BAHIR DAR UNIVERSITY

COLLEGE OF SCIENCE

DEPARTMENT OF INDUSTRIAL CHEMISTRY

ENTREPRENEUR ASSIGNMENT

BUSSINESS PLAN FOR Bahir Dar best cosmetics enterprise

Member of the group ID

1. Bahru Demeke………………………………………1403894

2. Yared Mohammed…………………………………..1403975

3. Abebe Firew…………………………………………1405781

4. Aman Gebeyehu……………………………………..1403776

5. Segni Geleta………………………………………….1406260

6. Zena Nigussie……………………………………..…1404158

SUBMISSION DATE 05/2017 E.C

SUBMITTED TO:Amare.J

Bahir Dar, Ethiopia

Table of content

EXECUTIVE SUMMARY .................................................................................................................... III

CHAPTER ONE ..................................................................................................................................... 1

1.1. Name of the business ................................................................................................................ 1

1.2. Produce the following products ................................................................................................. 1

1.3. Provide the following services ................................................................................................... 1

1.4. The customers will be ............................................................................................................... 1

1.5. The business will sell in the following way................................................................................ 1

1.6. The business will satisfy the following needs of the customers .................................................. 2

1.7. Swot analysis ........................................................................................................................... 2

1.7.1. Strengths of the Cosmetics enterprise .............................................................................. 2

1.7.2. Weaknesses .................................................................................................................... 2

1.7.3. Opportunities .................................................................................................................. 3

1.7.4. Threats ........................................................................................................................... 3

1.8. Vision, mission, goals, and objectives ...................................................................................... 3

1.8.1 Vision statement ............................................................................................................. 3

1.8.2. Mission statement .......................................................................................................... 3

1.8.3 Goals .............................................................................................................................. 3

1.8.4 Objectives ....................................................................................................................... 3

1.9. Market research ........................................................................................................................ 4

1.10. Promotional measures ............................................................................................................. 5

CHAPTER TWO .................................................................................................................................... 6

2.1 What capital investment do we need? ......................................................................................... 6

CHAPTER THREE ................................................................................................................................. 7

3.1. Production cost planning ........................................................................................................... 7

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 3.2. Labour cost ............................................................................................................................... 7

3.3. Indirect cost .............................................................................................................................. 8

3.4 product plan ............................................................................................................................... 8

CHAPTER FOUR ................................................................................................................................. 10

4.1 SALES AND COSTS PLAN................................................................................................... 10

4.2 Type and source of start up capital ........................................................................................... 11

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 EXECUTIVE SUMMARY

This plan is to set up a cosmetic shop in the name of "Bahir Dar best Cosmetics Enterprise ",
which will be located in Easy View at Bahir Dar. The cosmetic shop will be a sole partnership
owned by Bahir Dar best. we will use startup capital of ETB1,109,050 of which ETB829,050
will be owners’ equity and the remaining ETB 280,000 will be a bank loan which will be secured
from commercial bank of Ethiopia.

The key objective of the cosmetic shop will be to provide fresh quality cosmetics to our clients to
enable them to improve their general skin beauty, to obtain maximum customer satisfaction
through continued quality production, to obtain continuous production and supply of our
products to the customers, to create customer loyalty to our products such that they become well
pronounced in the customer minds.

The vision of the cosmetic shop will be ‘To be the leading suppliers of quality, fresh and health
skin booting cosmetics product’.

Our mission will be, dedicated at improving the skin health and body look and appearance of
our client. "We seek to become the recognized leader in our targeted local and international
market for carrying a diverse line of in demand cosmetics including perfumes, makeup, and other
accessories that will have a competitive edge towards customer satisfaction and retention at
attractive prices.
Our major customers will be corporate employees, students, market vendors, tourists and
retailers who will be consuming a range of our products including; Perfumes 1st class, Lemon
body lotion, Hair relaxer cream, Avocados body cream smoother and Hair glow.

Our forms/ ways of distribution will include, through Retailers, distributors and wholesalers who
will buy and sell in bulk to our final customers which we cannot sell to directly we shall also sell
directly to the customers because we have a high customer traffic at our main outlet in Bahir
Dar. We shall as well be using a van that will be leased to distribute to our customers who order
in large quantities.

In terms of our legal responsibilities, the following taxes apply to our business, sales tax,
employees’ income tax, national social security fund and Bahir Dar Municipal Council Tax and
other licenses like trading license. We shall as well need to the insurance for our business and
also carry out other social responsibilities like corporate social responsibility, being
environmentally friendly, and ensuring cleanliness of Bahir Dar town.

