QuickNet Trading

Business Plan

9/13/2016
Table of Contents
1 Executive Summary ......................................................................... 4
2 Background Information ................................................................... 5
2.1 Brief History .............................................................................. 5
2.1.1 Vision .................................................................................. 6
2.1.2 Mission ................................................................................ 6
2.2 Financial performance summary ................................................... 6
3 Key Success and Risk Factors ........................................................... 8
3.1 Key Success factors .................................................................... 8
3.2 Risk Factors ............................................................................... 8
3.3 Indicate the risk mitigating measures ........................................... 9
3.4 SWOT analysis ......................................................................... 10
4 Market Analysis ............................................................................. 11
4.1 Target Market Segment Strategy ................................................ 11
4.2 Sales Strategy ......................................................................... 12
4.3 Sales and profit Forecast ........................................................... 12
4.4 Service Business Analysis .......................................................... 13
4.5 Competition and Buying Patterns................................................ 13
5 Technical aspect ............................................................................ 14
5.1 Location and site ...................................................................... 14
5.2 Utilities ................................................................................... 14
5.3 Inputs / raw materials .............................................................. 15
5.4 Machinery and equipment ......................................................... 15
5.5 Production process and production capacity ................................. 15
5.6 Project implementation plan ...................................................... 17
5.7 Environmental impact ............................................................... 17
6 Organization and Management: ....................................................... 18
6.1 Organizational structure ............................................................ 18
6.1.1 Customer Service ................................................................ 18
6.1.2 Estimating .......................................................................... 19
6.1.3 Design Services .................................................................. 19
 6.1.4 Prepress............................................................................. 19
6.1.5 Printing .............................................................................. 19
6.1.6 Binding and Finishing ........................................................... 19
6.1.7 Marketing ........................................................................... 20
6.2 Technical capacity of management ............................................. 20
6.2.1 Management Goals .............................................................. 20
6.2.2 Operational Goals ................................................................ 21
6.2.3 Productivity/Efficiency Goals ................................................. 21
6.3 Human resource requirement and availability............................... 22
7 Financial analysis .......................................................................... 23
7.1 Fixed Cost ............................................................................... 24
7.2 VARIABLE COST ....................................................................... 24
7.3 Source of Finance ..................................................................... 24
7.4 Profit/loss forecast.................................................................... 25
7.5 Income statement as of June 2016 ............................................. 25
7.6 Balance Sheet Projection ........................................................... 26
8 Socio Economic benefits ................................................................. 27
9 Conclusion and Recommendations ................................................... 27
1 Executive Summary
There are two components to this company: Digital and Offset Printing
It is our goal to diversify the sales to the extent that we will never be
dependent on one customer to a degree. In addition, we want to improve
our efficiency and effectiveness through the implementation of Total Quality
Management (TQM).
We have the ability to operate as a "quick printer" when necessary. A full list
of services is included in the Business Operations description section.
There are fair competitions in the printing industry in the country. Supplies
of different types of papers, parts and consumables is readily available.
Our company has been and will emphasize service, quality, price, and speed
of service to compete in the market place. The printing industry is growing
at a rapid rate every year. We estimate our market share to be at least 5
percent and plan to increase that to 10 percent in five years through the
implementation and annual revision of this plan.
QuickNet has the ability to offer full-line printing services. The labor force
consists of considerable number of people who have 15 combined years of
printing and/or sales experience. We will use a delivery service to get the
products to our customers in the outlying areas and for customers who need
rush service.
We presently have a need for the following funds:

Accounts Payable 250,000.00

Operating Capital 250,000.00

Expansion/ Purchase of machineries 1,500,000.00

TOTAL 2,000,000.00

We would like to have this loan over a 5-year term at Enat bank interest
rate.
This business plan makes extensive and exhaustive use of strategic,
operational, and financial planning. An essential element of this plan is the
purchase and installation of the machineries.
2 Background Information
2.1 Brief History
QuickNet trading is a printing press company established in 2003 G.C.
QuickNet Trading is a sole proprietorship owned and operated by Tigist
Azerefegn. It provides a quality and affordable printing services to emerging
market in the country. Its main line of services generally include designing
and printing as detailed below.

