Kingdom Business Plan and Summary
February 2011
Annas Atta
DC Kura, Ghana
Business Name and Location: ‘Samnas’ – on the main road in DC Kura
Executive Summary
Business Description
Annas Atta owns a tailoring and fabric sale business called ‘Samnas’ on the main road in DC
Kura. Annas is a tailor in DC Kura where he sells fabric and sews men’s trousers and shirts. He
currently sells a very limited number of both men and women’s fabrics and would like to expand
his line to include additional grade levels and newer popular styles. He has an excellent location
on the only paved main road in town. Annas also wants to expand his business by purchasing an
additional sewing machine so that he and his apprentice can work simultaneously, therefore
increasing output. In addition, Annas would like to buy a finishing machine, which would save
money and time from the current outsourcing of this work. The finishing machine would also
allow him to generate more income by offering finishing services to other tailors and
seamstresses in the area.
Kingdom Impact
Annas builds relationships with his customers and shares the Gospel with them. Sometimes he
invites his customers to go to church with him. A while ago he invited two non-believers to go
to church with him and they accepted his invitation. One now attends the Baptist church in DC
Kura and the other attends BCA (Bible Church of Africa). They have both accepted Jesus as
Savior. Over the years he has invited others that have come to know the Lord. A current leader
in the Baptist church is also someone whom he had initially talked to and invited to church.
Annas leads the worship service on Sundays for the main service and Friday evenings for the
prayer and worship service. He also leads worship on Wednesdays for the prayer service. He is
very active in his church in DC Kura.
His shop is in a location that has a lot of traffic. Since both he and his brother are strong
Christians many brothers-in-Christ congregate at his shop where they discuss Christian living
and encourage one another. Unbelievers also stop by and listen to the stories. It is clear they are
listening closely, and some mock the minority Christians, but many return to hear more. Seeds
are being planted and watered because of Annas’ business location.
1
Investment Required
•
•
•
•
Three different quality levels of additional fabrics for an initial investment of 902GHS or
$635USD.
The additional sewing machine will require an investment of 260GHS or $183USD.
The finishing machine will require an investment of 250GHS or $176USD.
Total investment is 1,412GHS or $994USD.
Business Plan
Business Overview
Business Description
Annas is a tailor with a shop in DC Kura where he sells fabric and sews men’s trousers and
shirts. He currently sells a very limited number of both men and women’s fabrics and would like
to expand his line to include additional grade levels and newer popular styles. He has an
excellent location on the only paved main road in town. He is located directly next to a truck
park and the bus stop contributes to the potential of this business opportunity. He and his
apprentice currently share one sewing machine and Annas would like to borrow money to invest
in an additional one. His apprentice is becoming more skilled and will be able to assist more if
he had a machine of his own. In addition, Annas would like to purchase a finishing machine. He
currently has to outsource this work and it is costing him about 48GHS per month (12GHS per
week) as well as a half day of work.
Risks and Opportunities
The most significant risk is that the sales projections and the cost assumptions for new products
prove to be inaccurate. It is very difficult to predict demand given that this is a relatively new
addition to the existing business. The tie die fabric is quite expensive and, although very
popular, it is difficult to predict how much will be sold. We have reduced the amount requesting
to half of what he initially asked for to add in conservatism and allow him to grow his business
with the profit he will see as his business grows. The margin for tie die, although decent, is the
lowest of the three fabrics at 14%, while Fabric 1 returns 40%, and Fabric 3 returns 20%. The
biggest advantage of tie die is that it is in high demand and may draw new customers.
There are many opportunities in this business. Annas is currently the only men’s tailor in the DC
Kura area and he is located right on the main road. In addition, he will own the only finishing
machine in the area so he can take in finishing work from other seamstresses or tailors from
surrounding villages. The finishing work returns a very high profit margin (900%) for very
quick work. This could prove to be not only very profitable but also a big draw for new
customers.
2
Biography of Candidate
Annas Atta is married to Abigail. They recently had their first child, a boy, who is yet to be
named. (Due to the high level of infant mortality, babies are not named for the first several
weeks.)
Annas has been a tailor for about 2 years. He completed his apprenticeship in 2 ½ years
(normally a 3 year program). Annas has a divided shop that he shares with his brother who is a
drug seller (pharmacist).
They are both strong believers who share their faith whenever
possible. He and his brother are both interesting and personable. His brother, Samuel is a teacher
and a drug provider.
Company Structure
Annas Atta is the sole owner of the tailoring and fabric side of the business. The building and
property he shares with his brother. Annas has one apprentice whom he is currently training.
Marketing
Industry and Market Overview
Community
DC Kura is a village within the Yendi District with a population of approximately 1,500.
