EXECUTIVE SUMMARY

The educational institutes have tremendously increased in Nigeria including

institutes and education centers with schools. Furthermore, with the emphasis being
placed on the educational sector in the country as a whole, the demand for chalk
crayons would continue to grow. Dust-less chalk crayons, being much more
convenient and less messy, command premium value in the market. There is good
potential for the product, but a good sales network has to be developed first. Thus,
the proposed business of Chalk Manufacturing which literally means nations chalk
in national language. The enterprise will be located in Ede North Local Government
and Ede South Local Government. Since the enterprise will be prompt to the market
for the gathering of raw material for the production process.
Chalk Manufacturing intends to provide dustless white chalks for all the
education centers and institutes. The prior aim is to increase the nation’s economy
and provide employment opportunities to drop-outs, poor background citizen
especially focusing on youths. The production of the dustless white chalk will be as
per the demand since Nigeria has been importing the chalks from India and other
third countries.
Dustless White Chalk, which will be nationally called as Chalk Manufacturing
segregates the demographic which includes the nursery schools, primary schools,
secondary schools, colleges and Institutes and Education Center, etc. Thus, our
targeted customer is the Learners in the Education, since these segmented customers
will be using the Chalks at local market.

In addition to the dustless white chalk, Chalk Manufacturing will be providing

part time employment opportunities to those who would like to build up their
entrepreneurial skills. The promoter intends to take a 40 decimal land on lease for

the construction of production house as in Ede in Osun State. Thus 80% worth of N

776,846 will be met from the loan while the promoter or the proponent plans to inject

equity of N194,212. For the business to run effectively and efficiently the total

investment required is N 917,058.

The office hours will take place from Monday through Friday from 9am until

5pm. Sales and services hours may be subject to occur outside of office hours

determined by the demand of supply. Thus, Chalk Manufacturing would act on to

reducing the import contributing to nation’s economy. The estimated total

production capacity in the year 2017 to 2021 is 1,500 packets of chalk which comes

to 1,50,000 pieces of chalk monthly. The proposed business expects to have total

sales of N 2,187,911 against the total expenditure of N 1,069,638 by the end of fifth

financial year. On an average, the business would increase its yearly sales by 4.76%

on projected five year financial plan.

Therefore the business will prosper within the eight months of the

commencement. This can be illustrated with the Break-even point which shows that

the business will cover up the total cost. Thus the sales will prosper.

BREAK EVEN X BREAK EVEN Y LABEL

21,373 2,137,300 break even unit =21373

 The cornerstone of the proposed business is expected to be very profitable
with net present value worth N 2,215,164 with Internal Rate of Return (IRR) of 77%
and payback period of 3 years 7 months based on the five year projection cost.
MISSION
“To make bright and visible learning environment”
VISION
“To produce quality-product for the nation builders; to the learners”
OBJECTIVE
1. To contribute towards Nigeria economy.
2. To provide employment opportunities.
3. To provide every schools and institutions with dust free chalks.
4. To earn reasonable profit for the future growth of the business.
5. To utilize resources to optimum level with regard to calcium carbonate.
COMPANY PROFILE
PROPOSED NAME OF THE Beccamore Chalk and Marker
BUSINESS Manufacturing Company
PROPOSED BUSINESS TYPE Production and manufacturing
PROPOSED ACTIVITY Production and manufacturing of
dustless White chalks and markers
PROPOSED BUSINESS COST N790,644
TOTAL BUSINESS COST (including N 917,058
working capital)
MEANS OF FINANCING 80 % Debt and 20% Equity
80% DEBT N 776,846
20% EQUITY N 194,212
PROPOSED LOCATION OF THE Ede Local Area of Osun State
BUSINESS
PROPOSED PRODUCTS Dustless White Chalk and markers
LAND REQUIREMENT 40 decimal on lease
POWER REQUIREMENT N 2,000 monthly
 SUPPLIER DETAILS Devansh Tradings, Siliguri. West
Bengal, S.K. Udyog Siliguri and
Ayanavaram Ayanavaram, Chennai
PROPOSED STAFF REQUIREMENT 1 Manager cum Accountant (the
promoter)
1 Machine Operator
2 Assistant (Manual Helpers)
1 Sales and Marketing Person
5 Others on requirement on basis

SWOT ANALYSIS

STRENGTHS WEAKNESSES
Quality product Lack of experts
Reasonable price High expenses
Ideal location to run the business New Entrant – will take time and re-
Available of laborer sources to create lasting brand name in
Good customer base in targeted the market.
market segment.

