Social Entrepreneurship Final

7/28/2019 Social Entrepreneurship Final

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TABLE OF CONTENTS

Business Overview

Description of Company.Page 3

Demographic, Economic, Social and Cultural Factors...Page 3

Principal Actors...Page 4

Nature and Tendencies of the Industry....Page 4

Market Segment and Tendencies.....Page 5

Market Segment Choice...Page 6

Market Acceptance...Page 6

Product..Page 7

Distribution and Price...Page 9

Risk Factor....Page 10

Competition.,.Page 10

Competitive Advantages...Page 11

Sales and Marketing Plan

Clients...Page 12

Suppliers.......Page 12

Publicity and Promotion...Page 13

Distribution and Price...Page 14

Customer service policy....Page 15

Operating plan.......Page 15

Human Resources Plan..........Page 16

Action Plan....Page 18

Financial plan............Page 20

Executive summary...Page 20

Bibliography..Page 22


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Business Overview

Description of the company

I-On is a company that specializes in the conception and production of double parabolic

solar cookers at a low price. Our product is better and cheaper than similar ones that are currently

on the market. I-Ons mission is to empower the Ethiopian women through solar cooking,

providing a source of revenue for local workers and reducing energy costs for the Ethiopian

households. Our vision is to be the leaders of the solar cooking technology in Western Africa

within the next five years.

Demographic, Economic, Social and Cultural Factors

The company decided to sell the Abasala solar cooker in Ethiopia mostly because it is a

country with one of the highest food borne illnesses prevalence1. This factor is due to the

expensive cost of fuel and the absence of resources such as wood. Ethiopia is known for its

increasing land degradation2 that makes young girls and women to walk long distances through

dangerous areas to gather wood for their familys cooking fire3. Besides food borne illnesses due

to uncooked food, the families using fire for cooking are in constant contact with the smoke,

which can be very harmful for their health4.

During the conception and development of the product, we also had to consider the

demographic and economic factors. Ethiopia has a density of 82.95 people per square kilometer,

which is very high5, and a yearly income average of 500 CAD$6. These factors influenced our

solar cooker in the way that it had to be small for the dense areas without changing its

1 Ethiopia Major Infectious Diseases. IndexMundi. 26 July 2012.2 YESUF, M. Economic Assessment of Cost of Land Degradation in Ethiopia: Past Experiences and theWay Forward. Ethiopian Development Research Institute. 12 August 2010.3 Too Much to Bear. Geographical. June 2011.4 UNICEF. In Ethiopia, the expansion of rural health services is key to reducing child mortality.WESTERBEEK, Sacha. 22 June 2012.5 Population Density in Ethiopia. TradingEconomics. 2012.6 UNICEF. Statistics. 24 Feb. 2003.


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effectiveness, and had to be built with cheap materials to be able to sell at an affordable price.

An important cultural factor also had to be considered during the conception of our product

design: the solar cooker had to be able to cook the traditional injera bread that most Ethiopians

eat. The traditional bread has to be cooked at a very high temperature concentrated in one single

focal point and only the parabolic solar cookers are able to fulfill this requirement7.

A social fact that we took into account for our operations is the lack of female

empowerment in Ethiopia8. This is the main reason we decided to only hire women for the

production of the solar cookers as well as for their distribution through a group of tradeswomen.

Principal Actors

For the production of the Abasala solar cookers, we will be able to count on the AddisHome Depot located in the capital of Addis Ababa where our operations will be based. The store

will be able to provide us with the different equipment and raw materials that will be needed.

As soon as the production starts, we will be able to sell and distribute parts of our

production through the help of our distributors: the independent tradeswomen who will be

working for us on a commission-based salary.

The customers we are trying to reach are living in rural areas. This is why we chose to

distribute part of our production through the tradeswomen who live in those areas.

Nature and Tendencies of the Industry

Our product will be part of the cooking industry, most precisely the appliances and

techniques of cooking sector. This industry is composed of products such as ovens, barbecues,

solar cookers and fuel wood to cook amongst others.

The Ethiopian rural population is very poor and basically cannot afford any type ofelectric cooking appliances because they are too expensive and mostly because the electric power

7 GALLAGHER, Alan C. A Solar Fryer. Joint Institute for Laboratory Astrophysics of ColoradoUniversity. 20 Dec. 2010.8 THE WORLD BANK GROUP. Women Empowering Women. 2001.


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does not reach rural villages9. The rural population, then, mostly uses fuel or wood to light a fire

in order to cook.

Market Segment and Tendencies

There were originally four different segments in Ethiopia that we had to consider: the

people living in urban areas, the nomads living in the rural areas of the desert climate zones

(regions of Somali and Afar), the sedentary people living in the rural areas of the desert climate

zones (regions of Somali and Afar) and the sedentary people living in the rural areas of the

temperate climate zone10. We chose this last segment as our target market and we focused

particularly to the Oromia province. The province was showing some advantages for ourcompany: there are about 200 sunny days in a year11 and the capital Addis Ababa is located in

this province.

The company also had to consider the acceptance of the solar cookers in Africa. On this

note, the organization GTZ did a study on the acceptance of solar cookers that partly took place

in Ethiopia. The study showed that the families were using their solar cookers as much as their

other cooking techniques (such as fire), which demonstrates a very high acceptance12. We also

discovered that solar cookers can be quite popular in Ethiopia as a tradeswoman sold her 72 solarcookers in only two days13.

9 ENGIDA, Ermias, TSEHAYE, Eyasu & TAMRU, Seneshaw. Does Electricity Supply Strategy Matter?Shortage and Investment: Reflections based on CGE Analysis. Ethiopian Development ResearchInstitute. Dec. 2011.10 See climate map in Appendix C11 Solar Cookers World Network. Wikia. 2012.12 BERGLER, Hanna, BIERMANN, Eberhard, GRUPP, Michael, OWEN-JONES, Maria & PALMER,Richard. Moving Ahead with Solar Cookers: Acceptance and Introduction to the Market. GermanTechnical Cooperation (GTZ). March 1999.13 SOL SOLIDARI. Big success of the sale of subsidized solar ovens in Lalibela (Ethiopia). 12 May2011.


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Market Segment Choice

Typically people in rural Ethiopia use wood-burning stoves and campfires to cook food.