a) General
 Brochure & Postcards Printing
 Booklet Printing
 Folded Leaflets, Presentation Folders
 Menus, Business Cards, Invitations, Letterheads
 Business Kits, Flyers
 Various Cards (Wedding, postcard, birthday, Invites, …)

b) Large Format Printing

 Xerox Plan copy/scan/print
 Blue print
 Plotting

c) Promotional & Advertising services

 Printing on T-shirt, pens and caps
 Printing Bolo Stickers and Labels
 Vinyl PVC Banners
 Outdoor Posters
 Roll Up Banners & Stands
 Billboards & Signage
 Floor & Door Displays
 Tradeshow Displays
 Vinyl Flags
 Wall Graphics

d) Documentation (duplicating + finishing)

 Perfect Binding Books
 Saddle Stitching
 Wire Binding Documents
 Stapled Documents

Since the day of its inception QuickNet has been very successful in providing
excellent services to different customers. It is currently progressing in to a
higher level of service provision by increasing its capacity in all directions
and extending its scope to regional states and neighboring countries.
With the experience of over ten years Quicknet is ready to deliver the best
service to its customers. The company is located on Bole/Africa road in front
of Japan Embassy on the same building next to Novice supermarket.
QuickNet offers comprehensive document production services from design to
delivery, with an emphasis on customer service and environmental
responsibility.
Our main facility, located in Bole main road, houses our reception, digital
printing, bindery, and distribution facilities. But our large offset printing and
document center is located in Bole Bulbula. These services are available 8
hours a day, six days a week. In addition, we provide document
duplications, large format designing and printing for engineering design
plans.
It was created to meet the printing needs of the local community. After a
period of time it expanded to own two offices on the same building.
Moreover, the digital printing service also expanded to include offset and
press printing. The large press printing is installed close to Bole Airport in
Bulbul. The two locations provide a wide range of printing products and
services.

2.1.1 Vision
 Our vision is to become a reputable and renowned graphics design and
printing company with-in the country and in east Africa.
2.1.2 Mission
 Our mission is to provide the customer with creative and practical graphic
design work and printing services. We exist to attract and maintain
customers. When we adhere to this maxim, everything else will fall into
place. Our services will exceed the expectations of our customers.
 Penetrate market to global extent through smart usage of current
communication technologies. This includes creation of partnerships with
relevant companies locally and globally.
 Advance to higher level business category through calculated investment
and research.

2.2 Financial performance summary

Information about obtaining the comprehensive historical income statements
can be found in the financial analysis section. The following text is a
summarized version of these statements.
An analysis of the 12-year trend indicates an increase in revenue for the
past 12 years
There was a considerable salary increase without a corresponding increase in
sales or gross profit in some cases. This salary increase, along with the
absence of an active sales force, contributed to a slight decrease in gross
profits.
Several expense line items have been analyzed and have provided
opportunities for cost containment.

Cost of Goods
This item appears to have been out of proportion at certain periods. To
remedy this, several steps have been and will be taken.
• Procedures are being taken to monitor material waste. Waste due to
errors can be considerably reduced by implementing and enforcing
policies on quality control.
• Pricing updates will be made more often to reflect price increases on
papers and supplies. Price lists have recently been updated and
modified to simplify pricing procedures for employees. This will be a
major help in eliminating pricing errors.
• Each department will be responsible for recording time spent on each
job. This will show what types of printing jobs are more or less
profitable, and indicate what measures should be taken to increase
profitability.
Wages (including owners)
Wages have taken a significant percent over the 12 year history. Current
labor expense is high.
Increases in productivity brought about through the implementation of this
plan will bring this figure to lower average
Payroll Taxes
Payroll taxes have increased since 2003. However, this line item is only
controllable indirectly through total labor.
Advertising
Advertising also shows higher average for a small-sized business. In order to
increase our penetration in the market, this item will have to remain above
this average for a short time. However, we do feel that by utilizing an
effective advertising strategy, our advertising money will yield a greater
return than in the past.
Debts
Bad debts have not been our problem in the past, but we will continue to
monitor accounts receivable to avoid developing any problems in this area.
Insurance
Insurance costs should be in line with the standard average.

Interest
Interest has changed in the past years. We hope to reduce our interest
expense by obtaining a loan at lower interest rates than we were used to
pay.
Lease Expense
Lease expense has increased over the past years. We hope to reduce this
expense by using our own facility and purchasing additional. The purchases
will be evaluated with our accountant to determine what items will be most
advantageous at the time.
Repairs and Maintenance
Repairs and maintenance increased significantly through the years. This was
due in part to service agreements on new equipment.

