PUBLISHER PRIVATE LIMITED COMPANY

PROPOSED BUSINESS EXPANSION PLAN

2020/2021 to 2025/2026

DEVELOPED BY

AUGUST 2020

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 ADDIS ABABA

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 TABLE OF CONTENTS

CONTENTS PAGE
TABLE OF CONTENTS ........................................................................................................................ i

EXECUTIVE SUMMARY .................................................................................................................... 1

SECTION I: GENERAL OVERVIEW .................................................................................................. 2

1. Introduction ................................................................................................................................ 2

1.1. Background of .........Publisher ........................................................................................... 2

1.2. Objective of the TOR, Time Framework and Modality of the Planned Work ................... 3

2. Brief Review and Analysis on Raey’s Structure and Activities (1993 – 2019) ......................... 3

2.1. Objective of .........as Envisaged by the Founders............................................................... 3

2.2. Management structure ........................................................................................................ 4

2.3. Operational Structure.......................................................................................................... 4

2.4. Financial Management ....................................................................................................... 5

2.5. Highlighting Major Activities (Success and Failures) of Raey .......................................... 6

2.6. The Successes and Challenges Marketing .........Products .................................................. 9

2.7. Research and Development .............................................................................................. 12

2.8. Systems – the Scheme or Procedures ............................................................................... 12

2.9. Technology (knowledge, skills, processes, techniques, tools) ......................................... 13

SECTION II SPECIFIC PROPOSAL DETAILS ................................................................................ 14

3. Analysis and Articulation of the New Direction as Agreed by .........BOD .............................. 14

3.1. New vision, Mission, Objectives and Core Values of Raey ............................................. 14

3.2. The New Direction and Areas of Focus ........................................................................... 15

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 4. Reviewing the Present Business Permit of .........Publishers and Exploring Additional
Activities .......................................................................................................................................... 16

4.1. Analyzing the Content of the Current Work Permit ........................................................ 16

4.2. Reviewing the Current List and Exploring the Potential to Add New Ones.................... 17

4.3. Analysis of Major Business Engagements ....................................................................... 18

5. Analysis of the Major Categories of Planned Business Activities ........................................... 19

5.1. Market Analysis of Major Categories of On-going and Projected................................... 19

5.2. Market Analysis of Newly Proposed Categories of Business Activities ......................... 20

5.3. Overall Market Analysis of .........Products ...................................................................... 22

SECTION III: IMPLEMENTATION MODALITY ............................................................................ 21

6. Planned Activities in the Short, Medium, and Long-term Time Framework .......................... 21

6.1. Defining the Actual Time and Framework and Highlighting the Corresponding Activities
21

7. Evolution of Management Structure for New Raey ................................................................. 23

7.1. Structure and Possible Manpower Requirement for the Short-Term ............................... 23

7.2. Structure and Possible Manpower Requirement for the Medium-Term .......................... 25

7.3. Structure and Possible Manpower Requirement for the Long-Term ............................... 26

8. Financial Requirements and Proposed Way Forward .............................................................. 28

8.1. Financial Requirements for the Short-Term and The Immediate Steps to Consider to
Meet the Demand ......................................................................................................................... 28

8.2. Broad Indications for the Medium and Long-Term Financial Requirements .................. 29

8.3. Overall Analysis of Capital Budget Requirement and the Potential Steps to Consider ... 30

SECTION IV: WAY FORWARD ....................................................................................................... 33

9. Proposed Implementation Timetable ....................................................................................... 34

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 10. Critical Issues for the Special Consideration and Follow-up ............................................... 38

11. Concluding Remarks ............................................................................................................ 36

APPENDICES ...................................................................................................................................... 36

Appendix I Cash Flow statement of .........Plc in 2019 ..................................................................... 36

Appendix II Income statement of .........Publishers Plc in 2019 ....................................................... 38

Appendix III Owners equity statement of .........Publishers Plc in 2019........................................... 40

Appendix IV Balance sheet statement of .........Publishers Plc in 2019............................................ 41

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 EXECUTIVE SUMMARY
The purpose of this business expansion project proposal contains detailed business plan and
strategic directions for New .........Publishers Private Limited Company. To this end, the
document is prepared as much information as possible from .........through reviewing
documents, interviews and observations to use as a base line and be realistic. In so doing, this
document attempted to show the current overall sales of the company from Br. 4,700,000.00
to Br. 28,797,605.00. To realize this total sales in five years, the company would need to
generating additional investment capital by 64% which amounts to be Br. 4,316,823.96
through different strategies explained in this document of which Br. 3,000,000 would go to
machineries, Br. 270,000.00 to office furniture’s and equipment’s and the rest for operating
expenditure. This additional capital investment would increase the existing Net Total
Investment Br. 2,428,213.48 to Br. 6,745,037.44 i.e. increment by 64%.

In this proposal, some of the previous product types of the company are suggested to be
terminated in this proposal but rather only seven products which have relatively good recorded
history in customers preference and sales are maintained.

On the other hand, this document introduced new vision, mission, objectives, and values with
consultation with the intent of the owners of the company. Besides, this document incorporates
organizational structure and, human resource requirement of the New .........in the short,
medium and long term time period. Similarly, the expected activities in those three time
periods are also proposed in the document. At the same time, a preliminary action plan
expected to be done in each department is also be included in the document. Much of these
issues have never been addressed in a formal and professional manner in the old .........as learnt
during data collection.

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 SECTION I: GENERAL OVERVIEW
1. Introduction

The aim of this business plan is to ensure the expansion intention of .........publisher and
indicate way forward past the current financial, production and marketing related difficulties
that the company has faced. In doing so, the major issues noted in the TOR are used as sub
topics to fully address the expectation of the company’s Board of Directors (BOD).

1.1. Background of .........Publisher

.........Publishers Private Limited Company has been in business since 1993 until 2019. The
company has been publishing and distributing selected books which are helpful for the spiritual
growth of the Christian community and other interested citizens. In relation to this, .........has
been working in the publication and distribution of books through retailing outlets located
around Stadium, Kebena and Hayahulet whereas the production facility and head office of the
company is located __________ subcity, Woreda ________, Addis Ababa, Ethiopia. Besides,
the company has been importing some books published from abroad in foreign languages for
reselling. In addition to books, the company has also supply cassettes and stationery materials
through the retailing shops buying from other suppliers for retailing purpose. Be that as it may,
the company has been able to maintain separate sales records for each sales outlet.

The main products and services of .........publishers are publication and distribution of books
such as Bible and Commentaries, Theological books, Translated books, Private books and
Biography. The other products that .........retails together with its own publications are imported
books (usually written in the English Language), stationary items and others such as CD,
Cassette, bag, agenda, offering collection bag, and Bible verses card. Even so, the company
didn’t yet maintain a record of sales from each product in the past consecutive five years to be
used as a baseline.

The company has had more than twenty employees who have been assigned in operator, quality
control, sales, finance and human resources management positions. Having these numbers of

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staff, the company has been able to achieve a recorded success of total sales that amounts more
than five million every year in the past three consecutive budget years. The nature of the
company is a private limited one in which case its liability is limited to the capital invested by
its owners. And the major mission of the company is to assist the spirituality development and
growth of fellow Ethiopians.

1.2. Objective of the TOR, Time Framework and Modality of the Planned Work
This business project proposal is developed with the intent of reestablishing and reorganizing
.........Publishers Company in a new, strong and expanded structure. In this regard, the company
is going to give more emphasis to its publishing and distribution works much more than the
buying and reselling of items such like imported books, cassette and other stationery materials.
In relation to the collection of all available and relevant written data from Raey, this business
plan proposal and strategic document attempted to incorporate the sayings and views of key
resource persons of the company. This has been done through interviewing the management
and other relevant staffs of Raey, distributing questionnaire to .........owners, former staff
members and clients, interviewing selected .........clients/customers, interviewing selected
Church and Church affiliated Organizations, collect relevant general marketing information
related to business of .........through reviews of financial records, statements, and audit reports.
In fact, the data obtained in such a way is used as a baseline to come up with a new expansion
business plan and design way forward to the publishing company.

2. Brief Review and Analysis on Raey’s Structure and Activities (1993 – 2019)
2.1. Objective of .........as Envisaged by the Founders
The stakeholders of the company are business people who came together to address the primary
mission of the company with a concerted effort. In this regard, the business is established with
the contributions of the owners without the need to obtain loan from financial institutions. Even
so, due to cash flow problem during operation, the company has not been able to publish highly
demanded Bible commentaries most of the time. For this reason, this business plan would take

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into account the possibility of obtaining short term loan services from potential financial
institutions for smooth operation of its publishing endeavors.