Our products are costed and priced after comparison with our major competitor’s prices and
costing information acquired through market research. We have as well carried out cash flow
estimates to ensure that our business does not run out of cash.

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Our startup capital has been allocated to what we intend to start our business with that is renting
building for two months, buying machines for mixing the inputs, Machines, leasing van, buying
furniture and fittings, massage equipment, cloths and uniforms and other necessary things to start
with including the employee salaries for the first two months.

This plan will be effective on 1st June 2025 and that is when my business will begin at Bahir Dar
town.

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 CHAPTER ONE

BUSINESS IDEA

1.1. Name of the business

Bahir Dar best Cosmetics Enterprise
The reason why we call our enterprise as Bahir Dar best cosmetics enterprise because it will be
one the best cosmetics manufacturing company that satisfy the customer both in quantity and
quality of the the cosmetic that we will have produced at the reasonable price.

1.2. Produce the following products

Bahir Dar best Cosmetics Enterprise will provide different kinds of cosmetic products ranging
from body lotion to hair relaxers with potentials of using local fruits, both rare and common
fruits as key primary ingredients in the production of body oils and lotions. This will be intended
to improve the general skin health as well as boosting the beauty skin of our clients especially
ladies. Among the fruits we will use to extract include grapes, Chew cumber, palm fruits,
avocados, lemons, oranges, among others to produce body lotions that moisturizes and smooths
the skin for healthy attractive look of the boy and hair.
Our business will also provide moisturizing creams, body lotions, hair lotions of various types
and varieties to our esteemed customers.

1.3. Provide the following services

We will also offer the cosmetic products to our esteemed customers while providing consultancy
advise inform of skills for mixing and using the oils for their own benefit. We will provide free
consultancy services about lotion use, making and maintenance and caring for the skin especially
mostly by the ladies and young girls who our major customers and advise them on maintaining a
healthy balanced diet which include fruits and vegetables.

1.4. The customers will be

Other businesses that deal in cosmetics, retail shops, supermarkets all over the country, they will
be the young children, men and mostly women.

1.5. The business will sell in the following way

Distribute supermarkets, retail outlets, our agents all over the country and some customers will
buy directly from our company main outlet at Bahir Dar.

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1.6. The business will satisfy the following needs of the customers

Bahir Dar best cosmetics will offer reliable cosmetics, lotions, and jerrys intended to improve
the general skin health as well as boosting the beauty skin of our clients especially ladies, skin
treatment, cureskin rashes, and ensure all time beauty of our clients.

1.7. Swot analysis

The Cosmetics industry is one of the growing industry in Ethiopia. Despite the increase in the
Cosmetics industries, customer’s demands are not fully met due to the increasingly growing
population and poor delivery of the cosmetics to the customers, Bahir Dar best cosmetics
Enterprise is therefore aiming at filling this gap. The industry has shown a great interest for
investment. The industry has earned great reputation due to the increased differences in customer
requirements like skin colors, hair styles by different hair cosmetics and customer general beauty.

1.7.1. Strengths of the Cosmetics enterprise

 Ability to make cosmetic products from local available fruits

 High level of customer care that we shall portray
 We shall operate on a daily basis 24 hours to meet our customer needs which will ensure
constant supply.
 We shall do skin therapy to our special customers based on appointments at an affordable
price which will gain fame amongst corporate women.
 High quality and exceptional packaging material which are environmental friendly that
we shall offer.
 Operating from the cleanest environment
 Offering free training and consultancy services to our customers.

1.7.2. Weaknesses

 Limited natural inputs like fruits and vegetables to our business.

 Low supply of skilled labour that will assist in mixing the right quantities for the inputs.
 Low levels of knowledge about the cosmetic business.
 Low capital inputs to start up with in establishing the plant and expanding the business
operations to other regions.
 Do not have enough record keeping mechanism.
 Inadequate experience in the market due to few months of operation than our
competitors.
 Few workers in company which delays production.

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1.7.3. Opportunities

 Bahir Dar best Cosmetics Enterprises is growing and new cosmetics dealers are setting
up which will increase the market base.
 The competitors of Bahir Dar best Cosmetics Enterprises do not know about the new
emerging ideas in the global markets like new product development techniques to suit
customer demand.
 The competitors of Bahir Dar best Cosmetics Enterprises do not know how to
efficiently manage their supply chain and distribution channels.
 Financial boost from banks for service expansion and facility improvement

1.7.4. Threats

 The customers are used to buying from already established cosmetic industries that can
easily adopt to rapidly changing techniques of production and global competition which
is hard to adopt to for us
 Constant changes in customer demands which impact on our level of satisfaction to our
customers and changing economic environment.