3 Key Success and Risk Factors

3.1 Key Success factors

The keys to success are:

 Professionalism
 Creativity
 Practical insight
 Enjoyment of the experience

3.2 Risk Factors

Printing industry is exposed to various risks which include the risks listed
below. Although certain risks that may affect the businesses are listed in this
section, this list is not conclusive.
- Ability to respond to rapid technological changes
- Highly competitive markets
- Fluctuations in foreign currency exchange rates
- Foreign exchange rate fluctuations
 - Difficulties in recruiting and retaining personnel and managing
operations
- Unfavorable economic factors
- Procurement of parts and materials
- Government regulations
- Securing and retaining skilled personnel
- Employee benefit obligations
- Environmental laws and regulations
- Financing business
- Product liability
- Influence of disasters or other unpredictable events

3.3 Indicate the risk mitigating measures

The printing industry lives and works in a fast paced world. Companies go to
great lengths to win and retain customer contracts. Exacting diligence in
preventing loss at all stages in production is essential, from design and
prepress, through finishing and fulfillment, including distribution and delivery
to your customers and to customers. The very nature of customer needs and
the marketplace means the printing industry cannot afford downtime or loss
costs associated with property loss, equipment failure, accidents and
injuries, or errors and omissions in producing and delivering products to
customers on time. Knowing exactly what customers want and rapid delivery
to the marketplace are critical. Accuracy, quality and timeliness are key
measures by which customers judge reliability and decide whether or not to
continue to do business with the printing company.

Therefore, risk mitigation measures should be in place including: Property

protection and preservation, Electrical installation management, Ensuring
use of only qualified machine operators, Ensure a regular inspection,
cleaning, and maintenance of equipment; Management of Flammables and
combustibles; Installation of Fire detection and suppression
devices/systems; Ensure the health and safety of employees; implement,
communicate and train on equipment safety programs; Ensure Good
housekeeping; and ensure security of the premises.
3.4 SWOT analysis
Strengths
- Small businesses more flexible to satisfy
customer demands. In publishing
production networks characterized
through flexible specialization already
visible.
- Knowledge of and experience in how
to target audiences.
Opportunity
- Added services in communication
services.
- Creation of value and production
networks providing both specialization
and flexibility.
- Individualization of consumers leads to
new and more differentiated market
segments with differentiated profiles
and media demands.
- New media enable publishers to reach
these target audiences.
- Multimedia content development,
multimedia design and distribution due
to shift in media consumption.
- Digitization leads to lower printing
costs and may enhance printing
demand in small runs.
Weaknesses
- Small businesses lower
absorptive capacity regarding
process and product
innovation due to lack of
economies of scale and scope.
- Short term contracts limit
investments and innovation.
- Individualization of consumer
markets leads to decrease of
economies of scale.
Strengths
- Stronger competition.
- Growing importance of
electronic delivery of media
content causing substitution of
printed media by Internet and
mobile devices.
- Consolidation upstream and
downstream in the value chain
(counts for printing).
4 Market Analysis
QuickNet Trading will be targeting small- to large-sized companies. What
these companies have in common is they have started as a small company
with a good idea and have grown into a larger, more mature company that
must now decide if they are going to maintain the current business strategy,
or reinvigorate the company, employ professional service providers, and
move to the next level.

4.1 Target Market Segment Strategy

The market segments will be targeted in a number of different ways. It

must be noted that such firms generate visibility and sales not through
advertising, but through networking and client referrals.

QuickNet will rely on three activities in their marketing efforts. These

include:

 Networking: leveraging relationships to build more relationships within

the city. This strategy will be based on leveraging owner’s personal and
professional relationships that she has developed after spending years in
the industry. Ways of networking include sending out postcards to all
acquaintances announcing new developments and periodically meeting
with customers
 Client referral: by providing outstanding customer attention, current
customers are more likely to become a long-term customer and are more
likely to refer their friends. This includes some referrals that will come
through the Chamber of Commerce and some others that will come from
customers. Recognizing that referrals will be a good source of new
customers, we will be in constant contact with the Chamber.
 Targeted customer acquisition: the first step of this process is to target
who the ideal customer is, determine how QuickNet can offer them value,
and then network to come into contact with the decision maker at that
company. This is the researching and strategic formulation to attract a
chosen company to become a customer. We will put together a list of 20-
30 companies that would be excellent customers. Once these companies
have been identified, we will devise a strategy to target these companies
as customers by initially determining what value QuickNet can offer them.
Eventually, the goal is to be able to meet with the decision maker of the
company and present them with a portfolio of our past work as well as
the proposed value we can offer them.
4.2 Sales Strategy

