1

EXECUTIVE SUMMARY

I) BUSINESS DESCRIPTION

We are currently students at the University of Dar es Salaam, third year pursuing

Bachelor of Commerce in Accounting degree. We are planning to establish fruits

business that will be known as MATUNDA FRESH SHOP.

The proposed venture is expected to commence on 1st July 2012 soon after accomplish

degree level. The venture will be situated at Mwenge Area, Dar es Salaam; the main

activities will be selling and buying various types of fruits.

The proposed business venture will be owned by three partners namely,

Sanga Emmanuel (Bcom Accounting)

Kapanga Charles (Bcom Accounting)

Mgonzo Ebby (Bcom Accounting)

II) MARKET

Mwenge Area is an essential growing business centre in Dar es Salaam, so this shows

that there is high potential market for various fruits. Proper pricing, advertising and

indirect channel of distribution will be used to capture high market share.

III) OPERATIONS

The proposed business venture will use the most recent technology to store varieties of

fruits of high quality and differentiated from its prospective competitors. Using modern

technology will favour the position of the proposed venture.

IV) ORGANIZATION

The venture will have five (5) employees each to be provided with a particular task

depending on knowledge and experience they have. The technician of refrigerators will

be skilled, recruited from Vocational Training Institutions like VETA or other recognized

colleges.

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V) RENTED PREMISES

The proposed venture will occupy a 16 square meters that will be rented at affordable

rent payment. The main building will have two major parts and these are:

Shop

Store

VI) FINANCE

To develop the business venture a sum of Tsh 5,000,000 is needed the money will be

used to acquire refrigerators, equipment, and to meet initial operations

Each Partner is expected to contribute Tshs. 1,000,000/= from his own saving which will

make a total contribution of owners being Tshs. 3,000,000/=. This amount is equivalent

to 60% of the total capital required.

Other sources include:

Bank loan will be 1,500,000 that will be equal to 30%

Micro financers will be 500,000 that will be equal to 10%

Half of Micro credit loan will be paid in the last month of the year the remaining will be

paid at the end of the following year of operation. Bank or loan interest of 10% will be

payable in the year basis. The bank loan will be paid in two installments at the beginning

of the third year.

3

CHAPTER ONE

1.0 FEASIBILITY CHECK

1.1 FEASIBILITY FACT SHEETS.

Table 1.1.0

Details Communication

Business address MATUNDA FRESH SHOP

P.O.BOX 1225 DAR ES SALAAM

Telephone number

E-mail

+255752 180284

mfresh@gmail.com

Table 1.1.1

Critical location

factors

Reasons for being critical

Geography Mwenge area has potential markets and affordable rental cost

compared with other parts eg Kariakoo,Posta etc.

The area is easy accessible by customers.

Energy supply The location has small number of Industries therefore we

expect a constant supply of power through out a year.

Table 1.1.2

Competitors Estimated distance from the location

Mlimani City Super market

Machinga

1.5 kilometers

Around Mwenge

Table 1.1.3

Products and services of the Business

Products: Fruits eg.Mangoes, Apple , Pineapples, bananas, Avocadoes, Water melons,

Oranges, Pawpaw,

Services: counseling on proper use of fruits

4

Table 1.1.4

Client of business Details

i) Business people Are expected to buy fruits

ii) Households Need fruits

iii) Students Students need fruits

iv) Hotels Need variety of fruits

v) Others Will buy fruits

Table 1.1.5

KEY MATERIALS FOR BUSINESS SUPPLIER OF THE MATERIALS

Fruits Farmers from;

i) Tanga and Bagamoyo- mangoes suppliers

ii) Mbeya and Bukoba- banana suppliers

iii) Bagamoyo – pineapples suppliers

iv) Tanga –Oranges and Apples suppliers

v) Morogoro –pawpaws suppliers

vi) Mbeya –avocadoes suppliers

Table 1.1.6

Key equipment need for the business A known suppliers of the equipment

Furnitures and Fixtures

Refrigerators

Rufungila furniture centre

Samsung shop – at Kariakoo

Table 1.1.7

Key skill needed in the business

Management; the project managers must have the conceptual, human and technical skills,

also a degree in BCOM

Supervisors; operation supervisors must be degree holder

Operators; they should have entrepreneurship skill

5

Table 1.1.8

Critical location

factors

Reasons for being critical

Geography Mwenge area has potential markets and affordable rental

cost compared with other parts eg Kariakoo,Posta etc.

