ETHIOPIAN INSTITUTE TECHNOLOGY – MEKELLE (EIT-M)

SCHOOLOF ELECTRICAL & COMPUTER ENGINEERING

STREAM of ELECTRONICS AND COMMUNICATION ENGINEERING

ENTRPRENEURSHIP BUSSINES PLAN

Title:- HIDASSE Electronics Equipment Fabrication and Assembly

Workshop (HEEFAW)

Prepared by:

Group Members ID No:

1- Fasil Ashenafi 1803/05

2- Fireyat Hadish 1395/05
3- Tibebe Tufa 0897/05
4- Yosef Tadesse 0789/05

Name of Owners

 Fasil Ashenafi
 Fireyat Hadish
 Tibebe Tufa
 Yosef Tadesse
Phone no: +251923060794
Email – georgenavas33@gmail.com
Submitted to: H/Selassie (Ins.)
Submission Date: 7/06/2017
Contents
CHAPTER ONE ......................................................................................................................................... 4
COMPANY OVERVIEW .......................................................................................................................... 4
1.1. Introduction ...................................................................................................................................... 4
1.2. BACKGROUND OF THE PROMOTER ...................................................................................... 5
1.3 Mission ............................................................................................................................................... 5
1.4 Vision.................................................................................................................................................. 5
1.5 PROJECT OBJECTIVE .................................................................................................................. 5
1.5.1 GENERAL OBJECTIVES: .......................................................................................................... 5
1.5.2 SPECIFIC OBJECTIVES............................................................................................................. 6
CHAPTER TWO ........................................................................................................................................ 7
EXECUTIVE SUMMARY ........................................................................................................................ 7
CHAPTER THREE .................................................................................................................................... 9
BUSINESS ANALYSIS .............................................................................................................................. 9
3.1 COMPETITORS............................................................................................................................... 9
3.1.1 COMPETITORS STRENGTH ................................................................................................ 9
3.1.2. COMPETITOR’S WEAKNESS .............................................................................................. 9
3.1.3 COMPETITIVE STRATEGY .................................................................................................. 9
3.2 MARKET SEGMENTATION....................................................................................................... 10
3.3 PLANT CAPACITY ....................................................................................................................... 10
3.4 PROCESS DESCRIPTION ........................................................................................................... 10
CHAPTER FOUR..................................................................................................................................... 11
DESCRIPTION OF OUR VENTURE .................................................................................................... 11
4.1 SPECIFIC PRODUCTS ................................................................................................................. 11
4.2 MAJOR REASONS TO BEGIN OUR BUSINESS PLAN IN MEKELLE ............................... 11
4.3. INVESTMENT INCENTIVES ..................................................................................................... 11
4.3.1 LAND INCENTIVE ................................................................................................................. 11
4.3.2. CUSTOM AND INCOME TAX EXEMPTION................................................................... 12
4.4 SCHEDULE FOR THE PROJECT IMPLEMENTATION ....................................................... 12
CHAPTER FIVE ...................................................................................................................................... 13
FINANCIAL PLAN .................................................................................................................................. 13
5.1 Workshop Equipment .................................................................................................................... 13
CHAPTER SIX ......................................................................................................................................... 16
MARKETING SCOPE............................................................................................................................. 16
6.1 MAIN CUSTOMERS AND SUPPLIERS..................................................................................... 16
6.2. FIXED ASSET EQUIPMENT ...................................................................................................... 16
6.3. LAND REQUIRMENT AND BUILDING .................................................................................. 17
CHAPTER SEVEN ................................................................................................................................... 18
ORGANIZATION AND MANAGMENT .............................................................................................. 18
7.1 ORGANIZATION AND STAFF ................................................................................................... 18
7.2 ROLES AND RESPONSIBILITIES ............................................................................................. 19
7.2.1 CHIEF EXECUTIVE OFFICER (CEO): .............................................................................. 19
7.2.3 FINANCE & ADMINISTRATION: ...................................................................................... 19
7.2.4 SALES AND MARKETING OFFICER:............................................................................... 19
7.2.5 SUPERVISOR & TECHNICAL OFFICER: ........................................................................ 20
7.2.6 CASHER & GENERAL ACCOUNTANT ............................................................................ 20
7.2.7 DRIVER: .................................................................................................................................. 20
7.2.8 STOREKEEPER & CLEANER: ........................................................................................... 20
7.3 SALARY AND WAGE ................................................................................................................... 21
CHAPTER EIGHT ................................................................................................................................... 22
CONCLUSION AND RECOMMENDATION ...................................................................................... 22
8.1 CONCLUSION ............................................................................................................................... 22
8.2 SOCIO-ECONOMIC JUSTIFICATION ..................................................................................... 22
8.3 RECOMMENDATION .................................................................................................................. 23
 CHAPTER ONE

