main body of business plan

7/31/2019 Main Body of Business Plan

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1. Executive summary

NN General Trading is a business providing Internet, photocopying, scanning, binding, and

writing services and quality stationary materials at acceptable price/value. We will also maintain

a friendly, fair, and creative work environment, which respects diversity, ideas, and hard work.

Our Mission: To supply internet services with door to door special offer and

stationary Materials that enhance our clients need of information and quality

stationary materials.

Our Motto: Information is everything!

The timing is right for this new venture. Searching for more than a month for the perfect

location, one was finally found. The demand for information, as well as the ambition of the

owners to start their own such general trading, and the availability of highly specialized

professionals of management, finance and procurement to support the business, has made this

business one of great potential.

The talent of the owners and their experience in management, accounting and purchasing and

their ability of exploring new ideas from the experience they have, has what it takes to make this

venture an extremely successful one. We expect our growing reputation to lead to many new

clients to support our anticipated growth.

To achieve our objectives, our business is seeking Birr 140,000 in additional loan financing. This

loan will be paid from the cash flow of the business, and will be collateralized by the asset of the

business, and backed by the character, experience, and personal guarantees of the owners.

Highlights

0

500,000

1,000,000

1,500,000

2012 2013 2014

Sales

Gross margin

Net profit


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Key to success

The key to success in our business are:

Location: providing an easily accessible location for customers, Environment: providing an environment conducive to giving relaxing services and

providing the materials,

Convenience: offering clients a wide range of goods and services in one setting, andextended business hours.

Reputation: reputation of the owners as providing superior services and having excellentmanagement and professional experience.

2. Company Summery

NN general trading will, upon commencement of operation, sell a wide range of internet services

and stationary materials. We will provide quality internet services on shop and door to door

using broad band and 1x connections, photocopying, scanning, binding, printing and writing

services and offering quality stationary materials, along with the top internet and stationary

material providers. What will set NN general trading apart from the competition is our

commitment to providing all of those goods and services in one convenient location with that of

special door to door offer of internet service.

2.1 start up Summary

The owners decide to start the business from the ground up. The start-up capital will be used for

the design, leasehold improvements, and equipment of the whole business.

Leasehold improvements will amount approximately $ 40,000, and different equipments for the

whole business will costs about $ 100,000.


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Table-1: Start-up

Start-up

Requirements

Start-up Expense

Rent deposit 30,000

Others 0

Total start up expense 30,000

Start-up Assets needed

Cash balance on starting Date 6,000

Other current Assets 75,000

Total current Assets 81,000

Long term Assets 140,000

Total Assets 221,000

Total Requirements 251,000

Funding

Investment

Investor-1 20,000

Investor-2 20,000

Investor-3 20,000

Investor-4 20,000

Investor-5 20,000

Total Investment 100,000

Current liabilities

Accounts payable 0

Current borrowing 0

Other current liabilities 0

Total Current liabilities 0

Long term liabilities 151,000

Total liabilities 151,000

Loss at start up 30,000

Total Capital 70,000

Total Capital and liabilities 221,000


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Start-up

2.2 Company Location and Facilities

This general trading will be located in Addis Ababa at Balderass condominium houses. The

business will utilize 99 meter square. The location is strategically situated on one of the more

populated condominium houses in Addis Ababa. It is a high profile area, with easy access from

all parts of the city. There are more than 2,500 households and about 65% are considered as a

middle class who seeks our service.

3. Goods and services

NN general trading is an upscale goods and services provider business. We will offer high speed

internet service with special offer of door to door internet services on hourly, daily, weekly and

monthly bases and quality stationary materials that includes:

High speed broad band internet service with reasonable price and that of special offer, Writing services,

Photocopying, Scanning, Binding, Printing, and Different quality stationary materials

0

50,000

100,000

150,000

200,000

250,000

Expenses Assets Investment Loans


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3.1 Competitive Comparison

NN General trading wants to set itself apart from other similar businesses that may offer the

goods or service parts only. Having good managerial and professional skills, the owners realized,

from surveying different clients, that they desire all of the services that we are proposing, but

they remain frustrated because they must get information accessing internet at one place, and for

printing, copying, binding or scanning at another. Although the focus of NN General trading is

providing quality broad band internet service and stationary materials, we do wish to offer our

clients the convenience of these other services.