The area is easy accessible by customers.

Energy

supply(electricity)

The location has small number of Industries therefore we

expect a constant supply of power through out a year.

Table 1.1.9

Environmental

considerations

(waste disposal)

Details

Non hazardous waste Rotten fruits will be dumped to the city dumple

General impact on health

of people

Similar the impact is direct and step in controlling the effect

involve effective cleaning and safe storing of fruits

FINANCING THE PROJECT

Maximum amount of finance to be

Raised for the proposed project

Tsh. 5,000,000

Sources of finance Amount

Own Savings TSHS. 3,000,000

Micro credit scheme TSHS. 500,000

Bank loan TSHS. 1,500,000

TOTAL EXPECTED FUNDING TSHS. 5,000,000

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Table 1.1.10

Level of entry in the market in terms of capacity and sales volume and price Monthly

basis

ITEMS Volume price TSHS

Apples 300 490 147000

Mangoes 1000 490 490000

Pineapple 250 1400 350000

Oranges 1000 150 150000

Pawpaw 200 1400 280000

Bananas 500 150 75000

Avocadoes 500 300 150000

Total 1642000

1.2) FEASIBILITY ASSESSMENT

Table 1.1.11

Will it present problem?

Key issues Details Yes May be No

Products

Customers/Client Households and other people are

expected to buy more frequently

other customers like Hotels might

purchase in order

Competitors Are few at the location but sell

exactly similar products.

Fruits and Supplies Fruits are available near the location

technology Technology changes day to day so

management must keep track of

changes i.e Types of refrigerators

Fruits suppliers Price of fruits at the location will

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include transport

Choice of location Is expected to favors successfulness

of our business

Key skills Will base on management and

operation experience

Environmental

consideration

The shop wish to control its effect on

the environment

Self-situation,

motivation, skills,

experience and

education.

To achieve performance our

knowledge on management is

expected to be risen

Project Finance The project will be financed by own

saving and loan which is expected to

have constant interest

Other micro

economic and

political factors

Currency and political changes is

expected to have negligible effect.

Assessiment High Moder

ate

Low

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CHAPTER TWO

2.0) BUSINESS DESCRIPTION

2.1) NAME OF THE OWNERS

Partners are currently students at University of Dar es salaam expecting to graduate on

June 2012 .The proposed business venture will be owned by three partners namely,

Sanga Emmanuel (Bcom Accounting)

Kapanga Charles. (Bcom Accounting)

Mgonzo Ebby (Bcom Accounting)

2.2) DESCRIPTION OF THE PROPOSED OWNERSHIP STRUCTURE

Each Partner is expected to contribute Tshs. 1,000,000/=from his or her own saving

which will make a total contribution of owners being Tshs. 3,000,000/=. This amount is

equivalent to 60% of the total capital required.

Other sources include

Bank loan………………………………..30%

Micro financers………………………….10%

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2.3) DESCRIPTION OF THE PROPOSED BUSINESS

NAME: MATUNDA FRESH SHOP

LOCATION: MWENGE AREA IN DAR ES SALAAM.

BUS STATION.

Our business will commence on July 2012 soon after completion of our studies.

The business is expected to start as a partnership initially. This is due to sharing of basic

things such as skills, capital and risk. The major activities of the business will be as

follows.

2.4) PRODUCTION ACTIVITY

This will involve selling and buying of variaties of fruits such as apples, mangoes,

bananas, pineapple, pawpaw, adovocado etc .

Other activities will include.

Receiving of orders and distribution of fruits to clients customers.

The price charged to customers who are supplied with goods at their destination

will take into account the carriage cost.

Recording transactions and analyzing financial performance of the business.

The management will be planning short term and long term goals and take control

of the business activities

2.5) MAIN CUSTOMERS

All people because health as no age, color, gender, education etc.

2.6) DESCRIPTION OF THE CHOICE OF BUSINESS LOCATION

The chosen business location is considered a right place in terms of the market share

basing on the following factors.

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The infrastructure of the planned business location is good therefore easy

accessible by customers. Also for easy transportation of fruits from suppliers to

the shop.

The rental fee is reasonable compared to other location where rent is very high.

The annual rent for our venture is paid semi annually

Justification of the need for the business in the market place

There is a high demand for fruits due to ever increasing in number of people around the

area also the increase in hotels and restaurant have been the critical factor for the choice

of this location

There is a quality difference of fruits in existing shops so we think there is a need to have

a shop which can offer a quality fruits at affordable price. The business is expected to sell

high quality fruits to meet the need of the customers who cannot afford high priced fruits

from existing shops.

