ENJIBARA

UNIVERSITY
Cors OF SOCIAL
SCIENCES
DEPARTMENT OF
ENTREPRENEUR SHIP

COURSE TITLE :
VICTORY BAKERY
VICTORY BAKERY

zezelma campus 2013/2021

Submitted to MASTEWAL
ASSIGNMENT OF ENTERPRENEURSHIP
GROUP ASSIGNEMENT
GROUP NAME ID NO
1kasahun girma...................................0383
2 kidist abewa.......................................0397
3 keleme yeshiwas.................................0389
4 joseph mekonen....................................0379
5helan getachew.......................................
6 kenubish mihretie..................................0394
7 Keder aman ...........................................0387
8 keneni chali................................................0393
9 keritu baera................................................0395
10keshu gebeyehu........................................0397
 1 EXECUTIVE SUMMARY

Victory bakery is a partnership business which will establish next year in 2015 EC by our team.
The business intended to provide bakery or pastry product for the people of injibara.injibara
University, Restaurant, Hotel, Retailer, etc.
The partnership aimed to produce pastry and fresh bakery to the community and other
consumers, to promote implement and to contribute to the national economy by producing and
distributing pastry products, and also introducing modern style of bakery and pastry production.
Furthermore, it will create job opportunity for skilled and semi-skilled labor.

The company’s production and main sales office is intend to be located at injibara town
particular place of bate and also it will have four different sales offices. Since the demand for
bakery product is increasing locally as well as in the foreign market the company has the aim of
providing high quality product and making profit through customer satisfaction.

The company is run by all of the owners who took responsibility based on agreement. The first
partner is the managing director of the company, the second partner deal on production
marketing manager, and the third partner execute the human resource manager and the fourth
finance task of the business, the fifth deals with man power and general service and the remain
have their own duties The starting capital of the company estimated around 70,000 birr (seventy
thousand birr). The capital is acquired from the entrepreneurs and bank loan. The estimated study
indicate that annual profit increases every year by 7% and first year profit is expected to be
80,000 before tax.
 1

1. Company Summary
2.1 DESCRIPTION OF THE BUSINESS

Victory bakery is a manufacturing business. This business is managed by ten

partners. These partners represent management and administration, finance and accounting and
also, sales and marketing area and other activities. The partners will provide funding from their
own saving which will cover startup expenses and provide financial cushion for the first three
months of production. Five years long term loan will be covered by Commercial bank of
Ethiopia.
The partnership aims to establish strong and competent market through providing marvelous
products with high quality which will be competent and winner of the market share in injibara
town. The business plans to build strong market position in the town due to the partner’s industry
skill. The business will be inaugurated on meskerem 1/1/2015 EC.at the evening.

2.2 Mission, vision and objective of the business

Mission of the business
The mission of the partnership is to supply pure and quality bakery product for the society and to
the national market, distribute the product to every corner of injibara town.By achieving this
mission of the partnership it also aims to generate good net incomefrom the business.
Vision of the business
In addition it has a vision of contributing to the national economy by introducing new technology
and modern way of bakery production in the whole country, expanding the business by accessing
the products to the entire part of the town and making the business to have wide area
coverageand also through progress our product will be one of the competent and beloved product
in the whole country of Ethiopia.
.

Objective of the business

The general objective of the business is to support the national plan in developing regional
economy through boosting bakery production.
The specific objectives include:
 Making profit
 To open and promote employment opportunity for the citizen.
 To fulfill its social responsibility by providing donations and supplying bakery product
with the favorable price for the community
 Providing high quality of product with personal customer service
 Offering products with fair price
 Meeting the customers’ demand
 Being competitive business in the industry

THE SIZE, SCOPE AND LOCATION OF THE BUSINESS

Since, as mentioned earlier the business will be established by ten entrepreneurs with equal paid
up capital. The rest of the initial capital of the business filled up by borrowed money from the
bank. The main production, sales and distribution area of the business is located in Bahirdar
town.

