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2018

McNETHS FOODS EGG POWDER


BUSINESS PLAN

Prepared by McChatij
Enterprises & Asaneth Amos
McNETHS FOODS
McNETHS FOODS 08067080180
Page 1
18-Dec-18
Profile||Investment||Financial Indicators
Name of Business: McNeths Foods
5
Type Of Business: Food Processing and Packaging
5
Products: Powdered Whole Egg
5
Business Location: Kaduna
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Name of Promoter: Asaneth Amos
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Phone: 08067080180
5
Gender: Female Age: 36 email: molbome1000@gmail.com
e 5
Start-up Capital: 5
N 9,100,000 Number of Employees: 7
5
Equity: Total Value Of Equipment: N 6,500,000
N 2,500,000 5
N 2,600,000
Loan: Pre-Operating Expenses:
N 6,500,000 5
N 16,543,604
Loan Tenure: Total Turnover at the end of 3years:
36 months 5
Moratorium: Total Gross Profit at the end of 3years: N 6,243,604
3 months 5
Interest rate: Total Net Profit bf Tax at the end of 3years: N 8,648,000
9% 5
Net Profit after Tax at the end of 3years: N 5,558,600
5
Cash Balance at the end of 3years: N 23,103,370
5
Company Value at the end of 3years: N 29,018,370
5

Training Center: Kaduna Business School


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Trainees Batch Number: KBS/EBGP/2018/056
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Date of Submission: 12th March, 2019
5
Number of Copies Submitted: 1

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TABLE OF CONTENTS

CHAPTER
1.0EXECUTIVE SUMMARY…………………………………………………………………………………………………………………………………….………………………3-4
1.1 Objectives
1.2 Mission
1.3 Our keys to success
CHAPTER 2……………………………………………………………………………………………………………………………………………………………5
2.0 COMPANY SUMMARY
2.1 Company Ownership
2.2 Location and facilities
2.3 Contact Information
CHAPTER 3……………………………………………………………………………………………………………………………………………...……………6
3.0 INDUSTRY ANALYSIS
3.1 Challenges facing the egg Production
CHAPTER 4……………………………………………………………………………………………………………………………………………………...……7-8
4.0 START-UP SUMMARY
4.1 Start up costs
4.2 Product description and Growth Plan
4.3 Market Expansion
4.4 Market Penetration (Pricing Growth Strategy)
4.5 Future products
4.6 Service Description
4.7 Future services
CHAPTER 5……………………………………………………………………………………………………………………………………………………..……9
5.0 PRODUCTION SUMMARY
5.1 Production plan
5.2 Production cost
5.3 Production Labor
5.4 Production Process
5.5 Production System
CHAPTER 6………………………………………………………………………………………………………………………………………………….………10-12
6.0 MARKET ANALYSIS SUMMARY
6.1 Market segmentation
6.2 Market trends
6.3 Competition
6.4 Business competitive edge
6.5 Marketing strategy
CHAPTER 7…………………………………………………………………………………………………………………………………………………….…13
7.0 MANAGEMENT SUMMARY
7.1 Management team
7.2 Organizational structure
CHAPTER 8………………………………………………………………………………………………………………………………………………………..14-15
8.0 INTERNAL ENVIRONMENTAL ANALYSIS
8.0.1SWOT ANALYSIS
8.0.2 EXTERNAL ENVIRONMENTAL ANALYSIS
CHAPTER 9………………………………………………………………………………………………………………………………………………………16-21
9.0 FINANCIAL PLAN
9.1 Projected Cash Flow
9.2 Projected Income Statement
9.3 Balance Sheet Projection
9.4 Ratio Analysis
CHAPTER 10……………………………………………………………………………………………………………………………………………………….22
10.0 RISK ASSESSMENT
10.1 Financial risks
10.3 Technological Risk
10.4 Contingency plan
CONCLUSION……………………………………………………………………….……………………………………………………………………………….23

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CHAPTER 1
1.0 EXECUTIVE SUMMARY
McNETH Foods is focused on both egg powder and beverage production that provides for a large market
range. It also produces other by-product. It is based in Kaduna State. The founder has noticed the health
benefits of nutritious beverages and eggs. The persons who have come to start this business is Asaneth
Amos
Not only is the founder interested in meeting the demands of the customer, i also plan to create utmost
satisfaction for these customers. The founder also want to use this business as a means of creating
employment within the community it is based in and to contribute to the economy of the country. We plan
on providing products with quality and maintain this supply efficiently. This is a sole proprietorship
business that plans on distributing egg powder and beverages to restaurants, home delivery food centers,
hotels, schools, clubs, bakery and catering businesses and supermarkets. We also plan on doing this at very
affordable prices.
This business plan is meant to articulate the vision and future of our company, and to appeal to CENTRAL
BANK OF NIGERIA for startup funding of N6, 500,000 form the AGSMEIS FUND through
STERLING BANK and also for investors and external stakeholders to get involved in the course of the
business and help with its expansion in the next three years of successful running as it is a capital intensive
business. We also hope that it will serve as a guideline for the firm’s employees to move towards the goal
of the Company.
Not only do we offer products, but we offer services as well. We plan on providing home delivery services
to customers who order a certain amount of products. This offer will mostly be used by the section of our
target market that uses egg powder and beverages in large quantities like schools and bakeries.
Production site is at #4 Archie Jatau Street Kamazou GRA Kaduna. Plenty open space, cheap labors,
road connection, water availability and immediate access to markets. The funding of this business shall be
allocated to the following purposes: buying of production plants and other miscellaneous tasks. Fifty
percent gross margin is expected within 6 months of its operations withholding the chances of any
accidental or unexpected incidence and we hope to obtain the breakeven point within 1 year and 6 months.
We have considered the risks, financial, health and technology wisely

