1.0
EXECUTIVE SUMMARY
Evina Company limited is a company with high optimism of hitting the market with significant
impact within the shortest possible time. It is an emerging company which has decided to use
this business plan as a blueprint for its operational guidance. Our main focus is to hygienically
process and package herrings and shrimps in a way that appeals to the purchaser and appreciates
commercial value. Our mission is to meet the nutritional needs of all shrimps and herrings lovers
and also to people who by nature or health consciousness would prefer to stick to other source of
protein other than animal protein. Our vision is to be the leading brand in providing healthful,
nutritious, delicious and affordable substitutes to health threatening foods, both in Ghana and
beyond.
The management staff of Evina company ltd comprises of, Mr. Gaddiel Arkoh Acquah (General
Manager), Mr.Rockson Acheampong (marketing & sales supervisor), Mrs. Evelyn Amoako
Agyei (accountant) and Mr. Douglas Darko (production manager), all of whom have direct
knowledge of the industry and possess unique administrative skills. Our capital requirements as
far as machinery and storage facilities are concerned are estimated at GH¢12,000. Far reached
plans are underway to set up our production site in Anloga, a commercially busy town in the
Volta region of Ghana. This makes proximity to raw materials; availability of affordable labor
and easy access to transport an added advantage. The nature of our business locates us within
the food and beverages sector according to Ghana’s trade regulations. Our main competitors are
the traditional market women who unattractively package herrings and shrimps. Our target
market include the very health conscious Ghanaians, lovers of the fish meal, vegetarians, babies,
the hypertensive, the aged and the high in cholesterol. The busy classes in the society who are
time constrained to access the local markets for these valuable products are also a target group.
i
EVINA company ltd. in the long term is incubating plans to export to other African countries.
Research is far advanced into ways of processing and packaging more of other medically
certified and health-packed traditional food ingredients.
The total estimated investment required as initial capital is ¢25,000. Our personal contributions
add up to ¢15,000 which is 60% of total estimated investment. Our loan request is ¢10,000
which is 40% of total estimated investment. Our biggest motivation is to promote and meet the
health needs of our cherished customers in an attractive and convenient way.
ii
1.1
Mission statement
To meet the nutritional needs of all shrimps and herrings lovers and also to people who by nature
or health consciousness would prefer to stick to other source of protein other than animal protein.
1.2
Evina’s Vision statement
To be the leading brand in providing healthful, nutritious, delicious and affordable substitutes to
health threatening foods, both in Ghana and beyond.
iii
TABLE OF CONTENTS
EXECUTIVE SUMMARY……………………………………………………….......I
1.1
Mission……………………………………………………………………......iii
1.2
Vision………………………………………………………………................iii
1.0
ORGANIZATION……………………………………………..…………….1
2.0
PRODUCT IDEA AND REALIZATION OF SCHEDULE…2 - 7
3.0
HUMAN RESOURCE…………………………………………8 - 10
4.0.
MARKET ANALYSIS …………………………………….....11 - 21
5.0
FINANCIAL STATEMENT………………………………....22 - 24
iv
CHRISTIAN SERVICE UNIVERSITY COLLEGE
DEPARTMENT OF BUSINESS STUDIES
BACHELOR OF BUSINESS ADMINISTATION
EVINA COMPANY LTD
BUSINESS PLAN
A BUSINESS PLAN SUBMITTED TO THE DEPARTMENT OF BUSINESS STUDIES OF
CHRISTIAN SERVICE UNIVERSITY COLLEGE, KUMASI IN PATIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE COURSE.
CSAD 443 TEAM BUSINESS PROPOSAL.
BY:
AGNES OSEI ACHEAMPONG
10124209
FRANK KOFI KYEI
10124182
BETTY OWUSU FRIMPONG
10124163
IVAN HEATHCOTE-FUMADOR
10124169
GADDIEL ARKOH ACQUAH
10124075
NOVEMBER, 2011
I
HAVE
READ
THE
CHRISTIAN
SERVICE
UNIVERSITY
COLLEGE’S
REGULATIONS RELATING TO PLAGIARISM AND CERTIFY THAT THIS BUSINESS
PLAN IS ALL MY WORK AND DOES NOT CONTAIN ANY UNACKNOWLEDGED WORK
FROM ANY OTHER SOURCE. I ALSO DECLARE THAT I HAVE BEEN UNDER
SUPERVISION FOR THIS BUSINESS PLAN HEREIN SUBMITTED.
NAME OF MEMBERS
Index Numbers
AGNES OSEI ACHEAMPONG
10124209
FRANK KOFI KYEI
10124182
BETTY OWUSU FRIMPONG
10124163
IVAN HEATHCOTE-FUMADOR
10124169
GADDIEL ARKOH ACQUAH
10124075
Signature
CERTIFIED BY:
…………………
……………………..
……………….
(Supervisor)
Signature
Date
..…………………….
…………………
Certified by:
………………….
(Head of Business Studies Department) Signature
Date
1.0
ORGANIZATION
Evina Company Ltd which is a small enterprise’s activity largely falls under the Food and
Beverage Processing Industry. On broad terms, the food and beverage processing sector in
Ghana refers to the manufacturing, processing and preservation of meat, fish, fruit, vegetables,
oils and fats, manufacture of dairy products, manufacture of grain mill products, starches and
starch products and prepared animals feeds; manufacture of other food products (e.g. bread,
sugar, chocolate, pasta, coffee, nuts and spices), and the manufacture of bottled and canned soft
drinks, fruit juices, beer, wines, etc (World Bank 2007).
There are no restrictions in the industry so far, since any firm can enter and exit at any time, as
long as all other operating standards are met by the businesses trying to enter. However, as a
legal requirement, all businesses desiring to operate in the industry must register their businesses.
Since we fall under the food industry, our products should also meet the criteria set by the Ghana
Food and Drugs Board.
Evina company ltd will begin its operations in May, 2012 and it will be registered under
company’s code, 1963 Act 179. The operational units of Evina Company will consist of the
production department, marketing and distributions department, finance department and
administration department.
To make proximity to the raw materials; availability of affordable labor and easy access to
transport an added advantage, Evina company ltd plans to set up its production site in Anloga, a
commercially busy town in the Volta region of Ghana.
Page 1
2.0
PRODUCT IDEA AND REALIZATION OF SCHEDULE
2.1
Product Idea
Our company name, (EVINA) was carved from the Ewe translation of tasty. We believe this
name espouse the great ambition of our company to exploit every possible avenue to publicize
and educate people on the immense health benefits in our first two products, “NAMPA
herrings” and “NAMPA shrimps”. Evina Company Ltd. believes that, Ghana is blessed with
foods stuffs like shrimps, herrings, galvanum (prekese), and the rest. These local food
ingredients have however been largely substituted for other synthetic and health threatening food
