JIMMA UNIVERISITY

DEPARTMENT OF MANAGEMENT
INDIVIDUAL ASSIGNMENT FOR THE COURSE OF
ENTERPRENEURSHIP

BUSINESS PLAN FOR ABF DRONE MANUFACTURING COMPANY

Prepared by: - ID no

1 Amanuel Fikadu-------------------------------------------------------Ru 2370/12

Submitted to; -Mr. Bedasa

Submission date; -24/07/2013

JIMMA

Ethiopia 2013
 Uniqueness is our difference!!!!!!!!

|Page
TABLE OF CONTENT page

1. INTRODUCTION-----------------------------------------------------------------------------------1

I. Venture Defined-------------------------------------------------------------------------------1

II. Marketing Characteristics------------------------------------------------------------------1

III. Financial Summary---------------------------------------------------------------------------1

IV. Statement of Confidentiality Report------------------------------------------------------1

2. EXECUTIVE SUMMARY------------------------------------------------------------------------2

3. BUSINESS DISCRIPTION-----------------------------------------------------------------------2

3.1 Description of Product--------------------------------------------------------------------------2

3.2 Mission---------------------------------------------------------------------------------------------4

3.3 The product---------------------------------------------------------------------------------------4

3.4 Back ground of the Entrepreneur’s----------------------------------------------------------4

4. PRODUCTION PLAN-----------------------------------------------------------------------------5

5. MARKETING PLAN------------------------------------------------------------------------------6

5.1 Market research analysis----------------------------------------------------------------------6

5.2 Investment opportunities----------------------------------------------------------------------7

5.3 Market description------------------------------------------------------------------------------8

6. ORGANIZATIONAL STRUCTURE AND MANAGEMENT PALN-------------------9

6.1 Manufacturing organizational plan---------------------------------------------------------9

6.2 Leader ship of team----------------------------------------------------------------------------10

6.3 Objectives----------------------------------------------------------------------------------------10

6.4 Company owner ship--------------------------------------------------------------------------10

7. FINANCIAL PLAN--------------------------------------------------------------------------------11

7.1 Performa income statement------------------------------------------------------------------11

7.2 Cash flow statement----------------------------------------------------------------------------12

7.3 Balance sheet statement-----------------------------------------------------------------------13

|Page
 7.4 Financial ratio----------------------------------------------------------------------------------13

Reference------------------------------------------------------------------------------------------------14

|Page
List of tables
Table 1: Production plan --------------------------------------------------------------------------------5

Table 2: Asset and Depreciation -----------------------------------------------------------------------6

1. INTRODUCTION
I. VENTURE DEFINED
The business is intended to satisfy consumer demand by supply the manufactured Drones,
Arduino's, Servo motors, Esc with a reasonable market price to make a profit in a competitive
market.
ABF DRONE MANUFACTURING COMPANY.
ADDIS ABABA;( yeka sub city wereda 02 chefemeda district)
Phone no; - +251111772503
Mobile; - +251904107300
+251989544590
E-Mail; - abftechdrone@gmail.com
P.o.box; - 4455

II. Marketing characteristics

ABF Drone manufacturing company is the new established business company. The business
is intended to satisfy consumer demand by supply the manufactured Drones, Arduino's, Servo
motors, Esc with a reasonable market price to make a profit in a competitive market.
III. Financial summery
The startup cost of the business will be birr 2,500,000 which is financed by incorporated
enterprise’s members contribution.
The finance will be used to:
 Purchase 1`required materials like transmitters, radio controllers, propellers
 Purchase production raw material
 Recruit employees and cover working capital of the business.
IV. Statement of confidentiality of report

For all assets of the business, each member has their own responsibility. Since the asset of
one business includes business capital, the effective risk management should be applied for
this business (ABF Drone manufacturing company). For the success of, ABF Drone
manufacturing company the support from legal body of the city of Addis Ababa yeka sub city
municipal office is needed. By fulfilling all legal criteria and taking into account the existing
market situation such as demand, supply, price, competition, ABF Drone manufacturing
company would expect to be famous business in not only Addis Ababa but, also in national
market. By receiving feedback from its customers, ABF Drone manufacturing company
would plan to modify its operation system and production quality.

1
2.Executive summary
ABF drone manufacturing company is a partnership form of business company which
owned by 6(six) partners. The manufacturing union that we will produce different models of
Drone, Arduino, Servo motors, Brush-less motors and ESC (electric speed controller). Drone
and its related technologies have a great impact on the day-to-day activity of human being
most of in recent time. These technologies are very important for commercial purpose (aerial
surveillance, film making, journalism, scientific research, cargo transport and agriculture),
military purpose (reconnaissance, demining border patrol…), and civil base purposes (aerial
photography, inspection of power lines and pipelines, delivering medical equipment to other
wise inaccessible regions...) are the major purposes of those technologies.

