Mekelle University

College of business and economics

Entrepreneurship INDIVDUAL ASSIGMENT

Project Title: - ENAT FAST FOOD

NAME ID
Saron Getachew cbe/ur154445

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 12/JUNE/2021

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Table of Content
1. Executive Summary..................................................................................................................................1
2. Project background and history.................................................................................................................1
2.1 Project background.................................................................................................................................1
2.2 Project history.............................................................................................................................................2
Debre Markos has a rich food culture, with restaurants featuring cuisine from around the world. Still,
the development of fast food restaurants and chains hasn’t been as robust. Eating on the streets hasn’t
always been “accepted” in Ethiopian customs; however, the modern way of life seems to have
transcended the norm. Consequently, especially at nights, the streets of Markos are being flooded with
the fast spreading fast foods......................................................................................................................2
2.2.1 Object, Mission and vision..................................................................................................................2
2.2.2 Object of project..................................................................................................................................2
2.2.3 Mission................................................................................................................................................3
2.2.4 Vision..................................................................................................................................................3
2.2.5 Keys to Success...................................................................................................................................3
3. Market analysis and marketing concept...........................................................................................3
3.1 Marketing concept..............................................................................................................................3
3.1.2 Market Structure and characteristics...............................................................................................4
3.1.3 Customer profile..............................................................................................................................4
3.1.4 Product............................................................................................................................................5
3.1.4 Pricing and distribution....................................................................................................................5
3.1.5 Business name.................................................................................................................................5
3.2 Demand Size, Sales Forecast, Annual Sales Revenue..........................................................................5
3.2.1 Demand Size....................................................................................................................................6
3.2.2 Sales Forecast and Annual sales Revenue........................................................................................6
3.3 Anticipated Competition from Local Products or Supplies..................................................................9
3.3.1 Product quality.................................................................................................................................9
3.3.3 Competitors’ analysis.....................................................................................................................10

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 3.4 Annual Cost Sales Promotion and Market Budge.............................................................................10
3.4.1 Sales Promotion.............................................................................................................................10
-...................................................................................................................................................................... 11
3.4.2 SWOT analysis of fast food production and service.......................................................................11
4. Material input.............................................................................................................................................12
4.1 Raw material.............................................................................................................................................12
4.2 Factory Supplies and Components............................................................................................................12
4.3 Auxiliary material.....................................................................................................................................13
4.4 Utilities.....................................................................................................................................................13
4.5 Vehicle and bus........................................................................................................................................13
5. Location, Site and Environment..................................................................................................................14
5.1 Area and Places of the Project Implementation........................................................................................14
5.2 Estimate of the rental cost.........................................................................................................................14
5.3 Preliminary Environmental Impact Assessment.......................................................................................14
6 Technology and Engineering.......................................................................................................................15
6.1 Technology Equipment and civil engineering work..................................................................................15
6.2 Rough estimate of cost of Technology......................................................................................................15
6.3 Civil Engineering Work............................................................................................................................15
7. Organization Structure and Human Resource.............................................................................................16
7.1 Organizational Layout and Structure........................................................................................................16
7.1.1 General Manager...................................................................................................................................16
7.2 Human resource........................................................................................................................................16
7.2.1 Human Resource Requirements and Skills............................................................................................16
7.2.3 Estimated Annual Human Resource Costs.............................................................................................18
8. Financial Analysis and Investment.............................................................................................................18
8.1 Estimate of working capital requirements.................................................................................................19
8.2 Proposed capital structure and cost of capital (finance)............................................................................19
8.3 Estimated income statement.....................................................................................................................20
8.4 Estimated statement of financial position.................................................................................................21
8.4 Payback Period.........................................................................................................................................22
8.5 Net present value......................................................................................................................................22
8.6 Internal Rate of Return.............................................................................................................................23

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8.7 Benefit cost ration.....................................................................................................................................24
8.8 Break Even Analysis.................................................................................................................................24
9. Implementation Schedule...........................................................................................................................27
9.1 Implementation Time Schedule................................................................................................................27
10. Conclusion................................................................................................................................................27
10.1 Major advantage of the project...............................................................................................................27
10.2 Major drawbacks of the project..............................................................................................................28
10.3 Chances of Implement the Project..........................................................................................................28
Appendix........................................................................................................................................................29

