Professional Documents
Culture Documents
YeAbat knitting plc is the seventh mens, womens and childrens sock manufacturing industry next to these
six privately owned manufacturers in the country this newly introduced business plans to come up with
through the production of different sizes sock that are used as a casual and occasional sock products in the
country.
Through generous industries capital investment plan, the business will exceed its customers
expectations. These targeted customers will be willing to pay for the product because our product-customer
relations is done according to the need that come from the market not for the product to the market for that
reason if the product is delivered based on the need from customer since the product is acquired by the
customers in their day to day life.
The companys projected growth rate is very high each year with respectable profit margins as a percentage of
sales. YeAbat Knitting plc will be a home based business with four individual as partnership. At start up
the business need ETB 6,584,774.40 from this amount the cost of machinery covers 5,487,312.00 and
20% of from the lease amount working capital covers 1,097,462.40 both in the form of lease financing
and owners contribution. The business will have 30 permanent and temporary employees.
This profile envisages the establishment of a plant for the production of socks and stockings with a capacity of
1,200 This profile envisages the establishment of a plant for the production of socks and stockings with a
capacity of 1,200 tones (1.2 million pairs) per annum. The demand is expected to reach at _______ tones by
the year 2020. The plant will create employment opportunities for 20 persons. The total investment
requirement is estimated at about Birr _____ million, out of which Birr _________ million is required for plant
and machinery.
Some of the management positions in the PLC. will be full filled by the owners themselves, and the rest will
be employed from the market. The general manager of the business partners association will be Mr. Nurelegn
Zelalem, who has a BA degree in Accounting and MBA student having more than eight years experience in
different governmental and privet institutions. He will be responsible for all managerial and leadership
activities that the company acquire to grow such as financial risks and benefits, scheduling, training, and
customer care management. The Association will also have one finance manager, who is a graduate in
accounting with over 4 years experience in the field and will be responsible for performing financial reports,
prepare financial analysis, control insurance payables, control loan payables and short term loan needs etc.
There will also be an accountant who will be responsible for the inventory, cash collection, and preparation of
financial reports and documentation of financial documents. An office manager, who has a diploma in
secretarial science, will be assigned. She/he will be responsible for supervising the overall administrative
availability of the main raw material sellers and finished good buyers, The potential of the raw material
here is estimated to have a supply by the time of shortage, and can continue the same way in the second
rotation. Transportation of the raw material from supply site to the factory and finished products to the
market is very easy in that. About 200 KW is an estimated power requirement for the plan, and this is
easily available here as the electric power line from to the capital city Addis Ababa station crosses the area
with substation at 5 km from the factory and the factory will start the business through rental which full
filled the requirement os the electric power. Land for the mill and dumping of raw material and finished
YeAbat Kniting plc. vision in the sector is to see minimized currency spending and import
substituted by local manufacturing with maximized product quality and satisfied local market. In
addition, in addition to this generating foreign currency to the country and maximizing companys
profit through exported product market.
1.2 Mission of the company
YeAbat Kniting plc. mission is four-fold, with each being as integral to our success, as the next level:-
Product Mission - Provide customers the finest quality product and delivery products in the most efficient
time.
Environmental Mission It is known that waste is ecpected as long as though the production excist for that
reason our waste products will be process further for house hold products such as askopa
Community Mission - Provide community support through learning process and creat jop opportunity for
the community.
Economic Mission - Operate and grow at a profitable rate through sound economic decisions.
YEABAT KNITING PLC. mission is to provide the customers with reliable product and delivery service
in an efficient, completely trustworthy, and professional manner. It exists to attract and maintain
customers. When it adheres to this maxim, everything else will fall in place. The product will exceed
the expectations of its customers.
PART Two
2 SWOT Analysis
pretty much of an art, understanding of marketing, human relations and technology as well as operation needs
skill and techniques. The requirement can be fulfilled by the experience of the new business manager. In
addition to experienced manpower, the other strength of the business is the advantage of getting opportunity to
use rental sheds for production and the use of lease financing which is designed by the bank helps the new
business to start in easy way which minimize the cost of equity contribution. Serving the customers on credit
base, can motivate those who have temporary cash shortages in their day to day business activity to order at
any time of the month can be seen as strength of the new business. Moreover, providing the quality and standard
of the products are also an indicator of the strength of the new venture.
The main weakness of the business would be the possibility of not fulfilling the expected market
demand in the early phases of the factory production. This may particularly apply to customers residing
at remote distances from the production site. This may result in the emergence of new competitors for
the same product. In addition to that some production process such as dying for small quantity will not
be available in the country that may affect adversely for some customized product order that need this
process.