The initial capital of this manufacturing company is 2,500,000 and this amount of capital is
covered by the equal share the partners of the company.in addition to this the company hired
around 20 worker (the 17 employees are permanent workers of the company and the rest of
them are temporary workers to the company.) which they facilitate the production and supply
of our company product.

The distribution and supply of the manufactured products of our company targeted in the city
of Addis Ababa and Jimma as an initial point and for the two next year’s we targeted to that
supply of our product to different parts of the country like Bahirdar, Mekelle, Gondar,
Naziret, Hawassa....

3. Business Description
ABF Drone manufacturing company is as we stated in the above condition it is the new
established business which produce the technology results of Drones, Arduino's, Servo
motors, Esc.

3.1. DESCRIPTION OF PRODUCT

The term of drone more widely used by the public is coined in reference to the early remotely
flown target aircraft used for practice term was first used with 1920s Fairey Queen and 1930S
de Havilland Queen Bee targeted air craft. A drone, in technological terms, is an unmanned
aircraft. Drones are more formally known as unmanned aerial vehicles (UAVs) or unmanned
aircraft systems (UASes). Essentially, a drone is a flying robot that can be remotely
controlled or fly autonomously through software-controlled flight plans in their embedded
systems, working in conjunction with onboard sensors and GPS. Therefore, drone
technologies are the following application in a given environment.

AERIAL PHOTOGRAPHY; -Drones are now being used to capture footage that would
otherwise require expensive helicopters and cranes. Fast paced action and sci-fi
scenes are filmed by aerial drones, thus making cinematography easier.

2
SHIPPING AND DELIVERY; -Major companies like Amazon, UPS, and DHL are
in favor of drone delivery. Drones could save a lot of manpower and shift unnecessary
road traffic to the sky. Besides, they can be used over smaller distances to deliver
small packages, food, letters, medicines, beverages and the like.
GEOGRAPHIC MAPPING; -Available to amateurs and professionals, drones can
acquire very high-resolution data and download imagery in difficult to reach locations
like coastlines, mountaintops, and islands. They are also used to create 3D maps and
contribute to crowd sourced mapping applications.
DISASTER MANAGEMENT; -Drones provide quick means, after a natural or
man-made disaster, to gather information and navigate debris and rubble to look for
injured victims. Its high-definition cameras, sensors, and radars give rescue teams
access to a higher field of view, saving the need to spend resources on manned
helicopters. Where larger aerial vehicles would prove perilous or inefficient, drones,
thanks to their small size, are able to provide a close-up view of areas.
PRECISION AGRICULTURE; -Farmers and agriculturists are always looking for
cheap and effective methods to regularly monitor their crops. The infrared sensors in
drones can be tuned to detect crop health, enabling farmers to react and improve crop
conditions locally, with inputs of fertilizer or insecticides.
SEARCH AND RESCUE; -Presence of thermal sensors gives drones night vision
and makes them a powerful tool for surveillance. Drones are able to discover the
location of lost persons and unfortunate victims, especially in harsh conditions or
challenging terrains. Besides locating victims, a drone can drop supplies to
unreachable locations in war torn or disaster-stricken countries. For example, a drone
can be utilized to lower a walkie-talkie, GPS locator, medicines, food supplies,
clothes, and water to stranded victims before rescue crews can move them too
someplace else.
WEATHER FORECAST; -Drones are being developed to monitor dangerous and
unpredictable weather. Since they are cheap and unmanned, drones can be sent into
hurricanes and tornadoes, so that scientists and weather forecasters acquire new
insights into their behavior and trajectory. Its specialized sensors can be used to detail
weather parameters, collect data, and prevent mishaps.
WILDLIFE MONITORING; -Drones have served as a deterrent to poachers. They
provide unprecedented protection to animals, like elephants, rhinos, and big cats, a

3
 favorite target for poachers. With its thermal cameras and sensors, drones have the
ability to operate during the night. This enables them to monitor and research on
wildlife without causing any disturbance and provides insight on their patterns,
behavior, and habitat.
LAW ENFORCEMENT; -Drones are also used for maintaining the law. They help
with the surveillance of large crowds and ensure public safety. They assist in
monitoring criminal and illegal activities. In fact, fire investigations, smugglers of
migrants, and illegal transportation of drugs via coastlines, are monitored by the
border patrol with the help of drones.
ENTERTAINMENT; -Drones are being developed to provide entertainment for
players so that they can be used in fight clubs. Known as a cage match, two
contenders and their drones are put up against each other. The destruction of any of
the player’s drones results in the other’s win. Moreover, artificial drone intelligence is
used in several ways to capture videos and photographs, for example, the Dronie,
which is used to take selfies.

