Name of the business idea ECO liquid soap

Executive Summary
We want to establish a new liquid soap (ECO liquid soap) in Hawassa city specifically in
front of main campus. Although students and, local communities need more of liquid soap,
there is no sufficient availability here, that satisfy the needs of those users and hence our
business will solve this problem by providing the product in good quality and affordable
prices. Our objectives are to satisfy the customers need, increase the revenue and profit,
and improve the financial statements. Particularly it brings increase revenue, profit by
50% and 40% respectively in the first year and will do more in the next years. The business
will set up by birr 1,000,000 and the source will 30% from the owners and 70% from
financial institutions.

1. Description of the business

1.1 Mission
Our mission is going to be established to provide high quality liquid soap to the individual
customers, hotels, restaurants and distributors found in around Hawassa city.

1.2 Vision
To be a leading and most competent trader and business man of the city.

1.3 Objective

 To provide affordable liquid soap to households and small scale business shops.
 To promote hygiene and usage of liquid soaps
 To maximize the income of the company
 To get good competent position of liquid soap marketing for individuals, hotels,
restaurants and different consumers.

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1.4 Description of the business products

The main products of our business are personal, laundry and dishwashing products in
homemade level, the types are listed
Below;
Personal Cleansing LD Product;
It is a gel liquid soap and heavy duty hand cleaners. These products get their cleaning
action from soap, other surfactants or a combination of the two. The choice of cleaning
agent helps determine the product's lathering characteristics, feel on the skin and cleansing
ability.
Detergents or gels are formulated for cleaning the hands, face and body. Depending on
their ingredients, they may also moisturize the skin and/or kill or inhibit bacteria that can
cause odor or disease.
Laundry Detergents; are available as liquids, powders, gels, sticks, sprays, pumps, sheets
and bars. They are formulated to meet a variety of dirt, soil and stain removals.
Liquid detergents are either for general purpose or light duty. General purpose detergents
are suitable for all washable fabrics.
Light duty detergents are used for hand or machine washing lightly soiled items and
delicate fabrics. And most of the home made liquid detergents are used for light duty
purposes.

Dishwashing Products; include detergents for hand

and machine dishwashing as well as some specialty
products. They are available as liquids, gels,
powders and solids.
Hand dishwashing detergents remove food soils,
hold soil in suspension, oily and fatty films and provide long-lasting suds that indicate how
much cleaning power is left in the wash water.
Because no single product can provide optimum performance on all surfaces and soils, a
broad range of products has been formulated to clean efficiently and easily. While all-

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purpose cleaners are intended for more general use, others work best under highly
specialized conditions.
All the listed types of liquid detergents could be made in small scale industry or homemade
level scale for the day to day consumption with a fare and reasonable price. Especially the
one with light duty type used for all purpose is easy to produce in homemade capacity.
Product.

1.5. Location
The business will be located in Hawassa city specifically in front of Hawassa university A
good location plays very vital roles in inviting customers and increasing business.

Reason for selecting this site

 Easy to asses for student, teachers and other users to buy their requirements
 To encourage customers by offering them everything at the place saving them from
going away and searching for the required liquid soap.
 It is a good commercial area for increasing sales and profit

2. DEVELOPMENT AND PRODUCTION

2.1. Development status

The visionary project is on the progress of establishing the homemade liquid soap, since we
are beginner we are going to request working capital and we also on saving our equity.

2.2. Production process

The main goal of this project is making a homemade liquid soap by combining chemicals
with a simple recipe and a light mixing machine.

Material inputs and utilities to be used in the project

List of materials are:

1. Simple mixer machine which can be made locally with small

capacity generator fitted with 200 to 1000 litter container.

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 1. Alkyl sulphonic acid 96%
2. Caustic soda Flake 99%
3. Sodium Silicate
4. SLES
5. salt and perfume
6. Water(H2O)
In General the nature and appropriateness of the manufacturing process and technical
design of this project is simple and affordable enough.

Process of production

To produce 100Litter of liquid laundry soap

1. Alkyl sulphonic acid 96%/LABSA/----1.8 Kg

2. Sodium lauryl ether sulphate-----------7 kg
3. Caustic soda Flake 99%------------------200 gm
4. Sodium Silicate-----------------------------1.7 kg
5. Salt -------------------------------------------9 kg
6. Color-----------------------------------------0.1gm
7. Perfume-------------------------------------20 ml
8. Water----------------------------------------80.3 litter

In a typical continuous process, dry and liquid ingredients are added and blended to a
uniform mixture using the mixers. And after finishing the production the producer should
check the level of Acidity as well as the alkalinity of the product by using the PH meter or
PH paper. This is mandatory before the product is distributed to the market.