Contribution of the business to the community

The business is expect to create employment opportunity to unemployed skilled and

unskilled for the coming year of operation because we expect expansion of the venture,

this also will result in improving standard of living, provision of goods and services to

surrounding community, involve in social responsibility and contribution of revenue to

the government.

2.7) DESCRIPTION OF THE SHOP (BUSINESS) SIZE

The proposed business belongs to agricultural industry, fruits coming from this industry.

Fruits ventures categories into small (machinga), medium (shops) and large

(supermarket) venture. The proposed business will be among the medium venture. The

industry is very high therefore, the competition is high.

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Description of the Agriculture Trends and prospects

Agriculture is the foundation of the Tanzanian economy. It accounts for about half of the

national income, three quarters of merchandise exports and is source of food and provides

employment opportunities to about 80 percent of Tanzanians. It has linkages with the

non-farm sector through forward linkages to agro-processing, consumption and export;

provides raw materials to industries and a market for manufactured goods.

Agriculture in Tanzania is dominated by smallholder farmers (peasants) cultivating an

average farm sizes of between 0.9 hecters and 3.0 hecters each. About 70 percent of

Tanzania’s crop area is cultivated by hand hoe, 20 percent by ox plough and 10 percent

by tractor. It is rainfed agriculture. Food crop production dominates the agriculture

economy 5.1 million ha. are cultivated annually, of which 85 percent is under food crops.

Women constitute the main part of agricultural labour force. The major constraint facing

the agriculture sector is the falling labour and land productivity due to application of poor

technology, dependence on unreliable and irregular weather conditions. Both crops and

livestock are adversely affected by periodical droughts.

Irrigation holds the key to stabilizing agricultural production in Tanzania to improve food

security, increase farmers’ productivity and incomes, and also to produce higher valued

crops such as vegetables and even flowers.

Agriculture Performance:

Agricultural GDP has grown at 3.3 percent per year since 1985, the main food crops at

3.5 percent and export crops at 5.4 percent per year. Considering that the overall GDP

growth target for halving abject poverty by 2010 is in the range of 6-7 percent, this

performance falls short of the needed growth.

The macro economic reforms have and continue to have had significant impact on the

Agriculture sector. The economic reforms have lead to the opening up of the sector to

private investment in production and processing, input importation and distribution and

agricultural marketing. Most of production and processing and marketing functions have

12

been assigned to the private sector. The Government has retained regulatory and public

Support functions or facilitation role.

Farmers are free to sell their crops to cooperatives or private traders. Due to competition,

normal producer prices for food & export crops have increased as such farmers can now

sell their produce much faster. Farmers are no longer confined to a single source for their

essential inputs for crops and livestock.

Horticulture based system:

Found in Lushoto district; Tanga region, Morogoro rural; Morogoro region and Iringa

rural in Iringa region.

- Vegetables, (cabbages, tomatoes, sweet pepper, cauliflower lettuce and

indigenous vegetables) and fruits, (pears, apples, plums, passion fruits and avocado

13

CHAPTER THREE

3.0) THE MARKETING PLAN

In this of the business plan the information to be presented are those of customers,

competition, pricing strategy, sales tactics advertisement and promotion and distribution

strategy.

3.1) CUSTOMERS

The main potential customers of this business venture are groped into,

Households

Business people

Students

Hotels

Others

Relevant Characteristics of customer

Customer group Relevant characteristics

House holds Households are attracted to price and high

quality fruits. This group represents a large

number of buyers.

Business They attracted to price and quality fruits

Hotels likely to demand of fruits with hygienic

condition but may buy in a large quantity.

Students They attracted to low price and quantity

Others They differ in preferences

It is expected that customers will perceive the fruits well since the fruits will satisfy the

customers needs due to hygienic and quality of fruits.

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Below is the summary of the expected customer priority judgments.

Product Customer requirements

Fruits Quality, Quantity, hygiene and affordable

price

The sales will be made throughout a year this is because the needs for these fruits are in

most cases not seasonal ,this implies a constant buying behavior.

Initially all fruits will be sold for cash but credit sales will be offered as far as customers

continue to be loyal.

The markets size for the fruits.

Since the business is a new venture and according to the nature of its customers, it is

difficult to mention the exact number of customers until the time of its physical existence.