COMPANY OVERVIEW
1.1. Introduction

Scaling up manufacturing sector to promote industrialization is a key priority when it comes to

speeding up economic growth and ensuring broad-based development. History has shown that
countries with modern industrial development have been able to transfer their economies into
fast growing ones. European countries are the testimony of this fact. The same will be true for
African countries. If the continent is to sustain its growth, it should be able to invest more of
boosting its industrial production. While Ethiopia continues to attain consecutive and double
digit economic growth in the past decade, some of its sectors are yet to grow. True that some
sectors emerged to be registering leap-frog growth while others like exporting and manufacturing
should be further boosted so as to increase their share to the GDP.

In this regard, factories like Metals & Engineering Corporation (METEC), as an umbrella
organization for multiple industries and factories, has become a leading and an emerging
corporation registering remediable growth in the area of manufacturing and industrial
production. But regarding small scale electronics, our Electronics Equipment Fabrication &
Assembly Workshop needs to engage in order to prove itself to be a figurehead choice in the
sector giving hope for the flourishing manufacturing sector.

As initial phase of the feasibility study, we the promoter, have tried to visit availing electronics
shops and consult with shop owners as well as technicians. Regarding the technological process
and equipment, they told us that there are limitations in equipment variety and quality. As a
result, we have observed that being an additional choice for customers is the better idea as
business.
1.2. BACKGROUND OF THE PROMOTER

The Project Promoters, (Fasil Ashenafi, Fireyat Hadish, Yosef Tadesse and Tibebe Tufa) are
undergraduate Ethiopian youths willing to be passionately engaged in such fabrication and
assembly businesses in Mekelle city Administration.

We, the promoters, in its part believes that to participate in the proposed electronics equipment
fabrication and assembly business is a logical and moral imperative to engage to the current
socio-economic and technology level of the country in general and electronics equipment
fabrication and assembly in Mekelle City in particular beside bringing a plus change to the DTP
(Development and Transformation Plan) that the government plans per 5 years. Thus, we, the
project promoters, are committed to implement the proposed electronics equipment fabrication
and assembly business in the Mekelle city Administration.

1.3 Mission
The products provided by the project/or company would have long term economic values and
should make sense of environmental consideration. The electronics equipment fabrication will be
targeting benefiting the community and individual consumers
1.4 Vision
Our company has a vision of expanding its production capacity and market shops all over the
Ethiopian region, and further to other country states. Our aim is in incorporating other related
firms by taking part in the business, for it would become a very profitable venture. We intend to
make our company a tough and competitive one in the existing market system.

1.5 PROJECT OBJECTIVE

1.5.1 GENERAL OBJECTIVES:

The ultimate aspiration hold by our business plan is to meet local demands. Every industries,
promising to sustain their ongoing efforts, has reached a status to supply their products
throughout the local market. Apart from generating new technologies, our workshop will appear
to build efficient local capacities in terms of human resource and logistics. The overall economic
development of the proposed investment undertakings will be to play its role contribution to the
socio-economic and technological development to the region in particular and to the national
output in general.
1.5.2 SPECIFIC OBJECTIVES