Since fuelwood is both expensive and not environmentally sustainable, this leads to problems.

Land degradation has occurred widely in Ethiopia as a result of trees being cut down forfuelwood. Wood is becoming scarcer, and women often have to walk miles every day in

dangerous areas to find wood to cook with. When this wood is too expensive to purchase or

unable to be located, people often go without cooking their food at all. This can lead to health

problems from the consumption of unsanitary water and raw foods (9). We chose to target

Ethiopia for our market because Ethiopia has one of the highest rates of food-borne illness in the

world. It is warm, sunny, and dry, which is a perfect climate for solar cooking (1,14), it has

widespread land degradation, and it has few opportunities for the empowerment of women in

society. Our product is well-designed for this target market: culturally, economically, and

socially. It is able to achieve higher temperatures than many types of solar cookers, which allows

customers to bake the local staple, known as injera bread (1). It is cheap, since it is locally made

from easily obtainable materials. It provides jobs in manufacturing, since it is an easy, yet labor

intensive process, and we can sell our product through local agents/groups of tradeswomen, so

that we are integrated with the culture and support local businesses.

Market Acceptance

A research study by GTZ on the acceptance of solar cookers in Africa and Ethiopia

showed that families given solar cookers used them as much as the fuelwood stoves and other

methods of food preparation, indicating a high acceptance of solar cooking. In fact, one

tradeswoman received 72 solar cookers in her shop, which sold out in 2 days (17).


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Product

The Abasala solar cooker has a unique design that allows solar cooking to be done

cheaply and effectively. The cooker frame is made out of cob, a type of unbaked earthen masonry

made of soil, sand, clay, straw, and water. Cob is an ideal material on several levels: durability of

material, ease of creation, cost of creation, environmental impact, and community impact (4,5,6).

Cob is a durable material. It has a high compressive and tensile strength, high insulation, and

breathability. Since it is an unbaked natural material, it requires no machinery, framework,

artificial additives, fossil fuels, or electricity to make. Cob is highly sculptable, safe to construct,

and locally available. In addition, the cob will be locally made to reduce shipping costs, and is

completely environmentally friendly. The making of cob is a time-intensive process, but one that

requires little training, so it can provide steady jobs for people who may not be qualified for other

forms of work in the community, as well as those who are traditionally not included in

construction work, such as women. Unfortunately, cob is a very dense and heavy material, and is

not waterproof. However, as long as the cob is not allowed to soak, it is usually able to dry itself

pretty readily (4,5,6).

To cover the cob frame, we are using an earthen plaster made of the same materials as

cob, but with a finely ground texture. We are also adding linseed oil to the mix to give it

additional sculptability. Once the linseed oil dries with the plaster, it will provide the cooker with

extra water resistance. Since the earthen plaster has good breathability, it will allow the cob

underneath to breath also (4,5).

The shape of the solar cooker is an important feature. The inside of the frame will be

shaped like a compound parabola, in which all of the parabolas share the same focal point

(12,13). Like a single parabolic shape (3), this will allow all of the sunlight that reflects off of the

cookers interior to reflect to the same focal point where the cooking pot will be placed, which

will achieve high enough temperatures to cook with (12,13). But the compound parabolic shape

also tolerates a wider angle of sun position, which eliminates the need to track the suna major

downside of parabolic cookers (12). This allows the cooker to be left unattended for longer

periods of time, freeing up the women that use these cookers to pursue other important activities.


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The reflective material is an aluminum paint, which is made of a highly emissive material

to reflect most of the sunlight to the focal point (2,15,16). The pots used for cooking will be

painted with black paint, a highly emissive material, to absorb most of the sunlight that hits it

(15,16). To keep the cooker from collecting water and small debris in the bottom, we added a

drainage hole.

For optimal performance, the cooker will have a inside radius of 1.5 ft, a parabolic depth

of 1.1 ft and a inner surface area of 10 sq ft (0.929 sq m) (11). Since each square meter of

reflective surface gives approximately 1000 W of power (11), our cooker should generate an

average of 929 W on an average day in the climate of Ethiopia (10,14,16), which is more than the

suggested minimum of 800 W for parabolic solar cookers (11). The cooker itself should be no

thinner than an inch in all directions. It will be thicker on the bottom, since the bottom will be flat

for better stability. If needed, the cooker can be propped up with a simple wedge in order to face

the sun most optimally.

Additional accessories can be sold with the cooker. Consumers can purchase a supporting

bar and hook to hang the pot at the focal point. They can also purchase a tarp to cover the cooker

when not in use, to minimize weathering and prevent potential fire hazards (7). Probably the most

important and expensive accessory is the WAPI, or water pasteurization indicator. This device is

a simple weighted plastic tube filled with myverol, a kind of soybean fat. Myverol melts at about

70 degrees Celsius, which is water pasteurization temperature, making it easy to see when the

water you are pasteurizing with the cooker is safe to drink (8,9). This will allow people to use

less time to pasteurize water, since they wont have to wait for water to reach boiling

temperatures (9). It also eliminates the taste that boiled water has, which is often a deterrent

keeping people from pasteurizing unsafe water before consumption (8).


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We created a rough 3-dimensional prototype to test our design efficacy. It was a

completely functional, yet scaled down model of the solar cooker using aluminum foil and

wheatpaste instead of aluminized paint and without the earthen plaster coating. To test efficacy,

we placed a bright orange object at the focal point of the cooker and photographed it from various

angles. In each photo, the amount of orange seen reflected in the aluminum foil indicated how

much of the reflective surface was reflecting light to that focal point (13). The photos showed a

high efficacy of reflection, indicating an effective design.

Distribution and Price

Distribution

Our company will have two distribution systems: we will sell our product directly at theplant and we will sell it through a group of independent tradeswomen. The tradeswomen will be

paid on a commission-base. The retail price of the Abasala solar cooker will be of 17.46 CAD$

and the commissions will earn them approximately 11.45% (2 CAD$ per item). All the details of


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the price component and how we came up to a retail price of 17,46$ can be found in the appendix

D Estimated Average Cost per Unit.

