WOLDIA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF SOCIAL SCIENCE
SMALL BUSINESS AND ENTREPRENEURSHIP GROUP ASSIGNMENT

No Members Of Group Identification

1 DAME DERARA WDU 1303477

2 KELIFA AHMED WDU 1303829

3 SHEWANGIZAW DEJENE WDU 1304167

4 MOHAMMED ABDI WDU 1304016

5 Tebaye Woso RU2764/10

6 Kuwanet Hayile RU2746/10

7 RU2743/10

WOLDIA ,ETHIOPIA
APRIL
Table Of Content
1 Executive Summary...................................................................................................................... 1
1.1 Market Opportunity............................................................................................................. 1
1.2 Reasons for Our Project....................................................................................................... 1
2 General Company Description..................................................................................................... 3
2.1 Project Overview................................................................................................................. 3
2.2 Mission................................................................................................................................ 3
2.3 Vision................................................................................................................................... 3
2.4 Objectives............................................................................................................................ 3
2.5 Promotion............................................................................................................................ 3
2.6 Location............................................................................................................................... 3
2.7 Materials and Tools.............................................................................................................. 4
2.8 Project Challenges............................................................................................................... 4
3 Services......................................................................................................................................... 5
3.1 Importance of The Service................................................................................................... 5
4 Marketing Plan..............................................................................................................................6
4.1 Local Competition............................................................................................................... 6
4.2 The Market Area.................................................................................................................. 6
4.3 Demand Analysis................................................................................................................. 6
4.4 Pricing Strategy................................................................................................................... 7
Table 1: Charge/Price in ETB.................................................................................................... 7
5 Operational Plan........................................................................................................................... 8
5.1 Capacity............................................................................................................................... 8
Table 2: Project Capacity........................................................................................................... 8
Table 3: Average weight of selected cloths................................................................................ 9
5.2 Location of The Project....................................................................................................... 9
5.3 Operation - Washing Process............................................................................................... 9
6 Management and Organization................................................................................................... 10
Table 4: Employees Description.............................................................................................. 10
7 Financial Plan............................................................................................................................. 11
7.1 Start-up Funding................................................................................................................ 11
Table 5: Start-Up Fixed Asset.................................................................................................. 11
Table 6: Other Start-Up Expenses........................................................................................... 12
7.2Initial Capital...................................................................................................................... 13
Table 7: Initial Capital............................................................................................................. 13
7.3 Profit and Loss................................................................................................................... 14
Table 8: Weight Vs Charge/Price............................................................................................. 14
Table 9: Daily, Monthly and Annual Income........................................................................... 14
7.4 Annual Net profit............................................................................................................... 15
 1 Executive Summary
Laundry/washing machine facility is one of the service areas that students and other
university community members would like to get nearby their campuses. Despite its newness and
the various number of problems, Woldia University has not yet availed laundry/washing machine
service to its community members. Laundry/washing machine service is specially required by
the student population of the University who is currently facing various problems in connection
with washing of clothes.
The students have to spend considerable time to wash their clothes, have to wait for some
time to get free washing compartments; have to wash within shabby compartments and dirty
surrounding; and finally end up with unsatisfactory wash quality. This study investigates the
economic and technical feasibility of installing a laundry/washing machine service in the main
campus of Woldia.
The project aims at solving the current problem that students face in washing their clothes
which is crowded, time taking, tiresome, and inefficient. In addition, the project will generate
additional revenue (income) to the University itself or to the credit association of the university
whoever is pursing in the investment activity. The project is located inside the main campus of
the university.
The project is generally friendly with the environment and proper sewerage system will
also be constructed to remove all waste produced in the project. The market survey conducted in
connection with this project has revealed a number of important points. The students are eager to
see a modern washing machine installed in their campus.
1.1 Market Opportunity
Woldia University is one of the universities that have 8000 and above students from those
8000 students approximately half of the students suffer by the reason that the university doesn’t
have enough space for the students to wash their cloths even outside the campus there is no
enough service.
These frequent and serious problems lead or recommend us in order to start the business
in the main campus of Woldia University. We think that our project met or satisfy the campus
members and students where the water supply and space are not enough so that we are proud or
highly hoped by the business.
1.2 Reasons for Our Project
 Laundry business is an easy and convenient business to start.
 It is not capital or management intensive.
 We can start this business right from the campus and grow from there.
 Because of its importance for the university students and other members.
 Because of shortage of laundry spaces.
  Because students are busy by different assignments and projects.so they are
recommended in order to use the service.
These and other main factors lead the project profitable and acceptable in the University.

