MH BUSINESS PLAN

Table of Contents
Confidentiality Agreement..........................................................................................................................................3
I. Instructions: Executive Summary..........................................................................................................................5
Executive Summary...................................................................................................................................................6
II. Instructions: Company Description......................................................................................................................7
Company Description Worksheet.............................................................................................................................8
III. Instructions: Products & Services.......................................................................................................................9
Product & Service Description Worksheet.............................................................................................................10
IV. Instructions: Marketing Plan.............................................................................................................................11
SWOT Analysis Worksheet......................................................................................................................................12
Competitor Data Collection Plan...........................................................................................................................14
Competitive Analysis Worksheet.............................................................................................................................15
Marketing Expenses Strategy Chart.......................................................................................................................17
Pricing Strategy Worksheet....................................................................................................................................19
Distribution Channel Assessment Worksheet.........................................................................................................21
V. Instructions: Operational Plan............................................................................................................................23
VI. Instructions: Management & Organization.....................................................................................................25
Management Worksheet..........................................................................................................................................26
Organization Chart.................................................................................................................................................27
VII. Instructions: Startup Expenses & Capitalization...........................................................................................28
VIII. Instructions: Financial Plan............................................................................................................................29
IX. Instructions: Appendices....................................................................................................................................31
X. Instructions: Refining the Plan............................................................................................................................32
Now That You’re (Almost) Finished . . ...................................................................................................................34

Executive Summary

MH is an advanced shopping website in Ethiopia, with our head office situated in Addis
Ababa the capital city of Ethiopia. This online shopping website is a site where customers can
browse through the site and have a look at a product and place order. The website will aid
both consumer to consumer sales, business to consumer and marketplace. We are going to try
and make alliances with several vendors ranging from small and medium size businesses and
manufacturer can list their products at a cost on MH. You can buy everything, Computer,
mobile phones, mobile accessories, car parts and solar panels, Clothes and Shoe, etc on MH.
COMPANY DESCRIPTION
Company Name, Ownership, Location & Facilities
Universal Marketplace. is an advanced shopping website in Ethiopia, with our head office
situated in Addis Ababa the capital city of Ethiopia. This online shopping website is a site
where customers can browse through the site and have a look at a product and place the
order. The website will aid both Business to Business sales and business to consumer. We are
going to try and make alliances with several vendors ranging from small and medium size
businesses and manufacturer can list their products on Universal Marketplace.. You can buy
everything, Electronics, Hobby & Leisure, Fashion, Furniture & Homeware, Care Products,
DIY, and Grocery on Universal Marketplace. The company ownership will be the founder
team and investor.

Company Mission: to offer a whole new experience of shopping platform where anyone can
sell his products and to use the power of internet and technology to connect people, and to be
one of the best online marketplace with most convenient price and shopping experience in
Ethiopia. In addition, to also create jobs and skills that will empower the new generation in
Ethiopia to help build their life and drive the country forward.

Company Vision
To be one of the leading Online Market Place in Africa by providing our customers with
highest quality products and services at a competitive and low price.

Company Goals &Milestones

1. More offers and Discounts will be provided for buyers.

2. Customer satisfaction will be improved more.
3. Ease to spread business across the countries.
4. More than reach, it also important for increasing Digital transection of the country
5. Helps to increase our national income.

Company Milestones
 Increasing traffic from social media
 Getting more leads from SEO
 Creating more compelling content
 Better use of email marketing
 Improved shopping cart abandonment rates
 Increased conversion rates
 Increased customer satisfaction
 Improved retention/loyalty among customers
 More effective use of coupons/discounts
 Better overall website design and layout

Keys to Success
1. Clear understanding and identification of our customer requirements.
2. Translation of our customer order into delivered product
3. Offer a high-end web based Ecommerce business in a way that they can
afford.
4. Efficient resource allocation to each project.
5. Documentation of the process and informing our clients about the
progress.
6. Identification of the segments of our company that provides ecommerce related
services (website maintenance, hosting, web redesign, and search
engine optimization, marketing and consulting).
7. Establish strategic partnerships with service providers, consulting
companies and ecommerce marketing globally and regionally.