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1. Executive Summary
Fast food is a type of mass-produced food designed for commercial resale and with a strong priority placed
on speed of service versus other relevant factors involved in culinary science. Fast food was originally
created as a commercial strategy to accommodate the larger numbers of busy commuters, travelers and  wage
workers who often did not have the time to sit down at a public house or diner and wait for their meal. It is a
necessity of civilization since we have civilizations. From the ancient to modern times street vendors sold
food ready to eat for those with less money and on hard times. Today we have restaurants that do the same.

Our project is established in September 2014E.C in Addis Abeba town around kotebe, started the operation
after one year and our project business name is YAMI fast food. The owners of the business need to start a
fast food 10,500,000 birr, out of this 3,150,000 birr from the distributed from the member of fast food or
owners, 7,350,000 birr borrow from microfinance will be repaid within 8 years including interest rate of 10%
from each payment in year. The amount of sales revenue in the first year is 13,792,500 birr but the amount of
net income after deduction of tax and divided is 2,095,532 birr. The aim of YAMI fast food is to provide a
good quality fast food with delivery, Sell the products that are of the highest quality, as well as keeping the
customers happy with our product categories, and Satisfying the customer wants as an essential for the
business survival and competition. It is a new way to test markets especially in a country. The key role of
YAMIt fast food branding is to create strong, consistent brand image, help to win new customer, best
employee pride and satisfaction, help to build trust in market place, used to create strong advertising to our
target (market, competitor and customer).

kotebe is presented in addis abeba city. The main reason selecting our business location is suitable for our
project, we minimize our rental cost compared to other business location and suitable for transportation and
distribute our fast food to a specific site, sufficient storage space for our storage product and it is near to get
raw material for our fast food production. The ideal site for distribute the product of fast food is presented
around kotebe university college stadium and 02 The reason for selecting site is near to our production
location, it is a good commercial area for increasing sales and profit, we get more customer in those site and
Easily accessible by students, government employees and other users to buy our product. There is no major
problem and environmental effect related with our product except for disposal of waste, air pollution and
sound effect of generator.

Our project we use different type of technology equipment, engineering, fast food van and other technology
that facilitate our service and good. Such technology equipment’s like generators, stove and solar light that
used to facilitate the production and related to this we use different type of technology in future such as to
design website and android application that used to facilitate our business and easily accessible by our royal
customer and other related customer. The human resource management of our project involves developing
and administering program that is designed to increases the effectiveness of our organization or business.

2. Project background and history

2.1 Project background

This project established in September 2014 E.C and started the operation after one year. The project basically
establish to provide a fast food production and delivery service in Addis abeba town. The production place

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of our product is around kotebe The reason to select this specific area is comfortable to produce the product
in effective and efficient ways and chip price of rent. The product can be distributed around kotebe university
college. The reason to select this distributed area is many people are lives in this area and the central area for
business. The form of the project is partnership and it is formed by seven members. The major aim of our
project is to provide a good quality fast food with delivery. There are several benefits of our proposed project
as it follows:

Less of a risk: When it comes to being a business owner, minimizing your risk is one of your top priorities.
As a result of a sit-down restaurant costing more to start up than a food truck, it is easy to come to the
conclusion that food trucks are less of a risk.

Easier to maintain: It is much easier for maintaining the fast food van compared to buying a restaurant. These
issues can be incredibly expensive to repair especially if you’re still building your business.

Easily accessible: The proposed business will be easily accessed by the customers because it will be operated
in an open space.

Fresh products: The proposed business will be providing fast foods which have been made on the spot as and
when the customer’s order.

Cheaper price: The foods provided will be relatively slow and thus it would attract more customers .

