CAPITAL 5, 000,000

COMMERCIAL INDUSTRIAL AND ENGINEERING CONSULTANTS

Reg. N° : 022.400

‫بسم ٱل ٱلرحمان ٱلرحيم‬

Tâches à accomplir :

1) Chercher les différents fournisseurs des :

a) Briques en terre cuite

b) Autres briques en terre
c) Différents types fers à utiliser pour l’équipement de la boulangerie
d) Moteur électrique et autres accessoires
e) Bois d’espèces requis pour le pétrin
f) Différents types de tôles susceptibles d’être utilisé pour la fabrication des moules
g) Visite de l’emplacement prévu pour le site de la dite boulangerie
h) Détermination des différents documents administratifs et fiscaux tel que impôt/patent certificat
sanitaire, certificat médical, équipement anti-incendie, différents poids et balances
recommandées et les coûts d’obtention de ces derniers
Tous ceci demandant de nombreux coups de téléphones, la commission et le déplacement de certaines
personnes à l’accomplissement de certaines tâches ; est estimé à 90 000 FCFA (Quatre vint dix mille francs
Cfa)

2) Estimations quantitatives et financières des matériaux pré-cités, main d’œuvre et autres inclus
3) Réalisation des croquis brouillon du four de la machine à mouler la pâte
4) Estimation du coût de revient et de la rentabilité de la structure

La réalisation de tous ces travaux est facturée à 100 000Francs (Cent mille FCFA) sans aucune implication
dans les différents montages, exception faite pour, autant de conseil dont besoin s’en faut.
Deux à trois semaines est le temps estimé pour l’accomplissement et la livraison de ce devis !

S’il faut être impliqué dans les différents montages et finitions, cela ferra l’objet d’un nouveau contrat.

N.B : Ceci est un devis qui ne vise pas un gain immédiat, mais à long terme pour d’autres projets à venir.

NGUBONG Mohammed

Commercial, Industrial and Engineering Consultant

Douala : P.O. Box 18,656 Tel : (+237) 99 91 73 39

Bamenda : P.O. Box 109 (+237) 78 85 62 11
Limbe : P.O. Box 327 ( Page 1 ) Fax : 13 03 48 45 88 33
www.ngubong-engineering.biz.nf E-mail : ngubong_engineering@yahoo.com
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‫ والصاالةا والساالم علااي رسااول ااا‬.‫ الحمد ل رب العالمين‬.‫بسم ا الرحمن الرحيم‬

.‫ السلم عليكم ورحمة ا وبركاته‬.‫وعلي اله وأصحابه أجمعين‬
Bakery cash flow analysis.
Based on the experience in a bakery with 14 employees in Loom, the following cash flow can be done. Having
interviewed one of the main actors in the said bakery, I decided to modify the work force by reducing the
personnel number from 11 to 6, and doubling their salaries. In this way, I believe better results can be obtained.
The bakery in Loom transformed 5 bags of flour per day on average. We are going to start our analysis with 3
bags a day to be conservative. This yields the following.
1) The raw material costs S1 is made up of the following.
Flour (3 bags per day) 45,000
Wood 3,000
Yeast, oil, majmix, salt, tablets, saccharin etc 3,000
Plastic bags 500
Sugar 7Kg 4,000
Fuel 2,000
Transport and Communication 3,000
Unforeseen 2,000
The total monthly raw material cost( i.e. 30 * sum of above 1,875,000

2) The overhead charges S2 are given by

Rents per month 33000
Informal tax per annum 500000
Medical certificate 10000
Sanitation inspection 35000
Pesticide cover 15000
Total monthly value = Total annual value/12 560000 46670
Complications in payment 3330
Total Monthly salaries for 6 employees 180000
Administrative papers for motor bike/month 4000
Total over head charges 234000

3) Now the net sales revenue (S3) can be obtained from the total sales if we assume 1% loss during sales.
Remembering that each bag of flour when transformed produces bread worth 30,000frs, we have the
following daily figures
Sales revenue from 3 bags of flour less 1% loss (9000)= 81000
Therefore the net monthly sales revenue = 30 * above = 2,430,000

So from these figures we see that the expected monthly profits Pr+ is given by:
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Pr = S3 – (S1 + S2)…………………………………………. (1)
Where S3 is the net monthly sales revenue.

Thus for 3 bags a day, Pr = 2,430,000 - (232,000 + 1,875,500) = 322,500 Frs.

Now from the calculation of S1 above, the total raw material cost for N bags transformed per day over a month
S1N is equal to 1,875,500N/3 = 625,170N Frs.
The over head charges for N bags (S2N ) a day does not change because it does not depend on the level of
production. So the net monthly sales revenue for N bags per day ( S ) =2,430,000N/3 =810,000N. So the net
3N

profit for N bags a day using 6 workers Pr(N) = 810,000N - (232,000 + 625,170N ). That is
Pr (N) = 184830N - 232,000 …………………………. (2 )
Equation 2 will of course produce the results we first obtained for N = 3. That is 3 bags per day. Compared to
the bakery from which these figures were based, I have slightly reduced the number of workers and doubled
their salaries in order to motivate them better. We see that if we could produce as in this bakery, 5 bags a day,
but with our planed team, we will be talking about profits in the range of 692,150 Frs. CFA. Just put N = 5 into
equation 2.
Now with our team, what is the break even point? In other words what is the minimum number of bags of flour
we can transform per day and neither loose nor gain. That is making zero profit. This is the value of N for
which equation 2 is equal to zero. Solving equation 2 we find that Nmin is equal to 1.255 bags per day. So if we
can produce at least one and a quarter bags per day on average, we are in business.
Based on the 3 bags per day scenario, assuming the owner can live with 72500 Frs. CFA a month, he could pay
back a loan of 5 million Francs in about 20 months. Say two years by paying 250,000 F every month. The two
year pay back period is based on the Islamic contract called Qard Hassan. We could of course resort to other
types of Islamic contracts. Here are a few possibilities.