2.2. Management structure

According to the information obtained from .........Publishers Private Limited Company, the
company didn’t ever have a formal organizational structure which has been used for
operational and administrative purposes. In other words, the assessment in this regard indicated
that the company has never have a transparent and formal structure upon which work
communication and command of chain has been based. Though not the only one, but this
missing element can be considered as one of the reasons behind for the company unable to
maintain consistent operation avoiding the cash flow problem which recurrently challenge the
supply of highly demanded bible commentaries and other books.
In this regard, this new business proposal of .........consists and presents an organizational
structure which would be filled with human resources of different number in the short, medium
and long-term journey of the company depending on the expected production capacity of the
company. in doing so, this business plan begins by reviewing the management system of
.........so that a change can apply in the given set-up. The administration, operation, material
management of the company are believed to be reorganized.

2.3. Operational Structure

With regard to the operational structure of the company, the data collection only indicates the
number of staff members found in the sales, finance and administration departments. More
specifically, .........has had 3 sales staff at the Stadium shop, 2 sales staff at the Hayahulet shop
and 2 sales staff at Kebena shop. In this case, there sales team were a composed of 7 sales
people. On the other hand, .........has had nine staff members in the finance and administration
department of which some were working in the production department, human resources and
finance but not clear about how many were in each category. Due to lack of this information,

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the preparation of this business proposal couldn’t find a base line as to how many production
workers have been working with the old machine and equipment’s.

Not only that, the data didn’t clearly indicate as to how the sales outlets operate in relation to
the finance department and that of the production department. This lack of information may
related with the challenges that the company had faced in relation to loss of published books
in which case one can understand that no computerized and scientific inventory system has
been in practice. Not only that, no physical count has been done in a regular schedule which is
why the loss and management of inventory was found difficult. Be that as it may, the stock of
the company was measured high at any given point in time (as can be seen from the financial
statements of 2018 and 2019 of Raey) in which case failure to manage this account well has
led the company to loss as it was one of the major and significant account of the few found in
the publishing company.

2.4. Financial Management

The company’s financial circumstance is relatively good when it comes to keeping fair financial records
and statements based on the audit investigations performed by an independent audit firm named TAY
for the budget years 2018 and 2019 (See Audit Reports of the company in those two years for details).
Even so, the firm has faced repetitive cash flow problem to reprint highly demanded items when needed
due to poor financial forecast, plan and management as learnt from the stakeholders. In this regard, this
newly developed business plan shall come up with an initial financial forecast (cash flow statement)
for the coming twelve months and five years through which the cash flow problem is expected to be
controlled with a qualified personnel as well as the newly developed organizational structure takes that
into account.

The Financial Performance of .........Publishers Private Limited Company in the Past

Five Budget Years

Budget Year Total Sales in ETB Remark

2015 4,900,000.00 Even so, the company didn’t keep separate
2016 4,300,000.00 records for the sale of each item and for each

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 2017 4,600,000.00 outlet as well. Thus, this total sales encompasses
2018 4,900,000.00 all those items that the company supply to its
2019 4,700,000.00 customers.
(Source: the .........Publishers Plc resource person)

Sales Total (in Millions of ETB)

25.00 23.4

20.00

15.00
Sales Total (in Millions of
10.00 ETB)
4.90 4.30 4.60 4.90 4.70
5.00

0.00
2015 2016 2017 2018 2019 Sum
total

As can be learnt from the total sales history of Raey, the company’s sales volumes seems
stagnant while the inflation has been getting very high every year. Regardless of considering
the effect of all other market factors affecting performance, the company has to be able to
increase its sales volume in order to survive and remain in operation serving the society as it
in itself was considered as ‘profit’ depending on the mission it is bestowed by potential
stakeholders.

2.5. Highlighting Major Activities (Success and Failures) of .........

There are lots of publishing companies in Addis Ababa and other regional cities in the country
in which case the business competition sound somewhat stiff when seen at a glance. Be that as
it may, the focus area of .........is a bit indifferent in the sense that this company shall not receive
any printing jobs like the others but books and materials prepared for spirituality development.

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In this case, Raey’s market segmentation solely relies to the spiritual community which could
be addressed through spiritual institutions, churches and spiritual congregations.

Strengths of .........Publishers Plc

.........shall have a competitive advantage in supplying spirituality books, stationery materials,

cassettes, bag, agenda, offering collection bag, and Bible verses card in a one stop shopping
arrangement unlike any other firm in the market. In this regard, the company has been a very
good choice for customers who want to have two or more of those items in one stop. Besides,
the addresses of the sales outlets were relatively city centers in the sense that they were
accessible for many residents of the city i.e. Stadium, Hayahulet and Kebena. In addition to
that, the shops were staffed with relatively adequate number of personnel so as to provide the
required service with utmost care and treatment.

Weaknesses of .........Publishers Plc

Although, .........has had a competitive advantage in supplying spirituality books, stationery

materials, cassettes, bag, agenda, offering collection bag, and Bible verses card in a one stop
shopping arrangement unlike any other firm in the market, the sales outlets were situated in
locations which were not in exact locations to those of the target customers. The best places
for the retailing shops have been near worshipping centers and churches and yet, due to lack
of strategic thinking .........has been able to have any of its outlets in such a way. In fact, the
company had been trying to make van sales during peak hours at the gates of new churches
where the congregation flow is very high but it failed due to the churches request for
commission to make the sales effective. This should not be the only reason to miss that kind
of potential market in which case this experience of .........can be considered as one of the major
weaknesses in the previous performance which is going to be handled in a professional manner
by the new Marketing and Distribution Manager of the company as the new organizational
structure indicates.

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The other weakness that .........has been entertaining for so long was its registration for Value
Added Tax (VAT) in which case the selling price of its items were a little expensive compared
to other competitors. It is so as book sales is not require a VAT registration but due to the
stationary sales and supply the company has had the registration with the intent of buying and
supplying stationary materials in bulk. However, the registration for such type of tax had
seriously affected the expected sales of volume of the company in which case deregistration of
this type of tax shall be effective once this new business plan is finalized. In this case, the
previous experience of stationery material retailing and supply shall be revisited in the sense
that only a minimum amount of stock shall be maintained to simply suffice the quest and
demand of customers who are primarily coming to purchase spiritual books both published
and/or imported. In relation to imported books, the company has been able to sell them quite
good and yet, .........has had a difficulty to secure adequate Letter of Credit (LC) to obtain the
required copy of books to satisfy the market demand.

Opportunities of .........Publishers

The existing spiritual and psychological chaos observed in the country which is mainly caused
by poverty, addiction, corruption, socioeconomic and political forces is an indication for the
existence of a lot of work to be done in the area of spiritual growth and development. In this
regard, the pastoral leaders, congregations and all the spiritual community have a lot of work
to disseminate the gospel all over the country in which case the responsibilities that .........going
to bear is irreplaceable in strengthening the endeavor. To this end, .........needs to devise
mechanisms to network and collaborate with the newly established churches and congregations
so that it shall be able to make use of its production capacity to full size in the coming five
years. In the meantime, the primary goal of .........i.e. spiritual growth of fellow Ethiopians shall
be achieved very well without extra cost but making use of the new human resources ability
and the support of technology as explained in the following sections.

Threats of .........Publishers

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In the publishing industry, the cost of raw materials and inputs is becoming expensive with
increasing need for foreign currency in the country. Consequently, the cost of publishing books
is becoming very expensive which literally increases the selling price to be high compared to
the previous times. More specifically, books which has been sold in 30 to 60 ETB in the
previous years have now becoming a minimum of ETB 150 or more due to production cost
increment. In reality, it is not the increasing demand for foreign currency only that makes it
more expensive but also the increasing competition and technology advancement in the
industry as well.

On the other hand, the major threat for .........in the publishing industry can be the culture of
most publishing companies to receive any printing job which ranges from business cards to
that of books of any kind including spiritual ones. In this regard, the restrictions of
.........Publishers only spiritual books needs to be analyzed thoroughly in order to stay in
business. For instance, without compromising its values and vision of the company, .........can
receive printing jobs of any kind from all the Churches and Church Affiliated Organizations
in which case printing jobs of any kind like receipt vouchers, flyers, pamphlets, business cards,
Sunday school handouts, spirituality books of any size, biographies, and so on shall be received
in this new business plan. In addition to this, .........may also serve other firms in printing jobs
that do not compromise it’s vision and mission statements so as to remain competitive with all
other publishing companies found in the market.

2.6. The Successes and Challenges of Marketing .........Products

Reay Publishing Plc has stayed in business for nearly three decades which in itself is a success
as it has supported the endeavor of spiritual growth in the region no matter what. In relation to
this, the firm has been able to serve not only the general public but also the authors to reach
their readers by providing publication and distribution services bearing all the running and
overhead costs. In other words, .........works as an agent for writers though some of them
disappears once served.

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The company has been able to publish Old Testament (OT) and New Testament (NT)
commentaries which were very likened and demanded immensely by customers though the
reprinting such books interrupted due to cash flow problem. In this regard, the money collected
from sales of such books has been used for the publication of low demanded books and may
be used to cover the lion share of the expenses of the firm to stay in operation.

