Business Plan for Sonda Enterprises (Pvt) Ltd

2010

NOMBEKO SIBANDA KFM CONSULTANTS

12/3/2010

2

TABLE OF CONTENTS 1.0.0 COMPANY OVERVIEW……………………………………..………………... 5

1.1.0. Executive Summary……………..………………..….……………...… 5

1.2.0. Background Information…………..…..……………..………...……… 6

1.3.0. Mission Statement……………….…………………..………………… 6

1.4.0. Critical Success Factors….…………………………...………...……. 6

2.2.0. PRODUCT PLAN…………………….………..….…………………………… 6

2.1.0. Facility Determination………………………………………………...... 6

2.2.0. Labour Needs…………………………………………………………… 7

2.3.0. Output Supply…………………………………………………………… 7

3.0.0. MARKET OVERVIEW................................................................................ 8

3.1.0. External Analysis........................................................................... 8

3.1.1. Economic Environment.................................................................... 8

3.1.2. Political Environment…………………………………………………… 8

3.1.3. Market Analysis………………………………………………….……… 8

3.1.4. Sales Forecasts............................................................................... 9

3.2.0. Marketing Plan…………………………………………………………. 9

3.2.1. Marketing Objectives...................................................................... 9

3.2.2. Target Market.................................................................................. 9

3.2.3. Market Size and Potential................................................................ 9

3.2.4. Scale of Operation........................................................................... 10

3.2.5. Market Segmentation....................................................................... 10

3.3.0. Marketing Strategies………………………………………………….. 10

3.3.1. Promotion Strategy………………………………………………...…… 10

3.3.2. Pricing Strategy...…......................................................................... 11

3.3.3. Product Quality………………………………………………………….. 11

3.3.4. Public Relations Strategy................................................................. 11

3

4.0.0. COMPETITIVE ANALYSIS........................................................................ 11

4.1.0. Major Competitors......................................................................... 11

4.1.1. Competitor Strengths and Weakness……………………………….... 12

4.1.2. Sonda Enterprises (Pvt.) Ltd. S.W.O.T Analysis.............................. 13

5.0.0. OPERATIONS PLAN……………………………………….............………... 14

5.1.0. Staffing and Training Plan…………………………………………... 15

5.1.1. Employee Qualifications and Requirements……………………........ 16

5.1.2. Conditions of Service for Employees…………………………………. 16

5.2.0. Company Organisational Structure………………………………….... 17

6.0.0. MANAGEMENT TEAM……………………………………………………...... 18

6.1.0. The Board of Trustees…………………..…………………………… 18

6.1.1. Duties of the Board of Trustees...................................................... 19

6.2.0. Company Board of Directors……………………………………….. 19

6.2.1. Duties of the Board of Directors….................................................. 20

7.0.0. FINANCIAL PLAN……………………………………………………….......... 20

7.1.0. Capital Requirements...................................................................... 20

8.0.0. CONTROL AND MONITORING SYSTEM.......................................................20

8.1.0. Monitor Industry.………………………………………………...................20

……….8.2.0. Monitor Competitor Actions…………………………………………………21

……….8.3.0. Monitor Consumer Behaviour………………………………………………21

8.4.0. Performance Measurement…………………………………………………21

LIST OF TABLES

Table 1 Proposed Enterprises and Products………………..…………..….. 7

Table 2 Minimum Sales Required to Break-Even...................................... 8

Table 3 Competitor Strengths and Weaknesses....................................... 12

Table 4 Company Strengths, Weaknesses, Opportunities and Threats Analysis

13

Table 5 Employee Qualifications and Requirements................................. 16

Table 6 Start-Up Capital Required Per Enterprise.................................... 20

4

LIST OF APPENDICES

APPENDIX 1 Break-Even Analysis………………………………………...... 22

APPENDIX 2 Target markets for Different Enterprises…………………… 25

APPENDIX 3 Capital Requirements…………………………………………. 26

APPENDIX 4 CROPPING PLAN………………………………………….…. 28

LIST OF DIAGRAMS

Figure 1 Crop Rotation Plan...................................................................... 14

Figure 2 Organisational Structure............................................................. 17

5

COMPANY OVERVIEW

1.0.0 Executive Summary

The Sonda Youth and Community Development Programme (SYCDP)

located at the Sonda Youth and Community Centre was established in 2006

with initial funding from the Friends of St. Johns Hospital of the Netherlands

through Cordaid. The Programme has an established day-care facility and

provides training for the Sonda youth in carpentry and joinery, tailoring and

textiles and horticulture. All the services at the centre are for free to members

of the Sonda Community.