However in average, the area is surrounded by business people, students, hotels,

restaurants, household and others.

The following are the forecasted sales as per each product per month.

ITEMS Volume

Apples 300

Mangoes 1000

Pineapple 250

Oranges 1000

Pawpaw 200

Bananas 500

Avocadoes 500

Total 3750

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3.2) COMPETITION

Description of potential Competitors

The potential Competitors are the fruits sellers.

The known potential competitors are as mention below

Competitors Location (KINONDONI)

Mlimani City

Machinga

Other supermarket

Mwenge

Mwenge

Mwenge

Effects of business location in relation to other competitors

Advantages

The infrastructure of the planned business location is good therefore easy

accessible by customers. Also for easy transportation of fruits from suppliers to

shop.

The rental fee is reasonable compared to other location where rent is very high.

The business rental is paid semi annually while others pay annually.

Mwenge area is still developing so some community center has been opened so

there is need for fruits.

The competitive advantages of the proposed products owner those and the

competitors base on two main factors.

i). Quality: As a result of proper advertisement through publishing flyers customers will

recognize the value added on the fruits that will lead customers frequently to visit our

proposed venture.

(ii) Product innovation: Through innovation, fruits of different features will be sold to

give customers a wind range of choice.

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Description of the overall strengths and weaknesses of the potential competitors

Mlimani City

Competitor

Machinga

Competitor

Other

supermarket

Competitor

Benefit to

customer

High low Moderate

Technology High low moderate

Location High Moderate Low

Management Very high Very Low Moderate

Distribution

Channels

High Low Moderate

Referring to the competitors, overall strength and weakness two aspects are possible

Easy to compete with them.

Competitive advantage will be attained from use of modern technology to

store quality of fruits compared to those of competitors.

High managerial skills will enable the proposed venture to operate

efficiently and effectively while minimizing costs of storing and

transportation.

Product innovation and new styling will help to capture more customers

that will result into increased market share.

Difficult to Compete with them

Some competitors and the proposed business will share the advantage of

location of the business. Some have already established strong channels of

distribution.

17

Being in the industry for the long time, our competitors have experience

advantage in the market and have attained economies of scale hence low

cost per unit of fruits. This advantage can be used by competitors to

charge low price.

The rivals cope with changing technology and pose intensive competition

to the business venture.

3.3. PRICING STRATEGY

The price of fruits will base on the cost of transporting and storing a particular fruits.

That is the price will be determined by adding a ten percent 10% margin on transport

cost.

Several factors will be considered in setting prices. These are as follows.

1. Objective of the proposed venture is maximization of profit; The venture will

estimate the demand and costs associated with alternative prices and choose the

price that will produce the maximum profit or cash flow.

2. Government regulation on agricultural products ; Since the government have

put control over the price this will make the cost of buying fruits to be high from

farmers.

3. Competitors selling price; this is the most important factor to consider since

customers are price sensitive.

4. Market segments; there are groups of customer who perceive highly prices

goods as of high quality and could be comfortable to buy at that price than the

lower one.

5. Cost of transportation and storing; The cost of transportation and storing will

be hardly the floor of pricing. A price less than cost of transpotation and storing

will not be set because it will imply a loss.

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The forecasted selling prices are as follows.

Fruits Selling price (in Tshs)

Apples 490

Mangoes 490

Pineapple 1400

Oranges 150

Pawpaw 1400

Bananas 150

Avocadoes 300

Credit terms for products(Fruits).

Credit sales will be offered to customers who buy in large volumes particulars restaurant,

, other institutions, payments should be done within 30 days, and there will be a 2%

discount provision for customers who will pay within 10 days. Debtors will fail to pay

over six months will be declared uncollectible and legal action will be taken upon.

3.4) SALES TACTICS.

Two methods will be employed in selling the fruits.

i) Personal selling; Customers nearby the premise and other who could wish to buy

directly from the shop will be served accordingly.

ii) Agents: some fruits will be distributed to agents in different areas for easy accessible

by customers remote from the proposed business.

The price to be offered by agents will be monitored by the business venture staff protect

loyalty.

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3.5) ADVERTISING STRATEGY

Two main advertising media will be used by the proposed venture are appropriate for the

business venture.

Flyers : the venture will use fylers to advertise, this is because it is

cheaper compared to others advertising media.