The other recorded success that .........has been done was its discounted and credit sales
arrangement in distributing and selling of books both in cities up to provinces where no
adequate published materials were available. More specifically, the cash sales discount for
.........books were up to 30% while 10% discount were provided for books bought for reselling
purpose from others. In this regard, though .........had not been able to secure enough profit in
supplying books with discount and credit sales arrangement (with a risk of doubt to get
returned); dissemination of the books and supporting the spiritual growth of the people in those
areas was a success depending on the vision and mission of the company from the very
beginning.

Be that as it may, according to the data collected so far, .........has had different kinds of
customers. More specifically, the types of customers that the company have had were found to
be moody, conditional ones and seasonal. In other words, the moody customers chose
motivational books over others as a fashion whereas the conditional customers chose
biographies of some personalities for short while only (the case of Dr. Tibebu’s biography has
been mentioned as a show case for this scenario). On the other hand, the seasonal customers
prefer some types of books in some specific periods. In relation to this, the demand of fiction
and English books have been demanded much better during summer season where schools are
closed while the demand of such books decline greatly in some other times. At the same time,
the demand of fairy tales for children also been demanded high during summer than in any
other given time.

Not only that, the demand of books significantly declines during school registration time,
holidays and September. In other words, the sales volume becomes very less in those

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mentioned seasons as the house hold expenditure get relatively higher in this season than any
other time in a given year.

Reay has had an experience of budgeting without having the required cash at any given
moment in time in the production period due to which operational problems recurrently
appeared. In fact, this cash flow problem has happened not only to continue production but
also make it difficult to buy from others for reselling purposes according to the firms budget
which literally emanates from its poor financial planning and weak cash flow statements
prepared monthly.

The other challenges that .........has faced comes from its registration for Value Added Tax
(VAT). This in itself have had a positive contribution for the company in the sense that the
company have been able to recollect what it has paid through VAT while buying inputs from
suppliers. Even so, this VAT registration makes the selling cost of the company’s published
materials as compared to other similar products available in the market in which case the
demand of .........publications decline from time to time. As a matter of fact the company could
have reduced the selling price of books so as to maintain it’s competitiveness letting go of what
it has been paid in the form of VAT while purchasing raw materials and inputs from other
suppliers. However, due to lack of formal organizational structure and lack of operational
structures, it has been obliged to pass through this challenges for so long.

.........has also been challenged due to its credit arrangement as some of the agents disappear.
In relation to this, one could see that as to how the operation been done without taking serious
care in selecting agents. In other words, the agents who are privileged for credit needs to be
business people who are experienced in book sales and have a permanent address to do
business. Failure to do so has challenged .........a lot.

The company faced a challenge to manage Van (Car) sales in each church and make us of
steward sales due it issuing of receipts became difficult. Besides, some of the churches do not
allow as a norm while some others asked for commission. In this regard, the company’s
marketing strategy seems and sounds lame as the printed materials complement with the

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mission of the churches rather than competing with any respect. Moreover, the high rate of
staff turnover was also another challenge that .........experience so far in relation to this fraud
and loss of books made the management of stock very difficult. Despite the intention and want
to attend book fairs, lack of mobility of the cash register machine prevented the company from
doing so. All these challenges pushed the management to lose excessive energy and experience
boredom with the lapse of time. Thus, though .........is considered successful so long as serving
the society without experiencing a loss, it has to increase its financial capacity in order to
maintain a consistent supply books and remain in business amid the existing stiff competition.

2.7. Research and Development

The New .........Publishers Private Limited Company is required to have a research and
development habit in order to introduce new products to its customers. Besides, this practice
will also enable the firm so as to obtain a compiled and systematically organized data with
regard to the feed of its customers to each of its publications. The feedback assessments will
enable the company to manage its cash flow related problems and to avoid the publication of
less demanded books while devising mechanisms to increase the sales of already published
ones before it too late.

In this regard, a pool of experts from each department (from Finance and Admin, Marketing
& Distribution and Production) needs to be organized. This team shall be supported and
supervised by the department heads and the General Manager (GM) to push .........any all
respects without compromising its vision and mission but to obtain maximum profit and remain
competitive in the industry not only for today but for the coming decades.

2.8. Systems – the Scheme or Procedures

In the previous years, the production and distribution system has been backboned primarily by
the three retailing shops through which it was the customers who were supposed to come to
and visit .........Publishers products. There were some attempts that .........attempted to go to the
customers place making use of Car/Van sales though was not as such successful.

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 Publications of .........& other Stationery
Materials

Stadium Hayahulet Kebena

But in this New .........Publishers business plan, the company will not maintain any shop of its
own in which case marketing and distribution strategies illustrated in this business plan require
the company to go to customers either face to face or through the web. In this regard, this new
approach is believed to commensurate to have created quite enough market for all of its
products and be accessible to all of its target customers throughout the country. In changing
this traditional marketing arrangement, the company will be able to transfer all that amount of
rental expense to operational activities in the new approach (See section 5.2 and 5.3 for details).

2.9. Technology (knowledge, skills, processes, techniques, tools)

.........has had a long term experience in the publishing and distribution business when it comes
to the practical knowledge, skills (hands on), process, technical capability and tools in the
industry. However, the company is going to expand and reestablish the business venture anew
making use of this new business proposal. In so doing, some of the equipment’s which are
going to be launched in accordance with this business plan might somehow be new to be
operated with the former production workers and technicians. For such a reason, the company
is planning to provide a short term technical trainings in collaboration with the supplier of the
equipment’s for smooth operations. Besides, the company shall establish a long term friendly
work relation with the supplier of the equipment’s for any technical and technology related
support it might require in which case the capability of our employees shall be strengthen in a
sustainable manner.

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 SECTION II SPECIFIC PROPOSAL DETAILS
3. Analysis and Articulation of the New Direction as Agreed by .........BOD
3.1. New vision, Mission, Objectives and Core Values of Raey

.........Publishers Private Limited Company has now formulated a new vision, mission,
objectives and goals in alignment with this new business plan all of which are going to serve
as strategic directions in leading and managing the company from the date that this plan is
effective onwards. Subsequently, the vision, mission, objectives, goals and values of the
company are formulated as follows based on the consultations made with the concerned Board
of Directors (BOD) members of the company.

NEW VISION OF .........PUBLISHERS PRIVATE LIMITED COMPANY

➢ To become a number one choice to publish spiritual materials in East Africa by 2030.

NEW MISSION OF .........PUBLISHERS PRIVATE LIMITED COMPANY

➢ To support the spiritual development and growth of fellow Ethiopians and all the
Christians in the Horn of Africa by supplying spiritual books, magazines, flyers and so
on using high quality printed books and other published materials.

OBJECTIVES OF .........PUBLISHERS PRIVATE LIMITED COMPANY

➢ To reach an annual supply of printed spiritual books and related materials that worth
more than 10 million ETB in the coming five years.
➢ To supply adequate number of published spiritual books and related materials to all
parts of Ethiopia by 2025.
➢ To open at least one retailing shop or have a permanent agent in 50 towns and cities of
Ethiopia until 2025.
➢ To network and collaborate with 500 Pastoral Led Churches provide all their
publication needs by 2025.

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CORE VALUES OF .........PUBLISHERS

Values are virtues and moral qualities that the company shall make use of to guide the day to
day activities so as to achieve its objectives and goals in its journey to accomplish the mission
and reach its vision. In this regard, the company shall rely on the following values and each
staff member and stakeholders will be abide by them:

➢ Honesty
➢ Flexibility
➢ Focus
➢ Responsibility
➢ Commitment

3.2. The New Direction and Areas of Focus

The new direction gives emphasis to harness the advantage of economies of scale by moving
to mass production with the intent of providing the products of .........in a relatively optimum
price (See the section 8 in the financial requirements part of the new .........as to how it needs
to be expanded). Besides, this new direction also goes to the improvising the marketing and
sales platforms of company. The previous and traditional approach of marketing where
customers are expected to take of the company’s products should completely be replaced by a
new and innovative approach which entirely focuses on which channels and platforms could
the company best reach its customers and meets their expectations (for the new marketing
strategies and approaches to be used in this regard can be obtained in detail in sections 5.2 and
5.3 of this document).

At the same time, .........will receive additional demand based publishing assignments from any
individual and firm, unless and otherwise the content and intent of the publication
compromises its core values and the mission it is established. For instance, the new .........may
not receive publication works from other churches that don’t not comply its mission and

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contents of any political zeal. In doing so, the company would continue to become a
competitive choice of customers who wants to get the job done with quality and in a relatively
short time. Being competitive in the market will enable the company to get into financial
investments so that the company will have cash inflows in this respect. This new direction will
not compromise the mission and vision of the company in the sense that the company needs to
be profitable and strong enough so as to remain serving the society’s and communities spiritual
development in the long term. There is no line in between either becoming strong and continue
service or remain weak and kicked out of the market.