 Training and engaging skilled man power to such work environment and saving foreign
exchange to the country by substituting the current imports.
 Creating forward linkage with the manufacturing sub sectors and higher academic
institutions for research development.
 Generating income for the Government in terms of tax revenue and payroll tax.
 To contribute its share support to the ongoing effort of improving the local and national
development initiative and environment
 To reduce the supply-demand gap of small scale electronics materials needed to be
imported there by the foreign currency will be saved by only importing the required
materials as a whole and assembling here with our own human and intellectual resources.
 To contribute towards the creation of direct and indirect employment as well as the
government revenue earnings from income tax, payroll tax and like.
 To create forward linkage with the booming manufacturing sector & backward linkage
with livelihood improvement through expanding its employment creation capacity larger
scale.
 To contribute it share support positive in improving the local and national development
initiative and environment
 To optimize the exiting available assets together with human and nonhuman resource to
achieve better return with establishing a market presence that assures sustainable long
term profitability and to contribute to the government revenue though taxation.
 CHAPTER TWO

EXECUTIVE SUMMARY
This is a project proposal designed to establish “HIDASSE Electronics Equipment
Fabrication & Assembly Workshop (HEEFAW)”by importing and locally purchasing, in
whole, electronics components and other plastic cases to assemble and produce quality
electronics utility equipment with a required production capacity by which alleviating the
existing difficult problem and filling the vacuum of only depending on imported equipment with
less quality and no guarantee.

The country`s requirement of most of electrical equipment (ranging from small scale to higher
scale) is met through import. Without depending on collected data, it is possible to consider any
electronics shops that almost all of marketable goods are either legally or illegally imported
once.

The principle of sustainable development which implies that the promotion of the country’s
economic, social and technological development must occur and be attained in conduction with
the technological development and transfer for the present & coming generation has been
embraced by the government of Ethiopia.

Hence, as motivated and focused communication and electronics engineering undergraduates

with a drive to further develop our knowledge and experience, such potential possibility of
making money coupled with the available comparative advantages and government support to
such environmentally sound manufacturing work shop, are the major reasons and the pull factors
drawing us to work and correlate the activities and enhance our understanding of communication
and electronics engineering.

The main aim of this proposal is thus to assess the existing market demand, the financial and
technical possibility of the project undertakings in order to set up efficient, viable and profitable
business venture.
As a starting, the proposed land requirement to set up the intended assembly workshop is
500sq.m of which the building construction site is to be determined by the concerned Mekelle
Administration Small and microfinance enterprise. The work shop project will have its own
operational and defined management organizational set up which will encompass well skilled
personnel’s and trained & a semi trained workers, the total manpower of the intended project is
expected to be 16 at its 1st operation phase.

The principal raw materials required are electronics components which have to be importedand
purchased (vice versa), as a wholesale, from international suppliers as well as plastic packing
products that avails locally.
 CHAPTER THREE

BUSINESS ANALYSIS
3.1 COMPETITORS
The competitive arena of the industry in Mekelle is mainly determined by financial capacity,
technology and a relative market share. Based on these facts the existing competitors can be
categorized in tow main categories, namely strong and weak competitors. The stronger
competitor, which is only one; that is the METEC (Metal and Engineering Corporation), is a
governmental institution that has a good financial capacity, who used a good technology and
who have a relative better market share.

3.1.1 COMPETITORS STRENGTH

 Established market
 Strong financial capacity
 Possibly higher ability to adopt newer and better technology
 Vast production capacity
3.1.2. COMPETITOR’S WEAKNESS
 Lack of understanding of customer expectation and buying behavior.
 Weak distribution channels, most of the sales outlets are not located in relation to
customer proximity.
 Lack of consistency of product quality and size

3.1.3 COMPETITIVE STRATEGY

Taking into account the competitor’s strength and weakness, HIDASSE electronics
fabrication and assembly workshop will adopt the following competitive strategy to win over
a reasonable customer loyalty and market share.
  Make effective and efficient use of government policies that are ratified to support
flourishing small and micro scale businesses
 Meet or exceed customers’ expectation consistently by monitoring and evaluation
customer needs from time to time
 Opening different sales outlets which are perfectly suited in market areas.
 Producing high quality and visibly competitive electronics products and maintaining
consistency in it quality.