Company Philosophy/ Value

Innovation & Creativity: Stimulate and encourage new and progressive ideas to solve
problems.
Passion: Committed in the heart and mind
Flexibility: Commit to tasks that lead to common goals and readiness to rectify direction in
order to meet the needs and objectives of our clients
Excellence: Integrate professionalism, high standard of work, efficiency and ethics
Team Work: Engage team members to bring their talents together and work hand-in hand to
create better results at a faster pace to satisfy client needs and increase efficiency
Diversity: As inclusive as our brands
Transparency: Communicate openly, honestly and respect other’s competencies and
differences.
Create Trust :Make trust to our customer on our Service we provide at all level

Key Competitors
The major competitors in the online marketplace industry are HellooMarket, Addis Mercato,
Zmall, Shega, Qefira, Jiji, and AfroTie. More users are encountering problems with shopping
nowadays. With emphases on service excellence MH will differentiate itself by offering our
customers with the best shopping experience with advanced technology and 100% buyer
money refund and free shipping when the customers don’t like the item.
Industry and Market Analysis
However the poor customer service and doubtful return policies have made trust issues to
worsen among the customers. Also the uncertainty around receiving products that are
counterfeit and not able to return it back or get a refund has made Nigerian customers to buy
offline instead. With these problems, Our Company would Lay emphases on customer
service excellence we will differentiate ourselves by offering our customers with the best
shopping experience with advanced technology of measuring real size of item, having a look
virtually to psychologically estimate the size and 100% buyer money refund and free
shipping when the customers don’t like the item, and to encourage customers to checkout
with pay on delivery as this will help them see the item before payment.

Market Growth: MH plans to become more profitable in the future and grow vastly more
than the industry average by becoming a market leader not only in Ethiopia but in Other Horn
of Africa Countries. The company will rely on increasing sales volumes in the years to come
and potentially emulating fulfilment costs (storage) and increase use of safe mobile payment
and improvement of delivery service to our customers. We aim to get a 15% market share in
the first 4 years of operation because the number of internet users in Ethiopia is expected to
rise and with this we will be able to get more customers and expand sales to neighboring
countries.

Segmentation, Targeting & Positioning: The market will be segmented into various
target group, geographical and demographical segmentation will be our main focus.
• Our main target area is Addis Ababa, Adama, Dire Dawa and Harar
• Individuals within the age group of 18-35 especially students
• Female & male
• Workers busy to shop online.

Targeting: In this operation the company will target huge population, mass marketing and
also any individual who can connect to the internet via a computer or a phone. In addition, to
reach our objective of increasing sale of women good with women’s day event, we will target
women that can connect to the internet and place their orders online.
Positioning: The position that MH aims to attain is the leader in Ethiopia, and in the coming
years to boost sales and become the Ethiopian amazon as the company will offer different
products at a cheaper price.

PESTEL analysis

PESTEL analysis is a framework used to analyze and monitor the external marketing
environment (macro environment) factors that would have an impact on the business. The

result could be used to identify the opportunities and threats to the business (Drucker, 1985).
Political

• Increasing efforts of governmental on cyber-security

• stable political environment
• Accessibility to loans for SMEs

Economical

• Economic growth

• Inflation
Social

• Literacy (Level of knowledge) is poor in some areas

• Increasing online buying habits

Technology

• Ethiopia start uses of e-commerce and has one of the highest internet users.
• Increasing rates of cybercrime
• Higher rate of mobile data connection

Legal

• Tariffs regulation (Tax, VAT)

• Export regulation.

SWOT analysis

Strengths
  Virtual sight of products before purchase
 Pay release to Seller on delivery service
 Lower operational cost
 100 % money refund policy
 Service sector/ low risk
 A larger selection of products
 Faster and/or cheaper shipping
 More payment options
 Unique products
 Loyalty scheme
 Guarantees
 Better return policy
 Amazing photography, video, description and fitting/size information

Weaknesses

• Lack of trust and fraud concerns from customers

• Lack of connection with suppliers
• High capital intensive
• Some key competitors have established themselves and got loyal customers.

Opportunity

 Increasing customer need for product & service combination from time to time in our
country
 Good external environment including: government plan and current global Digital economic
environment
 Access to loan from the state and federal government.
 Joint ventures with small vendors and manufacturers.
 Improvement of postal codes system in the country by the
government.
 Using of big data analytics to help understand customer
preference.

Threat

• Price of virtual reality headset is high.

• Low barriers to entry
• Threat of rising cost of production.
• Increasing rates of cyber crime
• Consumers could always turn attention to foreign merchants.
Customers and Value proposition

The Business Model Canvas: This is a strategic management framework or tool for
developing existing or new business plans. It is a visual chart with section that describe a
firms infrastructure, finances, value proposition, resources and customers. It helps firms in
aligning company activities by showing potential trade-offs (Aaker, 1995).