The primary goal of the Programme was to train the youth in carpentry,

tailoring and horticulture so that they can become employable or self

employed one they qualify. As the training progressed, products made by the

students attracted a wide range of buyers like schools, colleges, hotels and

lodges as well as individuals. The products from the training sometimes fail

to satisfy demand.

Cordaid has indicated that the Programme will be weaned plus or minus

two years from now and thus there is a need for the Programme to become

self-sustainable. The aim is therefore to commercialise the activities of the

programme so they become a standalone business and generate enough

income to maintain operations at the centre. Commercialisation of the

Programme will be done in two phases. The initial phase will concentrate on

those enterprises that have a quick rate of return on investment and are

already in place. The business will have a social obligation to fund the

continuation of the training of the Sonda Youth and the provision of Day-care

services for those in need. Recommendations for the way forward are as

follows:

1. SYCDP should register a Trust which will be in charge of the social

activities of the programme. A board of trustees shall be appointed to run the

Trust.

2. A company called Sonda Enterprises (Pvt.) Ltd. should be registered

and it will be wholly owned by the Trust. A Board of Directors shall be

6

responsible for monitoring the commercial activities of the different

enterprises. Profits from Sonda Enterprises (Pvt.) Ltd. will be reinvested as

well as used to fund the day-care centre and the vocational training centre for

the community youth.

3. Funding to the value of MWK13,535,737.00 (Euro68,985.00) will be

required for start-up costs.

Sonda is situated 10kms form the nearest city of Mzuzu and the centre is

situated in the heart of Sonda. The centre would therefore bring to the

community products and services that are currently sourced from Mzuzu. In

addition; the centre’s training has been accredited by the Technical and

Vocational Education and Training Authority (TEVETA). Plans are underway

for the electrification of the centre after which, automated machinery can be

used to increase efficiency and facilitate the production of quality products.

1.2.0 Background Information

The formation of Sonda Enterprises (Pvt.) Ltd. has been necessitated by the

fact that Cordaid intends to wean off the programme and eventually

terminate its funding. The centre thus has to be self sustainable so that it can

continue providing its services to the community as well as remain a source

of employment for some members of the community.

The major goals of the proposed company are:

1. To supply superior quality products.

2. To ensure competitive pricing by minimising costs

3. To provide quality accredited training services

4. To raise at least 50% operational costs for the social function of the

centre

5. To include at least fifty paying trainees in the training programme

7

1.3.0 Mission Statement

To become the best supplier of superior quality products and services in

Malawi whilst remaining profitable and sustainable so as to fund the

enhancement of the quality of life of the underprivileged children and the

Sonda Youth

1.4.0 Critical Success Factors

a. The proposed company has a ready market and has the potential to

expand its market.

b. The centre is located in the heart of Sonda which is 10km from the city

of Mzuzu making it convenient for the local community

c. Students at the centre will be used as a labour source for production

which can help lower labour costs and facilitating cheaper prices.

d. Accreditation for training by TEVETA will help in attracting paying

trainees.

2.0.0. PRODUCT PLAN

2.1.0 Facility Determination

The proposed company requires at least five classrooms from which to

conduct lessons. Two additional poultry runs are required for poultry

production and five pig sties for piggery. Additional land is required for

horticulture. There is also a requirement for a three tonne truck to be used for

deliveries and errands for Sonda Enterprises (Pvt.) Ltd.

Friends of St. Johns of the Netherlands funded the building of a centre that is

wholly owned by SYCDP and land was allocated by the community Chief. The

centre has three classrooms, carpentry and tin-smithing shades and a piece

of land measuring 4 050m2 for horticulture. There is a water reservoir which is

being serviced by two water pumps for watering the garden. An additional

8100m2 of land needs to be cleared to accommodate all the planned activities

for horticultural production. A poultry run measuring 56m2 which can

8

accommodate 340 birds is already in place. Three more poultry runs are

needed to increase the scale of production. The community hall can be used

to generate income by being hired out. In addition, there are two offices that

are used for administrative purposes.

Table 1 below shows the proposed enterprises for the initial phase of the

commercialisation and their different products. Horticulture, poultry

production, piggery and training have been chosen because they are already

in place and programme staff has shown its ability to manage them profitably.

In addition; they can generate revenue fast with a high rate of return on

investment. The grinding mill has been added because it has minimum start-

up and input costs and needs an operator who can be easily trained. It can

also be a quick source of revenue.