2.1 OBJECTIVES
McNETH FOODS will measure its success by its ability to achieve the following objectives:

 Becoming the "Best and most hygienic food producer in the area" complying by the national
standards for food and drugs.
 Turn in profits from the first six months of operations.
 Maintain 50% gross margin ratio.
 Winning the hearts and tastes of our beloved consumers and establishing a brand image of the
company through heavy marketing campaigns in the first one year.

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2.2 MISSION
McNETH FOODS mission is to:

 Provide customers with quality, fresh, and valuable products.


 Respect all employees and enable everyone to have a say in company affairs.
 Provide investors with opportunities.
 Receive a nice return on investment and high-quality growth in the course of expansion.
 Contribute to the community through physical and social programs.
 Increase and expand our production to challenge the ever growing demand for food products. The
nutritious and protein rich products from our company would always be the first choice of our
consumers by making quality and service our number one priority.

2.3 KEY TO SUCCESS


McNETH FOODS will follow these principles in order to achieve success in its market:

 Increase gross margin to more than 40%.


 Excellent product and service that will build and maintain customer loyalty.
 A business location that will assure high company visibility and a high flow of customers.
 Our commitment to continuous improvement and total quality services.
 Increase our sales and expand our current customer base.

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CHAPTER 2
COMPANY SUMMARY
1.1 Company Ownership
McNETH FOODS is owned by ASANETH AMOS. It is a sole proprietorship business that and intend to
make it a partnership as it expands. McNETH Foods is also liable for any business debts or claims.

1.2 Location and facilities


At this point in the business the suitable location is Kaduna metropolis. We are trading from this spot
because is it a great place to reach our target market. The population base is large enough for our business
and it has a stable economic base that promotes a healthy environment for the company. Also it is a spot
that could tap a healthy workforce. We also considered pedestrian traffic and a large percentage of them are
potential customers. We plan on having a good parking space and sufficient security in our working site to
create a safe environment for the customers. We plan on renting the building at first, and then buy it after
we gain enough profit.
Our facilities will include an egg powder process plant and grinder for our tamba (finger millet) and Fonio.

1.3 Contact Information


I can be contacted through my email address, molbome1000@gmail.com. All these and the phone
numbers of the management team will be distributed in flyers and in the means we market our business as
our contact information.

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CHAPTER 3
3.0 INDUSTRY ANALYSIS
Poultry industry in the last 40 years has shown dramatic changes in both domestics and international
environments. Those environmental forces include are classified into 2 categories: the internal forces and
external forces. Internal and external forces include:
1. Poultry industry competitors: When the company have few competitors, it is more likely to get more
profit. For example in Nigeria, competition is today driven by a cost of manufacturing and the quality of
products sold to the customers.
2. Supplier dynamics: Suppliers of raw materials to the poultry companies are the ones the affect the costs
of poultry products. If there is development of new market and technology, the price of raw materials will
remain low.
3. Opportunities: Like in Nigeria, there are many opportunities in poultry industry. The first opportunity is
that there is small number of large scale poultry farmers, and the other ones are small scale business
farmers. So this will make businessmen to vertically integrate in the poultry business.
4. Cultural and religious forces: As we know, the presence of taboos can be a hindrance in the development
of poultry farming. However in Nigeria, there are very few, maybe none, laws or cultures that prohibit
eating poultry products. This is a good opportunity for businessmen to develop and expand their poultry
farm with in the country without any challenge.

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CHAPTER 4
4.0 START-UP SUMMARY
The business will be funded by STERLING BANK through AGSMEIS EMPOWERMENT
PROGRAMME initiated by the CBN. This section of the plan shows projected startup costs prior to our
opening.
Start-up expenses for McNETH FOODS include pre-launch marketing of cover flyers, a direct mail
campaign, and the normal legal expenses for consultation and permitting. Other current assets include
office and store furniture, shelving, and tools.

4.1 McCNETH FOODS start up costs and capital inputs

PARTICULARS QTY N

Egg Breaker 4 800,000

Centrifuge 2 600,000

Storage Tank 4 300,000

Tubular Heater 1 800,000

Feed Pump 2 400,000

Balance Tank 4 500,000

High Pressure Pump 2 700,000

High Pressure Spray Dryer 1 800,000

Cyclone with Exhaust and fan 1 800,000

Grinding Machine For Tamba and Fonio 1 300,000

Packaging Unit 1 500,000

Total 6,500,000

Miscellaneous Assets
Other miscellaneous assets required are fans, weighing balance, tables, chairs, furniture etc
which would cost N100,000
Raw and Packing Materials
The major raw material required is fresh eggs is N2,500,000. Prior confirmed arrangements for this
quantity are necessary. Packing material like poly-lined paper bags, corrugated boxes, labels etc. shall be
needed.

