BUSINESS PLAN ON BUTCHER SHOP IN MERAWI TOWN IN

AMHARA REGION NORTH WEST ETHIOPIA

PREPAIRED BY

MELSEW NIBRET (PROFESSIONAL)

MEHARIW WORKU (MANAGER)
KHER DENK THONK (AUDITORY)
MULUGETA AMARE ( MARKETING)
MITIKU FINANCE &ACOUNTANT

AICAT, JULY , 2016 ,

ISRAEL
 EXECUTIVE SUMMARY
1.1. OVERVIEW
Ethiopia has Africas largest livestock population. Most of
Ethiopia's estimated 71 million sheep and goats are raised by small
farmers who used them as a major source of meat and household
income.
our company merawi butcher shop is established by five
members of AICAT students to provide fresh red meat to customers
in high quality and quantity.
Nowadays consumers are becoming increasingly interested in the
food they eat, and many turn to their nearest butcher or farm shop in
search of quality ingredients from local suppliers.
In Amhara region, modern cattle fattening is a recent development.
The majority of fatteners do have adequate skills and knowledge on
animal selection, healthcare and proper feeding techniques.
But in the past years butchery industry is not well organized and it is not
get much attention because of some reasons:
i. Standard of living of the people was under
ii. Lack of iniciacition by the government
iii. More preference of vegetables
iv Much focus for income than nutrition
1.2.The Company's Name / Personnel And
Organization
Name Of Partners, Responsibilities And Their Addresses
Melsew nibret (purchasing) , pur@yahoo.com
Mehariw worku (manager) , manager@gmail.com
Mulugeta amare (marketing) , market@gmail.com
Kher deng tholbok ( auditory) , auditor@yahoo.com
Mitiku (finance and accountant) ,
finaacountant@gmail.com
%

1.3 Statements of Financial Requirement

Merawi butcher shop fresh red meat supplier company will be aimed to
be established with the capital of $50,0000 or 1,000,0000 birr with its 9%
contingency which will be raised from the friends , family, peers and bank
loan.
The owners contribution will be $25,000 or 500,000 birr.
The partners get the loan from the bank to return with the interest rate of 5
1.4.Goals and Objectives of the project

General objectives
To establish a standard butcher shop capable of producing
quality fresh meat so as to address to customers.
Specific objectives
To generate profit and create jobs for other people there
To improve the current economic status of the region
To satisfy the customers by enhancing the quality of product
 1.5.Mission:
The missions of the company are
By using this business plan one of the entrepreneurs, can bring
these document to international utilization stage
Building the capacity of the company through different ways;
empowering the employees, increasing the area of production,
increasing its branches and office.
Good job opportunity
Solve lack of meat to the people
Disseminate qualitified meat around merawi
 1.6. Vision:
The visions of the company are
To be one of the leading fresh red meat supplier company in
Ethiopia.
Wide our company to utilize all over domestic customer as
well as foreign customers.
Making export to neighbour country as well as to another
continent such as , Europe , America , Asia.... etc.
2.Nature Of The Busines Or
Products And Services:
It involves supplying frees red meat to customers in which the
animals will buy from the fatteners those are living in and
around merawi.
Other animals will buy from smallholder farmers.
This is done by buying animals from the fatteners and arranges
its meat in a proper and suitable manner as a pure and high
quality fresh red meat.
cont...
 2.1. Company Profile

The establishers and producers of Company are

AICAT students intended and interested to
produce and introduce high quantity and good
quality fresh red meat supplies to customer.
The establishers have potential to manage the
projects, since we have learned animal production
courses from our university we have also deep
knowledge in agri-business in AICAT , we can
manage how it is running agricultural business as
well.
cont.........
 2.2. Key success factor

Maintain high quality standards for our customers

Preserve meats in optimal conditions to maintain
freshness while in the store
Maintain excellence in the skill of butchering
meats through hiring, training, and supervision of
the staf
Listen carefully to customer needs and respond
with custom cut products.
The number of consumer in fresh meat in our hometown and
raising in Ethiopia.
 3. Marketing plan
3.1. Product Description
Merawi butcher shop is a company established or formed
purposely to help out customers.
By providing to them with a qualified products directly to
where they are on time.
3.2. Product Demand
The observation and indigenous knowledge identified and is
done in merawi; shows that demand for good quality and
improved butcher shop in huge throughout the periods.
 Cont...
3.4 Marketing Strategy
The Company shall use market penetration strategy to
introduce its products and to easily establish itself in the
national as well as international markets
The Company, in order to continue as open up in producing
and marketing butcher shop, have designed different
marketing strategies.
By reducing the production cost of the produce, the company
will follow cost leadership strategy to win the unexpected and
expected challenges and opportunities in the process of the
business.
 cont......
3.5 Marketing Budget
The marketing costs taken in consideration to promote ,
distribute and sales-persons costs.
The company sets inexpensive budget to the marketing of the
product By advertising throughout the country the name of the
product and the company in the national and local market.
 cont....
3.5. Product Strategy
The company is established to produce and deliver this books
product to different market segments; society, hotels/restaurants
etc.
3.6. Distribution Strategy
The company will sell its product to different customer groups
including big Hotels, business organizations, etc.These groups
can get their required products according to their requests.
It has its own principle and strategies to curve the problem at
hand. The Company will principally focus on developing strong
and smooth relationship with major and potential customers.
 cont...
3.7. Pricing Strategy
the pricing will be based on fresh meat weght we will sell by killo gram.
Competition will not be important with pricing; since the product is produced
at much medium relative cost than the others and more attractive by its
customers than others fresh red meat producing companies.
3.8. Products or Service Plan
The Company collects different animals (ox or cow, goats and lamb) from
producers like smallholder farmers, fatteners companies and others different.
The company will hire technical assistance, secretary and unskilled labourers
for running of for keeping animal until slaughter them and distribution process.
The owners will run the technical, administrative, marketing and
financial matters of the business and others.
 Start up funding
Merawi butcher shop fresh red meat supplier company will be
aimed to be established with the capital of $50,0000 or
1,000,0000 birr with its 9% contingency which will be raised
from the friends , family, peers and bank loan.
The owners contribution will be $25,000 or 500,000 birr.
The partners get the loan from the bank to return with the
interest rate of 5%.
 Current status