OPPORTUNITIES
Job opportunities
Can easily sell to the customers
High market demand
To reduce imports of Chalk product
and curb the INR shortage.
THREATS
Competitors (Nigerian) providing
similar product.
Entrant of similar projects
Unavailability of raw materials
Impact on Human health

LOCATION AND ACCESSIBILITY

The proposed business Chalk Manufacturing is to be situated in Ede North
and Ede South Local Government Area of Osun State, has been potential market
for manufacturing sector whereby the location is accessible to the raw materials
and prompt to the market.
SOURCE OF FINANCE
This table below illustrates the source of finance for the proposed business.
PARTICULAR AMOUNT
TOTAL PROJECT 790,644
COST
WORKING CAPITAL 180,414
TOTAL INVESTMENT 971,058
20% EQUITY 194,212
80% LOAN 776,846

Chalk Manufacturing will have five employed for the first month as of
commencing of the firm. The enterprise plans to employ more of part-time labor so
as to reduce the nation’s unemployment rate. At first, the enterprise is small as to
increase the employees however in the near future Chalk Manufacturing plans to
recruit for the export of the product.
The Manager cum Accountant will be the spearhead of the unit to oversee the
day to day activities. The HND graduate will be recruited as machine operator.
Thereby, the business will help in reducing the unemployment rate. Others will be
recruited as per the required qualification for various posts. The part-time labor will
be recruited on required basis.
PRODUCTION PROCESS OF DUSTLESS CHALKS
The plaster of paris and slaked lime must be mixed in proportion of 80 : 20 as
the chalk produced by this formula would just not have a good quality but also
reasonable production cost. The production process of making chalks is quite easy.
First of all the moulds are cleaned with a dry piece of cloth and then each cavity of
these moulds are well greased (4 parts of Kerosene and a part of
mustered/groundnuts/coconut oil, each) after greasing is done to prevent the mixture
of slaked line and plaster of Paris from sticking on the walls of the moulds. Later,
the mixture of finely powdered plaster of Paris and slaked lime are mixed in the
proportion of 80:20 on a tray. Such a quantity of this mixture must be prepared to
avoid any kind of wastage be-cause if there is, that material must be reused.
The uneven portion of the mixture over and above the mould must be removed
with the help of a knife and then must be left for 10-15 minutes for drying. After 15
minutes, the above portion of the mould can be touched to find whether the material
has dried. If the chalks are half dried, it might be taken out of the moulds with the
help of wooden hammer in the tray and finally exposed to sunlight for better drying.
The last step is to fill a box with saw dust and put 100 to 144 chalk sticks and pack
it.
FORECAST
PRODUCTION FORECAST
Particula Month 1 Year 1 Year 2 Year 3 Year 4 Year 5
r
Dustless 1,500 18,000 18,900 19,845 20,837 21,879
white
Chalk
Total
TOTAL 1,500 18,000 18,900 19,845 20,837 21,879
PRODU
CTION
ASSUMPTIONS
The Enterprise plans to produce 1,500 packets of chalk at Nu. 100 in a month.
The average inflation is considered at 5% to avoid over estimation of cost
projection across all the projected years and the production capacity forecast kept at
optimum.