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Cost of the Project and Means of Financing

ITEMS N

Plant and Machinery 6,500,000

Miscellaneous (Legal & Insurance Inclusive) 100,000

Pre-Operating Expenses 2,500,000

Total 9,100,000

Means Of Finance

Equity Contribution 2,600,000

Bank Loan 6,500,000

Total 9,100,000

4.2 Product Description and Growth Plan


MANUFACTURING PROCESS
Manufacture of dried egg powder starts with breaking of eggs and removing egg-shells. After removal of
shells, the mixture is filtered and stored in storage tanks at about 4º C and then it is taken to tubular heater
wherein it is dried at about 65º C for 8 to 10 minutes and it is filtered and passed to high pressure spray
drier with the help of high pressure pump. The material which comes out of high pressure spray drier is not
only in dried form but also in powder form which is then packed in poly-lined boxes. The average yield is
around 80%.

Breaking of Eggs and removal of shells

Filtration

Storage and Drying

Packing

We offer egg powder and beverages like Tamba beverage (finger millet) and other fonio products to our
target market. We plan to take pride in the uncompromising quality of our products. We also offer egg
shells as by products. This is mostly used in making feeds. McNETH FOODS shall produce high quality,
contaminant-free products to satisfy the taste of our beloved costumers. The products shall be distributed
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into a number of distributors - supermarkets, public markets, bakeries, restaurants and in the company’s
own retail space for easy access for marketing agents and consumers. In brief our products are;
Main products
a) Egg powder
b) Tamba(finger millet)
c) Fonio and other fonio products
 By-products
a) Egg shells and fonio dust

4.3 Market Expansion

McNETH Foods tend to expand its market by selling its existing products to new markets; this will be done
by reaching its product outside our current location.

4.4 Market Penetration (Pricing Growth Strategy)


This growth plan strategy will be used by lowering the prices of our existing products in our current market
thereby increasing our market share.

4.5 Future products


We have big plans for the future. We plan on supplying cracked egg shells for some detergent companies
for use. These special detergents are used in washing basins and pots. Another thing we have planned for
the future is the production of Date bars biscuit and other beverage like sugar cane juice.

4.6 Service Description


We plan on servicing our customers by providing home delivery for customers who are willing to buy at
least a certain amount of our products.

4.7 Future services


In the future, we plan on creating a restaurant that has eggs as its main menu. It will be like a breakfast
restaurant. In the future, if this business gets large enough, we would also like to build our own bakery. A
major ingredient in most baked goods is eggs.

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CHAPTER 5
5.0 PRODUCTION SUMMARY
5.1 Production plan
The egg processing operation separates eggs into different kinds of egg products: egg white, egg yolk,
whole egg and several mixes i.e. by adding sugar or salt. The pasteurized liquid egg is either packed as a
final product or, in case of egg powder production; it goes via pipelines into a spray dryer plant

5.2 Production costs


Our fixed costs include
 Rent for the company retail space
 Area of about one plot will be allocated for the farm;
 A house will be rented for the storage.
 Materials for office and store furniture, shelving, phone system, and tools.
Raw materials used include
 Eggs
 Tamba(finger Millet)
 Fonio(acha)
Sales Forecast

The first month of business will be used to set up the office. There will be no sales activity during this
period of time. Revenue will begin to occur during the second month; however it will only trickle in
until the four month when it will become more steady. It will not be until the middle of year two when
things begin to settle and become more like an established business in terms of dividing time between
serving clients and attracting new ones. McNeths Foods will receive revenue from sales of products.

Sales Forecast Table

Sales Forecast
Year 1 (N) Year 2 (N) Year 3 (N)
Sales
Egg Powder 15,221,604 15,221,604 16,543,604
Total Sales 15,221,604 15,221,604 16,543,604

Direct Cost of Sales Year 1 Year 2 Year 3


Raw Materials and other cost 7,300,00 7,300,000 10,300,000
Subtotal Direct Cost of Sales 7,921,604 7,921,604 6,243,604

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Production labor
Details of Salary Schedule

Staff Salary
Schedule
MONTHLY
NAME DESIGNATION SALARY(N)
Asaneth Amos CEO 30,000.00
Sule Emmanuel Manager 25,000.00
Cashier 20,000.00
Skilled worker Operator 15,000.00
Skilled worker Operator 15,000.00
Unskilled worker Supervisor 20,000.00
Security/Cleaner 12,000.00
TOTAL 137,000.00

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CHAPTER 6
6.0 MARKET ANALYSIS SUMMARY
6.1 Market segmentation
This section divides the market into similar groups with common characteristics so as to identify a
lucrative market segment for the products.
Generally, the potential market segments for the poultry farming business are as listed below: Formal
market sector

 Grading and packaging entities


 Wholesalers
 Retailers
 Franchise store
 Processing entities
 Export

Informal market sector

 Hawkers

6.2 Target market segment strategy


Individuals are a small sector in the market segmentation. They are a pretty large group but they buy a
relatively small amount.
The part of the market that we hope to supply large amount of egg powder to are the industries that
need eggs. We have strategically placed our site close to these industries. They are bakeries, restaurants,
boarding schools, home delivery food centers, retail shops and supermarkets.
Another part of our target market that will order our products in medium quantities are the homes that
will require our home delivery as we have a set amount of eggs they need to order for. Homes generally
utilize eggs in the preparation of edibles like chicken burger, chicken pie, salads, Scotch egg, omelets,
egg soup etc.
The parts of our target market interested in live chickens are small scale poultry farmers and festive
individuals. We have considered the needs of each section of the target markets and we plan on meeting
these needs effectively.

