BAHIR DAR UNIVERSITY

BAHIR DAR INSTITUTE OF TECHNOLOGY

FACULTY OF MECHANICAL AND INDUSTRIAL
ENGINEERING
ENTREPRENEURSHIP BUSINESS PLAN
SECTION B
Teff flour factory PLC

Group members ID NO
Mekonnen Kassahun ……………….… BDU0904689UR

Natinael Getinet …………………….….BDU0904897UR

Biruktawit Yigzaw ……………….…….BDU0903944UR

Aragaw Wagaye ……………….…….....BDU0903694UR

Haileyesus Sitotaw………………….…..BDU0904391UR

Submitted to: -

Ibrahim A.
 Acknowledgment

Before anything, our special thanks go to BAHIRDAR INSTITUTE OF TECHNOLOGY for

giving a wonder opportunity that helps us to know how to be successful enterpriser and to work
on this project
Secondly, we want to give our deepest heartfelt appreciation for teacher Mr. Ibrahim A, who
provided us valuable guidance and advice. Thirdly everyone who are willing to give us the
information we need to make this document.

i|Page
 Table of content

Contents
Acknowledgment.........................................................................................................................................i
Table of content...........................................................................................................................................ii
CHAPTER ONE..........................................................................................................................................1
1 INTRODUCTION...............................................................................................................................1
1.1 Business description....................................................................................................................1
1.2 Business plan confidentiality agreement......................................................................................2
CHAPTER TWO.........................................................................................................................................3
2 EXECUTIVE SUMMARY.................................................................................................................3
CHAPTER THREE.....................................................................................................................................6
3 INDUSTRY ANALYSIS....................................................................................................................6
3.1 Future outlook and trend..............................................................................................................6
3.2 Analysis of competitors...............................................................................................................6
3.3 Market segmentation....................................................................................................................6
CHAPTER FOUR.......................................................................................................................................8
4 DESCRIPTION OF VENTURE..........................................................................................................8
4.1 Products and service....................................................................................................................8
4.2 Service.........................................................................................................................................8
4.3 Size of business...........................................................................................................................8
4.4 Office equipment and personnel..................................................................................................8
4.5 Background of entrepreneur........................................................................................................9
CHAPTER FIVE.......................................................................................................................................10
5 PRODUCTION PLAN......................................................................................................................10
5.1 Manufacturing process...............................................................................................................10
Machinery and equipment.....................................................................................................................11
CHAPTER SIX.........................................................................................................................................12
6 MARKERTING PLAN.....................................................................................................................12
6.1 Pricing.......................................................................................................................................12
6.2 Distribution................................................................................................................................12

ii | P a g e
 6.3 Control.......................................................................................................................................13
6.4 Product forecasting....................................................................................................................13
CHAPTER SEVEN...................................................................................................................................14
7 ORGANIZATION PLAN..................................................................................................................14
7.1 Form of ownership.....................................................................................................................14
7.2 Principal shareholders................................................................................................................14
7.3 Authority of principals...............................................................................................................15
7.4 Role and responsibilities of members of organization...............................................................15
CHAPTER EIGHT....................................................................................................................................18
8 RISK ASSESSMENT........................................................................................................................18
8.1 Weakness of business................................................................................................................18
8.2 Plan to achieve goal...................................................................................................................18
CHAPTER NINE......................................................................................................................................19
9 FINANCIAL ANALYSIS.................................................................................................................19
PLAN CONCLUSION..............................................................................................................................21
REFERENCE............................................................................................................................................22

iii | P a g e
 CHAPTER ONE

1 INTRODUCTION

1.1 Business description

Company name
HAN teff flour manufacturing plc.
 Business address
Bahir dar , Ethiopia
 Name and address of the principals
 Mekonnen Kassahun, Bahirdar
 Natnael Getnet, Bahirdar
 Biruktawit Yigzaw, Bahirdar
 Haileyesus Sitotaw Bahirdar
 Aragaw Wagaye Bahirdar
 Nature of business
Teff milling and packaging service
 Statement of financing needed
 Mekonnen Kassahun share 20% from the profit and loss
 Natnael Getnet share 20% from the profit and loss
 Biruktawit Yigzaw share 20% from the profit and loss
 Haileyesus Sitotaw 20% from the profit and loss
 Aragaw Wagaye 20% from the profit and loss

1|Page
 1.2 Business plan confidentiality agreement
The undersigned reader of this HAN teff flour manufacturing plc Business Plan hereby
acknowledges that the information provided is completely confidential and therefore the reader
agrees not to disclose anything found in the business plan without the express written consent of
[Intellectual Property Attorney’s Name].

