BUSINESS PLAN.

mafanikio@yahoo.c om
PREPARED BY MBISE,ALOYCE;P.BOX.586 USARIVER,ARUSHA. Reg.No.T/udom/07/01009.-Bedcom.

Jan.2010.

Transmittal Letter
Mafanikio Timber Investment co. P.O.BOX. 300

HAI,KILIMANJARO. 1001-2010 NBC-Manager, Moshi Branch, P.O.Box.3024, MOSHI.

Re: Application for a Loan amounted Tzs. 6,500,000.

Mafanikio Timber Investment is a new business to be established at Bomangombe area in Hai District .The enterprise will be dealing with timber production and selling. For this purpose the enterprise is requesting a loan of Tzs 6,500,000 as source of capital to initiate the business .The uses of that money will be as follows; Tzs 3,300,000 as a man power requirement cost and rest 3,200,000 as a production and other pre-operational costs. The security for loan will be the house N0.524 located in Hai, Kilimanjaro .The loan will repaid in 1year. Yours sincerely Mbise A.
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MTIB-Manager

This is prepared by Mr. Aloyce Mbise On behalf of Mafanikio Timber Investment company. P.O.Box.3024 Hai, Kilimanjaro. All rights reserved. No part of this publication may be reproduced in form without Permission in writing from Mr.Mbise, Aloyce.

Pre-liminary assessment
Strength of business The investment to be undertaken will provide a direct and indirect employment to people around and outside the location of business. Weakness of Business The weather condition especially rain season can affect the business as it will going to use mainly season roads in transporting materials from production areas to the business location area. Opportunity of business The market for timber is largely available in Hai District council, Sanya Juu, Moshi Town and in other area along Bomangombe Threats of The Business The business will like the availability of competitors, thefts which common to near by towns such as Moshi, Arusha and Usa-river. Political, Economic, Social, Technological Ecological and Legal aspect(PESTEL). The business to be undertaken will increase the government revenue through paying tax, creating employment to people, and will play a good role in rising per capital income of individuals.

Vision of the business The business has a great opportunity to maximizing income, contributing to poverty reduction and provision for a better quality life for all Tanzanians,
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due to the availability of the market. The market for timber looks very promising due to the fact that timber is preferable product to many people due to its varies uses. At the beginning the business will be dealing with selling of timbers only ,but later should extend to make furniture for sale as a part of the business. Also in five years to come the business has a plan to open a hardware as an additional segment to the business. Mission of the business To provide reliable market for timber and other capacity building support to people and civil society organizations to enable citizens including vulnerable and poor, (economically disadvantaged) to; To engage effectively in economic activities and dialogue on poverty reduction. Contribute to economic and social development through holding seminars and workshops to account on matters of social and economic development.

Objectives of business 1.To offer quality products to customers around Bomangombe area and near by town areas. 2.To assure a reliable market with a reasonable price to customers. Motto: Buy our product your future success Important of product Timber is among of the most valuable product in country it is used in building , making papers, bridges and it contributes to the rise of GNP as some timbers are exported outside the country where foreign currency are obtained.

Table of contents
Transmittal letter..i Disclaimer letter (copy right) .ii Pre-liminary assessment.iii Executive summary1 Business description segment.2 Market segment 3 Research and development plan..4 Manufacturing segment.5 Critical risk ...6

Financial segment 7 Milestone ..8 References 9 Annexes .9

Executive summary
Mafanikio Timber investment is new business company to be established at Bomangombe Hai in Kilimanjaro region.The business owns a farm No.524 located in Meru-Arusha.The farm has got various trees to be used as a source of raw-materials to initiate a business. Mafanikio Timber Investment is requesting for a amounted Tzs. 6,500,000 for purchasing Milling equipment and the rest as a working capital to operate the business. The security for requested loan will be house No.524 located in HaiKilimanjaro region.The asset has a total value of Tzs 10 millions and market value of Tzs 12 millions.
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According to market analysis, timber is sold at minimum price of Tzs 3000 per piece timber of ten feet. The projected business cost will be Tzs 8,000,000 where Tzs 6,500,000 will be a loan the rest amount will be owners cash. Basing on the research development plan analysis it is concluded that, the business is favorable and therefore there is a need of requesting a loan of Tzs 6,500,000 to be repaid in 1year for enabling of the establishment of Mafanikio Timber Investment business.

