KYAMBOGO UNIVERSITY

FACULTY OF ENGINEERING

DEPARTMENT OF LANDS AND ARCHITECTURAL STUDIES

BSC. BUILDING ECONOMICS

YEAR 4 SEMESTER 1

HM211: ENTREPRENEURSHIP SKILLS

GROUP ASSIGNMENT

GROUP 5

SUBMITTED ON: 21TH SEPTEMBER 2019

PRESENTED ON: 24TH SEPTEMBER 2019

LECTURER: NAMULINDE RECHAEL

 GROUP 5 MEMBERS

NO
REGISTRATION
NAME NUMBER SIGN

1 ARINDA BANICE 16/U/6136/EBD/PD

2 GUMA JORUM 16/U/12923/EBD/GV

3 KICONCO MAJORY 16/U/6181/EBE/PE

4 KIWALABYE JOSEPH 16/U/6146/EBD/PD

5 MUSINDI MARK 15/U/6500/EBE/PE

6 NAKALYANGO DOROTHY 16/U/12250/EBE/PE

7 ODONGO BOSCO 16/U/6157/EBD/PD

8 OKOTH YOWA 16/U/6159/EBD/PD

9 OYELLA PROSCOVIA ANENA 16/U/6203/EBE/PE

10 SSEKONDE EDWARD GEORGE 16/U/6205/EBE/PE

11 WAISWA MARCUS 16/U/6164/EBD/PD

Question

The Entrepreneur must prepare a sound business plan in order to exploit an opportunity or idea. A
good business plan is important in determining the resources required, obtaining them and
effectively managing the business venture. Using a unique business of your own choice;

Prepare a comprehensive production and marketing plan for your business

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 PRODUCTION PLAN

1.1 Business description

The Business will be called “Tasty Cakes” and it will produce and sell majorly quality cupcakes
and birthday cakes to the general population of Kyambogo University and Banda. This is due to
the high demand by customers for ceremonies and fun time. Considerations will be made for low
income earners and non-sugar consumers by producing cakes in various sizes, flavours and sugar
levels.

1.2 Business location

The business premises shall be located in a strategic place within Banda, Kampala, this is to allow
for covering a wider radius extending up to most hostels as far as Safco and Madonna Hostel.

1.3 Range of products

Tasty Cakes for the start shall supply only cupcakes and birthday cakes in various flavours and
sizes. Considerations will also be made for diabetic customers by producing low sugar cupcakes.
The table below indicates the range of products that Tasty Cake shall produce and sell to
customers;

 Cupcakes

Cupcakes shall be produced in small and big sizes in all flavours; vanilla, red velvet, chocolate,
strawberry and banana.

 Birthday cakes

Birthday cakes shall be produced in small, medium and big sizes in different flavours ranging from
Chocolate, vanilla and strawberry.

1.4 Flavours

Tasty Cakes’ cupcakes and Birthday cakes will be produced in many flavours to cater for
individual customers’ taste and preferences. However, relatively expensive flavours like chocolate
and red velvet shall be produced at reduced quantity. Banana flavours shall also be produced to
which is relatively cheaper compared to other flavours. Tasty Cakes shall thus offer their products
in the following flavours;

 Chocolate
 Red Velvets
 Vanilla
 Strawberry
 Banana
1.5 Equipment and Raw materials

Materials that will be required for the production of the cupcakes and birthday cakes shall be
purchased from the Ugandan Market. These materials and equipment are locally available in the
market and are shown in the table below with their respective purchase price;

Table 1: Prices of materials used in cake production

Item Description Price (UGX)

All-purpose flour 1 kg 6,000

Baking powder Packet 1,500

Salt packet 1,000

Oil 1 Ltr 6,000

Liquid Food colouring 30 ml 7,500

Cocoa 1 kg 57,000

Unsalted Butter 200 grams 4,500

Granulated Sugar 1 kg 4,000

Large egg 1 tray 10,000

Pure vanilla 250 ml 38,000

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 Vinegar 500 ml 8,000

Buttermilk 1 Ltr 1,500

Cream cheese 226 grams 31,000

Powdered sugar 1 kg 32,000

Vanilla extract 250 ml 37,000

1.6 Legal requirements

Tasty Cakes shall purchase the legal documents like Trading License required for it to operate.
This license shall be processed by the Managers and purchase from KCCA (Kampala Capital City
Authority).