After this new expansion business proposal is well brainstormed and be effective,
.........Publishers Plc shall be able to make use of different distributers to sell its products in
which case the company will sell most of its products in cash except a few powerful and well
established distributors. In doing so, the company will contact the churches all over the country
as sales of those products of .........has becoming a usual practice in most churches these days.

4. Reviewing the Present Business Permit of .........Publishers and Exploring Additional

Activities
4.1. Analyzing the Content of the Current Work Permit

As per Ethiopian Business law, books sales do not require registration for Value Added Tax
(VAT). In relation to this, being VAT registered has caused problems .........Publishers Private
Limited Company in many ways such like difficulty to attend book fairs, Van/Car sales, higher
selling price and so on. It is therefore important to deregister for VAT among other things.

In relation to VAT, .........publishers has been collecting and administering it on behalf of the
government. When this is considered the total sales of the company presented in section 2.4
would have become as follows:

Budget Year Total Sales in ETB VAT in ETB Net Sales in ETB
2015 4,900,000.00 (735,000) 4,165,000
2016 4,300,000.00 (645,000) 3,655,000
2017 4,600,000.00 (690,000) 3,910,000

16
 2018 4,900,000.00 (735,000) 4,165,000
2019 4,700,000.00 (705,000) 3,995,000
Total 23,400,000 (3,510,000) 19,890,000
As can be learnt from the summary made in the table above, .........publishers plc have made a
total sales of more than twenty three million in the years between 2015 and 2019 of which
more than three million was VAT. The collection of this VAT for selling books have had three
fold negative impact upon the company in the following ways:

- It overstated the selling price as compared to the other selling price of competitors due
to this reason the demand for books has been relatively low given the fact that .........has
stayed for a very long time in the market and been able to build its reputation.
- .........has incurred additional costs to administer and declare the VAT on a daily and
monthly basis respectively.
- Being VAT registered prevents .........from selling books on events organized through
book fairs, churches, church affiliated organizations’, on the streets, and so on making
use of a number of sales people and agents as each transaction required an issuance of
receipts.

Besides, the involvement of variety of items in the outlets other than books makes the inventory
management difficult and experience loss. In this case, the new .........should only focus on
books and other published materials by avoiding cassettes, stationary materials and the like.
Off course, this decision requires a data as to how much sales and profit has been flowing from
each item at each outlet so that the contributions of each is known. Thus, deciding which items
to be kept and which ones are not as the supply of these materials is also provided by other
firms who specializes in these areas; for instance audio shops and stationary shops would
provide a better service than that of Raey.

4.2. Reviewing the Current List and Exploring the Potential to Add New Ones

.........has been able to publish books such as the Bible, Bible commentaries, imported spiritual
books in English language, Theological books, Translated spiritual books, private books
written by individuals with a spiritual content and biographies of prominent personalities. The
17
company displays all these products together with other selling materials such as stationery
items, cassette, CD, bag, agenda, offering collection bag and bible verses card. The list
indicates the existence of multiple product category in which case the communicating all these
things in those three shops located at Stadium, Hayahult and Kebena would be a good strategy.
However, from a marketing perspective, the company adds no value to the later lists of
products to enhance its brand in the market as those items can be found in every stationery
shops in the city. In this case, though we are a strong believers of having a multiple product
category, all of the products needs to be the outcomes of .........publishers in which case none
of them can be found anywhere else with the same look and style.

Therefore, in this newly expanded .........Publishers Private Limited Company, the company
will introduce publications like magazines, booklets, manuals, brochures, leaflets and so on on
demand based arrangement from potential customers. In doing to, the company would grow to
a middle level printing press which could serve all the businesses found in Addis Ababa not
only the spiritually affiliated organizations and churches alone though they remain the potential
and primary targets of the company only due to complementarity of missions. Based on our
brief market assessments, we have come to learn that there is a huge unsatisfied demand for
printing press. Raey, under the established brand, can join the market anew and expanded to
secure a market share. It will be a business not only for the company but also for any other
related works as well.

4.3. Analysis of Major Business Engagements

In the process of identifying potential areas for new business engagement of Raey, we have
given the following as samples:

- Receive huge publication orders of Churches and/or Church Affiliated Organizations

which aspire to supply spiritual materials (could be the Bible, Bible Commentaries,
training manuals, magazines, flyers, brochures, etc.) to their congregation or
community.

18
 - Receive publication assignments of vouchers (can be receipts or any kind) from any
firm either spiritual or not.
- Receive publication works of any book which would support the holistic growth and
development of citizens which literally has no any other intentions except the socio-
economic and personality development of individuals.
- Receive event related publication assignments of any kind from individuals, firms (can
be governmental, not-for-profit, private, charities and so on).
- Receive publication works from private schools for their need to publish supplementary
books in the summer time.
- Network with other printing presses and receive some of their works as a collaborative
agent while trying to meet the deadlines and .........could do the same for the them when
the time comes.

5. Analysis of the Major Categories of Planned Business Activities

5.1. Market Analysis of Major Categories of On-going and Projected

The market analysis has been based on the data collected through interview from .........staff as
summarized in the table below. In this case, the interpretations and discussions followed might
be limited to the suggestions provided but not recorded sales data.

Code Sales Item Suggestions from .........

A Bible and Commentaries Full Demand
B Imported books (English) Over Full Demand
C Theological books Irregular Demand
D Translated books Latent Demand
E Private books Latent Demand
F Biography No Demand
G Stationary items Irregular Demand

19
 Other (CD, Cassette, bag, agenda, offering
H Negative Demand
collection bag, bible verses card)

As can be learnt from the market analysis of major items supplied by .........under the on-going
operations, some of only items A and B are found to be demanded fully and sound promising.
The demand of categories such as D and E are not known clearly yet, in this case compilation
of sales record of these items and the real demand trend needs to be known so as to device
mechanism as to how promote them and increase the sales volume. It is also good to know the
feedbacks of customers with regard to these items.

When it comes to category C books, the demand sounds irregular in which case assessing the
underlying reasons and customers preference would be important so as to determine the
amount of books to be published in this category without affecting the cash flow need of the
company. On the other hand, the items in category F seem not having any demand and yet, it
is could possibly be due to lack of awareness as biographies are very useful pieces in
communicating role models. In this case, the choice and selection of whose biography to be
printed can be collected from the preference and choice of the customers themselves through
the research and development team before getting dive into publication.

Finally, the sales trend of category G sounds an irregular one in which case as .........has added
no value into it; it is not surprising for the company to be a first choice for its customers in this
respect. Similarly, the demand for category H doesn’t involve any value addition. Even so, the
demand for category H is even more discouraging as it was rated negative which literally
indicates that this category of items should be avoided from New .........Publishers Private
Limited company.

5.2. Market Analysis of Newly Proposed Categories of Business Activities

This newly proposed business plan suggested new marketing strategies such like web page
development, online sales, shelf sharing, delivery service, indirect advertisement, copy right

20
agent, flyleaf’s books sales and management review. In relation to each one of those a brief
explanations are given in this section.

When it comes to web page development, it is advisable to appear in any given webpage and
social media accounts such as face book, telegram, Instagram, twitter, etc so as to be accessible
and known for as many customers as possible. Continually updating, posting of new
publications and boosting the pages shall be under consideration. A well-organized webpage
influences people to get in to it. It will be easy to identify how many visitors appear and buy,
frequently searched items and run out books, the likes and dislikes of each item and so on could
be retrieved for planning and decision making purposes. Besides, these platforms will lead
.........to begin online sales which is underway with recent announcement made by the National
Bank of Ethiopia. Nowadays digital marketing is penetrating the market set up of Ethiopia. It
gets easy to buy and sale anything using online platforms. The cover page, contents and
premium pages will appear. When the customer orders a default help page with questions will
guide and then a call operator will contact to finalize the sales process. There shall be after sale
service too to ensure customer satisfaction and keep them by the company’s side as a long term
customers.

In relation to shelf sharing, books has no expiry dates unless they are products of research. In
general, books experience less damage and takes few spaces in which case shelving common
books by using a small place from any business shop, market center, supermarkets, churches,
Schools in any areas to address people from everywhere can be a very innovative marketing
strategy for the New .........Publishers Private Limited Company. Moreover, incorporating
delivery services are also recommendable for customers who ordered in any given platform.
Promoting the service starts from a single book without transport cost. Indirect way of
advertisement is such as using medias for book reading, interview, impact study result, etc.
and becoming a copy right agent for books from abroad would can be considered as a good
strategy. In other words, .........can negotiate with publishers to be an agent to copyright and
make the distribution and such a business relationship can be established using the internet plat
form by the marketing and distribution manager.

21
Another important strategy that can be implemented be the flyleaf books sales arrangement. It
is to mean that, it is advisable to acquire local market share through low price, a dominant
selection of products, a competitive variety of services including a hard to find book search,
plus a relaxing, friendly environment that encourages browsing and reading.

