ALETA WONDO INDUSTRIAL AND

CONSTRUCTION COLLEGE

DEPARTMENT OF MECHANICS
BUSINESS PLAN FOR:- KOCHO PROCESSING
COMBINATION MACHINE

PREPARED BY:-ENICHA HUSSIEN

APRIL 2022
A/WONDO ETHIOPIA

1
 Executive Summary

 Name of business - Aleta Machine Supplier group MESEs

 Legal Form-Partnership
 Contact address - ALETA WONDO
 Tel: +251916649687 Email: [email protected]
6.1.1 Types of business
Manufacturer √ Service provider
Retailer Wholesaler

Brief Description of the Business Idea

I. Products or services
This company manufacture of Combination Kocho processing machines.
Our company provide community centered and problem solver machine for society
with high quality and low cost.
II. Customer/target group
our targeted groups are Total population of the Sidama region and SNNP region
around 20 million based on house holds
III. Owner/s/
No Name Address Qualification Function in the Relevant
business experiences
1 Enicha A/Wondo BSC Mechanical General 6 Years
Hussien engineering Manager
Business Idea and market
Description of business idea
This idea is basically developed through value chain made at regional level.Durining data
collection we have observed that women are exposed to different loads of work for Kocho
processing. So this data implies that there are modern mechanisms should needed to overcome
the challenge. Due to we have decided to design this mult-purpose machine.

2
 Description of the market
Since our product covers whole society of Sidama Region,SNNPR,and some parts of
oromia our market areas are not limited. We should have to go every direction of
these regions and advertising the technology

Marketing plan product

Products/services types

No. Identified Customers Type of products How to reach the

needs customers

1 High market  House hold Manufacturing of  Retailers

de m a nd s  Hotels combination Kocho  Direct selling
 Ngos p rocessing machine
 Training provider institutes

Other unique features of Combination Kocho processing machine include:

Performs activities in sets
It is Kaizened
Low cost
Easy to assembly
easily to manufacture
No need of complex machines
No need of professional operator
performs,squeezing,rubbing,powedering, etc

What is special about the product/ the unique characteristics of the products?
This machine produced by local available materials, it produced with locally
highly quality
The unique characterics of this machine are:-
It is new idea for the area and there are no any trial before
Multi-purpose
Low cost
produced from locally available materials
Conventionally operated.
6.3.3 Specification of the machine
Combination Kocho processing machine has overall size of 1570 mmx500mmx750
mm height. Overall its weight is not more than 30 kg.This machine is combination of
three different machines. Those are mult-purpose screw conveyer Kocho processing
machine, which is 600mmx210x150mm and around 15 Kg weight. This machine
performs Kocho squeezing, Kocho rubbing(shreading) and spreading. The next one

3
is Kocho filtering machine which weighs around 10 kg.This next machine is
squeezer press machine which presses the baked Kocho with the help of manually
operated screw press
We will give the following after sell services
1. Maintenance service for one year
2. Coaching and consulting by operational manual
Marketing plan price
since our product is new for the environment there are no compitotors.Even if there
is no competitors our cost for combination set of machine is very low
Marketing plan place
Description of the planned location for the business will be every place which listed
above.
Reason for choosing this location
Since there are high market demand across the region we should select every place of
the location.
Reaching the customers by selling to
Individuals √ Retails whole sellers’ others
Reason for choosing this way of distribution we decided to deli ver this machine
directly to the customers to avoid unnecessary price increment which will affect
to avoid unnecessary price increment which will affect the purchasing power of our
customers.
Market plan promotion
We promote our business through:-
Social Media
Mass Media like Radio and Television
Bazaars
Broachers
Banners and stickers
6. 3. 7 Legal form
The legal form of the business will be:-
Sole partnership Partnership √ limited Company
Corporation
Reason for choosing this legal form
 Easy to form
 Low cost to start
 Added capital sources