Table 1. Proposed Enterprises and Products

Enterprise Product/ Services

1.Horticulture Vegetables, fruit tree seedlings

2.Poultry

production

Broiler chickens

3.Piggery Piglets, pigs

4. Grinding mill Processing of maize seed to samp, mealie-

rice and or maize meal

5.Training Qualified apprentices

2.2.0. Labour Needs

The proposed company requires the services of a manager, accountant,

administrator and a secretary for the administrative function. The operational

side requires qualified teachers in carpentry and joinery, agriculture and

tailoring and textiles. Four labourers shall be required for piggery and poultry

production and two for horticulture. A grinding mill operator will also have to

be engaged and trained.

9

2.3.0. Output Supply

The proposed company needs to make total sales of at least MWK

20,195,141.00 (Euro102,924.00) to break even during the first year of

production. The breakdown of minimum required sales for each enterprise is

as shown in the table below:

Table 2. Minimum Sales Required To Break- Even

Enterprise

Sales at B/E Point

(MWK)

Sales at Market

Price (MWK)

Sales at 25%

Mark-Up

Horticulture 635,653.50 794,566.88 794,566.88

Piggery 7,337,150.50 11,500,000.00 9,171,438.13

Poultry Production 11,314,433.50 12,000,000.00 14,143,041.88

Grinding Mill 907,903.50 3,150,000.00 1,134,879.38

TOTAL 20,195,141.00 27,444,566.88 25,243,926.25

Appendix 1 shows the detailed break even analysis for each enterprise

10

3.0.0. MARKET OVERVIEW

3.1.0. External Analysis

3.1.1. Economic Environment

The economy of Malawi is generally liberalised and companies operate and

access opportunities without government interference. Lending rates are one

of the highest in the region and this makes industry conservative in borrowing.

Although the lending rates are high, there is no discrimination when it comes

to access to credit. Foreign currency is difficult to access in Malawi.

Government provides subsidies for some agricultural inputs and controls

prices of petroleum products which help in controlling some input costs.

Moreover, agricultural equipment can be imported duty free.

3.1.2. Political Environment

The political environment in Malawi is stable and conducive for conducting

business. There is no fear of any instability that might arise.

3.1.3. Market Analysis

There is a lot of market potential for the products of Sonda Enterprises (Pvt.)

Ltd. The market is made up of the local and Mzuzu city communities. Areas

as far as the Nyika National Park and Nkhata Bay have also been targeted.

The products can be sold to schools, hotels, retailers and individuals from the

target markets. There is an opportunity for expanding the market to beyond

the borders of Malawi especially the exotic agricultural produce. Malawi

exports a lot of agricultural produce and 90% of export revenues are from

agriculture.

3.1.4. Sales Forecasts

Sonda enterprises will have its first sales within three months of funding after

equipment has been purchased and set up. Targeted sales will be a minimum

of MWK2,000,000.00 (Euro10,193.00) per month during the first year of

operation. Sales are forecast to increase by a minimum of 15% annually in the

consecutive years.

11

3.2.0. Marketing Plan

3.2.1. Marketing Objectives

1. To capture the entire Sonda market as well as the Mzuzu market.

2. To supply the right product at the right place at the right price and at

the right time.

3. To expand the market to other cities in Malawi and eventually in the

SADC region.

4. To increase sales by a minimum of 15% per annum.

3.2.2. Target Market

The target markets for most of the proposed company’s products are:

Non-Governmental Organisations

Local and neighbouring communities

Farmers

Hotels and lodges

Vendors

Abattoir

Butcheries

Boarding schools

Pig Breeders

Appendix 2 shows the target markets for the different enterprises in detail.

3.2.3. Market Size and Potential

The Sonda Community comprises of thirteen villages and has a total

population of 6,240. Most of the households survive on private agricultural

businesses which give the families an average household income of

MWK25,000 (Euro153.00) per month . In addition to the Sonda Community,

the programme can also service the city of Mzuzu with a total population of

12

138,325 where the average household monthly income is

MWK31,486(Euro164) from salaries and wages and MWK45,757 (Euro238)

from private enterprises.

There are eight primary schools and five secondary schools around Sonda.

Three tertiary institutions with boarding facilities are located in the Mzuzu

area.

3.2.4. Scale of Operation

Sonda Enterprises (Pvt.) Ltd. is aiming at making sales of at least

MWK25,000,000.00 (Euro127,411.00) during the first year of operation. If the

set targets are met Sonda Enterprises (Pvt.) Ltd. can actually make sales of

MWK7,249,426.00 (Euro36,946.00) above the breakeven point. Sonda

Enterprises (Pvt.) Ltd. therefore has room of making higher profits considering

that the target prices are lower than the market prices. The targeted sales are

higher than the initial investment of Euro68,985.00 required to commercialise

the company’s activities.

