ARSI UNIVERSITY

COLLEGE OF AGRICULTURE AND ENVIRONMENTAL SCIENCE

DEPARTMENT OF AGRICULTURAL ECONOMICS

ASSIGMENT OF BUSINESS PLAN

NAME OF STUDENT…………………………………… TESEMA KEBEDE

ID.NO ……………………………………….,UGR/8815/12

SUBMITTED TO MSC AYANTU G.

DATE FEBRARY 9 ,2023

1
1 :- INTRODUCTION

1.1 Name and Address of the Industry

The name of the enterprise is Hopefully supermarket. The reason that we assigned this name to
the company is to show longevity of the business.

Hopefull supermarket is located Adama city. This location is a great opportunity to get different
kinds of customer.

1.2Name and Address of the Principle

N A M E NATIONALITY C i t y I D
TESEMA KEBEDE E t h i o p i a n A d a m a 8 8 1 5

1.3 Nature of the company

As the name of the company indicates the initial focuses on providing different types of high
quantity and quality products to the people who come from different area. Hopefull supermarket
providing enterprise is established to overcome the challenges time management (fast
food) ,health facing the society at large and students from different area of the country. The
company also strives to create awareness concerning the usefulness of theseproduct in our day to
day life. The customer are coming to purchase are either for whole sale, retail or consumption
activities. Since the nature of the company is not only providing supermarket products but also
gives whole sale and retail service.

1.4 Statement of Financial Need

2
Hopefull supermarket providing enterprise planned to construct and establish a company with
capital of 111520 birr. The business requires means of acquiring this initial capital by borrowing
from financial institution, personal capital and from close relatives.

1.5 Statement of Confidentiality of Report

The owner of Hopefull Supermarket spends money, time, resources, and experience also
different things from thinking up on preparing this business plan. Therefore the owners would
like to announce to all that this business plan which is the result of all partners effort for this
reason that should not be transferred or copied to another individual or company. If anyone fails
to doesthis ownerhave responsibility to the individual or the company to bring them in front of
the law. “All Rights are reserved”

It is believed that various kinds of business run in each and every aspect our country or other side
of the world and this comes with interaction of countries with other countries in all aspects of
their socio-economic and cultural dogmatism with the beginning of Supermarketglobalization.
This may be because of comfort ability of various kinds of environment which assist or help
people to lead people to lead their life in a luxurious manner and encourage beating standard of
excellence in their life as well.

Due to this the members of this work plan owners expect something which help us to reach or
future or planned life.

To do this (to achieve our goal), now grouped with each other to propose business plan paper
related to the thing which we want to specialized on.

It may be propounded as a new venture which is controlled by the group members . The primary
purpose of this business plan is to provide qualitative and quantitative amount of various types of
a supermarket products at affordable price.

3
2 EXCUTIVE SUMMERY

Hopeful supermarket business will be run as partnership among all owners of the business.

The Hopeful supermarket enterprise offer high quality and quantity products for users and
customers. The product of the business will be available for sale at home and also sold to
wholesalers and retailers who sells in other markets. The price set by the business, is fair market
price or it should not exploit customers or should not annoy customers. So that customers are
willing to pay. the enterprises will provide its product at market price by identifying and listing
each type of products with their fair prices.

The activities included in this business are purchasing high quality and modernized products and
preparing store houses where needed products stored whenever there is excess supply of
products, auditing daily sales of business, etc.

The overall objective of the business is to provide high quality and quantity supermarket
products in order to get the expected profit and to satisfy the consumer and to achieve and
exceed sales forecasts to enable us to be operating at capacity, we would also have a claim to
create job opportunity, providing complementary and with products and plans to expand the
business in different area and also to expand the initial business in size.

In the first year the business forecast a profit of birr 22,028. The reason for obtaining such
positive gaining or profit can be mainly attributed to

 The profitability of the industry

 The presence of good market price
 Absence of strong competitors due to economies of scale
 Usage of few permanent workers
 Absence of payment for suppliers ( transportation cost)

In the second year and 3rd year we expect and predict that there will be increment of profit due to
further increases in sales. The overall objectives of the business are firstly to achieve and exceed
sales forecasts to enable the business to be operating at capacity, so that the business extended
the number of types of modern products that enables the business to meet (supply) the market

4
demand. We would also claim to be able to employ to have in future and expanding the existing
one.

