A BUSINESS PLAN PROJECT ON

FOOD SUPPLEMENT IMPORTATION AND DISTRIBUTION

BY

EMAK -JB ENTERPRISE

EMAK-JB
ENTERPRI
SE
LOCATION: KOTEI - KUMASI

JULY, 2023

ABSTRACT

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There is an increasing awareness of the need to be healthier. To create a more active lifestyle,
it is important to adapt individual’s training, diet and correct nutrition through correct food
supplements to the one’s needs. Many people do not take supplements due to time constraints
and high investment required to buy the available market product. To address this problem,
our company (EMAK -JB ENTERPRISE) offers individual doses of food supplements. To
the customer our product is user friendly, opportune and time-saving. Furthermore, to achieve
better acceptance from general public and penetrate the market, our product will be as cheap
(GHC5.00) and as comfortable as possible. In this summary, a business plan and financing
method of the food supplement was developed and described, while identifying its price,
market segment, placement and distribution. Our product will be first financed we the
enterpreneurs that will not only help financially but also with expertise and network. We
estimate to gather GHC500,000.00 that will cover our first three months of importation,
which we expect to payback in the first year. From a project’s perspective, it has a Net
Present Value of GHC 1,200,000.00, an Internal Rate of Return of 220%, around 30% Return
On Investment for the third to sixth year, a Return on Equity of 124% on the third year and
60%~70% for the remaining, a Growth Rate of near 60% for all years.

Keywords: business plan, financing methods, pre- and post-workout food supplements,
startups

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Index
I. Executive Summary...........................................................................................................4
II. Mission Statement and Vision.......................................................................................5
III. Business Description......................................................................................................5
III.I Business Model CANVAS......................................................................................6
III.II Product Viability Analysis.....................................................................................7
IV. EMAK -JB ENTERPRISE Introduction.....................................................................8
IV.I Sector Analysis and Potential Market......................................................................8
IV.II Market Segmentation.............................................................................................9
IV.III Target Segment.......................................................................................................9
IV.IV Critical success factors in the market...................................................................9
IV.V Competition Analysis...........................................................................................10
IV.VI Competition Analysis – Relevant Market..........................................................12
V. Project’s Assumptions.................................................................................................12
VI. Financial Strategy........................................................................................................14
VII. Investment Decision.....................................................................................................14
VIII. Conclusion.................................................................................................................15

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 I. Executive Summary
Within the global economy recession, there is a market that seems to be growing every
year, which is the food supplement market. Keeping in mind the attractiveness of this
industry, the food supplement market could be a good investment. Nowadays, there are a
couple of major companies but none of those controls this $10 billion market. Every time a
new brand gets into the food supplement industry it has a possibility to achieve a great
market share. This is possible because the new boomers (1983-2001) generation is
extremely concerned with health issues and continuous demand for such products.

Current food supplements products are similar in composition but different in flavor,
solubility and content (e.g. whey 80% vs whey 100%). Overall, consumers are satisfied
with the current available food supplement products. However, the major drawback is the
large product amount customers have to buy at online retailers to have a good price. In this
context, and considering consumers demand the best price-quality relation and ready to use
doses, our goal is to provide a low cost individual dose of high quality food supplements
available in the country, Ghana.

We will fund ourselves through pulling of capital from self-entrepreneur and government
grant fund in order to achieve our ultimate goal for being the biggest importing company
and selling of food supplement in Ghana. In order to reduce the initial risks and investment
needed, a buy strategy will be applied. We will also handle the importation and storage
distribution through our capital fund at the first year so we can reduce the costs.

In order to create the company (EMAK -JB ENTERPRISE), there is a need to gather
GHC500,000.00 that we should pay back in the first year. This money will be used for
importation and distribution of food supplements during the first 3 months.

We based our analysis on some market performance tools, such as Strengths, Weaknesses,
Opportunities and Threats (SWOT) and Political, Economic, Social and Technological
(PEST), as well as economic results, mainly Financing Sources, Working Capital, Costs of
Goods Sold (COGS) among others, will be used to fundament our final decision, which
will be explained further on.