3.2.5. Market Segmentation

The market for the proposed company will be broken down into different

segments according to the different products. Thus there will be five segments

for the five enterprises. The segments shall be further divided into wholesale,

retail and the general public. There shall be a distinction between bulk buyers

and individuals regarding pricing and terms of buying.

Customers will be supplied with goods on demand. A minimum amount of

goods have to be ordered for Sonda Enterprises (Pvt.) Ltd. to make deliveries.

Individuals will be required to pay cash-on-demand whilst thirty day accounts

can be opened for schools, hotels and lodges and retailers with a good

proven track record of debt servicing.

13

Agricultural commodities will be packaged accordingly for retail purposes.

Individuals will buy directly from the centre and provide their own packaging.

Poultry and pigs will be sold live as the centre has no refrigeration facilities.

3.3.0. Marketing Strategies

3.3.1. Promotion Strategy

Sonda Enterprises (Pvt.) Ltd. will promote its products through open days for

the target market. The open days will be held at the centre and at Mzuzu. On

the open days all the products from the centre will be displayed for the public

to see. Orders will be taken and sales made during the open days. Free

refreshments will be provided as a way of luring potential customers. The

intention will be to reach out to as many potential customers as possible. The

open days will be publicised through announcements at schools, posters at

clinics, the hospital and other strategic areas in Mzuzu. Sonda Enterprises

(Pvt.) Ltd. staff will wear promotional t-shirts and caps/hats on the open days.

3.3.2. Pricing Strategy

The pricing objective is to remain competitive whilst making sustainable

profits. Prices during the first year of operation shall be pegged below market

levels to lure customers and gain their confidence in the products. Once the

market has been established prices will be adjusted gradually to market

levels. The aim is to make at least 15% profit within the first year of operation.

Prices for bulk purchases will be lower than those of purchases for few

products. Where possible, a price lower than the prevailing market price will

be used as long as the target profit margin is achieved. Sonda Enterprises

(Pvt.) Ltd. therefore has the potential to lure more customers with cheaper

prices. The break-even analysis in appendix 3 shall be used to determine

prices for the different products.

14

3.3.3. Product Quality

Sonda Enterprises (Pvt.) Ltd. will strive to achieve the best quality for its

products. Proper procedures will be followed in the poultry, piggery and

horticulture enterprises so as to produce good quality products.

Recommended feeds will be provided to the animals and manure form the

chickens and pigs will be used in place of fertiliser for the horticulture and thus

promote organic farming practices. Crop rotation will be practised in the

garden to maintain the productivity of the land.

3.3.4. Public Relations Strategy

There has to be physical evidence of the existence of Sonda Enterprises

(Pvt.) Ltd. which will facilitate the marketing of its products. Calendars will be

distributed to potential customers and regular customers who will also get

diaries depending on the amount of purchases they make. Follow-up visits

can be made to clients to find out if they are happy with Sonda Enterprises

(Pvt.) Ltd. products and solicit for areas of improvement. Market research will

be conducted quarterly to identify new markets.

4.0.0. COMPETITIVE ANALYSIS

4.1.0. Major Competitors

Sonda Enterprises (Pvt.) Ltd. faces some competition in the selling of some of

its products. The major competitors are:

1. Mzuzu Technical College

2. Small scale farmers

3. Local grinding mills

15

4.1.1. Competitor Strengths and Weaknesses

The table below shows the strengths and weaknesses of Sonda Enterprises

(Pvt.) Ltd’s competitors.

Table 3. Competitor Strengths and Weaknesses

Competitor Strength Weakness

Mzuzu Technical

College

Practice modern

farming methods

Concentrates on training

more than production

Small scale

farmers

Fully focused on

production

Smaller overhead cost

due to lean workforce

Access to large market

limited due to

transportation costs

Focus is on traditional farm

products.

Production largely

seasonal

Limited resources

Lack professionalism

Local grinding

millers

Have experience

Established customer

base

Lack professionalism

Do not service equipment

regularly and therefore

prone to breakdowns

Have to pay commercial

rentals

16

4.1.2. Sonda Enterprises (Pvt.) Ltd. Strengths, Weaknesses, Opportunities and Threats Analysis

Table 4. Company Strengths, Weaknesses, Opportunities and Threats Analysis

Strength Weakness Opportunities Threats

Management has a lot of experience in community based projects

Lack of business management skills

Low overhead and labour costs can facilitate competitive prices

No title deeds to land.