The enterprise will require loan of birr 30,000 to be repaid over six years. The contribution made
for the business is equal for each partner and share of profits and loses also can be equally
shared. With fund (debt) the business will cover, house. (Store house), shelf, bulk containers
advertising and selling costs

3 .INDUSTRY ANALYIS
3.1 Future outlook and Trends
It is obvious that the environmental condition especially weather condition, its cold so it cause
hunger so that individual is in need of some products( packed foods, Juices, soft drinks), the
environment is protected, maintained and remain suitable so that there will be expansion of the
business at an alarming rate.

It is in this respect that our business provided a lot of opportunity is for the community of the
campus and surrounding peoples (people who lives Debre berhan) by enabling them to use latest
products .

3.2 Market Segmentation

From the very beginning business enterprises, the market for Supermarket is not limited local
market.

As we have stated out previously, the competitors house lack of structure and organization lead
them into in efficient and have declining sales. They are also not well organized and structured,
no further expansion and shortage of materials that is they depend in cease and need assistance of
finance and qualified managers.

4. DESCRIPTION OF VENTURE
The enterprise provides each type of products, as follows:

5
5. PRODUTION PLAN
The aim of the business is to provide high quality and quantity modern supermarket products in
order to get the predicted gain and to satisfy the customers. The first starting point of the
business is identifying which type of product that the consumers are in need of and then
purchasing or providing those products (packed foods, juice) at minimum possible pick that
doesn’t hurt anyone. The equipment is needed for immediate uses are the following

 Two shelves’ on which products are put on

 The clothing (wearing) for workers
 Calculator
 Different types of products(Candies, packed foods, Diet foods, cosmetics, non alcoholic
beverages, juices and etc.

To start the business activity the business starts with 20 different types of costs. Totally the cost
of the business includes the following:-

 The cost of buying different products

 The cost of house (rent)
 The cost of clothes
 The cost of living permanent employees

With the growth of the business additional ware houses will be needed

6. MARKETING PLAN
6.1 Pricing
The basis for our product prices is the market price and cost-benefit analysis. Therefore, due to
presence of small competitive, the business cannot set high prices. Even if the business operates
at lower cost it would not price below the market prices just because of the purpose result,
cosmetics providing business enterprise. As a result, Supermarket providing business enterprise
set the price of these products as the market that is it fluctuates over the time with market price.

6.2 Distribution
The distribution of the products would be in three ways first, the business its self undertake retail
service to consumers and customers at market price. Secondly, by selling the product to the
whole sales and thirdly by selling to both wholesalers and retailer.

2. Promotion
The promotion activity will be done once in a couple of month through notices to be posted at
public center and also through

 News paper and magazines

6
  Radio

7. ORGANIZATIONAL PLAN
7.1 Form of ownership
This business enterprise is a type of business in the form of partnership. There are reasons for the
selection of this form of business: these are

 Profitability of the business specially after the first year

 Ease of formation of the business

The overall operation or function of the owner would be governed or administered by the owner
there will be only one manager the manger had served for more than four years in this type of
business and have excellent experience in the area with his educational background that enable
him to manage the business successfully.

7.2 Roles and Responsibility of Members of the Organization

The role of the manager will be managing the overall activity of the business. That is:-

 Making decision regarding the state of business in the future

 Raising capital contribution
 Evaluating the quality of the products/ cosmetics
 Controlling the performance of workers
 Making decision regarding which types of cosmetics should be purchased

The organization will contain the following members:-

1. The management of the business

2. Permanent employees
3. Temporary employees

The permanent employees of the business consist of four workers. The three are responsible for
day-to-day activities of the business

8 ASSESMENT OF RISKS
The expected of risk to the business may be loss of income from expired products (Candies, packed
foods, Diet foods, cosmetics, non-alcoholic beverages, juices and during operation may happen in the
future, hence no one is certain about future, the other expected loss is attributed to fluctuation of market
price (devaluation, inflation, deflation) The business also don’t use advanced technology whenever there
is appropriate technology that go with operation, is ready to impliment