1.7 Future Prospects

Tasty Cakes as part of their production plan will operate on a medium scale for a period of two (2)
years before expanding the business and diversifying their products. Therefore, Tasty Cakes plans
in to accomplish the following in three years after establishment of the business;

 Online shopping. With the increasing technological trend, it is viable to expand the
business by allowing customers to make orders online from wherever they are. Tasty Cakes
therefore plans to put in place a comprehensive and safe shopping site where customers
can buy products from their smartphones.
 Shop on the Go. Tasty Cakes will provide mobile service since the market it is operating
does not allow for completely stationary business premise if sales and profits are to be
boosted. This will mean purchasing purpose made vans for supplying cake products
throughout the market.
1.8 Summary of Costs Incurred for production

It is projected that, on establishment of Tasty Cakes, the business will incur a huge amount of fixed
and variable costs listed below;

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Table 2: Estimate of costs incurred in a month

Item Description Cost (UGX)

Rent 1 month 250,000

Electricity 150 units 150,000

Water 300 jerrycans 60,000

Cleaner 1 month 50,000

Communication Airtime and Data 60,000

Sign post Medium sized illuminated 300,000

Ovens Big sized 6,000,000

Fridges Big sized 4,000,000

Furniture Plastic chairs and wooden tables 1,500,000

Trading License From KCCA 150,000

GRAND TOTAL 12,520,000

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 2.0 MARKETING PLAN

2.1 Market Analysis

The targeted market segment is; Kyambogo University Students, residents of Banda and Various
Hostels within and around Banda. According to the research carried out, the established population
of Kyambogo University is approximately 85,000 people. Approximately 53% are ladies and 47%
are men, this means the market population is composed of approximately 40,000 men and 45,000
ladies of which 90% of the total population lies within the age bracket of 18-28 years. This
indicates that the market comprises mostly youth that have high preferences for cake. A sample
was carried out in the Building Economics class to establish the number of people willing and able
to buy the cupcakes and the results showed that 4 out 40 men were willing and able to buy the
cupcakes. However, 16 out of 34 ladies were willing and able to buy the cakes. This sample was
then used to establish the general behavior of the market. 47% of the ladies and 10% of the men
in the total market population are thus willing and able to buy the cupcakes. This means; out of
approximated 40,000 men in Kyu, only 4,000 men are willing and able to buy our products, and
out of 45,000 ladies in the population, 21,150 ladies are willing and able to buy cupcakes. The
market analysis therefore shows that approximately 25,150 people (customers) which is 30% of
the total Kyambogo University population are willing and able to buy the cupcakes.

2.2 Competitor Analysis

“Hans” has been found to be the largest competitor in the cake production market in Banda. The
business premise is strategically located at the junction towards the Campus gate. This offers the
business a high opportunity of attaining the largest portion of the market. Tasty Cakes thus, plans
to exploit the competitors’ weaknesses for their advantage and also weaken the strengths of
competitors so as to hold the biggest share of the market.

2.2.1 Strength of the competitors

Tasty Cakes carried out a research and established that our biggest competitor, “Hans” have an
added advantage due to the following strengths;

 Long time existence in the business. Hans has been operating the cake business for a period
of about 3 years now which offers her a greater advantage over Tasty Cake.

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  Diversified products offered. Besides cakes, Hans offer other products like Ice cream.
 Strategic location of the business premise near Campus main gate.
 Higher ability to advance credit to customers with increased credit limit.