The sales strategy will be to utilize the general manager’s portfolio of past
work to qualify a sales lead. Using a portfolio is very common within the
industry to show past examples of work. Our strategy will be the
development of several different portfolios, each one customized to a
specific type of work. By having different portfolios, we will be able to better
illustrate our proficiency with that specific skill set. In addition to the use of
the portfolio, we will do research on the prospective company and their
industry so that we have specific knowledge of the needs the company may
have and solutions that he can offer.

4.3 Sales and profit Forecast

QuickNet will continue to develop larger projects and will continue to grow
steadily.

Sales Forecast (Ethiopian Birr)

Sales 2018 2019 2020 2021 2022
Private companies 500,000.0 550,000.0 605,000.0 665,500.0 732,050.0
NGOs 2,000,000.0 2,200,000.0 2,420,000.0 2,662,000.0 2,928,200.0
UN agencies 1,000,000.0 1,100,000.0 1,210,000.0 1,331,000.0 1,464,100.0
Gov 600,000.0 660,000.0 726,000.0 798,600.0 878,460.0
Total 4,102,018.0 4,512,019.0 4,963,020.0 5,459,121.0 6,004,832.0

Expenses of 2016
Salary & Benefities Expense 249,759.24
Loading & unloading 49,079.00
Computer Accessories 3,082.61
Air Travel 43,478.26
Car rent 118,800.00
Fuel Expense 22,150.00
Rent or Lease Expense 124,300.00
Maintenance & Repairs Expense 68,210.25
Utilities Expense 4,768.91
Supplies Expense 7,793.10
Telephone Expense 18,498.52
Advertising Expense 1,500.00
Transit and Storage 3,951.42
Transport and carurier 43,458.43
Depreciation Expense 111,945.06
Total Expenses 870,774.80
4.4 Service Business Analysis

The graphic design and printing industry is fairly diverse with all types of
service providers. There are large advertising agencies, freelance designers,
Printing houses, and in-house firms that typically only serve the specific
company.

Within the last seven to 10 years, there has been a trend in the industry for
the general advertising companies that previously only worked with
advertising, to act as a full-service agency that not only prepares
advertisements, but also does a lot of the creative work in-house instead of
outsourcing it. This trend toward full-service agencies has continued. To a
large degree it is occurring due to higher profit margins for the service
providers. QuickNet will be bucking this trend and concentrating on their
specific skill set.

4.5 Competition and Buying Patterns

The following are examples of the different types of competitors:

 Government and/or Private owned large printing presses: over the

years these firms have increased their number of service. These
companies are typically large and focus on bulky printing service
provision. They also share the graphic designing market because they
tend to follow the “full-service company” strategy. Many customers are
considering such approach specially to minimize costs related time and
transportation.
 Large advertising agencies: They offer from selling media forms of
advertising, to a full-service company that develops creative work in-
house, working with companies to develop corporate identity, etc.
 Freelance designers: these competitors are typically a one-man
operation, often operating out of their own home. Often the freelance
designers are just getting into the business and are trying to get
experience, or they have left a firm in search of a more flexible
lifestyle. Some freelance designers are well experienced and can offer
the same professional level of quality the large agencies offer.
5 Technical aspect
5.1 Location and site
The printing plants are located at Bole road and Bole bulbula. Both locations
are well developed and easily accessible.

5.2 Utilities
The main Production site is equipped with 3-phase electric power to fully
support the heavy printing press machineries. 24 hours stand-by generator
is installed as well. Other utilities such as telephone (data and voice) and
water supply are also available.
5.3 Inputs / raw materials
The major input to a printing press is paper which is widely available in the
city. Other inputs such as inks, spare parts are also available. We have
partners providing us regularly.