3. MARKET DESCRIPTION

3.1 Demand and need Assessment

This is the initial and primary part of the project activity that involves how much the
product (homemade Liquid soap) is wanted and how many of the society are using the
product as well in the selected area hawassa city

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This assessment is really mandatory for this project because the target of the company is to
create business channel and to have opportunity. For this reason we tried to have
appropriate information about;
- The potential users of this product.
- The sustainability of the need for the product.
- The cost and price analysis per unit of product.
- Identify appropriate channels of distribution.
- Identify constraints administrative, technical, and legal etc.

3.2. The potential users of this product

The product is a day to day consumption of the community for their personal and
household usage. And study identifies that households,wholeseller, small shops as a
retailer, car wash/labyajos/ and Garages are the potential users of this product. So, the
primary customers will be local community, hotels, restaurants and institutions (the
cafeteria and lounges found in Debre brehan University).

3.3. Market size and trends

The product can be sold directly to bulk buyers. For individual buyers existing outlets such
as super markets and specialized food baking items department stores can be used.

3.4. Competition

There are some small sized individual household that produce the product in the town. In
which thus are not such strong competitors in the market by taking the higher demand of
the population into consideration.

Hygiene is really mandatory for any human being and it should be the primary practice for
our society.

Even if liquid detergents are important for our society to have pleasant, comfortable, time
saving and easy cleaning the price of those items are not easily affordable for the low level
of the community.

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Therefore homemade liquid detergents are the best solution to address the need of little
income as well as the middle income society with different types, standards and volumes

3.5. The business positioning and pricing strategy

The products are going to be distributed either directly to the nearby individual customers
or indirectly to the distributors. The envisaged business, as a new entrant into the market,
has to penetrate the market and create awareness and product loyalty first. Therefore, the
objective of the pricing policy should be to gain a foot hold in the market, get a sizable
market share and attempt to sustain a reasonable profitability, which at the initial
stage, could only be achieved through charging of lower prices that could influence users
of the product.

3.6 Promotion strategy

The store’s promotion strategy will be based on the following elements:

 Developing good relationships with other producer of the product that would
receive a percentage of sales to the referred customers.
 Word of mouth referrals generating sales in the local community through customer
referrals.
 Advertising using brochures and fliers.

3.7 SWOT Analysis of the sector

This project is very good for creating own Job and good for the society to have an
affordable product that is comfortable and suitable to use in its nearest areas so that can
save the time and labor time.

 Strength
 Commitment of the members to run the business as they are visionary groups.
 Similar economical and social status that enables the members to work and
communicate easily.

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  The potential for future specialization with quality service provision both at
national and international level. It will encourage youths to create their own job and
invest their money and time to produce this product in a simple way.

Weakness
 Slow adoption of automation in production system.
 Lack of capital to invest in assets, equipment and inputs that would improve quality
are the major challenges faced by the market value chain.
 Lack of experience to create project proposal documents.
 Lack of laboratory and solution checking skill.

Opportunities

 Support and incentives from the government.

 Availability of infrastructures.
 Availability of cheap labor force.
 Low production costs.
 Domestic Consumption
 Availability of demand for the product.
 Easily can enter to the market.
 Suitability for Social and environmental aspects.

Threat

 Some sellers may add water into the soap

 Natural disasters
 The government legal process that couldn’t accommodate to permit this kind of
small scale projects.

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4. Organization

4.1. Form of ownership

The business will be set up as a strong partnership in a term of agreement sharing the
profit or lose equally, it will have ten members.

Human resources

Qualification Experience Quantity Salary

Position

BA degree in General manager 1 year 1 8900

marketing and sales
management

Diploma in Accountant 1 year 1 7250

Accounting

Diploma in Purchaser 1 year 1 5100

purchasing

Certificate in Storekeeper 1 year 1 4300

purchasing

Certificate in sale Sale person 1 year 1 750

management

Certificate in Cashier 6 months 1 500

secretarial science

10th grade Secretary 1 year 2 600

Management

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The business will managed by the person who is graduated in marketing and sales
management because it is assumed that he or she will have a general understanding about
a business .So the business be managed better by marketing manager.