It is also acknowledged by the reader that the information to be furnished in this business plan is
in all aspects confidential in nature, other than information that is in the public domain through
other means and that any disclosure or use of the same by the reader may cause serious harm and
or damage to HAN teff flour manufacturing plc.

Upon request this business plan document will be immediately returned to [Intellectual Property
Attorney’s Name].

This is a business plan. It does not imply an offer of any securities.

Applicable Law

This contract shall be governed by the laws of the County of Ethiopia in the State of Amhara
region and any applicable Federal law.

______________________________________________________________________________
Signature Date

__________________________________________________
Printed Name

2|Page
 CHAPTER TWO

2 EXECUTIVE SUMMARY

HAN teff flour factory is a standard teff flour mill production factory which will be located at
Bahir dar. We have been able to locate the factory to be closer to our customers and also to be at
the center of the country to have an access to address all around the country. We ensured that our
facility is easy to locate and we have mapped our plans to develop a wide distribution network
for wholesalers all around Bahir dar and throughout Ethiopia.

We are in the teff mil production business to engage in processing, packaging, retailing teff flour.
We are also here to make profit at the same to give our costumer value of their money.

We choose to engage with this business is as all of us grow up eating injera as our main meal and
its flour has been made in traditional way up to recent year this hasn’t been no industry that can
do this in modern way, Also most of the time preparing teff flour is done by women’s going to
milling house and the process which is filtering and all that is terrifying process. In this modern
day going with the traditional process is time consuming so our company will reduce the hustle
and give relief to most women in our country. beside this the other problem is when we buy teff
in the traditional way we don’t get the full weight that we want it mostly we find pure teff 70%
-80% of the total weight the rest is scrub. But our product we will serve 100% of pure teff.

Teff is originated from Ethiopia and Eritrea. It is edible seed and also for its straw to feed the
cattle. The seeds are very small, about a millimeter in length and a thousand of grain weight
around 0.3gram. They are found in colors ranged from white to deep reddish brown. Teff is
mainly used to make Ethiopians and Eritrean favorite food called injera. As we know we most
Ethiopians consume teff-injera in our daily meal. Also, Teff is a gluten free it has a many health
benefit its demand is increasing across the world. Processing teff into flour there is wide range of
baking application such as bread, pasta. Considering this fact there is not much done in this
business so we believe our company will provide a standard quality teff to our customers in wide
range.

Much more than producing healthy, well processed and well packaged teff flour, our customer
care is going to be second to none. we know that our customers are the reason why we are in

3|Page
business which is why we will go the extra mile to get them satisfied when they will purchase
our teff flour warehouse and also to become our loyal customers and ambassadors.

Our factory will ensure that we give first class treatment whenever they visit our flour mill or
warehouse. We will have a CRM software that will enable us manage a one on one relationship
with our customers. We will ensure that we get our customer involved when making some
business decision that will directly or indirectly affect them.

HAN teff flour manufacturing company is is private limited company which is owned by our
vision is to establish standard teff flour production company whose products will not only be
sold in Bahir dar but throughout the country and in long term we will be able to sell our product
on the global market.