Business description segment

Mafanikio Timber Investment company has planned to open a new Timber Investment Business at Bomangombe,Hai District in Kilimanjaro.the name of the
busness will be "Mafanikio Timber Investment Business"

Location and Description of Timber Investment The business is located at Bamangombe in Hai District ,Kilimanjaro.The area is characterized by mushroom of growing buildings which will offer conducive environment for the business.
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Uniqueness of business The product(s) ,timber and later furniture will be of high quality and there will be a discount provision to those customers who will buy large quantities. This will accompany with an offer of transporting those goods to their premises.
Key successful of the business

Geographical location of the business, the business is located in accessible area where by it interacted by Arusha-Moshi road, KIA-Mererani road, and Mos hi-sanya Juu road, second the business located in a growing town which
characterized by mass growing of buildings which requires raw marerials from the business hence bring success to business.

Market segment
Research analysis

The business has to utilize inputs effectively and efficiently so as to increase outputs (productivity) for the purpose of maximizing profit through use of all technical relevant to timber production.

Markert size
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The market for the business is very reliable and cover the whole areas around K.I.A and Hai District. Competition The competition for the business exist although the market for timber is very good such that there is asure market is assured market regardless of price fluctuation do occur due to various factors such as weather condition, inflation and the increase in numbers of competitors. Pricing and Pricing Policy Domestic market survey shows that the price of timber is 3000/= per one piece of timber. The pricing model which will be used is COST PLUS PRICING POLICY, where the total cost per unit will be added with 5% to get sales per unit of product. Advertising and Promotion. The business will assured its market through offering the discounts to customers and as R.S.T-Moshi station Radio, Boma-Hai FM Radio, Arusha Times, New papers and through use of business card and visual Aids.

Research and Development Plan.

The business short-term plan is to add the segment of furniture manufacturing , but its long-term plan (5 years later) is to open a Hard ware and extending in other regions of the country. Training and Technical Advice

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The business will going to offer training ,workshops, and seminars to its staffs as well as retooling production services purposely for aim of increasing production capacity.More advice on timber production will be obtained from Natural Resource Office if nessary. Research Development Team To assure sustainable development and growth, the business will employ the following personnel; Human Resource Manager, Accountant, Marketing Manager and economic Planer.

Manufacturing segment.
Product and services to be offered, the business main activities will be milling and selling of timbers. Mode of conversion of Raw materials and materials to be used. Initially the business will gain raw materials which are trees (logs) to make timbers from the business owners farm which is located in Meru area in Arusha. In that farm there is varieties of trees which is favourable for timber production. Milling /lumbering , this work will be much conducted by using chain sawmills and manual-saws wherever necessary. Timber Development, the frame has already been prepared, the remaining work as apart of investment include; buying of manual saw-mills, chain saw-mills, employing of people to work, and hiring of trucks to transport timbers from milling to the business location. Transport, a business will require two trucks for transporting timbers from
production area to the business location.

Labour supply;as the investment will conducted along the public area,the population will cover the required labour to facilitate timber production.The gender consideration issue will be regarded,the business permanent employees will be10 of whom 8 are men and the rest will be women,for the case of casual labours,gender will be taken into consideration(i.e) both male and female will have opportunity to be employed.

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Manufacturing cost data. Total units to be produced total cost 13,200 37,884,000 cost/unit 2,870

Management Segment
Proposed Management . The business will employ the owner of the business as a manager for the overall in charge of the business,assisted by an accountant, store-keeper and low rank workers.The names of manaqgement team are listed below; S/N NAME . 1. Mbise Aloyce 2. Chaba Yusuph 3. Redempta Msaki 4. Spora Mbise 5. 6. 7. 8. 9. 10. Albert Mwale Gamaliel Jonas Geofrey Elia Elibarik Lema Judica Moses Joseph Mollel POSITION Manager Accoutant Store -keeper Sales women Sale man Saw-mill worker Saw-mill worker Saw-mill worker Saw-mill worker Security QUALIFICATION B.com(Accounting) BAF Certificate in procurement Certificate in sales Certificate in sales Certificate in carpentry(VETA) Certificate in carpentry Certificate in carpentry Certificate in carpentry Certificate in civilian army SALARY 500,000 300,000 150,000 150,000 150,000 100,000 100,000 100,000 100,000 100,000

Legal structure of the business

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The business has all legal documents required for its operation, the owner has already paid for trade license including milling (timber processing from raw materials (i.e.) logs to real product (i.e) timbers. Capital Requisite T he capital required for the business isTzs.8, 500,000 whereby Tzs 6,000,000 will a loan from bank and the rest 2,000,000 is owners cash at bank. Rather than the loan, the owner of this business has got 100trees in his own farm located in Meru-Arusha as a capital for starting a business. The trees have a total value of 5,000,000Tzs and market value of 6,200,000Tzs.