6.4 Competition
THREAT FROM CUSTOMERS

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There is a threat emanating from the dynamics in the needs and preferences of consumers. Customer
demands and expectations must be met and products attractively priced, otherwise the customers could
opt for other providers. The threat is demonstrated by the scenario that the customers can buy from
anywhere as well as the fact that the price of the egg product is somewhat dictated by the market.

THREAT FROM SUBSTITUTES


While there is potentially no immediate substitute for an egg powder; the number of alternative
providers of fresh eggs based in Kaduna as well as areas as far as State is moderately high that the threat
from substitutes is a reality.

THREAT FROM SUPPLIERS


This threat is relatively minimal as there are many suppliers of layers and the essential stock feed and
other requisitions required to maintain layers used for egg production. A key source of layer birds is
Ogun State where key suppliers are present.

INTENSITY OF RIVALRY
The intensity of rivalry is centered on factors such as price, reliability, quality, and brand recognition.
The intensity of rivalry in the Industry is relatively high as evidenced by the high frequency of
marketing campaigns, internet advertising, and number of new players entering the market, new
strategic alliances being formed and the subsequent closure of certain poorly performing businesses in
the market.

6.5 Business competitive edge


Our strength over its competitors is firstly based on the fact that we are entering this business to make
much money. We are entering this industry to solve the present problem that our population is facing.
We are here to provide quality affordable products. We saw that some of our competitors are seasonal
they only produce eggs at a given period of time. We won’t work like that; we will be always ready to
provide our products. We know the importance of time and know that people have many and varying
activities; knowing all that we will be delivering our products to the customer’s door. Through our motto
“customer first” we will have an ever fast delivery. The other factor that will help us to have success
over our competitors is to motivate our employees and helping them to improve their way of living, this
will help our employees to be focused on their work and provider better services to their customers. We
expected our business to grow and start working at national level and this will be achieved through
hardworking of management team and efficiency and effective use of materials and time is the key to be
successful over our competitors.

6.6 Marketing strategy


McNETH FOODS will strive for the production of products with the highest quality and we plan on
employing the following strategies. Our location puts us in proximity of a major hotel, restaurant,
schools with campuses and home deliver food centers we will be supplying to. We would also make

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contracts with hawkers in markets to sell our live products. We would also make contracts with retail
shops for constant supply of our products at intervals.

Sales strategy

 Better market management practices


 “consumer is first” policy
 Keeping up with new technology for production efficiency.

CHAPTER 7
7.0 MANAGEMENT SUMMARY
7.1 Management team
The management team is simply the proprietor and the employee team.

7.2 Organizational structure


1. ASANETH AMOS Chief Executive Officer: As the top manager, the CEO, while SULE
EMMANUEL AVONG her assistant are typically responsible for the entire operations of the

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company. It is her responsibility to implement decisions and initiatives and to maintain the smooth
operation of the company, with the assistance of the management team.
2. OTHER EMPLOYESS will run day to day task or instructions for the smooth running of
production and delivery in a structured manner. These personnel includes:
1. Skilled and Unskilled
2. Security
3. Supervisor
4. Cashier
Salary schedule

MONTHLY
NAME DESIGNATION SALARY(N)
Asaneth Amos CEO 30,000.00
Sule Emmanuel Manager 25,000.00
Cashier 20,000.00
Skilled worker Operator 15,000.00
Skilled worker Operator 15,000.00
Unskilled worker Supervisor 20,000.00
Security/Cleaner 12,000.00
TOTAL 137,000.00

ORGANOGRAM

CEO

MANAGER

CASHIER SUPERVISOR

OPRTR OPRTR SECRITY

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CHAPTER 8
8.0 INTERNAL ENVIRONMENTAL ANALYSIS
8.0.1 SWOT ANALYSIS
SWOT stands for strength, weakness, opportunities and threats and we have made an analysis in each
case.

Strength

 Produce high quality products enriched with protein


 Relatively good infrastructure systems
 Good marketing system
 Our products are not seasonal products and can be eaten any time of the year
 Environmentally friendly

Weakness

 Capital intensive. Starting a Egg powder processing business requires a large capital funding.
 Outbreak of disease and drought can affect the entire business.

Opportunities

 Expansion into large scale production of by products(fertilizer and detergent)


 Export to neighboring towns
 A large and successful company will ensure food security

Threats

 More competition
 Avian diseases
 High feed ingredients prices
 Threat of import.