Key Partners Key Activities Value Proposition Customer Customer S

• Product Relationships • Teenage
• Vendors development For our buyers: • Discounts and adults
• Alibaba furniture’s • B2C & B2B sales • Guaranteed return coupons • Adult sh
• Buyers • Shipping policy with 100% • Loyalty reward • Consum
• Sellers • Solving customer money refund • Referral bonus • Both fo
• CyberDome web problems • Pay on delivery • Rating system sellers.
security • Easy order tracking which helps buyers
• Shipping agencies • Buy goods worth to identify the best
• investors 50,000 and get 70% vendor or seller to
discount on a VR buy from.
headset
Key Resources Channels
• Partnership with For our Vendors • Shipping companies
 shipping and seller • Personal delivery
companies & • Efficient vans & bikes
online Payment distribution • MH Websites
firms channels • Mobile application
• Big data analytics • Cheaper listing fees • Social media
and analysts to for their products
identify market • Opportunity for
changes buyers to view
• Web security and products in VR or
antivirus firms for AR mode.
data protection
• Good marketing
strategy
• Financial funding
• Network

Cost Structure Revenue Streams

• Website Maintenances and security (Tech platform cost) • Sale commission from vendors and sellers
• Sales & marketing ( advertising costs, contract costs) • Product sales
• General & Administrative (employee salaries, rent, Tax, • Listing fees
utility bills and insurance) • advertising
• Logistic costs

Figure 3 Business model canvas

Marketing strategy

Product: MH offers an online platform for selling which offers different types of domestic
and international products. The website is attractive and very easy to use and products can be
viewed with augmented reality or virtual reality. The products will be classified based on
categories like body care, electronics, beauty, kitchen accessories and machineries) and
classified by (men and women). The company sells quality products at affordable prices and
will use to forms of payment (payment release to seller on delivery,)

Price: MH will look to offer products at a competitive prices and use penetration pricing
strategy to attract customers from old retailers. The platform will have different verified
sellers and vendors that will list their products, and customers can find same products with
different prices and can choose from which seller to buy, with this strategy there will be
pressure on seller to lower their prices. Also a customer has the opportunity to return any
product that has a defect for free shipping and get refunded as the aim of MH is to offer good
value for money.
Place: Building a good brand image will be one of our major objective so as to allow us have
a strong presence in the country through communication, word of mouth and advertising. MH
is located in the capital city of Addis Ababa, Adama and other branches in Dire Dawa and
Harar. The company will try and expand and have small representatives in all major states in
order to facilitate and make deliveries efficient. We will also make alliances with different
distribution companies so as to facilitate delivery to all locations around the country.

Promotion: As regards to promotion, MH will use commercials, television, social media

platforms and digital ADS to advertise its presence. The company will also use search engine
marketing so as to get the company’s name high enough in search results.

Operational plan

Porter’s Value Chain: below is a business framework tool which was designed by Michael
porter, this tool can be used a business concept and furthermore, explain all activities and
operations that will be achieved so as to get competitive advantage in the market (Porter,
2001)
Figure 4 Porters Value chain
 Management team and company’s structure

Managing
Director

Manager

Sales & Customer service Head of IT & Transportation &

Head of Finance
Marketing Head Department Software Distribution

Employees Employees Employees Employees Employees

Designation of staff Name Experience & skills

Managing Director

Manager

Sales & Marketing Head

Head of Finance

Head of IT & Software

Transportation & Distr.

Customer Service Dept.

MH will depend on organized division of responsibilities in order to run efficiently. The main
responsibilities and decisions will be divided between the top 2 which is the managing
director and the Manager. The manager will be responsible for assessing the tasks of all the
departments and determine promotions and salaries and setting sales target. While the top
division managers will be giving specific responsibilities, the finance head will be handling
all accounts and deals with the bank and money management, the marketing and sales head
will be in charge of planning and source of information from the market and also assist the
manager in setting the sales target. The head of IT will be in charge of maintenance of
website and any software related issues. While the customer service department are in charge
all customer complaints, after sales refunds and issues. Lastly the transportation and
distribution head will be responsible for delivery of goods to the customers, accepting returns
and making contacts with shipping companies.
Resources

Network

Infrastructure Financial

MH

Human
Software &
resources &
IT
skills

Financing: the most important element in starting a business requires financial funding as our
business is going to incur multiple costs like registering the business, obtaining business
offices, office equipment’s, buying of delivery vans and machines. The financial resources
will be obtained from a Bank Loan as there are many grants from Nigerian financial
institutions for new entrepreneurs, personal funds, private investors and family funds at a
Total of 56,000,000 Ethiopian Birr.