leading to serious repercussion on the health of many in the country. We hear of many diseases
such as heart diseases, obesity, diabetes, hypertension and cancer contracted by people at quiet
younger ages. This never used to be the story. Our indigenous rural people are discovered to live
longer healthier lives and the obvious reason for that is healthy nutritional consumption they
have adopted. It therefore proved reasonable that, it would do society well if we begun
substituting a lot of our adopted unhealthy foods with healthful fish meal like shrimps and
herrings. From this, the founders of Evina Company Ltd. came up with an idea to research into
herrings and shrimps. Results were that, herrings and shrimps contain much healthful ingredients
that increase the lifespan of people. Research has proved that, herrings and shrimps give strength
and boosts ones immunity to many diseases. Also they serve as an excellent source of selenium.
Shrimp in particular is identified to be a very good source of vitamin D and vitamin B12, low in
calories and saturated fat. Shrimp improves the electrical properties of the heart cells and protect
it against fatal abnormal heart rhythms (a study from Greece). Herrings and shrimps help prevent
and control high blood pressure. A further development that whips up our enthusiasm into
Page 2
processing and packaging herrings and shrimps is that, many doctors now more than ever advise
patients and the general public to patronize this healthful meal. A Dutch maxim states clearly,
“when the herring is around, the doctor is far away”.
2.1.1 Product features
Nampa shrimp and Nampa herrings will be viewed as a unique, convenient and high quality.
Shrimp
Herring
2.1.2 Status of the product
The current status of the powdered herrings and shrimps reduce the required demand for it. The
crudely packaged products have fishy smell and hard scent stains around them. The local market
women who are in the industry do not endeavor to extract any unwanted particles during
production stages. With the well undertaken marketing research, Evina seeks to solve the
problems of the products at its current status.
2.1.3 Proprietary position
Evina plans to protect its trademarks and copyright after two years in operation since by then it
would have been able to generate substantial amount of money to do so. In the mean time, we
will employ appropriate techniques that will enable us ensure that our products will not be
imitated to tarnish its corporate image and identity. These techniques will be a distinct design,
Page 3
logo and unique inscriptions. These will be executed in a way that will be very difficult to
imitate.
2.1.4
Cost of products
The cost of these fish varies depending on seasons. From July to September where herrings and
shrimps are in bumper harvest season, the cost ranges from GHC 40 a basket to GHC 42. In late
December where herrings and shrimps seem to be scarce, the price ranges from GHC 42 a basket
to GHC 45. EVINA estimates that, it will use GH¢10000 of quantity in its first production. This
will cost about GH¢12000 (including carriage costs, milling and packaging cost to our company
premises). Currently plans are underway to ensure that our first supply is on time. Our lead-time
will be 1 to 3 days.
2.1.5 Research and development
Research has it that, there is a growing tendency of people becoming more health conscious in
Ghana. There is a general trend of people moving from fatty animal sources of protein to fish
meal. With a general increase in Ghana’s population and income levels, more and more
Ghanaians are expected to patronize fish products. In effect, the future looks bright for investors
to invest in Evina Company ltd.
2.1.6
Stage of growth of the product
Nampa herrings and shrimps have a close substitute which is powdered herrings and shrimps tied
in rubbers and sold by local market women. The demand for these products is on the maturity
stage of the product/industry life cycle (see Figure 2). Since Evina Company seeks to make these
products more appealing to a larger number of people, our products will be at the introductory
stage close to the growth stage.
Page 4
2.1.7 Sourcing and quality assurance
We aim to obtain our raw materials from our main source, Volta region. However, contingency
measures will be put in place to also source raw materials from Central region (Elmina), and
Greater Accra should there be any delays or non-delivery of raw materials. Arrangements will be
made with very influential and resourceful fishermen who have very cordial relationship with
fish mongers .There will also be a liaison with the leader of fish mongers. With these two people,
our company’s quantity and quality requirements; the specific schedules of our purchase and
transport arrangements will be communicated. To gain some exceptional respect and preferential
treatment among the suppliers, the fishermen and fish mongers’ association president will be
strategically included on our management team.
2.1.8 The future of our products
There are various local foods with rich nutritional value in Ghana which have sadly not been
publicized that much. Evina is sternly aiming at researching into these essential food ingredients.
We don’t only endeavor to publicize but to add value (innovation) to it and present them in
various ways that both appeal to the buyer and attracts commercial value. However, Evina will
always focus its resources on Nampa shrimps and Nampa herrings as its major brand. We plan to
develop a system that will enable our customer suggest their ideas which we believe will
facilitate our creativity in our future plans of expansion.
Page 5
2.2
Realisation of Schedule
Number of Schedules
1.
Activity
Period
Funding
December
Responsibility
2011
– Financial manager
March -2012
2.
Locating of office
January, 2012
Operations and quality
control manager
3.
Licensing
January, 2012
Accountant
4.
Recruitment of staff
February, 2012
production manager and
General manager
5.
Lunching
April , 2012
Entire staff members
6.
Start of production
May
Entire staff members
Page 6
3.0
HUMAN RESOURCE
3.1
Shareholders
Mr. Gaddiel Arkoh Acquah, Miss Agnes Osei Acheampong, Mr. Frank Kofi Kyei, Miss Betty
Owusu Frimpong and Mr. Ivan Heathcote-Fumador are the owners of Evina Company. These
shareholders control the business.
3.2
Board of directors
The board of directors of Evina Company Ltd. consists of the following; Miss Agnes Osei
Acheampong (she is pursuing banking and finance in Christian Service University College and
she is a member of ACCE), Mr. Frank Kofi Kyei (he is a marketing manager of Secoras
enterprise), Miss Betty Owusu Frimpong (she is the accountant of Royal Gas Company Ltd), and
Mr. Ivan Heathcote-Fumador (a student of Christian Service University college).
3.3
Management team