2.2 Opportunity and Threat
There are far more opportunities now for running a business than before fifteen or twenties years ago. Among
this, the increasing in modern citizens and the expansion of cities helps for the growth of demand for shoes and
the sock bear in mind the change with in citizen is due to the change attributed to good economic
developments with in the community and other factors are among the opportunities that can be stated. Hence
these opportunity helps the new business to transact with different micro and medium level retailers by
delivering sufficient product for their demand in producing finished products, and with the growing construction
companies in satisfying the need for different size, color and design.
However, these and other opportunities in implementing of the proposed business are not free from
threats. The possible entrance of new competitors and the increasing local and export prices of raw
materials would be some of the threats that the new PLC may face in the future in addition to this
employee constancy in staying for long in the company will affect in loosing of trained man power from
the experience of other related industries further more in finding trained man power in the area is
difficult.
2.3 Micro and Macro Environment of the Business
A wide variety of individuals and organizations as well as the whole society may be affected by the
business. Each of these groups has its own desires and expectations. Among those who have a high
personal stake in the new business decisions that the micro environment includes are retailers,
employees and customers.
Employees: The business provides its employees not only with good pay and good working condition,
but also with the opportunity to grow and to achieve their full potential as per the growth of the
business. In addition, their rights and privileges will be advanced and they can take parts in decision
making process of the business.
Customers: The business is conscious of the importance of fair price, good quality products, and
honest in its products. Thus the customers can be free from harmful and deceptive product such as
selling law quality product for socks as a great quality, manipulating of price and measurement
device. On the other hand, purchasers may be affected by some unfavorable purchasing decisions,
opportunities for fraud and illegal payment by different retailers. However, they can be protected by
contacting the company.
To examine the impact of macro factors which act on a business, demographic, economic, technological,
political and social/cultural factors should be considered. The company considers these points in the
following manner :-
Demographic environment: Socio-economic variable, such as socks manufacturers age level, the
industries size, industries profitability and occupation are type of demographic data often used to
classify market. However, the new business will meet the demand of all groups because it mainly
focuses on those largest consumers, medium and micro retailers.
Economic environment: Since the business depend on the purchasing power of its customers; which
is the function of current income and prices, availability; it has to recognize major trends in the
economic environment. The countrys general economic growth and stagnation has an important
influence on the business. Even hundreds of factors can affect the economic condition of the
country. Our business may not be as such affected in the short run.
Technological environment: It embraces all the specific ways customers obtain the product based on
their and other services as their desire. The technology of sharing information through telephone and
web sites helps the new business as well as the customers to exchange orders and other vital
information that can simplify the complexity of rendering the intended product on time. Supplementary
to this we use technology which is produces by the state of the arts specially technology produced in
Turk that can stay for long that enables us to minimize the cost of spare parts and to save the countrys
extra cost of foreign currency.
The legal-political environment: The government in regulating business activities requires the
business to be registered. Accordingly, the new PLC is ready to register and pay taxes based on the
government taxation policy. The new business service, channel of distribution, price and promotion
strategy does not affect and be affected by the current rule and regulation of the country.
The Socio-cultural environment: The beliefs and way of living of the society is an important part of
environment that surrounds the business. The social value and beliefs of the society has no
contradiction with the new idea of the business because most of the customers have the idea of socks
product. Recently there are six companies that are engaged in producing socks. The new business has
a capability of producing the amount what the two existing companies can produce per annum. In
addition, the promotion that the business is going to do is also expected to stimulate the customers
demand of the service. For that matter the new business doesnt faced any socio-cultural environment
problem.
The existing socks manufacturers and importers are the competitors and are well experienced, strong
enough to extend their market share as long as they are well informed about the market and have
advantage of keeping their customers for a long time.
Their weakness would be lack of expanding their industry and achieving the need of the market of this
product. This shows the new business that they are not strong enough in producing their products
based on customer needs rather they just produce and sell which means lack of providing all type of
different size of plywood to the market.
Thus, the new business is advantageous over the expected competitors on providing good products
according to the customers preference. Since this new PLC has the power of capturing the feeling of
customers and stimulate/encourage them to purchase, it will be easy for the customers to shift to the
new way of getting product and service. So the new business can be built on hard work, creativity, and
genuine customer satisfaction.
PART - THREE
3 Product description
The main product of YEABAT BUSINESS PLC is socks. Socks is serving as a main input for the safety of our
foot that we can use as a fashion when we use shoes or to protect our foots/legs from cold environment.
The following table explains the type of the product and its use:
The sales strategy of the industry is as per the customers need. The company uses different sales strategy but to
reach to the customers geographical area the company would use wholesalers and retailers in addition to the
companys own retailing shops in different geography position. During the commencement of product marketing
3.3 Technology
The technology that the company will use is the current state of the art technology which is now underutilization
The production capacity of the socks machine which is proposed to be from 8/12 pairs per hour using 40 socks
machine with all supportive machineries on the first phase we planed to produce 1.2 million pairs per year with
10 hours working time per day for 300 working days per year , This paper is discussing production of phase one
only. The amount of production is to be increased in due course from 1,200,000.00 pairs to 2,880,000.00 of socks
per annum.