Human Resources (Employees): The success of any business heavily relies on the talent and
contribution of its workforce. MH company would need to hire experienced professionals
with a track of excellence in administration, marketing and advertising so as to ensure that the
vision and mission of the company is carried out efficiently and effectively. Strong team
members will be recruited using search specialist and through referrals from individuals
trusted.

Software & IT: MH is an online retailer and hence requires a website to start operation. This
website needs professional developers to work on it, we are working with cyberDome cyber
company to help us provide security for the website and secure payment by our customers,
we also have a contract with antivirus providing firms to maintain our website so as to
operate as efficiently as possible. In addition we also require 360 4k cameras, AR & VR
software on our website and mobile app developers for our online mobile application.

Infrastructure (physical resources): whether a retail operation or a small home business,

every business requires an office work space so as to prove to customers you really exist ().
This office will require telephone lines, internet connection and effective marketing materials.
in addition the company needs to acquire a warehouse and delivery vans.

Network: starting a business can be highly stressful for an entrepreneur, to make sure we are
on track with the business and be motivated, it is important to have a support team that can
give advice and guidance. This team could be from family or friends as well as professional
group or an external mentor.

Financing
Funding
Source of funds for startup Amount (in ETB)

(figures in million)

Personal funds
 Bank loans

Family funds

Total Fund available

Cost of project

Infrastructure required Cost (in ETB)

Office Rent Head office Addis Ababa

Office Rent branch office Adama
Office equipment’s for both offices ( computers,
printers, internet facility, telephones, furniture’s,
cabinets and Air conditioners)
Generators
4K 360 degree Camera’s for VR&AR visuals
Website development
AR and VR software for website
Delivery machines and vans
Payment to antivirus providing firm (annually)
CyberDome web security company
Business licensing
Mobile application developers
Fulfilment warehouse building

Total cost

Financial projections
Income statement statement
2024 (ETB) 2025 (ETB) 2026 (ETB)

Revenues

Total cash Inflow

Expenses
 Cost of sales

Operating Expenses

Advertising expenses

Transportation expenses

Depreciation

Insurance

Licenses

Legal and professional services

Warehouse costs

Salaries

Telephone Bills

Utilities

Miscellaneous

Total Expenses

Net Profit Before Taxes

Tax paid

Net Income

Balance sheet

Assets yr 1 ( ETB) yr 2 (ETB) yr 3 (ETB)

Non-current Assets

Office

Furniture

Vans and machinery

current Assets
 cash and cash equivalents

Inventory

Total assets

Short-term Liabilities

Accounts Payable

Long term liability

Bank Loan

Capital

Total liability

Risk and risk options

As a web based business, we could be facing a number of technological risks. This is due to
the fact that technology changes quickly and the company has to catch up with the changes
which may require different resources (Flanagin et al., 2014). MH website may be exposed to
security threats and risk from hacking to malware and security breach which would mean that
our customers credit card and information would be breached.
Risk option: - MH has a partnership with CyberDome web security company which is a
good company that will maintain security against threats of hacking, malware attack and
provide security against data breach and customer information.
- The company will encourage customers to use the pay hold on escrow and release
after products arrive at your door, as this will enable customers to view the item before
payment and hence no need to provide their Bank information online. This will reduce the
customer and seller disputes about counterfeit products or fake items and encourage those
customers without a bank account to make a purchase anytime.

Key milestone
A key milestone in a project is a target that indicates the components in a business plan and
all the key operations, growth plan and stages that the plan will go through so as to ensure the
business is heading into the right direction. Kotler et al. (2005) defined a milestone as “a set
of plans, aim, objective and what a business or project is targeted to achieve or to which level
it is expected to be at a pre time date.”.