8.0.2 EXTERNAL ENVIRONMENTAL ANALYSIS


Socio-cultural – Eating habits of our consumers will definitely affect our business. Also, the success of
restaurants and other firms that order our products will indirectly affect our business.
Technological - A good technical infrastructure would lead to better production and hence lower costs.
Technology will also mean more effective business marketing.
Economic – economic trends such as demand and supply will determine the sustenance and profitability
of the business. Also inflation rates will affect the way we pay our employees and the price of the
product.
Political – this will include government policies concerning inspection by the ministry of health and
organizations like NAFDAC.

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CHAPTER 9
9.0 FINANCIAL PLAN
In every project found. We have to pass through the financed process. This have to do with the starting
of business, whether the personal income used or term loans from banks. In our business, the financing
structure and ways of doing it is like the path below.
1) Equity contribution: is N2, 600,000
2) AGSMEIS FUND THROUGH STERLING BANK of 6,500,000 Naira, which will be used for
start-up operations.
Financial assumptions
We assume that within the project span interest rate will remain at 9% Assumption on Tax
with unchanged government policy is projected at 30% With good maintenance culture
Assumption on depreciation is 30%
All our equipments will be secured on Assumption of 10% insurance

ITEMS N

Plant and Machinery 6,500,000

Miscellaneous 100,000

Pre-Operating Expenses (Legal & Insurance Inclusive) 2,500,000

Total 9,100,000

Means Of Finance

Equity Contribution 2,600,000

Bank Loan 6,500,000

Total 9,100,000

ASSUMPTION
1. Interest rate is at 9% on an annual reducing balance method.
2. Moratorium is assumed at three(3) months

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Loan details and Projected Cash Flow
We shall apply for the Central Bank of Nigeria/ commercial Bank/ loans, grants and schemes. This
shall be channeled to “plant and machineries; inject into our working capital (Raw material/
Consumables)” the loan will be paid back in three years Tenure at a proposed interest rate of 9%
per annum and a proposed moratorium of 3 months. We are hopeful about this loan.

Loan Repayment Schedule


Months Principal Interest Total Paid Balance
1 - 16,250 16,250 6,500,000
2 - 16,250 16,250 6,500,000
3 - 16,250 16,250 6,500,000
4 6,500,000 16,250 196,806 6,303,194
5 6,303,194 16,250 196,806 6,122,638
6 6,122,638 16,250 196,806 5,942,082
7 5,942,082 16,250 196,806 5,761,526
8 5,761,526 16,250 196,806 5,580,970
9 5,580,970 16,250 196,806 5,400,414
10 5,400,414 16,250 196,806 5,219,858
11 5,219,858 16,250 196,806 5,039,203
12 5,039,203 16,250 196,806 4,858,746
13 4,858,746 16,250 196,806 4,678,190
14 4,678,190 16,250 196,806 4,497,634
15 4,497,634 16,250 196,806 4,317,078
16 4,317,078 16,250 196,806 4,136,522
17 4,136,522 16,250 196,806 3,955,966
18 3,955,966 16,250 196,806 3,775,410
19 3,775,410 16,250 196,806 3,594,854
20 3,594,854 16,250 196,806 3,414,298
21 3,414,298 16,250 196,806 3,233,742
22 3,233,742 16,250 196,806 3,053,186
23 3,053,186 16,250 196,806 2,872,630
24 2,872,630 16,250 196,806 2,692,074
25 2,692,074 16,250 196,806 2,511,518
26 2,511,518 16,250 196,806 2,330,962
27 2,330,962 16,250 196,806 2,150,406
28 2,150,406 16,250 196,806 1,969,850
29 1,969,850 16,250 196,806 1,789,294
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30 1,789,294 16,250 196,806 1,608,738
31 1,608,738 16,250 196,806 1,428,182
32 1,428,182 16,250 196,806 1,247,626
33 1,247,626 16,250 196,806 1,067,070
34 1,067,070 16,250 196,806 886,514
35 886,514 16,250 196,806 705,958
36 705,958 16,250 196,806 525,402
37 525,402 16,250 196,806 344,402
38 344,402 16,250 196,806 163,846
39 163,846 16,250 196,806 -

ASSUMPTION
1. Interest rate is at 9% on an annual reducing balance method.
2. Moratorium is assumed at three(3) months

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T o ta l Ca s h
Mo n th 1 Mo n th 2 Mo n th 3 Mo n th 4 Mo n th 5 Mo n th 6 Mo n th 7 Mo n th 8 Mo n th 9 Mo n th 10 Mo n th 11 Mo n th 12 F lo w Af te r
C A S H FL O W Y E A R 1 12 m o n th s
Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l

S a le s 400,000 850,000 900,000 1,000,000 1,050,304 1,075,020 1,031,000 1,310,000 1,135,000 2,070,150 2,300,000 2,300,130 15 , 2 2 1, 6 0 4

E q u ity 2,600,000

3,000,000 850,000 900,000 1, 0 0 0 , 0 0 0 1, 0 5 0 , 3 0 4 1, 0 7 5 , 0 2 0 1, 0 3 1, 0 0 0 1, 3 10 , 0 0 0 1, 13 5 , 0 0 0 2 , 0 7 0 , 15 0 2,300,000 2 , 3 0 0 , 13 0 15 , 2 2 1, 6 0 4