3.6) DISTRIBUTION STRATEGY:

Due to the nature of the venture that they need careful handling the channels of

distribution will be as far as from Venture………. Agent………. Customers, and venture

…..customers. Wholesalers and retailers will not be involved because fruits may

deteriorate in quality and attractive along the way to customers.

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CHAPTER FOUR

4.0) OPERATIONAL (PRODUCTION) PLAN

The facet of the business plan covers the description of the facilities indirect labor and

overheads required in selling proposed fruits. In addition, this part insists of indication of

compliances and regulatory framework that will affect operations of the business.

4.1) PRODUCT DESIGNS AND DEVELOPMENT:

Using modern technology, we intend to differentiate our fruits (fruits from those

competitors by introducing new features). Before undertaking the fruits, development

will do the following:

i). Search for customer’ feedback as to how they perceive the fruits by doing personal

selling, responds to fruits after buying it.

ii). Do market surveys to evaluate the reach of the business in terms of market shares.

iii). Make a feasibility study on the performance of the fruits in the market place.

iv). Research comparative offerings by looking for prices.

The general findings on the performance of the products (fruits) in the market place will

guide the extent to which the fruits will have to be re-innovated.

The fruits costs referred to as in this case is the cost of analyzing the market trends of

the fruits, which include a small-scale research on customers need training to provide

them with appropriate skills necessary in fruits. New styles of packaging fruits may

require special equipments that mean the venture will need cash for acquisition of new

equipments which will be in the budget of the coming year of operation.

On the other hand, the following disadvantages may be encountered:

a) Most of the customers particularly households are low-income earners which

mean the tendency to repeat purchases are limited.

b) Some of customers are not sensitive towards fruits categories that they do not

look for the value added by fruits categories. This in turn discourages fruits

innovations.

c) Most customers especially offices they do like imported fruits

d) Too rigid and conservatism they like to use their formal suppliers.

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The size of competitors in relation to the proposed business

Our

Venture

Mlimani

City

competitor

Machinga

competitor

Others

competitor

Assets Small Large small Small

Sales

volume

Expected

to be large

Large small Medium

No. of

employees

Small Large small Medium

No. of

brands

medium Large small Small

Comparison of proposed products with those of competitors

Our Venture

business

Mlimani

City

competitor

Machinga

competitor

Others

competitor

Performance Moderate High Low Moderate

Quality High high Low Moderate

Reputation Moderate Very high Low Moderate

After sales

services

Moderate Very high Low Moderate

Durability Moderate High Low Moderate

Attractiveness High High Very low Moderate

Product

innovation

Moderate High Low Low

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The venture plans to use simple but modern technology in storing high quality fruits. We

specifically intend to use power refrigerators and tools to simplify operations and

improve efficiency.

This level of technology is appropriate for the newly established business that will have

low capital base. We intend to acquire more technologies as far as the venture becomes

financially capable.

The appropriateness of this technology is in the following aspects:

i). Simplicity in utilization and flexibility in adoption. The operations in fruits

storing is common for a person who has skill, it is easy to manage use of the

refrigerators because nothing changes in operation but only the source of power

electricity instead of human labour.

ii).Efficiency in Storing

Refrigerators is usually need electricity to freeze fruits thus makes easy to store our fruits

iii).Cost –effectiveness

Using refrigerators is affordable in acquiring and use . This implies that we can buy and

operators ourselves thus reducing cost of labour.

iv). Extent of availability or frequency of maintenance. Simple maintenance and

repair activities for refrigerators and other equipments will be done by part time

technicians once there is any problem encountered.

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4.2) PRODUCTION FACILITIES AND CAPACITY

The acquisition of machinery and equipments will be as follows.

Item Cost per

unit (Tshs)

Units

required

Total cost

(Tshs)

Refrigerators 600,000 2 1,200,000

Table 100,000 1 100,000

chairs 60,000 3 180,000

shelves 450,000 2 900,000

Total 2,380,000

Description of the monthly Fruits and consumable requirements

Fruits Volume(quantity) price TSHS Frequency per monthly

Apples 350 300 105,000 2

Mangoes 1100 300 330,000 2

Pineapple 250 900 225,000 2

Oranges 1100 70 77,000 2

Pawpaw 230 900 207,000 2

Bananas 600 70 42,000 2

Avocadoes 600 160 96,000 2

Total 1,082,000

Other supportive equipment will be acquired to enhance smooth operation and to attain

close interaction with the external environment.

