How Creativity, Innovation, and Entrepreneurship Are Related? Essay

RABBIRRA ener take inic postscript inwardness plans to leverage its line of crossings model to satisfy three elemental consumer necessarily information, monetary value forcefulness and quality in a single pop out. As far as information generation is concerned, RABBIRRA Mobile Accessory Center plans to use opinion leaders to generate extensive reviews on popular fruits. Furthermore RABBIRRA mobile accessory center plans to offer attractive incentives for clients to sign up on our web site and review products.We also plan to import high quality of china model mobile accessories and other countries model. 2. Cost effectiveness With its expertise in wholesaling and all its suppliers based in China, RABBIRRA mobile accessory center anticipates margins of 30-60% on its products and can react to new entrants by offering similar products at negligible margins. 1. 3 Location Locating the business forget be in East showa at Gedo City kebele 01 near(a) Chaliya Hotel. The reason for chosen this location has been the following criteria.In this location we get all facilities easily such as transport, water supply, electric power supply and others, the house economic rent is very less apostrophize, we get a lot of customers because around the location there is no more other business to operate this activities. It is comfortable to direct markets . the location also enables the business to cover a large and rapidly developing customer populace. E-Commerce The business will make an effort to enhance its gross revenue through a serious and utilityous website in order to attract customers that be reluctant to do business with large companies. 1. 4 Market worldThe market area of our business plan to selling our mobile accessories is in the center of Gedo City kebele 01. It has a lot of population around here and it is near to Chaliya Hotel. In this area there are a lot of schools, building constrictions, and social and religion institutes, other market centers, hotels and restaurants this give a better advantage of selling our products. 1. 5 Market Segmentation RABBIRRA Mobile Accessory Center will focus onfive customer groups, bearing in header that it is quite customary today to oblige more than one mobile phone per family * Children in the age group of 14-17 grades old Students * General populace * Professionals * Service organizations and companies that need to be in constant communication with their employees. Customer potential Growth Year 1 Year 2 Year 3 Children(14-17 days) 3% 90,000 92,700 95,481 Student 2 % 50,000 51,000 52,020 Professions 2 % 40,000 40,800 41,616 General public 2% 250,000 255,000 260,100 Operating service comp either 4% 40,000 41,600 43,264 Other 1% 30,000 30,300 30,603 essential 2. 29% 500,000 511,400 523,084 Table 1. 1 Main customers of RABBIRRA Mobile Accessory Center . 6 entire demand The following table is show demands of the product per month and pre year- wares Demand per month(quantity) Demand pe r year(quantity) Battery 100 1200 battery charger 90 1080 retrospect cx 1320 Screen protector 50 600 Case 55 660 speak 95 1140 Adapter 75 900 telephone set 98 1176 Head countersink 80 960 Cable 60 720 Modem 45 240 Audio accessory 48 576 Table 1. 2 Main product demands of RABBIRRA Mobile Accessory Center In general total demand of our business is increased based on as we see that he topic of customers are increases and they will satisfy by our product and the place of the business is comfortable for the market. 1. 7 Market Share RABBIRRA Mobile Accessory Center has set modest goals for gains in market share as can be seen from the chart down the stairs. Starting with a market share of 15%, RABBIRRA Mobile Accessory Center plans to capture 24% of the market by 2016. % 30 25 20 15 10 0 Year 1 year 2 year 3 Fig 1. 1 Market sharing of RABBIRRA Mobile Accessory Center 1. 8 Selling harm Many product sellers are struggle with selling price, and we are regularly asked how we work it out.As much as we want to and the selling price formula is based on Rate-Plus regularity. The selling price of from each one product is the following- Products Purchasing price ( zoom a farsighted) Profit ( percent) Profit ( zoom along) Selling price(birr) Battery 73. 45 10. 27 7. 55 80. 00 Charger 24. 50 22. 45 5. 5 30. 00 Memory 65. 70 14. 15 9. 30 75. 00 Screen protector 43. 80 14. 15 6. 20 50. 00 Case 17. 00 17. 65 3. 00 20. 00 Cover 21. 50 16. 28 3. 50 25. 00 Adapter 18. 60 18. 28 3. 40 22. 00 Earphone 23. 00 21. 74 5. 00 28. 00 Headset 85. 40 17. 38 14. 60 100. 00 Cable 35. 0 12. 04 4. 30 40. 00 Modem 53. 65 11. 84 6. 35 60. 00 Audio accessory 92. 00 19. 