S te rlin g Ba n k Loa n 6,500,000 0 0 0 0 0 0 0 0 0 7,300,000

9,500,000 850,000 900,000 1, 0 0 0 , 0 0 0 1, 0 5 0 , 3 0 4 1, 0 7 5 , 0 2 0 1, 0 3 1, 0 0 0 1, 3 10 , 0 0 0 1, 13 5 , 0 0 0 2 , 0 7 0 , 15 0 2,300,000 2 , 3 0 0 , 13 0 2 3 , 12 1, 6 0 4

Dire c t Cos t Of S a le s 500,000 680,000 620,000 610,000 690,000 640,000 620,000 700,000 500,000 600,000 620,000 520,000 7,300,000

P a yroll 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 960,000

In s u ra n c e 65,000

De p re c ia tion 0 0 0 0 0 0 0 0 0 0 0 195,000 19 5 , 0 0 0

Oth e rs 100,000 0 0 0 0 0 0 0 0 0 0 0 10 0 , 0 0 0

NDIRE CT CO S T S / O v e rh e a d s

Re n t 200,000 0 0 0 0 0 0 0 0 0 0 0 200,000

Ba n k c h a rg e s 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12 , 0 0 0

IT AL CO S T S /F IXE D AS S E T S 0 0 0 0 0 0 0 0 0 0 0 0 -

E q u ip m e n t 6,500,000 0 0 0 0 0 0 0 0 0 0 6,500,000

Loa n Re p a ym e n t 180,556 180,556 180,556 180,556 180,556 180,556 180,556 180,556 180,556 1, 6 2 5 , 0 0 4

T O T AL
CAS H P AID 7 , 9 0 1, 5 0 0 782,750 723,500 7 11, 5 0 0 788,500 747,500 720,500 800,500 6 0 1, 0 0 0 698,000 7 14 , 0 0 0 6 3 1, 9 5 0
O UT B

- CAS H O N
398,500
HAND[B e g in465,750
n in g o f m o n 442,250
th ] C 730,750 992,554 1,320,074 1,630,574 2,140,074 2,674,074 4,046,224 5,632,224

McNETHS FOODS Page 21


T o ta l Ca s h
Mo n th 1 Mo n th 2 Mo n th 3 Mo n th 4 Mo n th 5 Mo n th 6 Mo n th 7 Mo n th 8 Mo n th 9 Mo n th 10 Mo n th 11 Mo n th 12 F lo w Af te r
C A S H FL O W Y E A R 2 12 m o n th s
Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l

S a le s 1,310,000 1,310,000 1,031,000 1,000,000 1,050,304 1,075,020 1,031,000 1,310,000 1,135,000 2,070,150 2,300,000 2,300,130 15 , 2 2 1, 6 0 4

1, 3 10 , 0 0 0 1, 3 10 , 0 0 0 1, 5 0 0 , 0 0 0 1, 0 0 0 , 0 0 0 1, 0 5 0 , 3 0 4 1, 0 7 5 , 0 2 0 1, 0 3 1, 0 0 0 1, 3 10 , 0 0 0 1, 13 5 , 0 0 0 2 , 0 7 0 , 15 0 2,300,000 2 , 3 0 0 , 13 0 2 3 , 12 1, 6 0 4

Dire c t Cos t Of S a le s 500,000 680,000 620,000 610,000 690,000 640,000 620,000 700,000 500,000 600,000 620,000 520,000 7,300,000

P a yroll 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 960,000

In s u ra n c e 65,000

De p re c ia tion 0 0 0 0 0 0 0 0 0 0 0 195,000 19 5 , 0 0 0

Oth e rs 8,500 8,500 8,500 8,500 8,500 15,000 10,000 8,000 8,500 7,000 14,000 5,000 10 0 , 0 0 0

NDIRE CT CO S T S / O v e rh e a d s

Re n t 300,000 0 0 0 0 0 0 0 0 0 0 0 300,000

Ba n k c h a rg e s 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12 , 0 0 0

IT AL CO S T S /F IXE D AS S E T S 0 0 0 0 0 0 0 0 0 0 0 0 -

E q u ip m e n t 0 0 0 0 0 0 0 0 0 0 0 -

Loa n Re p a ym e n t 180,556 180,556 180,556 180,556 180,556 180,556 180,556 180,556 180,556 180,556 180,556 180,556 2 , 16 6 , 6 7 2

T O T AL
CAS H P AID 1, 19 2 , 0 5 6 782,750 723,500 7 11, 5 0 0 788,500 747,500 720,500 800,500 6 0 1, 0 0 0 698,000 7 14 , 0 0 0 6 3 1, 9 5 0
O UT B

7,300,404
CAS H O7,418,348
N HAND[B e g7,945,598
in n in g o f m o8,722,098
n th ] C 9,010,598 9,272,402 9,599,922 9,910,422 10,419,922 10,953,922 12,326,072 13,912,072

CAS H
P O S IT IO N[
End of 7 , 4 18 , 3 4 8 7,945,598 8,722,098 9 , 0 10 , 5 9 8 9,272,402 9,599,922 9 , 9 10 , 4 2 2 10 , 4 19 , 9 2 2 10 , 9 5 3 , 9 2 2 12 , 3 2 6 , 0 7 2 13 , 9 12 , 0 7 2 15 , 5 8 0 , 2 5 2
m o n th ]A - B
+ C