General Manager
Evina will be led by one of our highly qualified member, Mr. Gaddiel Arkoh Acquah who will
be responsible for carrying out the strategic plans and policies of the company. The overall
management of the company’s activity shall be his responsibility. Mr. Gaddiel Arkoh Acquah is
a part II holder of ACCA (Association of Certified Chartered Accountant). He is currently
pursuing a Degree program in Christian Service University College. He possesses good
leadership skills and has records of good management.
Page 7

The accountant
Mrs. Evelyn Amoako Agyei will be responsible for the assembling, analyzing and checking of
the accuracy of all transactions. She has an HND (Higher National Diploma) in accounting and
has much skill in that field. Her roles will include keeping records of all financial transactions
(accounting books). Preparing of financial statement will be her duty. Resolving accounting
discrepancies is also part of her roles. The accountant will also be responsible for monitoring and
interpreting financial reports to specific deadlines. We will also have an accounts clerk who will
report directly to the accountant.

Marketing and sales manager (Mr. Rockson Acheampong)
He stands unavoidable because of his skills and innovativeness. He holds a diploma in sales
management and a degree in marketing. He has unique skills in developing marketing strategy
and plans, managing marketing mix, understanding current and potential customers, managing
customer relationships and ensuring timely delivery. He will be responsible for the recruitment
and hiring of sales personnel and ensuring effective marketing of the company’s products.