2 General Company Description

2.1 Project Overview
Our laundry project called MyHat Laundry was found in Woldia University it is formed
and owned by ten (10) shareholders. Our project will provide an efficient and healthy service that
is good in quality and low in cost.
2.2 Mission
 To create an awareness about our project and its benefits for the customers.
2.3 Vision
 To provide strategies and training programs related to our project.
2.4 Objectives
The main objective of this study is to assess and determine the economic feasibility of installing
laundry washing machine service facility in the main campus of Woldia University. The main
campus is selected for the study since it has the highest number of student population compared
to its laundry service.
This business plan will help to answer the following basic questions in connection with this
project.
 The market potential for a laundry or washing machine service in the main Campus of
woldia University.
 The resource or material, technology, and manpower requirements of the project.
 The project capacity required to meet demand satisfactorily.
 The initial investment required for the project and how the business perform financially.
 The impact of changes on the performance of the project i.e., how will the project
perform if it is forced to reduce its price and at the same time if the major cost items
increase.
2.5 Promotion
The promotion of this project is the responsibility of Facility of Social Science and Humanities
management of Woldia University. We also use other methods like:
 Using stencils, banners in the University environment.
 By using announcements and others.
2.6 Location
MyHat laundry or washing machine project is built in Oromia State around the main campus of
Woldia University. The store will be located in the middle of the University and “Hager
Maryam” church. The location of this store is essential for acquiring the target customer since it
is located in the place with competitors around it.
All acquired utility services at the location are available and can be upgraded to the necessary
requirements to provide adequate services for the laundry project.
Laundry facility requires adequate utility service to properly run all machines during peak usage
with the assistance of vendors the utility usage for gas, electric, water and others has been
calculated and the necessary upgrades are included in the startup costs.
2.7 Materials and Tools
Materials needed to start the business:
 Washing machine
 Dryer
 Two pressing irons: steaming iron and ordinary iron
 Two tables: one for washing and the other for ironing
 Shelve (shelf)
 One standing industrial fan
 Spraying can
 Tagging gun (for monitoring purpose)
 Buckets (liquid carrier), brush, hangers, laundry nylon(chemical)
Tools needed for this MyHat laundry

 Laundry hampers.
 Washing bags for washing delicate items.
 A laundry basket of three.
 Drying rack and hanging bar.
 Tumble dryer sheets and tumble dryer balls.
 Sprays and detergents.
 Buckets and sinks.
 Ironing board and iron.
 Surface for folding and for other necessary conditions.
 Sewing supplies for running repairs.

2.8 Project Challenges

Our project may face various problems or challenging situations in creating its brand working
station and attracting customers to wards the service due to:
  The emergence of competitors in the market.
 Lack of budget for the project.
 The cost of acquiring laundry commercial equipment, registration including taxes and
bills.
 Salaries for employees working in our company.