3.2 Mission

In recent time peoples are starting to used Drone and its related technologies and relying on
this we hope to benefit a lot of from our drone manufacturing company. The main concern of
the partners of ABF drone manufacturing company is to satisfy and meet the demand of the
societies of the cities and as well as the peoples of the country and also the business is to
make its members financially self-sufficient, valuable and be competent partnership in
Ethiopia.

3.3 The Product

The businesses will supply well-handled products to the targeted customers.

The following products will be supplied: -

 Drones
 Servomotors
 Arduino's
 Esc

3.4 Background of the Entrepreneurs

4
 It has 6(six) partners, namely Amanuel, Bantamlak, Nemersen, Simion, Mekides and
Kalehywet. It will be officially opened in April30 2020. It is located nearby Abyssinia water,
tea and coffee factory.

The partners have the following Experience Bantamlak; Degree in Accounting and
Finance from Ambo University and he has 7 years’ work experience in KDJ drone
manufacturing company which found in Kenya.

Amanuel Fikadu is the machine operator who has been doing this job for several years in
Addis Ababa and Jimma. Therefore, he is experienced enough.

Mekides Alemu has her first degree from Mekelle University by Electro Mechanical
Engineering.

She has served as a designer of the motor for vehicles for more than four years in Niyala
motors and engineering corporation. So, there is no doubt that she will make the company
profitable.

4.PRODUCTION PLAN
ABF Drone manufacturing company, has a factory on 800 acres of land. In this plan, it is
planned to produce Drones, Arduino s, Servo motors, Brush less motors and Esc. So, the
following table shows production plan.

Table 4.1 production plan

NO Type Description Quantity Price per unit Total cost

1 Drone Sensor 2 900 1800
2 Motors 4 450 1800
3 Transmitter 1 106 106
4 Receiver 1 126 126
5 Propellers 4 300 1200
6 Frame 1 500 500

1 Servo Gear 4 250 1000

motors
2 Coil 2meter 200 400
3 Plastic bug 1 500 500
4 Motor 1 450 450

1 Arduino's Psb 1 200 200

2 Lead 1meter 200 200
3 Resistors 3 500 1500

5
 4 Sensor 1 900 900

1 Brush less- Coil 3meter 200 600

2 motors Magnet 1 500 500
3 Gear box 1 100 100
Total 6,382 11,882

Table 4.2 Asset and Depreciation

Asset Price Depreciation Description

Generator 100,000 20,000 The depreciation

amount Is determined
Grinder 10,000 2,000 through straight line
method.

5.MARKETING PLAN
Drone technology now time it became the most demanded product in Ethiopia. An increase in
demand of drone technology in national market leads to high demand for the product in the
country. Beside its crucial role in improvement of the GDP of the country, it makes strategic
condition for the market of the product.
ABF Drone manufacturing company will try to meet their customers demand by setting a fair
price, by delivering quality of product and being excellent provider of the item.

5.1Market research and Analysis

Opportunity
The following are list of information that created the business: -

1. Affordable production cost.

2. Minimum financial requirement is needed to establish the business.
3. Small numbers of competitors (in recent analysis only Ethiopian Space Science
Institute is the only competitor in Ethiopia).
Competitors
Hence our business is new to the market and to the eyes of the market’s elements, so,
we may find ourselves circumscribed with in the competition. Our main target is
providing a quality of products to our customers that will make the competition worst.

6
 Advertising
This plan attempts to use different advertising techniques according to the targeted
markets. our plan to provide the service will be communicated in the following
manners.

- Through business card.

- Package decoration like colorful pack, make portable.
- Bulletin Board on display materials and so on.

5.2 INVESTMENT OPPORTUNITIES

The opportunities and future prospectus of drone manufacturing in Ethiopia is indicated as

follows.

 Enhanced asset monitoring

Drones offer a great opportunity for manufacturers to improve how asset monitoring is
performed. Faults in the production line are difficult to prevent without an overall view of
the machinery, and these faults can hinder or even shut down production. Operations
managers should leverage infrared and thermal technology to get accurate information on
the temperature of production lines and machinery. In the case of too high temperatures –
signaling a problem within the machinery – operators can quickly and proactively address
the issue before it impacts the production process and costs the plant time and money.

