COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ECONOMICS

BUSINESS PLAN: QUALITY EGG PRODUCTION ASSOCIATION

IN 2010
GROUP: 12 SEC. 3
GROUP MEMBER

NAME ID.NO
1. Rigebemariam Brhanu……………………RBE/03054/08
2. Solomon Yibelu……………………………….RBE/03311/08
3. Redi Kemal………………………………………RBE/03250/08
4. Nega Sema……………………………………….RBE/03230/08

Submitted to Instr. Tewodros

Submission date 22/03/2010 E.C.

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Table of content page
1. EXECUTIVE SUMMARY……………………………………..… 2
1.1. Key success………………………………………………….3
2. BUSINESS CONCEPT……………………………………………………..3
2.1. Business description………………………………………………3
2.2. Objective of the business………………………………………….5
2.2.1. General objective………………………………………………..5
2.2.2. Specific objective………………………………………………5
2.2.3. Vision of the business……………………………………………5
2.2.4. Mission of the business…………………………………………..5
2.2.5. Goals of the business……………………………………………5
2.2.5.1. Short term goals ……………………………………….6
2.2.5.2. Long term goals ……………………………………….6
3. SERVICE LINE ……………………………………………………………6
4. MARKET RESEARCH AND Analysis………………………….7
4.1. Demand and supply ……………………………………………..7

5. MARKETING PLAN………………………………………………...9
5.1. Pricing strategy……………………………………………………10
5.2. Distribution strategy……………………………………………….10

5.3. Promotion strategy …………………………………………………10

5.4. Customer analysis …………………………………………………11
5.5. Competitors………………………………………………………..11
5.6. SWOT analysis…………………………………………………11
6. ORGANIZATIONAL PLAN………………………………………….12
6.1. legal form of owner ship …………………………………….12
7. MANUFACTURING AND OPERATIONPLAN…………………………12
8. FUNDING REQUEST…………………………………………………14
9. FINANCIAL PLAN……………………………………………….….……14
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10.APPENDIX……………………………………………………………….18

1. EXECUTIVE SUMMARY

Our business in egg manufacturing partners, which established by ten

partners in November 9/02/2010 E.C. in Adigrat town at 04 Keble market

center. Those who were in related business around Adigrat town. Since

November 9/02/2010, we plan to emerge and operate as one by going br.150,

000 worse assets together. The business offer egg by least cost [2br and 75

cents] and are near to the market. We plan to work eleven hours and six days in

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a week [12 hour and 6 day per week].The place is in Adigrat kebele 04 around

Mobile center by renting garden with 100 square meter. The main focus of our

partnership manufacturing enterprise is getting raw material and making

products that are essential for users and generate profit from the production.

The name and address of our subcontractor is Nigus Tamirat hotel. The

marketing plan is a vital role in egg producer and distributor partner

successful. Our business group followed low cost strategy. Our weakness in the

business is door-to-door selling. The manager of the business organization is

Mr. Solomon Yibelu. The risk of our pjrrowed 150,000 from Dashen bank as of

5 year long term loan with 13% interest. Our partners have a deposit of br.150,

000 from the Dashen bank. Our partners almost known by all part of Adigrat.

1.1. Key success

1. It uses various types of promotional to attract other customer

2. Continuous mentoring of our service and expense

3. It gives service for long hour

4. Satisfying customer interest by providing service

2. BUSINESS CONCEPT

2.1. Business Description

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 Our business is egg manufacturing partners, which established by ten

partners in November 9/02/2010 in Adigrat town at Mobile center. Those who

were in related business around Adigrat town. here the reason why we merge

our business in to one that before we have lower capacity to meet all demand

and have poor financial ability to invest and to expand our business, and we

were self competitor any rather than fulfilling customer satisfaction so since

November 9/02/2010 we plan to merge and operate as one by going 300,000

birr worth asset together.

Our business were sets in Adigrat town at Mobile center and we plan to satisfy

customer around Adigrat town for two consecutive years .Since Adigrat is a big

town there are many hotel and restaurants , so we plan to supply and satisfy

customer around Adigrat town which includes begging and already established

hotels, restaurants and cafés around Adigrat.