3 Services
The university community in general and students in particular require the arrangement
of various services in university campuses. Library services, dormitory service, laundry or
washing machine service and cafeteria service are the most important services that students
would like to get from their universities.
In the case of Woldia University the students have access to most of the above-
mentioned services except the laundry/washing machine service. Despite its newness and the
increasing number of students enrolled in the university every year, the arrangement of laundry
or washing machine services which is common in most other universities abroad is not yet
available to the University community, particularly to the students of woldia University.
The community supports our mission and the quality provided by our staff will met or
exceeded the expectations of our customers. The additional poundage (a percentage of the total
earrings of a business paid as wages) will enable gains in efficiencies and better pacing of
workflows. The correct batching (a quality of service served at one time) of the washers and
dryers will allow for reduced lost opportunities.
3.1 Importance of The Service
Out of the total number of students found in the main campus of Woldia University 90%
of them will be happy with the installation of this service in the University.
Their reasons include:
 Students would have more time for academic activities.
 Students would be able to wear their clothes for longer time without changing shape and
color.
 The students’ clothes will be clean and hence will give them better looks.
 4 Marketing Plan
4.1 Local Competition
MyHat laundry has a number of a public Laundromat facilities located in the city of those only
few of them has direct competition with our project, but we will be the first or the selected one:
Because of:
 The distance they located; they are far from the campus.
 The punctuality and quality of our service.
 Certified trainers (workers) from top ranked laundry institutions.
 Low cost quality service in comparison to competitors.
 Our commitment and dedication to wards laundry project services.
 Our project’s location that is inside the campus avoids additional transportation cost for
the students.
 It avoids wastage of time for the students.
 It reduces the amount of taxes and other wastages.
4.2 The Market Area
The proposed business mainly targets that of on-campus students of the main campus of
Woldia University. Therefore, the business should be located within the premises of the main
campus or in some other convenient place within the vicinity of the main campus.
Woldia University is one of universities found in Ethiopia there are about 5300 students
who get dormitory services in the main campus and who are expected to be potential customers
of our business. In addition to the students, the administrative and academic staff members also
might be the customers of the services we offer.
4.3 Demand Analysis
The demand for the services of the project comes from the student population of the main
campus, the administrative and support staff members of the university and the academic staff
members of the University.
The total demand of MyHat laundry or washing service facility is affected by a number of factors
including the following:
 The number of times that a student washes his/her clothes.
 The weight of the clothes that a student washes at a time.
 The quality of the service and the efficiency of the service.
 The price charged
4.4 Pricing Strategy
The service is going to be marketed to a student population whose financial capacity &
purchasing power is limited therefore the price to be charged must be affordable. The price may
initially be set at a level which covers operating costs plus some margin for the investor.
A field survey conducted in other universities acknowledge as to how much the janitors,
who give manual wash services to students, charge their customers. The charge varies depending
on the number of customers that a janitor has, the intimacy of the student and the janitor, the type
of cloth and the others.
The following table illustrates the average charges obtained from the survey:
Table 1: Charge/Price in ETB

No Type of Garment Charge/Price

1 Jeans Trousers 3 00
2 Sweaters 1 50
3 T-Shirts 1 50
4 Jackets 3 00
5 Bed Sheets 2 00
7 Girls Dresses 2 00
8 Pajamas 2 00
9 Towels 1 00
10 Shorts 1 00
 5 Operational Plan
5.1 Capacity
The project aims at giving efficient laundry or washing machine service to the
community of university. Therefore, it must have the required capacity to satisfy the huge
potential demand.
The manufacturer and the local distributors of the machines advise that the machines
should be operated for not more than 8-10 hours in a day. Hence, this study assumes that the
laundry facility will operate a normal working day of 8 hours.
The proposed capacity of the project is as shown below.
Table 2: Project Capacity

1 Working hours per shift 8 Hours

2 Number of shifts per day 1 Shift
3 Working days in a year 365 Days
4 Weight of cloths washed and dried per load 20 KGs
5 Hours required per load 45 Minutes
6 Cleaning time per process 15 Minutes
7 Total hour used per load 1 Hour
8 Number of loads per shift in one machine 8 Loads
9 Maximum weight of cloths washed and dried in a day 8*20=160 KGs
10 Total demand expected per day in KG 640 KGs
11 Number of washing machines required to meet demand 4 Units
12 Total weight of cloths washed and dried in year on four machines 233000 KGs
Table 3: Average Weight of Selected Cloths