4
  Shared managements
 Possible tax advantage

6.4 Production Plan

6. 4. 1 List of Production Step
i. Prepare working drawing
ii. Select raw materials
iii. Prepare cutting lists
iv. Measuring and cutting the appropriate size
v. Make joints according to design
vi. Assemble the parts according to drawing
vii. Apply hardware /fixture and accessories
viii. Apply coating and finishing materials
List of Fixed Assets Needed and Their Cost

No Item Quantity unit price total price

1 Try square 2 50 100
2 Tape measure 2 100 200
3 Plastic Hammer 2 150 300
4 Ball pen hammer 3 150 450
5 Center punch 2 20 40
6 Steel rule 3 250 500
7 File 6 50 300
8 Divider 2 200 400
9 Chisel 2 100 200
10 Hacksaw 2 1000 2000
11 Wood saw 2 1000 2000
12 Nail hammer 2 200 400
13 Paint Brush 2 50 100
14 manual planner 2 300 600
machine
15 Diestock set 1 5000 5000
16 Arc Welder 1 10 000 10 000
17 Mig/Mag 1 25000 20 000
18 Gas compressor 1 20000 10 000
19 Manual rolling 1 25000 20 000
machine
Total cost 72590

5
 6. 4. 3 List of raw material needed

No Item specification measurement Quantity unit total remark

cost cost
1 Sheet metal 1000x2000x2mm pieces 1 2000 2000
2 Angle iron 20x20x6000x2mm pieces 1 800 800
3 Angle iron 40x40x6000x2mm pieces 1 1300 1300
4 Round bar ϕ10x6000mm pieces 1/2 300 300
5 Round bar ϕ20x6000mm pieces 1/4 750 750
6 Ball bearing 6204 pieces 4 150 600
7 Rhs 40x40x6000x2mm pieces 1 1300 1300
8 Timber Wanza pieces 2 400 800
9 Electrode ϕ2.5 E6013 pack 1 350 350
10 Electrode ϕ3.2 E6013 >> 1 400 400
11 Spray silver silvery pieces 5 150 750
12 Spray blue blue >> 1 150 150
13 Belt C-Grade >> 2 150 300
14 pulley ϕ 60 mm >> 2 100 200
Aluminum
15 Ant-Rust - >> 1/4 175 175
16 Paint Pale green >> 1/4 175 175
17 Electric 0.75 Hp single >> 2 3000 6000
motor phase
18 galvanized 3/4" >> 1/12 75 75
pipe
19 sieve medium grade >> 68x50 mm 150 150
20 cricketo/lock metal type >> 1 20 20
21 Hinge - >> 1 20 20
22 Bolt and Nut M-13 >> 20 15 300
23 Bolt and Nut M-10 >> 20 5 100
Total Cost 17,015
Factory overhead expenses
No overhead expenses Amounts per product
1 Electricity 5
2 Water 5
3 Telephone 10
4 Mentainance 3
5 insurance 20
6 Allowance 5
8 others 100
Total overhead cost 148

6
 What is the useful life time of each fixed asset?

No Investment Life span Deprecation Investment Total

item deprecation
in years (%) cost
1 Buildings 20 5 -
2 Simple 15-20 5 60 00 0 3000
machine
3 Hand tools 3 33.3 12590 4192.47
total Deprecation 7192.47
Brief description capacity of the project per month

Month 1 2 3 4 5 6 7 8 9 10 11 12
No of 10 10 10 10 10 10 10 10 10 10 10 10
products

Organizational structure

GENERAL MANAGER

PRODUCTION FININCIAL
MANAGER MANAGER

PRODUCTIO QUALITY PURCHASER MARKETIN

N TEAM CONTROL PROMOTER

Organizational Staff cost

No Position Qualification Salary Remark
1 General Mechanical 5 000
manager Engineer
2 Production Mechanical 4500
Manager Engineer
3 Financial BA 4 000
manager Accounting
4 Machinist Mechanics l-4 3 000

5 Quality Mechanics l-4 3 000

controller
6 Purchaser Accounting L- 2 500

7
 3
7 finishing Welding L-4 2 500
operator
98 Cleaners G r a d e 10 1500
9 Wage Every labor 1500
Total staff cost 27,500
Administrative expenses