Production manager (Mr. Douglas Darko)
He holds a degree in banking and finance and a diploma in human resource management. He has
being to several capacity building conferences and so is endowed with the skills in controlling
activities of production. This is why we believe he can contribute immensely to our operations.
His roles include, controlling of production activities, deciding on the right resources and
equipment to be used in production and the quality and quantity of products to be produced.
Page 8
3.4
Company structure
Evina’s management philosophy will encourage responsibility and mutual respect. While we will
present a strong decisive management team, we will also foster an atmosphere of genuine
employee appreciation and open communication.
The structure of the company is shown in the organizational chart below
Board of directors
General Manager
Accountant
Accounts clerk
Marketing
and sales
Manager
Sales personnel
3.5
Production
manager
General
Operators
Decision making authority
Operational decisions in the company will be made by individual sector managers. Strategic
decisions will also be made senior Management.
3.6 Labor: Evina plans to have ten (10) number of workforce with much skill in the industry for
a start. To improve on their skills, training programs will be organized for them regularly.
Page 9
4.0
MARKETING ANALYSIS
4.1
Business operations and systems.
4.1.1 Production process
The system of operation of Evina will consist of stages namely purchasing and storing of raw
materials, packaging and distributing of finished product. The raw material to be purchased is the
dried, grilled herrings and shrimps. Purchasing will be done from established suppliers who
know the level of quality and quantity the company purchases. The raw materials will be
checked meticulously by the quality control personnel to ensure its thorough dryness and taste
before it is passed into the stores for further processing. After the purchasing procedures are
done, the next to be done will be milling. Before milling, the quality assurance personnel will
ensure that, all unwanted materials and particles are separated from the fish. Milling will be done
in batches for each product.
To prevent any mistake of a mix up in the packaging stage, the collection bowls will be two
distinct colors, thus to say, blue bowls for herrings and red bowls for shrimps. They will also be
tagged with herring and shrimp stickers to aid a clear distinction of the two products.
After the milling, quality control will still examine the texture of the product. If the texture is
unsatisfactory, that batch will be sent back for re - milling. The well milled shrimp and herring
will be allowed to cool down since milling generates considerable levels of heat in the process.
There after, the products will be passed on to the packaging floor. Our packaging rubbers will be
purchased from our designers and stocked for use. The ceiling of the product will however be
done with a machine which would make the process very fast. The operations manager will be at
Page 10
hand to instruct and supervise how many units of each quantity should be produced after
consultation with the accountant and marketing manager. The packaged products will then be
packed for distribution.
Production process
Input
processing
RAW MATERIALS
(Shrimps and
Herrings)
Separation of stones,
Picking incomplete dry shrimps
and herrings,
finished product
Final
product
Milling and Packaging.
Storage
4.2.
Environmental analyses
4.2.1
Political Environment
Political factors that can affect our business include political instability, government regulations
in the fish farming sector, international trade regulations, tax policies and competitive regulations
among others. Currently, the political environment is favorable for our business because there is
government support for fish farming.
4.2.2 Economic Factors
The economic factors affect the demand for our products. Currently factors that influence market
operations are; Prime Rate 12.20%, Base Rate 24.75%, Inflation Rate 8.30%, Exchange Rate:
GH¢ 1.45 : $ 1.00, GH¢ 2.50 : £ 1.00, GH¢ 2.20: € 1.00, and Minimum Wage : GH¢ 3.60.
Page 11
Since these factors influence the buying power of customers, Evina Company will constantly
analyze these factors to set a fair price or charge for its products in order to beat competition and
to stay in business.
4.2.3 Socio-Cultural Environment
Income distribution, demographics, population growth rates, age distribution, lifestyle,
education, and health consciousness can go a long way to influence the demand for our products.
Society’s attitude towards the consumption of healthful meal is rapidly increasing. This situation
will have a positive impact on our business.
4.2.4 Technological Factors
Technology has advanced so much that; Evina company ltd will need Technological advances
that improve information and management methods. Technology helps monitor fishing activity
and improves consumer information about the condition and origin of fish products. But
successful management of the fishing Operations will depend on the coordination of technology
and policy. Evina will consider technology to gain much competition in the market.
4.2.5 Ecological factors
Our operations are going to be environmentally friendly. Our source of energy will not be fuel
but electricity. The production process will not be characterized by smoke emissions. The noise
from our milling machine will not be irritating. Evina‘s operation will also contribute
significantly to national economic development in relation to food security, employment, poverty
reduction, improvement in GDP and foreign exchange earnings.
Page 12
4.2.6 Competition
The chunk of the work is got to do with the changing the minds of existing customers to move
from the conventional products to our innovative products. The level of competition therefore
creates not much panic to Evina.
4.2.7 Competitor analysis Competition in this line of production is very moderate. Through the
enhanced features of Evina products, we foresee an upper hand over our competitors.
The competitor for Evina’s product is the already existing marketing women who tie the
powered shrimps and herrings. Though they are already in market, they do not pose much threat
to Evina Company ltd. This is because; Evina Company will put strategic plans in place to gain
competitive advantage in the market. Figure x shows the strength and weakness of our
competitors.
Strengths of competitors
Weaknesses
1. Already established distribution chains
1. Smooth ground herrings and shrimps
2. Established customer base
have sandy taste.
2. Inexperienced management
3. Poor brand awareness
Figure x
Page 13
4.3
Target Market
The targets of Evina company ltd are people who cook for both private and commercial
purposes. Evina will also focus its strengths mostly on babies and toddlers, the hypertensive and
the obese that must use these products for medical recommendation. Evina’s products will target
the high class and the busy class of the society who shops mainly from across the road shops.
The package of our product will also make it suitable for travellers, busy workers and students
who have no time moving to the market to demand for it.
4.4
Potential Market
Based on Ghana Statistical services estimates, Ghana’s current population is about 24 million
and will increase to about 27 million people by 2020. About 50% of these populations now live
in urban areas. Assuming that the well processed and packaged Nampa herrings and Nampa
shrimps are patronized by people living in urban areas, the current potential customers will be
about 12 million. Of the 12 million, 85% (10 million Ghanaians) are between 5 and 65 years old,
which is the population that patronizes fish meal, the most. With people having different tastes
and preferences, assuming that only 40% will actually prefer herrings and shrimps, then the
target potential market in Ghana that could patronize Nampa herrings and Nampa shrimps will
be about four million people. With increasing awareness of health benefits of herrings and
shrimps, this target market size can only increase.
4.5
Market strategy
Evina company ltd will adapt the differentiation, the cost strategy and price penetration to gain
competitive advantage over its competitor. Since the market of these products look perfectly
elastic, Evina’s strategy to differentiate its products will put it on a quiet different pedestal for
Page 14
changing prices. We also plan to differentiate our products through quality and attractive
packaging, emphasizing the health benefits.
4.6
Marketing Mix
Evina’s marketing strategy will be hinged on the four sets of decisions that have been referred to
as the 4 Ps thus, product, price, place and promotion. Our promotion and communication efforts
in marketing strategy are directed at accomplishing brand awareness, brand loyalty and increase
in market share. The increase in market share will be achieved by effective advertising, personal
selling, secured channels of distribution, retail outlets, other forms of communication and other
promotional variables.
4.6.1
Promotion