No Description Average Weight

1 Trouser 0.35
2 Shirts 0.18
3 Sweaters 0.50
4 Jackets 0.75
5 Girls Dresses 0.35
6 Bed Sheets 0.35
7 Pajamas 1.00
8 Towels 0.45
9 Shorts 0.35
Total Average Weight 4.28

5.2 Location of The Project

The service shall be located in a convenient and safe place to all users of the service
given by our project. In addition, sufficient waiting room with reading facilities and others like:
TV, Magazines, and other reading materials to make them feel refreshed must be arranged so that
students who want to stay there until their clothes are washed.
5.3 Operation - Washing Process
Step by step activities performed in My Hat Laundry:

 Receive: The laundry shop receives the clothes of the customers.

 Numbering: The number of the clothes of the customers are measured to determine what
the customer should pay.
 Payment: The customer pays the amount determined and presents the receipt to the
attendants.
 Tagging: The clothes of each customer are tagged with a specific number to facilitate
identification & delivery after washed and dried. The clothes will also be separated as per
color & fabric texture to avoid damages.
 Washing: The clothes will then be washed using powder soap.
 Drying: The washed clothes will be manually transferred to a dryer machine.
 Sorting & Delivery: The clothes are sorted as per the tag number previously assigned
and then delivered to the customer.
6 Management and Organization
The final organizational structure of the proposed project depends on the management
style and control techniques of the investor in the business.
MyHat Laundry is a company owned by 7 shareholders each of them experiencing equal
rights in deciding in the company basis. This company will hire 7 peoples for starting its service
each of them described in the following table.
Table 4: Employees Description

No Position Number of Employee

1 Laundry Service Head/Manager 1
2 Shift Supervisor 1
3 Secretary/Cashier 1
4 Cleaner/Attendant 4
Total No of Employees 7

The Laundry service head is the higher responsible for the project and has a secretary or cashier
and shift supervisor beneath him. His responsibility is includes hiring new employees controlling
the incoming and outgoing capitals and also the profit and loss of the company.
The shift supervisor is advisor for laundry service head in case of emergency and incase of
system failure, the work for the secretary or cashier is reporting daily income report once in a
week and receiving and delivering cloths to the customers the cleaners and attendants are
responsible starting from receiving cloths, washing up to final delivery.
 7 Financial Plan
7.1 Start-up Funding
MyHat laundry business plan for the year ended 2014 E.C
Our Startup expenses will be funded through a combination of the group capital, invested
by the owners (shareholders) as summarized in the table 7 below we invest 450,000 in the
business.
In this chapter we try to explain:
 Stat-up expense needed to launch MyHat Laundry.
 Income statement/Profit and Loss
 Shareholders share capacity/investment capital
Table 5: Start-Up Fixed Asset

No Type Unit Single Price Total Price

1 Washing Machine 4 15,000 00 60,000 00
2 Dryer 4 5,000 00 20,000 00
3 Steaming Iron 4 3,500 00 14,000 00
4 Table 6 3,000 00 18,000 00
5 Shelve/Shelf 5 5,000 00 25,000 00
6 Industrial Fan 4 9,550 00 38,200 00
7 Buckets 4 1,000 00 4,000 00
8 Laundry nylon (Chemical) - 15,200 00 15,200 00
9 Laundry Hamper 6 500 00 2,100 00
10 Laundry Basket 6 500 00 2,100 00
11 Generator 1 25,000 00 25,500 00
12 Other Expenses - 50,000 00 50,000 00
Total 273,900 00
Table 6: Other Start-Up Expenses

