Natural Herbs investment
Executive Summary
In Manzini Region where a group of elderly always use the little, they have to go and see doctors
in various clinics around Manzini, since they mostly suffer from high blood pressure. A group of
intelligent students who are economically and health conscious decided to provide a natural herb
(bitter herb) which will be a close substitution of the high blood pressure medication provided by
doctors.
Natural herb investment was chosen to be the name of the company. The name signifies that the
herb will be natural. Enterprise will be based in Luyengo campus but it will operate around the
Manzini region where bitter herb will be sold and distributed even in the various Tinkhundla.
The main aim of Natural herb investment is to sell bitter herbs of good quality to the elderly
around Manzini. Through this investment, we hope to offer an affordable alternative of the high
blood pressure medication that is offered in hospitals. Most of all, obtaining a bigger market
share around Manzini is one of the crucial goals of Natural herbs investment.
Bitter herb stock will be bought from Mbekelweni, Bhunya and Mbasheni area where there are
farmers who grow natural herbs including bitter herbs. Herbs will then be dried, crushed and
later packed into different sized containers.
Chosen idea
Buying bitter herbs (inkaka and inshubaba) from SMES farmers, dry and package them crushed,
green. It can be used as food ingredients during cooking or in food dressing (crushed) and can
also be used to make green herb solution. The business will use several promotion and pricing
strategies to attract more customers.
Mission statement
Natural Herbs Investment’s mission statement is to act as a middleman in processing and selling
bitter herb to the elderly who are health conscious at an affordable price around Manzini region.
Natural Herbs Investment’s Objectives
To make and ensure continuous flow of profit of a minimum 50% per annum
To be reliable supplier of about 50% of elders with bitter herbs within the first two years of
operation of the business.
To capture a market share of at least 50% in 5 years.
Calculating the Size of the Market and Expected Market Share
A) Number of customers unit/target market E1 000 grannies
B) Average annual gross income per unit E2400/ elder
C) Total income for area E2 400 000
D) Percentage of income spent on items 5%
E) Potential lilangeni value of market share E120 000
F) Realistic percentage of market share 7%
G) Lilangeni value of entrepreneur’s market share E8 400
The organizational structure
GENERAL MANAGER (SIMELANE MNDENI)
ADMINISTRATION (ZWANE
MZWANDILE)
PRODUCTION OPERATION FINANCIAL FUNCTION PURCHASING FUNCTION
(SIMELANE AYANDA) (MATSEBULA KWANELE) (NYATABO MNOTFO)
HUMAN RESOURCES MARKETING (GAMEDZE
(MHLUNGU SIFISO) EXTERNAL RRELATION
MILLION)
(NGCAMPHALALA ZWELAKHE)
Pricing strategy
Natural herbs investment will use customer-oriented pricing backward pricing strategy whereby
customers will be willing to pay E 15.40 per item.
Material used
1. Packaging container 20g
2. Stickers
3. Bitter herbs
4. Ventilated plastic 20g
Marketing Plan
Marketing research and analysis
A survey was conducted by the member of Natural Herbs Investment concerning the need for
bitter herbs. There results showed that there is a huge need for bitter herbs particularly in dry
season in the Manzini region. Natural Herbs Investment will sell their products in various
disbursements stations of elderly grants, community meetings and school meetings.
Target market
Elderly and a portion of people who are healthy conscious especially ladies as well as those
people who are living with a condition of blood pressure.
Pricing strategies
Natural Herbs Investment will use the penetration and psychological pricing strategies.
Competition analysis
Natural Herbs Investment operate in a highly competitive market and compete with the
following:
Manzini market
There are street vendors who are selling the same product.
PROMOTION STRATEGIES
Natural herbs investment main objective in promoting the product is to persuade the customers to
switch to our brand through the following strategies:
Personal selling – product will be transported to customers.
Advertising through radio since most of our target customers usually get information
through radio.
Public relations officer will verbally promote the product to the customers.
Distribution strategies
Direct distribution- products will be taken to elderly disbursement grant station.
Indirect distribution-products will be taken sto general dealers where the product will be sold to
customers.
BUDGETED INCOME STATEMENT FOR BITTER HERBS ENTERPRICE ENDING 30
NOVEMBER 2019
QUANTITY UNIT AMOUNT AMOUNT
PRICE
Sales Revenue 500 15.40 7 700
Raw materials 500 8 4000
Gross profit 3 700
Operation expenses
Stationary 50
Transport 500
Bank charges 50
Airtime 150
Electricity 200
Advertising 500
Rent 400
Wages 1 200
Total operational expenses
Net operational income
Other expenses (3050)
Interest paid 650
Net income before tax (160)
490
BUDGETED BALANCE SHEET FOR BITTER HERBS ENTERPRICE ENDING 30
NOVEMBER 2019
Fixed Assets Liabilities
Furniture 1 000 Account payable 300
Cutlery 900 Note payable 800
Total Fixed Assets 2700 Owner’s equity
Current Assets Capital 1600
Inventory 200
Cash in hand 300
Account receivables 250
Total current assets 800
Total assets 2700 2700
BUDGETED CASH FLOW FOR BITTER HERBS INVESTMENT ENDING 30 NOVEMBER
2019
SEPTEMBER OCTOBER NOVEMBER
INFLOW
Beginning balance 2 400 7 050 11 890
Sales 7 700 7 700 7 700
Total inflow 10 100 14 750 19 590
Outflow
Stationary 50 50 50
Electricity 200 150 250
Rent 400 400 400
Airtime 150 120
Wages and salaries 1 200 1 200 1 200
Advertisement 500 450
Interest paid 160 160
Transport 500 450 550
Bank charges 50 50
Total outflows 3050 2 860 2 780
Net out flows 7050 11 890 16 810
LIQUIDITY RATIOS
1. Current ratio = current assets / current liabilities
= 750/1 100
= 0.68
This means at the first year of the operation of the company, the company cannot meet its current
obligations because it has more liabilities than its assets but as time goes on there will be more
assets.
2. SOLVENCY RATIOS
Debt to assets ratio = Total liabilities /Total assets
= 1 100 / 2700
= 0.407
The proportion that lenders are contributing to the total capital of the firm is 0.407 % which
shows that that the business has opportunity to expand