Advertising
Taking into consideration cost-effectiveness and efficiency, we will use a combination of radio
adverts and targeted handbills in the most potential areas. Our target at the start will be the urban
population in Kumasi, Volta, Tamale and Accra.

Personal selling
In personal selling, we will use one-on-one persuasive selling technique. During personal selling,
we will plan to use some free samples to those centres that have the potential of pushing our
sales. We will mainly target business enterprises like supermarkets and hospitality centres.
Page 15

Direct marketing
Direct marketing will also be used to reach the busy class in the corporate bodies who also form
part of our target group. Hand bills sensitizing them on the health benefits and hygienic
packaging of Nampa products will be distributed to their offices. Permission will also be sought
from their managers to speak about our products personally to them either on one-on-one basis
or in their internal meetings. Directions as to the shops they can easily make purchase will also
be given during these interactions.
Evina Co. Ltd. will also look out for various women groupings in societies, communities and
religious bodies. These groupings have a way of convincing many women in their regular group
meetings. Women who usually do the cooking form the major part of our target group. These
groupings therefore provide an excellent platform to reach as many of them as possible.
Invitation will be requested of these groups for us to share with them on such point as the health
benefits of herrings and shrimps and the quality and hygienic conditions under which Evina
products are processed.
Evina also plans to be the major large buyers in the hospitality industries. These may include
restaurants, hotels and large food venders.
4.6.2 Price
We strive at producing a quality product at very affordable prices which will be much more
easily accessible to many people living in Ghana.
Page 16
4.6.3 Product
Evina’s Nampa herrings and shrimps are mainly powdered dry herrings and shrimps. Though
this product is sold and largely patronised on the market by local market women. Evina’s
products have very unique features. It is an innovative intervention which has a really attractive
sachet packaging. Convenience in shelving these products in a luggage without a worry of
tearing and pouring is well secured. Its good package eliminates the issue of strong scent around
the locally packed fish product. Nampa herrings and shrimps comes in sizes of packs (maxi size,
medium and small sizes). Another unique feature of Evina’s products is its neatness and
hygienic content. This is born out of its outmost concern for quality at each stage of the
production process. This innovative intervention comes in handy as a solution to complaints
raised consumers.
4.7
Distribution Channels
Since Evina is targeting Ghanaians desiring to take healthy fish meal, the appropriate distribution
strategy which will give us the best results is intensive distribution strategy (mass coverage) in
our targeted urban areas (Volta region, Northern region, Kumasi and Accra). With this strategy
we plan to distribute our product widely in nearly all locations in which our product can be sold.
Evina understands that this strategy might make us incur a substantial amount of cost because of
our relatively large target market, which will result from additional sales force that will be
needed for effective distribution. However, despite all these Evina will offset this cost with very
high sales volume. The below will also be the company’s distribution channel.
Page 17
Our distribution channels
Fish farmers
Evina Company Ltd
Processing and Packaging
Major wholesale outlets
supermarkets and hospitality
centers
Retail outlets, individual
commission sellers
Evina consumers
4.9
Markets Test
To assess the impacts of our promotion and advertising strategies and customer satisfaction, we
will conduct a survey within 6 months of the introduction of our product. By that time, people
would have used the product and known its worth. We plan to interview about 150 buyers each
in Kumasi, Accra and Volta region. To improve on the product, we will conduct product testing
at selected outlets in the three cities.
Page 18
4.8
SWOT analysis
The diagram below shows analysis of our strengths, weaknesses, opportunities and threats.
Strengths
1.
Processing skills: We will not
Opportunities
1.
Favorable government policies:
require sophisticated machines
Farming activities attract 10years tax
and skills to process and
free levies.
package our product both in the
short and long terms. Our focus
2.
consumption of fish meal by doctors
is more on hygiene processing,
leading to high demand.
packaging and distribution.
3.
2.
Increasing health consciousness of the
Ready Market for our Products.
Labor skills: Because of high
level of unemployment in the
district, we expect that labor
required is highly available.
3.
Opportunity for diversification
Weaknesses
1.
No personal distribution
1.
There are already exiting local market
van. Evina does not
women who sell the ground shrimp and
envisage buying a
herring.
distribution van at least in
2.
Threats
2.
Changing the minds of Customers’
the first two years of
loyalty from the crudely packed
operation.
herrings and shrimps to our innovative
Local dilate not very
Nampa herrings and shrimps.
familiar with most staff.
Page 19
FINANCIAL ANALYSIS
5.0
5.1 Risk Analysis
Evina Company is likely to be exposed to certain types of risks should it start business. These
risks are the price risk, credit risk, pure risk, market risk, and operational risk