The DC Kura area has predominately non-believers. Many of the residents are animistic or idol
worshippers. There are no Muslims living in DC Kura. Mostly, the Christians and nonChristians get along well. There have been a few issues in the dry season because some of the
idol worshippers have tried to force the Christians to contribute funds to purchase ‘sacrifices’ i.e.
goats, flowers, etc. for the shrines (idols) during the dry seasons. They complain that the entire
community should contribute to sacrificing to the shrine in an attempt to call down rain. Of
course, the Christians refuse. Otherwise, they mostly live in peace and Christians frequently are
able to share Christ with non-believers. The main road that runs through DC Kura from Tamale
is paved and runs all the way to Yendi.
Like other local areas there is no electric or running water in the majority of homes or buildings.
The standard of living is quite low with most of the people making significantly less than 5GHS
(approx. $3.50 per day). The average family does not have electricity or plumbing. Many
people walk for several miles to get their water. The most predominate industry is agriculture
with businesses slowing significantly during the farming season which runs from JuneNovember. Harvesting typically takes place during the last two months of farming season.
3
Travel is difficult as very few people have cars or trucks. Most people either walk or ride
bicycles. Only the main road from Tamale (regional capital) to Yendi is paved. All others are
dirt. Traveling far is difficult and expensive. Most ride bicycles, even for long distances.
The community in DC Kura and surrounding is very friendly and hospitable. They are very
receptive to outsiders coming in and sharing Christ openly with non-believers.
Given the number of Muslims in the larger Yendi region, Christians are often ostracized when
they come to know the Lord. When a believer publicly acknowledges Christ, they often lose
customers, friends and sometimes even family. However, this is not as big of an issue for those
living in DC Kura.
There is a market day in most communities every six days on a rotating basis. The market is
extensive and the main source of supplies for the local community. Annas has a bicycle which
he uses to go to markets. If given this loan, he would like to save for a motorbike in order to
further expand his fabric sales.
Local Tailor/Seamstress Market
There are many seamstresses in the region, however, Annas is currently the only tailor. The other
tailor very recently went out of business. This is a unique opportunity for Annas to expand his
business and become the leading provider of men’s apparel and the ‘place to go’ for finishing
work. Despite low income levels, people continue to buy clothing out of necessity and cultural
tradition.
Despite the lower economic level, there are several times in the year when business is difficult to
keep up with. One time is, predictably, Christmas but also February and March are busy periods
for the seamstress due to funerals. Although people are buried immediately, the actual funeral is
planned for (due to the cost) and includes a week-long gathering for family and friends of the
deceased. Thus there is a funeral season. New outfits are quite often purchased for this event.
Customers
Because Annas’ shop is right in the village, he has a lot of repeat customers and people from his
church as well as people passing his shop. Annas builds relationships with his customers and
treats them well, understanding that customer service is a big part of his business success. He
shares the Lord with non-believers and often invites his non-Christian customers to church.
Most of his customers are local residents.
Annas has marketed to the local school through his brother’s connections as a teacher. The
uniforms, although purchased by the parents must all be purchased from the same place so that
the fabric matches. Annas sells to this target market also by speaking with the teachers who then
recommend his shop to the parents.
Competition
4
The other tailor in the area (John W.) is no longer in business and Annas will have the entire
village as the only men’s tailor. There are three woman seamstresses and they all sell fabric but
only for woman. Annas will be the only shop that sells men’s fabric. Men’s fabric is already
available on market day which is every six days
Pricing and Distribution
The customers come to his shop to put in an order and get measured, and then come back to pick
up their orders depending on when they want it. Express orders are 2GHS extra.
Name of Product or Service
Fabric 1 per 2 yard
Fabric 2 per 2 yard tie die
Fabric 3 per 2yard piece
sewing trousers
Sewing short sleeeve shirt
Sewing Long sleeve shirt
finishing work
Unit Price
in Cedis
7.00
8.00
3.00
4.00
3.00
4.00
0.30
Price is determined by comparing what is being charged in surrounding towns. Annas’ price is
in line with other areas.
Promotion
Annas has advertised on the local radio station that covers an area of three districts for 3GHS per
day. Population is approximately 60,000. In the past, Annas had experienced a large increase in
business based on a one day advertisement. This made many in the community aware of Annas’
shop. He plans to advertise again when the radio station is repaired. Depending the results of the
advertisement, he might continue do so every few months.
Annas is also making samples to hang outside his shop. He will determine whether or not to
make a sign based on the literacy of the people.
5
Financial
Startup Costs
Startup costs for the business consist of the following:
Total Loan
Fabric Purchase
Sewing machine
Finishing Machine
Cedis
1,412
$
$994.37
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
1,412
$994.37
902
260
250
Operating Cash
Total Start-up Expenses
Investment Required
The total startup cost for this project is 1412GHS or $994USD.