Our mission is to establish standard and world class teff flour that in our own capacity will
favorably compete with our competitors. When we come to selling teff flour, there is indeed a
wide range of customer most of Ethiopians consumer teff in everyday of our life. Our target
market can’t be restricted to just a group of people. But we will be engaging in wholesale
distribution and retail well packed teff flour in different size. Our main customers will be

 Hotels
 Restaurants and canteens
 Household
 Universities
 “enjera” bakery

Complete set of teff flour machine can be divided in to three parts

a) Cleaning part
b) Milling part
c) Packing part

1. Cleaning part

4|Page
To clean out the middle and small impurity from teff e.g. dust includes beating, screening,
destoner, magnetic separator and dampening. This section is preparing for milling part and to
protect the machinery as well.

2. Milling part

The second step, to mill the teff and separate the flour, bran and other by-product

 Mill: the teff to break the integrity by the roller moving.

 Sifter: to separate the flour, bran and other by product also separate large sized and small
size to ensure flour quality.
3. Packing part

The third step the packing machine can be manual or automatic weighing and packing in this
case automatic packing machine is used.

4. factory controlling system

To control the whole set of machinery to work well and showing the process of working.

To start this business, it needs an investment cost of 6,340,000br.

5|Page
 CHAPTER THREE

3 INDUSTRY ANALYSIS

3.1 Future outlook and trend

Future trend of peoples always related with comfort. Interestingly our product is directly related
with making life easy, hustle free, modern life. We hardly believe that our company will have an
everlasting future. Our company will be successful in agro -industry manufacturing field.

3.2 Analysis of competitors

As much as the teff flour has many demands unfortunately, there is only one Production
Company working on this field. The company name is “ture teff flour”. Beside this there is
traditional milling house in every villages where most of the consumer use this process. As most
of us know how the traditional milling house the customer purchase unprocessed teff from
merchants and take it to the milling house and get it processed.

What our production company makes difference is that we provide pure teff, high quality with
fair and very reasonable price that is affordable and worth our customer’s money. We also have
delivery service. Our customer can order through our contact service line (call center or online)
and we deliver goods.

3.3 Market segmentation

We built different channels to describe how our venture communicates and reaches its customer
segments to deliver our proposed value.

 pre-sale phase: we will aware our customers about our product, help them to
understand its usage and contact information by using different promoting tools of that
target place. Like through radio and television advertisement, social Medias (face book
page, Instagram, telegram channel...), chalk written logo, will written on road and
pathway curbs and flyers will posted to the public bulletin boards of people center. In
addition, we let other distributors that can work with us from other states through-out
Ethiopia.

6|Page
  Sale phase: - in this phase, the actual sales done with standardize price. The sale process
will take place at our shop (display) and order through call or online and delivery
service. We will give skilled and interesting personal presentation. When we see the
payment condition, we follow different revenue streams like cash payment for
individual customers, subscription fee for hotel and other who have contract with us.
 After sale phase - hear we will provide post purchase support to increase after sale
potential, to have great bond with our customers and to get loyal customer base and
community motivation.

7|Page
 CHAPTER FOUR

4 DESCRIPTION OF VENTURE

4.1 Products and service

HAN teff flour manufacturing is producing a milling unprocessed raw teff into flour and
packaging and serving to our customers. We are planning to serve our product in different weight
5kg, 10kg, 25kg, 50kg as customer prefers. Our teff flour also be served with different type of
teff white teff, mixed teff (also known as “sergegna”) dark red brown teff (also known as “qey-
teff”). We will serve world standard quality 100% pure teff.

4.2 Service

Our services will be delivering our product to our customers on right time at right place.

4.3 Size of business

As starting this business, we will start as a small scale with small number of employers as the
business start growing and as more orders come our company will start producing in massive
range, then we will expand to other state of the country. In long term the company will start
exporting globally.

4.4 Office equipment and personnel

In order to keep producing the product, facility and some equipment are needed to run the
business. This are

 Production room
 Store room
 Filtering machine
 Flour milling machine
 Packaging machine
 Office table and chair
 Electric supply

8|Page
  Skilled labor

4.5 Background of entrepreneur

All of this business partners are mechanical engineering graduating student. As an mechanical
student, all of have a better understanding in business, entrepreneur and production, so we have
the capability to run this business. Beside the education, some of has a small business that we run
individually.