1.8. Vision, mission, goals, and objectives

1.8.1 Vision statement

To be the leading suppliers of quality, fresh and health skin booting cosmetics product’

1.8.2. Mission statement

It will be, dedicated at improving the skin health and body look and appearance of our client.
"We seek to become the recognized leader in our targeted local and international market for
carrying a diverse line of in demand cosmetics including perfumes, makeup, and other
accessories that will have a competitive edge towards customer satisfaction and retention at
attractive prices.

1.8.3 Goals

 To expand to the other markets across East Africa.

 To exploit opportunities in the market including the gaps left out by already established
firms.

1.8.4 Objectives

 To obtain maximum customer satisfaction through continued quality production

 To obtain continuous production and supply of our products to the customers
 To create customer loyalty to our products such that they become well pronounced in the
customer minds.

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  To efficiently publicize our products to create awareness among the customers.

To achieve our objective, the cosmetic shop will employ strategies such as: Offering quality,
body skin lotions, oils and herbal cosmetics that help fight the skin diseases made from fresh
fruit and vegetable which are nutritious through adequate research and proper mixture of the
lotions, oils and herbal ointments to meet the standard skin contents and characteristics of
customers in the market through advertisement by use of sign posts, direct selling , offering
special incentive to our regular clients, offering our cosmetics at relatively lower prices for
market penetration, creating a conducive environment for our clients, employing people who
understand the meaning of customer care and meaning of quality by giving them samples for use
as a way of expanding our markets especially among the young children, youth and women. All
this encompasses our strategies that include, communication strategy, supplier relationship
strategy, marketing strategy, competitive strategy and human resource strategy.

1.9. Market research

Product Customers Needs and preference of Competitors
customers

they need unique scent Low quality perfumes

that is packed in that are not unique
Perfumes 1st class luxurious containers and
can last long when used. Does not always have
Corporate employees knowledge of the latest
Must be available in products
time and in recognizable
supermarkets and Inconsistent supply and
shopping malls so shortages in the
market

Wide range of High prices and limited

differently colored and varieties not
Lemon body lotion flavored lotions offered consistently supplied.
Students at relatively low prices.
Different sizes and Low quality and
shapes. unattractive colours and
shapes.

Hair softeners with Unreliable supply and

reliable supply in all un defined distribution
Hair relaxer cream Market vendors corners of the country channels that affects
availed to all vendors in constant supply
time

High quality products Low quality lotions

availed in recognized with less moisturizing

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 shopping centers and content
malls
Avocados body cream Tourists
smoother High level of skin
moisturizing and
smothering.

Hair glow Retailers Reliable supply at the Delays in supply and

right time and place in uncoordinated supply
right quantities. chain and distribution
channels.

1.10. Promotional measures

We intend to invest heavily in advertisement of our products through the use of signposts, face
book. We also intend to use a highly skilled marketing manager to market our products.

The objectives of promotion are;

 To create awareness of our products to our customers

 To persuade the customers to prefer our products to those of our competitors
 Communicate to the potential customers about where our products can be found.
 Create a good initial image of our products in the society and our potential customers.

Type of advertising Details Costs (ETB)

A sign on the building The sign will say “Bahir Dar

best Cosmetics Enterprises”
showing the product that we offer 25,000
such that customers can know
that there is a cosmetics in the
building

Personal letters We will send personal letters to

our vendors, wholesalers and
selected retailors. We will 18,000
introduce the letter that “Bahir
Dar best Cosmetics Enterprises”

Direct selling We shall sell our product directly No costs

to our customers and share with
them information about our
products and why they should
use them.

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Free delivery We shall deliver our products N/A
freely to our wholesalers and
retailers selected.

Sponsoring public shows These will be the ones where the 45000
target customers will be
converged in large numbers for
example music shows.

CHAPTER TWO
Fixed capital planning

2.1 What capital investment do we need?

The capital investment that we will need will be business premises and the equipment as well as
for fitting or design the process.

The business premises will be constructed so it needs to invest in that. The whole floor on Easy
View complex will be constructed.

Fixed capital How to obtain it Cost required(ETB)

Building Construct 100,000

Machine Buy 90,000

Van Lease for 1 year 40,000

Office furniture Buy 15,000

Fitting Some how buy and we can 10,000

design in some parts

Total 255,000

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 CHAPTER THREE
PRODUCTION PLANNING

3.1. Production cost planning

These are the materials used in production that will become part of the final product. These
include the following. Grapes, Chew Cumber, Palm Fruits, Avocados, Lemons, Oranges, and
Others.