5.4 Machinery and equipment

Unit Total
S/N Description Qty
Price Price
1. Perfect binding machine 1 150,000.0 150,000.0
2. Cutting machine: Polar 72 1 160,000.0 160,000.0
3. Roland DG 640i VersaCam print/Cut 1 600,000.0 600,000.0
4. Wire Stitching machine, Gaitzsch Agrafix 1 70,000.0 70,000.0
5. Folding machine 1 10,000.0 10,000.0
6. Perforating & Riling machine 1 80,000.0 80,000.0
7. Electric wire binding Renz eco 1 75,000.0 75,000.0
8. Laminator GBC 1 50,000.0 50,000.0
9. Konica Minolta c540e digital printer 2 300,000.0 600,000.0
10. Konica Minolta c1060 digital printer 1 450,000.0 450,000.0
11. Konica Minolta c650/652 digital printer 4 130,000.0 520,000.0
12. HP laser Jet 400 1 4,500.0 4,500.0
13. Epson L110 1 3,800.0 3,800.0
14. Canon 2020 copier 2 25,000.0 50,000.0
15. RISO duplicator 1 90,000.0 90,000.0
16. Electric cutter A2 size 1 80,000.0 80,000.0
17. Mac desktop computer 1 30,000.0 30,000.0
18. Laptop computers 2 12,000.0 24,000.0
19. Desktop computers 8 6,000.0 48,000.0
20. Laminating machines 3 40,000.0 120,000.0
21. Manual paper cutter A4 3 4,000.0 12,000.0
Total 3,227,300.0

5.5 Production process and production capacity

Our operations consist of the following procedures:
First, the customer places the order. The employee taking the order should
get as much information from the customer as possible (filling out the job
order worksheet should be sufficient). Also, at the time the employee
receives the order a reasonable time should be determined for completing
the job. The customer should be notified of any changes occurring with the
order.
Second, the job ticket with all the information should be completed and
documented in the job log book. The designer and typesetter should be
notified if there is correction or the job should be taken directly to layout if
all of the information is camera-ready.
Third, the typesetter should typeset any required copy as specified by the
customer. Questions or problems should be directed to the person who took
the order. No work should leave the typesetter until it has been properly
proofed by other employees.
Fourth, every time typesetting is done for a customer, the customer must
see a proof before printing is done. Therefore, the client is to be called in for
proofing and they should sign a proof slip after reviewing the completed
work. A customer who is proofing the typesetting that we have done should
be encouraged to check spelling, phone numbers, etc. for accuracy.
It is a good idea, and should be a regular practice, for an employee to go
over the proofing process with the customer and review the printing
specifications as they are printed on the job ticket. Take nothing for granted
and never ASSUME anything.
Fifth, after the proofing and correction stage, the job should go to layout,
where logos and art work are added, an original is made, and a plate is
prepared for printing.
Sixth, the plate is taken to a pressman. The pressman's job is to pull the
stock required for the job and then print it to the specifications on the ticket.
Again, the pressman should not assume anything. If there is any question or
doubt as to the specifications of printing the job, the pressman should take
the questions to the shop foreman for clarification.
Seventh, the job is printed and then goes to the bindery for any bindery
work needed (i.e. collating, numbering, padding, cutting, gathering,
packaging, etc.). When all bindery work is done and the job is complete, it
should either be delivered or taken to the front office for pick-up.
Eighth, the delivery person or the front office employee should get a signed
delivery receipt and/or a signed in voice when the job is picked-up. The
delivery receipt should then be placed in the job envelope and the envelope
filed in the completed box. The invoice also has its assigned place and
should be filed there without fail.
Personnel in each department should be aware of the delivery dates
requested by customers. The work schedules should ensure that these dates
are met. Should a job be held up in a department that will affect the delivery
dates, the customer should be notified to help maintain proper relations.
5.6 Project implementation plan

Our plan for the coming years will be to discuss our future plans, why
they’re important, and the opportunities and obstacles and to address them
to move forward.
The basis of this plan is our statutory responsibilities, our commitment to
our customers, and our desire to build our capacities to provide the best
value for our customers.
Our employees are a team of uniquely talented professionals that handle the
many aspects of print communication, including:
- custom job design and marketing strategy
- single and multi-color print production
- assembly and finishing
- address management and mailing services
- copying and data printing services
- fulfillment services (envelopes, letterhead, and business cards poster
and banner production)
We partner with private companies via contracts to provide promotional
items and print services to meet the nationwide needs of government and
other organizations.