9. FINANCIAL PLAN

7
The business plan is prepared to obtain funds amounting 30,000 birr. The supplementary
financing is required to being work on site preparation, equipment purchases and to cover
expense in the first year of operations. Additional financing has already been secured in the form
of:-

1. Birr 36520 from personal capital and

2. Birr 45,000 from closed relatives

No T y p e I t e m Quantity Total cost

1 S h e l f M a n g o 6 30000
2 B i s c u i t Packed food 60 packs 12000
3 Sandwich Packed food 20 packs 8000
4 S h e m u Candies 500 packs 5250
5 Diet foods - 2600
6 H o b b y conditioner 2 5 p a c k s 4000
7 T a b l e 3 13745
8 D o x e Shampoo 20 pck s 4500
9 A x e Deodorant 2 0 7000
10 Vaseline l o t i o n 5500
11 D u r u s o a p 1 0 p k s 1000
12 C o c a Non alcholic 2 0 0 1200
13 S p r i t e Non alcholic 2 0 0 5 0 0 0
14 F a n t a Non alcholic 2 0 0 6000
15 S o f i Non alcholic 6 0 0 3 2 0
16 Mango J u i c e 30 packs 4920
17 miscellaneous 4 5 5
T o t a l 111520

9.1 PRO-FORMA INCOME STATEMENT

The sale of revenue of cosmetics is expected to be audited daily and as well as monthly since it is
difficult to predict the price of each type of cosmetics we take the approximation of the sales of
monthly on average to be 7000 birr. Hence there are 12 months in business year total annual
revenue is calculated as follows

Total revenue= 7000*12=84000 birr

8
9.2 Salary expense
For permanent worker: each of the three permanent workers out of the four earn 1000 birr and
remaining one person earn 600 birr per month:

Total salary for permanent workers= (1000*3*12) + (600*15*12) =43,200birr

This is a salary for these permanent workers per a year plus a salary for the remaining person per
a year

For temporary workers: these temporary workers has an activity like cleaning the office and the
shop once a day he/she earns 5 birr per day or 150 per month

Total annual payment= 150* 12=1800 birr

Total salary expense=43208 + 1800= 45000birr

9.3 Depreciation Expense

The hopeful supermarkets have some depreciation expense in the form the cost of expired
cosmetics. And it expected to be 12,852 birr.

Total depreciation cost (Expenses)= 12852 birr

Interest Expense= principle*interest rate

=30000*10%

=3000birr

10.1 Miscellaneous Expense

Items Quantity Unit price Total price

Pen 8 4 32

Paper rim 2 80 160

White piece of 1 70 70
cloth

Total 450

9
9.4Pro-forma income statement as of year 1
R e v e n u e
Sales-------------------------------------------------------------------------------------84000
Expense

Salary Expense-----------------------------------------------------------45000
Depreciation Expense---------------------------------------------------12852
Freight Expense----------------------------------------------------------300
Interest Expense----------------------------------------------------------3000
Advertising Expense-----------------------------------------------------500
Miscellaneous Expense--------------------------------------------------320
Total Expense---------------------------------------------------------------------------------61972
Gross Profit -----------------------------------------------------------------------------------22028

In the second year of operation it is assumed that the business will increase the provision of
cosmetics and overall sales from 7000 birr/month to 7875 birr/month on average.

Revenue (Sales) annually 94,500 birr per year 7875*12

Pro-forma income statement of year 2

R e v e n u e
Sales-------------------------------------------------------------------------------------94500
Expense
Salary Expense-----------------------------------------------------------------45000
Depreciation Expense---------------------------------------------------------12852
Freight Expense ----------------------------------------------------------------300
Interest Expense-----------------------------------------------------------------3000
Miscellaneous Expense---------------------------------------------------------320
Total Expense--------------------------------------------------------------------------61972
Gross profit ----------------------------------------------------------------------------32528
In the third year of operation it is assumed that the business will increases the operation of sales
volume from 7875 birr to 9625 birr per month, using full capacity at efficiency. Therefore
Revenue (Sales) annually= 9625*12=115500

Pro-forma income statement of 3rd year

R e v e n u e
Sales-----------------------------------------------------------------------------------115500
Expense
Salary Expense-----------------------------------------------------------------------45000
Depreciation Expense--------------------------------------------------------------12852
Freight Expense---------------------------------------------------------------------300
Interest Expense-------------------------------------------------------------------3000
Miscellaneous Expense-----------------------------------------------------------320
10
Total Expense ----------------------------------------------------------------------61972
Gross profit --------------------------------------------------------------------------53528

