Introduction
This is a document plan on our intention to set up a bakery in Ekiugbo Ughelli, Delta State, Nigeria the bakery will be known and JOLI-BEE BAKERY. Our mission is to operate a bakery using available resources in our locality to run a standard bakery that will specialise in baking of bread with high quality. For our business to be successful, we should design our operation in a way that is customer focus by creating programmes which will make our bread to be on everyone’s table in the entire Ekiugbo community and beyond by given special incentives to our distributors according to sales recorded.
Registration of the business
Before we begin operation, we shall ensure that our bakery is duly registered with the Corporate Affairs Commission (CAC). We shall use the name “JOLI-BEE BAKERY LIMITED.
Our value system
JOLI-BEE BAKERY will embrace the value system of customer focus, making optimum use of available resources and manpower to produce bread which will compete favourably in the Ekiugbo bread market and beyond. Shall pay special attention to our corporate responsibilities by setting up a foundation called the JOLI-BEE ORPHANAGE EDUCATION FOUNDATION which will cater for education of orphans by liaise with different orphanages our area of operations. The foundation will be funded by 5% of our annual profit.
It is obvious that the bakery business is a very challenging one considering the number of bakeries in the area and the economic situation of the country. In addition, we will have to compete favourably with some of the already existing bakeries in the area, especially, Godwill, Bakery, Yoma Bakery and Yummy Bakery, but we believe that by baking quality bread, effective distribution channels and paying attention to our corporate responsibilities through the JOLI-BEE FOUNDATION, in no time we shall win the heart of the people in our area of focus.
Our bread will target medium and low income earners, since they make up of about 90% of the population of our focus area. We shall make sure that we produce high quality bread and try to maintain our price within the average price of our competitors. This will believe will reduce our profit margin, but will surely drive the sales volume up to give us a very high turnover daily. Our operations that be focussed on making a profit of an average N2,000 on a daily basis which will add up to an average of N60,000 after expenses.
JOLI-BEE BAKERY will be a private limited liability company owned by shares. For a start the only shareholders of the company shall be Oyenike Lilian, Urojevwe Rebecca, Okpor Ruth Chineye, Olomu R. Unity, Inira Akpos, Efaghene Evelyn, Ejakpovi Philo and Beggi Regina. Admission of other shareholders shall be subject to further decision on the need and through votes according to number of shares of each of the shareholders.
None of the shareholders or their family member shall be qualified to work as staff of the company unless they have proven evidence of three (3) years relevant experience on the area of their interest and they shall undergo the normal recruitment process of the company.
JOLI-BEE bakery shall drive business through incentives to distributors based on their volume business with the company. An incentive of 1% of total amount of bread distributed shall be given to our distributor who do a volume higher that N100,000 in a month and 1.5% will be given to those who did more than N200,000 per month as incentive.
For a start, we will required the sum of N10,000,000 as start up capital which shall be divided into 1 million shares which means that the shares of JOLI-BEE Bakery Limited shall be N10 per share.
For a beginning, the staff strength of the company shall be based on operational demands and volume of businesses. In essence, the volume of business will determine the number of staff working at the company at any given time.
Business description
Running a bakery in Ekiugbo will certainly be very challenging but focuses and dedication will surely be very profitable. There are various business challenges in running a bakery in Ekiugbo, bearing in mind that many bakeries have tried and not been successful before. The start up with a business such as ours is risky because it does require certain equipment that other businesses do not Other obstacles include the permits and licenses that we would need to get in order to operate a bakery such as NAFDAC, but once we have passed these beginning challenges, we believe that our business will head in a positive direction. We shall focus mainly on the baking of quality bread and aggressive marketing strategies through our distributors and other channel which shall be adopted based on the dynamics of the market and competitions.
Objectives
JOLI-BEE Bakery major objective will be to bake quality bread, focus on aggressive marketing of the bread through a well motivated group of distributors and paying attention to our corporate responsibilities to portray the companies in as a responsible company which is dedicated to provide quality bread and contribute to the general well-being of the society at large.
Location
The location of the bakery which is Ekiugbo is certainly a very strategic location, since it is a suburb of Ughelli with good network of roads. The will give the bakery opportunity to attract qualified workforce, get easy access to raw materials and enable effective distribution of finished products.
Our baking time
The baking process shall take place any time of the day based on market projections and turnover. Workers shall be running shift of eight hours daily. We shall be opening for opened for non-baking business by 5.30 a.m. – 6.30 p.m. Monday through Saturday, and run through a business day until
Mission/vision statement
JOLI-BEE mission statement: Our mission is to serve Ughelli Metropolis with high quality bread and a very affordable price.
Vision statement: JOLI-BEE hopes to expand its target area to the entire Delta State and beyond with the baking of quality bread and an affordable price.
