 34,240.00 37,664.00 41,430.40
A/P 0 0 0
Note payable 0 0 0
Total Liability 34,240.00 37,664.00 41,430.40
Owner equity 8,560.20 9,416.22 10,357.84
Total liability and owners’ equity 42,801.00 47,081.10 51,789.21
The following table shows that the cash flow statement at the end of 1 st and 3rd year
1st Year 2nd Year 3rd Year
Net income 57180.29 62898.319 69188.159
Depreciation 0 0 0
Account payable 11413.6 11413.6 11413.6
Net cash flow from operating activities 72017.93 79219.723 87141.69
Sale of equipment 0 0 0
Purchas of equipment 2340 2340 2340
Net cash flow from investing activities 69677.93 76645.723 84310.29
Payment of dividends 12000 13200 14520
Note payable 0 0 0
Net cash flow from financing 12000 13200 14520
Net change in cash 57677.93 63445.723 69790.2953
9. Break even analysis
The break-even analysis show what we need to salary our service for meet cost.
Benefit obtained from the project years
No Project Year Cost Income Benefit Discount Net benefit
factor 5%
1 1st 245,532.00 57,180.29 188,351.71 0.23 43,220.89
2 2nd 270,055.20 62,898.32 207,156.88 0.233 48,267.55
3 3rd 297,093.00 69,188.16 227,904.84 0.234 53,075.35
189,266.77 534,563.79
N.P.V= {N.B-initial cost) =534563.79-245532= (+) 289031.79 in each year
Hence the business is profitable.
10. CONCLUSION
As indicated by the above analytical steps of income statement and the balance sheet, this project
named “MILKI BALITENA AND SPICES SHOPS” is supposed to be profitable and the daily, monthly and
annual revenue generated from prepared pepper, Peas, Shiro lentil, Bean kik, Onion, Bula kimem, Tikur
kimem, Beso, Abish and other special spices is assumed to increase from year to year. The market,
financial, technical as well as organizational aspects are also shown to be feasible. Therefore, both the
responsible government body and the project owners have to do pre-operational works including the
arrangement and hiring of required man power, getting license and provision of capital loan and
required land area as soon as possible so that establishment of the project was realized according to the
budgeted capital and the proposed time schedule.