2.2 Project history

Addis abeba has a rich food culture, with restaurants featuring cuisine from around the world. Still, the
development of fast food restaurants and chains hasn’t been as robust. Eating on the streets hasn’t always
been “accepted” in Ethiopian customs; however, the modern way of life seems to have transcended the norm.
Consequently, especially at nights, the streets of addis abeba are being flooded with the fast spreading fast
foods.
But now a day street food market is common like French fries, samosa, doughnut, cookies and other snacks
over the past decade. With a growing number of people living in cities and the hectic work hours, many
started to consume these relatively less expensive fast foods.

Fast food is a type of mass-produced food designed for commercial resale and with a strong priority placed
on "speed of service" versus other relevant factors involved in culinary science. Fast food was originally
created as a commercial strategy to accommodate the larger numbers of busy commuters, travelers and  wage
workers who often did not have the time to sit down at a public house or diner and wait for their meal.

Fast food is a necessity of civilization since we have civilizations. From the ancient to modern times street
vendors sold food ready to eat for those with less money and on hard times. Today we have restaurants that
do the same.

2.2.1 Object, Mission and vision

2.2.2 Object of project

Objectives of our project are:-

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 To provide high quality fast food.

 Increased our customers and production level throughout delivery service.
 To create a job opportunity.
 Satisfying the customer wants as an essential for the business survival and competition.
 To deliver fast food to customer in a short period of time.
 To solve the problems of the customers with that of the fast food supply availability and demand
feasibility.

2.2.3 Mission
Our main goal is to create the most successful fast food production and delivery outlets in Addis abeba,
starting with three retail outlets located inside a major shopping mall as a market tester. We went our
customer to have the total experience when visiting our outlets. To minimize the shortage of fast foods
deliver in our country and make available for all customers with affordable price to save our customers time,
money and buying effort.

2.2.4 Vision
To be best fast food provider and deliver company in 2020 E.C

2.2.5 Keys to Success

To succeed in this project we must:

 Sell the products that are of the highest quality, as well as keeping the customers happy with all of
our product categories.
 Provide 100% satisfaction to our customers and maintaining the level of excellent services among
other competitors.
 Create a unique, innovative, entertaining menu that will differentiate us from the rest of the
competition.
 Encourage the two most important values in fast food business: brand and image, as these two
ingredients is a couple of main drivers in marketing communications.
 Get access to high-traffic shopping malls near the target market.
 Control costs at all times, in all areas and implement a conservative approach to growth policy.
Although, we provide more than enough fund to open more than one outlet, we want to be on the
safe side of the business.
 Promote good values of company culture and business philosophy

3. Market analysis and marketing concept

Food is one of the necessary things for human being to survive. Most food in Ethiopia takes long time to
prepare like injera and weot for this reason fast food is preferable to save time. Fast food is a name for food
that is made and presented to customer in short time.it is usually made with preheated or precooked
ingredients, prepared in bulk and sold in packages for takes-away.

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Most of the vendors in Ethiopia lack knowledge of healthy food preparation and the unsanitary streets of
Addis; street food has been predestined to being a cause for food-related diseases. Our company will start
selling fast food with a better service than what people were used to.

3.1 Marketing concept

The marketing concept of fast food production and delivery service helps organizational plan, design
strategies and execute their marketing strategies to get targeted customers. The branding of fat foods will
play a large role in targeted market and customer.

The key role of fast food branding is to create strong, consistent brand image, help to win new customer, best
employee pride and satisfaction, help to build trust in market place, used to create strong advertising to our
target (market, competitor and customer). The main principle of fast food in market is to create a good
quality product and service with fair price to lower income group of customer and promote our product in
right place of market. The production and delivery of fast food in our country is unusual but now a day
people use street food like sambas and French fries.

Our fast food production place will be found around in kotebe addis abeba..

3.1.2 Market Structure and characteristics

Based on the user of our product and service to segment our customers in market place .we have established
the segmentation as flows:-

 Primary customer market

 Secondary customer market
 Resident of kotebe customer market

We have to segment the user of our product and service based on the following time frame arrangements:

Our primary target is to establish a good primary customer market user. Our primary customer market is
purchaser from our outlets and consumer to use fast food on street road. From our observation people now a
day in our country adapted and use fast food in street road. Additionally in primary customer market to
create a good awareness to targeted groups of consumer about the importance of fast food.