Price

Asforoursellingprice,wedecidedthat17.46CAD$wouldbereasonablebecause

wewouldhavethemostaffordablesolarcookeronthemarket14aswellasallowingusto

makeasmallprofit.Havingourflatproductioncostat14.46CAD$,therewouldbea3CAD$

profitoneachitemsold.Yet,asexplainedearlier,mostofthesaleswillbecarriedoutbythe

tradeswomenonacommission-basedsalarythatwillearnthem2CAD$oneachitemsold.

Thismeansthatwewouldhaveaprofitof1CAD$oneachitemsold.

Risk Factor

There are two main risks that we have to consider: the consumers habits and the ability of

our salespeople. The clients that we are seeking have been using wood and fire to cook for as

long as they can remember. Even though the acceptance of the solar cookers is high, there might

be a chance that their habit of using wood is too strong. It was also noted in an interview with an

Ethiopian woman that selling a product in Ethiopia needs very good salespeople15

, which is whywe cannot afford to hire salespeople who do not have the ability to sell.

Competition16

As of now, in Ethiopia, there are three main companies producing all different kinds of

solar cookers: Solar Clutch, EG-Solar and ET-Solar Tech. The first one, Solar Clutch, produces

very simple and rudimentary solar cookers and promotes them in refugee camps with the help of

14SeetheCompetitiveComparativeAnalysisinAppendixn15 See full interview in Appendix H16 See Competitive Comparative Analysis in Appendix A


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local agencies17. Their solar cooker is very cheap and easy to produce, but is not a durable

product.

The second company, EG-Solar, is actually an NGO that should definitely be considered

as one of our competitors since it focuses its sales in the rural areas of many African countriesincluding Ethiopia. EG-Solar offers a fast and wide (1.5 meter of diameter) single parabolic solar

cooker. The components of their solar cookers are manufactured in Germany and then shipped to

Ethiopia where their users assemble them. The fact that their product is manufactured in

Germany and that it has to be shipped makes it very expensive. The company also offers

workshops in the Ethiopian capital18.

The last company, ET-Solar Tech, was created and is still based in Ethiopia. This

company produces different models of solar cookers: the single parabolic solar cooker, the boxcooker and a more rudimentary solar cooker. ET-Solar Tech provides those solar cookers to

different Ethiopian NGOs to distribute them in the rural areas. Some of those NGOs, as Sol

Solidari, distribute the solar cookers for free at first to gain exposure and then sell them at a cheap

price with the help of a local tradesperson19.

Competitive Advantages20

Even though there are already three competitors acting in Ethiopia, our product has somecompetitive advantages that surpass our competitors products. The double parabola solar cooker

that we are producing is cheaper and as effective than the usual single parabolic cookers, in fact it

is cheaper than all solar cookers available on the Ethiopian market. This new model is also more

durable than cardboard panel cookers and does not require tracking the sun, which means that

this solar cooker does not need as much maintenance as the other existing ones. We will also

offer two services with our product: some teaching workshops on the use of our cookers as well

as microcredit.

17 Solar Cookers World Network. Wikia. 2012.18 Solar Cookers World Network. Wikia. 2012.19 Ibid.20 See SWOT Analysis in Appendix B


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Sales and Marketing Plan

Clients

Even though our operations will be based in the capital Addis Ababa for strategic

advantages that will later be explained, the consumers that we are trying to reach are mostly

living in rural areas. The company, then, decided to focus the distribution of the Abasala solar

cooker to the five regions sharing borders with Addis Ababa: North Shewa, West Shewa,

Southwest Shewa, East Shewa and the Special Zone. In total, there are 1,445,318 households

including 1,231,776 rural households which is our potential market size21.

The five regions targeted as our potential market are located in the province of Oromia,

which is a sunny and temperate climate zone area. We are mainly targeting the sedentary people

living in those rural areas that have the needs in term of solar cooker to be more reliable than

wood and that does not require much maintenance (doesnt need wood gathering). The

population living in those areas speaks the official language of Ethiopia, the Amharic, is mostly

Christian (61%) and has a yearly income of about 500 CAD$22. The life expectancy of women is

of 59 years old and the median age is 1723. Knowing that over two third of the women have their

first child in their twenties24, we want to target the sales of our solar cooker to the women aged

between twenty and forty years old that are starting a family or already have one. These statistics

represent a profile that we are expecting to see in our customers and that will help us to reach

them.

Suppliers

Oneofthemostimportantmaterialsintheconceptionofourproductisthealuminum.

SinceEthiopiadoesnotproduceanyaluminumfoil,wehadtosearchforotherderivatives

thatwouldbeavailableinthiscountry.WefoundthattheEthiopiancompanyMIDROCis

21 Ethiopia. Central Statistical Agency. 2011 Population. July 2012.22TheMIDROCEthiopiaTechnologyGroup.Paints.2012.15Nov.2012.

23 Ibid.24 Ibid.


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producinganaluminumpaintthatwouldfitperfectlywithourproduct25.Theirpaintissold

attheAddisHomeDepot26,whichislocatednearourplantinthecapitalAddisAbaba.

AddisHomeDepotwillalsobeabletosupplyuswithallthedifferentequipmentand

materialsthatwillbeneededfortheproductionoftheAbasalasolarcooker.

Publicity and Promotion

To promote the Abasala solar cooker, the company chose to make a brochure 27 especially

for the NGOs located in Ethiopia, which is why it will be written in Amharic and in English, two

of the official languages in the country. The main goal of the brochure would be to reach as many

NGOs as we can and to gain partnerships with those that would be interested in distributing the

product or in teaching workshops on how to use it. On this note, the company was able to gain a

partnership with the NGOLoeuvre Lger28 who will be helping by sending volunteers to do

teaching workshops to women on how to cook with the solar cookers. Those workshops will be

offered in the city of Addis Ababa where we are based, but also in rural areas around the capital.

Those workshops will help Ethiopians make the transition from charcoal or wood to solar energy,

because wood scarcity is becoming a problem29 in Ethiopia. We also hope they will encourage

more and more people to try and adopt our solar cooker as a regular cooking habit.

In terms of publicity, the company only chose one medium, which is the radio because it

is the most effective way to contact the Ethiopians who live in rural areas around Addis Ababa.