Startup summary
License and permits................................300

Salary of sales Personnel……....................800

Salary of janitors ….................................600

The Salary of guards..................................500

Salary of bakers…..................................1500

Supplies…………......................................5000

Rent…………...........................................1500

Utility………………….…………………………….....140

Advertisement…...................................1500

Total start up expense …………………………………….11840

Assets

Current asset

Cash………………………………………………….…33560

Other current asset……………………………..1000

Total current asset………………………….....34,560

Long term asset

Long term assets…...............................15000

Total long term assets………………...........15000

Total asset…………………….............................................................49,560

Total requirement...............................................................61,400
 4
DESCRIPTION OF THE PRODUCT
The business wants to produce breadscookies and cakes with different size and shape. There will
be breads with circle, oval, and with other different shapes and their size will be measured in
terms of gram. At the same time cookies will have different size like star, circle, rectangle, and
other animals (like cat, cow, sheep…) and fun shapes that are designed with the aim of attracting
the impression of children. The following inputs will be used in order to produce breads, Cookies
and cakes.
 Milk cream
 Wheat-flour
 Water
 Salt
 Yeast
 Oil
 Sugar
Our product differ from other similar products in this region first by its quality, it will be
produced from best raw material with new technology. The bakery provides freshly prepared
bakery and pastry product at all times during the business operation. Six to eight moderate
batches of bakery products are prepared during the day to assure fresh baked goods are always
available

5
MARKET ANALYSIS
Environmental and Industrial Analysis
We will put our business in a proper consideration context first by analyzing the business
environment. It is to mean that environmental factors which are basic and important determinants
of the business operation must be assessed. These factors include. Cultural, Economical, legal &
technological.
And regulations of the government and abstain from any activity which is against the well Being
of local residents around where it is located the government and society at large.

COMPETITIVE ANALYSIS
In injibara town there are a number of bakeries and pastries producing breads, cakes and biscuit
but not identical with the products of Victory bakery uses some additions spices and ingredients
indifferent with others. Competition in the local area is somewhat sparse and does not provide
newly the level of product quality and product variety as Victory bakery. Local customers are
looking for fair price and quality products in relaxing atmosphere. They desire a unique, classy
experience.

Technological survey competitors make fresh bread, sweet cookies and related products
available in the most parts of the region. Additionally our competitors have a capacity to produce
in high quantity. They try to access their products to their final customers by using their own
retail shops and by providing transportation service to address to their final customers. This leads
them to have comparative recognition from their customers. Some competitors’ row materials
are supplied from their own stock. Like, flour on the top of this they are well organized and more
experienced in the industry. In spite of these, they have some drawbacks among all. Even if they
are capable of producing products in high quantity but products are with low quality.

Additionally they deliver their products to the customers with high price. More over their
products do not consider the age groups of the customers. The competitors’ strategy is coverin
the demand of the residents of the city by considering mass productivity. Thecompetitors are not
that match successful, because of high price and inability of meeting their different market
segment. That is why we are engaged in this business.
TARGET MARKET
Our target customers are all the residents of injibara town, injibara university , restaurant, and
hotel. These Residents consume the majority of the company’s outputs. The target also includes
children and adult customers. They are different in preference so that to meet its customers’
needs based on their preference.

Market Segmentation
Our company practice market segmentation recognizes that buyers differ in their needs,
perception and buying behaviors. Hence our company tries to isolate the broad segments based
on demographic segmentation and behavioral segmentation.

Demographic Segmentation
There are a number of consumers in the market, so as to meet the demand of these customers,
our company segments the whole users of its products into homogeneous groups on their
demographic variables specially based on their age. For example kids are eager of consuming
sweet cookies. They will compromise the higher percentage of cookies sales. On the other hand
adults want to consume breads other than sweet cookies. Therefore the company will treat those
target consumers separately.

. Behavioral Segmentation
Our company focuses on usage rate that is heavy users who are purchasing my products
frequently. Heavy users of the product are children so my company wants to meet its customers
need. This will establish a highly consistence revenue base to insure stability of the busiess

7
MARKETING PLAN
Victorybakery marketing plan is accessing its final products to final customers, and the business
decide to offer products in line with its customers’ preference and the price will be determined
by the target customers’ needs and wants. In addition to this the aim of the company to insure,
understand, create, communicate and deliver customer value and satisfaction is at the very heart
of modern marketing thinking and practice. The essential requirement of new market is that they
must satisfy the need of the customers.

