Department of Accounting and Finances Accounting and Finance Program

Department of Accounting and Finances
Accounting and Finance program
Course: Entrepreneurship
Individual Assignment:- hypothetical small business plan
Prepared by;- YASSIN MOHAMMED
ID NO;- ECSU 1700876
Submitted To;- Abeje Ewunetu (MA)
Addis Abeba, Ethiopia
June 30, 2020

Contents
Executive summary
1. Brief Description of the Project-----------------------------------------------------------------------1
2. Brief Profile of the Entrepreneur---------------------------------------------------------------------2
3. Project's Contributions to the Economy------------------------------------------------------------2
1. Sales and Marketing-----------------------------------------------------------------------------------
3
1.1 Product description------------------------------------------------------------------------------------3
1.2 Competitors'---------------------------------------------------------------------------------------------3
1.3 Location--------------------------------------------------------------------------------------------------3
1.4 Market Area---------------------------------------------------------------------------------------------3
1.5 Main Customers----------------------------------------------------------------------------------------3
1.6 Total Demand-------------------------------------------------------------------------------------------5
1.7 Market Share--------------------------------------------------------------------------------------------6
1.8 Selling Price---------------------------------------------------------------------------------------------6
1.9 Sales Forecast------------------------------------------------------------------------------------------6
1.10 Promotional Measures------------------------------------------------------------------------------8
1.11 Marketing Strategy-----------------------------------------------------------------------------------8
1.12 Marketing Budget------------------------------------------------------------------------------------8
2. Production-----------------------------------------------------------------------------------------------9
2.1 Production Process-----------------------------------------------------------------------------------9
2.2 Fixed Capital-------------------------------------------------------------------------------------------9
2.3 Life of Fixed Capital----------------------------------------------------------------------------------10
2.4 Maintenance and Repairs--------------------------------------------------------------------------10
2.5 Sources of Equipment-------------------------------------------------------------------------------11
2.6 Planned Capacity-------------------------------------------------------------------------------------12
2.7 Future Capacity---------------------------------------------------------------------------------------12
2.8 Terms and Conditions of Purchase of Equipment-------------------------------------------12
2.9 Factory Location and Layout----------------------------------------------------------------------13
2.10 Raw Materials Needed----------------------------------------------------------------------------14
2.11 Cost of Raw Materials-----------------------------------------------------------------------------14
2.12 Raw Materials Availability------------------------------------------------------------------------14
2.13 Labor--------------------------------------------------------------------------------------------------15
2.14 Cost of Labor----------------------------------------------------------------------------------------15
2.15 Labor Availability-----------------------------------------------------------------------------------15
2.16 Labor Productivity----------------------------------------------------------------------------------15
2.17 Factory Overhead Expenses--------------------------------------------------------------------15
2.18 Production Cost-------------------------------------------------------------------------------------15
3. Organization and Management------------------------------------------------------------------16
3.1 Form of Business-------------------------------------------------------------------------------------16
3.2 Organizational Structure----------------------------------------------------------------------------16
3.3 Business Experience and Qualifications of the Entrepreneur-----------------------------17
3.4 Pre-Operating Activities-----------------------------------------------------------------------------17
3.5 Pre-Operating Expenses---------------------------------------------------------------------------17
3.6 Office Equipment-------------------------------------------------------------------------------------17
3.7 Administrative Expenses---------------------------------------------------------------------------18
4. Financial plan-----------------------------------------------------------------------------------------18
4.1 Project Cost-------------------------------------------------------------------------------------------18
4.2 Financing Plan and Loan Requirement--------------------------------------------------------18
4.3 Security for Loan-------------------------------------------------------------------------------------20
4.4 Profit and Loss Statement-------------------------------------------------------------------------20
4.5 Cash Flow Statement-------------------------------------------------------------------------------21
4.6 Balance Sheet----------------------------------------------------------------------------------------23
4.7 Loan Repayment Schedule-----------------------------------------------------------------------24
4.8 Break-even Point (BEP)---------------------------------------------------------------------------24
4.9 Return on Investment (ROI)----------------------------------------------------------------------25
4.10 Financial Analysis---------------------------------------------------------------------------------26

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Department of Accounting and Finances Accounting and Finance Program

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Department of Accounting and Finances

Accounting and Finance program

Individual Assignment:- hypothetical small business plan

Prepared by;- YASSIN MOHAMMED

ID NO;- ECSU 1700876

Submitted To;- Abeje Ewunetu (MA)

Addis Abeba, Ethiopia

June 30, 2020

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