The radio is the most used medium in Ethiopia with approximately 50% of the population having

access to it and listening to it on a daily basis30. There are four main radio channels in the Addis

25TheMIDROCEthiopiaTechnologyGroup.Paints.2012.15Nov.2012.26TheMIDROCEthiopiaTechnologyGroup.ContactUs.2012.15Nov.2012.27 See full brochure Appendix G.28 As confirmed on the phone with Charles Mugiraneza, African Program Manager, InternationalProgrammation from LOeuvre Lger.29 DAMTE, Abebe, KOCH, Steven F. & MEKONNEN, Alemu. Coping with Fuel Wood Scarcity:Household Responses in Rural Ethopia. IDEAS. Nov. 2011.30See Factor Cost from the Ethiopian Investment Agency


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Ababa region, butEthiopia Radio is the most popular one. We already have prepared a jingle that

would last approximately 15 seconds and that could be aired on the radio.

Another way for us to advertise our product is doing demonstrations of the Abasala solar

cooker in local market places. We would be demonstrating our product by cooking the food onthe public place and distributing it for free to the curious people passing by. There are two

markets at a distance of 12 kilometers of our plant: the Merkato Market and the Shiromeda

Market. The Merkato is the biggest food market in Africa while the Shiromeda is a smaller public

market specialized in pots and other cooking crafts31. Our Ethiopian contact also told us that the

best way to have publicity is to go in those markets and sell our product with the help of very

good demonstrators or salespeople32.

Last but not the least, as another way to promote our product, we will also offer financingplans for families who cant afford to pay their purchase in a single payment. The interest rate

that we will be proposing is of 40%, which is less than usual rates in Africa33.

Distribution and Price

Two opportunities were presented to us in regards of the distribution of our product and

we decided to take advantage of both of them: the on the spot sales and sales through rural

tradeswomen. The first one is to sell our product directly at its place of production, in AddisAbaba, where we will have a customer service front desk in the plant.

The second opportunity is to have commission based independent agents selling our

Abasala solar cookers in their respective rural areas. The NGO Green Ethiopia34 will help us get

in contact with groups of women they already know that would have the capacity and will to sell

the product as their own small business. These women will work on a commission-based salary

that will earn them approximately 11.45% an item (2 CAD$ for each item sold). We thought we

could expand our sales gradually in the five regions targeted, starting with the closest one to

31 Addis Ababa. WikiTravel. 17 Oct. 2012.32 Full interview in Appendix H33 Serving the Worlds Poor. Harvard Business Review. September 2002.34 Full e-mail in Appendix I


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Addis Ababa: the Special Zone. There is about 113,215 rural households living in this first

zone35.

Customer service policy

The company will offer an on the spot after purchase customer service, which will

consist in giving assistance, answering technical questions about the product or receiving the

monthly payments directly at the plant. We will also have a phone line for the customers who

cannot travel all the way to the capital. A one month warranty will be offered on our solar

cookers and people will be able to come in person for exchange or refund.

Operating plan

We decided to produce the Abasalas directly in Ethiopia, in the capital of Addis Ababa because

this will reduce our operating costs and we will not have any import fees, since all the raw

materials will be purchased locally. The workforce is also quite inexpensive (140 CAD$ per

employee per month) and this will benefit the local populations: we will be able to employ more

Ethiopian women to assemble the Absalas for a reasonable cost, thus lowering as a result the final

retail price of the solar cookers. In addition, the Ethiopian women we will hire for the production

will receive an income that will improve their quality of life. The location of Addis Ababa is also

strategic: the infrastructure is more developed than in the rural regions around and this will

facilitate our acquisition of raw materials. The capital is also a central point around the villages of

the Oromia region, which will be our target market.

We found a plant in Addis Ababa which we could rent for 1600 CAD$ per year36.

35 Ethiopia. Central Statistical Agency. 2011 Population. July 2012.


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The monthly fees for Electricity, water, gas and garbage are 216 CAD$ 37. We will not need to

invest a lot of money for the equipment, because the production chain only needs simple tools

such as wheelbarrows, buckets, knives and hand drills. Based on calculations by Teresa

Whitaker, we predict that with our 10 employees, we will be able to produce 300. This is an

average of one Abasala per worker, per day. This number is reasonable; since we can produce in

waves and start many Abasalas at the same time, then continue with a second batch while waiting

for the first one to dry.

Teresa Whitaker is in charge of the R&D. She developed the Abasala, which has improvements

compared to the competitors, thanks to its double parabolic shape and the water drainage hole.

We will also use aluminum paint for a better resistance to humidity. We will keep improving theproduct based on the feedback from our customers.

Both the product and our method of production are environmentally friendly. Based on the

Environment Law Ethiopia from the International Encyclopaedia of Laws, our production method

does not violate any environmental regulations.

Human Resources Plan

Each successful company has certain positions for certain people. Having several leaders

for certain tasks rather than one single leader in charge of everything makes for a more dynamicand well rounded team. Within our team, we explored each persons strengths, and each persons

weaknesses. From there we were able to build and select key positions for each team member.

36 Found thanks to an online Ethiopian realtor, www.ezega.com37 All costs were found in theFactor Costs from the Ethiopian Investment Agency.


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Sara Bibeau was appointed the title of CEO. Sara majors in International Business and has

a strong head for business matters, as well as dealing with people. A CEO of a company is a big

role to fill and we feel that Sara is more than suited for the position, as she stays organized and

helps to make sure all aspects of the company are running smoothly.

Laurence Hebert-vinet was elected into the position of Vice President of Finance and

Marketing. Laurence currently majors in Business and in turn studies the logistics of business and

marketing. Laurence has had a huge role in gathering and organizing researched data about the

target market and selling audience. Laurences position in the company is pivotal to its success.

Teresa Whitaker was chosen to be the companys Vice President of Operations and R&D,

or research and design. Teresa is a science major at the University of Cincinnati, with a focus in

biology. Teresa is the mind behind the technical aspects of the Abasala Solar Cooker and worksto make sure that the cooker functions to the highest of its potential. Her contacts in the science

field have also been a huge help in further developing our product.

Finally, Kara Storey was selected to be the Vice President of Human Resources. Kara

mainly focuses on the development and production of marketing material and the branding for

the company. Kara designs and produces items such as brochures and flyers for distribution.

Karas main task is to create items that encourage the market to learn about and buy our product.