5.7 Environmental impact

The key environmental issues for printers are: Air pollution, e.g. releasing
volatile organic compounds (VOCs) into the atmosphere due to solvents use.
Handling and disposing of hazardous materials, such as solvent wastes and
photographic chemical wastes. Waste management, including the reuse,
recycling and disposal of inks, paper, plates and pallets. Energy use from the
printing process and transport contributes to greenhouse gas emissions and
climate change.
6 Organization and Management:
6.1 Organizational structure
Quicknet is structured in to strategic departments so that each department
job contributes to an integral part of printing service.

General manager

Finance and Administration Marketing and Sales

Manager Operation manager
manager

HR manager Machine Operators

Sales rep
Accountant Graphics designer

Consultant Finishing clerks

Cashier

6.1.1 Customer Service

Customer Service Representative (CSR) is a single point-of-contact for each
customer to ensure that customers receive excellent service and product
quality. The CSR assists our customers with:
• Answering questions
• Receiving new orders
• Tracking the status of jobs
• Planning upcoming projects
• Consult with customers on printing needs
• Discussing improvements to printing services
• Provide information concerning new services
• Guide customers through complexities of ordering printed products.
6.1.2 Estimating
Cost estimates are produced by calculating the cost of the labor necessary to
complete a job and adding the cost of the materials involved. Customers
may request an estimate through the online estimate request form available
on the Department of Printing website (www.quicknetprinting.com) or by
contacting their Customer Service Representative.

6.1.3 Design Services

Design Services help customers start their projects on the right track by
assisting with:
• Concept planning and consultation
• Company identity and logo design
• Page layout and image placement
• Creation of electronic document files and artwork
Use of Design Services allows for professional documents at an affordable
price. Additionally since the designers are experienced in prepress and the
printing process, they are uniquely qualified to design projects that can be
produced and distributed cost effectively.

6.1.4 Prepress
The Prepress Department is primarily responsible for transforming electronic
print files and camera-ready art into printing plates. The technicians impose
the document, laying out the pages in the proper location for printing. They
then ensure that multiple-color jobs are trapped correctly and add all
necessary fold marks, crop marks and color bars. They provide several
types of proofs depending upon customer requirements.

6.1.5 Printing
The Department of Printing offers complete printing services from simple
one-color letterhead to full-color materials. The press area contains a wide
variety of equipment including Small two-color presses and Large one, two
or four-color presses for printing.
6.1.6 Binding and Finishing
This department offers a wide variety of finishing options to meet every
need. Cutting is performed by computerized cutting equipment. Folding can
be done on everything from roadmaps to note cards along with a
computerized collator that gathers sheets of paper into sets at very high
speeds. Binding can be accomplished through any number of ways such as
padding, stapling, perfect binding, thermal binding or comb binding.
Numbering, perforating or scoring can also be added to any print job and
jobs can be finished through boxing.
6.1.7 Marketing
Marketing department offers personalized customer education to introduce
new services and to help customers use our services more effectively.
Printing specialists are happy to go to the customer’s offices.

6.2 Technical capacity of management

QuickNet is equipped with highly talented and vibrant experienced stable
staff. Most of the management staff are graduates of a degree of diploma
programme. Moreover, they are highly experienced in the management of
printing industry. Detail of the qualifications is shown in the next section.
The managers' duties are quite encompassing, as they oversee all shop
employees. Therefore, this job requires knowledge of operational
procedures, people skills, and a very broad knowledge of shop equipment
maintenance. Further duties and responsibilities are:
• Management of each department supervisor
• Ordering supplies and all paper stock
• Overseeing the completion of jobs and ensuring quality control
• Maintaining schedules
• Cost controlling and waste management which requires shop personnel
to use stock that is cut and left from previous jobs, instead of cutting
down new stock
• Responsible for monitoring job flow and ensuring that each order is on
schedule
• Taking job orders, answering the phone if the front office needs help,
and waiting on customers
6.2.1 Management Goals
• Recapitalize through loan proceeds.
• Initiate a plan of action to create a better working atmosphere.
• Reduce cost and increase profits.
• Increase profitability through new formats and procedures.
• Strengthen present customer base and expand customer base to
outside areas (Regional states, neighboring countries etc.).
• Update equipment to expand into more specialized areas of the
printing market.
• Increase employee benefits.
6.2.2 Operational Goals
• Contain all costs within guidelines where applicable.
• Establish a regular insurance audit to determine needs and reduce cost
where applicable.
• Install TQM in phases as indicated on the master calendar.
• Examine costs on a regular basis during monthly financial review.
• Implement accounting changes: such as Capital Expenditures
6.2.3 Productivity/Efficiency Goals
• Contain waste through regular management meetings, at the present
time and through TQM methods in the long-run.
• Install employee suggestion box with cash incentives for suggestion
that result in cost savings on increased productivity. This will lead to a
team based presentation program through TQM in the long-run.
• Outline Quality Control Procedures.
6.3 Human resource requirement and availability
Below are the lists of staff who are currently working for this company.