Piggery, poultry and horticulture enterprises are already operational

Lack of electricity The government of Malawi is putting a lot of emphasis on youth empowerment

Water harnessing can hinder agricultural production

Some of the start-up equipment can be produced at cost at the centre and by products of some enterprises can be used as inputs by other enterprises

Lack of modern equipment There is enough land to expand horticultural production

Commencement of too many activities at the same time

Ability to produce a variety of exotic horticultural products continuously throughout the year

High operating costs Sonda is being developed into a city

Practising of organic farming Staff is trainable

Company vehicle can be used to access markets as far as Nkhata Bay and Nyika National Park

Centre is easily accessible to the thirteen villages of the Sonda Community

17

The SWOT analysis above shows that Sonda Enterprises (Pvt.) Ltd. has more

strengths than weaknesses and more opportunities than threats. This is a sign

that Sonda Enterprises (Pvt.) Ltd. has higher chances of success than failure.

Moreover, Sonda Enterprises (Pvt.) Ltd’s strengths and opportunities are

more than those of its competitors.

18

5.0.0 OPERATIONS PLAN

SYCDP owns the land and infrastructure from which it is carrying out its

activities. Therefore, Sonda Enterprises (Pvt.) Ltd. will be required to pay rent

to the trust for the leased premises. This is a way of raising funds for the

social activities of the centre. Rentals and lease periods shall be determined

by the Trust and shall be market related.

Production for all enterprises except horticulture shall be continuous

throughout the year. Production of horticultural crops is seasonal and

therefore a cropping plan shown on Appendix 4 will be implemented based on

the crop rotation outlined below.

Figure 1 Crop Rotation Plan

Legumes

Peas, Beans

Root Crops

Carrots, Irish

Potatoes

Brassicas

Cabbage, Spinach, Egg Plants,

Broccoli, Cauliflower, Tomatoes,

Choumollier

Alliums

Onions, Garlic,

Leeks

19

5.1.0. Staffing and Training Plan

The Programme staff constitutes of a manager, an accountant, an

administrator, a secretary, three trainers, a driver, a pre-school teacher and

cooks. Once Sonda Enterprises (Pvt.) Ltd. is set up there will be a

requirement for additional staff as follows:

1. Driver/ Messenger

2. Six labourers

3. Grinding mill operator

Sonda Enterprises (Pvt.) Ltd. will seek to be an employer of choice by

attracting, developing and retaining best employees. As a socially responsible

organisation, efforts will be made to recruit from the community in order to

create employment opportunities.

20

5.1.1. Employee Qualifications and Requirements

The following are the minimum requirements for the company’s employees.

Table 5. Employee Qualifications and Requirements

Title Qualification Additional Requirements

Programme

Manager

Diploma in Project

Management

Minimum 30 years of age

Computer literacy

Programme

Accountant

Accounting Diploma Minimum 30 years of age

Computer literacy

Programme

Administrator

Certificate in Business

Administration

Minimum 25 years of age

Computer literacy

Secretary Secretarial Course Minimum 20 years of age

Computer literacy

Trainers Diploma in relevant

field

Teaching qualification

Minimum 25 years of age

Driver Class 2 drivers licence

Valid defensive driving

certificate

Minimum 35 years of age

Cook Cookery qualification Minimum 20 years of age

Labourer Minimum 20 years of age

Day Care

Teachers

Childcare qualification Minimum 25 years of age

Love for children

21

5.1.2 Conditions of Service for Employees

1. Annual leave of 30 days per year

2. Five working days per week from 08:00hours to 16:30hrs. Piggery and

poultry attendants will have to do shift work so that there is someone

on duty during weekends and during public holidays.

3. Performance based bonus and salaries. At the beginning of each year

each employee will together with the Programme Manager agree on

targets to be achieved for the year based on job descriptions.

Evaluations of the achievement of goals will be done every six months

and each employee will be given a score. Depending on the overall

performance of the programme salaries will be determined using the

average of the two scores. Cost of living adjustments will be effected

as and when necessary and if possible.

4. Provision of loans at a level of interest lower than the commercial rate

in times of need

5. Payment of gratuities on retirement

5.2.0 Company Organisational Structure

Sonda Enterprises (Pvt.) Ltd. shall have a structure that is linked to that of the

Programme. The manager will report to Sonda Enterprises (Pvt.) Ltd. Board of

Directors. The proposed structure is depicted below.