As the above indicates, each member of our four-person team has a very specific task.

However, when need be, each team member is able and more than willing to step into another

role at any point. This combination of structure and flexibility genuinely are the backbone of

making our company a successful one.


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Action Plan

TheGanttchartwecreateddemonstratesourplanofactiononcewereachour

locationofproductioninAddisAbaba.Theplanweoriginallycreatedisbasedonatime

spanoffourteenweeks,butthisissubjecttochange.

Ideally,onceinAddisAbaba,weplantosignthecontracttorentourfacilitieswith

anestablishedmonthlyrent,purchasetherawmaterialsnecessaryforbeginning

operations,andtransportingsaidrawmaterialstoourrentedestablishmentwithinthefirst

week.


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Withinaboutfiveorsixweeksaftertheseinitialtransactions,wehopetohave

created,released,andbegunacceptingjobapplications.Alsoduringthisfivetosixweek

timespan,weplantohavecompletedthefirsttestrunofourproduct.

Shortlyafterjobinterviewshavebeenconducted,thehiring,orientation,and

trainingofnewemployeeswouldtakeplace.

Bytheendoftheseventhweek,thesetupoftheproductionlinewouldbe

completed,endingwithaqualitychecktoensurethatthesolarcookersarethebestthey

canbe,beforebeingreleasedforsale.

Thefollowingseventoeightweekswouldconsistofthestartofmainproduction.

Onceallofthekinksareworkedoutandemployeesarecomfortable,theoperationsshould

runsmoothlyandefficiently.

Finally,bytheendofthisfourteen-weekplan,thesalesofthesolarcookerswould

begin,bothattheplantandbycommissionersonthefield.


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Financial plan

We fixed our selling price at 17.46$. We predict to be able to produce at least 300

Abassalas per month and to have a high demand; therefore we will be able to sell all of our

monthly production on a regular basis. Since we will work with independent Ethiopian salesagent, we will be able to calculate ahead of time the average demand and adjust the production in

consequence. A projective Income Statement can be found in the appendix D for years 1, 3 and 5.

We do not expect year one to be a profitable year, but on the 3 rd year of operations, thanks to a

governmental grant of 30 000$38 which we could be eligible to thanks to our mission, we will be

profitable. Based on the estimated average cost per unit, we found out that the profit margin per

unit will be of around 5.72%.

All the cost of sales and the operation costs can be found in the document Estimated Cash

Flow Over Five Years in the Appendix F. The main cost components are the facility rent, the raw

material purchase, the publicity and marketing, the services (phone/internet), the transport and the

commission on sales.

All 4 team members (Teresa, Kara, Laurence and Sara) will put $7,000 each from their

savings in order to have a start up funding of $28,000. It will be sufficient to rent the facilities,

pay the first service bills, purchase the raw materials, and pay the salaries during the first three

months until the production chain is well in place.

The ROI (Return on investment) will be negative on the 1st and 2nd year (around -1,11 and

-1,75), but in the 3rd year we will start to be profitable thanks to the governmental grants. The

ROI will be between 1,28 and 1,67. We dont plan to use bank loans; therefore the ROA (return

on assets) will be the same as the ROI.

Executive summary

In summary, our 4 team members will each invest $7,000. We will then have a start up

funds of $28,000. We count on government grants to be able to help the company be viable38 Please read the Email from J. patrick Wozny from the US Embassy in Addis Ababa in theAppendix E


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within the first three years of activity. We expect to be able to grow thanks to the help of NGOs

that will volunteer to educate the population on the benefits of cooking with solar energy and

teach them how to cook with the Abasalas. Our product is more competitive in terms of price and

it has the best design with a double parabolic shape. It is also a possibility for the Ethiopian

households to lower their energy costs. Our company will grow thanks to our independent agents

and the fact that we have the best product and we will keep improving it based on our customers

comments. We will first focus our target market in the Oromya region near Addis Ababa, but we

will promote the product in the nearby regions on the radio and with the brochures that we will

distribute to the NGOs in Ethiopia. Our long-term vision is to cover the Ethiopian market within

3 years and to implement it in Kenya, Sudan and Uganda within the first 5 years of operations.

We are confident that I-On will be a success and benefit greatly the Ethiopian women and

households. They will love cooking with the Abassala, because cooking with I-On, Its SUN-tastic!


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Bibliography

Ethiopia Major Infectious Diseases. IndexMundi. 26 July 2012. 14 Sept. 2012.

DAMTE, Abebe, KOCH, Steven F. & MEKONNEN, Alemu. Coping with Fuel Wood Scarcity:Household Responses in Rural Ethopia. IDEAS. Nov. 2011. 29 Sept. 2012.

YESUF, M. Economic Assessment of Cost of Land Degradation in Ethiopia: Past Experiencesand the Way Forward. Ethiopian Development Research Institute. 12 August 2010. 29Sept. 2012.

UNICEF. In Ethiopia, the expansion of rural health services is key to reducing child mortality.WESTERBEEK, Sacha. 22 June 2012. 29 Sept. 2012.

Population Density in Ethiopia. TradingEconomics. 2012. 6 Oct. 2012.

UNICEF. Statistics. 24 Feb. 2003. 9 Nov. 2012.

GALLAGHER, Alan C. A Solar Fryer. Joint Institute for Laboratory Astrophysics of ColoradoUniversity. 20 Dec. 2010. 20 Sept. 2012.

THE WORLD BANK GROUP. Women Empowering Women. 2001. 21 Sept. 2012.

ENGIDA, Ermias, TSEHAYE, Eyasu & TAMRU, Seneshaw. Does Electricity Supply StrategyMatter? Shortage and Investment: Reflections based on CGE Analysis. Ethiopian

Development Research Institute. Dec. 2011. 20 Sept. 2012.

Solar Cookers World Network. Wikia. 2012. 20 Sept. 2012.

SOL SOLIDARI. Big success of the sale of subsidized solar ovens in Lalibela (Ethiopia). 12May 2011. 6 Oct. 2012.


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BERGLER, Hanna, BIERMANN, Eberhard, GRUPP, Michael, OWEN-JONES, Maria &PALMER, Richard. Moving Ahead with Solar Cookers: Acceptance and Introduction tothe Market. German Technical Cooperation (GTZ). March 1999. 26 Sept. 2012.