5.3. Overall Market Analysis of .........Products

Of all those products that .........has been introducing to the market (those listed out in section
5.1 above); only seven of them are considered as potentially and uniquely identified as products
of Raey. In this regard, this business plan considered only these products of .........as the major
publication works of .........and the amount of publication for each category has been decided
based on the customers feedback and demand as explained in section 5.1. It is therefore, the
market forecast has been done for this products only making use of the total sales record of the
company as a bench mark.

Benchmarking the records of .........has limitations in the sense that we could only find the
annual total sales of the company which failed to answer ‘how much from each product type?’.
In this case, the information obtained from resources persons through interview has been used
to make the intellectual guess to allocate ratios and make the forecasts below:

Code Product Type Allocated Ratio

R001 Bible and Commentaries 31.00%
R002 Imported books (English) 37.00%
R003 Theological books 8.00%
R004 Translated books 7.00%
R005 Private books 4.00%
R006 Biography 4.00%
R007 Bible verses card 9.00%

22
 Twelve Months Demand Forecast of .........Publishers Private Limited Company Products

Ref. Month and Sales of Publications in ETB Year-end

Products
No. 1 2 3 4 5 6 7 8 9 10 11 12 total
Bible and
R001 7,285.00 8,499.17 12,141.67 9,713.33 12,141.67 9,713.33 12,141.67 10,927.50 9,713.33 10,927.50 9,713.33 8,499.17 121,416.67
Commentaries
Imported
R002 books 8,695.00 10,144.17 14,491.67 11,593.33 14,491.67 11,593.33 14,491.67 13,042.50 11,593.33 13,042.50 11,593.33 10,144.17 144,916.67
(English)
Theological
R003 1,880.00 2,193.33 3,133.33 2,506.67 3,133.33 2,506.67 3,133.33 2,820.00 2,506.67 2,820.00 2,506.67 2,193.33 31,333.33
books
Translated
R004 1,645.00 1,919.17 2,741.67 2,193.33 2,741.67 2,193.33 2,741.67 2,467.50 2,193.33 2,467.50 2,193.33 1,919.17 27,416.67
books
R005 Private books 940.00 1,096.67 1,566.67 1,253.33 1,566.67 1,253.33 1,566.67 1,410.00 1,253.33 1,410.00 1,253.33 1,096.67 15,666.67
R006 Biography 940.00 1,096.67 1,566.67 1,253.33 1,566.67 1,253.33 1,566.67 1,410.00 1,253.33 1,410.00 1,253.33 1,096.67 15,666.67
Bible Verses
R007 2,115.00 2,467.50 3,525.00 2,820.00 3,525.00 2,820.00 3,525.00 3,172.50 2,820.00 3,172.50 2,820.00 2,467.50 35,250.00
Card
Sub total 23,500.00 27,416.67 39,166.67 31,333.33 39,166.67 31,333.33 39,166.67 35,250.00 31,333.33 35,250.00 31,333.33 27,416.67 4,700,000.00

Five Years Demand Forecast of .........Publishers Private Limited Company Products

Year and Sales of Publication in ETB

Ref. No. Products
First Second Third Fourth Fifth Total

20
 Bible and
R001
Commentaries 1,457,000.00 1,529,850.00 1,682,835.00 1,935,260.25 2,322,312.30 8,927,257.55
Imported books
R002
(English) 1,739,000.00 1,825,950.00 2,008,545.00 2,309,826.75 2,771,792.10 10,655,113.85
R003 Theological books 376,000.00 394,800.00 434,280.00 499,422.00 599,306.40 2,303,808.40
R004 Translated books 329,000.00 345,450.00 379,995.00 436,994.25 524,393.10 2,015,832.35
R005 Private books 188,000.00 197,400.00 217,140.00 249,711.00 299,653.20 1,151,904.20
R006 Biography 188,000.00 197,400.00 217,140.00 249,711.00 299,653.20 1,151,904.20
R007 Bible Verses Card 423,000.00 444,150.00 488,565.00 561,849.75 674,219.70 2,591,784.45
Sub total 4,700,000.00 4,935,000.00 5,428,500.00 6,242,775.00 7,491,330.00 28,797,605.00

21
 SECTION III: IMPLEMENTATION MODALITY
6. Planned Activities in the Short, Medium, and Long-term Time Framework
6.1. Defining the Actual Time and Framework and Highlighting the Corresponding
Activities

The time frame short, medium and long-term are considered and the activities to be done under
each of them are listed out following them. In doing so, only the major and strategic issues are
considered without going deep into details. It so as the details are addressed in Section 4, No.
9 below of this document. Now let us see which major activities to be considered while
planning, one at a time as follows:

Short Term Planned Activities (May take one to two months)

o .........will find ways to finance this new business expansion plan (can be either through
shareholders additional investment or long term loan from financial institutions).
o Reorganizing and redesigning the office facilities and production plant of the company.
o .........is going to assess the market to make the purchase of new machineries and
equipment’s to reorganize the company production capacity. Besides, the launching
and maintenance arrangements should also be considered in the meantime.
o .........should make a thorough inventory of stocks and compile a database before
starting the operation in this new arrangement.
o Doubtful accounts in relation to agents needs to be decided to be closed or make one
last try before jumping to closing before this new business plan become effective.
o Deregistration of VAT and maintain Withholding tax alone.

Middle Term Planned Activities ( May refer to the first year of operation)

o Recruitment of employees based on the human resource requirement of the new

.........(See section 7 below for more detail).
o Undertaking trainings and orientation of employees towards the new .........vision,
mission, values and objectives.

21
 o Purchase of production inputs and office supplies to start operation.
o Planning ways to start sales of products which are found in the stock in so doing the
company needs to promote and send letters to all of its presumably esteemed customers
about its products and areas of focus. While doing this, the company needs to discard
or transfer those stationery items to other businesses in the market with negotiation in
which case no attempt shall be made to sell them like before at any cost. Or the
company may keep them for office use if their size and collection is not that large.
o The company needs to revisit its finance, human resource, production, marketing and
other important manuals and guidelines to match the scope and focus of this New
.........business plan.
o The company’s needs to open social media accounts which do not cost much to start
promoting its services, products, and begin online sales and delivery.
o The other newly introduced strategies of marketing needs to be tested and
operationalized at this stage (See section 5 for details).

Long Term Planned Activities (Ranges from second year of operation onwards)

o The development of web site that is updated and upgraded dynamically.

o The digitizing of all of its financial and sells records.
o Launching a scientific and computerized inventory system in place considering either
LIFO or FIFO for its raw materials and product stocks as appropriate to the nature of
the company inputs.
o Revisiting the dynamics of human resource requirements to match the increasing
production capacity of the new Raey.
o Networking with potential customers which ranges from Churches, Church Affiliated
Organizations, government, not-for-profit international or local organizations, private
firms like schools, colleges, health institutions, other businesses and so on.

22
7. Evolution of Management Structure for New Raey

In this section, the management structure and human resource requirements for New .........has
been illustrated. In so doing, the first two years are considered as short term, the third and
fourth years as medium term and the fifth year as the long term plans. When it comes to the
organizational structure, this business plan presents just the same for all those three except the
size of the human resource requirement each may have depending on the responsiveness of the
market and demand in supply. In fact, the structure may need to be segregated to specific areas
of specialization when the performance and market share of the new .........increases and yet,
this business plan aimed to keep it cost effective and realistic for at least the first five years of
operations given the fact that the business transactions and the socio-economic and political
context of the country is at risk.

7.1. Structure and Possible Manpower Requirement for the Short-Term

The organizational structure illustrated below is not only for the short term but to the first five
years of operation as well. In fact, the staffing differs depending on the classifications made in
the introductory statements of this section above. In this case, this structure shall only be staffed
as presented in the table below in the first two years of operation.

23
 The Expansion of .........Human Resource Requirement and Budget

Short term HR Requirements

Job Position Year 1 Year 2

General Manager 1 1
Admin & Finance 1 1
Marketing & Distribution 1 1
Production Manager 1 1
Office Assistants 6 6
Total number of employees 10 10

24
 10
10
9
8
7 6
6
5
4
3 Short term HR Requirment
2 1 1 1 1
Year 1
1
0 Short term HR Requirment
Year 2

As can be seen from the above table, the organizational structure of the new .........shall only
be staffed with 11 permanent staff in the short-term, which literally is assumed to covers the
first two years of operation. Even so, the company may involve a lot of additional contractual
and commission agents so as to satisfy the increasing demands of customers based of the
expansion of the market share it secures from time to time in all those three departments in a
planned and cost effective manner.

7.2. Structure and Possible Manpower Requirement for the Medium-Term

In the medium-term as well, the new .........is assumed to maintain the same organizational
structure presented in section 7.1 above except the staffing size it may have that is
commensurate to the ongoing market demand. In this regard, the size of the permanent staff is
expected to grow the one presented below in the third and fourth years of operations.