3.2 Benefits and Features:

Offering of genuine stationary materials Reasonable & fair price with the possibilities of discounts based on different assumptions Different internet connection systems ( EVDO-4GB, 1X and wireless connections) All in one service (internet, printing, binding, scanning, photocopy and offering of

stationary materials) etc

Special offering of internet service (door to door service, service offering based on hours,days, weeks and months using laptops)

4. Marketing Strategy

Our marketing strategy is a simple one: satisfied clients are our best marketing tool. When a

client leaves our business with a new look, he or she broadcasting our name and quality to the

public. Most of our clients will be referrals from existing clients.

No major advertizing campaigns are anticipated. Our research has shown that word of mouth is

the best advertizing for this type of business. We will, however, run specials throughout the

week. We will also ask clients for referrals, and reward them with discounted or free services

depending on the number of clients they bring. We will also offer discounts to the new clients

who have been referred.


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5. Management summary

NN General trading will be organized and managed in a creative and innovative fashion to

generate very high level of customer satisfaction, and create a working climate conducive to high

degree of personal development and economic satisfaction for employees.

Training classes to help improve employee knowledge and skills will be conducted on a regular

basis. As the business grows, the company will consider offering an employee benefit package to

include health and vacation benefits for everyone.

5.1 Management Team

Ato. Belaineh Tamire, owner, he has bachelors degree in business administration and he has

worked as a supply chain manager for the last 4 years and as a sales expert for 5 years. He has

extensive experience managing people. He loves dealing with people, and has the drive,

ambition, and discipline to manage the business and its employees.

Ato. Haftu W/tekile, owner, he has bachelors degree in accounting from Addis Ababa

University. He has worked as an accountant for 4 years and as finance D/manager for 3 years. He

is the owner of Dire Stationary materials in Dire Dawa.

W/r. Azeb Wolde, owner, she has bachelors degree in information technology from Addis

Ababa University. She has worked as an IT expert for 3 years and as IT manager for 2years.

5.2 personnel plan

The personnel plan calls for a receptionist who will greet customers and receive payments for

services and goods. There will be two sales persons and two guards. All but the receptionist will

be contract workers and the sales persons will be paid a sliding commission scale based on the

revenue created.


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Table-2:Personnel plan

2012 2013 2014

Reception (1x) 12000 14400 18000

Sales person(2x) 28800 31200 33600

clerk (2x) 12000 12000 16800

Other people 20,000 24,000 26,500

Total 72,800 81,600 94,900

6. Financial plan

Having more experienced management group and talented financial, sales and receptionist (with

good customer handling experience) professionals, our goal is to be a profitable business in the

first few months (maximum of six months). Enclosed, here under are the financials with different

assumptions.

6.1 Break-even Analysis

The break-even analysis shows that NN General trading has a good balance of fixed costs and

sufficient sales strength to remain healthy. Our break-even point shows only Birr 351,800 sales

level on a year.


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6.1 Revenue (Sales) forecast (3 years) Table-4:

Year-1 (2012)Year-2 (2013) Year-3 (2014)

- from service300,000 376,000 648,000

-From stationary materials600,000

624,000 702,000

Total900,000 1,000,000

1,350,000

Cost Description Fixed Costs ($) Variable cost

Variable cost (cost of goods sold) 360,000Salary Expense 72,800

Sales & marketing & other Expense 50,000

Rent Expense 60,000

Depreciation Expense 14,000

Supplies Expense 13,000

Others 40,000

Principal portion of debt payment 28,000

Total Expenses277800

360,000

Breakeven Sales level = 637,800


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Three year Revenue Forecast

6.2 Profit and loss projection

We expect income to hit Birr 900,000 at the end of the first year of business. It should increase tomore than Birr 1,350,000 by the third year. Second year revenue is anticipated with the addition

offive laptop computers.