58 18. 00 110. 00 Table 1. 3 Product selling price of RABBIRRA Mobile Accessory Center 1. 9 Sales Forecast Sales forecast displayed here is very although we aim very high, we decided to show a very slow growth and rewrite the plan on a yearly basis. As a rule we expect to expand the volume much more rapidly Year 1 Products A mount (quantity) Price (birr) Battery 1,200 96,800 Charger 1,080 32,400 Memory 1,320 99,000 Screen protector 600 30,000 Case 660 13,200 Cover 1,140 28,500Adapter 900 19,800 Earphone 1,176 32,928 Headset 960 96,000 Cable 720 28,800 Modem 540 32,400 Audio accessory 576 63,360 numerate 10,872 573,188 Table 1. 4 Product Sales Forecast of RABBIRRA Mobile Accessory Center (year one) Year 2 Products Amount (quantity) Price (birr) Battery 1344 107,520 Charger 1209 36,270 Memory 1478 110,850 Screen protector 672 33,600 Case 739 14,780 Cover 1276 31,900 Adapter 1008 22,176 Earphone 1317 36,876 Headset 1075 107,500 Cable 806 32,240 Modem 605 36,300 Audio accessory 642 70,620 list 12,171 640,632 Table 1. Product Sales Forecast of RABBIRRA Mobile Accessory Center (year two) Year 3 Products Amount (quantity) Price (birr) Battery 1505 120,400 Charger 1354 40,620 Memory 1655 124,125 Screen protector 753 37,650 Case 828 16,560 Cover 1429 37,725 Adapter 1128 24,816 Earphone 1475 41,300 Headset 1204 120,400 Cable 903 36,120 Modem 678 40,680 Audio accessory 719 79,090 Total 13,631 719,486 Table 1. 6 Product Sales Forecast of RABBIRRA Mobile Accessory Center (year three) Fig 1. 2 Product Sales Forecast of RABBIRRA Mobile Accessory Center 1. 10 Promotion measuresPrimarily when we begin agreement selling the product we sell that product price without including our get and other expenses sell the product only the represent of the purchasing product. In addition to this we advertisement by satisfied customers, use of posters, Brochures, billboards and regular trigger off supply by the manufacturer. 1. 11 Marketing Strategy short-term marketing strategies are those that bringwill bring usa temporary progress in traffic. Although these techniques are very important toour over-all plan, they are only a temporary traffic source and must not be solely relied upon.Short-term marketing strategies include * Purchasing Advertising * Bulletin Boards * Search Engines Long-term marketing s trategies are those that will bringus a steady pour out of targeted traffic over time. These strategies will continue to produce results even years down the road. Long-term marketing strategies include * Decide-in Lists * Free gift * Content By creating and implementing a fit marketing strategy, using both short-term and long-term strategies,RABBIRRA Mobile Accessory Centerwill drive a steady flowing of targeted traffic to our website.Using this simple formula when creatingour Internet marketing strategy and excelling at all three, we hope toguarantee our success. Our short-term marketing strategy will focus heavily on cut-rate gross sales promotion, niche positioning in the market and customer service with loyalty and retention in sales. Our promotions will unendingly stay in tune with our company objectives and mission statement. Sales Strategy Constructing our Sales Strategy we shall follow the following steps Sales Success Requires readying we shall formulate our sales str ategy and tactics to achieve our sales success.Analyze Our Potential we shall step through a structured process that will fixateus for the development of our sales strategy. Strategize Around Strengths the description of our sales activitywill be analyzed producing a report that reveals factors impacting our sales potential. Develop Our evasive action we shall receive guidance to develop a comprehensive tactical plan to achieve our success. Measures Our Success we shall constantly develop key measurements that mark the progress of pecuniary estimates that guide our growth.Employ an Action Plan for Success we shall provide our sales force a clear tactical plan that is also aligned with counsellings strategic objectives. The sales strategy of RABBIRRA mobile accessory center is simple. The key to customer satisfaction is having the product andservicesthat meet the customers needs. A crucial part of that is to also arouse knowledgeableemployees to help customers quickly find what they want. 1. 12 Marketing cipher RABBIRRA Mobile Accessory has a high quality products compare to our competitors.We have a skillful promotion is social networks other advertising business card to peoples, by allocating brochures, Billboards and other tools. Since those be that are used in our promotion are not too much apostrophizely because we develop by ourselves. In addition to this promotion in social networks in not costly it is free to post our products to advertise. Totally we for month marketing budget of birr 40 or annual budget of birr 480. Chapter two 2. Production 2. 