2.2.2 Weaknesses of the competitors

Our biggest competitor, ‘Hans’ has weaknesses which Tasty Cakes as a potential rival can exploit.
Some of the top weaknesses includes the following;

 Poor customer services. Hans do not offer any form of after sales promotion.
 Poor advertising strategy. Hans do not do any form of extensive adverts.
 No promotional offers given to customers.
 No free delivery to customers.
 Stationary business location without mobile shops.

2.3 Sales analysis

According to the market analysis carried out, Tasty Cake projected that in the period of one month,
with the best marketing strategies correctly implemented, a huge amount of sales can be realized
thereby, bringing in good profits to the business. Below are the projected sales for the first four
months.

Table 3: Projected Sales of Tasty Cake Product in 4 months

Item Number of units sold

August, 2020 Sept, 2020 October, 2020 November, 2020

Birthday cake 200 300 100 120

Cupcakes 15,000 11,000 10,000 5,000

Revenue from Sales

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With reference to the above projected sales amount, the revenue the business is likely to generate
in three years is shown in the table below. An assumption that the market will be growing in at a
rate of 0.46% was made.

Item Gross Revenue (UGX)

2020 2021 2022

Cupcakes 82,000,000 95,120,000 114,632,000

Birthday Cakes 50,400,000 58,464,000 70,156,800

GROSS TOTAL 132,400,000 153,584,000 184,788,800

2.4 SWOT Analysis

Tasty Cakes performed a SWOT analysis to establish the business’ strengths, Weakness,
Opportunities and Threat. Results got are shown below.

2.4.1 Strengths

 Being University students, we have extensive knowledge of the market since we best
understand our Campus customers.
 Free delivery which are not offered by other competitors like Hans.
 Extensive advertising strategy compared to other competitors who do not have any in place.
 Mobile shops (Shops on the go) helps bring services close to students.

2.4.2 Weaknesses

 Limited ability to offer credits to the customers.

 Inadequate knowledge about the customers’ addresses or residences when it comes to
deliveries.
 Low scale production to meet market demand due to small startup capital.
 Small portion of the market compared to the competitors.

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2.4.3 Opportunities

 Legal permission of the University to operate within the campus premises with little or no
cost.
 Online marketing or trading.
 Diversification of products. High opportunities of expanding the scope of products to
wedding cakes.
 Newer and more efficient and cost effective technology.

2.4.4 Threats

 Seasonality of the business. There is decreased sales during holidays (when students are
not around) and “Black November” (when most students have financial issues).
 Possibility of new and large Businesses entering the cake production market.
 Jokers and scammers that can lead to losses.
 High level of perishability of the products.
 Untrustworthy customers being offered credit.

2.5 Market objectives

 To create a good customer relationship.

 To ensure customers are satisfied at all times with the quality of the cakes.
 To bring to the awareness of the general population and target market about the Tasty
Cakes high quality products.
 To take up at least 70% of the market share in Banda and Kyambogo University in its third
year of operation.

2.6 Marketing Team and Budget

The marketing team will comprise of highly skilled and trained marketers under the overall
management of the Sales manager. These marketers will be stakeholders of the business and shall
perform the following functions;

 Advertise and sensitize the population about our products.

 Making timely deliveries.

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  Making follow up on credits.
 Communicating with the clients.

2.7 Marketing strategies to reach strategic objectives

Tasty Cakes plan to achieve the above strategic market objectives by employing the following
marketing strategies;

2.7.1 Flavouring

Tasty cakes will have cupcakes produced in various flavours to cater for all the customers’ tastes
and preferences. The cupcakes will be produced in the following flavours with or without frosting.
Frosted cupcakes is expected to be on high demand by customers due to its attractive look;

 Vanilla
 Straw berry
 Chocolate
 Banana
 Red Velvet

2.7.2 Designs

Attractive designs will be incorporated in the cupcakes. Tasty cakes planes to design the cupcakes
with letters or initials of customers’ names, for example, “J” for a customer named Joseph. This
will help entice a customer to buy the cupcakes.

