Kingdom Business Plan and Summary

February 2011
Name: Adisa Address : Nalogba, Northern Region, Ghana Business Name and Address: Shea Butter, Kuli Kuli, and Groundnut Oil Production & Sales

Executive Summary
Business Description
This business is a shea butter, kuli kuli, and groundnut (peanut) oil production and sales business. The product is processed near Adisas, the owner and operator, home in the village of Nalogba. The shea butter production process involves cracking, roasting, milling, separating oil, boiling, and cooling. Currently, Adisa is processing one bag of shea nuts to make 2 calabash (local bowls used for measurement and packaging) of shea butter. She would like the business to be processing three bags of shea nuts each week which will create 6 calabash of shea butter. She expects enough demand to sell all the additional shea butter in the same amount of time. The kuli kuli and groundnut oil production involves cracking, frying, and milling the groundnuts, separating oil, and frying the kuli kuli. Adisa currently sells the products of 15 bowls of groundnuts each week. She is not planning to expand this product line due to low profit margins, but will continue the line for ministry purposes.

Kingdom Impact
Adisas home is near the large mango tree in the center of her village. Several days a week Adisa sits under the shade tree to make kuli kuli. Many people from her village and surrounding villages come to sit under this tree, chat, and buy her kuli kuli. It is well known that Adisa is a Christian given the many times the discussion has turned to a debate over religious issues. Adisa is able to answer questions about Christ and will win the arguments since she is armed with the Truth.

Investment Required
The investment required to increase Adisas shea butter business from 2 calabash per week to 6 calabash per week is 361GHS ($255USD). Loan to be paid back in 6 monthly installments of 69GHS over a half year period. There is a one-time service fee of 15%. First payment to be due at the end of the second month after loan inception. 1

Business Overview
Business Description
Adisa produces and sells shea butter, kuli kuli, and groundnut oil from her home in Nalogba. Nalogba is a very small village of primarily Muslims and is approximately a 20 minutes car drive from Yendi town in the Northern Region of Ghana. Shea Butter Adisa currently produces two calabash bowls full of shea butter per week. This is the product of one five pound bag of shea nuts. The process of shea butter production is as follows: Once the raw nuts are purchased they are cracked by pounding and then roasted. The roasted nuts are carried to a nearby village where there is a grinding mill. After paying to have the nuts ground, they are carried back to Nalogba as a paste. The next steps are very important as they will determine the color and quality of the shea butter. Shea nut oil is extracted from the paste. The time and attention that is put into this step determines the clarity of the oil. The oil is then boiled to reach the appropriate consistency. The best method is to bring the oil to a boil and then decrease the temperature to a low boil or simmer. Once the oil has boiled, it cools and solidifies into soft shea butter the finished product. Adisa is asking for a loan to increase her business to 6 calabash of shea butter each week. Shea butter is in demand all year but the price does change to indicate high and low seasons. The price is high starting in May through early July. The price then decreases for late July through April. While shea butter is a very profitable product year-round the low price season provides the highest profit margins and lasts for 9 months. Adisa travels to Yendi on market days to sell her shea butter. She pays for transportation for herself and her product. Yendi market charges a flat tax of 50 pesewas (similar to cents) to sell product there. Yendi market is held every six days and therefore can occur four or five times a month depending on timing. Adisa sells two calabash full of shea butter at each occurrence of the Yendi market. She is certain that the market can support the entrance of an additional four calabash. Kuli Kuli & Groundnut Oil Adisa currently produces kuli kuli and groundnut oil from 15 bowls of groundnuts per week. Kuli kuli is a small snack similar to a savory churro. Groundnut oil is used for cooking. Once the raw nuts are purchased they are cracked by pounding and then roasted. The roasted nuts are carried to a nearby village where there is a grinding mill. 2

 After paying to have the nuts ground, they are carried back to Nalogba as a paste. Oil is extracted from the paste and stored in a jerry can for sale to customers. The remaining paste is separated into smaller sections and rolled into thin strings and made into circles. The thin circles are then fried over charcoal (it is important to use charcoal rather than firewood in this step for a better product). The finished circles, kuli kuli, are sold in sets of four. Adisa is not planning to increase the volume of her groundnut products. Kuli kuli and groundnut oil are products with very low profit margins, but they do provide a remarkable platform for her to share the Gospel with her neighbors. Kuli kuli and groundnut oil are not sold at the Yendi market, rather they are sold from her home. Adisa is particularly well known for the quality of her kuli kuli. It is an affordable snack product very well liked in the area.