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

year-1 year-2 year-3


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Table-5: Profit and loss projection

Year-1

(2012)

Year -2

(2013)

Year -3

(2014)

Revenue (Sales)

sales - internet service300,000 376,000 648,000

Sales - stationary materials600,000

624,000 702,000

Total revenue 900,000 1,000,000 1,350,000

Cost of Goods sold (stationary materials) 360,000 374,400 421,200

Gross profit on sales 540,000 625,600 928,800

Operating Expense:

Salary Expense 72,800 81,600 94,900

Sales & marketing & other Expense 50,000 50,000 50,000

Rent Expense 60,000 60,000 60,000

Depreciation Expense 14,000 20,500 22,500

Supplies Expense 13,000 15,000 17,500

Others 40,000 45,000 50,000

Total Operating Expense 249,800 272,100 294,900

Profit Before Tax 290,200 353,500 633,900

Taxes (30%) 87,060 106,050 190,170

Net profit 203,140 247,450 443,730


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Total Operating Expense

Net Profit

6.3 Pro forma Cash Flows (3-years)

We expect to manage cash flow over the next three years simply by the growth of the cash flow

of the business. The business will generate more than enough cash flow to cover all of its

expenses.

220,000

230,000

240,000

250,000

260,000

270,000

280,000

290,000

300,000


0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000



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Table-5:Pro forma Cash Flows (3-years)

Pro forma Cash Flows

Year-1 Year-2 Year-3

Cash ReceivedCash from Operation

Cash sales 800,000 510,000 730,000

Cash from Receivables 100,000 490,000 620,000

Subtotal Cash from Operations 900,000 1,000,000 1,350,000

Additional Cash Received

New Borrowing 500,000 0 0

New Other Liabilities 0 0 0

New Long-term 0 0 0

Sales of Other Current asset 0 0 0

Sales of long term Assets 0 0 0

New Investment Received 0 0 0

Subtotal cash received 1,400,000 1,000,000 1,350,000

Expenditure:

Ex enditure from o eration:Personnel 72,800 81,600 94,900

Cash Purchase 360,000 374,400 421,200

Rent 60,000 60,000 60,000

Purchase of supplies 13,000 15,000 17,500

For sales & marketing & other 50,000 50,000 50,000

Others 40,000 45,000 50,000

Consulting services 0 0 0

Promotion 0 0 0

Subtotal total spent on operation 595,800 626,000 693,600

Additional Cash spent:

Taxes 87,060 108,000 192,720

Long-term liabilities and principal payment 28,000 34,500 36,500

Purchase of Long-term Asset 65,000 20,000 0

Dividends 0 0 0

Subtotal Cash Spent 775,860 788,500 922,820

NET CASH FLOW 624,140 211,500 427,180

CASH BALANCE 630,140 841,640 1,268,820


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6.4 Projected Balance sheet:

As shown in the balance sheet, we expect a healthy growth in net worth, from approximately Birr

273,140 in year one to Birr 964,320 by the end of year three.

Table-6:Projected Balance sheet

Balance Sheet (Projected)

Year-1 (2012) Year-2 (2013) Year-3 (2014)

Assets:

Current Assets:

Cash in Bank 630,140 841,640 1,268,820

Inventory 62,000 63,950 64,000

Accounts receivable 0

Supplies 13,000 15,000 17,500

Total Current Assets 705,140 920,590 1,350,320

Fixed Assets

Computers 100,000 120,000 120,000

Accumulated Depreciation/computers -10,00 -22,000 -34,000

Photocopy, printers & scanners machines 65,000 65,000 65,000

Accumulated Depreciation/printers & 0 -6,500 -13,000

Furniture 40,000 40,000 40,000

Accumulated Depreciation/furniture -4,000 -8000 -12,000

Total Fixed Assets 191,000 188,500 166,000

TOTAL ASSETS 896,140 1,109,090 1,516,320

Liabilities and Equity

Current Liabilities

Accounts Payable 0

Long term- liability

Bank loans payable 623,000 588,500 552,000

Total Liabilities 623,000 588,500 552,000

Owners Equity

Retained Earnings 70,000 273,140 520,590

Earnings 203,140 247,450 443,730

Total Owners Equity 273,140 520,590 964,320

Total Liabilities and Equity 896,140 1,109,090 1,516,320

Net worth 273,140 520,590 964,320


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Total Assets

Net Worth

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200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

year - 1 year -2 year -3

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100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

year - 1 year - 2 year - 3

main body of business plan

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