3.2 MARKET SEGMENTATION

The intended assembly workshop wants to tap the available market by establishing a large
regular customer base relationship with its prospective customers, like water tanker producers,
NGO's, hotels and hospitals. Therefore, the market will be segmented to serve customers who are
located primarily in Mekelle and neighboring cities.

3.3 PLANT CAPACITY

Plant capacity will be determined by the basic facts demand forecast, market penetration,
technology and equipment considerations.

3.4 PROCESS DESCRIPTION

The process for Fabrication & Assembly comprises following main steps:

1. Main circuit diagrams

2. Material selection
3. Combination of those materials selected as needed and recommended
4. Packaging
5. Store
6. Deliver to customers, wholesalers and retailers
 CHAPTER FOUR

DESCRIPTION OF OUR VENTURE

4.1 SPECIFIC PRODUCTS

 Anti-mosquitoes (mainly supplied for rural regions, hotels, field workers)

 Water Tank level detectors & alarms (mainly supplied for fiber water tanker producers)
 Experimental circuits (mainly supplied for educational institutions, i.e. for primary,
secondary & preparatory schools)

4.2 MAJOR REASONS TO BEGIN OUR BUSINESS PLAN IN MEKELLE

 Easily availability of skilled labor force that outcome from TVET institutions.
 The Geo-physical location of the City which make the city to serve as an important trade
center for other neighboring cities like Adigrat and Axum.
 The current national policy for dominancy of urban economy to depend on manufacturing
sectors as majority of population live in urban and earn their income from these economic
sectors.
 The existence and increasing trends of economically active population.
 The Strong Economic linkage of the City with the surrounding regions.
 The Special Investment Incentives arranged by the City Administration & strengthened
enabling environment.
4.3. INVESTMENT INCENTIVES

The government actively encourages both domestic and foreign participation in the economy,
through a plethora of investment incentives, which include:

4.3.1 LAND INCENTIVE

Any investor that wants to take part in one of the following investment is entitled to receiving
Land incentive offered by the City Administration of Mekelle.
  For types of investment projects designed to address existing gaps in the social sectors
that should have been covered by the government.
 For types of investment projects designed to reduce the prevailing shortage considerably.
 For types of investment projects designed to save foreign currency by producing the basic
Consumer goods formerly imported from abroad.
 For types of investment projects designed to create forward and backward economic
linkages in the sector.
 For types of investment projects designed to promote creativity or innovations among the
society.
4.3.2. CUSTOM AND INCOME TAX EXEMPTION

 100% exemption from the payment of import duties and other taxes levied on imports of
capital goods, equipment and spare part up to 15% of the value of capital invested;
 Exemption from the payment of import duties levied on the import of raw material for
production of export- orientated goods;
 Income tax exemption for periods ranging from three to eight years;
 All research and development expenses are tax deductible; and
 Remittance from the proceeds of the sale or transfer of shares or assets upon liquidation
of enterprises to domestic investors is exempted from the payment of any tax.

4.4 SCHEDULE FOR THE PROJECT IMPLEMENTATION

As soon as the relevant clearance and permits have been obtained, we the promoter will proceed
with the implementation of the intended project. A general planning has been made on the salient
tasks that would be under taken to reach the desired assembly workshop.
 CHAPTER FIVE

FINANCIAL PLAN
5.1 Workshop Equipment
No. Type Amount Unit Price Price

1.
Auto-Dip 6035- 6 5,779 34,674
TS Dip Soldering
System

2. 2 in 1 862D+ 7 1,236 8,652

SMD Soldering
Iron Hot Air
Rework Station w/
4 Nozzles

3. Rigol DS1052E 2 6,975 13,950

50MHz Digital
Oscilloscope with
2 Channels, USB
Storage Access, 1
GSa/sec sampling