Ethiopia. Central Statistical Agency. 2011 Population. July 2012. 27 Oct. 2012.

Addis Ababa. WikiTravel. 17 Oct. 2012. 28 Oct. 2012.

Too Much to Bear. Geographical. June 2011. 7 Oct. 2012.

Solar Cookers World Network. Wikia. 2012. 21 Sept. 2012.

Gographie et climat. Abyssinie Voyages. 7 Oct. 2012.

Serving the Worlds Poor. Harvard Business Review. September 2002. Accessed on 28 August2012

Ethiopian Chamber of Commerce. "Taxation in Ethiopia." Electronic publication information

(January 2005). Accessed on November 14th 2012. http://bds-forum.net/bds-

reader/handbooks/taxation-in-ethiopia.pdf

Ethiopian Investment Agency. "Factor Costs." Electronic publication information (March 2012).

Accessed on October 24th 2012

Ezega.com. "Real Estate." Electronic publication information (2007). Accessed on October 23 rd

2012


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Hailu, Germa. "Environment Law Ethiopia."International Encyclopaedia of Laws. Electronic

publication information (August 2000). Accessed on November 4th 2012

Sorach. "Understanding Financial Statements. " Electronic publication information. Accessed on

November 9th 2012.

"Ethiopia." Solar Cookers World Network. Ed. Tom Sponheim. Wikia, 3 Jan. 2007. Web. 1 Oct.

2012.

"Homemade Solar Ovens: Best Materials and Supplies."Homemade Solar Ovens: BestMaterials and Supplies. Cantina West, n.d. Web. 1 Oct. 2012.

Tulloue, Genevieve. "Draw a Parabola Using Pencil and String."Animated Figures for Physics.N.p., n.d. Web. 1 Oct. 2012.

Weismann, Adam, and Katie Bryce. "Building with Cob."Natural Life Mar/Apr (2007): 20-25.ProQuest. Life Media, 8 June 2007. Web. 9 Oct.2012.

Smith, Michael. "Cob."Alternative Construction: Contemporary Natural Building Methods. Ed.Lynne Elizabeth and Cassandra Adams. Hoboken, NJ: John Wiley and Sons, 2005. 117-50. Print.

Minke, Gernot.Building with Earth: Design and Technology of a Sustainable Architecture.Berlin, Germany: Birkhaeuser-Publishers for Architecture, 2006. Print.


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Jones, Steven E. "How to Make and Use the BYU Solar Funnel Cooker/Cooler." The SolarFunnel Cooker. Solar Cookers World Network, n.d. Web. 12 Oct. 2012.

Metcalf, Robert. "Recent Advances in Solar Water Pasteurization."Recent Advances in SolarWater Pasteurization. Solar Cookers World Network, n.d. Web. 12Oct. 2012.

Clasen, Thomas, Catherine McLaughlin, Neeru Nayaar, Sophie Boisson, Romesh Gupta, DollyDesai, and Nimish Shah. "Microbiological Effectiveness and Cost of Disinfecting Water byBoiling in Semi-urban India." The American Journal of Tropical Medicine and Hygiene 79.3(2008): 407-13. American Society of Tropical Medicine and Hygiene. Web. 1 Oct.2012.

"Formula for Calculating the Surface Area of a Parabola?" WikiAnswers. Ed. Jacob Ewing.Answers, 4 Apr. 2010. Web. 30 Oct.2012.

Eddy, Betty M. "What About Parabolic Solar Cookers?" Understand How a Parabolic SolarCooker Works. Life Skills International, n.d. Web. 30 Oct.

2012.

"Can I Increase the Output of the Solar Energy Capture Tubes?" Solar Energy Capture Tubes.Fossil Freedom, n.d. Web. 16 Sept. 2012.

"How Do We Test a Compound Parabolic Shape for Effectiveness?" Compound Parabolic SolarCooker, Make a Template with Technical Drawing. Instructables, 17 Dec. 2008. Web. 16 Oct.2012.


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"Ethiopia Global Horizontal Solar Radiation." Map. National Renewable Energy Laboratory,

Aug. 2005. Web. 12 Oct. 2012..

"Emissivity Coefficients for Some Common Materials." The Engineering Toolbox. N.p., n.d.Web. 4 Oct. 2012.

Sullivan, James. "Consultation on Project Design." Personal interview. 3 Oct. 2012.

German Technical Corporation. "Moving Ahead with Solar Cookers: Acceptance andIntroduction to the Market." German Technical Corporation (GTZ), Mar. 1999. Web. 26 Sept.2012. .


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APPENDICIES

Appendix A


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Appendix B

SWOT Matrix

Strengths Weaknesses

We offer a new model of solar cookerthat is:

Cheaper than usual parabolicsolar cookers in terms of price;

More durable than cardboardpanel cookers;

Cooks at higher temperaturesthan most solar cookers;

Does not require to track sun; Environmentally friendly and

user friendly; Providing jobs and community

bonding time.

We will be offering workshops andtraining to the final users.

We will also offer microcredit

We offer a product that is: Not as waterproof as metal

cookers; Not very portable; Increasing fire hazard.

Opportunities Threats

Our operations will be based in thecapital Addis Ababa, which is a verystrategic site.

The existing solar cookers are onlydistributed or sold on a small scale.

A study from GTZ showed that theacceptance of the solar cookers is highin African rural areas.

Few NGOs distribute the product forfree, which narrows down a little bitthe number of potential clients.

Those NGOs are served by a verydiversified company.

The political situation of Ethiopiacould be a threat because there is a riskof civil war.


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Appendix C

The temperate climate zone is in green39; this is where Addis Ababa and the five regions

surrounding it are located.