The supportive equipment includes the following:

Item Quantity Cost per

unit (Tshs)

Total cost

(Tshs)

Telephone 1 30,000 30000

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4.3) PRODUCTION STRATEGY

The monthly labour requirement is as follows;

i). Direct workers: the ventures being small will require an average of 12 skilled direct

workers.

ii). Indirect workers: 10 indirect workers will be needed for such tasks as up loading

furniture on Lorries at the workshop and down loading them at the agent’s places.

They are employed when needed.

4.4) DESCRIPTION OF SKILLS LEVEL

Function of an employee(partners) Skills required

Operator Knowledge have a degree from a UDSM

Indirect workers Need not have technical skills but rather

experience

Sales workers -Marketing knowledge

-Computer literate

Note, indirect worker may be required in case of there is any emergency occurred but not

frequently needed to our venture.

These are some preliminary expenses that the venture will incur during production.

These are as follows

Expenses Amount

Stationeries 10,000

Meal allowance 20,000

Travel allowances 30,000

Total (Tshs) 60,000

25

Monthly cost overheads will be as follows:

Electricity Tsh 30,000

Telephone 30,000

Water 20,000

Rent 100,000

Total 180,000

4.5) COMPUTATION OF COST OF OPERATION

Cost of Operation per monthly

Fruits Volume(quantity) price TSHS Frequency per monthly

Apples 300 490 147000 2

Mangoes 1000 490 490000 2

Pineapple 250 1400 350000 2

Oranges 1000 150 150000 2

Pawpaw 200 1400 280000 2

Bananas 500 150 75000 2

Avocadoes 500 300 150000 2

Total 1,642,000

4.6) PRODUCTION PROCESS/SERVICES AND GOVERNMENT

REGULATION:

The following external factors are likely to affect the production process.

i). Weather condition

The transportation of raw materials (fruits) may be very cost full and inefficient

during rain season.

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ii) Power supply

During power rationing, production may be fluctuating. The venture is expecting

to acquire other alternative sources of power like generator.

iii) Competitors’ level of technology

Competitors may acquire new technology improving quality of their products. In

turn, this will pose an intensive competition in market place, low market share

means the venture will have to change with new modern technologies so that it

will keep on growing in the market.

How to minimize those effects;

a) The venture will maintain a sufficient stocks of materials (fruits) before rainy season

to avoid shortage.

b) The venture plans to acquire a standby generator in order to combat power problems.

The generator will ensure a constant operation hence reducing the chance for idle time to

occur.

c) To minimize loss of market shares, the venture will; keep track with change in

technology to use the latest available technology.

d) The venture plans to advertise to create awareness to potential customers as well as to

retain existing customers.

Government power and regulation;

-The proposed business is likely to be affected by the agricultural policy of the

government. The policy deals with matters relating to authorization and licensing fruits

dealings.

-Tax compliance certificate is renewable in annual terms at a cost of Tsh 60,000

27

CHAPTER FIVE

5.0) ORGANIZATION PLAN

This part is mainly composed of description on polices of the organization and human

resource management that will facilitate achievement of efficient operations and

distribution of fruits.

5.1) ORGANIZATION

The organization will compose of three Owners, all of them are partners

5.2) MANAGEMENT TEAM AND THEIR DUTIES

The venture will be managed by Owners , their duties include overall management of the

venture, finance management and Administration. The operation part will manage

acquision activities including ordering of materials..

5.3) SALARY/ REMUNERATION

The partners in the venture will share equally profit or loss

5.4) EMPLOYEES RECRUITMENT AND PERFORMANCE EVALUATION

The business will be conducted by the owners (partners) themselves

Trainings to partners will be offered after three years of work within the venture to

improved performance. The trainings will be at the ventures expense.

To improve performance of partners each partner will be offered one set of bonus once a

year

The Partners’ health will be taken into consideration by paying in advance to the nearest

health center.