Risks & Opportunities

Risks One risk in increased shea butter production is if she purchases bags of poor quality shea nuts. Some sellers will put good shea nuts at the top of the bag but fill the bottom with bad shea nuts. This can be avoided by asking the seller to measure out the bag in front of her. Another risk is decreased quality in her production process since she will be hiring workers from her village. This risk can be addressed by close personal supervision and accountability. Adisa will personally monitor the purchase of shea nuts and the production process. Additionally, with increased production there is always the inability to sell ones inventory. Adisa has the ability to sell products in the Yendi market but can also sell in nearby large markets if she is unable to sell everything in Yendi. Opportunities With increased production and profits, Adisa will have the opportunity to invest in other grains and farm products when the prices are low and sell them when the prices increase (normally during dry season). Using this same thought process, Adisa can purchase groundnuts when the price is low and store them to use for her groundnut products when the price is high.

Biography of Candidate
Adisa is approximately 55 years old, is married, and has seven children. Her oldest child, Abrafu, is attending Videres training program also and sells grains. Adisas husband, Selifu, is a farmer on local farmland. As a member of the Dagomba tribe, Adisa was raised Muslim. Adisa initially heard of and was afraid of Christianity. She was raised to believe that anything other than Islam should be feared. As an adult she began to respect Christians individuals. Selifu was also very impressed with the 3

lifestyles of the Christians he knew. The word of Christ was first introduced in Nalogba through a literacy program. The literacy program (Dagbani and English literacy) is run by Christians who also share Christ with the participants. Selifu became a Christian through the influence of this literacy program on their village and lives. Sometime after her husband became a Christian, one of Adisas sons had to go to the hospital. A Christian from the literacy program visited the sick son in the hospital, prayed for him, and gave the family money to pay for his medical care. Adisa was very touched by this show of love and generosity and believed in Christ as a result of their actions. After coming to Christ, Adisa, like many Dagombas, endured persecution from the Muslim majority in her community. Her neighbors would ridicule her for going to church and act out towards her (in a nonviolent way), but once they realized that her commitment to Christ was strong, they quit. The Christian congregation of Nalogba is 25 people; there are 19 Christians in Nalogba and 6 who come from a nearby village.

Company Structure
Adisa will operate the shea butter business herself. With the requested increase in production quantity she will hire two employees from her village. These employees will help with the processing of the shea nuts as well as the transportation to and from the grinding mill. Adisa will pay each employee 1GHS per day and will need both of them two days each week. Adisa will not be involved in any other business or revenue producing activities other than shea butter, kuli kuli, and groundnut oil production.

Marketing
Industry and Market Overview
The shea butter market is thriving in northern Ghana. Shea butter is a product used locally in household cooking in cakes, rice and beans, fried yams, etc. and is also used in soap and skin products. Shea butter is also used commercially in pomade, hair cream, and soap. Only the larger towns have markets large enough to sell shea butter, so buyers know where to go to purchase shea butter. Yendi is one of the few markets in the region that sell shea butter.

Customers
Adisa sells to men and women as well as commercial buyers from the southern cities of Kumasi and Accra.

Competition
Adisa sells shea butter in the Yendi market. Within her stall in the Yendi market there are 20 30 others selling shea butter and there are several such stalls in the Yendi market. Included in her stall are seven others from Nalogba who make shea butter and sell it in the Yendi market. Adisa is the sister-in-law of Sakina, another Videre participant who also produces shea butter in Nalogba. Although much competition exists, the demand for shea butter remains large and unmet. Since shea butter is sold to individuals and commercial buyers there are many who buy the product. Kuli kuli and groundnut oil have fewer competitors. There is one other kuli kuli producer in the village of Nalogba but Adisas kuli kuli is much preferred. People from the household of the competitor will even come to buy from Adisa. There are many times that the demand is so high that Adisa will sell out of her kuli kuli and will go to her competitor and help her sell all of her product as well.

Pricing and Distribution

Shea butter is always picked up in the market by the buyer. No delivery is necessary; therefore the sales price is consistent regardless of the buyers destination. The shea butter price does vary depending on the season. During high season shea butter can be sold for 30GHS per calabash. During the low season shea butter can be sold for 25GHS per calabash. Although the price is lower the profit margin is higher in low season. Kuli kuli and groundnut oil can be sold for the same price all year. Kuli kuli is sold for 10 pesewas for four pieces and groundnut oil is sold for 2GHS per bottle. Both groundnut products are distributed at Adisas home.

Promotion
Adisa sells her shea butter in large calabash bowls. The only manner of differentiating her product from the other shea butter sellers is to vary the quality and color. Roasting and boiling are both points in the production process that can determine if the shea butter will be clear and light in color or will be dark, and this influences quality. Dark shea butter is perceived to be lower quality. If the shea nuts are roasted too long, the oil and butter will be dark. Similarly, when the oil is separated from the paste the boiling process must occur at the correct temperatures or the oil will turn dark. Adisa can introduce a leaf or root during the preparation process and can vary the color from a light green/white color to a yellowish color, respectively. Different buyers prefer different colors. Adisa can find out which buyers will be at the upcoming Yendi market day and adjust the coloring of her shea butter accordingly. Kumasi buyers prefer light green/white while the Accra buyers prefer yellow. 5

Since shea butter is sold in large calabash there is no other packaging that can be taken into consideration. Adisas kuli kuli is very well known due to the high quality and her attention to detail. Her kuli kuli is promoted through word of mouth in her village and the surrounding area. Groundnut oil is a cooking staple in the region and is usually in high demand. Adisas neighbors know that she sells groundnut oil and will come to her for their needs.