Administration expresses Amount

Allowance 400 Birr
Supplies 1000 Birr
Communication 1000 Birr
Total administrative expenses cost 2400 Birr

Financial plan
Sources of funding

Type Source Conditions Amount

(duration
/interest)
Equity capitals  Own saving 150,000
 Partner 50000
Loan 1  Credit 100 , 000
cooperation
 Government
scheme
 Bank loan
TOTAL 300,000
FUNDING

8
Capital requirement

Capital requirement (project cost) Amount

Investment or Fixed Assets
- Land ---
- Building ----
- Equipment (with machine) 72,590 Birr
- Others 500 Birr
Total fixed assists 73,090 Birr
Working capital /operational costs of one
month
- Raw materials costs one month 170,150Birr
- Administrative expenses 2400 Birr
- Overhead expenses 148 Birr
- Staff cost of one month 27,500 Birr
Total working capital in one month 200, 19 8
Total Capital requirement 273, 28 8

Information about funding sources Loan

Name and address of creditor or credit institution
Aleta Wondo town Omo micro-finance
Credit agreement
�under discussion � finalized Money available on (date)
DEBT SERVICE

payment period 1 amount 2 amount 3 amount 4 amount 5 amount 6

amount
Loan 1
Installment/Principal 100,000
interest 10% 10,000
Debt service sum of 100,000
installments
Factory /plant location and layout

WELDING AREA FINANTIAL MANAGER STORE

QUALITY
MANAGER OFFICE MANAGER
OFFICE

MACHINING FINISHING AREA

AREA
GATE DOOR
9
 Business Operation and Costs
Monthly sales plan all products, product range or services

Mont 1 2 3 4 5 6 7 8 9 10 11 12
h
Prod pri 22,1 22,1 22,1 22,1 22,1 22,1 22,1 22,1 22,1 22,1 22,1 22,1
ucts ce 48.1 48.1 48.1 48.1 48.1 48.1 48.1 48.1 48.1 48.1 48.1 48.1
Qt 10 10 10 10 10 10 10 10 10 10 10 10
y
All Tu 221,4 221,4 221,4 221,4 221,4 221,4 221,4 221,4 221,4 221,4 221,4 221,4
prod rn 81 81 81 81 81 81 81 81 81 81 81 81
ucts ov
er
Monthly operational cost plan
Planning is based on the monthly plan
Mon 1 2 3 4 5 6 7 8 9 1 11 12
th 0

Pro Qu
duct anti
ty
10

10

10

10

10

10

10

10

10

10
10

10
10

Mat To t
170150

170150

170150

170150

170150

170150

170150

170150

170150

517015
,1520

170150
erial al
170150

01
74
co s t

07
1
5
+ To t
Staf al
f co s t
27500

27500

27500

27500

27500

27500
27500

27500

27500

27500
27500

27500
27500

+ To t
Oth al
er co s t
500

500

500

500

500

500
500

500

500

500
500

500
500

oper Tot
atio al
200 , 19 8

200 , 19 8

200 , 19 8

200 , 19 8

200 , 19 8

200 , 19 8

200 , 19 8
200 , 19 8

200 , 19 8

200 , 19 8

200 , 19 8
200 , 19 8

200 , 19 8

n cost

+ inte
rest
C a pi t a l
10000

10000

10000

10000

10000

10000

10000
10000

10000

10000

10000
10000

10000

10
 +
+
+
+
+
+
+
=
cost

I.