1 Production Process The production process is a component appearing under the operating plan of the overall of our business plan.The production process is the process a product or service takes in order for it to become ready for customers to buy. In our business we have no production process since we are not going to produce production materials instead we are going to share the product as a centrali zed organ. To progresses our business the following things should be fulfilled. 1. Selecting the appropriate place to sale our products 2. Having enough money to do the business 3. Decide what customers available for our production 2. 2 Fixed Capital Fixed capital Building 11,400( each year in birr) EquipmentComputers 8,000 ? 1 =8,000 3 Shelves 2,000 x 3 =6,000 3 tables 500 x 3=1,500 4 chairs 4504=1,800 1 speaker 6501=650 2 adapters 602=120 2 calculators 902=180 Total laid addition 29,650 2. 3 Life of fixed capitalsThe life of the fixed building is undetermined because it is not owned by us. The life of computing devices, shelves, tables, speakers, chairs and adapters are more than 10 years because we can maintain computers, speakers and adapters when it fails and we patch chairs and tables when it breaks. The life of a shelf is more than 10 years because it is regularly used when we are putting materials. The annual derogation cost, assuming no scrap value, will therefore be 5 % of 11,400 (Building)Birr 570 10% of 18,250 (equipment) Birr 1,825 Annual depreciation cost Birr 2,395 . 4 aid and repairs Because of simplicity of equipment the worker of the shop can maintain and repair the things that needed to repair. When we say mobile accessory sales we can conclude that maintain and repair the mobile accessories, such as mobile cover, changing mobiles ice, screen protector and and so on 2. 5 Source of Equipment Source of our equipment are the super market, Production suppliers, and etc. 2. 6 Planed capacity The capacity to sale equipment should be greater than the existing one. Also attraction of customer should be better than the others. 0% of equipment should be sale per a day. 50% per a week and 90% per a month. 2. 7 Future capacity In the future we are going to increase customer by increasing the quality of our service more and more. After two year we will open the branch of our Business in appropriate place and we will open job opportunity for jobles s persons. 2. 8 Terms and conditions of purchase of Equipment There is no raw material we need since we are not producing by our self simply we get or purchase the equipment from the organization of the product. 2. 9 Factory location and layoutOur Mobile accessory Center will be located in one room which is used for selling room. The total size of the rooms will be on 15sq. ft. We does not use any other materials therefore there is no estimation of cost of raw materials and their availability. 2. 10 moil The manager by himself can participate in workings and manages other workers and equipment. And also supervise the entire of the work. 2. 11 Cost of labor The owner will pay will pay himself a wage of birr 1000 and his assistant will be paid birr 600 per month. The other labor get 200 birr and mediate labor Birr per month 5 Owner / manager 700 x5=3,500 Sweeper 200 x1=200 Total 3,700 Direct labor Birr per Month Worker 3501 = 350 Total labor cost 4,050 2. 12 Labor availability Work ers available all the time since there are more educated persons in Ethiopia.So we can get labor whenever we need. 2. 13 Labor productivity The wage for workers will paid on holly day depending on condition of market 2. 14 Factory overhead Expenses Factory overhead in our business consists of the following things Per Month Birr Indirect labor 3,700 Electricity and telephone 100 Transport of Materials 200 Total factory overhead 4,000 2. 15 Production cost 1.Direct labor Birr per month Worker 350 x1= 350 2. Factory overhead Expenses Birr per month Indirect labor 3,700 Electricity and telephone 100 Transport of Materials 200 Total factory overhead 4,000 Total production cost 4,350Chapter Three 3. Organizations and Management 3. 1 Form of Business The business will be registered under the name RABBIRRA Mobile Accessory Center as a sole proprietorship and owned by Mr. PeterosTona, RebumaYadasa, Shiferaw Tegen, SadikAwol and Siraj Ahmed . It will have its business address located at West showa in Gedo City. 3. 