In Adigrat town there is no enough producer ,so there is no more

competitor ,for more to be sure there is one governmental organization and no

more than four private company ,that are produce .but there is many retailer

,that sold and distribute by purchasing egg from produce out of Adigrat town

,so this competitors are first limited in number in comparison with the number

of the user . Secondly they incur additional expense special retailer, like

transportation. Thirdly they does not have adequate capacity to meet all the

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 market demand, even those they have high linkage of market, so they does not

affect our business.

Since the business is established with the aim of aiding the limited supplies

and minimizing price, which increased by competition we got good acceptance

from the concerned body. And here there may be equation like 'why our

business will be successful? ‘Or 'why customer will purchase our egg?', then we

answer this question by comparing our competitor with our offering.

Our company issue of winning our competitor. Because as we know our

competitor purchases the egg from out of Adigrat town, they are not accessible

and customer does not get as they went, as a realest they have to tall there order

before a day. Were as individual householders are fired by higher price of

retailers. But our businesses are accessible and have lesser price, because it has

economy of Scale.

2.2. OBJECTIVE OF THE BUSINESS

2.2.1 General Objective

The general objectives of our business is maximizing supply of quality eggs

2.2.2 Specific Objectives

 Satisfying customers consumption requirement

 To minimize customer transportation cost

 To purchase good quality of eggs

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2.2.3 Vision of the business

To solve shortage of eggs service as well as to promote our business

internationally by providing a good quality of eggs.

2.2.4 Mission of the business

 Providing qualitative style living style to its workers

 Supplying high quality of eggs which is good for health strength suitable for

bodies

 Providing entertainment service for customers

2.2.5 Goals of the business

2.2.5.1 Short term goals

 To provide work for all member

 To create job opportunity for local people and promoting our business

2.2.5.2 Long term goals

 To export egg to foreign country

 To increase the number of employee

 To own wide egg production

3. Service or product line

Production business plan is if& only if necessary for manufacturing products. The

main focus of our partnership manufacturing enterprise is getting raw material

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&making products that are essential for users and generate profit from the

production. We are responsible for all activities of the manufacturing operations.

Because all the manufacturing Operations performed by the members of

partnership ,the partnership is established by the interested groups .As a quality

egg producers we need contractors /subcontractors .the name &address of our

subcontractors’ are Nigus Tamirat hotel, Time cafe and restaurant are the main

subcontractors& receiver of our products/eggs. The addresses of our subcontractors

are in the Adigrat town. The reasons behind the selection of these subcontractors

are the ability to buy large amount of products, based on transportation cost that is

subcontractor’s location somewhat near to our manufacturing area, they bought on

cash& they bought our eggs permanently. The outcome of our manufacturing entity

is eggs. The equipment’s needs to immediate production purposes are egg’s lay

equipment, egg’s store equipment, egg’s safety equipment that is keeps eggs in

normal condition for a specific period of time, office equipment’s etc. Cost which

is incurred in quality egg producers’ association are listed & explained more deeply

in the financial statements because financial statements are given priority for costs

expenses in deeply. Generally our egg manufacturing partnership enterprise

activities are so many in numbers. From the main and major activities are keep

societies health by providing healthy egg, build up the enterprise capacities,

generate adequate profit in the long term ,to bee competitor, expands area of

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production and to be continued its operation in the normal condition.

4. Market research and analysis

4.1. Demand and Supply analysis

Most of the time demand and supply do not balance each other to balance supply

with demand we must do continuous assessment on the number of our customer,

we must identify the primary need of our customer

As we have seen earlier our quality egg producers association produce

homogeneous eggs to the society or people. Our background of business

experience is helpful for our business. This means that produce and sell eggs to the

people is the most profitable business .Because most people need eggs for food

consumption and resell purpose. Our business experience that produces quality

eggs for the people is the most acceptable business. Selling eggs using low cost

strategy. Our weakness in the business is door-to-door selling. In order to

compensate these business members plans in the future to provide services to the

customers when there are funds using different appropriate cars. In our business

organization the manager is Mr. Solomon Yibelu. He is one of the member and

founder of the business organization. His strength is hard work habit, honesty,

good business skill, punctuality and fair decision. As the same time his weakness

he don’t like meeting with the rest of the business members and he can’t keep

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business organization secrets. The duties of the manager are clearly defined when

the business organization established.