Core values
Our core values are customer focus and quality products
Competitive analysis
In Ekiugbo, there are no bakeries in the community and its environs. However, all the supermarkets and small shops sell bread baked by Godwill, Bakery, Yoma Bakery and Yummy Bakery. All these bakeries are located in outside the community and in some cases they do not promptly distribute bread to the community and its environs leading to scarcity of bread for some days.
Based on this reason we strongly believe that baking of quality bread that will be selling at an affordable price and being in the locality of our target market will certainly give us a competitive edge over our competitors. Our products would be fresher and of higher quality, thus superior to the ones of the other bakeries since they will be delivered faster when they are still fresh.
Management team plan
The day to day operation of JOLI-BEE operation shall be headed by a manger who must be a graduate of Business Administration and with at least five year relevant experience at the time of recruitment.
The recruitment of the other staff shall be entrusted to the managing director which the approval of the shareholders who will be headed by the chairman who shall be elected for a period of five years based on the votes of the share holders.
Marketing plan
JOLI-BEE Bakery shall sell bread to it target market through a list of highly motivated independent registered distributors. However, the company will undertake the responsibilities of advertisement through newspapers, especially the Urhobo Voice which is widely read in the area of operation. The bakery shall also sell bread at a discount of 1% of the normal price to individual shop owners who decide to come to the bakery to directly from the bakery. This will serve as incentive for their transport expenses.
Target market: The target market for JOLI-BEE Bakery is medium and low income earns who make up about 90% of the entire population of Ekiugbo and Ughelli metropolis.
Need
There is no other bakery in Ekiugbo and the bakeries that supply bread to Ekiugbo are located far away. They also have poor distribution strategies leading to a situation where there is scarcity of bread in the locality for some period of time. And even when they distribute, their bread will most of the time not be fresh due to the fact that they normally travel very long distance before reaching Ekiugbo and Ughelli metropolis.
Pricing
The price of our bread shall be the average price of our competitor. Though we are going to produce bread with a higher quality, we shall hang on to a lesser profit but encourage higher turnover than our competitor, thereby making a higher profit in the long run. The following shall be our proposed price of some of the brand of bread we hope to produce:
| S/N | Brand | Proposed unit price (N) |
| 1 | Eco-Joli | 40 |
| 2 | Deli-Joli | 60 |
| 3 | Grad-Joli | 80 |
| 4 | Super-Joli | 100 |
| 5 | Exclusive-Joli | 120 |
Distribution
Our major distribution shall be through a list of highly motivated independent registered distributors. However, the company will undertake the responsibilities of advertisement through newspapers, especially the Urhobo Voice which is widely read in the area of operation. The bakery shall also sell bread at a discount of 1% of the normal price to individual shop owners who decide to come to the bakery to directly from the bakery. This will serve as incentive for their transport expenses.
Financial plan
Capital requirement and equipment
The level of investment is based on the objectives of the project
Required capital investment
| Capital Investment Item | Qty | Unit price (N) | Total (N) |
| Land & Building | 1 | 3,000,000 | 3,000,000 |
| Firewood oven | 1 | 300,000 | 300,000 |
| Mixer | 1 | 300,000 | 300,000 |
| Power system | 1 | 200,000 | 200,000 |
| Trays | 100 | 1,000 | 100,000 |
| Tins (1kg size) | 100 | 100 | 10,000 |
| Tins (1/2 kg size) | 100 | 50 | 5,000 |
| Furniture and fittings | – | 50,000 | 50,000 |
| Delivery van | 2 | 2,000,000 | 2,000,000 |
| Slicing machine | 1 | 20,000 | 20,000 |
| Other tools | – | 20,000 | 20,000 |
| Total | 6,005,000 |
Production and operating costs
(a) Direct materials, supplies and costs in N
| Cost of items | Qty/day | Unit cost | Pdn cost/day | Pdn cost/wk | Pdn cost/mth | Pdn cost/yr |
| Direct costs | ||||||
| Wheat flour | 2 bag | 1,500 | 3,000 | 18,000 | 72,000 | 864,000 |
| Salt | 1 kg | 20 | 20 | 120 | 480 | 5,760 |
| Sugar | 1 kg | 100 | 100 | 600 | 2,400 | 28,800 |
| Yeast | 6 kg | 20 | 120 | 720 | 2,880 | 34,560 |
| Improver | 4 kg | 20 | 80 | 480 | 1,920 | 23,040 |
| Water | 200 l | 0.5 | 100 | 600 | 2,400 | 28,800 |
| Vanilla | 1 btl | 10 | 10 | 60 | 240 | 2,880 |
| Cooking fat | 2 l | 30 | 60 | 360 | 1,440 | 17,280 |
| Packaging materials | 10 pkts | 20 | 200 | 1,200 | 4,800 | 57,600 |
| Other materials | 1,000 | 7,000 | 28,000 | 336,000 | ||
| Sub-total | 4,690 | 29,140 | 116,560 | 1,398,720 |
General cost (overheads)
| Cost items | Pdn cost/day | Pdn cost/wk | Pdn cost/mth | Pdn cost/yr |
| Salaries | 5,000 | 30,000 | 120,000 | 1,440,000 |
| Utilities | 700 | 4,200 | 16,800 | 201,600 |
| Sales & distribution | 2,000 | 12,000 | 48,000 | 576,000 |
| Administrative Expenses | 1,000 | 6,000 | 24,000 | 288,000 |
| Cleaning and toiletries | 200 | 1,200 | 4,800 | 57,600 |
| Miscellaneous | 500 | 3,000 | 12,000 | 144,000 |
| Depreciation | 200 | 1,200 | 4,800 | 57,600 |
| Sub-total | 9,600 | 57,600 | 230,400 | 2,764,800 |
Total operating cost for a year = 1,398,720 + 2,764,800
= N 4,163,520
Ø Production costs assumed 288 days per year with daily capacity of producing 3,000 loaves of bread.