Our secondary target is to establish a secondary customer market user. This market bring additional fast food
consumer. The additional fast food consumer is government organization, private organization and NGO.
The aim of secondary market is to deliver our product and service to the specific area of a selected
organizational office.

Our third target is to established resident of kotebe customer market. This market focuses on providing our
product and service in residents kotebe in order to satisfy their fast food craving.

After building a stable customer in the market place, we will able to dedicate a great effort to bring fresh and
health fast food to specific market place.

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3.1.3 Customer profile

Our core target market customers profile is based on the following categories:

 Age - Youngsters, single, currently enrolled in college and high school.

 Family unit - We will also appeal to families (young families) with children.
 Gender - We will target both sexes
 Income - We will appeal to the medium income individuals and to all in the lower medium income
bracket.

Generally in this day and age, lots of people work two or three jobs and they prefer anything that is served as
quick as possible. In this regards, companies like our company strive to be the alternative service providers
as opposed to cafe and restaurants. Besides the quick service, foods and drinks on the streets are inexpensive.
Our concept will have very broad appeal. It is our goal to be the hip destination for fast food cravings.

3.1.4 Product

Through, our product offerings variety of fast food will connect with our customers who live and work in
Addis Ababa. The proposed services will be offering a large variety of quality products at competitive prices.
The product line will be including different types of fast food. As the production will depend on the sales
potential, the sales are estimated depending upon the life style of the society. The project will be having three
sales outlets of production at three street of Addis Ababa. It is hereby assumed that sales to other customers
will at a trade with delivery service.

3.1.4 Pricing and distribution

Price is the only marketing mix variable that generates our revenue. Our set pricing of fast food will have
major positive effects on our potential customer. The overall pricing strategy will base on competitive
benchmark. The price our fast food is different accordance with the type of product such as; ertib, sanbusa,
French fries (chipes) and Sandwich. The price and the detail deception of the product listed below:

Our target to distribute each type of product is by using our bus. This bus used to distribute the product in the
selected area of our target market and used as a sales store. To distribute the product by packed each type of
product using aluminum foil, plastic packed materials and another fast food packed materials which are made
for this purpose. Our main target area for distribute the product is around kotebe university and 02, for
distribution purpose we use three fast food van car for sales purpose and one normal car for distribution
purpose.

3.1.5 Business name

YAMI fast food is the name of our project .If the trade name we select is occupied by another existing
company or organization. We have to backups the first 6ST fast food and the second is Ethio fast food.

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3.2 Demand Size, Sales Forecast, Annual Sales Revenue

3.2.1 Demand Size

Currently in Ethiopia most of the people prefer fast food despite their age. So basically there is a huge
demand in the market for the fast food providers. The proposed business will be providing fast foods on city
buses, which will solely be a new venture business in the country as there hasn’t been any business that
provides fast foods on bus. Thus there will be demand from the people as it will be new to the market. Also
from the location that we choose as distribute target locations are in the heart of Addis abebas, while its
location is a good commercial area, the vans is easily seen from the street.so the demand will be same as we
forecast.

3.2.2 Sales Forecast and Annual sales Revenue

Our daily unit of production is estimated from the total customer of our target consumer from all target area
of the sales market. From our estimated daily product production, our estimated dilly production, unit price
and revenue will be forecasted for the first year will be as follow.

ERTIB

The daily production and annual sales forecast of normal ertib is listed below:
Daily production of normal ertib = 700unit.
Selling price per unit of normal ertib = 20br.

Working day with a year (for all product) =348 days

Therefore, the estimated sales for year one calculated by the following formula:

Sales = unit selling price *daily unit of production

Annual sales = working day per year *sales per day

Sale =20*700=1,400br per day Annual sales = 1,400*348=487,200br per year.

The daily production and annual sales forecast of special ertib is listed below:

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Daily production of special ertib = 350unit.

Selling price per unit special ertib = 30br.

Sales =350*30=10,500br per day

Annual sales =10,500*348=3,654,000br per year.

The daily production and annual sales forecast of ertib with vegetable (ertib ba atekelt) is listed
below:
Daily production of ertib ba atekelt = 350unit.
Selling price per unit ertib ba atekelt = 30br.

