Natural Herbs investment

Executive Summary

In Manzini Region where a group of elderly always use the little, they have to go and see doctors
in various clinics around Manzini, since they mostly suffer from high blood pressure. A group of
intelligent students who are economically and health conscious decided to provide a natural herb
(bitter herb) which will be a close substitution of the high blood pressure medication provided by
doctors.

Natural herb investment was chosen to be the name of the company. The name signifies that the
herb will be natural. Enterprise will be based in Luyengo campus but it will operate around the
Manzini region where bitter herb will be sold and distributed even in the various Tinkhundla.

The main aim of Natural herb investment is to sell bitter herbs of good quality to the elderly
around Manzini. Through this investment, we hope to offer an affordable alternative of the high
blood pressure medication that is offered in hospitals. Most of all, obtaining a bigger market
share around Manzini is one of the crucial goals of Natural herbs investment.

By selling 223 products Natural herbs will be able to break even, which means on daily basics
we shall aim at selling 8 products and nothing less.

As young and aspiring entrepreneurs we are hoping to sail this ship toward greater horizons and
offer products that will satisfy our client’s needs and ensure the sustainability of our product in
the market. Since we shall be the first to be producers of such biter herb. We hope to keep and
maintain our market share whist also passing on our newly found knowledge to the next
generation of entrepreneurs.
BUSINESS DESCRIPTION

Bitter herb stock will be bought from Mbekelweni, Bhunya and Mbasheni area where there are
farmers who grow natural herbs including bitter herbs. Herbs will then be dried, crushed and
later packed into different sized containers.

PRODUCTION PLAN

Chosen idea

Buying bitter herbs (inkaka and inshubaba) from SMES farmers, dry and package them crushed,
green. It can be used as food ingredients during cooking or in food dressing (crushed) and can
also be used to make green herb solution. The business will use several promotion and pricing
strategies to attract more customers.

Assessment risk

Strength; knowledge of entrepreneurial skills, management skills as well as marketing skills. We

have been able to identify the gap in the market and filled it with a valuable product that comes
with health benefits.

Weakness; include lack of packaging skill and expertise. Our target customers also have no
knowledge of such product which may lead them to be skeptical at first.

We shall ensure our marketing strategies are the best and we will accept comments and
suggestions regarding the improvement of our product.

Mission statement

Natural Herbs Investment’s mission statement is to act as a middleman in processing and selling
bitter herb to the elderly who are health conscious at an affordable price around Manzini region.

Natural Herbs Investment’s Objectives

To make and ensure continuous flow of profit of a minimum 50% per annum

To be reliable supplier of about 50% of elders with bitter herbs within the first two years of
operation of the business.

To capture a market share of at least 50% in 5 years.

Calculating the Size of the Market and Expected Market Share

A) Number of customers unit/target market E1 000 grannies

B) Average annual gross income per unit E2400/ elder
C) Total income for area E2 400 000
D) Percentage of income spent on items 5%
E) Potential lilangeni value of market share E120 000
F) Realistic percentage of market share 7%
G) Lilangeni value of entrepreneur’s market share E8 400
 The organizational structure

GENERAL MANAGER (SIMELANE MNDENI)

ADMINISTRATION (ZWANE
MZWANDILE)

PRODUCTION OPERATION FINANCIAL FUNCTION PURCHASING FUNCTION

(SIMELANE AYANDA) (MATSEBULA KWANELE) (NYATABO MNOTFO)

MARKETING (GAMEDZE
EXTERNAL RRELATION
MILLION)
(NGCAMPHALALA ZWELAKHE)

HUMAN RESOURCES
(MHLUNGU SIFISO)
General Manager- (Simelane Mndeni)

• To do directing, decision making, leading, managing and to be an executor.

• The Chief Executive Officer is responsible for the success or failure of the company.

Marketing Manager- (Gamedze Million)

• Monitors all sales of the business and the promotion strategies of the products.

• The marketing manager will also be responsible for advertisement and marketing of the
product.

• Come up with ideas to enhance increase in sales to meet the business goals.

Purchasing Manager- (Nyatabo Mnotfo)

• Responsible for purchasing all the necessary inputs to the site of production.

• Organizing transport to bring the inputs to the production site.

Field and Financial manager- (Matsebula Kwanele)

• Responsible for keeping all the financial records, oversee the preparations of financial
reports.

• Implement cash management strategies.

• Focus on the business’s financial position.