9.5Cash flow statement for year 1

C a s h B u d g e t T o t a l
Beginning cash balance-------------------------------------30000
Cash collected from customers---------------------------84000
Total cash available for need 114000
Operating Expense------------------------------------------61972
With draw-----------------------------------------------------1200
Total cash needed 63172
Cash Excess deficit ------------------------------------------50828

Cash flow statement for year 2

Cash Budget T o t a l
Beginning cash balance------------------------------------ 50828
Cash collected from customers---------------------------94500
Total cash available for need 145328
Operating Expense------------------------------------------61972
With draw-----------------------------------------------------1200
Total cash needed 63172
Cash Excess deficit ------------------------------------------82156

Cash flow statement for 3rd year

C a s h B u d g e t T o t a l

Beginning cash balance------------------------------------ 82156

Cash collected from customers---------------------------115500
Total cash available for need 197550
Operating Expense------------------------------------------61972
With draw-----------------------------------------------------1200

11
Total cash needed 63172
Cash Excess deficit ------------------------------------------134484

Operating Balance sheet

A s s e t Liability
Cash--------------------------------30000
Fixed asset-------------------------81200 Account payable------------------45000
Miscellaneous Expense-----------320 Note payable----------------------30000
Total asset------------------------111520 Total Liability………………..75000
Capital
Capital -----------------------------36520
Total liability and capital ---------111520

9.6Pro-forma Balance Sheet at the end of 1st year

A s s e t Liability
Cash --------------------------------50828 Account payable------------------45000
Fixed asset-------------------------81200 Note payable----------------------30000
Depreciation------------------------12852 Interest payable---------------------3000
Operating Expense------------------3000 Total capital-----------------------78000
Total asset-------------------------122176 Capital------------------------------44176
Total liability and capital-------122176

Pro-forma Balance sheet as the End of 2nd year

Asset Liability
Cash -------------------------------82156 Account payable------------------45000
Fixed asset--------------------------81200 Note payable----------------------30000
Depreciation-----------------------25704 Interest payable---------------------6000
Operating Expense-----------------6000 Capital-----------------------------62652
Total asset------------------------143,652 Total liability and capital ------143652

Pro-forma Balance sheet as the end of 3rd year

A s s e t Liability
Cash -------------------------------134484 Account payable------------------45000
Fixed asset--------------------------81200 Note payable----------------------30000

12
 Depreciation-----------------------38556 Interest payable--------------------6000
Operating Expense------------------6000 Capital------------------------------62652
Total asset-------------------------186128 Total liability and capital-------143652

9.7Break-Even Analysis for 1sr year

Total sales of products on average-------------------------------birr 84000

Total cost of each products----------------------------------------birr 61972

Gross profit (GP) ------------------------------------------------------birr22028

Gross profit margin (GPM) =GP/SALES *100=22028/84000*100=26.23

Over head (fixed cost) for first year -----------------------------birr 60,172

Breakeven turn over= overhead/GPM *100

=birr 60172/26.23*100= 71.63%

Breakeven Analysis for year 2

Total sales of products on average ------------------------------------birr 94,500

Total cost of products ---------------------------------------------------birr (61,972)

Gross profit (GP) ----------------------------------------------------------birr 32,528

Gross profit margin GPM= 32528/94500*100=34.42%

Overhead (fixed cost) for 2nd year --------------------------------------------birr 60,172

Breakeven turn over=birr 60172/34.42*100=174816.97birr

Break even gross profit margin= 60172/94500*100=63.67%

Breakeven Analysis for year 3

Total sales of products on average-----------------------------------------birr 115500

Total cost of products--------------------------------------------------------birr (61972)

Gross profit (GP) ---------------------------------------------------------------birr 53528

Gross profit margin GPM= 53528/115500*100=46.34%

Overhead (fixed cost) for 2nd year--------------------------------------------birr 60172

Breakeven turn over =birr 60172/46.34*100=129848.94birr

13
Breakeven gross profit margin 60172/115500*100=52.096%

14