2 Organizational Structure The proprietors have their individual obligation and burdens in successively the business consecutively the business. General music director Mr. PetrosTona, Finance manager Mr.ShiferawTegen, Marketing and Purchasing Manager RebumaYadasa, Seller Mr. SadikAwol and Mr. Sirage Ahmed as main variance of work and when work loaded all members is work as Seller. Two part time will be hired for customers contact and reservation the needs of the regulars. When work load is happens all owners can cover each other tasks to minimize overload of the work. Fig 3. 1 Organizational Structure General Manager Mr. Petros Tona Marketing and purchasing Manager Mr. Rebuma Yadasa Finance manager Mr. Shifera Tegen Seller Mr. SadikAwol and Siraj Ahmed Worker (To be hired) 3. Business experience and qualifications of the entrepreneur Most of the proprietors do not have a proper way business experience but our satisfaction we learn several thing about busin ess in two subjects. The primitive of this satisfaction is we learn entrepreneurship and small business management movement. In this course we have a good knowledge and confidence to work this business. The other course we take Economics, it related to business. All entrepreneurs will get BSC degree in computer science from Jimma University. They took varies major and common course during the 4 years program. approximately of the major courses are Calculus , discrete math, economics advanced programming, object oriented programming, fundamental of database system, Internet programming, advanced database system, computer graphics, data communication and computer network, wireless communication and mobile computing, artificial intelligence, distributed system, multimedia system, computer protective cover, formal language theory, compiler design, complex theory, statistics and others. 3. 4 Pre- subroutine Activities We listed down the following activates to be started in the lead w e can activate our business 1.Process the steps needed for business 1 day 2. Preparing expressing the business plan 5 weeks 3. Applying for a loan and citation 3 weeks 4. Contact product suppliers 1 week 5. Employment labor 2 days 6. Purchasing product 4 days 7. Setting up the product 1 day We intended to start the operation approximately five months after our credit application, eight weeks after release our loan.Table 3. 1 Giant chart Pre-Operation Activities Time Table (in weeks) 1 2 3 4 5 6 7 8 9 10 Registering the business Preparing the business plan Applying for a loan and approval Contact equipment suppliers Construction the factory Hiring labor Equipment purchasing RABBIRRA Mobile Accessory Center pre-operation activities 3. 5 Pre- Operation Expenses Our Pre-operation is that we have to decide the place properly to progresses our business.Pre-operating Expense birr Registration cost 200 Electricity 150 Transportation cost 100 Total Pre-operating expense450 3. 6 Office equipment We will just buy three inexpensive tables which are suitable for computers and four chairs, calculators and stabilizer. All this costs birr 18,250.The periodic and annually depreciation for this equipment will be birr 22and 1,825 respectively. 3. 7 Administrative Expense The entrepreneur wants to keep our cost low in order to be competitive. Our monthly administrative expense consists of Birr Treasure allowance (wife) 290 Depreciation of office equipment 22 Supplies and communication 30 Electricity 200 Total 542 Chapter Four 4 Financial Plan 4. 1 Project cost 4. 1. 1 Fixed assets Building 11,400(Annually in birr) Equipment18,250 Total fixed assets29,650 29,650 4. . 2 Pre-Operation Expense 450 4. 1. 3 works Capital Monthly purchasing price of each product= monthly amount of each product x purchasing price of each product Annually purchasing price of each product= monthly amount of each product x purchasing price of each product x 12 Products Monthly amount Purchasing price(birr) per month Annually amount Purchasing price(birr) per year Battery 100 7,345 1200 88,140 Charger 90 2,205 1080 26,460 Memory 110 7,227 1320 86,724 Screen protector 50 2,190 600 26,280 Case 55 935 660 11,220 Cover 95 2,042. 50 1140 24,510Adapter 75 1,395 900 16,740 Earphone 98 2,254 1176 27,048 Headset 80 6,832 960 81,984 Cable 60 2,142 720 25,704 Modem 45 2,414. 25 240 28,971 Audio accessory 48 4,416 576 52,992 Total 906 41,397. 75 10,872 496,773 The cost of one month of Purchasing product 41,397. 75 Values of each needed for operation. This will be The cost of one month of labor and overhead 8,050 Total working capital49,447. 75 49,447. 75 Total capital want 79,547. 75 4. 