The enterprise plans to increase its production by 10% in every financial year and
accordingly the cost of inventory is increased proportionately.
The average production has been keep at the minimum. The firm will produce
more than the aforementioned production once the project is established.
 SALES Month 1 Year 1 Year 2 Year 3 Year 4 Year 5
FOREC
AST Unit
price
(Min)
Dustless 100 150,000 1,800,0 1,890,0 1,984,5 2,083,7 2,187,9
white 00 00 00 25 11
Chalk
TOTAL 150,000 1,800,00 1,890,00 1,984,50 2,083,72 2,187,91
SALES 0 0 0 5 1
ASSUMPTION:
The prices of the products are kept minimum and constant throughout all the
financial years to avoid the over-estimation of the sales though the prices are much
higher; and the probability of price becoming higher is definite in the subsequent
years.
TOTAL EXPENDITURE PROJECTION
PARTICULARS MONTHLY YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
COST
Cost of Goods Sold:
Purchases 3,300 39,600 41,580 43,659 45,842 48,134
(inventory &
others)
Freight-in 6,000 72,000
Direct labor 15,000 180,000 189,000 198,450 208,373 218,791
Indirect 2,000 24,000 25,200 26,460 27,783 29,172
Expenses
(electricity)
Less:
Ending Inventory
Total 26,300 315,600 255,780 268,569 281,997 296,097
Expenses:
Advertising 1,000 1,000 1,000 1,000 1,000
Salary & 25,000 300,000 315,000 330,750 347,288 364,652
Allowances
Commissions 1,000 12,000 13,200 14,520 15,972 17,569
Delivery 1,000 12,000 13,200 14,520 15,972 17,569
expenses
Depreciation 3,141 65,817 65,817 65,817 65,817 65,817
Insurance 2,000 24,000 24,000 24,000 24,000 24,000
Interest 2,372 28,467 22,632 16,560 10,240 3,663
Maintenance 2,500 30,000 33,000 36,300 39,930 43,923
Miscellaneous 2,500 30,000 33,000 36,300 39,930 43,923
Permits and 1,000 1,000 1,000 1,000 1,000
licenses
Professional 500 6,000 6,600 7,260 7,986 8,785
fees
Repairs 3,000 36,000 39,600 43,560 47,916 52,708
Telephone 1,500 18,000 19,800 21,780 23,958 26,354
Utilities 2,000 24,000 26,400 29,040 31,944 35,138
Vehicle 1,000 12,000 13,200 14,520 15,972 17,569
expenses
Wages 8,000 96,000 100,800 105,840 111,132 116,689
Total 55,513 696,284 728,249 762,767 800,057 840,358
Expenses
Others: MONTHLY YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
ASSUMPTIONS:
 Electricity cost is assumed to be increasing by 5% on every financial year.
 Advertising is assumed to be constant throughout the financial year.
 Remaining expenses is assumed to be increasing by 10% in every financial
year.
FINANCIAL ANALYSIS
INCOME STATEMENT
INCOME STATETMENT PROJECTION FOR 5 YEARS
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Revenue 1,800,000 1,890,000 1,984,500 2,083,725 2,187,911
Cost of 315,600 255,780 268,569 281,997 296,097
Goods Sold
Gross 1,484,400 1,634,220 1,715,931 1,801,728 1,891,814
Profit
Expenses 696,284 728,249 762,767 800,057 840,358
Net 788,116 905,971 953,164 1,001,671 1,051,456
Operating
Income
Net 788,116 905,971 953,164 1,001,671 1,051,456
Income
(Loss)
Less:
30% BIT 236,435 271,791 285,949 300,501 315,437
Net Profit 551,681 634,179 667,215 701,170 736,019
(Loss)
Additional Information
Depreciatio 65,817 65,817 65,817 65,817 65,817
n expenses
% of Net - 14.95 5.21 5.09 4.97
Income
(Loss)
% of Average Net Income (Loss) 6.04
% of Net - 14.95 5.21 5.09 4.97
Profit
(Loss)
% of Average Net Profit 6.04
Monthly 19,703 22,649 23,829 25,042 26,286
Taxes
Payable
(30% BIT)