Price risk
As Evina’s products, Nampa herrings and Shrimps starts business, it may experience
uncertainties over the magnitude of cash flows due to possible changes in output and input
prices. Evina however intends to analyze this form of risk because, price risk associated with the
sale and production of existing and future products and services plays a central role in strategic
management.

Credit risk
It refers to the risk that a firm’s customers and the parties to which it has allowed credit might
delay or fail to make promised payment. Most firms face some credit risk for account
receivables. The exposure to credit risk is particularly large for production institutions and may
lead a firm to bankruptcy if not taken into consideration. Since Evina is no exception of firms
likely to face credit risk, it will try to engage in cash and carry system in most of its transactions.

Operational risk
Though Evina Company will be prone to credit and price risk, it is also noticed to experience
operational risk. These factors such as power outages, machine break downs, employees’
Page 20
absenteeism / turnover, delay and or non delivery of raw materials might cause operational holds
-up. Evina might also face the risk of producing defective products.

Pure risk
Evina is likely to face to job related injuries because of the use of machine in the production.
Since our raw materials attract rodents, our production site is prone to rats and mice infestation.

Property Loss Exposures
These include the risks of theft of company equipments and raw materials supplies and finished
products. This risk also includes the risk of loss of production site to fire.
Risk management
In order not to be destabilized by the above mentioned risks, a cost effective risk management
strategy will be adopted. This will be composed of more of risk control measures than risk
financing such as;

Loss control measures (risk reduction and risk prevention)

Loss financing measures (insurance)