9|Page
 CHAPTER FIVE

5 PRODUCTION PLAN

5.1 Manufacturing process

The manufacturing process have 3 stages this are

1. Supply
2. Production
3. Delivery
I. Supply stage
First, we get the raw material from farmers and transport the unprocessed teff to the factory then
keep to store room. The other product the factory receive is packaging bag from local packaging
bag company.

II. Production stage

In production stage there will be three main operations that is filtering, milling, and packaging.
The first operation is taking the teff from store room pour it in filtering machine. This process is
separating the pure teff and the dirt. The machine has a multiple layer of deck also designed for
teff size. After filtering, the next operation is milling process, this process is converting the teff
seed to flour form. After the milling process the flour will be purified then last operation is
packaging and keeping to store in the shop or deliver to distributors and customers.

10 | P a g e
 Raw material Store room Filtering

Milling

Purifying

Delivery Packaging

Production plan

Machinery and equipment

 Vibration cleaning machine
 Flour milling machine
 Destoner
 Packaging machine
 Truck
 Forklift truck

11 | P a g e
 CHAPTER SIX

6 MARKERTING PLAN

6.1 Pricing
Price =cost + profit Price= variable cost/product + profit (30%)

Variable cost= material cost+ transportation cost+utility cost (electricity and water) + operation
cost+ vat

Product 1-white teff

=4000 +15+ 130 +9.05+158.3+ 158.3*0.15(allowance)+ profit (15%)

Price = 4335birr+ 650br=4985birr

Product 2 mixed teff (sergegna teff)

=3800+15+130+9.05+158.3+158.3*0.15+ profit (15%)

Price=4135+620br=4755.25br

Product 3 dark red teff (qey teff)

=3400+15+130+9.05+158.3+158.3*0.15+ profit (20%)

Price=3735+747=4482br
As we compare this price with current price in the market white teff is selling at a price 5000br
(unprocessed one), sergegna teff is currently sell at price of 4500-4700br, qey teff is 4500-
4700br. so when we compare our price with the current price its lower than the market and
considering the benefit that it gives that will make our company product preferable.

6.2 Distribution
After finishing the production, we transport the product to our shop, and to our customer place.

12 | P a g e
 6.3 Control
In that we will manage the whole system. The management system has its own organizational
structure. We ourselves are going to control every task and we will take every possible risk
temporary worker.

6.4 Product forecasting

In future we are planning to produce beside the pure teff, to formulate with other ingredient like
rice, corn…that have different nutrient ion as our customers prefer some don’t want only pure
teff because some people prefer to rice and corn mostly.

13 | P a g e
 CHAPTER SEVEN

7 ORGANIZATION PLAN

7.1 Form of ownership

The company structure is crucial point for business owner. This decision will have everlasting
effect on the business. Therefore, after consulting our friends who are law and accounting
department students, we chose general partnership by considering:

 Size and nature of our business

 Ease of establishment
 Tax implication of different ownership structures
 Level of control

Then we are going to start this business and run it together jointly. This business will be owned
by three members who are on equal footing, divide the profit equally among them and have
unlimited liability.

7.2 Principal shareholders

These are business owner of HAN teff flour factory. In our venture, all of the three members are
principal shareholders. They have security and exchange commission statues. This are:

 Mekonnen Kassahun,
 Natnael Getnet,
 Biruktawit Yigzaw,
 Haileyesus Sitotaw
 Aragaw Wagaye

14 | P a g e
 7.3 Authority of principals

General Manager

Marketing Communicat Research Human Production Technical

and sales ion officer development resource manager manager

Production
Accounting Mechanical
Sales person operator
department

Electrical
department

Authority of principal

7.4 Role and responsibilities of members of organization

I. General Manager: - we hire Miss Natnael Getnet as general manager. Then she is
responsible in
 Oversee many different opportunities related with manufacturing and distribution of our
product
 Hiring employees
 Oversee and improve manufacturing operation, establishing production goal and
developing organizational structures
 Providing guidance and leadership for all members of organization
 Control standard operating procedures
 Ensure safety of workers

15 | P a g e
 II. Marketing and sales officer: - we hire Mr. Haileyesus on this position since he has better
performance on financing tasks. He makes a key decision in our small venture.