Tigist Azerefegn, Diploma in

1 General manager business Administration, 16 years of
experience

2 Marketing and Technical

Adugna Jiregna
manager

3 Finance manager Muna Abdella

4 HR Manager Yohannes

5 Operation manager Meskerem Tegegn

6 Cost estimation specialist Minassie Zewdie

7 Binding specialist Tigist Alene /Mesay

8 Printing operators Maedot Wodaj

9 Sr. Graphics designer Elias

10 Graphics designer Sintayehu Meherete

11 Office secretary Tsehay Mulugeta

12 Cashier Kalkidan

13 Sales representative Temporary external agents

14 Accountant Kalkidan

15 Office clerk Tishager Wodajo

7 Financial analysis

The total capital of the project is computed to be Birr 2,600,000.00 out of

which fixed costs accounts 60% and variable cost accounts 40 %. Regarding
the source of finance 30 % will be financed by the promoter and the
remaining 70% will be financed by bank loan.
The capital restructuring program measured in Ethiopian Birr is as follows:

Accounts Payable 250,000.00

Operating Capital 250,000.00

Expansion/ Purchase of machineries 1,500,000.00

TOTAL 2,000,000.00

Of the 350,000 in operating costs, 100,000 will be marked for emergency

use only.
Historical growth has occurred over the last 12 years. The actual year to
year growth rate varies in accordance with the flow of the local economy.
The value of the equipment was estimated using replacement costs. Cash
was used as a plug figure from the income statements. Accounts receivable
and inventory were increased per year, and this amount was subtracted
from cash because no allocation was made in the pro-forma income
statements. The capital purchases were also subtracted from cash.
Depreciation was estimated at the current rate for the life of the projection. .
Since the business has a substantial amount of equipment depreciated out
or almost out, the net worth figure was modified to arrive at an adjusted
figure.
7.1 Fixed Cost
 Fixed costs are expenditure on purchase of printing machines, computers,
accessories, installations and setting up infrastructure; and pre-operation
cost. The total fixed costs of the project are outlined.

Table 7: Estimation of Fixed Cost

DESCRIPTION COST

Installation Cost 150000

Purchase of Machinery 1,500,000

Pre-operation & Running Cost 350,000

Total fixed Cost 2,000,000

7.2 VARIABLE COST

Variable cost is estimated to be Birr 200,000 and contingency takes 100,000

birr. The major components of the production cost are paper input, financial
cost and Labor Cost.

7.3 Source of Finance

Federal and state government of Ethiopia often have financial assistance in
the form of tax credits for expanding businesses.
For small businesses that are beyond the startup phase and already have
revenues coming in, a venture capital investment may be appropriate.
Fast-growth companies with an exit strategy already in place can gain up to
tens of millions of dollars that can be used to invest, network and grow their
company quickly.
Bank loans. Banks are like the supermarket of debt financing. They provide
short-, mid- or long-term financing, and they finance all asset needs,
including working capital, equipment and real estate. This assumes, of
course, that you can generate enough cash flow to cover the interest
payments (which are tax deductible) and return the principal.
7.4 Profit/loss forecast
Sales Forecast (Ethiopian Birr)
Sales 2018 2019 2020 2021 2022
Private companies 500,000.0 550,000.0 605,000.0 665,500.0 732,050.0
NGOs 2,000,000.0 2,200,000.0 2,420,000.0 2,662,000.0 2,928,200.0
UN agencies 1,000,000.0 1,100,000.0 1,210,000.0 1,331,000.0 1,464,100.0
Gov 600,000.0 660,000.0 726,000.0 798,600.0 878,460.0
Total 4,102,018.0 4,512,019.0 4,963,020.0 5,459,121.0 6,004,832.0