22

Figure 2 Organisational Structure

23

6.0.0. MANAGEMENT TEAM

The management team will constitute of the Board of Trustees, Company

Board of Directors, the Project Manager and the accountant

6.1.0. The Board of Trustees

The board shall be composed of eight trustees eligible to office for a two year

term. Board members shall be eligible for reappointment for a second term

after which they shall not be eligible for appointment. Their nominations will be

based on the following criteria:

One representative from the Friends of St. Johns

A representative from Mzuzu Diocese to be appointed by the Bishop

One representative from the Sonda Community to be appointed by

Inkosana Unyolo Lungu

An accountant or bookkeeper from the community

An individual well vexed with donor funded projects from the locality

Legal person or lawyer from the community

Programme Manager as secretary

6.1.1. Duties of the Board of Trustees

The functions of the board as spelt out in the constitution are to:

Determine the policy of the trust

Facilitate the registration and accreditation of training programmes with

TEVETA

Set training standards and code of conduct for training programmes

24

Register a company that is 100% owned by the trust

Appoint a board of directors for the registered company

keep proper books of accounts for the trust as required by the law

Initiate the annual audit process

receive quarterly and annual financial reports from the accountant

Receive operational reports from the Programme Manager

Approve annual budget and capital expenditure

6.2.0. Company Board of Directors

The board shall be appointed by the Trust and shall be eligible for a two-year

term of office. The following criteria shall be used for appointing members:

An individual with public relations and marketing qualifications (non-

executive)

Must be at least 21years of age.

One founder of the SYCDP

A small scale agribusiness owner / Venture Capitalist(Non-executive)

The Programme Accountant (Executive)

A local Banker (Non-executive)

An individual from a tertiary institution (Non-executive)

The Programme Manager (Executive)

In addition to the criteria mentioned above, board members hould have at

least completed secondary education with the minimum approved ordinary

level passes.

25

6.2.1. Duties of the Board of Directors

The functions of the board as spelt out in the constitution shall be to:

Report to the Trust

Enter into contracts in the name of Sonda Enterprises (Pvt.) Ltd.

Keep proper books of accounts as required by the law

Employ personnel when necessary

Discipline students and members of staff appropriately

Receive quarterly and annual financial reports from the accountant

Approve annual budget

Approve capital expenditure

26

7.0.0. FINANCIAL PLAN

7.1. Capital Requirements

The table below shows the start-up capital required for Sonda Enterprises

(Pvt.) Ltd. to operate efficiently and produce quality products. The

requirements have been calculated based on production of one year after

which the company is expected to be self-sustainable

Table 6 Start-Up Capital Required Per Enterprise

Enterprise Capital Required (MWK) Capital Required (Euro)

Horticulture 590,300.00 3,008.43

Piggery 5,753,000.00 29,319.88

Poultry Production 3,817,330.00 19,454.83

Grinding Mill 1,880,000.00 9,581.33

Other requirements 1,495,107.00 7,619.74

TOTAL 13,535,737.00 68,984.21

A total of MWK16,952,630.00 (Euro86,398.00) is required to set up Sonda

Enterprises (Pvt.) Ltd. to be able to produce the proposed products at the right

place, price and time.

Appendix 3 shows a detailed breakdown of the capital requirements.

27

8.0.0. CONTROL AND MONITORING SYSTEM

Monitoring and control systems are the most important actions that have to be

given adequate attention in order to affirm that marketing strategies are being

effectively and efficiently implemented and that the outcome of the results is

up to the required standards. Simple control methods such as the supervision

of personnel and some technical control mechanisms for making the different

products will be used. The following are suggested monitoring and control

mechanisms to be used.

8.1.0. Monitor Industry

This can be achieved by employees of Sonda Enterprises (Pvt.) Ltd doing the

following;

Attending as much as possible all meetings, seminars and expos relating

to each enterprise

Reading all publications pertaining to each enterprise

Researching on possible improvements to the company’s products.

8.2.0. Monitor Competitor Actions

Being aware of new competitors as well as competitors closing down and

why they are closing down.

Being aware of competitor activities and promotions

Being aware of price changes and special offers

Being aware of the introduction of new products

Being aware of competitor marketing strategies.

8.3.0. Monitor Consumer Behaviour

Normally observing the amount, type and pries of purchases made, can help

to reflect consumer’s preferences. This will enable management to make

decisions as to the amount of each type of product that needs to be produced

to maximise profits. This can result in there being a requirement to increase

production of some whilst reducing the production of other products.