Sales =350*30=10,500br per day

Annual sales =10,500*348=3,654,000br per year.

Therefore, the total amount of annual Sales Forecast for ertib is equal to the sum of the type of eritb so the
amount is equal to 7,795,200br per year (487,200 +3,654,000+3,654,000).

SAMBUSA

The daily production and annual sales forecast of sambusa ba mesere is listed below:
Daily production of sambusa ba mesere = 750unit.
Selling price per unit sambusa ba mesere = 5br.

Sales =750*5=3,750br per day

Annual sales =3,750*348=1,305,00br per year.

The daily production and annual sales forecast of sambusa ba rose is listed below:
Daily production of sambusa ba rose = 750unit.
Selling price per unit sambusa ba rose = 5br.

Sales =750*5=3,750br per day

Annual sales =3,750*348=1,305,000br per year.

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The daily production and annual sales forecast of sambusa ba atekelt is listed below:
Daily production of sambusa ba atekelt = 1,050unit.
Selling price per unit sambusa ba atekelt = 5br.

Sales =1,050*5=5,250br per day

Annual sales =5,250*348=1,827,000br per year.

Therefore, the total amount of annual Sales Forecast for sambusa is equal to the sum of the type of sambusa
so the amount is equal to 4,437,000br per year (1,305,000 +1,305,000+1,827,000).

SANDWICH

The daily production and annual sales forecast of sandwich with vegetable is listed below:
Daily production of sandwich with vegetable = 225unit.
Selling price per unit sandwich with vegetable = 8br.

Sales =225*8=1,800br per day

Annual sales =1,800*348=626,400br per year.

The daily production and annual sales forecast of sandwich with egg is listed below:
Daily production of sandwich with egg = 225unit.
Selling price per unit special sandwich with egg= 10br.

Sales =225*10=2,250br per day

Annual sales =2,250*348=786,000br per year.

Therefore, the total amount of annual Sales Forecast for sandwich is equal to the sum of the type of sandwich
so the amount is equal to 1,412,400br per year (626,400+786,000).

FRENCH FRIES

The daily production and annual sales forecast of French fries is listed below:-

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Daily production of French fries = 425unit.

Selling price per unit French fries = 10br.

Sales =425*10=4,250br per day

Annual sales =4,250*348=1,479,000br per year.

The co-owners of a business man expect the annual sales of a product increased by 15% for the year two,
25% for the year three, 35%for the year four and 45% for the year five.so from this expectation the annual
sales forecast from year one up to year five are listed below in table :

Total product Annual sales in birr and growth rate of the product with percentage
name list
Year one Year two Year three Year four Year five
(15%) (25%) (35%) (45%)

Ertib 7,795,200 birr 8,964,400 birr 11,205,500 15,127,425 21,934,766.25

Sanbsa 4,437,000 birr 5,102,550 birr 6,378,157.5 8,610,512.625 12,485,243.31

Sandwich 1,412,400 birr 1,624,260 birr 2,030,325 2,740,938.75 3,974,361.19

French fries 1,479,000 birr 1,700,800 birr 2,126,000 2,870,000 4,161,500

Total amount 13,792,500 birr 17,392,010 birr 21,739,982.5 29,348,876.37 42,375,870.75

birr birr birr

3.3 Anticipated Competition from Local Products or Supplies

Street-vended foods should be prepared in a location that is clean and as far as possible from waste
drainages, and water and food oil sanitation must also be given due attention. Furthermore, the vegetables
used in the process must be stored at an appropriate temperature, in clean and fresh state. The handling and

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serving of end products, as well as hygiene of the vendors must be kept at a high standard in order to prevent
an outbreak of widespread food borne diseases.
Most of the vendors recycle the oil which has been used to fry once and use it for up to three days. And some
of them boil the potato with salt and lemon before they fry the potato, to keep the goods sanitary. But, this
does not mean all vendors have good habits.
Addis Ababa Food, Medicine & Health Care Administration & Control Authority (AAFMHACA) is the
body responsible for the quality, safety and healthy control of food and beverage in the Addes Abeba
jurisdiction. AAFMHACA gives a working license to food and beverage companies after inspection. It also
takes the initiative to train or, in some cases close businesses that fail to meet the standards it sets. It has an
enforcement body that extends to Woreda levels. However, since street vended foods business is an
emerging new business, and because of the lack of human resources, it is difficult for the authority to train
them all or even to incorporate them into the inspection system.
In general as competitor in order to achieve our goal we would like to compute our competitors by delivering
high quality fast food and service. This is best computation strategy to achieve our target goal.