Employee Payroll
No Position No of Employee Salary
1 Laundry Service Head/Manager 1 4,000 00
2 Shift Supervisor 1 2,000 00
3 Secretary/Cashier 1 1,500 00
4 Cleaner/Attendant 4 2,000 00
0
Total Monthly Salary 9,500
0
0
Total Annual Salary 114,000
0
Promotion
0
5 Promotion Budget 28,000
0
Decoration And Maintenance
0
6 Decoration(Reception Room) 30,000
0
House Rent
0
7 House Rent(Monthly) 2,500
0
0
Total Annual Rent 30,000
0
Detergents And Soap
Type Measurement Price
8 Liquid Soap Kilo 100 00
9 Soap Piece 70 00
0
Total Daily Consumption 170
0
0
Total Monthly Consumption 5,100
0
0
Total Annual Consumption 61,200
0
Monthly Electric and Water Fee
10 Electric 500 00
11 Water 500 00
 0
Total Monthly Fee 1,000
0
0
Total Annual Fee 12,000
0
0
Total Other Start-Up Expenses 76,100
0
0
Total Annual Expenses 217,200
0

7.2 Initial Capital

Total capital needed to launch the project is the sum of start-up fixed asset expenses and other
start-up expenses and cash kept in the MyHat Laundry’s account:
Start-Up Fixed Asset: 273,900.00 ETB
Start-Up Other Expenses 76,100.00 ETB
Cash held in Account 100,000.00 ETB
Total Initial Capital 450,000.00 ETB

The initial capital will be funded/invested by the owners (shareholders) of the company. The
shareholders invest 450,000.00 out of this capital 350,000 will be used to launch our project and
the other 100,000.00 will be kept in the MyHat Laundry’s account in cash in case of business fail
and emergency other state.
Table 7: Initial Capital

No Share Holders No of Shares Shares

1 Dugasa Desalegn 1 45,000 00
2 Eliyas Dukale 1 45,000 00
3 Eliyas Endalew 1 45,000 00
4 Diriba Tariku 1 45,000 00
5 Elshaday Derso 1 45,000 00
6 Elsay Gelo 1 45,000 00
7 Ejersa Kebede 1 45,000 00
8 Duresa Wako 1 45,000 00
9 Eferem Birhanu 1 45,000 00
10 Ebiso Gobena 1 45,000 00
Total 450,000 00
7.3 Profit and Loss
Table 8: Weight Vs Charge/Price

No Type of Garment Average Weight in Kgs Charge/Price

1 Trousers 0.35 3 00
2 Sweaters 0.50 1 50
3 T-Shirts 0.18 1 50
4 Jackets 0.75 3 00
5 Bed Sheets 0.35 2 00
6 Girls Dresses 0.35 2 00
7 Pajamas 1.00 2 00
8 Towels 0.45 1 00
9 Shorts 0.35 1 00
Total 4.28 17 00

When our machines and manpower is working in full performance, we expect the following
daily income from a single station.
Maximum weight of cloths washed and dried in a day: 160 Kgs
The Average Price for washing and drying 1Kgs cloth is: 3.971 = 4 ETB
Table 9: Daily, Monthly and Annual Income

Income In ETB
No Machines Amount /Kgs
Daily Monthly Annual
0
1 Washing Machine 1 160 640 00 19,200 230,400 00
0
0
2 Washing Machine 2 160 640 00 19,200 230,400 00
0
0
3 Washing Machine 3 160 640 00 19,200 230,400 00
0
0
4 Washing Machine 4 160 640 00 19,200 230,400 00
0
0 0 921,60 0
Total 640 2,560 76,800
0 0 0 0

Monthly Profit: Monthly Income - Monthly Expense

 76,800.00 ETB - 18,100.00 ETB = 58,700.00 ETB
Annual Profit: 58,700.00 ETB * 12 Month = 704,400.00 ETB

7.4 Annual Net profit

The Annual Net Profit is calculated by Annual Profit (Annual Income – Annual Expenses) minus
Start-UP Expenses minus 15 Percent Tax
Annual Net Profit Before Tax:
Annual Profit-Start-Up Expenses
704,400.00 ETB - 350,000.00 ETB = 354,400.00 ETB
Annual Net Profit:
354,400.00 ETB * 15% = 53,160.00 ETB
354,400.00 ETB – 53,160.00 ETB = 301,240.00 ETB