Some of the duties of manager are

-Control all activities that can be done.

-Arrive on time.

-Respect other member’s right.

-coordinate activities of the employee.

-Keep business organizations secrets.

-Meet with the customers when they need eggs and

-Check the organization goals that can be meeting or not.

Our current personal needs are wants to get money. This is the same for the

rest of members. Currently we need salary to buy personal goods that are

appropriate for our life. Our plans for hiring and training personnel’s are given

continuous education to them. That education 100% relegated to business. This

teaching process helps for our business organization in order to be successful. After

we are hiring and training, our personnel deeply know how to work for the

production of eggs, which kinds of methods can be used when they work and so

on. So generally this continuous teaching process for hiring and training personnel

is helpful for our business to be successful.

5. THE MARKETING PLAN

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 The marketing plan is a vital role in egg producer and distributor partner

successful. The critical concern of the partner is the marketing plan and finding of

potential customer /who by large amount of egg money times/.the potential

customer of our partner are new and they live in Adigrat town they also buy large

amount of eggs from our partner for their hotels, supermarket, shops and some of

them distribute to other retailer. The work place of the customer is in Adigrat town

and most of the customer buy large amount of eggs from our partner because of

distribute at lower price than other competitor. It distribute the egg at 2 birr and 75

cents but our competitor distribute the egg at 3 birr and the other reason is the

location of our partner near to Adigrat town then it decreases the transportation

cost, time and energy of the customer to buy the egg and our partner produce high

quality of eggs in a short time and distribute to them.

The partner follows the three ways to meet the company needs and want then

other near competitor like Adigrat town egg distributor and governmental prouder.

Firstly its competitor increase through time to time, then by increasing of the

quality and producing high amount of egg by decreasing cost many competitor

leave the market and money customer come to our company. Secondly the pricing

strategy of the companies, because our company follows list cost rule money

customer come to our business to buy large amount of eggs.

5.1. Pricing strategy

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The basis for our egg production price is the market price and cost benefit analysis,

we can reduce our price in order to attract and get our customers attention as a

result we can increase our profit from large number of customer.

5.2. Distribution strategy

The distribution of the egg production to the customer can be distributed in

different ways like wholesaler, end users, retailers service and direct to the

customer house.

5.3. Promotion strategy

Our we plan to promote our product and business by using media channels such

as;

i. Light board

ii. Local FM radio

iii. Notice

iv. Newspaper

5.4. Customer analysis

Our target customers are

 Adigrat and mobile society

 Adigrat university

5.5. Competitors
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 Some of our direct competitor’s area

 Adigrat town super market and retailers

5.6. SWOT analysis

 Strength

The strength of our competitor is high initial capital and have enough man power

 Weakness

They provide poor quality

 Their services of time is limited

 They do not respect their customer

 Opportunities

 Presence of capital for starting this business

 Presence of adequate man power

 Treating

 Initiated workers

 Proximity to suppliers

6. Organizational plan

6.1 Legal form of ownership

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Quality egg production association providing businesses are a type of business in

the form of partnership, the reason for the selection of this form of business is:

 Profit gained in the first time it established

 Simplicity to establishes the firm

7. Manufacturing and operation plan

Basic equipment needed is:

a. Market

b. Basket

c. Chicken and

d. Hein

Generally the cost of business activity includes:

 Cost for Hein

 Cost for basket

 Cost for transportation

 Cost for license

Assessment of risk

The risk of our partnership affects the normal production and distribution of eggs.

There are money risk which affect the normal operation of the partner among

them; frequently broken down of egg, some hen not lay egg, hazards like hen

disease which kills large amount of hens and other risk related to our partner

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sometimes customer don’t buy large amount of egg because of decrease the

consumption level of individual at the normal condition and the absence of food

which feed to the hen it result to decrease the production of egg and the death of

hens, the other main future anticipate risk of our partner is increase the number

competitor around our partner which may lead to the shift of our customer to their.

