Business Plan

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1.

Executive summary
Perficient plastic recycling shop business will be run as partnership. The enterprise offers high
quality decorating apparatus of house or any other, materials for customers. The price is
affordable should not annoy or exploit customers So that customers are willing to pay. The
main job in this business is purchasing/collecting and processing plastic, preparing it to store
the product, monitoring and auditing sales of business and distribute to costumers. The main
objective of the business is that to recycling waste plastic material to useful thing by satisfying
customer wants and we become businessman. we will start the business by 1045000birr.from
this 75000birr collection of members family gift for startup and the 400,000 birr is loan from
OROMIA micro finance.
In the beginning year the business forecast 67000 profits. In the second year 28129.68birr and
third year we expect that there will be increment of profit due to further increases in the number
of customers and get acceptance. The main location of our organization will be found in
Hawassa near to Omega automotive engineering. Because of high waste plastics are dropped
around that then after a time we will distribute our organization to the other region of Ethiopia.

1. Brief description of the project


Recycling is one of the most important actions currently available to reduce debris in land foils
and in natural habitats impacts and represents recycling provides opportunities to reduce oil
usage, carbon dioxide emissions and the quantities of waste requiring disposal, while plastics
have been recycled since 1970’s the quantities that are recycled vary geographically, according
to plastic type and application. Recycling of packaging material has been rapid expansion over
the last decades in a number of countries.
The plastic industry has developed considerably since the invention of various routes for the
production of polymers from petrol chemical sources plastics have substantial benefits in terms
of their low weight, durability and lower cost relative many other material types in addition
plastics are in expensive ready be molded into a variety of products that find use in wide range
of application.
As a consequence, the production of plastics has increased markedly over the last sixty years
related to this there is waste plastic material, this waste is now global problems and one that
must be addressed in order to solve the world resource and energy challenges by recycling or
reuse.

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Developing of Business Plan
The names of our organization are “Perficient” plastic recycling shop. This organization has
its own brand symbol (trademark). And the form of ownership is partnership. Our organization
will be registered in different administration organ.
The main location of our organization will be found in Hawassa near to automotive engineering.
because of high waste plastics are dropped around that then after a time we will distribute our
organization to the other region of Ethiopia.
Then our organization will be supplying different types of material or applicable apparatus to
the people successfully. Some of the products will be manufacture are brush, plastic floor cover,
and other different decoration apparatus.

2.1 (SWOT ANALYSIS)


In our reusing of plastic there will have our claim vital impact happen. These impacts are
investigation by quality, shortcoming, opportunity and dangers.
Strength and Weakness
We know that quality and shortcoming are the inner appearance of a businessperson. Our
quality is to actualize the work of the plant is that we have a great aptitude to arrange how the
manufacturing plant organize, and we have a great communication expertise with any portion
of the society related to the items and the manufacturing plant working guideline. In
expansion to this we have a arrange to alter or set to down to earth way. From here we have a
few shortcomings to perform this arrange like that of misfortune of certainty and we anxious
to require chance.
Opportunity and Threats in the Business Environment
These are external analysis of the business environment. The opportunity that we are installing
a factory of recycling of plastics there are more waste plastic material from Hawassa industries
it’s advantageous to us to get more customers. Our threats, we are thinking in the future is that
the political condition, distribution system, market condition, place requirement and other
natural hazards.

2.2. Objectives
General Objectives:
Our common objective is that to reusing squander plastic fabric to valuable thing by fulfilling
client needs and we ended up in trade.
Specific Objectives
The specific objectives of our business plan are as follow:
➢ Collecting data related to our product quality.
➢ Satisfying customer needs, by changing our production style according to the customer
opinion.
➢ Our product will sell in a moderate cost.
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Developing of Business Plan
➢ Knowing the current situation and widening our business to become successful for
future.
➢ To clean our country from waste deposit of plastics

2.3. Policies-Guidelines and Rules


➢ A few of the rules are, we'll make timetable to attain when the raw fabric come to the
production line and how long the item take time until wrapping up machining time and
labor hour. The specialists within the company must wear security cloth and shoes, and
each specialist must be prompt for their duty.
➢ Working time before launch entrance 2:00 – 5:00 o’clock and after launch 7:00 –
11:00. Totally 9 o’clock per day
➢ Equal sharing of benefits monthly
➢ Provide the enterprise material and product safely!
➢ Meeting once in every 2 weeks
➢ The decision has to be taken by a majority rule and minority right.
➢ Every partner shall be liable to the other partners in respect of any damage which he
has caused by his fault.
➢ Absence from workplace without permission is forbidden. Without any accident or
case.
➢ If a member has an accident in the working time, we have to cover his working
responsibility within equal sharing of the profit, but the skill is determined.
➢ All workers respect any person who is new for the enterprise.