He is responsible in

 Budgeting, distribution, branding and sales of our product

 Provide direction and feedback according to market need
 Analyzing product future benefit, short fall and market success
 Make cost break down at every quarter of the year
III. Communication officer:-we hire Mr. Aragaw for she has communication and pitcher
behaviors in addition to her educational quality. Through her, communication with customers
and suppliers will be easy. Her responsibilities are:
 Develop effective communication strategy based on our target audience
 Coordinate publicity events as required
 Manage conflict as it arise between workers or customer and worker
 Give training for sales persons about interesting presentation of product and inter
customer relationship
 Control sale persons and everything related with customers
IV. Research and development officer:-we hire three persons since this position is very
important to stable our venture. they are responsible:
 Plane, monitor and implement new programs that would help to modify and
development of our product.
 Determine and execute improved technologies used by suppliers, compotators and
customers
 Understand customers expectation on to be manufactured products
 Document all phases of research and development

V. Sales person (Mr. X): we are going to employ one sales person. This person will work under
the control of MISS Fatuma.

16 | P a g e
  Help customers find item in the store and give them marvelous presentation about
the product
 Ring up purchases
 Have harmonious relationship with customers

17 | P a g e
 CHAPTER EIGHT

8 RISK ASSESSMENT

8.1 Weakness of business

 Fluctuation of price from the supplier
 Fluctuation of price in market
 Since the raw material depend on seasons there may be shortage of supply

8.2 Plan to achieve goal

In order to achieve this goal some strategies that we will use

 Invest more advertainment

 Continuous quality improvement
 On time delivery
 Build strong relationship with our customers
 Preventive maintenance
 Allowing employer in decision making
 Comfortable working area for workers

18 | P a g e
 CHAPTER NINE

9 FINANCIAL ANALYSIS

In order to stand the factory in two foots starting from the facility and machinery to labor cost we
need initial money to open this factory. For this we shall know the amount needed or investment
cost. The table below shows the estimated cost for the first three month of the production.

COST (birr)
Facility rental 150,000
Machinery and equipment 2,400,000
Raw Material cost 3,237,000
Direct labor cost 105,000
Indirect labor cost 132,000
Advertisement 100,000
Utility 10,000
Total 6,134,000
Investment cost

Therefore, the initial investment to start production is 6,134,000br.

After the factory is setup it has a capacity of producing 10-20ton per day.

As the first months we will produce 100quintal per month to also check the market. as we
calculate above if we take white teff the selling and profit from the selling is 4985br and 650br
per quintal if we have 26 working days per month.

Selling price per product is 4985br per quintal *100qunital per month=498,500br

Profit is 650br per quintal *100 per month =65,000br

As the company grow, it can start to produce by its maximum capacity up to 100quntal per day.

Selling price per product is 4985br per quintal* 100* 26 working day=12,961,000br per month
19 | P a g e
Profit is 650*100*26=1,690,000br.

If the factory can sell 2600 quintal each month it can return the investment cost in one year.

In one year

From selling 12,961,000*12=155,532,000br per year

Profit 1,690,000br*12month=14,196,000br

Net profit= profit -profit* tax (40%) =8,517,600br.

PLAN CONCLUSION

20 | P a g e
This business plan report has investigated the possibilities of opening teff flour factory in
Bahirdar. The study has assessed the marketing aspects, the technological aspects, the resource
requirements, the organization and
management aspects of the project, and the financial commitments and rewards of the project.
The project has been evaluated in terms of the return that it generates to the investor, the present
value of the future cash flows of the project expected throughout the project life and the number
of years that the project takes to pay back all the initial investment made on the project. The
project is found acceptable by all of the above evaluation criteria. The impact of changes on
the project has also been assessed and the project is still feasible and we will decide to proceed
with creating business project by using the above approved methods.

REFERENCE

21 | P a g e
Entrepreneur text book

22 | P a g e