Colour designs will also be given to the cupcakes. This unique designs will come in red, pink and
other colours which will allow Tasty cupcakes look attractive than normal brown coloured
cupcakes.

2.7.3 Sizing of the cakes

The cupcakes will come in small and big sizes and will be sold at 500 Ugx and 1000 Ugx each
respectively. Tasty cakes to entice the customers will have the cupcakes sold in sets of 6 at a
reduced price of 3500 Ugx. Tasty cakes will also supply cakes in small sliced pieces at 3000 UGX.
All these cakes will come in different flavours to meet individual tastes and preferences.

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2.7.4 Branding

Tasty cakes will have their products branded with the Business name and Contact. This will be
done by an experienced personnel.

2.7.5 Promotions

As part of the marketing strategy, Tasty Cakes will be holding promotions once in a week, during
which customers will receive free offers. Customers who buy five or more cupcakes will receive
one free cupcake. The offer will be called “Buy 5 get 1 free Flash sale”. This is the offer will run
from 4PM to 5:30PM.

2.7.6 Free Delivery

Tasty cakes will offer free delivery of products to customers who purchase cakes for 40,000Ugx
or more. However, Tasty cake will offer this to only customers only as far as Madonna Hostel.
Free delivery will thus be made only to customers within; Banda, University and Hostels within
2km radius from the business premises. Free delivery will only be made between 8AM to 7PM for
security reasons.

2.7.7 Credits

Tasty Cakes will offer interest-free credit inform of products of up to 30,000 Ugx to trustworthy
and financial established customers who makes purchases up to 100,000 in a week will be eligible
to such credit facilities.

2.8 Advertising strategies

Tasty Cakes will indulge in an informative advertisement in the first four months to give customers
comprehensive knowledge of their products. These form of adverts will include the following;

2.8.1 Social Media

Tasty Cakes will use social media platforms like; WhatsApp, Facebook, Twitter and Instagram as
an advertising medium. Ads will be posted everyday on these platforms by responsible employees
who will be permanently employed to handle online communication and businesses. Tasty cake

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will boost their ads at a cost to targeted people using Facebook Ad Boost which will cost 2.9 USD
(approximately 11,000 UGX) per Ad per day.

2.8.2 Banners

Tasty Cakes will have a skilled graphic designer located in Kampala Town make four (4) big sized
and nice looking banners, which will comprise the different scope of products offered by Tasty
Cake including pictures. These banners will be strategically located within our market
environment, that is; at the West End Main gate, Banda gate, around Senate and at the small gate.

2.8.3 Flyers

Flyers will be designed by a skilled Graphic Designer located in Kampala town. These flyers will
be distributed to potential customers within Banda and Kyambogo University.

Table 4: Projected Cost Estimate for Advertising in 1 month

Item Estimated Cost (UGX)

Banners 400,000

Flyers 120,000

Social Media 38,000

Grand Total 558,000

2.9 Product pricing

Prices of Tasty Cake products will be set basing on the costs incurred in the production process,
the demand of our products and comparison with prices of competitors. A higher price is to be set
if demand is high and a low price if demand is low. However, there will be no use of cut-throat
pricing method, but rather will price their products equally to the competitors.

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Table 5: Prices of Tasty Cake Products

Item Description Price

(UGX)

Birthday Cake 500 grams 35,000

Birthday Cake 1 kilogram 50,000

Cupcakes Small size without frosting; all flavors except chocolate 500
and red velvet flavours.

Cupcakes Small size without frosting; Chocolate and red velvet 1,000
flavours

Cupcakes Big size with frosting; chocolate and red velvet flavours 1,500

Sliced Cake Without icing, in all flavours except chocolate 3,000

Sliced Cake Without icing sugar, chocolate flavour 3,500

Cupcake A set of 6 small size; all flavours 3,500

2.10 Sales tracking dashboard

Tasty Cake will employ the sue of tracking dashboard to check whether monthly sale targets are
met or not. This chart or dashboard will be located in the Sales Managers’ office.

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