Internal risk reduction (diversification and investment in information)
Knowing that, herrings and shrimps processing and packaging needs uninterrupted power
supply, generator will be used in our operations during power cuts.
Page 21
ASSUMPTIONS UNDERLINING THE FINANCIAL PLAN
 Appraisal
Net Present Value (NPV), Sensitivity Analysis (what-if), Break-even Analysis and Ratio
Analysis have been used to appraise the business.
 Depreciation
Asset will be depreciated on a straight-line method at the rate of 20% per annum.
Trade receivables
5% of all advances shall be unpaid for by the end of the accounting period and 30% on
loans received.
 Taxation and SSNIT contribution
Tax and SSNIT contribution will be 5.5% and 22.5% respectively.
 Cost of advertisement shall not be the same throughout the first three years.
 Rent of GH¢1000 has been paid for 3 years ending 31st December 2014
 License for operation shall be renewed every year at GH¢100.
Production
As per our research result reveal that one (1) pack of shrimps and herrings when grinded
gives 50 pieces of GH¢ 4.00 containers and 100 pieces of GH¢ 2.00 containers respectively.
Evina estimates production for the three years to be 20000, 25000, and 30000. It will use 200
packs of shrimps and 100 packs of herrings in the first year, 250 packs of shrimps and 125
packs of herrings in the second year and 300 packs of shrimps and 150 packs of herrings in
the third year respectively.
Page 22
In the first year, EVINA Company estimating demand will produce 5000 pieces of herrings
and shrimps in the first year. The company therefore project production to be 10000. With
product managerial and advertising strategies, the company expects a 10% increase in
demand. This will base on last year's inventory.
By the third year we believe the company would have gain cognizance within the public and
communities trust. We then project another 20% increase in demand base on the second
year's inventory.
Page 23
EVINA COMPANY LIMITED
5.2
PROJECTED INCOME STATEMENT AT THE END OF THE THREE PERIODS
2012 (GH¢)
2013 (GH¢)
2014 (GH¢)
66,250.00
75,337.50
92,187.50
cost of sales
9,525.00
10,560.00
14,070.00
gross profit
56,725.00
64,777.50
78,117.50
28,080.00
30,326.40
advertisement and promotion
1,000.00
300.00
Depreciation
5,225.00
5,225.00
travelling and transportation expenses
300.00
600.00
100.00
administrative expenses
150.00
175.00
215.00
repairs and maintenance
150.00
352.00
450.00
generator and land rent expense
500.00
500.00
500.00
health insurance and first aid
100.00
109.00
110.00
5,000.00
5,500.00
7,000.00
-
250.00
Sales Revenue
less expenses:
salaries / wages
containers and rappers
rodents trap, other drugs and protective
500.00
legal fees
100.00
formation expenses
100.00
Utilities
32,752.51
100.00
5,225.00
100.00
100.00
-
-
2,500.00
1,300.00
total expenses
43,705.00
44,287.40
48,302.51
profit before interest and taxes
13,020.00
20,290.10
29,814.99
3,000.00
2,400.00
1,200.00
10,020.00
17,890.10
28,614.99
Less tax (25%)
3,255.00
5072.53
7,453.75
net profit after tax
6,765.00
12,817.57
21,161.24
interest on loan
net profit before tax
1,500.00
Page 24
EVINA COMPANY LIMITED
5.3
PROJECTED FINANCIAL POSITION AS AT 31ST DECEMBER,
ASSETS
2012 GH¢
2013 GH¢
2014 GH¢
property, plant and equipment
20,900.00
15,675.00
10,450.00
1,230.00
1,000.00
880.00
current assets:
inventory
Debtors
2,000.00
1,000.00
940.00
prepayment (rent)
1,000.00
1,000.00
1,000.00
cash or Bank
4,390.00
41,406.33
69,450.99
47,520.00
60,081.33
82,720.99
37,500.00
37,500.00
37,500.00
6,765.00
12,817.58
21,161.24
44,265.00
50,317.58
58,661.24
4,691.22
16,606.00
3,255.00
5,072.53
7,453.75
47,520.00
60,081.33
82,720.99
EQUITY AND LIABILITIES
capital and surplus
Stated capital
net profit
Non current liability:
Creditors
corporate tax
Page 25
EVINA COMPANY LIMITED
5.4
PROJECTED CASHFLOW
2012 GH¢
2013 GH¢
Sales
66,250.00
75,337.50
capital introduced
25,000.00
2014 GH¢
CASH INFLOW (A)
92,187.50
-
-
91,250.00
75,337.50
non-current assets acquisition
27,125.00
-
Interest
3,000.00
2,400.00
rent prepayment
1,000.00
-
general expenses
43,705.00
44,487.40
48,302.51
materials purchases
9,525.00
10,560.00
14,070.00
tax payment
2,505.00
4,472.53
7,153.75
86,860.00
61,919.93
70,726.26
4,390.00
13,417.58
21,461.24
opening balance
-
27,988.75
47,989.75
closing balance
4,390.00
41,406.33
69,450.99
LESS CASH OUTFLOW (B)
net cash flow (A-B)
92,187.50
1,200.00
Page 26
EVINA COMPANY LIMITED
5.5
INVESTMENT APPRAISAL
year
cash flow GH¢
( NET PRESENT VALUE)
discount factor 30%
1.00
present value
(25,000.00)
0
(25,000.00)
1
4,390.00
0.77
2
13,417.58
0.59
7,939.05
3
21,461.24
0.46
9,768.43
3,380.30
Savage value 10,450.00
14,362.22
SENSITIVITY ANALYSIS
Assuming we could not achieve our cash flows as projected but able to achieve 90%, 80%, and
70% of cash flow for 2012, 2013 and 2014 respectively to certainty equivalents.
Period
Year 0
Cash flow
Discount Factor
Present Value
GH ¢
20%
GH ¢
(25,000)
1.00
(25,000)
Year 1
6,651.00
.77
5,121.27
Year 2
12,216.10
.59
7,207.49
Year 3
15,678.60
.46