4. Breadboard 15 195.5 2,932.5

5. Parts Express 120- 5 460 2,300

536 3-12 VDC 2
Amp Variable
Power Supply

6. 30V 5A 110V 2 1,081 2,162

Precision Variable
 DC Power Supply
Digital Adjustable
w/ Cable

7. BK Precision 2 1,678.31 3,356.62

2831E True RMS
Bench Digital
Multi meter 4 1/2
Digit

8. NEW Bench-Top 2 531.76 1,063.52

Digital Multi
meter 40,000
Count True RMS
LCD

9. 2 Way 3'' Drill 2 1,379.77 2,759.54

Press X-Y
Compound Vise
Cross Over Slide
Mill Drill Press
Table

10. Work Bench 10 492.90 4,929

Tables

11. Desktop 3 6,970 20,910

computers

12. Office furniture In kind 25,000

(tables& chairs)
 13. Pick up vehicle 1 132,000 132,000

14. Others 20,000

Total 274,689

Table 5.1: workshop equipments

 CHAPTER SIX

MARKETING SCOPE
The intended assembly workshop project will works with a stiff competition in the market to
retain and attract current and potential customers. The promoters believe that there is ahuge
opportunity for high level improvement to produce and provide quality products and service
delivery. In such a competitive business environment, one needs to provide quality assured
products with affordable prices.

In addition to product quality and delivery mode, the production process cost will also be cost
effective to deliver quality products with competitive price. The reputation of the proposed plant
products will build on an absolute insistence on high quality.

6.1 MAIN CUSTOMERS AND SUPPLIERS

The intended assembly workshop project will have different kinds of customers which mainly
can be categorized as private and public owned, individuals these includes

 Anti-mosquitoes (mainly supplied for rural regions, hotels, field workers)

 Water Tank level detectors & alarms (mainly supplied for fiber water tanker producers)
 Experimental circuits (mainly supplied for educational institutions, i.e. for primary,
secondary & preparatory schools)

6.2. FIXED ASSET EQUIPMENT

The total cost of fixed asset equipment is estimated at Birr 274,689. The list of fixed asset
equipment required and cost estimated are summarized in the project detail cost description.
6.3. LAND REQUIRMENT AND BUILDING

The land requirement for the proposed project implementation is estimated to be 500sq.m square
meters. The proposed site will be of which the building construction site is to be determined by
the concerned Mekelle Administration Small and microfinance enterprise.

The proposed land will be developed for the following major elements፡

1. Building for Manufacturing unit 170 Sq. meter

2. Administration & Office building 100 Sq. meter

3. Raw material Storage 100 Sq. meter

4. Finished product Store 100 Sq. meter

5. Toilet& shower Rooms 30 Sq. meter

Total Area 500 Sq. meter

Table 6.1: Land requirement and building

 CHAPTER SEVEN

ORGANIZATION AND MANAGMENT

This project will establish defined and formal organizational set up management arrangement
and the size & scope of the intended assembly workshop project operation have been taken to
determine the organizational structure in order to endorse the system, approve the annual
budgeted plan & financial statements, appointing the firm manager of the manufacturing plant.
However, the regular operational activities of the intended assembly workshop project will be
managed and coordinated according to current production needs and market demands.

The project follows conscious direction in recruiting and assigning its manpower following its
detail human resource development & operational manual.

7.1 ORGANIZATION AND STAFF

We have made provision for the following position in our organization;

• Chief Executive Officer (CEO)
• Finance & Administration
• Sales & Marketing Officer
• Supervisor & Technical Officer
• Casher & General Accountant
• Skilled Workers
• Driver
• Storekeeper& Cleaner
• Guard
7.2 ROLES AND RESPONSIBILITIES
7.2.1 CHIEF EXECUTIVE OFFICER (CEO):

• Creating, communicating, and implementing the organization’s vision, mission, and overall
direction – i.e. leading the development and implementation of the overall organization’s
strategy.
• Evaluates the success of the organization
• Responsible for:-
 providing direction for the business
 Periodical & regular inspection by informing to quality assurance organizations
 the day to day running of the production
 handling high profiled clients and deals
 fixing prices and signing business deals
 recruitment
 signing checks and documents on behalf of the company