 Increased compliance

Any image captured during asset monitoring should be filed away for the plant maintenance
record. Recording temperature checks, production line observations and faults from drone
images this way means manufacturers can ensure higher levels of regulatory compliance.

Another key benefit of drone technology comes from improved health and safety compliance.
When routine plant maintenance inspections are carried out, safety considerations often
require operations to grind to a halt – especially in areas that are difficult to reach for humans.
Here, drones can inspect machinery in unsafe locations without compromising staff safety or
production.

 Saving time on inventory checks

7
Beyond asset monitoring, drones can also be leveraged to carry out accurate inventory checks
– a lengthy and manual task consuming valuable work hours across warehouses and plants.

By scanning radio frequency identification chips and bar codes, drones are able to perform
inventory checks in far less time – allowing teams to concentrate resources and attention on
production rather than monitoring tasks.

Take the oil and gas industry for instance. Asset monitoring carried out by drones in this
sector can take just a fraction of the time – 10% to be precise – that is needed for a human to
do a manual check. A simple but crucial process improvement which also translates to the
manufacturing sector.

 Streamlined mobility across sites

Transporting parts between different areas of the manufacturing plant can be a complicated
and time-consuming task. The larger the plant and the more journeys are made from the
central warehouse, the more likely it is to experience disruptions to production.

Drones have the capacity to carry five kilograms and are well-suited to fly to central
warehouses to collect spare parts and deliver them to work areas, without compromising
safety. They can be programmed to fly over buildings and crossings if necessary. Obstacles
are also recorded in real time and pre-programmed routes can be altered accordingly to avoid
the obstacle.

Drones are also set to offer help with picking and packing. They can be set to move around
warehouses selecting products for specific orders to be taken to the packing area. While such
an application is yet to be realized, the technology is available for implementation.

5.3 MARKET DESCRIPTION

Consumers these days choose a commodity that is high on quality and low on market price.
Drones and its related products fit these requirements perfectly, and hence, the demand for
drones is on the rise. As a result, the market for drones is expected to increase in the coming
years. The basic characteristics of drone technologies are especially attractive, due to their
applicability in the life of societies. As reported by Ethiopian science and technology institute
the market of drone and its related technologies are have huge potential in the Ethiopian
domestic market (recent phenomena). For example, photography drones, agriculture purpose

8
drones, different types of Arduino models, medical equipment supplier drones, are high on
demand in the domestic market.

In addition to these, there is only one competent firm in this business which manufactured
drones and some other technological out puts as stated earlier Ethiopian Space Science
Institute is the only drone manufacturer in Ethiopian context. So, our market coverage is
basically considering the domestic demand of the technology.

6.ORGANIZATIONAL STRUCTURE AND MANAGEMENT PLAN

6.1Manufacturing or Organizational Plan

The Partners have a good educational background to lead the business experiences that will
contribute a lot to what is planned to be achieved. The business experience they accumulate
will benefit their business in the area of handling customers properly and delivering quality
product to them.

The Organizational Flow Chart is described as Follows

Manager

labour store
workers keepers

cashier distributer

The responsibilities of each responsibility are described as follow

General Manager

- Has the task of controlling the overall activities of the business.

- Ensure Business plan practically implemented and make any correction when the
situations become difficult.
Labor workers
- The have the responsibility over the production of the products and they have the
responsibility of repair and maintenance function of the business enterprise.
Store keeper

- Has the task of keeping all materials that used for production and for other similar
purposes.
Cashier

9
 - Has the task of controlling and managing cash and related activities.
Distributors
-They are responsible for distribute our products or the manufactured products to the
market at right time and at right place.
6.2 Leadership of team

The industry does not expand in the sectors but the government policy is clear and
convenient concerning small micro enterprises in the past small business do not get
attention. However currently special attention is given. The enterprise has found the
legal environment is encouraging and promising.

 Lack of trained workers to provide quality service.

 Lack of Production place.
 Financial and material constraint
The Manager

The General manager of ABF Drone manufacturing company is one of the owners and
founders of the company, Bantamlak Fikadu. He has his first degree in Accounting and
Finance from Ambo University. He has served as General Manager for seven years on similar
sector (drone manufacturing plc) in neighboring country of Kenya. Manager exercises the
duties of planning, supervision and controlling the overall activities of the firm’s operation.
All functional units are totally responsible to the owner who is the manager of the business.
There are other activities that are under the jurisdiction of Manager with their own
demarcated duties and responsibilities.
6.3 OBJECTIVES

 Maximize the profit of the company permanently by producing those

technological products with at low cost.
 Maximizing the utility of our customers by providing high quality of drone
technologies.
 Making the maximum effort to meet the demand for the product in the country.
 Introducing new type of drone models of product which they make life easy of the
society.
6.4 Company Ownership

ABF Drone manufacturing company will be a partnership based company which is held by
Bantamlak, Amanuel, Simion, Nemersen,Mekides and Kalehywet. These six partners had

10
 contributed equal fund to found the Company which is six hundred thousand birrs (416,667
birr) for each.