MH will have numerous milestones on:

• Completion of business plan. This will be an essential tool or a roadmap for the improvement and
performance of the company.
• Business registration
• Head and branch Office set up.
• Website development completed.
• Secure funding from bank Loan
• Complete hiring of the initial company employees.
• Product Launch marketing campaign
• Product sales lunch
• Revenue exceeding 10,000,000 ETB

S/N Name Duration Start

1 0 days
Completion of business plan.
2 14 days
Business registration
3 21 days
Head and branch Office set up.
4 21 days
Website development completed.
5 30 days
Secure funding from bank Loan
6 30 days
Complete hiring of the initial company
employees.
7 21 days
Product Launch marketing campaign
8 7 days
Product sales lunch
9 By 2025
Revenue exceeding 10,000,000 ETB

Conclusion
MH is an advanced shopping website in Ethiopia, with our head office situated in Addis
Ababa the capital city of Ethiopia. The business will start as a partnership business as it
involves different family funds. This online shopping website is a site where customers can
browse through the site and have a look at most of the products virtually with the use of
virtual reality headsets or in Augmented reality with the use of a smartphone. MH will look to
expand to neighbouring countries in Africa as Nigeria only consists of 10% of the population
and 90% of the rest could be customers too. MH will face major risk and problems along the
way like cyber security breach problems with payment, deliveries and system reliability.
However, the company will make alliances with good tech companies and delivery firms to
tackle the problems and make deliveries efficient.

Finally the company will lay emphases on service excellence as we will differentiate
ourselves by offering our customers with the best shopping experience with advanced
technology and
100% buyer money refund and free shipping when the customers don’t like the item they are
buying.

Reference

Aaker, D. (1995). Strategic Marketing Management, John Wiley, New York, NY

Drucker, P. F. (1985). Innovation & Entrepreneurship. New York, Harper Trade.

Flanagin, A.J., Metzger, M.J., Pure, R., Markov, A. and Hartsell, E., 2014. Mitigating risk in
ecommerce transactions: perceptions of information credibility and the role of user-generated
ratings in product quality and purchase intention. Electronic Commerce Research, 14(1),
pp.123.

Kotler, P. & Keller K. L. (2005), Marketing Management, 12th edition, Pearson Prentice
Hall.

Mckinsey (2015). How e-commerce supports African business growth. [online] Available at:
[Link]
ecommercesupports-african-business-growth. [Accessed 03 Aug. 2019].

Mckinsey (2013). Africa’s growing giant: Nigeria’s new retail economy. [online] Available
at: [Link]
africasgrowing-giant-nigerias-new-retail-economy. [Accessed 03 Aug. 2019].

Porter, M. E. (2001). The value chain and competitive advantage. Understanding Business
Processes. Routledge.
Statista (2019). Number of internet users in Nigeria from 2017 to 2023 (in millions). [online]
Available at: [Link] [Accessed 03
Aug. 2019].

Statista (2019). Virtual reality (VR) video gaming sales revenue worldwide from 2015 to 2020
(in billion U.S. dollars) [online] Available at:
[Link]
[Accessed 03 Aug. 2019].

Thompson, A. (2003). Major Entrepreneurship and Business Innovation. Perth, Strategic

Entrepreneurship Journal. 9(1), pp. 99–117.

Appendices
Income statement
2019 2020 2021
(naira) (naira) (naira)

Revenues 17,961,000 24,901,000 43,751,000

Total cash Inflow 17,961,000 24,901,000 43,751,000

Expenses

Cost of sales 8,980,000 8,980,000 11,980,000

Operating Expenses

Advertising expenses 350,000 350,000 350,000

Transportation expenses 100,300 100,300 100,300

Depreciation 95,000 95,000 95,000

Insurance 150,000 150,000 150,000

Licenses 250,000 100,000 100,000

Legal and professional services 80,000 80,000 80,000

Warehouse costs 170,000 170,000 170,000

 Salaries 4,500,000 6,500,000 8,500,000

Telephone Bills 30,000 30,000 30,000

Utilities 90,000 90,000 90,000

Miscellaneous 65,000 65,000 65,000

Total Expenses 13,860,300 13,860,300 21,710,300

Net Profit Before Taxes 4,100,700 11,040,700 22,040,700

Tax paid 196,049 492,849 1,542,849

Net Income 2,904,651 7,547,851 20,497,851

Balance sheet

Assets yr 1 ( naira) yr 2 (naira) yr 3 (naira)

Non-current Assets

Office 2,900,000 2,900,000 2,900,000

Furniture 3,100,000 3,100,000 3,100,000

Vans and machinery 4,500,000 4,000,000 3,500,000

current Assets

cash and cash equivalents 11,850,000 11,850,000 11,850,000

Inventory 16,850,000 16,900,000 16,980,000

Total assets 39,440,000 38,990,000 38,570,000

Short-term Liabilities

Accounts Payable 1,623,758 1,000,000 950,000

Long term liability

Bank Loan 11,000,000 11,000,000 11,000,000

Capital 26,816,242 26,816,242 26,816,242

Total liability 39,440,000 38,990,000 38,570,000