Medium term HR Requirements

Job Position Year 3 Year 4
General Manager 1 1
Admin & Finance Manager 1 1

25
 Marketing & Distribution Manager 1 1
Production Manager 1 1
Office Assistants 12 12
Total number of employees 16 16

16
Total number of employees

12
Office Assistants

Production Manager
Marketing & Distribution
Manager
Admin & Finance Manager
1 Medium term HR
Requirment Year 4
1 Medium term HR
Requirment Year 3
1

1
General Manager

0 5 10 15 20

Be that as it may, the involvement and recruitment of contractual labor and commission agents
to match the ongoing market demand and expectation of customers shall be used in a planned
and cost effective manner. Therefore, .........shall maintain a total of 16 permanent staff in the
medium term i.e. 3rd and 4th years of operation. In this case, 12 office assistants shall be
employed who are going to be assigned 4 at each department.

7.3. Structure and Possible Manpower Requirement for the Long-Term

In this long-term range as well, the new .........is assumed to maintain the same organizational
structure presented in section 7.1 above except the staffing size it may have that is
commensurate to the ongoing market demand. In this case, the size of the permanent staff is
expected to grow up to 28 (twenty eight) as shown in the table below in the fifth year of
operation.

26
 Long term HR Requirement
Job Position 5th Year
General Manager 1
Admin & Finance Manager 1

Marketing & Distribution Manager 1

Production Manager 1
Office Assistants 24
Total number of employees 28

Long term HR Requirement 5th Year

General Manager
1 1 1
1 Admin & Finance Manager

28 Marketing & Distribution

24 Manager
Production Manager

Office Assistants

Total number of employees

In the 5th year, the new .........shall involve around 28 permanent staff of which 4 additional
office assistants, operators, and technicians shall be added in each of those three departments’
indicated in the organizational structure. Here also, the involvement and recruitment of
contractual labor and commission agents to match the ongoing market demand and expectation
of customers shall be used in a planned and cost effective manner.

27
8. Financial Requirements and Proposed Way Forward
8.1. Financial Requirements for the Short-Term and The Immediate Steps to
Consider to Meet the Demand

Before going deep into the proposed financial requirements for the New Raey, let us briefly
review the previous performance in relation to finance. The last financial statements of
.........Publishers prepared in 2019 budget year have been used as base lines for the analysis to
be done in this section (See Appendices section to refer to the copy of the statements).

Previous Year’s (2019) Financial Description of .........Publishers Private Limited

Company

Items Amount in ETB Remark

Sales 4,764,155.97
Cost of Sales (3,413,573.76)
Gross Profit 1,350,582.76
Interest Income 13,856.21
Expenditures (988,641.72)
Profit Before Tax 375,796.70
Provision for profit tax (108,582.15)
Net Profit after tax 267,214.55
Transfer to legal reserve (13,360.73)
Net profit after taxation and Reserve 253,853.823
Book value of Fixed Asset 29,700.91
Stock 3,257,125.54
Debtors 436,936.44
Cash at Hand & at Bank 569,794.50
Current Assets 4,263,856.48

28
 Creditors & Accruals 1,767,377.73
Profit Tax Payable 97,966.18
Liabilities Total 1,865,343.91
Net Current Asset 2,398,512.57
Share Capital 2,013,000.00
Net Total Asset 2,428,213.48 Legal Reserve 161,359.66
Retained Profit 253,853.82
(Source: the income and balance sheet statement of .........Publishers Plc for 2019 – Refer
Appendix II and IV for the copy of the statements)

Proposed Investment Budget for the New .........Publishers Private Limited Company
Expansion in ETB

Items Existing Additional Sum total

Printing Machines 29,700.91 3,000,000.00 3,029,700.91
Office Equipment’s - 150,000.00
Office Furniture’s Equipment’s 120,000.00
Operational Budget 988,641.72 1,046,823.96 2,035,465.68
Net Current Asset 2,398,512.57
Net Total Investment 2,428,213.48 4,316,823.96 6,745,037.44
Owners Share versus
36% 64% 100%
Liability Comparison

29
 4,500,000.00
4,000,000.00
3,500,000.00
3,000,000.00
2,500,000.00
2,000,000.00
1,500,000.00 Existing
1,000,000.00
500,000.00 Additional
0.00

The Expansion of .........Human Resource Requirement and Budget

In Number and Amount of Monthly Salary in ETB

Job Position
Year 1 Year 2 Year 3 Year 4 Year 5
General Manager 10,000.00 10,000.00 12,500.00 12,500.00 15,000.00

Admin & Finance Manager 7,500.00 7,500.00 9,000.00 9,000.00 10,500.00

Marketing & Distribution 7,500.00 7,500.00 9,000.00 9,000.00 10,500.00

Manager
Production Manager 7,500.00 7,500.00 9,000.00 9,000.00 10,500.00

Office Assistants (2 for 12,000.00 12,000.00 30,000.00 30,000.00 52,000.00

Each Department)
Salary Expense Total 44,500.00 44,500.00 69,500.00 69,500.00 98,500.00

The financial forecast and planning is being made making use of the chart of accounts used in
the previous financial statements of the old .........in which case the details of some of the
accounts may not be clear for us while preparing the forecast and for our readers as well. For
instance, the account Expenditure may consist of specific accounts which may or may not be
assumed while we develop this forecast as compared to the actual meaning and scope that it is
given in the old .........financial records. Even so, one could think of all accounts that are not

30
solely mentioned but related to such an account can be considered included without we need
to communicate it. It is done this way so as to align this financial plan and forecast with the
age old recording system and culture of the company.

31
 Twelve Months Profit and Loss Statement of New .........Publishers Private Limited Company Expansion

Month and Amount in ETB

Item
1 2 3 4 5 6 7 8 9 10 11 12
Sales 6,764,155.97 6,764,155.97 6,764,155.97 6,764,155.97 6,764,155.97 6,831,797.53 6,831,797.53 6831797.53 6831797.53 6,900,115.50 6,900,115.50 6,900,115.50
Cost of Sales (4,413,573.76) (4,413,573.76) (4,413,573.76) (4,413,573.76) (4,413,573.76) (4,457,709.50) (4,457,709.50) (4457709.498) (4457709.498) (4,502,286.59) (4,502,286.59) (4,502,286.59)
Gross Profit 2,350,582.76 2,350,582.76 2,350,582.76 2,350,582.76 2,350,582.76 2,374,088.03 2,374,088.03 2374088.032 2374088.032 2,397,828.91 2,397,828.91 2,397,828.91
Interest
23,856.21 23,856.21 23,856.21 23,856.21 23,856.21 23,856.21 23,856.21 23856.21 23856.21 24,094.77 24,094.77 24,094.77
Income
Administration
(1,575,103.45) (1,575,103.45) (1,575,103.45) (1,575,103.45) (1,575,103.45) (1,590,854.48) (1,590,854.48) (1590854.485) (1590854.485) (1,606,763.03) (1,606,763.03) (1,606,763.03)
Expense
Profit Before
799,334.97 799,334.97 799,334.97 799,334.97 799,334.97 807,089.76 807,089.76 807089.7576 807089.7576 815,160.66 815,160.66 815,160.66
Tax
Provision for
(230,927.87) (230,927.87) (230,927.87) (230,927.87) (230,927.87) (233,237.15) (233,237.15) (233237.1487) (233237.1487) (235,569.52) (235,569.52) (235,569.52)
profit tax
Net Profit after
568,407.09 568,407.09 568,407.09 568,407.09 568,407.09 573,852.61 573,852.61 573852.6089 573852.6089 579,591.13 579,591.13 579,591.13
tax
Transfer to
(28,420.35) (28,420.35) (28,420.35) (28,420.35) (28,420.35) (28,704.55) (28,704.55) (28704.5535) (28704.5535) (28,991.60) (28,991.60) (28,991.60)
legal reserve
Net profit after
taxation and 539,986.74 539,986.74 539,986.74 539,986.74 539,986.74 545,148.06 545,148.06 545148.0554 545148.0554 550,599.54 550,599.54 550,599.54
Reserve

Five Years Profit and Loss Statement of New .........Publishers Private Limited Company