3.3.1 Product quality

Most of the vendors lack knowledge of healthy food preparation and the unsanitary streets of kotebe street
food has been predestined to being a cause for food-related diseases.in our society to the fact that anything
consumed from the streets has been considered unhygienic and unhealthy by many people in the past. And
also many people have been hospitalized as a result of consuming street food.

From the fact we mentioned above we are responsible in changing people’s mindset by providing clean
products. So our main consideration is to make sure everything cleans. From the type of raw material (oil,
fruit…) we use, to the place we work, store and serve at, we keep everything to the maximum standard .

3.3.2 Competitiveness of the project

 New to the market: The idea of fast food bus is new to the market and thus it would act as
monopoly business.
 Meals on Wheels: Unlike other usual sit-down restaurants, this business will be providing fast foods
on the bus through which the customers can easily access services.
 Reduction in cost: The proposed business not only serves the purpose of reducing cost of the
business but it also reduces the cost of customers’ expenditure and afford as they don’t have to travel
in order to access the services.
 Location: target locations are in the heart of kotebe while its location is a good commercial area, the
vans is easily seen from the street.

3.3.3 Competitors’ analysis

Customer per day

Com

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Ertb Sambusa Chips Sandwich

petitors

(French fries)
Normal Special Vegetable Lentil Rice Normal Egg Vegetable

Mr A(around 6 kilo) 40-50 20-30 30-40 50-60 30-40 80-90 15- -

20
Mr B(around 5 kilo) 30-40 20-30 30-40 60-70 - >100 20- -
30
Mr. C(around Paisa) 60-80 25-40 70-80 80-90 50-60 80-100 60- 60-80
90

3.4 Annual Cost Sales Promotion and Market Budge

3.4.1 Sales Promotion

To promote our product we will use the following promotion strategies:

o Promoting our fast food by conducting an opening ceremony. On this ceremony different well
known peoples will be invited and some part of the customers will also be invited. Also invite our
neighbors to have a good public relationship

o Prepare Banner advertising and Business cards that contain a detail information

o Different flyers and brochures will prepare by the Company.

o Posting on the bulletin boards on Addis Ababa City main roads.

o To design and post our fast food image in our van.

o To print T-shirt that contain the image of ours business and related information that attract our
customer to buy our product.

Promotion strategies Cost per year(birr)

Year1 Year2 Year3 Year4 Year5

Opening ceremony 40,000 - - - -

Print T-shirt 5,000 5,000 5,000 5,000 5,000

Image design of van 2000 - 2,000 - 2,000

Banner and cards 3,000 3,000 - 3,000

-
Flyers and brochures - 5,000 - - -

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bulletin boards on roads - 20,000 - 2,000 -

Electronic medias like web - - - 3,000 -

design and digital market

Total 50,000 30,000 10,000 10,000 10,000

In addition to the above, Now a day most of peoples in our country use internet and other electronic medias,
so it an attractive marketing environment. We have created our electronic mailing address for receiving
comments and suggestions from different peoples. Therefore, we can promote our products through internet
by creating our web sites and Facebook page. Like; www.5stfastfood.com and 5stfastfood @facebook.com.