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Financial Plan
SAMNAS
Year
(all amounts are in Cedis)
1
2
3
Incom e
Fabric 1 per 2 yard
2,576
2,576
2,576
Fabric 2 per 2 yard tie die
2,080
1,928
1,928
873
873
873
sew ing trousers
1,768
1,768
1,768
Sew ing short sleeeve shirt
2,766
2,766
2,766
Sew ing Long sleeve shirt
600
600
600
finishing w ork
336
370
406
0
0
0
Fabric 3 per 2yard piece
Gross Sales
0
0
0
10,999
10,881
10,917
4,295
Expenses
Cost of Goods Sold
4,421
4,291
Wages
0
0
0
P ension Fund @ 14% o f emplo yees' wages+150 per mo nth
0
0
0
So cial Insurance @ 4.00% of wages
0
0
0
M edical Insurance @ 3.60% of wages
0
0
0
Occupatio nal Trauma (injury) tax @ 0.02% of wages
0
0
0
Revenue Tax @ 6.00% o f gross sales
0
0
0
transportation
360
360
330
zippers
180
180
180
thread
120
120
120
Buttons
60
60
60
Advertising
33
36
36
120
120
120
misc expenses
Loan Payments
1,080
544
0
Total Expenses
6,374
5,711
5,141
Cash Profit
4,625
5,169
5,776
Loan Proceeds
1,412
Start-up Costs
1,412
Cash Flow (Cum ulative)
4,625
9,794
15,570
Projected Cash Flow
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SAMNAS
(all amounts are in $)
Year
1
2
3
Fabric 1 per 2 yard
$1,814.08
$1,814.08
$1,814.08
Fabric 2 per 2 yard tie die
$1,464.79
$1,357.75
$1,357.75
$614.79
$614.79
$614.79
sew ing trousers
$1,245.07
$1,245.07
$1,245.07
Sew ing short sleeeve shirt
$1,947.89
$1,947.89
$1,947.89
Sew ing Long sleeve shirt
$422.54
$422.54
$422.54
finishing w ork
$236.62
$260.28
$285.63
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$7,745.77
$7,662.39
$7,687.75
Incom e
Fabric 3 per 2yard piece
Gross Sales
Expenses
Cost of Goods Sold
$3,113.45
$3,022.15
$3,024.69
Wages
$0.00
$0.00
$0.00
P ension Fund @ 14% o f emplo yees' wages+150 per mo nth
$0.00
$0.00
$0.00
So cial Insurance @ 4.00% of wages
$0.00
$0.00
$0.00
M edical Insurance @ 3.60% of wages
$0.00
$0.00
$0.00
Occupatio nal Trauma (injury) tax @ 0.02% of wages
$0.00
$0.00
$0.00
Revenue Tax @ 6.00% o f gross sales
$0.00
$0.00
$0.00
transportation
$253.52
$253.52
$232.39
zippers
$126.76
$126.76
$126.76
thread
$84.51
$84.51
$84.51
Buttons
$42.25
$42.25
$42.25
Advertising
$23.24
$25.35
$25.35
misc expenses
$84.51
$84.51
$84.51
$760.56
$383.10
$0.00
$4,488.80
$4,022.15
$3,620.46
$3,256.97
$3,640.24
$4,067.28
$6,897.21
$10,964.49
Loan Payments
Total Expenses
Projected Cash Flow
Cash Profit
Loan Proceeds
$994.37
Start-up Costs
$994.37
Cash Flow (Cum ulative)
$3,256.97
8
Loan Information
Loan to be paid back in 15 installments of 108GHS over a 1.25 year period. First payment to be
due at the end of the 3 month.
Loan Amount (Principal)
One-time Service Fee Percentage
Number of Years
Months before First Payment
Monthly Payment Amount
Cedis
1,412
$
$994.37
108
$76.06
1,624
212
$1,143.66
$149.30
15.00%
1.25
2
Total of all Payments
Total Service Fee Paid
Assumptions
•
During farming season (June, July, August, Sept) productivity and sales are decreased to
60%
•
Annas and his apprentice currently have a max of 8 products per day with two sewing
machines, and this reduces to 4 in farming season.
•
Assumes six day work week unless farming season.
•
Will often be working by lantern at night.
•
Assumes 30% trousers, 60% short sleeved shirts, 10% long sleeved
•
Sales and cost numbers were provided by business owner and checked with a local
tailor/seamstress for feasibility.
•
Farming and harvest season is June-November ---business is significantly reduced during
this period. Sale of fabric is reduced to 60% during June-November with slight increase
in November and December.
•
Significant additional revenue potential in December, and the funeral period of JanMarch
•
The cost associated with tailoring/sewing is primarily the time to make the product, so
profit margin appears very high.
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Action Plan
Upon receipt of the loan the following steps should be taken quickly.
•
Purchase sewing machine from Tamale
•
Purchase finishing machine from Kumasi (southern town in the Ashanti Region)
•
Travel to Togo for the fabric purchase
•
The above should be able to be accomplished within the 10 days from loan receipt.
•
Advertise on the radio to inform the community of the new selection of fabrics and the
finishing machine (ongoing)
Phase 3 The following should be discussed:
Encourage fabric & finishing machine sales to be set aside for loan repayment.
In addition, Annas should be saving for replacing/adding equipment.
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