28
 Budget Year and Amount in ETB
Item
First Second Third Fourth Fifth
Sales 6,900,115.50 7,245,121.28 7,969,633.40 9,165,078.41 10,998,094.10
Cost of Sales (4,502,286.59) (4,727,400.92) (5,200,141.01) (5,980,162.16) (7,176,194.60)
Gross Profit 2,397,828.91 2,517,720.36 2,769,492.39 3,184,916.25 3,821,899.50
Interest Income 24,094.77 25,299.51 27,829.46 32,003.88 38,404.65
Administration Expense (1,606,763.03) (1,687,101.18) (1,855,811.30) (2,134,182.99) (2,561,019.59)
Profit Before Tax 815,160.66 855,918.69 941,510.56 1,082,737.15 1,299,284.58
Provision for profit tax (235,569.52) (247,348.00) (272,082.80) (312,895.21) (375,474.26)
Net Profit after tax 579,591.13 608,570.69 669,427.76 769,841.92 923,810.30
Transfer to legal
(28,991.60) (30,441.18) (33,485.30) (38,508.09) (46,209.71)
reserve
Net profit after taxation
550,599.54 578,129.52 635,942.47 731,333.84 877,600.61
and Reserve

29
 Twelve Months Cash Flow Statement of New .........Publishers Plc

Month and Amount in ETB

Item
1 2 3 4 5 6 7 8 9 10 11 12
Cash inflow from
Operating
Activities
Net Profit (loss)
375,796.70 394,586.54 418,261.73 447,540.05 483,343.25 526,844.14 579,528.56 643,276.70 720,469.90 814,130.99 928,109.33 1,067,325.73
for the year
Deprecision 8,014.47 - - - - - - - - - - 89,970.09
Total cash inflow 383,811.17 394,586.54 418,261.73 447,540.05 483,343.25 526,844.14 579,528.56 643,276.70 720,469.90 814,130.99 928,109.33 1,157,295.82
Decrease
(Increase) in (349,774.64) (384,752.10) (442,464.92) (530,957.90) (663,697.38) (862,806.59) (1,164,788.90) (1,630,704.46) (2,364,521.47) (3,546,782.20) (5,497,512.41) (8,796,019.86)
Stock
Decrease
(Increase) in (61,207.91) (64,268.31) (68,124.40) (72,893.11) (78,724.56) (85,809.77) (94,390.75) (104,773.73) (117,346.58) (132,601.63) (151,165.86) (173,840.74)
Debtors
Increase
(Decrease) in 233,022.19 256,324.41 294,773.07 353,727.68 442,159.61 574,807.49 775,990.11 1,086,386.15 1,575,259.92 2,362,889.88 3,662,479.31 5,859,966.90
Creditors
Total Profit
Before Working (177,960.36) (192,696.00) (215,816.25) (250,123.33) (300,262.33) (373,808.88) (483,189.54) (649,092.04) (906,608.13) (1,316,493.96) (1,986,198.97) (3,109,893.71)
Capital Changes
Profit tax paid (101,317.90) - - - - - - - - - - 320,197.72
Withholding tax
(10,615.97) (11,146.77) (11,815.57) (12,642.66) (13,654.08) (14,882.95) (16,371.24) (18,172.08) (20,352.73) (22,998.58) (26,218.38) (30,151.14)
paid

29
Total Taxation
(111,933.87) (11,146.77) (11,815.57) (12,642.66) (13,654.08) (14,882.95) (16,371.24) (18,172.08) (20,352.73) (22,998.58) (26,218.38) (290,046.58)
Paid
Net cash inflow
from Operating 93,916.94 98,612.79 104,529.55 111,846.62 120,794.35 131,665.84 144,832.43 160,764.00 180,055.68 203,462.91 231,947.72 266,739.88
Activities
Cash flow from
investing - - - - - - - - - - - -
activities
Fixed Asset
(1,913.04) 3,270,000.00 - - - - - - - - - 3,270,000.00
Purchased
Investment
5,000.00 - - - - - - - - - - -
disposal
Dividends Paid (267,254.23) - - - - - - - - - - (233,183.74)
Net Cash inflow
(outflows) from
(264,167.27) (4,316,823.96) - - - - - - - - - (4,316,823.96)
Investing
activities
Net cash In/out
flow from - - - - - - - - - -
- -
Financing
Activities
Increase
(Decrease) in (178,762.85) (189,488.62) (202,752.82) (218,973.05) (238,680.62) (262,548.68) (291,429.04) (326,400.52) (368,832.59) (420,469.15) (483,539.53)
(170,250.33)
Cash and Cash
Equivalents
Cash and Cash 777,047.07 823,669.90 881,326.79 951,832.93 1,037,497.90 1,141,247.68 1,266,784.93 1,418,799.12 1,603,243.01 1,827,697.03 2,101,851.58
740,044.83
Equivalents at the

30
Beginning of the
Year
Cash and Cash
Equivalent at the 569,794.50 598,284.23 634,181.28 678,573.97 732,859.89 798,817.28 878,699.00 975,355.89 1,092,398.60 1,234,410.42 1,407,227.88 1,618,312.06

End of the Year

Five Years Cash Flow Statement of New .........Publishers Private Limited Company

Budget Year and Amount in ETB

Item
First Second Third Fourth Fifth
Cash inflow from Operating Activities

Net Profit (loss) for the year 1,067,325.73 1,547,622.31 2,321,433.46 3,598,221.87 5,757,154.99
Deprecision 89,970.09 75,573.08 63,695.77 53,870.20 45,718.38
Total cash inflow 1,157,295.82 1,623,195.39 2,385,129.24 3,652,092.07 5,802,873.37
Decrease (Increase) in Stock (8,796,019.86) (9,675,621.85) (11,126,965.13) (13,352,358.15) (16,690,447.69)
Decrease (Increase) in Debtors (173,840.74) (191,224.82) (219,908.54) (263,890.25) (329,862.81)
Increase (Decrease) in Creditors 5,859,966.90 6,445,963.59 7,412,858.13 8,895,429.75 11,119,287.19
Total Profit Before Working Capital Changes (3,109,893.71) (3,420,883.08) (3,934,015.54) (4,720,818.65) (5,901,023.31)
Profit tax paid 320,197.72 352,217.49 405,050.11 486,060.14 607,575.17
Withholding tax paid (30,151.14) (33,166.25) (38,141.19) (45,769.43) (57,211.78)
Total Taxation Paid 290,046.58 319,051.24 366,908.93 440,290.71 550,363.39
Net cash inflow from Operating Activities 266,739.88 293,413.87 337,425.95 404,911.14 506,138.92
Cash flow from investing activities - - - - -
Fixed Asset Purchased 3,270,000.00 - - - -

31
Investment disposal - - - - -
Dividends Paid 233,183.74 256,502.12 294,977.44 353,972.92 442,466.16
Net Cash inflow (outflows) from Investing activities 833,183.74 256,502.12 294,977.44 353,972.92 442,466.16
Net cash In/out flow from Financing Activities - - - - -
Increase (Decrease) in Cash and Cash Equivalents (483,539.53) (531,893.48) (611,677.50) (734,013.00) (917,516.25)
Cash and Cash Equivalents at the Beginning of the Year 2,101,851.58 2,312,036.74 2,658,842.25 3,190,610.70 3,988,263.38
Cash and Cash Equivalent at the End of the Year 1,618,312.06 1,780,143.26 2,047,164.75 2,456,597.70 3,070,747.13

32
 8.2. Broad Indications for the Medium and Long-Term Financial Requirements

The new .........Publishers financial requirement for the short term is indicated in the expansion
proposal of this business plan. In relation to this, the additional Br. 4,316,823.96 which is 64%
of the existing capital of the company. This additional investment may be obtained from the
share contributions of existing members or by adding new owners of the company to raise this
amount or as a third options a long term loan can be considered to implement this new
expansion project. This additional investment is expect to be utilized for machineries,
equipment’s, office furniture’s, and so on as can be seen from one of the tables presented in
section 8.1 above.

When it comes to the medium and long term financial requirements of the company, the focus
is believed to maintain the consistent publications, importing, and operationalizing of the
company. In this regard, the previous practices of retained earnings should be strengthened
with the expense of dividends and legal reserves as much as possible, with the consent of the
stakeholders in fact. Besides, the other major strategy to maintain the medium term financial
requirement of the company should be shouldered by the marketing and distribution and
financial and administration departments in the sense that all the products should be marketed
aggressively and new orders should be brought up on a continual basis, and the cash flow
statement should be prepared dynamically taking into account the ongoing cash consumption
and demand of products.

When it comes to the long term financial requirements of the .........Publishers, expanding the
financial sources is very important to ensure this. More specifically, the company needs to
focus on expanding its services to other stakeholders’ who may have printing press needs
without compromising its vision, mission, objectives and values with the intent of generating
additional income so that it can have money for investing activities. In the long term, the
income from investing activities of in potential business ventures (could be banking, real states,
and so on) will enable to ensure .........can have power to repay its long term loans and sustain
its mission and reach its vision. Besides, the company could transfer ownership through the

29
sell of some shares to Churches and/or Church Affiliated organizations to generate money for
investing activities.