Secretary- (Zwane Mzwandile)

• To keep records of the project.

• The secretary will also take minutes in every meeting.

• Other responsibilities are updating the members by reading the minutes of the previous
meetings.

• Making sure that the operations plan is working.

Public Relations Officer- (Mhlungu Sifiso)

• To gain understanding and support for clients, as well as trying to influence opinion and
behavior.

• Public relations officers use all forms of media and communication to build, maintain
and manage the reputation of the clients.

Personnel management – (Ngcamphalala Zwelakhe)

• Responsible for all activities that include compensation, development and maintenance of
the personnel of the organization

Pricing strategy

Natural herbs investment will use customer-oriented pricing backward pricing strategy whereby
customers will be willing to pay E 15.40 per item.

Material used

1. Packaging container 20g

2. Stickers
3. Bitter herbs
4. Ventilated plastic 20g

Marketing Plan

Marketing research and analysis

A survey was conducted by the member of Natural Herbs Investment concerning the need for
bitter herbs. There results showed that there is a huge need for bitter herbs particularly in dry
season in the Manzini region. Natural Herbs Investment will sell their products in various
disbursements stations of elderly grants, community meetings and school meetings.
Target market

Elderly and a portion of people who are healthy conscious especially ladies as well as those
people who are living with a condition of blood pressure.

Pricing strategies

Natural Herbs Investment will use the penetration and psychological pricing strategies.

Competition analysis

Natural Herbs Investment operate in a highly competitive market and compete with the
following:

Manzini market

There are street vendors who are selling the same product.

PROMOTION STRATEGIES

Natural herbs investment main objective in promoting the product is to persuade the customers to
switch to our brand through the following strategies:

 Personal selling – product will be transported to customers.

 Advertising through radio since most of our target customers usually get information
through radio.
 Public relations officer will verbally promote the product to the customers.

Distribution strategies

Direct distribution- products will be taken to elderly disbursement grant station. Indirect
distribution-products will be taken sto general dealers where the product will be sold to
customers.
BUDGETED INCOME STATEMENT FOR BITTER HERBS ENTERPRICE ENDING 30
NOVEMBER 2019

QUANTITY UNIT PRICE AMOUNT AMOUNT

 Sales Revenue 500 15.40 7 700

Raw materials 500 8 4000

Gross profit 3 700

Operation expenses

Stationary 50

Transport 500

Bank charges 50

Airtime 150

Electricity 200

Advertising 500

Rent 400

Wages 1 200

Total operational expenses

Net operational income

Other expenses (3050)

Interest paid 650

Net income before tax (160)

490

BUDGETED BALANCE SHEET FOR BITTER HERBS ENTERPRICE ENDING 30

NOVEMBER 2019
 Fixed Assets Liabilities

Furniture 1 000 Account payable 300

Cutlery 900 Note payable 800

Total Fixed Assets 2700 Owner’s equity

Current Assets Capital 1600

Inventory 200

Cash in hand 300

Account receivables 250

Total current assets 800

Total assets 2700 2700

BUDGETED CASH FLOW FOR BITTER HERBS INVESTMENT ENDING 30 NOVEMBER

2019
 SEPTEMBER OCTOBER NOVEMBER FEBRUARY MARCH APRIL MAY

INFLOW

Beginning balance 2 400 7 050 11 890

Sales 7 700 7 700 7 700

Total inflow 10 100 14 750 19 590

Outflow

Stationary 50 50 50

Electricity 200 150 250

Rent 400 400 400

Airtime 150 120

Wages and salaries 1 200 1 200 1 200

Advertisement 500 450

Interest paid 160 160

Transport 500 450 550

Bank charges 50 50

Total outflows 3050 2 860 2 780

Net out flows 7050 11 890 16 810

BREAK EVEN ANALYSIS

Break-even point = fixed costs (indirect costs) / selling price per unit – variable costs per unit

= 1650/15.40-8

= 223 units

LIQUIDITY RATIOS
 1. Current ratio = current assets / current liabilities

= 750/1 100

= 0.68

This means at the first year of the operation of the company, the company cannot meet its current
obligations because it has more liabilities than its assets but as time goes on there will be more
assets.

2. SOLVENCY RATIOS
Debt to assets ratio = Total liabilities /Total assets
= 1 100 / 2700
= 0.407

The proportion that lenders are contributing to the total capital of the firm is 0.407 % which
shows that that the business has opportunity to expand