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 II. Mission Statement and Vision
Mission Statement

Our mission is to enhance the well-being and quality of life for individuals by providing
high-quality food supplements that promote health, vitality, and overall wellness. Through
our dedication to customer satisfaction and education, we strive to empower individuals to
take control of their health and make informed choices for optimal nutrition.

Vision statement

Our vision is to be a trusted global leader in the food supplement industry, recognized for our
commitment to excellence, innovation, and ethical practices.

III. Business Description

Our company will be called EMAK -JB ENTERPRISE and will be created to fill the needs
of supplement consumers in some diet, such as busy corporate office workers and market
women, bodybuilding, football, among others. It is a microenterprise included in the food
industry.

This strategy has two main advantages,

(1) increase the proximity to the consumers, making them try our products and (2) provide
a ready to use food supplement to those who either forgot or want to try. Our distributing
point will sell food supplements, which is readily available to be taken by any consumer in
order to exercise their nutritional needs.

Regarding the dietary intake, for a maximization of the nutrients absorption, the food
supplement must be ingested within 15min before the diet. 3Thus, our product is perfect for
costumers with busy schedules, being opportune and timesaving. This food supplement
contains Whey protein 80% (concentrate), Dextrose, Vitamin C and BCAA (in a proportion
of 2 leucine, 1 isoleucine and 1 valine). In this context, our product will address the need of
a zero effort and ready to use solution, even though it is not as cheap as the online
competition in price/quantity ratio, but still cheaper than the already available food
supplements in the current market. For instance, it is possible to buy at online retailers food
supplements but only at large scale, representing an investment risk for the costumer. Our
product will be presented in individual doses that do not need much money and time

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 commitment from the costumer and it costs half the price of the equivalent products on the
market.

EMAK -JB ENTERPRISE will handle the importation and food supplements distribution
with its own vehicle. During the first year, the products will be stored at the distribution
points and while we get our own warehouse later in the second year. On the third year, we

will acquire few more vehicles to transport the food supplements.

III.I Business Model CANVAS

With this Business Model CANVAS, divided in 6 topics, we aim to detail our strategies in
order to be more efficient in our business.

Segmentation – Our target segment are busy-schedule personnel from all different
corporate offices and busy market women which their dietary intakes are questionable,
which wish to improve their performance by the use of food supplements. We will also try
to gather non-supplements users through word-of-mouth, forums.

Value Proposition – Our value proposition is focused mainly on the convenience and the
price.
We are offering a service that is as convenient as the already available in current market,
but at half price. Our product is user friendly, timesaving and very practical. Comparing
our food supplements with the online retailers, ours is much more convenient.

Distribution channels – Our distribution, as previously stated, will occur through

distributing point and later vehicle delivery being the most efficient way to reach our target
segment. This way, we can establish contact with customers in locu (e.g. gym, sport
center).

Customer Relationships – EMAK -JB ENTERPRISE lacks customer direct relationships,

since our product is sold mainly through distributing point, there is no direct contact with
end users. However, we plan on getting to know their opinion through the internet and

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 social media (Snapchat, forums, Instagram and Facebook), as well as promotions, reviews
and other activities.

Income Sources – Our income sources will be from the sale of food supplements.

Cost Structure – With the extensive use of outsourcing and with a value proposition based
on low prices, we will be able to offer our product to consumers at the lowest price
possible.

III.II Product Viability Analysis

In this $10 billion market there is a lot of competition but no one controls the market yet.
Nowadays there is a growth in health care related issues, which can be correlated with the
increasing dietary intake. Each person has their personal goal but all of them are results
focused. With our food supplements, we help our customers to achieve their goals faster.
After rigorous research we found that there is around 2000 daily people and the numbers
tend to grow bigger each year, showing this market has a lot of potential. By the end of
2024 we will to be present in 3 countries with our food supplements product as we have
plan to manufacture the products later when our company reach self-independent and
become prominent in this circle. Taking into account each individual dose is sold at
GHC5.00 we expect a revenue close to GHC800,000.00 per year.