39 Gographie et climat. Abyssinie Voyages.


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Appendix D

Estimated average cost per unit (300 abasalas/month)

Description Price(CAD$)

Term or unit used Total costper month

(CAD$)

Unit cost(CAD$)

FIXED COSTS

Facility rent 1600,00 Per year 134,00 0,45

Electricity, water, gas,

garbage

216,00 Per month 216,00 0,72

Marketing costs 20,75 Per week day (x20) 415,00 1,38

Human resources * 140,00 10 employees 1400,00 4,67

Internet (& online phone

services)

168,00 Per month 168,00 0,56

VARIABLE COSTS

Sand/Clay/Straw Free Transport fromvillages

0 0

Water 123,00 300 cubic meter 123,00 0,41

Linseed 410,00 A ton - 0,21

Aluminum paint 39,96 A gallon - 1,60

Supporting bar 4,18 6 feet acrylic rod - 2,09

Black paint 0,30 Per oz (4 oz needed) - 1,20

Hook N.A - - 0,08

Amortization on tools** 27,77 Per month 27,77 0,09

Transport/Delivery 2,00 Per item 600,00 1,00

* Fixed costs are in blue, the more units we produce, the cheaper the cost per unit will be.*Variable costs are in black.

**Include shovels, wheelbarrows, buckets, knives, and hand drills. Total of 1000$ withdepreciation of 36 months.


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(CAD$)

Unit cost(CAD$)

COMMISION ON SALES

For women entrepreneurs 2,00 Per unit sold - 2,00

Retail selling price

(CAD$)

17,46

Total unit cost

(CAD$)

16.46

Profit per item

(CAD$)

1,00

Profit margin 5,72%

OPTIONNAL ITEMS



(CAD$)

Unit cost(CAD$)

OPTIONAL COSTS

Tarp 72,00 30 tarps - 2,40

Water pasteurization indicator 7,00 Per unit - 7,00

Retail selling price(CAD$)

27,46

Total unit cost(CAD$)

25,86

Profit per item(CAD$)

1,60

Profit margin 5,82%

*Greater profits are possible with the interest revenues (rate of 40% on equal payment plans),

but they are not considered in this chart in order to cope with the risk of payment default.

**We will be eligible to governmental grants after a few months of production, which could

eventually lower the cost per item


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Appendix D

Income Statements: projections after 1, 3 and 5 years of operations. Please note that the high

profit margins at year 3 and 5 are due to the governmental grants. All benefits will be reinvested

to expand the company.

I-On inc. Income Statement (Projection, Year 1)

Revenues Total

Sales at the plant 8488Sales from Independent Agents 33961Grants 0Total Revenues 42449

Material 24048Plant Labor 16800Plant & Depreciation 1705Custom Eng./Installation 11761Total COGS 54314

Gross Margin -11865Gross Margin % -27,95

Selling (commission) 3889General & Administrative 4980Operating earnings -20734

Interest Revenue 8489,8Interest Expense 3000Total Financial Items 5489,8

Earnings Before Tax -15244

Tax (35%) 0

Net Earnings After Tax -15244Net Profit Margin -35,91


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Revenues Total

Sales at the plant 23124

Sales from Independent Agents 92498Grants 30000Total Revenues 145622


Gross Margin 75915Gross Margin % 52,13

Selling (commission) 10591General & Administrative 18137Operating earnings 47187


Earnings Before Tax 47867

Tax (35%) 16753,36

Net Earnings After Tax 31113Net Profit Margin 21,37


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Revenues Total

Sales at the plant 28294

Sales from Independent Agents 113177Grants 30000Total Revenues 171471


Gross Margin 81614Gross Margin % 47,60

Selling (commission) 12959General & Administrative 8926Operating earnings 59729


Earnings Before Tax 61447

Tax (35%) 21506,42

Net Earnings After Tax 39940Net Profit Margin 23,29


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Appendix E

Email sent to James Patrick Wozny,

US Embassy, Addis Ababa

From: Sara Bibeau [mailto:[email protected]] Sent: Wednesday, October 17, 201210:11 PM To: Wozny, James P Subject: Question about a social entrepreneurship project inEthiopia

Good afternoon Mr. Wozny,

I am a Bachelor student and I'm working on a social entrepreneurship project with my teammatesfrom the UQM (Universit du Qubec Montral - Canada) and from the University of

Cincinnati. We'd like to start a small business in Ethiopia by producing and selling solarcookers.We'd like to hire and train a few Ethiopian women to build the cookers and then sellthem in the towns nearby. Those solar cookers could improve greatly their quality of life, since itwould create jobs, they'd also be able to cook food without energy costs such as fuel, it wouldprevent deforestation and health problems due to smoke inhalation. Basically, my question isthis one: would our small business be eligible to the funding opportunities offered by the USEmbassy? If not, would you be able to give us a few tips on where we should be looking for ourstart up funding? It's quite difficult to get loans for small businesses since we plan to have ouroperations outside of the United States. Thank you very much for your help. Truly yours, SaraBibeau

Hello Sara;

Thanks for your letter and I wish you all of the best, so I am going to take the time toanswer this as completely as I can.

Generally I can say yes, your idea could qualify for funding from my office, but each ofour program has its own set of requirements from the particular source of our funds, but also

Ethiopian law has some restrictions, depending on where you are working and how yourorganization is structured, so we would have to see the proposal before we could say for certain.

For example, under our Ambassadors Special Self-Help Program(SSH) we normally

fund local NGOs and we are required to verify the organizations legal registration certificatesunder Ethiopias CSO law. There are restrictions for charities under the CSO law of howincome generated by their activities may be used, and the category for which the organizationshould be registered, depending on their particular activities and the percentage of their budgetin foreign funds. We have been able to fund a variety of handicraft, animal fattening, food

production projects that support community based groups, like womens cooperatives or for theelderly. I actually believe that operating as business, even a very socially concerned one, mayfree you from the civil society restrictions aimed at directly at charities.


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We havent awarded SSH funds directly to businesses very often, but there is nothing inour rules that specifically prohibits it except that we cannot use SSH funds for seed capital,revolving funds or start ups, so keep that in mind when writing a proposal of what we can fund.

There is a new policy pending that will not allow us to fund virtually any kind construction. Inrecent years about 90% of our projects under SSH have been construction projects, so we may be

looking for more Income Generating Activities (IGA).We have another program not listed on the website from the United States African

Development Foundation (USADF). You might look at their website for information on whatthey do, but we have a limited amount of funding for small grants up to $12K for IGA projects

like you are describing, but it you apply for SSH funding we will automatically consider you forthis fund. The problem you will run into, however, is your organization must be completelyowned managed and run by Ethiopians and based here.