Ø Depreciation on fixed assets assumes 4-years life of assets written off at 25% year for all assets.
Ø Direct costs include materials, supplies and other costs that directly go into production of bread
Ø Total monthly days assumed are 24-days.
Ø The valuation currency used is Naira.
Production costs
| BRAND | Qty/day | pdn unit cost/day | pdn cost/day | pdn cost/wk | pdn cost/mth | pdn cost/yr |
| Eco-Joli | 1210 | 20 | 24,200 | 145,200 | 580,800 | 6,969,600 |
| Deli-Joli | 710 | 30 | 21,300 | 127,800 | 511,200 | 6,134,400 |
| Grad-Joli | 460 | 40 | 18,400 | 110,400 | 441,600 | 5,299,200 |
| Super-Joli | 310 | 50 | 15,500 | 93,000 | 372,000 | 4,464,000 |
| Exclusive-Joli | 310 | 60 | 18,600 | 111,600 | 446,400 | 5,356,800 |
| Total | 3,000 | 200 | 98,000 | 588,000 | 2,352,000 | 28,224,000 |
Revenue
| BRAND | Qty/day | pdn unit cost/day | pdn cost/day | pdn cost/wk | pdn cost/mth | pdn cost/yr |
| Eco-Joli | 1210 | 40 | 48,400 | 290,400 | 1,161,600 | 13,939,200 |
| Deli-Joli | 710 | 60 | 42,600 | 255,600 | 1,022,400 | 12,268,800 |
| Grad-Joli | 460 | 80 | 36,800 | 220,800 | 883,200 | 10,598,400 |
| Super-Joli | 310 | 100 | 31,000 | 186,000 | 744,000 | 8,928,000 |
| Exclusive-Joli | 310 | 120 | 37,200 | 223,200 | 892,800 | 10,713,600 |
| Total | 3000 | 400 | 196,000 | 1,176,000 | 4,704,000 | 56,448,000 |
Profitability analysis table
| Profitability item | Per day | Per week | Per month | Per year |
| Revenue | 196,000 | 1,176,000 | 4,704,000 | 56,448,000 |
| Less: Production Cost | 98,000 | 588,000 | 2,352,000 | 28,224,000 |
| Less: Operating Cost | 9,600 | 57,600 | 230,400 | 2,764,800 |
| Profit | 88,400 | 530,400 | 2,121,600 | 25,459,200 |
Source of fund
Funds from shareholders at the rate of N10 per share
Corporate responsibility
Donation to Joli-Bee Orphanage Education Foundation
5% of annual profit = N 1,272,960
Share of profit
30% of profit shared to shareholders
Investments
10% shall be invested in City-Scope Flour Limited
10% shall be invested in Covenant Suite & Hotels Limited.
10% shall be invested in First Bank of Nigeria Plc Shares
10% Shall be Placed of Fixed Deposit Account at Zenith Bank Plc at the rate of 12% per annum.
Company reserve
25% shall be left in the company reserve account at First Bank Plc Patani Road Branch.
Conclusion
Bread is a very common food eaten by almost every family in Nigeria and Ughelli metropolis in particular. It is generally accepted as a very nutritive food and it is taken by most people in the morning along side tea as their breakfast and as a fast and ready to eat meal at any other time of the day, especially by people who are either very busy or too lazy to cook. Bread making is a business that one can start in Nigeria at different level. One can even decide to start from the home, using the kitchen oven and other available resources in the home. This is certainly a very lucrative business for entrepreneur in Nigeria.
References
Cayenne Consulting (2011). Cayenne Consulting LLC Ten Big Questions”. London: Cayenne Consulting LLC.
Davis, K. (2007). Creating a Business Plan: Expert Solutions to Everyday Challenges. United States: Harvard Business School.
Eric, S. Siegel, R. Ford, J. & Bornstein, M. (2008), ‘The Ernst & Young Business Plan Guide’. New York: John Wiley and Sons.
Pinson, Linda. (2012). Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and Securing Your Company’s Future (6th Edition). Chicago: Dearborn Trade.