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CHAPTER SIX

6.0) FINANCIAL PLAN

6.1) PROJECTED INCOME STATEMENT

QUALITY FURNITURE CENTER PROJECTED INCOME STATEMENT

QUARTER

1

QUARTER

2

QUARTER

3

QUARTER

4 TOTAL

Sales 4,926,000 4,926,000 4,926,000 4,926,000 19,704,000

Cost of goods sold 3,246,000 3,246,000 3,246,000 3,246,000 12,984,000

Gross profit 1,680,000 1,680,000 1,680,000 1,680,000 6,720,000

Operating Expenses

Electricity 90,000 90,000 90,000 90,000 360,000

Telephone 20,000 20,000 20,000 20,000 80,000

Water 30,000 30,000 30,000 30,000 120,000

Rent 300,000 300,000 300,000 300,000 1,200,000

Transport 500,000 500,000 500,000 500,000 2,000,000

Sundry expenses 150,000 150,000 150,000 150,000 600,000

Total Operating Costs 1,090,000 1,090,000 1,090,000 1,090,000 4,360,000

Net Profit 590,000 590,000 590,000 590,000 2,360,000

Note; Partnership is not taxed as entity(Accordingly to Tanzania Tax Act 2004) ,partners

are taxed as individual.

Loan bank interest not included in statement of comprehensive income because

will be paid in the third year of operation , and loan from microfinancer will be paid at

the end of second year of operation

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6.2) PROJECTED BALANCE SHEET

QUALITY FURNITURE CENTER PROJECTED BALANCE SHEET

Fixed Assets:

Refrigerators 1,200,000

Furnitures and Fixtures 1,180,000

Current Asset

Cash at Bank 2,079,000

Stock 541,000

Total Assets 5,000,000

Financed by:

Bank Loan 1,500,000

Micro-credit schemes 500,000

Owners Equity 3,000,000

Total owners equity and Liabilities 5,000,000

30

6.3) PROJECTED CASH FLOW STATEMENT

PROJECTED CASH FLOW STATEMENT OF QUALITY FURNITURE CENTRE

DETAILS

QUARTER

1

QUARTER

2

QUARTER

3

QUARTER

4 TOTAL

CASH INFLOW

Revenue 4,926,000 4,926,000 4,926,000 4,926,000 19,704,000

TOTAL INFLOW 4,926,000 4,926,000 4,926,000 4,926,000 19,704,000

CASH OUTFLOW

Refrigerators 1,200,000 1,200,000

Fittings and funiture 1,180,000 1,180,000

Rent 600,000 600,000 1,200,000

Purchases 3,246,000 3,246,000 3,246,000 3,246,000 12,984,000

TOTAL OUTFLOW 5,626,000 3,846,000 3,246,000 3,846,000 16,564,000

Closing balance (700000) 1080000 1680000 1080000 3,140,000

Balance b/f 5,000,000 4,300,000 3,220,000 1,540,000 5,000,000

Balance c/f 4,300,000 3,220,000 1,540,000 460,000 1,860,000

IMPORTANT ASSUMPTIONS MADE TO REACH THE FIGURES IN THE

FINANCIAL STATEMENTS PROJECTED.

i. Rent will be paid on two installments at the end of every six months.

ii. Loan and equity will be received before the first quarter begins.

iii. All purchases will be done at the beginning and at the middle of the same month

iv. All assets will be purchased at the first quarter.

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6.4) FINANCIAL REQUIREMENTS

Total amount of money required at start up Amount ( in Tshs)

Working capital 2,620,000

Fixed assets:

Refrigerator 1,200,000

Fittings 1,180,000 2,380,000

Total financial requirement 5,000,000

Proposed capitalization

Total investment will be 5,000,000

Funds from our own savings 3,000,000

Borrowings: Micro credit scheme 500,000

Bank loan 1,500,000

The security for loan will be our degree certificates. Half of Micro credit loan will be

paid at the end of the second year of operation. Bank or loan interest of 10% will be

payable at the end of the third year of operation. The bank loan will be paid in two

installments at the beginning of the third year.

6.5) EXPECTED PROFITABILITY

As indicated in the profit and loss projections, the profit will be determined by transport

cost plus.

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CHAPTER SEVEN

7.0) CRITICAL RISK ASSESSMENT AND IMPLEMENTATION

The main risk that may happen during the business operations is the default(perishability)

risk. The customer may fail to honor their obligation to pay their debt thus to affect the

operations of the business to deal with this problem the management will set up standards

for offering credit sales (customer credit worthy rating). Also proper follow up will be

made frequently.

In addition, imported fruits (Fruits from other countries) can lead to loss of large market

share, to address this management will insure quality services for selling fruits which will

meet international standards.

7.2) IMPLEMENTATION SCHEDULE

EVENT EXPECTED START

DATE

EXPECTED DATE

OF

COMPLETION

Registration - January 2013

Acquisition of start up requirement May 2013 May 2013

Installation of machines and

equipment

July 2013 July 2013

Start of the operations July 2013 -

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