Marketing mix

Pricing
Price is a key factor which determines the attraction and shifting of the customers towards the
product. Making the price high causes for shifting of customers to the product of the
competitors.Makingthe price low causes shifting of customers towards our company. So to be
competitive in the market our company settles the lower price by producing a large amount of
quality products. This helps to the company to cover all the costs of production and to make high
profit.

Advertisement
Our company will create awareness about our products and helps our customers to have some
known how about:
 What type of product producing
 What type of ingredients
 About product size
 About the place where the production area located.
 About product quality
In order to advertise our product we will use the following ways:
 Exiting and impressive land mark
 Disseminating business paper (brushers)
  Stamping the brand name of the company on the package of the product
Using movable shops

SALES FORCAST

Unit sales Meskerem Tikimt Hidar

Bread………………..………………...6000..………………...7200………………4200

Sweet cookies……………………….4000…………………3800……………….9800

Others………....………………………..0………………………..0…………………….0

Total unit sales…………………….10000…………………11000……………14000

Unit prices

Bread…………….......…………….…3…………………….…….3……………………..3

Sweet cookies…………………………3………………………..3…………………....3

0thers………………………………..…0………………….……….0...…………………0

Sales

Bread…………………………………18000…………………...21600…………......12600

Biscuit……………………………...12000……………………….11400…………….29400

Other………………………..………….0…………………………...0……………………......0

Total sales………………………….20000…………………….22000……………....28000

Direct unit cost

Bread………………………...............1………………………..1……………………….1
Biscuits……….………………………..1…………………….....1……………….....……1

Others……………….…………………0…………………………..0………........……….0

Direct cost of sales

Bread…………………………………..6000………………….7200…………....……4200

Biscuits………………………...........4000…………………..3800……………....…9800

Others…………………………………….0………………………..0……………....……….0

Total direct cost of sales…………....10000………………...11000…………….....14000

MANAGMENT TEAM
The partnership is well organized and has various professional partners from the same field. The
members are listed below with their educational back ground and work experience.
N o . Neme Educational back ground Work guidance
1 Kasahun girma Under graduate in menegimet Manager
2 Kidist abewa Under graduate in accounting and finance Accountant
3 Keleme yeshiwas Under graduate in Economics Economist
4 Joseph mekonin Uder graguate Merketing menager
marketing menegimet
5 Kenubish mihratie Assistant Manager
Uder graguate megimet
 6 Keder aman Uder graduate in Baker
bekary
7 Assistant
Helan getachew Under graduate in merketing
marketing manager
8 Uder graduate bakery Baker
Kenani chali

9 Keritu bera Uder graduate bakery baker

1 0 Kishu gebayew Uder graduwet bekry baker

11. OPERATIONAL PLAN

11.1. Production Plan
Our company will focus on to produce bread and sweet cookies which are different in customers’
preference, quantity, ingredients, spices and others.
11.1.1. Production Process
The basic ingredients of leavened bread are flour (usually wheat), salt, yeast and water. Other
ingredients can be added to alter the flavor, appearance and keeping quality the bread. Fat or oil
can be added to improve the flavor and help to keep the bread fresh for longer. Milk can be used
in combination with water to make bread with softer texture. Savory ingredients such as onion
tomato cheese or harps and sweet ingredients such as sugar cinnamon and bride fruits can all be
added to basic dough to make a range of products. A combination of different flours such as rye,
cassava, sorghum, millet or maize can be mixed with the wheat flour in different proportions to
produce arrange of different bread. At least 85% wheat flour must be used in leavened breads to
allow the bread to raise. Unleavened breads are made from many different type of flour
depending up on what is locally available. Salt and water are added to the flour, but no yeast is
used. The flour and water are mixed and needed to give smooth dough that is baked into crisp
flat bread.
11.1.2. Production Cost
In the company the presupposed costs which are going to be incurred in the first month of the
operation. The costs are listed as follow

 Salary for sales personnel

 Salary for janitors
 Salary for guard
 Salary for bakers
 Rent building
 Supplies
 Maintenance
 License and permits
 Cash register
 Purchase of equipment
 Bill of electricity
 Other expenses

12. HUMAN RESOURCE (STAFF) MANAGEMENT

The man power composition of the business is going to be 15 peoples on starting phase, among
which five are skilled man power and the rest is semi-skilled. This management and staff profile
shows it is more than enough to handle customers and to run the business successfully. Based on
the above team members, the business hired both skilled and semi-skilled employees in
permanent and temporary basis to run the business. The management team also strongly believes
that the success of a business will depend on ability, qualification, experience and hardworking
of its staff members so that the team is wise in selecting their own partners with the objective of
the right person at the right position.