28

8.4.0. Performance Measurement

Performance of company employees will be measured through the following

ways:

Output of quality products and the ability to satisfy the market

Demand for the different products

The number of customer complaints and compliments

Using performance appraisal methods

New strategies and innovations introduced

Ability to lead and control subordinates’

Analysing company profitability and financial statements

Audits carried out bi-annually on stock, finances and assets`

29

APPENDIX 1 Break-Even Analysis

General Assumptions

1. Sonda Enterprises (Pvt) Ltd will pay 50% of the salaries of employees

who work for the programme

2. Labourers hired by Sonda Enterprises (Pvt) Ltd will be paid wholly by

the business.

3. Salaries and wages for the business will be divided by four so that ach

enterprise contributes equally.

4. The break-even analysis is based on production and sales over

12months

5. All figures are in Malawi Kwacha (MWK)

HORTICULTURE

ITEM COST (MWK)

Personnel 580,903.50

Seeds 8,250.00

Pesticides & Herbicides 46,500.00

TOTAL 635,653.50

Description Vegetables/ Seedlings (MWK)

Total production cost 635,653.50

Break Even Sales 635,653.50

Tot. Sales at 25% mark-up 794,566.88

Assumptions

1. 3ha will be used for horticultural production

2. 1 ha will be under a green-house

3. Prices for produce will be determined by the market at the time of sale

30

POULTRY PRODUCTION

ITEM COST (MWK)

Salaries and wages 580,903.50

Day Old Chicks 1,440,000.00

Broiler Starter 2,768,280.00

Broiler Finisher 6,247,800.00

Vaccines and medicine 107,500.00

Charcoal 163,200.00

Paraffin 6,750.00

TOTAL 11,314,433.50

Description Broilers (MWK)

Total production cost 11,314,433.50

Tot. number of units produced 12,000.00

Break Even Selling Price 942.87

Tot. Sales to Break-even 11,314,433.50

Unit Price at 25% mark-up 1,178.59

Total Sales at 25% Mark-up 14,143,041.88

Market Price 1,000.00

Total Sales at Market Price 12,000,000.00

Assumptions

6. 1000 birds will be sold monthly

7. Losses in terms of death will be offset by extras that come with the

day-old chicks

31

GRINDING MILL

ITEM COST (MWK)

Salaries and wages 580,903.50

Belts 8,000.00

Grease 4,000.00

Bearings 15,000.00

Electricity 300,000.00

TOTAL 907,903.50

Description Milling Services (MWK)

Total production cost 907,903.50

Tot. Sales to Break-even 907,903.50

Total Sales at 25% Mark-up 1,134,879.38

Total Sales at Market Price 3,150,000.00

Assumptions

4. An average income of MWK12,500.00 will be realised per day

5. The grinding-mill will operate for 5 days a week (Monday to Friday)

32

PIGGERY

COSTS (MWK)

ITEM PIGLET COSTS SOW COSTS

Salaries and wages 1,856,650.50 0.00

Vaccine 31,250.00 0.00

De-wormer 45,000.00 0.00

Antibiotic 31,250.00 0.00

Feed 3,573,000.00 1,800,000.00

TOTAL 5,537,150.50 1,800,000.00

Description Piglets (MWK) Mature Sows

(MWK)

Total production cost 5,537,150.50 1,800,000.00

Tot. number of units produced 950.00 50

Break Even Selling Price 5,828.58 36,000.00

Tot. Sales to Break-even 5,537,150.50 1,800,000.00

Unit Selling Price at 25% mark-up 7,285.72 45,000.00

Total Sales at 25% Mark-up 6,921,438.13 2,250,000.00

Market Price 10,000.00 40,000.00

Total Sales at Market Price 9,500,000.00 2,000,000.00

Assumptions

6. 50 sows each producing 10 piglets biannually

7. Sows are sold after two births

8. 50 piglets are retained for breeding for the following year to replace old

sows

1. Some of the piglets will be male (boars) and thus will be sold at a

higher price than the female piglets

33

Pig Feed Consumption to Sell Date

Age of Pig Days Food

Consumption

Total

Consumption

Weeks (kg) (kg)

4 28 0.28 7.84

6 42 0.5 7.00

8 56 0.852 11.928

10 70 1.22 17.08

12 84 1.62 22.68

14 98 2.1 29.4

16 112 2.6 36.4

TOTAL CONSUMPTION 132.33

APPENDIX 2 Target markets for Different Enterprises

Product Target Market

Chickens, pigs,

vegetables

Hotels and lodges

Vendors

Abattoir

Butcheries

Boarding schools

Piglets, seedlings Local farmers

Breeders

Beekeepers

34

APPENDIX 3 CAPITAL REQUIREMENTS

Enterprise Required Equipment Quantity Unit Price (MK) Total Price (MK) Total Price (Euro)