8,936.80
Savage value
NPV
10,450.00
6715.56
Page 27
EVINA COMPANY LIMITED
5.6
BREAK EVEN ANALYSIS
=
fixed cost
contribution
Sales
66,250.00
Variable Cost
31,925.57
Contribution
34,324.43
Fixed Cost
27,125.00
Profit
7,199.43
The contribution of sales
(C/S) ratio
34,324.43
contribution =
Revenue -
Variable cost
=0.52
66,250.00
Break Even
27,125.00
=
52,354.29
0.52
RATIO ANALYSIS
RETURN ON ASSET
=
Profit for the Year
×
100
Total Asset
Page 28
Year 2014
year 2013
year 2012
15060.08 × 100
7515.00 × 100
81837.74
59933.83
47520.00
=27.2%
=25%
=15.8%
RETURN ON EQUITY =
Profit for Year
22250.99
× 100
×
100
Total Equity
Year 2014
Year 2013
Year 2012
15060.08 × 100
7515.00 × 100
37500
37500
37500
=59.3%
=40.2%
=20.0%
22250.99 ×
100
Page 29
RETURN ON INVESTMENT
This will be calculated as
=
х 100
Net Profit before Tax
Capital Employed (Total assets – current
liability)
Expected Return on
Investment:
Year 1
10,020.00
Year 2
17,890.10
Year 3
28,614.99
45,015.00
22%
53,608.80
33%
73,747.24
39%
Net Profit before Tax
Capital Employed
Return on Investment
sales strategy
projected production quantity (cement
packs)
projected sales
Quantity
Shrimps
Herrings
total quantity
Shrimps 200
Herrings 100
2012
10,000.00
10,000.00
20,000.00
Shrimps 210
Herrings 105
2013
10,500.00
10,500.00
21,000.00
Shrimps 250
Herrings 125
2014
12,500.00
12,500.00
25,000.00
Page 30
unit quantity/ price
Shrimps
GH¢
GH¢
GH¢
25grams
1.00
1.20
1.30
50grams
2.00
2.30
2.40
75grams
5.00
5.30
5.40
100grams
10.00
10.40
10.50
Average price
4.50
4.80
4.90
25grams
0.50
0.70
0.80
50grams
1.00
1.20
1.30
75grams
2.00
2.30
2.40
100grams
5.00
5.30
5.40
average price
2.13
2.38
2.48
Sales
GH¢
GH¢
GH¢
Shrimps
45,000.00
50,400.00
61,250.00
Herrings
21,250.00
24,937.50
30,937.50
total sales
66,250.00
75,337.50
92,187.50
65.00
67.00
Herrings
Direct cost
Shrimps
Herrings
70.00
Page 31
55.00
58.00
61.00
Shrimps
6,500.00
7,370.00
9,800.00
Herrings
3,025.00
3,190.00
4,270.00
total direct cost of sales
9,525.00
10,560.00
Direct cost of sales
14,070.00
HUMAN RESOURCE
SCHEDULE
POSITION
basic salary
GH¢
SSF 5.5%
GH¢
Tax GH¢
General manager
400.00
50.00
20.00
Financial Administration
370.00
46.25
18.50
Operation / HRM
370.00
46.25
18.50
Marketing manager
370.00
46.25
18.50
milling operator
180.00
22.50
-
packaging staff 1
180.00
22.50
packaging staff 2
180.00
22.50
Security
140.00
17.50
-
Advisory
150.00
18.75
-
total payroll
2,340.00
292.50
75.50
Net
Monthly
Salary
GH¢
Net
Annual
Salary
GH¢
330.00
3,960.00
305.25
3,663.00
305.25
3,663.00
305.25
3,663.00
157.50
1,890.00
157.50
1,890.00
157.50
1,890.00
122.50
1,470.00
131.25
1,575.00
1,972.00
23,664.00
Page 32
NON CURRENT ASSETS
SCHEDULE
ITEM
UNIT
QUANTITY PRICE
TOTAL
AMOUNT
land and building
1.00
10,000.00
10,000.00
milling machine
1.00
1,000.00
1,000.00
packaging machine
tables and chairs (wooden
bench)
1.00
1,000.00
1,000.00
5.00
50.00
250.00
Fridge
1.00
200.00
200.00
fixtures and fittings
10.00
1,420.00
office equipment
5.00
95.00
total
24.00
13,765.00
14,200.00
475.00
27,125.00
DEPRECIATION
SCHEDULE
ITEM
COST
DEP.
VALUE
Building
9,000.00
1,800.00
milling machine
1,000.00
200.00
800.00
packaging machine
1,000.00
200.00
800.00
Fridge
200.00
40.00
160.00
fixtures and fittings
14,450.00
office equipment
475.00
Total
26,125.00
2,890.00
95.00
5,225.00
NET BOOK
VALUE
7,200.00
11,560.00
380.00
20,900.00
Depreciation is of straight line method and at the rate of 20%.
Page 33
FORMATION EXPENSES
GH¢
registrar general
50.00
Travelling and transportation
35.00
Others
15.00
Total
100.00
ADVERTISMENT
GH¢
Radio
300.00
hand bills
300.00
samples
100.00
Total
700.00
PRODUCTION ANALYSIS
DIRECT PRODUCTION COST
inventory raw material
2012 GH¢
2014 GH¢
9,410.00
12,720.00
-
add purchases raw material
8,525.00
containers and rappers
5,000.00
carriage inwards
2013 GH¢
200.00
8,725.00
250.00
300.00
9,660.00
13,020.00
direct labor
450.00
490.00
650.00
direct expenses
350.00
410.00
400.00
10,560.00
14,070.00
9,525.00
Page 34
expenditure:
salaries / wages
12,000.00
12,960.00
300.00
13,996.80
advertisement and promotion
1,000.00
Depreciation
travelling and transportation
expenses
5,225.00
300.00
600.00
100.00
administrative expenses
150.00
175.00
215.00
repairs and maintenance
150.00
352.00
450.00
generator and land rent expense
500.00
500.00
500.00
Insurance
100.00
109.00
110.00
containers and rappers
5,000.00
5,500.00
7,000.00
protective and clothes
500.00
-
250.00
legal fees
formation expenses
100.00
100.00
100.00
-
Utilities
total expenses
2,500.00
22,400.57
1,300.00
21,896.57
5,225.00
100.00
5,225.00
100.00
1,500.00
24,322.37
Page 35
LOAN REPAYMENT SCHEDULE FOR THE THREE PERIOD
INTEREST CHARGE 30%
TOTAL
LOAN CAPITAL
year
$
INTEREST AMT
$
$
REPAYMENT CAPITA
AMOUNT
$
BALANC
L PAID
E
$
$
1
10000
3,000.00
13,000.00
5,000.00
2,000.00
8,000.00
2
8000
2,400.00
10,400.00
6,400.00
4,000.00
4,000.00
3
4000
1,200.00
5,200.00
5,200.00
4,000.00
-
TRADE
RECEIVABLES
=
TRADE PAYABLES
year 1
TRADE PAYABLES
year 2
27.5%* Sales
=
21,230.00
22.01%* Direct
= cost
= 2,691.22
22%*DIRECT
= COST
= 14,786.00
Page 36
Page 37