7.2.3 FINANCE & ADMINISTRATION:

• Handles all HR (Human Resource) concerns for the organization

• Issues receipt to customers
• Prepares financial report at the end of every working week
• Handles all financial transaction on behalf of the workshop
• Any other duty as assigned by the CEO

7.2.4 SALES AND MARKETING OFFICER:

• Sources for clients for the company

• Responsible for promoting the company’s image
• Responsible for creating marketing and sales strategies, etc.
• Represents the organization in some strategic business meetings
• Any other duty as assigned by the CEO
7.2.5 SUPERVISOR & TECHNICAL OFFICER:

• Makes sure that quality in all processes from initial stage to delivery of products is
maintained at all times
• Oversees the entire workshop process
• Responsible for training and orientation of new employees
• Responsible for preparing different list of orders as requested by our clients

7.2.6 CASHER & GENERAL ACCOUNTANT

• Makes lists and budget

• the payment of salaries
• Responsible for payment of tax, levies and utility bills
• Any other duty as assigned by the Finance & Administration

7.2.7 DRIVER:

• Delivers customers’ orders promptly

• Runs errand for the organization
• Any other duty as assigned by the Supervisor & Technical Officer

7.2.8 STOREKEEPER & CLEANER:

• Responsible for cleaning the office and workshop facilities at all times
• Ensure that toiletries and supplies don’t run out of stock
• Responsible for safe removal of wastes in environmentally friendly way before and after
production of the workshop
• Any other duty as assigned by the Supervisor & Technical Officer
7.3 SALARY AND WAGE

No. Title. Unit Qty. Monthly Annual

Salary

1. Chief Executive Officer (CEO) No 1 3000 36,000

2. Finance & Administration No 1 4500 54,000

3. Sales & Marketing Officer No 1 3000 36,000

4. Supervisor & Technical Officer No 1 2750 33,000

5. Casher & Gen. Accountant No 1 2000 24,000

6. Skilled Workers No 8 2000 192,000

7. Driver No 1 1800 21,600

8. Storekeeper& Cleaner No 1 2000 24,000

9. Guard No 1 900 10,800

Total 16 431,400

Table 6.1: Salary and wage

 CHAPTER EIGHT

CONCLUSION AND RECOMMENDATION

8.1 CONCLUSION

The key elements that makethis project much worth are:

1. the Comparative advantage and the market potential derived from the strategic & geo-
physical location of Mekelle
2. The possibility of workingventure in manufacturing with the help of a very supportive
policy environment for the development of the private sector's role in this sub-sector.
3. The socio-economic value of the project realization in terms of its contribution in
assisting poverty reduction efforts by virtue of being laborintensive in addition to its role
of generating revenue through Taxation.
4. The need to replace the present import with domestic production in order to save the hard
earned foreign currency for improved trade balance and to create additional employment.

8.2 SOCIO-ECONOMIC JUSTIFICATION

The economic benefit of the intended assembly workshop is that the small degree of labor
intensity of certain reclamation processes enables numerous people to earn some kind of income.
Therefore, the intended assembly workshop provides significant employment opportunities for a
number of individuals such as TVET graduates and wholesalers. As a result of the limited job
opportunities in the intended assembly workshop, as it generates employment for numbers of
people.

The intended project undertakings will have number of socio- economic benefits as it contributes
tremendous in assisting the overall effort of alleviatingpoverty by creating employment
opportunity in addition to its share support to the regional governments revenue earnings and to
the national output by saving the hard earned foreign currency by import substitution as well as
generating additional foreign exchange by exporting processed and semi-processed products.
8.3 RECOMMENDATION

The intended assembly workshop project is financially viable and socio-economically warranted,
therefore the establishment of intended assembly workshop in Mekelle, which is much worth
financing due to its feasible financial Viability; assessed technical possibility and regional and
national desirability.