Our company have strategically plan for reducing of these risk. Among them;

 Place the egg in safety place.

 Protection of diseases.

 Buying large amount of foods for hens.

 Increase advertisement.

 To decrease the selling price for attracting new customer and to stay

the existing customer.

8. Funding request

Risk of our partnership affects the normal production and distribution of eggs.

We borrowed 150,000 from Dashen bank as of 5 year long term loan with 13%

interest. Our partners have a deposit of br.150, 000 from the Dashen bank

9. FINANCIAL PLAN

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 Key assumptions of financial plan

The venture will start up with total capital of Birr 300,000.

That is equity contribution from ten partners, Birr 15,000 each=150,000

Five year long term loan with 13% interest from Dashn Bank =150,000

Interest will be paid annually, and the principal will be paid at November

9/02/2010

For the first five years we will have two employees with monthly salary

of Birr 1000 each. The ten partners work by shift with monthly payable of

Birr 1,500 for each.

-For each partners and employees, 80 eggs will be given as a bonus annually,

(20 eggs x 4 holidays per year for ten partners and two employees).

-500 egg laying hens will be bought at Birr 80 each. After two, or three years,

we replace the hens with new ones (without additional cost, we will get new

young hens).

Ten homes for hens at Birr 3,600 each will be bought. One home is for fifteen

hens.

-We assume to get 450 eggs per day from 500 hens after two months of

purchase.

-Egg will be sold at Birr 2.80 per egg for 2016, and for the next years, we

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assume price will increase by Birr 0.05 per egg annually.

-food for hens will be bought at Birr 4687.5 annually

-We pay Birr 3,000 monthly for rent of land and office.

-We will buy one office table by 400 birr and four chairs by 100 each (400)

We assume 10 years of useful life for all equipment’s.

-We budget Birr 30,000 for legal issues to start the business.

-We use budget 500 birr for advertising.

QUALITY EGG PRODUCERS ASSOCIATION (QEPA)

INCOME STATEMENT
FOR THE YEAR 2010

REVENUE:-

Sale………………………………………………..451,687.5

EXPENSE:-

Purchase of home………………………………...40,000
Purchase of hen…………………………………36,000
Expense for land rent and office………………….36, 000
Expense for office equipment…………………….800
Food expense for hens……………………………4687.5
Expense for legal issue…………………………...30,000
Advertising expense………………………………500
Salary expense ……………………………………204,000
Total expense……………………………………...351,987.5
NET INCOME………………………………….....99,700

QUALITYEGG PRODUCING ASSOCIATION (QEPA)

BALANCE SHEET
FOR THE YEAR 2010

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ASSET:-

Cash………………………………………………………….187, 200
Home…………………………………………………………40,000
Hen……………………………………………………………36,000
Land…………………………………………………………...36,000
Office equipment………………………………………………800
TOTAL ASSET…………………………………………………300,000

LIABILITY:-

Account payable……………………150,000

CAPITAL:-

Owners’ equity………………………150,000

TOTAL LIABILITY AND EQUITY……………………………300,000

'
QUALIYTY EGG PRODUCERS ASSOCIATION (QEPA)
CASH FLOW STATEMENT
FOR THE YEAR 2010

REVENUE:-

Sale……………………………………..451,687.5

EXPENSE:-

Purchase of home…………………………40,000
Purchase of hen…………………………...36,000
Rent and office expense…………………..36,000
Expense for office equipment…………….800
Food expense for hen …………………….4687.5
Expense for legal issue…………………..30,000
Advertising expense………………………500
Salary expense…………………………….204, 000
TOTAL EXPENSE………………………...351,987.5

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10. APPENDEX
Our partners have a debit of 150,000 f Birr from the dashen bank.

Our partner almost known by all part of Adigrat town.

The partner get source of information from the existing company and from

potential customer.

Government encourages small business then our partner get license from city

administrator.

The partners have legal document about level of capital and the installment place

of our partner.

Initially start the business by renting of house but plan to build at the future.

The partner made contract to by the hen and to sell the egg.

Our partner has ten consultancies because the employ and owner of the partner are

profession of management

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