2.4. Brief profile of the entrepreneur


Our business name/unique name: “Perficient” plastic recycling shop
.
3. Marketing plan
3.1. Marketing research
a Target markets.
Our target market includes Households, restaurants, university, hotels and urban centers. These
are the highest consumers of beatification products b, Market Trends
In our country most people use costly products to decorate their house as well as their
environments so use of recycled plastics for decorative purpose would serve as a good
alternative and also it used to clean our country waste deposit of plastics.

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Developing of Business Plan
3.2. Marketing Plan/Analysis
A market analysis is a quantitative and qualitative assessment of amarket.it looks into the size
of the market both in volume and value, the various customer segments and buying patterns,
the competition, and the economic environment in terms of barriers to entry and regulation.
Competitive Edge:
When we build and install the factory in Hawassa
➢ There will be a compotator around our factory.
➢ Customers are available.
➢ We are profitable by producing quality product and adding different decoration with a
minimum cost in order to satisfy customer needs.
Marketing Objectives:
The objectives of the marketing analysis of our business plan are to show for as:
➢ Knowing our market
➢ The market is large enough to build a sustainable business Marketing Methods:
A) Product
➢ Specification: -Our product specification mainly measured with quantity. That is in
kilogram. According to our decision we have to be deciding in order to put the amount
of plastic material to consume for each product are described as follows;
✓ The amount of plastic material in molten form measured in kilogram is determined
related to the factory product.
✓ In our factory plastic ceramic consume 0.4 kg per unit of molten plastic material, and
similarly decorative flower holder consume 0.6kg per unit molten plastic material.
➢ Finally, there are other tangible products in our factory; such as, broom consume 3
highlands of water and a decorative material resorts required one highland for 3 flowers
and a steam and leaves required 5 highlands.
Competitor Analysis
Competition is the rivalry between companies selling similar products and services with the
goal of achieving revenue, profit, and market share growth. Market competition motivates
companies to increase sales volume by utilizing the four components of the marketing mix,
also referred to as the four P's. These P's stand for product, place, promotion and price our
direct competitors are the companies that works on waste plastic recycling for beatification and
home purpose that targeting the same audience, selling the same products and a similar
distribution model as ours.

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Developing of Business Plan
another company that offers the same products and services, much like direct competitors;
however, the end goals are different. These competitors are seeking to grow revenue with a
different strategy. For example, general contractors, other company that works on the
manufacturing of plastic products for different purpose.

3.3. Pricing
We will use a penetration pricing strategy to attract our primary target market. The method
for setting pricing is based on our capital flow and by considering customers interest but not
much considering lowest prices because lowest pricing is not good for most small business.
We will try to reduce prices of services and products to fit our competitors if it doesn’t have an
effect in our business flow of cash.
Location
Place: Hawassa: -since many peoples and industries are found in Hawassa, in their day-to-day
activity they use plastics and plastic products, so many accumulations of waste plastics are
available.as result we select Hawassa as the location for our company.
Location or site: around Omega automotive engineering at Hawassa highway
Promotion/advertisement: -
➢ Advertising once a week across the environment using car and sometimes in mass
media.
➢ Building and open furniture houses in different small towns, for maintenance and
distribution
➢ Announcing the functionality, easily maintainability, durability, performance and
aesthetic value of the machine

4.product and service

4.1. Production/manufacturing process


When we are producing recycling plastic we follow the following steps: First we collect the
waste plastics from available areas. Our manufacturing process is categorized in to two ways.
The raw materials after passing washing process it performs as an output product. The second
category is that the raw material as an input which pass some steps to take product. Then after
washing it will be dry at 42 degrees centigrade and the plastic is made in a small piece and
reach to a furnace of 250 degree centigrade for melting purpose and then go to mold to take a
shape of output product.

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Developing of Business Plan
4.2. Supplier and raw materials
In this company the raw materials are waste plastic products, and the suppliers are those
industries which use plastic products, societies who use plastics in their day-to-day activities
and peoples who are intended to clean the city etc.…

4.3. Machineries and equipment


The machinery we use to achieve the activity are drilling machine grinding machine, and
vibrating machine are some of them. And the equipment we use in the factory is plastic path
container; furnace, mold, and conveyer are some of the main components of production system.
Price: -As there are many competitors for our business, we prefer premium price method of
marketing. Place distribution!
It is product supply and service giving partnership business group that produce end products of
the recycled plastic material and supply to the customers as well as gives awareness how
customer use our products. The raw materials are supplied from the society, and after processed
to products finally customers buy for different usage.