12.1. Salaries and Benefits of Employees

Salaries of permanent workers will be paid monthly and salaries of per time workers will be
payable regarding with the length of time they engaged in work. Similarly if workers are
engaged for short time, the company will pay low amount of salaries, when employees engaged
for long period of time, they will get fair salaries and will be motivated by some incentives. On
the other hand if employees have not good performance in the work place, our company will not
pay some other Incentives and allowances

13. ACTION PLAN

The bakery industry in Ethiopia has recently experienced rapid growth. Due to the increment of
supplementary goods, people prefer to eat bread. Unity bakery wants to establish a large regular
customer base, and will therefore concentrate its business and marketing on local residents,
which will be the dominant target market. This will establish high consistence revenue base to
insure stability of the business. In addition passengers’ traffic is expected to comprise
approximately 31.5% of the total revenue.

FINANCIAL PLAN
Victory bakery expects to raise 50,000 birr its own capital and borrow 20000 birr guaranteed by
Commercial bank of Ethiopia five years loan. This provides the bulk of the current financing required.
Victory bakery expects to raise 50000 birr from each of owners (5000birr*10=50000birr), and it will
borrow 20000 birr guaranteed by Commercial bank of Ethiopia as 5 years loan. This provides sufficient
fund to start the business. Victory bakery expects to sale 30000birr in the first month, in the Second
month 33000birr and 38000birr in the third month of the plan. Victory bakery should break even by the
second month of the operation as it steadily increases its sales. Profit expected to be approximately
(260), 830 and 1024 for the first, the second and the third month Operation respectively

Equipment and Machinery

Victory bakery needs the following equipment’s and machineries to carry out the proposed plans of
production

 Mixer
 Cake display
 Baking cup /cake box for bakery/
 Bakery cart
 Bakery oven
  Stove
 Cash register

14.1.1. Labor Equipment

Our company incurred the following labor equipment like;

 Uniform for all employees

 Glove for janitors
 Pistol and uniform for guard

14.1.2. Supplies
Inputs of our company production are supplied from many suppliers. These are;-

 Wheat Flour from addis abeba

 Sugar from retailer
 Milk from household
 Oil from retailers
 Yeast from retailers
 Baking powder from Tadese

14.2. Startup Materials and Building

The business will be start its operation by renting a building and needs the following materials

 Mixer
 Bakery oven
 Stove
 Baking cup/cake box for baking/
 Bakery cart
 Cake display
 Cash register
14.3. Break Even Analysis
Victory bakery break even analysis is based on the average of the third month figure for total
sales by unit and by operating expenses. These is presented as per unit revenue, per unit cost
and fixed cost. These conservative assumptions make for a more Accurate estimate of real risk.
Victory bakery should breakeven point at the second month of its operations it steadily increase
its sale.

14.4. Capital (Manufacturing) Budget

Before preparing Performa income statement, it is required to prepare capital (manufacturing)
budget and operating budget.

MeskermTikimtHidar

Projected sales in units………..........12000……………….14000………………18000

Desired ending inventory……...........1000………………3000………………...2000

Cost of goods available for sale.......13000…………..17000……………...20000

Beginning inventory…………................. (0)………......... (1000)………………. (3000)

Total production required..................13000……..........16000………….….17000

(Capital budget)-it is assumed that average selling price is 3 birr per unit After setting of capital
budget let as prepare operating expense budget

Salary of sales Meskerm Tikimt Hidar

Personnel……........................800………………800………………….1200

Salary of janitors …...............600….…………..600………………….600

Salary of guards.....................500……………...500.…………….....500

Salary of bakers….................1500…............1500…….…………..2000

Supplies…………....................5000….............5000…………..........6000
Rent…………...........................1500.…………....1500………………...2000