7.5 Income statement as of June 2016

PROFIT AND LOSS STATEMENT
Revenues
Printing Income 4,414,487.11
Total Revenues 4,414,487.11
Cost of Sales
Cost of Sales-Printing materia 2,033,916.61
Cost of Sales-Printing Service 716,711.73
Cost of Sales-Labor cost 401,890.00
Total Cost of Sales 3,152,518.34
Gross Profit 1,261,968.77
Expenses
Salary & Benefities Expense 249,759.24
Loading & unloading 49,079.00
Computer Accessories 3,082.61
Air Travel 43,478.26
Car rent 118,800.00
Fuel Expense 22,150.00
Rent or Lease Expense 124,300.00
Maintenance & Repairs Expense 68,210.25
Utilities Expense 4,768.91
Supplies Expense 7,793.10
Telephone Expense 18,498.52
Advertising Expense 1,500.00
Transit and Storage 3,951.42
Transport and carurier 43,458.43
Depreciation Expense 111,945.06
Total Expenses 870,774.80
Profit Before Tax 391,193.97
Provision for Profit tax
Profit Before Tax 391,193.97
Profit Tax 128,967.89
Less-Withholding tax 48,578.38
Profit after tax 80,389.51
103,359.40
22,969.89
7.6 Balance Sheet Projection
Balance sheet of Quicknet trading as of June 2017

ASSETS

Current Assets
Cash on Hand 22,308.47
Withholding Tax Receivable 48,578.38

Total Current Assets 70,886.85

Fixed Asset
Furniture & Equipments 22,986.16
Computer & Printer 61,391.32
Printing Machine 460,000.00
Accum. Depreciation - Furn&Equ (4,597.23)
Accum. Depreciation - Comp&pri (15,347.83)
Accum. Depreciation - Machine (92,000.00)
Total Fixed Asset 432,432.42

Total Assets 503,319.27

LIABILITIES AND CAPITAL

Liabilities

Accounts Payable 10,900.00

Value Added Tax 5,753.94
Payroll tax payable 20,895.36
Pension Payable 33,714.96
Total Liabilities 71,264.26
Capital

Capital 5,050.00
Retained Earnings 35,811.04
Net Income 391,193.97

Total Capital 432,055.01

Total Liabilities & Capital 503,319.27

8 Socio Economic benefits

Economists have found no evidence that the printing press was associated
with in-creases in productivity at the macroeconomic level. Some have
concluded that the economic impact of the printing press was limited. But
there is a new perspective that show the significance of the printing press in
the economy of a country.
The printing press fostered knowledge and skills that were valuable in
commerce. Print media played a key role in the development of numeracy,
the emergence of business education, and the adoption of innovations in
book-keeping and accounting.

9 Conclusion and Recommendations

Quicknet's management is confident that the Company can achieve its sales
forecasts, generating total sales of approximately 4 million in 2018, 4.5
million in 2019, 5 million in 2020, 5.5 million in 2021, and 6 million
Ethiopian birr in 2022. In addition, The Company’s' management has
carefully considered its market, potential customer base, and its ability to
grow its sales average to capture market share in the printing industry.

The Company has the potential to become a highly regarded resource in

local, regional, national, and international markets. Due to the company's
aggressive marketing strategy, establishment of the company as a "highly
competitive" entity in its industry, careful development of its services
coupled with strategic partnerships with some of the industry's leaders, and
the company's profitable revenue model, The Company has the potential to
provide lucrative returns to potential investors.

It can be observed that our company has been growing continuously

because it has been:
 Diligent in adding new service lines. At the beginning it was very
small and it was providing limited printing and designing services.
 Able to continuously overcome increasing and stronger competitions
from time. That is why it existed for over fourteen years.

For The Company to achieve status as an industry leader, it must secure

initial capital. This capital will be used for expansion costs, to establish a
reputable storefront, and to further develop the business, business
infrastructure, internal systems, product development, and extensive
marketing.
Providing that the company is able to acquire its funding requirements, the
Company will be able to achieve operational success for the years to come
and a funding bank will also benefit from investing in our company.
The combination of 14 years of industry experience combined with cutting-
edge technology has poised Quicknet printing company to claim the top spot
in the market.

Our company is looking for a 2000,000 ETB to invest in expansion,

operational cost and purchase of additional machineries.