From the investors’ point of view, this project is a good investment, since we have
narrowed the costs to the minimum to get the better margins. Our microenterprise will be
composed by about 100 employees (with salary retention), with their cars, and storing
everything at the distributing point. The only expenses will be the imports duties,
advertisements, fuel and designers. We estimate that this will be a very fast growth project,
giving us a bigger profit margin guaranteeing us to be self-independent financially in 3
years’ time.

Fast – buying the product online takes at least one day to arrive after the order, while
buying at the distributing point is instantaneous.

No commitment – buying the product in bigger doses takes commitment that many times
the consumer is not willing to take, due to the fact it may not like the flavor, the results, etc.

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 Time Saving – the time spent in ordering and processing the imports is something that turns
considerable on the long run, and while the company managers can make available time in
analyzing their project plans.

IV. EMAK -JB ENTERPRISE Introduction

IV.I Sector Analysis and Potential Market
In a study conducted by CNN in 2011, it was reported that in the Ghana and Africa as a
whole, half of the country’s population took some kind of supplements, which may vary
from Vitamins and Omega3 to supplements targeted to dietary intakers.

The global value of the supplement market is $10 billions according to a research from
Euro monitor.

Forbes has stated the Nutritional food Supplement Industry as one of the fastest growing
industries in the world. The same study also considered that the food supplement industry
has a huge potential, and shows no signs of slowing down. It is predicted to grow at 4% per
year in the next 4 years.

Despite the fact that there are some major players in the industry as is the case of Optimum
Nutrition (ON) and Bio-Engineered Supplements and Nutrition (BSN) (both owned by
Glanbia) and Muscle Pharm it would be wrong to say there is a “Monopoly” since there are
several minor players in this market, that altogether control a big portion of the food
supplement industry. The company Muscle Pharm back in 2010, went from new company
to conquer the global food supplement market in few years through its strategy of
communication on social media.

Omega3 supplements and Vitamins represent the majority of the market share being focus
on masses and bought by women and families. However, food supplements are responsible
for bigger revenues, as they are meant for dietary intakes.

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 IV.II Market Segmentation
The supplements market we are inserted in, can be segmented in:

- Food Nutrition supplements;

- Vitamins and minerals;
- Plant origin supplements;
- Meal replacement supplements and Specialty supplements.
The vitamins and minerals segment is the one that presents the biggest number of sales but
is also the one where the customers are less loyal to the market. However, this is not the
case of food nutrition supplements, where customers are tremendously loyal to the market.

IV.III Target Segment

Our product focuses on people who take food nutrition supplements. This is the segment
we know more about and it has the most loyal customers in the global supplement market
and it is the one with the biggest growth potential.

IV.IVCritical success factors in the market

The food supplement market is ruled by different success factors. In the EMAK -JB
ENTERPRISE point of view, quality of the product, brand, word-of-mouth and internet are
the most important in descending order. Below is a brief explanation for each of these
factors:

Quality of the product - the quality of the product is essential for the customers to feel
comfortable and trust us when buying any new product we decide to commercialize.

Brand – How customers perceive EMAK -JB ENTERPRISE must be carefully studied. If
we enter in the market as a brand with supplements too directed to dietary intakes,
consumers might think this is the only type of customers that EMAK -JB ENTERPRISE is
trying to reach. The image we intend to transmit is of a company that is concerned about
performance enhancing and healthier habits.

Word-of-Mouth and Internet – In the food supplement sector it is extremely important

that our customers are satisfied with our product and that they recommend it to friends and
other potential customers.

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 IV.V Competition Analysis
The food supplement industry began its dramatic increase 40 years ago, since then buying
large quantities started to be the most profitable way to acquire such supplements (e.g.
package with
1-5kg’s of product). Nowadays, the situation has changed and there is a new concept based
on the notion that consumers demand smaller quantities (a single dose) near the
environment where consumers will need it the most. With this new concept (in Portugal
since 2013) new brands have emerged, and some old brands have added this service to their
portfolio. Nutristrada and Scitec are examples of old brands that have adopted a business
plan similar to ours. These companies are present in Portugal with their own products and
vending machines, however their cost is still considered high for some customers.
Nevertheless, in Portugal, the biggest companies have not yet adopted this approach, since
it is expensive and demands countless resources to adapt their strategy to this new market
need. Thus, we consider there is still a market gap we could take advantage of.