A) Qard Hassan: The loan of 5 million is paid back in block two years later or in installments of 250,000
per month until all is repaid without any interest put over it.
B) Musharaka: Several partners raise the full amount and share the profits sin a predetermined ratio.
Losses are shared according to the proportion of the initial outlay provided.
C) Mudharaba: Here the profits are shared between the finance providers and the manager in a
predetermined ratio. The losses however are borne by the finance providers alone, w unless it can be
shown to have been the result of some deliberate act on the part of the finance user.
D) Term Mudharaba: Here the profits are shared as in the classic Mudharaba, but the finance user
(Mudharib) foregoes part of his share of the profits which are put into an account until it reaches the
amount of the initial outlay. It can also be given to the finance provider directly. When the initial outlay
is reached, the finance provider signs over the business to the finance user and it become his.
E) Diminishing Musharaka: Here some partners slowly buy shares from other willing partners until some
partners sell all their shares and leave the partnership.
F) Murabbaha: Here the finance provider buys all the tools and equipment and sells to the project
promoter with a profit. The project promoter pays all at some future date or by installments. It could
also be rented to him, in which case it is a different contract.
There are of course many other types of Islamic contracts. However as far as financing the start up of a
bakery is concerned, I' shall like to stop here. This is an opportunity to practice those parts of Islam we
tend to neglect.

Now let us see how much the initial outlay has to be. (All in thousands of Frs. CFA)

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Initial prospection, communication & bargaining. (Going up 190

and down to the various sources of tools and equipment and
locations + communication to supervise manufacture, building
etc (NB: The figures are in thousands of CFA francs)
Cost of over construction (3m X 3m) 420 bricks for the floor 63
Sun dried bricks for the walls 50
Metal doors and spade 25
Labor of workers 25
Unforeseen costs 20
Total cost of the cheapest traditional wood burning oven (no 183
heat exchanger)
Molds: For loaves of 100F @unit cost of 850F, 300 molds 255
For loaves of 200F@ unit cost of 850F, 150 molds 127.5
For open molds@1300F a mold, 50 molds 65
Total cost of molds = 447.5

Now the wood work.

shelves 150
2 tables 100
3 chairs 30
2 benches 10
Show case 75
Mortar (2m X 1m) 50
3 long spades 10
Unforeseen expenses 25
Total cost of wood works 450

Now the motorbike:

One two wheeled motorbike. 450
Wooden boxes to supply the bread (3 boxes) 45
Administrative documents of bike; Insurance, Grey card road 50
tax etc
Accessories of bike 5
Unforeseen expenses related to bike. 5
Total cost of bike 505
Now we come to the fiscal expenditure on an annual base: We shall include some equipment such as fire
extinguishers, first aid and social insurance here. I must say that it will be advisable to take independent
steps to arrange some form of medical insurance because the state run social insurance are usually only

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interested in collecting money from their various sources. They are not usually in a hurry to make any
payments, to put things mildly, except of course the salaries and bonuses of those working for the
national social insurance fund.

The main informal tax. (Should explore formalizing it and see if 500
advantageous as 2008 finance law exclude newly set up companies
from business license)
Medical certificate 10
Sanitation inspections 35
Pesticide cover 15
Fire extinguisher 50
First aid box 50
Social insurance 45
Total fiscal expenses for the year 705

Some other miscellaneous tools and equipment:

Set of spanners and screwdrivers. 25

Calculators and stationery 10
2 Mobile phones 60
Simple second hand computer and printer 150
Internet modem and phone 40
Alarm system 100
Touches, knives and other cutters, cutlasses, axes, chisels for 40
spiting wood; buckets etc
Electricity, 3-phase meter 100
Standby generator (petrol burning because it is cheaper) 120
Dough kneading mill 750
Unforeseen 50
Total miscellaneous equipment. 1545

For the bakery to be complete, it has to produce not only bread but cakes and doughnuts as well.
Doughnuts require frying. Here is a list of some of the equipment required. All the amounts are still in
thousands of CFA francs.

Truck and show case 100

Frying pan 25
Fire place 15
Storage box 10
Total doughnut equipment 150

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In order to lower the cost of raw materials, it is better to buy them in bulk. Here is a list of the initial
stock we need to set up at the beginning. There should be proper stoke management so that if the stoke
is depleted, it is replaced immediately.

20 bags of flour 300

One bag of sugar 28
One bag of powdered milk. 60
2 Gallons of oil (20l each) 40
One bag of salt 3
One packet of saccharin 6
Two cartons of yeast 40
Two cartons of magemix 60
Flavor 10
Improver 90
Alimentary colour 5
Bleach, soap, and detergent 1.5
One bag of plastic bags 45
3 months salary of the launching staff. 3X 75,000 225
Fuel reserve, 50l 25
3 months rents. 35;000 X 3 105
Total raw material costs. 1057

The total amount of investment outlay required is the sum of all the above. =
4,997,500 Frs. CFA. That is Four million nine hundred and ninety seven thousand
five hundred francs only.

Mohammed Ngubong
(Commercial, Industrial and engineering consultant)
Tel: 237-699917339 Email: Ngubong_engineering@yahoo.com
237-678856211 www.ngubong-engineering.biz.nf

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