Consultancy and Technical Advice The business will consult the following people for technical advice when needed; 1. The NBC-Bank, Manager-Moshi Branch P.Box.3010 Moshi. 2. Chamber of commerce-Manager, Moshi Branch. P.Box.3552 Moshi. 3. IPP-Media, Chairman. P.Box.9027.Dar es salaam.

Critical Risk
The business will face several risks such as transport problem during heavy rainfall seasons as the business will going to use seasonal roads to transport timbers from production area to the business location .This will reduce the business yield. Another is unexpected accidents which do occur obvious, price fluctuation, inflation, credit problems and fire. To overcome these problems ,the business must keep enough stock to cover the whole business period,open a business Insurance and buying of fire extinguisher for case of fire.
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Financial segment
Financial Projection. Mafanikio Timber Investment Profit and Loss account for 6 months(JuneDecember 2010) Sales Less cost of sales Raw-Materials(trees) 5,000,000 2,4oo,000 7400,000 36,000,000

Transport(carriage inwards) 28600,000 Less Expenses. Operation Expenses Pre-operational expenses Petrol 520,000 990,000

Depreciation of fixed Asset(10%/YR)146,000 Administration Expenses. Insurance Premium Loan Interest (for 6months) Salaries Wages NSSF (10%of employees salary) Electric and water bills 15,453,500 Profit before tax deduction 13,146,500 Tax (10%) 1314650
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500,000 487,500 9,900,000 1,320,000 990,000 600,000

Net Profit after tax 11,831,850

Mafanikio Timber Investment Balance sheet for year ended Dec.2010 Fixed assets total Chain saw mills 2@500,000 1,000,000 Computer machine 400,000 Manual saw-mills 2@30,000 60,000 Total fixed assets 1,460,000 Current Assets. Cash at bank Stock(finished goods) Less current Liability Loan Working capital 734,000 Capital employed 2,194,0 3,250,000 540,000 3,444,000 3,984,000

Milestone Segment
TIME(2010) January
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EVENT/ACIVITIES Ideal generation

February March April May June

Business Plan preparation Loan requirement Buying of materials Recruiting and installation Starting Business

References.
http//www.Busconsulting.miingo.com/services/business-plans.html? http//www.business in an box.com/? gclid. http//www.sbinformation.about.com/cs/ business plan/a/htm http//www.bplans.com/samples/sba.cfm. http//www.captureplanning.com/lhc/how tto write business proposal.cfm? http//www.writinghelp-central.com/business proposal.

Annexes.
Annex 1. Financing Plan. Cash at Bank 2,000,000 Loan 6,500,000 Total 8,5000,000

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Annex 2. Investment Plan Machinery and Equipment requirement 1.Chain saw-mills 2 2.Computer Machine 3.Manual saw-mills 2 1,000,000 400,000 60,000

Annex 3. Man Power Requirement Position Total/6months 1.Managing Director 3,000,000 2.Accountant 1,800,000 3.Store-keeper 900,000 4.sales men 1,800,000 5.Saw-mill workers 2,400,000 6.Security guard 600,000 Total 10,500,00 Annex 4; Projected Revenue 4 1 10 No. of people 1 1 1 2 Wage/month 500,000 300,000 150,000 300,000 400,000 100,000 1,700,000

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Total production 6months 13200timbers Sold Cost/unit 3000 Total sales 36,000,000. Annex 5.Production cost Description cost/6months 1. Lumbering/Milling cost 2. Transport and timber collection. 3,720,000 3. Petrol 990,000 Total 4,710,000

per month 2200 timbers 2000

per six

12000

6,000,000

Time Cost/month 400,000 2,400,000

620,000 165,000 785,000

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