The question “Will the biggest companies ever adapt this new way of delivery or will they
stick with the old approach?” remains.

The major current companies in the market are:

• Optimum Nutrition – bought 5 years ago by an Irish Group (Glanbia) for $2M. It
has the bestselling whey protein powder in the world. (100% Whey Gold Standard –
the basis of a good post-workout shake).

• BSN – bought 2 years ago by the same group that bought ON, for $1.5M.
• MusclePharm – came into the picture in 2010 and quickly earned a huge market
share with the growth of MMA (Mixed Martial Arts). It is now publicly listed with
a market cap of around $4.5M. 6
• Gold Nutrition – the biggest Portuguese supplement brand and increasingly the
biggest threat for international well-established brands.
As previously stated, despite the fact that the above companies are our main competitors
and still will divert many customers from our business, they do not satisfy the customer
needs that we satisfy. These brands are not represented in Portugal (except Gold Nutrition);
hence their

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 selling price is inflated. When it comes to prices EMAK -JB ENTERPRISE offers a lower
retail price for a similar product, (An ON bar similar to what our offers costs about 2€
whereas ours only costs 1,5€). However, if these brands decide to adopt this service, with
the market share that they already have, their market knowledge and their marketing budget
they will constitute a serious threat. Gold Nutrition has not adopted this kind of strategy
with their own machines or products in Portugal. We perceive our service, as a “question
mark” in the
BCG Matrix (Figure 2). It is located in a market with high growth with the chance to
become a “star” product.

SWOT ANALYSIS

Concerning the SWOT, as Strengths we have our strategic advantage of a new form of
distributing the product to the end user and the relatively unexplored market of food
supplement in Ghana and Africa as a whole. However, our low budget for R&D to
approach this new business constitutes a weakness and our low brand awareness is a
weakness when compared to others well-established brands in the national market. The
Industry’s enormous growth could not be stressed enough as an opportunity and EMAK -
JB ENTERPRISE could be the center piece of this revolution in the supplement world in
Ghana, as other brands have not taken advantage of this service to its fullest. Our
dependence of imports suppliers is a threat as they may not deliver items on time or the
quality of the product may be altered in the course of time.

IV.VI Competition Analysis – Relevant Market

Relevant market is the market where the process of competition takes place. It is
determined through two different criteria (Potential competition/Geographical market,
Demand-side and Supply-side substitution):

• Potential competition/Geographical market – it may become more

expensive/impracticable to sell our product in different countries after importation
due to barriers to entrance or transportation costs. That may result in different
companies taking advantage of this situation and consequently becoming
competitors, however they will be from our industry, commercializing substitute
goods.

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 • Demand-side and Supply-side substitution – demand/supply side substitution is the
reaction consumers have based on prices fluctuations. We feel we should not be
awfully concerned about this aspect of the business because there is not another
product that substitutes both products we sell. At the most consumers will stop
consuming ours, but we do not see that happening, since we offer really low prices.

V. Project’s Assumptions
Our project will start in 2024. In the first year we assume there will be only three selling of
food supplements, each food supplements averages of 2000 clients per day. Thus we
estimate to sell on average, per food supplement, Our total sales will be determined by the
number of food supplements we add each year, as show in this figure.

Chart Title
1,400,000.00

1,200,000.00

1,000,000.00

800,000.00

600,000.00

400,000.00

200,000.00

0.00
2024 2025 2026

Vitamin C Omega -3 Glucanoid

Regarding the price, in the first year it will be GHC5.00. Both products will cost the same
and over the years will be affected by the inflation rate.