c o st
Cash

sales
loans
equity
Month

Any other
the month

investment
beginning of

Total
Cash in

pre-operational

operational cost
-
-
-
n
dep
reci
atio

Pre-

5000
100000
200000

300,000

273 , 28 8
Monthly cash flow

operation
Cash Flow Plan
G ra n d t o t a l co s t

-
-
-
-
-
1
200 , 19 8 243,193 221,481 21,712

-
-
-
-
262405.47

2
7192.47
200 , 19 8 254476 221,481 32995

200 , 19 8 265759 221,481 44278 3

4 262405.47 7192.47

277042 221,481 55561 262405.47 7192.47

200 , 19 8

11
5

262405.47 7192.47
200 , 19 8 288325 221,481 66844

262405.47 7192.47
6

200 , 19 8 299608 221,481 78127

262405.47
7

7192.47
200 , 19 8 310891 221,481 89410
262405.47 7192.47
8

200 , 19 8 322174 221,481 100693 262405.47 7192.47

9

262405.47 7192.47
200 , 19 8 333457 221,481 111976
262405.47 7192.47
10

200 , 19 8 344740 221,481 123259

262405.47 7192.47
11

200 , 19 8 356023 221,481 134542 262405.47 7192.47

262405.47 7192.47
12

200 , 19 8 367306 221,481 145825

 +
+

I.
II.

Total
Sales
Month
Product
interest

any other

Net profit
(after tax)
I – II Profit
the month

(before tax)
Total

II. Operation
cash out

I-II Cash at end of

-
-

Qt y

c o st

15%
Total
21,712

Profit Margin
278,288

Turnover
1
10
18090.55 21283 200,198 221,481 221,481
32995 210,198 10000

2
10
18090.55 21283 200 , 19 8 221,481 221,481

Monthly estimation of net profit

44278 210,198 10000

3
55561 210,198 10000

10
18090.55 21283 200 , 19 8 221,481 221,481

66844 210,198 10000

12
10
18090.55 21283 200 , 19 8 221,481 221,481
78127 210,198 10000
5
10
18090.55 21283 200 , 19 8 221,481 221,481
89410 210,198 10000
6
10
18090.55 21283 200 , 19 8 221,481 221,481 100693 210,198 10000
7
10

18090.55 21283 200 , 19 8 221,481 221,481

111976 210,198 10000
8
10

18090.55 21283 200 , 19 8 221,481 221,481

123259 210,198 10000
9
10

18090.55 21283 200 , 19 8 221,481 221,481

134542 210,198 10000
10
10

18090.55 21283 200 , 19 8 221,481 221,481

145825 210,198 10000

10
11

18090.55 21283 200 , 19 8 221,481 221,481

10
12

18090.55 21283 200 , 19 8 221,481 221,481 157108 210,198 10000

Opening Balance Opening balance of my business (Date)

A s se t Value Liability Value

Fixed asset Equity 150000 Birr
Land------------- Long –term liabilities
Building--------- - Loan 100000Birr
Equipment’s------ 72590 Birr
Others------------- - mortgage
Total Fixed Assets
72590 Birr 50000
- others

Current asset current liabilities

Total long –term liabilities
Cash and bank - Account payable
Accounts receivable
Inventory - taxes payable
227410
Total Current
- other payable

Total cost 300000 Total liabilities and net worth 300000

Total current liabilities

13
 Profit and Loss Statement

First Month Projects Profit and Loss Statements

Gross sales 221481Birr
Less: Returns ----------
Net Sales 221481Birr
Less: Cost of production 200198 Birr
Gross profit 212831Birr
Less: Administrative & Selling Expenses 2400Birr
Operating profit 18883 Birr
Less: Interest Expense 100 00 B i r r
Net profit Before Tax 8,883Birr
Less: Estimated Income Tax 15% (3883)
Net profit After Tax 500 0

+
++++-(Price
Break –even point per unit-
variable cost
 Break –even point per unit)
Break even quantity =Total fixed cost =
(Price per unit- variable cost per unit) 41,250 Birr
= 4 125 0
= 38000 Birr = = 94
22148.1 Birr – 17015 Birr 2
38000/5133.1 = 7 505 Birr –
2067Birr
438
 Return on investments
Rate of return = Amount of received- amount invested ×100
Amount invested  Ret
=300000 Birr – 273,288Birr x100 urn on
investmen
273 , 28 8 ts
= 9. 7 7

14 R
ate of
return =
Amount of
received-