Financial
Startup Costs
One-Time and Startup Items Tools and Equipment (see below) Equipment Installation & Prep. Starting Inventory Veterianary Fees Advance Rent Other Fees (legal, etc.) Licenses and Permits Initial Advertising & Promotion Operating Cash Total Start-up Expenses cedis 262 9 90 $ $184.51 $6.34 $63.38 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $254.23

361

Tools and Equipment XL pot L pot Basin Water Container Calabash Frying Machine Firewood Extra Paddle Total Tools and Equipment

Unit Price Number in cedis of Units 60 1 40 1 20 1 60 1 3 6 60 1 2 3 1 1

cedis 60 40 20 60 15 60 6 1 262

$ $42.25 $28.17 $14.08 $42.25 $10.56 $42.25 $4.23 $0.70 $0.00 $184.49

Investment Required
The investment required to increase Adisas shea butter business from 2 calabash per week to 6 calabash per week is 361GHS ($255USD).

Financial Plan
Financial Investment Required
cedis 361 15.00% 0.5 1 69 415 54 $48.59 $292.25 $38.03 $ $254.23

Loan Amount (Principal) One-time Service Fee Percentage Number of Years Months before First Payment Monthly Payment Amount Total of all Payments Total Service Fee Paid

Loan to be paid back in 6 monthly installments of 69GHS over a half year period. There is a one-time service fee of 15%. First payment to be due at the end of the second month after loan inception.

Financial Projections
Projected Income Statement
Adisa - Shea Butter, Kuli Kuli, & G-nut Oil
Year
Incom e Shea Butter, low season Shea Butter, high season Kuli Kuli, high season Kuli Kuli, low season Groundnut Oil, high season Groundnut Oil, low season Gross Sales Expenses Cost of Goods Sold Wages Firew ood - shea butter Calabash bow ls Grinding mill - shea nuts Market Tax Transportation to market - shea butter Firew ood - groundnuts Spices Grinding mill - groundnuts Charcoal Loan Payments Total Expenses Projected Cash Flow Cash Profit Loan Proceeds Start-up Costs Cash Flow (Cum ulative) 1,552 361 361 1,552 3,527 5,516 1,975 1,989 4,264 96 282 705 720 24 336 72 168 144 96 415 7,322 4,304 96 282 705 720 24 336 72 168 144 96 0 6,947 4,386 96 282 705 720 24 336 72 168 144 96 0 7,029 1,500 6,840 45 210 48 231 8,874 1,500 6,840 45 210 96 231 8,922 1,500 6,840 45 210 192 231 9,018 (all amounts are in cedis)

Projected Income Statement

Adisa - Shea Butter, Kuli Kuli, & G-nut Oil
Year
Incom e Shea Butter, low season Shea Butter, high season Kuli Kuli, high season Kuli Kuli, low season Groundnut Oil, high season Groundnut Oil, low season Gross Sales Expenses Cost of Goods Sold Wages Firew ood - shea butter Calabash bow ls Grinding mill - shea nuts Market Tax Transportation to market - shea butter Firew ood - groundnuts Spices Grinding mill - groundnuts Charcoal Loan Payments Total Expenses Projected Cash Flow Cash Profit Loan Proceeds Start-up Costs Cash Flow (Cum ulative) $1,093.13 $254.23 $254.23 $1,093.13 $2,483.70 $3,884.63 $1,390.57 $1,400.93 $3,002.64 $67.61 $198.59 $496.48 $507.04 $16.90 $236.62 $50.70 $118.31 $101.41 $67.61 $292.25 $5,156.16 $3,031.26 $67.61 $198.59 $496.48 $507.04 $16.90 $236.62 $50.70 $118.31 $101.41 $67.61 $0.00 $4,892.53 $3,088.51 $67.61 $198.59 $496.48 $507.04 $16.90 $236.62 $50.70 $118.31 $101.41 $67.61 $0.00 $4,949.78 $1,056.34 $4,816.90 $31.69 $147.89 $33.80 $162.68 $6,249.30 $1,056.34 $4,816.90 $31.69 $147.89 $67.61 $162.68 $6,283.10 $1,056.34 $4,816.90 $31.69 $147.89 $135.21 $162.68 $6,350.70 (all amounts are in $)

Action Plan
Date
March 2011

Item
Purchase 3 bags of shea nuts to begin increased production immediately Purchase required start-up tools for increased production Sell increased product inventory in Yendi market weekly

March 2011

March 2011