7.Financial plan
Cost analysis
The firm will be established by equity financing of the partners. The initial total
investment for the accomplishment of the activity is birr 250,000.00

The Performa of cost analysis of the venture is as follows:

Cost Analysis for Initial Investment
A. Initial cost Cost
- Machine ………………………………………………………….…209,000
-Equipment…………………………………………………………….219,000
- Purchase of land……………………………………………………...1,000,000
- Worker’s uniform…………………………………………….………6,000
- Advertisement ………………………………………………………50,000
- License Process cost…………………………...………………….50,000
-Total……………………………………….…………………….….1,535,000
B. Operational cost
- Material purchase ……………………………………………40,000
- Working Capital. ……………………………………………300,000

- 1st month Salary Payment…………………………………… 125,000

Total…………………………………………………………………465,000

Total initial cost………………………………………………………. 2,000,000

NB: REMANING BIRR 500,000 WILL BE KEEPED FOR OTHER RISK PURPOSE

7.1 Proforma Income Statement

The business will have good marketing demand with reasonable price in the market.
The performed income statement indicates the possible profit in the consecutive
months as well as years.

BBFT Drone manufacturing company

Proforma Income statement

For the year, 2020

Total Revenue…………………………………………………………...2,000,000

11
Expenses

Salary expense…………………………………………...………...……125,000

Advertisement expense………………………………………..…..…….50,000

Land purchase …………………………………………………………..1,000,000

License………………………………………………………..…………50,000

Material expense…………………………………………………….…..40,000

Workers uniform ………………………………………………………..6,000

Equipment …………………………………………………..…………..219,000

Machine …………………………………………………….…..………209,000

Total expense…………………………………………………...………1,699,000

Net Income Before Tax …………………………………………………………………....301,000

Less; income tax (0.25)……..…………………………………………………………..… 75,250

Net Income After tax……………………….………………………………………………225,750

7.2 Cash flow statement

ABF drone manufacturing company
Proforma cash flow statement
For the year 2020
Total revenue--------------------------------------------------------------------------2,000,000
Expenses
Salary---------------------------------------------------------------------------125,000
Advertisement expense ------------------------------------------------------50,000
Land purchase-----------------------------------------------------------------1,000,000
Material purchase-------------------------------------------------------------40,000
License-------------------------------------------------------------------------50,000
Worker’s uniform-------------------------------------------------------------6000
Equipment --------------------------------------------------------------------21,900
Machine -----------------------------------------------------------------------20,900
Total cash flow----------------------------------------------------------------686,200

12
7.3 Balance sheet statement
The purpose preparing balance sheet is, to show the financial position of a given business organization on
particular time. In this case the following balance sheet is the reflection of ABF drone manufacturing
investment company’s financial status after two years of production ( in 2020)

ABF drone manufacturing company

Proforma balance sheet

For the year of 2020

Current asset

Cash --------------------------------------------------------------------------2,411,950

Fixed asset

Machinery ------------------------------------------------------------------20,900

Supply ----------------------------------------------------------------------45,150

Less accumulated depreciation ----------------------------------------------------22,000

Total fixed asset -------------------------------------------------------------------44,050

Total asset -----------------------------------------------------------------------------------2,500,000

Liabilities

Account payable--------------------------------------------------------------------------0

Owners’ equity -------------------------------------------------------------------------------2,500,000

7.4 Financial ratios

net profit before tax 686,200

Return equity = = =27.448%
net equity 2,500,000

current asset 2,411,950

Current ratio = = =Ɇ (current ratio is indeterminate because
current liability 0
we have no current liability)

total liability 0
Debit to equity = = =0...the company won’t have debt
net equity 2,500,000

13
 current asset −invetory 2,411,950
Quick ratio = = =Ɇ (indeterminate)
current liability 0

14
REFERENCE

https://www.iberdrola.com/innovation/drones-uses

https://internetofthingsagenda.techtarget.com/definition/drone

https://www.toptal.com/finance/market-research-analysts/drone-market

Accounting department student’s

15a g e |
P