4.4. Plant design /layout.


Definition: Plant layout refers to the arrangement of physical facilities such as Machines,
equipment, tools, plastics etc. in such a manner so as to have quickest flow of material at the
lowest cost and with the least amount of handling in processing the product from the receipt of
raw material to the delivery of the final product.
Types of layouts:
There are mainly four types of plant layout: -
(a) Product or line layout
(b) Process or functional layout.
(c) Fixed position or location layout
(d) Combined or group layout.
Among those Product or line layout is prefer to our plant design. Since in this type of layout
the machines and equipment are arranged in one line depending upon the sequence of
operations required for the product. It is also called as line layout. The material moves to
another machine sequentially without any Backtracking or deviation i.e. the output of one
machine becomes input of the next Machine. It requires a very little material handling. It is
used for mass production of standardized products.

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Developing of Business Plan

Advantages of Product layout:


➢ Low cost of material handling, due to straight and short route and absence of
backtracking
➢ Smooth and continuous operations
➢ Continuous flow of work
➢ Lesser inventory and work in progress
➢ Optimum use of floor space
➢ Simple and effective inspection of work and simplified production control
➢ Lower manufacturing cost per unit
Space required.
The factory requires space for building as well as for storing the input and the output material
required area is 500*300 m2. Table 1 Activity/action plan
NO. Activity Resource Responsible duration communication

1 General Books and Employed Six 2 Week report


manager professional months
computers
person

2 Finance Worker’s activity Bekalu Tesfaye Six Monthly report


and months

human.
resource
management
3 Buying square Marketing members Six monthly
part and characteristic months
necessary
materials

4 Machine Knowing about members monthly


operators the machines

5 Assembly Knowing the Skilled person 1 year Monthly report


testing and procedures of
assemble
inspection
6 Quality Knowing the professionals weekly Weekly report
checking products

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Developing of Business Plan
7 Deliberate to Finished on time members monthly Monthly advertise
the customers

5. organization and management plan


For implementation of the business plan the following analysis should analyzed in order to
functional the business plan.

5.1. Management of Resources


Our management is expected to use resources wisely, operate profitably, pay debts, and abide
by laws and regulations. Our management system is based on teamwork, responsibility, and
mutual respect. People who work recycling of plastics in this enterprise can easily create partner
because our team encourages creativity, diversity, growth, and performance.
Management level:
Bekalu Tesfaye: As Main Manager.
Dr. Samuel Jilo: As Vice President
Bizuayehu melak and Tigist Bekele: As Financial Management
Meron hordofa and melese Abiye: As Advertiser
Tsion Niguse: As Secretary (Clerk)
Tigist Zerga: product counter
Shamble Aklilu and Natnael Girma: supervisor.
LEGAL IDENTITY
Form of ownership: Partnership since the business is owned and operated by 10 people. The
reason what we are going to select the partnership that is association of two or more persons to
carry as co-workers of a business where the relationship is based on the agreement is called
partnership.
The advantages of a partnership include: -
Easy of formation, large resources, Diverse skills and expertise, Flexibility of operations,
sharing of risk, Benefits of unlimited liability, Promptness in decision making, Close
supervision, Reduced management cost, Protection of minority interest
5.1.1. Human resource
In our factory there is different skilled manpower to achieve or accomplish the activity in
effectively and efficiently.
Personnel: we went to three skilled persons.
➢ Lawyers
➢ Accountants
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Developing of Business Plan
➢ Engineers: - designers and machinist
5.1.2. Existing management
The management team is organized based on experience and knowledge of the members. The
team’s name for the management starts from higher manager includes all workers in the
hierarchy of the organization. The manager controls all the working process of the company.
There are different departments in our recycling of plastic materials.
➢ General Manager
➢ Finance and human resource management.
➢ Manufacturing department
➢ Maintenance department
➢ Machine operator’s department
➢ Assembly, testing and inspection department.
5.1.3. The Future Requirement
The future requirements of the business will expand by adding workers who have skilled and
professional manpower, it upgrades to small scale enterprise and gradually changes to large
enterprises.

5.2. Operation:
In our business factory the materials, equipment and other resources are operated in the proper
manner. By collecting data for material and other necessary things for our factory we can draw
and analysis the trend of the chart. By looking at the price movement of a security and using
this data we can predict its future condition. Lastly, find solution for how to perform the
operation in the factory.

5.3. Human resource requirement and management


The labor required for the manufacturing process is easily available since we are working in a
partnership enterprise. The organization is permanent the on daily wages, per unit basis and
permanently employed. It is recommended that selective highly skilled labor should be
employed permanently, and other labor should be hired as and when required.

Table 2Activity breakdown for implementation


Major activity Preceding activity Required time in weeks

(A) Approval of the project by - 6 weeks


city administration

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Developing of Business Plan
(B) Appointment of project A 3 weeks
implementation team

(C) Completion of legal B 3 weeks


procedure

(D) Acquisition of land C 14 weeks


(E) construction of civil D 54 weeks
works

(F) Purchase of machinery E 5 weeks


(G)Installation of machinery F 3 weeks
(H) Requirement employees G 3 weeks
Commissioning of H 4 weeks
machineries
.