McNETHS FOODS Page 22


T o ta l Ca s h
Mo n th 1 Mo n th 2 Mo n th 3 Mo n th 4 Mo n th 5 Mo n th 6 Mo n th 7 Mo n th 8 Mo n th 9 Mo n th 10 Mo n th 11 Mo n th 12 F lo w Af te r
C A S H FL O W Y E A R 3 12 m o n th s
Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l Ac tu a l

S a le s 1,400,000 1,050,000 1,031,000 1,070,000 1,050,304 1,075,020 1,031,000 1,031,000 1,135,000 2,070,150 2,300,000 2,300,130 16 , 5 4 3 , 6 0 4

1, 4 0 0 , 0 0 0 1, 0 5 0 , 0 0 0 1, 0 3 1, 0 0 0 1, 0 7 0 , 0 0 0 1, 0 5 0 , 3 0 4 1, 0 7 5 , 0 2 0 1, 0 3 1, 0 0 0 1, 0 3 1, 0 0 0 1, 13 5 , 0 0 0 2 , 0 7 0 , 15 0 2,300,000 2 , 3 0 0 , 13 0 16 , 5 4 3 , 6 0 4

Dire c t Cos t Of S a le s 500,000 680,000 620,000 610,000 690,000 640,000 620,000 700,000 500,000 600,000 620,000 520,000 10 , 3 0 0 , 0 0 0

P a yroll 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 137,000 960,000

In s u ra n c e 65,000

De p re c ia tion 0 0 0 0 0 0 0 0 0 0 0 195,000 19 5 , 0 0 0

Oth e rs 8,500 8,500 8,500 8,500 8,500 15,000 10,000 8,000 8,500 7,000 4,000 15,000 10 0 , 0 0 0

NDIRE CT CO S T S / O v e rh e a d s

Re n t 300,000 0 0 0 0 0 0 0 0 0 0 0 300,000

Ba n k c h a rg e s 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12 , 0 0 0

IT AL CO S T S /F IXE D AS S E T S 0 0 0 0 0 0 0 0 0 0 0 0 -

E q u ip m e n t 0 0 0 0 0 0 0 0 0 0 0 -

Loa n Re p a ym e n t 180,556 180,556 180,556 180,556 180,556 180,556 180,556 180,556 180,556 180,556 180,556 180,556 2 , 16 6 , 6 7 2

T O T AL
CAS H P AID 1, 19 2 , 0 5 6 782,750 723,500 7 11, 5 0 0 788,500 747,500 720,500 800,500 6 0 1, 0 0 0 698,000 7 14 , 0 0 0 6 3 1, 9 5 0
O UT B

15,671,522
CAS H 15,879,466
O N HAND[B e g16,146,716
in n in g o f m o16,454,216
n th ] C 16,812,716 17,074,520 17,402,040 17,712,540 17,943,040 18,477,040 19,849,190 21,435,190

CAS H
P O S IT IO N[
End of 15 , 8 7 9 , 4 6 6 16 , 14 6 , 7 16 16 , 4 5 4 , 2 16 16 , 8 12 , 7 16 17 , 0 7 4 , 5 2 0 17 , 4 0 2 , 0 4 0 17 , 7 12 , 5 4 0 17 , 9 4 3 , 0 4 0 18 , 4 7 7 , 0 4 0 19 , 8 4 9 , 19 0 2 1, 4 3 5 , 19 0 2 3 , 10 3 , 3 7 0
m o n th ]A - B
+ C

McNETHS FOODS Page 23


Projected Profit and Loss

Profit & Loss

Pro Forma Profit and Loss


Year 1 (N) Year 2 (N) Year 3 (N)
Sales 15,221,604 15,221,604 16,543,604
Direct Cost of Sales 7,300,000 7,300,000 10,300,000
Other Production Expenses 0 0 0
Total Cost of Sales 7,300,000 7,300,000 10,300,000

Expenses
Payroll 960,000 960,000 960,000
Depreciation 195,000 195,000 195,000
Bank charges 12,000 12,000 12,000
Insurance 95,000 95,000 95,000
Rent 200,000 300,000 300,000

Total Operating Expenses 1,562,000 1,652,000 1,652,000

Profit Before Interest and Taxes 5,738,000 5,638,000 8,648,000


Interest Expense 195,000 195,000 195,000
Taxes Incurred 1,721,400 1,691,400 2,594,400

Net Profit 3,821,600 3,751,600 5,858,600


Net Profit/Sales -16.23% 10.53% 14.78%

McNETHS FOODS Page 24


Projected Balance Sheet

The following table will indicate the projected balance sheet.