PROJECTION BALANCE SHEET

Projected Balance Sheet For 5 Years
Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Cash 891,132 1,714,871 2,579,730 3,486,776 4,437,030
Accounts 180,000 189,000 198,450 208,373 218,791
Receivable
Inventory - - - - -
Prepaid expenses (53,256)
Other Current Assets
Total 1,017,876 1,903,871 2,778,180 3,695,149 4,655,821
Current
Assets
Net Fixed 618,708 581,016 543,324 505,632 467,940
Assets
Other Assets
Total Assets 1,636,584 2,484,887 3,321,504 4,200,781 5,123,761
Liabilities & Capital
Accounts 20,625 900,122 1,844,667 2,836,879 3,878,094
Payable
Taxes 236,435 271,791 285,949 300,501 315,437
Payable
Payroll Taxes Payable
Accrued Wages Payable
Unearned Revenue
Short-Term Notes Payable
Short-Term Bank Loan Payable
 Total 257,060 1,171,913 2,130,616 3,137,380 4,193,531
Current
Liabilities
Long-Term 633,632 484,583 329,461 168,019 0
Notes
Payable
Total Long- 633,632 484,583 329,461 168,019 0
Term
Liabilities
Total 890,692 1,656,496 2,460,077 3,305,399 4,193,531
Liabilities
Owner's 194,212 194,212 194,212 194,212 194,212
Equity
Net Profit 551,681 634,179 667,215 701,170 736,019
Total Capital 745,893 828,391 861,426 895,381 930,231
Total 1,636,584 2,484,887 3,321,503 4,200,781 5,123,761
Liabilities &
Capital

COST BENEFIT ANALYSIS.

Cost Benefit Analysis

Sl no Benefit 0 Year 1 Year 2 Year 3 Year 4 Year 5
Source
s
1 Dustles 0 1,800,00 1,890,0 1,984,5 2,083,7 2,187,9
s white 0 00 00 25 11
Chalk
Total 0 1,800,0 1,890,000 1,984,500 2,083, 2,187,91
Benefit 00 725 1
per
year
Grand total benefit 9,946,136
NET PRESENT VALUE (NPV) AND INTERNAL RATE OF INTEREST
(IRR)
Net Present Value (NPV) 2,215,164
Internal Rate of Return (IRR) 77%

PAYBACK PERIOD
PAYBACK PERIOD Number of years
0 1 2 3 4 5
Net Cash (971,058) 710,718 823,738 864,859 907,046 950,254
flow
accumula (971,058) (260,340) 563,399 1,428,25 2,335,30 3,285,55
ted cash 8 4 8
flow
Payback period 3 years 7 months 3.7
Note:
 The company can repay the loan which is pay Back period of Chalk

Manufacture is 3 year 7 months.

CONCLUSION

Chalk and Marker Manufacturing is a manufacturing firm for the Dustless White

Chalks and makers for the various schools and institutes. The total investment to

commence this business estimates N 978,058 with debt equity ratio of 4:1 as per

annum. The location of the firms will be at Ede North Local Government and Ede

South Local Government Area respectively.

Today, Nigeria is suffering from the shortage of INR which affects on the

country’s economy. It is mainly due to the increase imports of merchandise from the
neighboring countries. Thus by reducing to some extends through the manufacturing

of Chalks and makers which our country imports.

Owing to the feasibility of the business, Chalk and Maker manufacturing is to be

established to meet the needs of the country in reducing import and expanding the

economy through exports in near future. But the effect will be more in the future

with its expansion and diversification of the products which also create more

employment opportunities.

As a forward-looking company and as a socially responsible firm, we would

bring about benefits to the local community and our customers. We will create

employment to qualified Nigerian people and contribute to the nation’s economy in

the form of taxes.

The enterprise will give satisfactory salary and allowances with commission to

the employees as they are bedrock of our business and our success depends on the

level of satisfaction they de-rive working in the business house.

Chalk and Maker manufacturing business firm will provide dustless white chalk

and durable maker for the smooth writing and dustless learning in every schools and

institutes.

It is assumed the enterprise would make more profit once it starts production and

marketing. It can be guaranteed that it would make more profit than as it is

aforementioned.
35% of the total business cost is invested in purchasing fixed assets which is the

production engine of the proposed business. This indicates that the proposed

business is feasible and viable in terms of its investment strategy.