We may have funding in the coming months for gender based grants up to $30K So, if

the focus were on services for improving the lives of women and girls primarily, with the cookersas a means to achieve those goals your proposal could qualify. We will announce the programand goals on our website when funding is available.

We have funded various efficient cookstoves (mirt, Rocket, alcohol ), biogas projects and

manufacturers. We currently work with a manufacturer of solar cookstoves and they also make asolar sterilizer for medical equipment, but the solar cookers dont seem to work well with thekinds of food people eat and the way they prepare it. Ethiopia has signed on to the Clean CookStove Alliance, Peace Corps is working on small projects with stoves, and we can point you

toward regional organizations (e.g. HOA-Rec) and universities working on these issues too.USAID through their Democracy and Governance office may have funding too, but I wouldimagine your project would be too small for their ability to fund. I spoke with our RegionalEnvironmental Office too, to see who they might recommend. Other governments through GIZ

and SNV work in these areas too.

I dont want to discourage you, but I know I have laid out a bit of a maze, given you lotsof thing to look up, and suggested that funders are not that enthusiastic about solar here. Eventhough offices like mine take a long time to make their decisions, we still manage to fund lots of

projects every year. I think working as a business may help you, at least in terms ofsustainability.

Best,

J. Patrick Wozny

Small Projects Coordinator

Political Economic Section, Small Projects Office

US Embassy, Addis Ababa

Tel: 011-130-6094

Fax: 011-124-2431

Mob: 0911-529-773


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Apendix F


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Appendix G


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Appendix H

Interview with our Ethiopian contact

Interview with Hirut Tinsai Akalu

Hirut is a 20-year-old International Relations major at the University ofCincinnati. She speaks both fluent English and fluent Amharic. ThoughHirut was born in the United States, both of her parents are native toEthiopia and they visit as a family once a year. Hirut is part of a strongEthiopian community both within Cincinnati and in the surroundingcities.

Q: How many times have you been to Ethiopia?

A: I have traveled to Addis Ababa with my family once a year since Iwas a child. Some years we stay in Addis Ababa, and others we travel to the surrounding areas.

Q: When in Ethiopia, what do you and your family spend time doing?

A: Mainly visiting with my grandparents and family members. We spend a lot of time eating andcatching up. Sometimes we take drives to different parts of the country to go to markets and visitorphanages.

Q: When your grandparents cook, how do they go about this?

A: My grandparents are fairly wealthy so they have an oven that is similar to the ones we use inAmerica.

Q: Do most people have ovens? If not, how do they prepare their meals?

A: It depends on the part of the country you are in. Some parts are wealthy, while others areextremely poverty stricken. I have seen men boil water over a flame and cook that way. Mostly,food is prepared over a flame. Some food is not cooked at all.

Q: Do you think Ethiopian citizens would be open to a new means of cooking and food

preparation?

A: Yes, I believe if presented the right way, the Ethiopian community could be open to this.

Q: What are the markets like in Ethiopia?


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A: Again, this depends on the part of the country you are in. Some markets are extravagant andsell fabrics and animals. Others are small and dirty and the people are violent. In general,transactions at Ethiopian markets are centered around the barter system. There really is never aset price for anything. Some markets are sort of in the middle of nowhere; so one person will goand retrieve things for a whole group of people.

Q: How do Ethiopians best respond to advertisement?

A: I do not recall many advertisements from when I have been in Ethiopia. Usually one goes tothe market with something already in mind, or purchases items based off what is presented tothem at the market. For any new product, I would definitely recommend having salesmen whoare able to demonstrate and sell.

Q: How widely accepted is the English language in Ethiopian communities?

A: There are a lot of people like me, who know both languages. Some only speak Amharic, but

can look to others for help with identifying important things.

Q: Do you have any advice for someone just starting a business in this part of the World?

A: Just to keep your mind open. You may need to experiment with what works, what issuccessful, and what allows you to sell your product and make a profit. Know what you aretalking about and be able to provide concrete evidence of its purpose and use. Have goodsalesmen who are able and willing to communicate with average customers in the market place.


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Appendix I

Email sent to Green Ethiopia

Good afternoon,

I am a Bachelor student and I'm working on a social entrepreneurship project with my teammatesfrom the UQM (Universit du Qubec Montral - Canada) and from the University ofCincinnati. We'd like to start a small business in Ethiopia by producing and selling doubleparabolic solar cookers.We'd like to hire and train a few Ethiopian women to build the cookersand then sell them in the towns nearby. Those solar cookers could improve greatly their quality oflife, since it would create jobs, they'd also be able to cook food without energy costs such as fuel,it would prevent deforestation and health problems due to smoke inhalation.

Basically, my question is this one: would your NGO be wiling to help us in teaching theEthiopians how to use the cookers, or help us train a few women to build them? Also, would youaccept as an NGO, to distribute and help us promote this kind of product?

Thank you very much for your help.

Truly yours,

Sara Bibeau

Dear Sara

Thank you very much for your contact and congratulation for your work and the idea youhave. We appreciate very much such initiatives. We have many good contacts to small women

groups and women associations. These women do not have any alternativ to cook. All cookingsare done by charcoale and solar energy would be a good alternative. The problem why inEthiopia cooking with solar energy is not common is because the ladies they cook in the evening,after sun-setting. There are a lot of organizations which try to install alternativ cookers but

unfortunately until today they are not very succesful. But we are sure for the future that is thebest alternativ, because wood is very rare in Ethiopia.

I stay in Ethiopia in November (5.11. - 24.11.) and than next year after the 25 January. Icould contact some ladies groups and ask their interest. But for that I need more information(type of solar cooker, costs, etc.). Are you planning to visit Ethiopia and discuss yourself with

interest groups? If yes, I would make the contact between you and women groups. We ourself wewould not sell solar-cookers by our NGB. But we know enough young ladies which would be able


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and interested to start such a business. And we know also other organizations who allready sellsuch solar cookers.

I hope that this answer is OK for you. Once more I thank you for the contact and let meknow if I can do more for you. Anyway I wish you good success with your Bachalor studies.

Freundliche Grsse / Kind regards / Meilleures saltutations

Kurt Pfister, president

Stiftung Green Ethiopia

P.O. Box 171

CH - 8405 Winterthur

+41 52 233 1531

[email protected]

www.greenethiopia.org

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Social Entrepreneurship Final