6.financial plan
6.1. Funding Requirement:
The fund requirement institution to borrow money of (400,000) from Oromia micro finance
and each member have75,000 who gets from family. The total is 1,150,000.
Table 3 Funding Requirement
Item Cost
(ET Birr)
Human resource 10000
Building 200000
Machine and equipment’s 300000
Raw material 175000
Necessary infrastructure 82000
Insurance 53000
Maintenance and repair 45000
Other 180000
Total 1045000
The remaining 105,000 birr is saved in the bank for emergencies like political crises and natural
phenomena.

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Developing of Business Plan
6.2. Profit And Loss:
The profit and loss will allow the manager to understand which lines of the product mix need
to be focused on and which should not. All companies will have loss leaders, which are
products or services which are not profitable, that company has to offer for the sake of offering
another product/service at a greater profit, or to attract new customers. However, the profit and
loss is one way of finding out which products/services are most profitable and which are loss
leaders. Each line within the product mix can be compared to its correlating expenses in order
to determine its overall profitability. This can only be done if the Income Statement is set up
correctly.
Revenue and profit in each year calculated as: -
Rev=sales*unit price
Net Profit = Rev-total annual cost
Table 4 Profit loss analysis

Year 1 2 3 4 5
Sales 3000 4000 6000 7000 8000
Unit price 100 150 120 100 100
(birr)
Revenue 300000 600000 720000 700000 800000
(birr)
Total annual 35000 68090 62000 96000 90000
cost (birr)

Net profit 265000 532010 658000 604000 710000


(birr)

Revenue 1st year = 100*1500=150000birr as observed from the table

The investment for one year = birr


First year total annual cost = machine deprecation + initial investment+ other cost
Machine deprecation cost is considered as 8% of machine cost from the above estimated
= 300000birr *8% = 24000 birr

Total annual cost =209000+24000=233000


Profit = revenue – annual cost
=300000 – 233000 = 67000 birr

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Developing of Business Plan

To forecast the second year of total annual cost the value then
Total annual cost = f1 + (d-f1)
=233000 + 0.3(1220-233000)
=28129.68birr
Table 5 Forecasting of Total Annual Cost
Year Demand Forecasting total Profit(birr)
annual cost(birr)

1 900 233000 67000


2 1220 28129.68 50337.6
3 1320 28159.68 68337.6
4 2000 28363.68 110337.6
5 2500 28513.68 120337.6

6.3. Cash Flow:


Since Cash flow is the process of estimating initial capital requirement. So, the following
statements will show the projected cash flow for our business.
1) 400000 br. in the form of long-term loans from Oromia micro finance.
2) 750000 br. from our family
The preparation of a cash flow budget requires that you consider two key factors.
Cash in (receipts)
Cash out (outflows)
To come up with these figures, you will have to make a series of assumptions about how your
business will be operating. If your cash outflows are greater than your receipts, then you have
an early warning that you should take actions.

6.4. Balance Sheet:


Is a financial accounting document used to state a company’s asset, liability, and equity. A
business should have a balance sheet available in order to show potential investors and
shareholders the current financial state of their company.
Balance Sheet analysis
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Developing of Business Plan
Table 6 Assets
Materials Number Buying price Single price Total price
PC(laptop ) 25 6500 8000 200,000
Refrigerator 60 5000 7000 420,000
TV 300 3000 7000 210,000
Speakers 20 1800 2500 50000
Camera 50 2000 2500 125,000
Dish 40 1000 1200 60,000
Total 520 19300 28200 1065000
Debit (Rs.) Credit (Rs.)
Particulars
Current Assets:
Cash 400000
Inventory 100000
Total Current Assets 500000

Fixed Assets:
House rent (30000/month rent) 4000
Machinery (27,000) -
Less: accumulated depreciation (30,000 @ 10%=3000)
Total Fixed Assets 4000
Total Assets 307000

Current Liabilities:
Estimated income tax 8410
Total current Liabilities 8410

7.CONCLUSION
Waste plastic recycling is treated as a commercial commodity as product sales generate regular
cash income. Market-oriented recycled plastic production has many benefits for urban
community mainly as we explained in the analysis, the demand for good and cheapest recycled
plastic beautification products are highly increased and consumption rate of the products also
in increasing way in our country. Due to this it is appropriate to develop and encourage waste
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Developing of Business Plan
plastic recycling enterprises in our country. According to the feasibility study analysis the
number of employees in the enterprise and the enterprise will get benefited within the first
months and the debts or credits of the enterprise get paid within 5 years. Therefore, the company
extends its production capacity and looks for another opportunity or problem seeking.

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