8.3. Overall Analysis of Capital Budget Requirement and the Potential Steps to
Consider

The capital budget allocated for the printing, cutting, binding machines, office equipment’s
and furniture’s is ETB 3,270,000.00, as can be seen in section 8.1 above, of which only the
three million is allocated for the printing machineries. In this regard, the international suppliers
of paper printing machines have a price that fluctuates on a daily basis based on the market
due to this we couldn’t exactly tell how much would it cost but the range i.e. between 60 to
120 thousands of USD. To simply illustrate what the machines would look like and their
specification, two options are presented here under. Even so, these machines would enable the
New .........Publishers Plc to grow and develop to a small or middle level printing press or
enterprise.

The manufacturers of the paper printing machines could be contacted through the internet and
many of them which are geographically near to Ethiopia resides in India and China. It is from
these locations that the two options are derived. In the process of making the purchase we
suggest that .........needs to make use of technicians and experts in the printing industry to
consult and present technical details as to which machines best suit to the needs and demands
of the company. For example, the items to printed by .........needs to be taken into account in
the decision making of which machines best suit that purpose in terms of speed, functionality,
color choice and options, level of automations, electric power consumption, cost of
maintenance, and so on.

Option 1

30
31
Option 2

32
In general, the major manufacturers and suppliers of the machines worldwide encompasses
the following firms:

✓ Advanced Vision Technology Ltd.

✓ Agfa Graphics
✓ Bobst
✓ Dover Corp.
✓ Eastman Kodak Company
✓ Goss International Americas, LLC

And the technical advisers who are going to consult the purchasing process of the paper
printing machines shall prepare technical specifications in the following main areas about the
machines:

✓ Pre-Press Systems
✓ Printing Presses
✓ Offset Presses
✓ Sheet-Fed Presses
✓ Post-Press Machinery and Equipment
✓ Paper Cutting Machines
o Manual Cutters
o Electric Cutters
o Hydraulic Cutters
✓ Folding Machines

33
 o Letter Folder
o Office Friction Folder
o Heavy-Duty Friction Folder
o Vacuum Folder
o Right Angle Folder
o Self-Mailer Folder
o Accumulator Folder
o Folder-Inserter
✓ Trimmers
✓ Folding Machines
✓ Binding Equipment
✓ Other Printing-Related Equipment
✓ Plates
✓ Quality Control Equipment
✓ Parts & Accessories
✓ Platens
✓ Dyers
✓ Rollers
✓ Binding Equipment
o Coil Binders
o Thermal and Tape Binders
o Plastic Comb Binder
o Wire Loop Binder

SECTION IV: WAY FORWARD

9. Proposed Implementation Timetable

First Year Implementation Time Table (2020/2021)

34
 Quarter
Activities
First Second Third Fourth
Resource Resource Resource Resource
Production Department
Allocation Allocation Allocation Allocation
A. Bible and
0.31 0.31 0.31 0.31
Commentaries
B. Imported books
0.37 0.37 0.37 0.37
(English)
C. Theological books 0.08 0.08 0.08 0.08
D. Translated books 0.07 0.07 0.07 0.07
E. Private books 0.04 0.04 0.04 0.04
F. Biography 0.04 0.04 0.04 0.04
G. Procurement As need be As need be As need be As need be
Marketing and
Time Time Time Time
Distribution
Allocation Allocation Allocation Allocation
Department
A. Social media
40% 40% 40% 40%
marketing/online sales
B. Open marketing
10% 10% 10% 10%
and promotion
C. Contacting
Churches and Church
15% 15% 15% 15%
Affiliated
Organizations
D. Bill board
5% 5% 5% 5%
advertisements
E. Face-to-Face sales 30% 30% 30% 30%
Finance and
Time Time Time Time
Administration
Allocation Allocation Allocation Allocation
Department

35
 A. Keep track of the
30% 40% 40% 40%
cash in/outflow
B. Keep track of the
15% 15% 15% 15%
Budget
C. Human resource
10% 10% 10% 10%
requirement
D. Keep track of
monthly expenditures & 5% 5% 5% 5%
expenses
E. Other routine
40% 40% 40% 40%
activities
The ratio indicated in the above table shall be revisited dynamically based on the ongoing
monitoring and evaluation of the demand of each product and activities conducted by each
department.

Five Years Implementation Time Table

Year
Activities
First Second Third Fourth Fifth
Production Resource Resource Resource Resource Resource
Department Allocation Allocation Allocation Allocation Allocation
A. Bible and
0.31 0.31 0.31 0.31 0.31
Commentaries
B. Imported books
0.37 0.37 0.37 0.37 0.37
(English)
C. Theological
0.08 0.08 0.08 0.08 0.08
books
D. Translated books 0.07 0.07 0.07 0.07 0.07
E. Private books 0.04 0.04 0.04 0.04 0.04
F. Biography 0.04 0.04 0.04 0.04 0.04
G. Procurement As need be As need be As need be As need be As need be

36
H. Bring the
As per As per As per As per As per
production up to
demand demand demand demand demand
75%
I. Begin production As per As per As per As per As per
at 85% capacity demand demand demand demand demand
Marketing and
Time Time Time Time Time
Distribution
Allocation Allocation Allocation Allocation Allocation
Department
1. Social media
marketing/online 0.36 0.36 0.36 0.36 0.36
sales
2. Open marketing
0.1 0.1 0.1 0.1 0.1
and promotion
3. Contacting
Churches and
Church 0.15 0.15 0.15 0.15 0.15
Affiliated
Organizations
4. Bill board
0.05 0.05 0.05 0.05 0.05
advertisements
5. Face-to-Face
0.3 0.3 0.3 0.3 0.3
sales
6. Identify the
choice and
0.125 0.125 0.125 0.125 0.125
preference of
customers
7. keep track of
highly demanded 0.1 0.1 0.1 0.1 0.1
items

37
 Finance and
Time Time Time Time Time
Administration
Allocation Allocation Allocation Allocation Allocation
Department
A. Keep track of the
0.3 0.4 0.4 0.4 0.4
cash in/outflow
B. Keep track of the
0.15 0.15 0.15 0.15 0.15
Budget
C. Keep track of the
changing Human
0.1 0.1 0.1 0.1 0.1
resource
requirement
D. Keep track of
monthly
0.05 0.05 0.05 0.05 0.05
expenditures &
expenses
E. Other routine
0.4 0.4 0.4 0.4 0.4
activities

Similarly, the ratio indicated in the above table shall be revisited dynamically based on the
ongoing monitoring and evaluation of the demand of each product and activities conducted by
each department. Besides, additional activities might be included based on the responsiveness
of the new market segments and approaches illustrated in this new business expansion plan
making use of the ongoing records of performance and need assessments.

10. Critical Issues for the Special Consideration and Follow-up

There are critical issues that needs to be decided by the BOD of .........which have been
entertained in this document. In relation to this, the BOD can consider the following seriously
before proceeding and putting this business plan in to action:

- The transfer of ownership of .........with the intent of generating additional money.

38
 - The involvement in investing activities as a strategy to suffice the long term financial
requirements of the company.
- Sacrificing legal reserve to some extent and the dividend payout fully to meet the
medium and long term financial requirements of Raey.
- The intent of receiving publishing materials other than spiritual contents.
- The termination of the product types such as stationery materials and cassettes from the
shelf.
11. Concluding Remarks

The development of this business expansion proposal is developed based on a brief record
history of .........Publishers company and similar business in the market. Even so, while
attempting to assess the status of competitors complication of scope has occurred as to which
ones needs to be considered and which ones not. Not only this, but the aspiration of the new
.........to be considered in the printing press business is simply considered Middle Level by
considering all those critical issues which needs to be authorized by the BOD (see section 10
above).

Once those critical issues get addressed by the BOD, this business expansion project proposal
might needs to be revisited accordingly to make it in alignment with their interest and
preference. It is so, if some of the assumptions considered as chosen and preferred strategic
directions in this document are not found acceptable by the BOD.

APPENDICES

Appendix I Cash Flow statement of .........Plc in 2019

36
37
Appendix II Income statement of .........Publishers Plc in 2019

38
39
Appendix III Owners equity statement of .........Publishers Plc in 2019

40
Appendix IV Balance sheet statement of .........Publishers Plc in 2019

41
42
Appendix V

This New .........Publishers Plc business expansion proposal takes into account the following
assumptions based on the preliminary assessments’ conducted in the market:

Direct Costs Proposed Budget

Human Resources Commensurate to market price
Raw materials and 10% of total sales
transportation cost
Building rental Commensurate to market price
Indirect Costs
Machine repair 0.5% of total sales
Electricity 2% of total sales
Administration and
Advertisements’ cost
Marketing and distribution 4.5% of total sales
Insurance 5% of fixed asset
Telephone 1% of total sales
Water 1% of total sales
Training of Employees 1.5% of total sales
Supplies 0.5% of total sales
Sanitary supplies 2.0% of total sales
Legal services 2.5% of total sales
Miscellaneous 2.5% of total sales
Depreciation
Machineries 20% of historical cost
Office equipment’s 15% of historical cost
Office furniture’s 10% of historical cost

43
44