Here is a draft investment proposal for a bread production business in Ethiopia using 200 kg
of flour per day to produce 50-gram loaves:
Bread Production Investment Proposal
Project Title: Small-Scale Bread Production Unit in Ethiopia
Production Capacity: 200 kg flour/day
Product Size: 50-gram bread units
Sales Price per Bread: ETB 4
1. Project Summary
This proposal outlines the establishment of a small-scale bread production unit in Ethiopia with a
daily capacity of 200 kg of flour, converting into 50-gram loaves. The project aims to meet local
bread demand while generating sustainable income and employment.
2. Technical Feasibility
Production Calculation:
Flour/day: 200 kg = 200,000 g
Estimated dough yield: 160% (hydration and ingredients)
Total dough: 200,000 g × 1.6 = 320,000 g
Number of 50g breads:
320,00050=6,400breads/day\frace{320,000}{50} = 6,400 breads/day50320,000
=6,400breads/day
3. Financial Assumptions
Parameter Value
Flour cost per 100 kg ETB 10,000
Daily flour cost (200 kg) ETB 20,000
Selling price per bread ETB 4
Monthly working days 26 days
Monthly utility cost ETB 10,000
Monthly salary ETB 10,000
Total breads/month 6,400 × 26 = 166,400
Monthly revenue 166,400 × ETB 4 = ETB 665,600
Monthly flour cost 200 kg/day × 26 = 5,200 kg
4. Capital Expenditure (CAPEX)
Item Cost Estimate (ETB)
Dough Mixer (Industrial) 150,000
Baking Oven (electric/gas) 200,000
Bread Slicer & Packing Tools 100,000
Working Tables, Trays, Tools 50,000
Generator (optional) 120,000
Initial Working Capital 100,000
Total Initial Investment ETB 720,000
5. Operating Expenses (OPEX) – Monthly
Expense Amount (ETB)
Flour (5200 kg × 100 ETB) 520,000
Utility (electric/gas/water) 10,000
Salary 10,000
Packaging & Transport 15,000
Maintenance & Miscellaneous 10,000
Total OPEX/month ETB 565,000
6. Revenue and Profitability
Description Amount (ETB)
Monthly Revenue 665,600
Monthly Operating 565,000
Cost
Gross Profit/month 100,600
Annual Profit (est.) 100,600 × 12 = ETB 1,207,200
7. Break-Even Analysis
Initial Investment: ETB 720,000
Monthly Profit: ETB 100,600
Break-even Time:
720,000100,600≈∗∗7.2months∗∗\frac{720,000}{100,600} ≈ **7.2
months**100,600720,000≈∗∗7.2months∗∗
8. Social and Economic Benefits
Creates 3–5 direct jobs
Supplies affordable bread to the local market
Strengthens food security
Encourages local agro-processing
9. Risk and Mitigation
Risk Mitigation
Raw material price hikes Long-term supplier agreements
Power outages Generator backup
Market fluctuation Diversify into rolls/pastries
10. Funding Requirement
We seek a total investment of ETB 720,000, which could be funded via:
Equity: 30% (ETB 216,000)
Bank Loan: 70% (ETB 504,000)
Based on the bread production investment proposal you provided, a starter entrepreneur aiming to
succeed in this venture should possess the following common and special traits in terms of personality,
skills, and knowledge:
1. Common Personality Traits
These are general traits essential for success in most businesses:
Trait Why It’s Important
Discipline Needed for maintaining consistent daily production and managing
inputs/output.
Resilience To handle fluctuations in raw material prices, power outages, and other
uncertainties mentioned in the risk section.
Integrity Builds trust with employees, suppliers, customers, and financiers.
Proactivenes Helps in preparing for market shifts, cost changes, and exploring additional
s products like rolls and pastries.
Patience The break-even point is about 7.2 months, requiring sustained commitment.
2. Special Personality Traits
Trait Why It’s Important
Attention to detail Bread production requires accuracy in ingredient measurement, baking time,
and hygiene.
Customer- Necessary to adjust quality and pricing based on consumer feedback.
orientation
Adaptability To manage technical issues (e.g., oven breakdown), raw material sourcing, and
evolving market needs.
Team leadership Needed to manage 3–5 staff effectively and maintain productivity and morale.
3. Essential Skills
Skill Relevance to the Proposal
Basic Accounting & To calculate costs (like the 5200 kg flour/month), track profitability,
Costing and manage break-even analysis.
Food Safety & Bread is a consumable. Compliance with food safety standards is
Hygiene essential to build trust.
Inventory Proper stock handling for flour, packaging, and ingredients reduces
Management wastage and loss.
Machinery Operation Understanding how to operate and maintain mixers, ovens, and
slicers minimizes downtime.
Marketing & Sales To grow revenue, explore market expansion, and respond to price
competition.
4. Essential Knowledge Areas
Knowledge How It Helps
Bread Production Knowledge of flour-to-dough ratios, baking temperatures, and
Process packaging for consistent quality.
Supplier Networks To secure affordable and consistent flour and ingredient sources (e.g.,
negotiate ETB 2,000/quintal rates).
Regulatory Ensures compliance with health, labor, and food production laws in
Environment Ethiopia.
Financing Options Understanding loans vs equity (e.g., 70% bank loan in proposal) is
key to structuring funding.
Energy Management Knowing when and how to use the generator backup and reduce
utility costs.
Summary Profile of a Successful Starter
A person who is disciplined, adaptive, detail-oriented, with basic business, technical, and
food handling knowledge, and has the resilience to wait 6–9 months for return on
investment will be in a strong position to succeed in this bread production business.