Utility…………………................140……….……………140…..………...…..160

Depreciation………................1000……..….......1000……………......1000

Advertisement….................1500……………….1500……………….....1500

License and permits...............300………………...300………….....……440

Total operating expenses.....19340………..…..19340……....……....23500

14.5. Performa Income Statement

MeskeremTikimtHidar

SALES…………………………………. 36000………………….42000 …………… 54000

less-Cost of goods sold…......(8000)…………......…..(9000)…………........(12000)

Gross profit………….................28000…………............33000………….….…42000

Less operating expense……….(19340)………….....….(19340)…............…..(23500)

Net income before tax…………8660……………....… 13660………............18500

Tax(40%)......…………………...(3464)………..….....…(5464)…......…...........(7400)

Net income…………………….…8196…………………....5196…………..............11100

. Performa cash flow statement

MeskermTikimtHidar

Cash receipts ……………....................................32400…….....................41400……………………….....52800

Additional cash receipts

Sales tax, VAT, HST/GST received.....................….0................................0..................................0

New current borrowing……………..........................0………………….…............0………………….………………..0

New other liabilities (interest fees).....................0………….......................0………..........................0

Sales of other current asset…………………………..…...0……...........................0………………………............0

Sales of long term asset………………………………….....0…………......................0…………………….………......0

New investment received…………………………………..0………………….…...........0…………….……………….....0

Subtotal cash received……................................32400…………..……….….41400…………………………..…52800

Cash Disbursement

Operating expense…………………………….………......19340…………….………..19340………….............….. 23500

Cost of goods sold .….………………....………………....8000…………………….….9000..............................12000

Bill payment……………….……...…………………………..….0………………………………..0…………………….…………. 0

Total spent on operation………………………………....27340………………………28340…………………………...35500

Sales of tax, VAT, HST/GST paid out…………………...0..……………………….……0…………………………….…....0

Principal payment of current borrowing…………....0.....…………………….…...0……………………...............0

Other liabilities principal payment………………….....0……….....................…0………….........................0

Long term liabilities principal payment……………….0….....……………..……....0………………....................0

Purchase of other current assets…………………….….0……………………....….….0……………………...............0

Purchase of long term asset…………………………….1500………………………….1000………………………........1400

Dividends……….…………………………………………..……0……....……………….…......0……………………………….....0

Subtotal cash spent………………........................28840…………………….….…29340…………………………....36900

Net cash flow…………………….……………………..……3560……...................…..8460………………................11700

Beginning cash………………...............................30000………………………....33560…...........................45260

Cash balance……………………………………………......35560………………….….….42020…………...................46430

The above data is computed on the following bases:

A-from the total sales of each month 90% of sales is collected in the first month and the remaining 10%
will be collected in the subsequent periods. That means; cash collection on the sales of
May=36000birr*90%=32400 Cash collection in June=36000*10 %( May) +42000*90 % (JUNE) =41400
Cash collection in July=42000*10 %( June) +54000*90 %( July) =52800

B-from the total cost of goods sold of each month80%is paid in the current month and the
remaining20%is to be paid in the subsequent periods. That means; cash paid during
May=10000*80%=8000 Cash paid on June=19340*20 %( May) +19340*80%=9000 Cash paid on
July=19340*20 %( June) +19340*80%=12000

14.7. Balance Sheet

May June July

Assets

Current asset

Cash……………………………33560…………….42020………………46400

Other current asset……………..1000…………….....2000…………………5560

Total current asset……………...34560………………44020………………..33260

Long term asset

Long term assets……...………..15000………..12000……………….12000

Accumulated depreciation…..…1000………………2000……………….3000

Total long term assets……....….14000……………..10000………………..9000

Total asset……………………...48560……………..54020……………….41720

14.8. Liabilities and Capital

Liabilities

Current liabilities

Account payable………………….20,000……………..20,000………………….20,000
Other current liabilities…….…12,000………………12,000…………..……..12,000

Total current liabilities ……....32,000…………..…32,000…………….….…32,000

Capital ………..…….………………..16,560……………..22,020………………....31,720

Net worth...........……………..…48,560……………...54,020……………....…41,720