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 Concerning the annual costs, we will outsource our production in order to eliminate the
need for investment in infrastructure and to access to skilled resources. Thus, Cost of
Goods Sold (COGS) is linked to the outsourcing contract, as importation of our products
and is related to the gross margin.
Initial Invest of EMAK -JB ENTERPRISE
Investment needed (1st year)
GHC.00
Vehicle 50,000.00
Working Capital 200,000.00
Rent Utility 170,000.00
Salary 70,000.00
Miscellaneous 10,000.00
Total Financing 500000.00

VI. Financial Strategy

In order to create and start a company, the entrepreneur has to fund raise the needed capital
to cover the future expenses. It can be done in pulling of capital from sole proprietor
(investor) or government grant funds.

Every entrepreneur has to decide on the most efficient way to borrow money. Is it by
issuing debt or equity? Nowadays asking for a bank loan, is not cheap, as there are large
fees and taxes (up to 20% in some cases), and the borrower is obliged to pay back in 5
years. Furthermore, banks lend small quantities (GHC100,000.00 maximum), and only lend
money. When borrowing from a bank, there are less fees to pay in case the company is not
profitable, however, when compared to the investor, bank loan is not an attractive proposal.
The investor will provide the necessary capital to start the business, will also give more
time to pay-back (sometimes the entrepreneur only does it after the business gets pre-
determined revenues), and on top of all, it is smart money. This means besides the capital,
investors offer their expertise, their know-how, their experience and network. This is the
best deal to get when trying to start a company and this is why Business Angels and
Venture Capitalists (both investors) are so important in entrepreneurship. The most
important aspect is the fact that with investors, the capital comes in the form of money and
knowledge.

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 VII. Investment Decision
As previously analyzed on chapter II, the food supplement market has been increasing over
the last few years. Given the fact there is not an absolute leader, no substitute products, low
supplier and consumer bargain, this market can be good to invest in. There is a lot of
competition, but there is still a gap between consumer supply and products delivered from
these companies, since almost every brand sells their product in high quantities, making it
riskier for customers. Consumers that do not want to invest large amounts have very few
alternatives to the products available. With our product, we expect to fill this gap and deliver
to the consumer a cheap alternative. Since this new idea of individual doses is relatively new,
there is low competition, which a great opportunity for EMAK -JB ENTERPRISE to
penetrate the food supplement market.

When analyzing our project viability, more precisely Net Present Value and Internal Rate of
Return we can get some conclusions, such as project’s profitability. When looking at our
NPV we see it is GHC1,200,000.00 and we can conclude this is a financially viable project.

It is important, however, not to forget that a business plan is a complex study that requires
deep analysis and reflection from the entrepreneur. This does not mean a business plan is
100% reliable, since it is not possible to predict exactly how an investment will turn out in
just a matter of months. The entrepreneur and investor should take in consideration that many
factors (both internal and external) may affect the project if this was to be implemented.

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 VIII.Conclusion
This thesis was done with the intention of analyzing, discussing and concluding about a very
specific market niche viability. After this project, it was clearly noted this industry still has a
lot of potential, and this one in particular could be a very good business to invest in. Without
the need of a large amount of investment, high potential of growth and a market that is
growing each year, it can attract many investors, making it easier to stablish in the market.
Truth be told, the competition in this area (Supplements) is enormous, but at the same time,
only a few are investing in food supplements, hence why this project is extremely viable. It is
obvious that this project has potential, which was shown throughout this thesis. This project
was extremely satisfying, since it allowed me to explore part of the Financial Industry,
Investments and Project Management.

This thesis proves that the food supplement market is a very good market to invest in. Even
though this project is risky, the returns are good, and with the experience and money of a
Business Angel, and all the data mining of this project, I am sure it would be profitable.
Please keep in mind all these values are estimations, but the expected value are (on the
projects perspective vs investors perspective):

- Net Present Value of GHC1,200,000.00

- Internal Rate of Return of 220% vs 220%
- Around 30% Return On Investment for the third to sixth year
- Return on Equity of 124% on the third year and around 70%~60% for the remaining
- Growth Rate of around 60% for all years except the second (with 100%)
- Positive Cash Flow of 199 GHC150 on the third year

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