3.4.2 SWOT analysis of fast food production and service

STRENGTH
New form of business related to our new fast food product and service.
To provide fast delivery service including affordable price and quality.
The sales and production atmosphere is also so attractive and suitable for customers.
Quick and convenient.
To create a good choice of items available on menu

WEAKNESS
Limited exposure and advertising
Difficulty to expand distribution channel at the present location
limited funds available
The nature of the business is new so our customer don’t easily accept our product and
service

OPPORTUNITY
It creates a job opportunity for the owner of a business man
To survive demand and supply for consumption of people
Crate personal satisfaction to consumer.
For those unemployment people (special women’s) it becomes not so expensive to get their
own business

THREAT
A high street brand is moving into the area.
Eating on the streets hasn’t always been “accepted” in Ethiopian customs.
The perspective of people in fast food in our country is negative regarding to quality
and hygiene

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4. Material input

4.1 Raw material

The required raw materials for the production of fast food are as follows:

No List of items No of item Unit price in birr Total price in birr

1. Potato 171390kg 6.00 1,028,340

2. Bread 644,000pice 2.00 1,288,000
3. Ingredient 4000kg 70.00 280,000
4. Cabbage 67,425kg 4.00 269,700
5. Egg 300,150unit 4.00 600,300
6. Carrot 44,370kg 10.00 443,370
7. Oil 20,880liter 80.00 1,670,000
8. Flour 29,580kg 15.00 443,700
9. Rice 5220kg 25.00 130,500
10. Lentil 5220kg 55.00 287,100
11. Onion 3,480kg 13.00 45,240
12. Tomato sauce 1740liter 250.00 87,000
Total 6,573,250

4.2 Factory Supplies and Components

No List of items No of item Unit price Total price

1 Fryer 5 5000 25,000
2 Stove 8 1600 12,800
3 Potato shrivel 20 1500 30,000
4 Table 40 200 8,000
4 Chair 160 150 24,000
5 Generator 3 50,000 150,000
6 Water tanker 1 3000 3000
7 Miscellaneous(knife, spoon, - - 10,000
dish, pan ,bidet, filter)
Total 262,800

4.3 Auxiliary material

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No Cost description Total cost in (birr)

1.   Materials used to service equipment and premises like 5000
-lubricating or cleaning materials
2. Materials that do not constitute the main substance of output and are added to  5000
the basic materials to impart specified properties to the finished product like 
-varnish and paint

3. Materials used in supply and marketing like 800,000

-packing material and tissue paper
4. Materials used to the needs of the workers like 5,000
-employee uniform and glove
5. Miscellaneous 5,000
Total 820,000

4.4 Utilities
No Cost description Total cost in (birr)
1. Power 30,000
2. Water 3000
3. Fuel 120,000
4. Fire wood 5,000
Total 158,000

4.5 Vehicle and bus

Model 2007
Color White
Transmission Manual

Fuel Type Petrol

Cost 450,000
Used for delivery of:

Raw material from supplier’s production place

Product from production place sales place

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5. Location, Site and Environment

5.1 Area and Places of the Project Implementation

The terms location and place in geography are used to notice and or identify a point or an area on the Earth's
surface or elsewhere. The term 'location' generally implies a higher degree of certainty than "place" which
often has an ambiguous boundary relying more on human/social attributes of place identity and sense of
place than on geometry. Site refers to a specific piece of land where the project would be set up. Based on
our project, Kotebe a is the main location for our business operation, delivery, storage and distribute our
product to specific site. kotebe is presented in Addis abeba city. The reason for selecting our business
location is listed bellows:

 Our business location suitable for our project

 Sufficient storage space for our storage product.

 It is near to get raw material for our fast food production.

The ideal site for distribute the product of fast food is presented around kotebe university, 02 and shiro
meda. The reason for selecting site is near to our production location, it is a good commercial area for
increasing sales and profit, we get more customer in those site and Easily accessible by students, government
employees and other users to buy our product .

5.2 Estimate of the rental cost

The estimated amount of rental cost our project is 10,000 birr per month and the total amount of the rental
cost per annual is equal to 120,000 birr (10,000 birr 0000* 12 month).

5.3 Preliminary Environmental Impact Assessment

There is no major problem and environmental effect related with our product except for disposal of waste,
air pollution and sound effect of generator. The wastage of potato peel removed though sale for the farmers
who live near to city for fertilization and also for Poultry farming (chicken farmer), others solid wastes are
removed by using block collection. Block collection is one way of management of solid waste .