Grinding Mill Maize Mill 1 695,000.00 695,000.00 3,542.03

Sheller 1 685,000.00 685,000.00 3,491.07

Electricity connection 1 500,000.00 500,000.00 2,548.23

Sub Total 1,880,000.00 9,581.33

Horticulture Drip irrigation

equipment (2ha)

1 260,000.00 260,000.00 1,325.08

Green house 1 181,800.00 181,800.00 926.53

Motorised water pump 1 30,000.00 30,000.00 152.89

Seed (30 pkts) 1 9,500.00 9,500.00 48.42

Pesticides & Herbicides 1 109,000.00 109,000.00 555.51

Sub Total 590,300.00 3,008.43

Piggery Cement 40 2,500.00 100,000.00 509.65

Iron sheets 100 2,500.00 250,000.00 1,274.11

Bricks 10000 5.00 50,000.00 254.82

Nails (kg) 25 450.00 11,250.00 57.34

Roofing nails (kg) 25 500.00 12,500.00 63.71

Gate 5 7,500.00 37,500.00 191.12

Labour 5 2,250.00 11,250.00 57.34

35

Piglets (sows) 30 15,000.00 450,000.00 2,293.40

Boar 1 25,000.00 25,000.00 127.41

Feed 1699 3,000.00 5,097,000.00 25,976.61

Vaccine 25 1,250.00 31,250.00 159.26

Dewormer 50 900.00 45,000.00 229.34

Antibiotic 25 1,250.00 31,250.00 159.26

Sub Total 5,753,000.00 29,319.88

Enterprise Required Equipment Quantity Unit Price (MK) Total Price (MK) Total Price (Euro)

Poultry Production Feeding troughs 15 500.00 7,500.00 38.22

Drinking troughs 15 500.00 7,500.00 38.22

Start-up chicks 1000 120.00 120,000.00 611.57

Broiler starter 34 6,785.00 230,690.00 1,175.70

Broiler finisher 89 5,850.00 520,650.00 2,653.47

Vaccines & Medicine 6 790.00 4,740.00 24.16

Water 1 2,500.00 2,500.00 12.74

Paraffin 45 150.00 6,750.00 34.40

Charcoal 34 800.00 27,200.00 138.62

Torch 4 4,500.00 18,000.00 91.74

Infra-red lamp 4 19,700.00 78,800.00 401.60

Iron sheets 52 50,000.00 2,600,000.00 13,250.77

36

Planks 60 600.00 36,000.00 183.47

Off cut planks 400 37.50 15,000.00 76.45

Transport (trips) 3 10,000.00 30,000.00 152.89

Labour 1 50,000.00 50,000.00 254.82

Nails (kg) 30 400.00 12,000.00 61.16

Door Frame 2 2,500.00 5,000.00 25.48

Tower Bolt 4 750.00 3,000.00 15.29

Hinges 4 500.00 2,000.00 10.19

Cement 16 2,500.00 40,000.00 203.86

Sub Total 3,817,330.00 19,454.83

Salaries and wages 6 months remuneration 6 1,161,807.00 5,921.09

Other Requirements Desktop Computer 1 151,500.00 772.11

Laptop Computer 1 181,800.00 926.53

Grand Total 13,535,737.00 68,984.21

37

APPENDIX 4 CROPPING PLAN

CROP JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC

AREA UNDER USE IN HECTARES

Cabbage 0.25 0.25 0.25 0.25 0.025 0.025 0.025

Spinach 0.125 0.125 0.125 0.125

Broccoli 0.25 0.25 0.25 0.25

Choumollier 0.225 0.225 0.225 0.25

Cauliflower 0.125 0.125 0.125 0.125

Egg Plants 0.125 0.125 0.125 0.125 0.125 0.125

Tomatoes 0.25 0.25 0.25 0.25 0.25 0.5 0.5 0.5 0.5 0.5 0.125

Peas 0.125 0.25 0.25 0.25 0.125

Beans 1 1 1 1 0.125 0.75 0.75 1.25 1.125

Onions 0.5 0.5 0.5 0.5 0.5

Garlic 0.25 0.25 0.25 0.25 0.25 0.25 0.125 0.25 0.25 0.25 0.25

Leeks

0.5 0.5 0.5 0.5 0.5

Carrots 0.25 0.25 0.25 0.25 1 1 1

Irish Potatoes 0.5 0.5 0.5 0.5 0.5 0.25 0.25 0.25 0.25 0.25

Green Pepper 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25

Total

Area(ha) 3 3 3 3 3 3 3 3 3 3 3 3

INDEX

GROUP Brassicas Legumes Alliums Root crops