2 Financing plan and loan RequirementInitially individually we collect 8,500 birr for each of us which results 42,500 birr covering the cost of building, equipment, labor, factory overhead and pre-operating expense. A loan will be required for the purchasing of product. Particulars Owners fair-mindedness Loan Total Fixed Capitals (in birr ) Building 11,400 - 11,400 Equipment 18,250 - 18,250 Pre-operation expense 450 - 450 Working capital 12,400 37,047. 75 49,447. 75 Total 42,500 37,047. 75 79,547. 75 Percent 53. 43 % 46. 57% 100% 4. 3 security for loan All of owners have a land which is valued at birr 50,000.This land is pledge as security against the loan. 4. 4 Profit and bolshy statement Birr Sales of 10,872 products with form table of year one sale 573,188 Less The cost of one month of Purchasing product x 12 496,773 Labor birr 350 ? 12 4,200 Overhead birr 4000 ? 12 48,000 548,973 GROSS PROFIT 24,215 Less Marketing and administration cost birr 40 ? 12 +54212=480+6504 6,984 OPERATING PROFIT17,231Less interest expense 3,705 NET PROFIT BEFORE TAX13,526 For the next three years, the projected income statement appear below Projected income statement (birr) Year 1 2 3 Sales target 10872 12171 13631 Capacity 76% 88% 100% Sales 573188 640632 719486 Less Labor 4200 4200 4200 Overhead 48000 48000 48000 Manufacturing 52,200 52200 52,200 Gross Profit 24,215 91,659 170,513 Less Mktg&Adm cost 6,984 6,984 6,984 win Profit Before interest and tax 17,231 84,675 163,529 Less Interest 3,705 2,470 1,235Net meshing before tax 13,526 82,205 162,294 Accumulative Profit 13,526 95,731 258,025 4. 5 Cash flow statement Projected cash flow statements (Birr) Particulars Pre-operation period Year 1 2 3 Cash Inflow Equity 42,500 - - - Borrowing 37,047 - - - Cash sales * 573,188 640,632 719,486 Total Cash Inflow 79,547 573,188 640,632 719,486 Cash Outflow Pre-operation expense 450 - - - Purchase of fixed asset 29,650 - - - Purchasing product 496,773 556,385 623,151 Direct Labor - 4,200 4,200 4,200Factory/operation Overheads ** - 48,000 48,000 48,000 Market expenses - 480 480 480 Administrative expense ** - 6,504 6,504 6,504 Interest expense - 3,705 2,470 1,235 Loan amortization - 12,349 12,349 12,349 Total cash outflow 30,100 572,011 630,388 695,919 Net cash Inflow(outflow) 49,447 1,177 10,244 23,567 Cash Balance Beginning - 49,447 48,270 58,514 Cash Balancing Ending 49,447 48,270 58,514 82,081 4. 6 Balance sheet Projected balanced sheet particular Pre-operating period Year 1 2 3 Assets Current asset Cash 49,447 48,270 58,514 82,081 Total current assets 49,447 48,270 58,514 82,081 Fixed assets Building 11,400 11,400 11,400 11,400 Equipment 18,250 18,250 18,250 18,250 Net fixed assets 29,650 29,650 29,650 29,650 Total fixed assets Other assets Pre-operation expenses 450 Total assets 79,547 79,547 79,547 79,547 Liabilities Current liabilities Loans payable - 12,349 12,349 12,349 Total current liabilities 12,349 12,349 12,349 Long term liabilities Loan payable 37,047 24,698 12,349 -Total long term liabilities 37,047 24,698 12,349 - Owners equity Capital beginning 42,500 42,500 42,500 42,500 Accumulated capital - 42,500 42,500 42,500 Add net profit after tax 13,526 82,205 162,294 Total owners equity 56,026 Total liabilities and equity 79,547 79,547 79,547 79,547 4. 7 Loan Repayment document The loan of birr will be paid over a 3 year period. The repayment schedule is as follows Year Amount principal outstanding of installment due at 10% Interest amount Total 1 37,047 12,349 3,705 16,054 2 24,698 12,349 2,470 14,819 12,349 12,349 1,235 13,584 4. 8 Break even Point (BEP) The brake even point can be calculated as follows Birr Annual sales 573,188 -Annual Fixed cost Owners salary birr 5 ? 700= 3500 /month 42,000 Annual interest 3705 Annual factory depreciation ,395 Other overheads 300/month 3,600 Marketing and administrative cost 6,984 58,684 Annual Variable Costs Direct labor 350/month 4,200 Purchasing product 496,773 500,973Annual Sales ? Annual Fixed Cost = BEP (Annual Sales) Annual sales annual variable Costs 573,188 x 58, 684 ______________________________________________________ __ 573,188 -500,973 =465,789 BEP (Annual production) 465,789 BEP percentage Annual fixed cost x 100 _______________________________________ Annual sale annual variable cost =BEP (percentage) 58,684 x 100 _________________ 573,188- 500,973 = 81. 26% BEP in annual sales = BEP% x annual sales 81. 26 x 573,188 =465,789 4. 9 Return on investing (ROI) The ROI for this project is as follows Annual Net Profit 13,526 ____________________________ = ________________ x100 Total Capital Requirement 79,547 = 17% ROI is therefore, 17%The return on owners investment (RIO) is Annual Net Profit 13,526 ____________________________ = __________ x 100 Owners investment 42,500 =31. 83% RIO is, therefore, 31. 83%.