Product costing form for Bahir Dar best cosmetics Enterprises

Raw material (kgs) Unit price Quantity per annume Total cost per annum
(ETB)

Grape 20 500 10000

Chaw chamber 15 450 6750

Palm fruit 30 650 19500

Avocado 35 700 24500

Lemon 10 550 5500

Orange 45 640 28800

Total raw material cost per annum 95,050

3.2. Labour cost

Our enterprise will have 8 employees of which six are from the business group.

Name of Employees, their responsibility and their annual wage or cost.

Name Responsibility Annual salary (ETB)

Bahru Demeke General manager 100,000

Aman Gebeyehu Production manager 90,000

Abebe firew Quality control manager 80,000

Yared Mohammed Financial manager 65,000

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Segni Geleta Operational staff 63,000

Zena Nigussie Secretary of manager 60,000

Mr.X Labor 36,000

Mr.y Labor 30,000

Total labour cost per annum 524,000

3.3. Indirect cost

Indirect costs are the other costs that we have for running our business. They are summarized
below in the indirect costs form.

Indirect costs annual costs(ETB)

Advertizment 88,000

Electricity and water 35,000

Rent 9000

Insurance 15,000

Interest on loan 28,000

Indirect labour 12,000

Distribution and marketing cost. 8000

Depreciation 40,000

Total annual indirect costs 235,000

3.4 product plan

Products, services or range of products offered

Perfumes 1st Lemon body Hair relaxer Avocadoes Hair glow

class lotion cream body cream
smoot

Annual Quantity 600 680 720 830 690

produced(item)

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How much 330-450 500-530 400-450 600-700 280-300
customers are
willing to pay
(ETB)

Unit Selling 420 510 430 620 300

price(ETB)

Total sale(ETB) 252,000 346,800 309,600 514,600 207,000

Packaging Metallic Plastic Plastic Plastic Plastic

material containers containers and containers and containers and containers and
tube tubes tube tube

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 CHAPTER FOUR
Financial planning

We shall follow the following steps to plan and monitor the financial situation of Bahir Dar best
cosmetics enterprise.

1. We Make a sales and costs plan

2. We make a cash flow plan
3. Compare records with both plans every month
4. And we shall take action if anything goes wrong

4.1 SALES AND COSTS PLAN.

A costs and sales plan shows the sales, costs and profits our business is likely to have each
month and it is made annually. We have forecasted my sales and costs for the first year in
business.

Detail June July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Tota
l

Sales( 135, 130, 130, 140, 125, 150, 145, 115, 155,0 125, 135, 145, 1,63
ETB) 000 000 000 000 000 000 000 000 00 000 000 000 0,00
0

Direc 7900 7600 8000 8100 7450 7550 8100 7950 8200 8000 8300 7900 95,0
t 50
mater
ial
cost(
ETB)

Direc 43,6 43,6 43,6 43,6 43,6 43,6 43,6 43,6 43,66 43,6 43,6 43,6 524,
t 66.6 66.6 66.6 66.6 66.6 66.6 66.6 66.6 6.67 66.6 66.6 66.6 000
labou 7 7 7 7 7 7 7 7 7 7 7
r
cost(
ETB)

Gross 83,4 78,7 78,3 88,2 73,8 98,7 93,2 63,3 103,1 73,3 83,0 93,4 1,01
profit 33.3 33.3 33.3 33.3 83.3 83.3 33.3 83.3 33.33 33.3 33.3 33.3 0,95
(ETB 3 3 3 3 3 3 3 3 3 3 0
)

Indire 19,5 21,8 18,7 17,9 21,0 18,5 19,5 17,5 19,80 20,5 19,3 21,0 235,
ct 00 00 00 00 00 00 00 00 0 00 00 00 000
costs(

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ETB)

Net 63,9 56,9 56,5 70,3 52,8 80,2 73,7 45,8 83,33 52,8 63,7 72,4 775,
profit 33.3 33.3 33.3 33.3 83.3 83.3 33.3 83.3 3.33 33.3 33.3 33.3 950
(ETB 3 3 3 3 3 3 3 3 3 3 3
)

Here after we can calculate the net profit after a year as following

Profit= total net profit - Total fixed capital investment

Profit= ETB775,950-ETB255,000

Annual Profit=ETB520,950

4.2 Type and source of start up capital

Bahir Dar best Cosmetics Enterprise will require an initial capital of ETB1,109,050 of which
ETB829,050 will be owners' equity and the remaining ETB280,000 will be a bank loan to be
secured from centenary bank payable at a rate of 10% per years. This money will be used for rent,
purchase of cosmetics purchase from the suppliers, employees, design and packaging of the
cosmetics products, purchase and mixture of cosmetics products such as hair glow, relaxers, and
herbal cosmetic research, shelves. Chair, bottles, tables and others.

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