PART FOUR
4 Marketing Plan
The second segment of the market that is targeted medium level retailers that sell the
product as a major input during their daily base business activities.
The main market targets of direct consumers for the products are institutions such as
different regional police officers (Reginal police office) and Federal police mass
shoes comforts, protecting coldness, for sport, fashion and much more. The need for this
product is growing rapidly in the in Ethiopia. The Demand for this product seems to be
expanding through different part of the country because of the easy to use and its
affordable price.
This product is under a serious shortage in different locations of the country because of
the diversified use of the product and the shortage of manufacturing industries of the
product. This leads to the conclusion, that the existence of the market opportunity is
high.
PART FIVE
Accountant Accounts
supervisor
Chief
Technician
officer Clerk
Disbursement Warehouse
Officer manager
Production International
supervisor sales and Factory General
5.2 Man power requirements
No. Position Job Qualification No.
1 General Manager management, leadership and fields 6 years relevant experience in the field.
administration of the factory
Order receiving
3 Operations manager Manage and control the Degree in industrial management with 5 yr 1
production activity related experience
5 Marketing and Sales Controlling the market Degree holder in marketing or procurement 1
Manager and sales environment and sales with 5 year experience
Accounts supervisor Control the overall Degree in accounting and 5 year experience 1
6 accounting records
Opperators Daily work TVET graduate
8 20
Total 26
Price List
Sr. No. Description Qty
USD/unit Total USD USD/ETB TC
Single cylinder double welt
1 socks knitting machine 4-14 4 4,500.00 18,000.00 24.00 432,000.00
pairs/hr each
Double cylinder sock knitting
2 36 4,500.00 162,000.00 24.00 3,888,000.00
machine, 4-8 pairs/hr each
Dyeing machine, 50
6 1 24.00 -
kg/operation
Sock molding Machin steam 1 5,000.00 5,000.00 24.00 120,000.00
Table 2: FORECASTED INCOME STATEMENT FOR THE NEXT FIVE YEARS (000 birr)
2014-2018
Volume
of
product 1,920,000 2,160,000 2,400,000 2,640,000 2,880,000
for Sale
(m3)
Sales per
1m3 10.00 10.50 11.00 11.50 12.00
BUSINESS PLC
2014-2018
Asset
Non-Current Assets
Plant and property 6,840.00 8345.08 9346.50 9798.78 13110.55
Motor Vehicles 900.00 - - 1200.00 -
Furniture and Fixture 45.00 116.00 116.00 119.48 124.30
Office Equip. 40.80 82.00 82.00 82.00 85.28
Deprecation (1,368.00) (1735.02) (1935.3) (2266.76) (2691.97)
Total non - current Asset 6457.80 6808.06 7609.20 8933.50 10,628.16
Current assets
Inventories 771.00 1,301.64 2,195.02 2748.67 3748.67
Trade receivables 900.00 928.30 1230.85 1,250.00 1394.00
Other current Assets 400.20 560.00 672.00 1,000.00 1446.01
Cash and Cash equivalents 1936.20 2,300.00 3164.93 3916.15 5091.00
Total current Asset 3,542.20 5089.94 7262.80 8913.86 11,679.68
Total Asset 10,465.00 11,898.00 14,872.00 17,846.40 22,307.84
Equity and Liabilities
Equity attributable to owners 3.000.00 4,050.00 8923.20 10,707.84 16,584.644
Total Equity 3.000.00 4,050.00 8923.20 10,707.84 16,584.644
Non- Current Liabilities
Long Term borrowings 5,600 4,200.00 2800.00 1400.00 -
5,600 4,200.00 2800.00 1400.00 -
Total non-current liabilities
Current Liabilities
Trade and other payables 265.00 1,460.00 1108.80 1658.56 2173.20
Short term borrowing 200.00 788.00 640.00 1,280.00 2,150.00
Current portion of Long term 1,400.00 1,400.00 1,400.00 1,400.00 1,400.00
borrowings
Total current Liabilities
1,865.00 3,648.00 3148.80 4338.56 5723.20
Total Liabilities 7,465.00 7,848 5948.80 5738.56 5723.20
Total equity and Liabilities
10,465.00 11,898.00 14,872.00 17,846.4 22,307.84
Results and Discussion on the Economic sensitivity analysis
What makes hard for this new business is most of the raw matrials are not
found in a home base made rather it is through importation this process may
generate some tackle in the production process unless and atherwise from
the forcasted financial statements we understand that the business can run
smoothly.