Responsibilities

 The marketing manager will be responsible to manage and supervise all the
business activates and human resource.
 The accountant will responsible to keep recorded of all transaction and report the
financial position (profit or loss) of the business
 The cashier will be responsible to receive payment
 The purchaser will be responsible to arrange and put inventories on the store by
their respective order and to make available/to make inventories out of the while
purchase order comes.
 The sale person will be responsible to provide information about the quality price
and other aspects of the product and to make sales
 The secretary

4.2 organization chart for the business

General Manager

Product Sales
ion Unit Purchasing Accounting
unit
unit unit

Store Cashier
unit

5 .Risk analysis
The uncertainties face on this project is the way how the good and perfect recipe will apply
on the production period and the availabilities or row materials in the market.

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Raw materials are chosen according to many criteria, including their human and
environmental safety, cost, compatibility with other ingredients, and the form and
performance characteristics of the finished product. While actual production processes
may vary from manufacturer to manufacturer, there are steps which are common to all
products of a similar form.
The flexibilities of the production can be limited by the producer of the product.
In the event of major change in the market, we might see some reduction in revenue. We
feel that we are sufficiently aware of potential risks and have contingency plans in place to
either minimize or eliminate them.

6. Financial Plan

Financial analysis evaluates the feasibility of the project from costs and benefits
perspective and helps in deciding whether to accept or reject the project.

6.1 Cost of plan

Initial investment cost (in birr) –include

Machinery and equipment………………………...400,000

Legal fee for license and others …………………30,000

Pre-production marketing costs…………………70,000

Operating cost

Advertisement cost………………………………….…10,000

Material cost……………………………………………....80,000

Utilities………………………………………………..…….30,000

Wages and salaries……………………………………..200,000

Rent……………………………………..…………………….110,000

Installation cost…………………………………………..70,000

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6.2 Income statement
Eco Liquid Soap

Income statement

For the year ended June 2017E.C

Revenue

Fees earned……………………………………………….…….1,500,000

Less operating expense

Rent expense…………….…………………..……………110,000

Utility expense…………………………….……………30,000

Advertising expense…………………………………10,000

Salary expense …………………………………………200,000

Material cost…………………………………..…………80,000

Cost of machinery and equipment………….…….400,000

Miscellaneous expense………………..…….……….100,000

Total operating expense…………..………….…….930,000

Net income…………………………………..…….……570,000

6.3 statement of financial position

Eco liquid soap

Balance Sheet

Dec 30, 2018 E.C

Asset

Cash………………………………………………….100,000

Account receivable…………………………....180,000

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Inventory…………………………………….……190,000

Supplies…………………………………………….200,000

Equipment and machinery ………………...400,000

Less depreciation: ……………………………..50,000

Total asset…………………………………………1,020,000

Liability and Owner’s equity

Liability……………………………………….…….600,000

Owner’s equity…………………………………...420,000

Total Liability & owners’ equity………….1,020,000

6.4 Statement of Cash Flow

Eco liquid soap

Statement of Cash Flow

For the year ended June 2017E.C

Cash flows from operating activities:

Cash received………………………………………………………….70,000

Less: Cash payment for expense………………………………30,000

Net cash flow………………………..…..………………40,000

Cash flow from investing activities:

Cash received as owner’s investment……………...…………50,000

Less: Cash withdrawal by owner…………………………..….20,000

Net cash flow…………………………………………………30,000

Cash from financing activities:

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Cash received…………………………………………………………..60,000

Less: Cash paid……………..………………………………….………30,000

Net cash flow………………………………………………………30,000

6.5. Source of Finance

Initial capital fund

Eco liquid soap will set up its business with capital of birr 1,000,000. The source of finance
will be 30 %( 300,000) from owners’ fund & the remaining 70 %( 700,000) from financial
institutions or banks.

6.6 Break-even Analysis

By definition: break-even is where
Total revenue (TR) =Total cost (TC)
Also by definition
TR=selling price (SP)*Quantity (Q)
And (TC) =Total fixed cost (TFC) +Total variable cost (TVC)
Thus: SP*Q = TFC + TVC, where TVC = variable cost /unit*Q TC
So, SP*Q = TFC+ (VC/unit*Q) TR
SP*Q - (VC/unit*Q) = TFC TR, TC B
Q (SP-VC/unit) = TFC
Q=TFC /SP-VC/unit

O Q

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References
1. Project planning and management assignment handout
2. www.google.com/project writing

Rift valley university

Hawassa campus
Group assignment Entrepreneurship
Name of students
1, Edosa Debisa. Accounting
2. Nibret Degu. Business management
3. Gadisa Almasu Business management
4. Daniel Bukula. Accounting
5. Eserael Beyene Accounting
6.Hilina Tadesse Business management

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