The benefit of feasibility study

Summery

 Ye’Abat knitting plc is the seventh men’s, women’s and children’s sock manufacturing industry next to these six privately owned manufacturers in the country this newly introduced business plans to come up with  through the production of different sizes sock that are used as a casual and occasional sock products in the country.

 Through generous industries capital investment plan, the business will exceed its customers’ expectations.  These targeted customers will be willing to pay for the product because our product-customer relations is done according to the need that come from the market not for the product to the market for that reason if the product is delivered based on the need from customer since the product is acquired by the customers in their day to day life.

The company’s projected growth rate is very high each year with respectable profit margins as a percentage of sales.  Ye’Abat Knitting plc will be a home based business with four individual as partnership.  At start up the business need ETB 6,584,774.40 from this amount the cost of machinery covers 5,487,312.00 and 20% of from the lease amount working capital covers 1,097,462.40 both in the form of lease financing and owners contribution. The business will have 30 permanent and temporary employees. 

This profile envisages the establishment of a plant for the production of socks and stockings with a capacity of 1,200 This profile envisages the establishment of a plant for the production of socks and stockings with a capacity of 1,200 tone’s (1.2 million pairs) per annum. The demand is expected to reach at _______ tones by the year 2020. The plant will create employment opportunities for 20 persons. The total investment requirement is estimated at about Birr _____ million, out of which Birr _________ million is required for plant and machinery.

Some of the management positions in the PLC. will be full filled  by the owners themselves, and the rest will be employed from the market.  The general manager of the business partners association will be Mr. Nurelegn Zelalem, who has a BA degree in Accounting and MBA student having more than eight years’ experience in different governmental and privet institutions. He will be responsible for all managerial and leadership activities that the company acquire to grow such as financial risks and benefits, scheduling, training, and customer care management.  The Association will also have one finance manager, who is a graduate in accounting with over 4 years experience in the field and will be responsible for performing financial reports, prepare financial analysis, control insurance payables, control loan payables and short term loan needs etc. There will also be an accountant who will be responsible for the inventory, cash collection, and preparation of financial reports and documentation of financial documents.  An office manager, who has a diploma in secretarial science, will be assigned. She/he will be responsible for supervising the overall administrative activities of the office and subordinate staff.

1.   Company location and facilities 

The company is located in B.D/A.A town, The location is selected mainly because of the high potential and availability of the main raw material sellers and finished good buyers, The potential of the raw material here is estimated to have a supply by the time of shortage, and can continue the same way in the second rotation. Transportation of the raw material from supply site to the factory and finished products to the market is very easy in that. About 200 KW is an estimated power requirement for the plan, and this is easily available here as the electric power line from to the capital city Addis Ababa station crosses the area with substation at 5 km from the factory and the factory will start the business through rental which full filled the requirement os the electric power. Land for the mill and dumping of raw material and finished products is already acquired on rent at the location.  

1. Vision of the Company

Ye’Abat Kniting plc. vision in the sector is to see minimized currency spending and import substituted by local manufacturing with maximized product quality and satisfied local market. In addition, in addition to this generating foreign currency to the country and maximizing company’s profit through exported product market.

1.    Mission of the company

Ye’Abat Kniting plc. mission is four-fold, with each being as integral to our success, as the next level:-

• Product Mission - Provide customers the finest quality product and delivery products  in the most efficient time.
• Environmental Mission – It is known that waste is ecpected as long as  though the production excist for that reason our waste products will be process further for house hold products such as “askopa”
• Community Mission - Provide community support through learning process and creat jop opportunity for the community.
• Economic Mission - Operate and grow at a profitable rate through sound economic decisions.

YE’ABAT KNITING PLC. mission is to provide the customers with reliable product and delivery service in an efficient, completely trustworthy, and professional manner.  It exists to attract and maintain customers.  When it adheres to this maxim, everything else will fall in place.  The product will exceed the expectations of its customers.

PART – Two

1. SWOT Analysis

1.   Strength and Weakness

The new business entrant is not intended to provide a product without any base.  As manufacturer, design is still pretty much of an art, understanding of marketing, human relations and technology as well as operation needs skill and techniques.  The requirement can be fulfilled by the experience of the new business manager.  In addition to experienced manpower, the other strength of the business is the advantage of getting opportunity to use rental sheds for production and the use of lease financing which is designed by the bank helps the new business to start in easy way which minimize the cost of equity contribution.  Serving the customers on credit base, can motivate those who have temporary cash shortages in their day to day business  activity to order at any time of the month can be seen as strength of the new business. Moreover, providing the quality and standard of the products are also an indicator of the strength of the new venture. 

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