Balance Sheet

Pro Forma Balance Sheet


Year 1(N) Year 2(N) Year 3(N)
Assets

Current Assets
Cash 7,300,404 15,580,252 23,103,370
Total Current Assets 7,300,404 15,580,252 23,103,370

Long-term Assets
Long-term Assets 6,500,000 6,305,000 6,110,000
Accumulated Depreciation 195,000 195,000 195,000
Total Long-term Assets 6,305,000 6,110,000 5,915,000
Total Assets 13,605,404 21,690,252 29,018,370

Liabilities and Capital Year 1 Year 2 Year 3

Long-term Liabilities 4,874,996 2,708,324 2,166,672

Paid-in Capital 9,100,000 9,100,100 9,100,000


Retained Earnings 369,592 9,881,928 17,751,698

Net Worth 13,605,404 21,690,252 29,018,370

McNETHS FOODS Page 25


CHAPTER 10
10.0 RISK ASSESSMENT
10.1 Financial risks
Key financial Risk

 Changes in our pricing policies or that of our competitors


 Fluctuation in revenue from distributors and retailers
 Timing of costs related to acquisitions or payments

10.3 Technological risks


Technology is good but they also have their disadvantages. There are normally problems involved in
using technology; the use of the machine that collects eggs may fail to work or spoil, making the work
slow and adding more cost to the business by repairing it. The cost for electricity is also not easy and
some electric problems can lead to fire outrage and burn the building causing the loss of assets and
perhaps the entire business.

10.4 Contingency plans


As we considered these risks we have also made contingency plans for unprecedented events or
occurrences. Another contingency plan we will make is insurance that will protect our assets. One of the
risks we have to face mentioned earlier, the occurrence of a fire outrage will be curbed by placing fire
extinguishers at strategic places. And in case of financial crises, we may have to resort to go into
partnership.

Business Risk and mitigating factor


Business Risk: under listed are possible business risks of general business peculiarity
1. Product Rejection
2. Burglary/theft
3. Fire and Natural occurrence
4. Inability to produce due to Unplanned Occurrences
5. Break down of equipment in the middle of production
6. Demurrage/ Transit Damages
7. Government policies

To mitigate the above risks we shall employ;

McNETHS FOODS Page 26


1. Strict adherence to product quality with raw material check, on process checks,
packaging checks, finish goods and storage checks
2. All our facilities stock room and warehouse shall be under CCTV/security watch
3. We shall have fire extinguishers stationed at adequate place while insurance against
natural occurrence will be in force
4. We shall plan every production at least a month before kick-off and one week review
before production
5. We shall adopt a daily routine equipment check, a quarterly general maintenance and
adequate equipment utilization not overload on its capacity
6. All our drivers and vehicle hired or employed must have goods on transit insurance cover
before loading
7. We shall keep abreast with the trending policy by weekly news daily report on the state
of the economy.

McNETHS FOODS Page 27


Business Model Canvas

Our Key Our Key Activities Our Our Customer Relationships Our
Partners *Materia Valu expectations: Credit, SOR- Customer
*(CBN/HB/N l e Proposition Contractual, Mutual, formal& Segments Our
Y SC- sourcing *Value Cordiality Customer
YIEDP) *Production fo Segment
*Distribution. r money At the moment we offer; Ranges from
*Mr. *Quality 1. Formal, Cordial, SOR lower class,
Emmanuel Distribution & Patronage considerations middle class
Cliffe Channel: Whole & Variety 2. After sell service and few
consultant seller- Retailer- *Affordability 3. Free products. proportion of
consumer. *Healthy living the high class.
*Improved IQ. Integration of Model:
Our Customer *Reduces Bad Debt and sustains Our most
SUPPLIERS
Relation: Problem our Revenue Stream important
1. Apia Farms
Cordial, s solved: *Cost Effectiveness it is quit Customers are
2.Dan Alheri
formal *Malnutrition cheaper than bad Debt. people of
Farms
, &mutual. *Obesity/stress different age
PARTNER *Heart/ BP group:Childre
Our Key issues
KEY n, Teens &
Resources *mental
RESOURCE Our Channels the obese,
1. OUR Value retardation
*Finance CCC Preference: Calls, SMS, pre
Proposition
*Legal/Licens letter natal and post
Requirement Our products:
es natal mothers
*Research 1 Whole
*Raw and the aging
*Internet, powdered egg Our efforts:
Materials *Professionals We currently utilize; phone calls, group.
*Repair 2 Tamba
Flour social media & formal
&Maintenance 2. Machines communications.
. 3. Raw Material Our Best CCC: calls, letter/social
Customer
4. Human media.
Satisfaction:
Resource. *Feeding
*Healthy living Cost effective CCC: S/media,
Our Dist. *Development SMS & mails.
Channel: & Growth
*Van, mini trucks. Integration plan: We are hoping
to have CCC unit.
Customer
relation:
*contractual/hire.
*Revenue stream:
*Equity/Loan
Our Cost Structure Our Revenue Streams
Most important cost: Equipment and Machineries, Customers are willing to pay 350 to 500 naira
internet Current payment is at 370 naira
Most Expensive activity: Marketing And Sale Preferred payment Cash and few for Bank
Most expensive Resource: Human Resource, power Number of stream 3, Contribution ; 30%, 30%
40%

McNETHS FOODS Page 28


Conclusion

To have a successful e-business there are a couple of methods that the business must consider first.
(1) They must know their target market and by knowing this they have a competitive advantage that
allows them to have an edge on the competitors.
(2) They must also know their value chain which is a series of transactions between all participants that
influences the final product. The value chain is a place where the businesses need to be in order to
identify the needs of its target market.

McNETHS FOODS Page 29

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