Huge number of livestock

Many fattners
More attention to meat
The area is open to business like this
Good networking with other nearby areas
Only few number of butchery shops are there
 4.Financial analysis

The machinery and equipment requirement of the company is

requirement ranging from slaughter equipment and slaughter
house.
The company will buy one slaughter house from the
investment office of merawi by the amount of 300,000 birr.
Fixed slaughter equipment and other machine also purchased
from the foreign market.
 4.1. Fixed cost
Equipment/machine cost in( birr)
Temrature controller or air conditioner 3500
slaughtery machine 11,000
knife 200
fresh red meat shelves 12000
waste diposal machine 10000
computer 15000
tables 5000
chairs 1000
office house(merawi) 90000
slaughtery house 100000
Home house 210000
Printer 10000
Photocopier 40000

Total 507700 birr

 4.2.Variable assets or cost

Unit cost cost ( per month)

Electricity 4500/day 135,000
water 1000/day 30,000
transport 5000/day 150000
Other Matterial 10000/day 300000

Total 615,000 birr

5.SWOT Analysis of the project
5.1 Strength of the project
Good promotion and strong business network
Only few competitors.
Huge availability of livestock and fatteners.
5.2 Weakness of the project
The price of the animal sometimes fluctuated may be the price
of them one time down in another time up in case of this it will
be fluctuated.
Not suitable for low-income people
Lack of finance
Profit per year

Start up costs at the first year

Items

cost(birr)

Slaughtering machine 50000

Beef cattle(120)
120*15000=1800000
Houses 400000
Workers
Computer 15000
Printer 8000
Water 5000
Electricity 60000
Other expenses
100000
Cont
Now lets calculate the profit in the first year
To do this first we need to know the price of 1 kilogram of red
fresh meat
Priceof red meat(1kg)=150birr
Average price of other meats out of red meat(1kg)=80birr
In the first year we have 120 beef cattles and from one cattle
we may have around 120kg of fresh red meat and 80 kg of
meats out of red meat(distributed to restaurants and hotels)
from one cattle.
There fore the revenue for one from red fresh meat for 1
cattle=the price*quantity
=150birr*120kg
=18000birr
The revenue for one month from other meats for 1
cattle=price*quantity
=80birr*80kg
=6400birr
cont
From the above we can calculate the total revenue from 1 cattle(for one
month) as:
Revenue of red meat+revenue of other meats
18000birr+6400birr=24400birr(revenue from one cattle)for one month
And we will buy 10 cattles in one month
The revenue from 10 cattles for one month is calculated as;
Number of cattles*revenue from one cattle
=10*24400birr=244000

birr(TOTAL REVENUE OF 10)

After all now we can calculate the revenue of the first year:
In the first year we will buy 120 cattles(12 months and 10 cattles in one
month)
Therefore the revenue for the first year for 120 cattles=120*24400birr
=2928000birr(total revenue in the first year)
cont

Profit
Profit of the company is the revenue minus the expenses(costs)
Profit for the first year
Profit of the company=total revenue-total cost
Profit=2928000birr-2678000birr
=250000 birr(this is the profit in the first year)
Profit in the second year

In this year we increase the salary of our workers from 1000birr to 1500birr per month
Number of cattle increased to 150
For water cost increases from 5000birr to 6000 birr
For electricity cost increases from 60000 birr to 70000 birr

Items Cost(in
birr)
Workers(20)
20*1500*12=360000
Beef cattle(150)
150*16000=2400000
Water 6000
Electricity 70000
Other expenses 100000
Total cost
2936000
cont
Revenue in the second year
Price of 1kg of red meat 150birr
Price of 1kg other meats 80 birr
From 1 cattle 120kg of red meat and 80 kg of other meat
120kg*150birr=18000 birr(from red meat)
80 kg*80birr=6400 birr
Revenue total=18000birr+6400birr=24400birr
From 150 cattles total revenue=150*24400birr=3660000 birr

Profit in the second year

total revenue-total cost
=3660000birr-2936000birr=724000 birr(the profit in the second year)
 cont...
5.3. opportunity of the project
There is wide consumer market in merawi
There is enough fatteners in and around merawi so there is a
competition between them during this the price of animal is low.
opportunity to export meat.
5.4. Threats of the project
This project has own negative effect there may be difficult to select
suitable animals for fresh meat.
the government may exposed us to high tax.
Since these and other limits are there we have to change the way and
methods of producing fresh red meat which will not bring such kinds
of problems.
 5. Financial Plan
5.1 Basic Financial Assumptions
The basis of financial assumptions or plans of this Company may include
all the following;
There will not be credit sales and purchases
The company expects to have all working days (20 hours/da
The business will grow after startup from its own cash flow.
Significant growth is possible in the initial target markets before
there is a need to take on additional staff or move to a larger
facility
 6 Future Plan
Becoming one of the powerfull fresh red meat supplier company in
the country.
We will wide or open another butcher shop in neighbor town