6 Technology and Engineering

6.1 Technology Equipment and civil engineering work

Our business Technology is the accumulated discovered and developed methods and tools used to extend the
native abilities of man. In addition to this our business Technology is the practical application of engineering
knowledge. Engineering is the basis for technology but engineering without technology is a colossal of
emptiness. So our project we use different type of technology equipment, engineering, fast food van and
other technology that facilitate our service and good. Our business technology are unique from other

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competitors because we use fast food van for distribute our product in specific site and location that selected
by a business man.

6.2 Rough estimate of cost of Technology

The total amount of the estimated cost of our technology equipment and civil engineering work is equal to
600,000birr. In our estimated cost don’t include the price amount of our website and android application
because of this technology can be constructed or designed after three years.

6.3 Civil Engineering Work

Our civil engineering works of the project will be used to facilitate or increase the overall activities within
the project site and location. Such as layout designer, electric power installers and Interior design of working
house.

Number Civil engineering worker list Cost of each civil engineering in birr

1. layout designer the car 50,000

2. electric power installer in house of production and 20,000

our van

3. Interior design of working house and van 80,000

Total 150,000 birr

6.5 Environmental Impact of Technology

Our business technology will have a little effect in environment. Such as generators sound effects and air
pollution. Renewable energy solutions have positive environmental effects. Over 99% of cell sites worldwide
are deployed with diesel generators as a backup or as the primary source of electrical power.

7. Organization Structure and Human Resource

7.1 Organizational Layout and Structure

General Manager

Operation (production) Finance

16

Senior chief
 Junior chief
Supplier Buyer
YAMI FAST FOOD 2013
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7.1.1 General Manager

The general manager of our business or project is an executive who has overall responsibility for managing
both the revenue and cost elements of a company's income statement, known as profit & loss (P&L)
responsibility. A general manager usually oversees most or all of the firm's marketing and sales functions as
well as the day-to-day operations of the business. Frequently, the general manager is responsible for effective
planning, delegating, coordinating, staffing, organizing, and decision making to attain desirable profit
making results for an organization.

7.2 Human resource

Human resource is used to describe both the people who work for organization and the department
responsible for managing resources related to employees. For any kind of business organization we need
humane resource so from this our business contains humane resource. The human resource management of
our project involves developing and administering program that is designed to increases the effectiveness of
our organization or business. If we are looking in to the organizational structure, which shows the status and
responsibilities of each employee, the /General Manager/ which include the production and finance. It is
responsible for the overall activities of the business for example developing of rules and regulation, making
important decisions etc.

7.2.1 Human Resource Requirements and Skills

The project has required total number of 22 employees. The employees have their own background and skill.
The employees’ background and skill described fully below in table format.

No Job description No of employee Qualification Related

experience
1. General manager 1 BA Degree 2 year
2. Accountant 1 Degree 1 year
3. Sales person 6 Business diploma 0 year
and driving license
4. Senior chief 1 Degree 2 year
5. Assistant chief 10 Diploma 6 month
6. Driver 2 Licensed 2 year
7. Security 1 Above 0 year

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7.2.2 Human resource responsibility

1. General manager
 Evaluate company’s financial, operational, and sales and marketing structures to plan for continual
improvements and a continual increase of operating efficiencies.
 Mentor and interact with members of staff at all levels to foster growth and encourage development
among senior executive team and all members of staff.
 Provide expert financial guidance and advice to others within executive leadership.
 Communicate effectively and establish credibility throughout the organization.
 Create, improve, implement and enforce policies and procedures of the organization that will
improve operational and financial effectiveness of the company
 Plan, develop, implement and direct the organization’s operational and fiscal function and
performance.
2. Senior chief
 Create a production schedule
 Train new employees
 Schedule regular maintenance for equipment
 Discuss budget expectations with accountant.
 Overseeing production processes.
 estimating, negotiating and agreeing budgets and timescales with accountant and managers
 Check freshness of food and discard out-of-date items
 Monitor food stock and place orders.
 Inform wait staff about daily specials
 Study each recipe and gather all necessary ingredients
3. Sales person
 Coordinate shipping schedules and delivery of production and services.
 Sell food for the purpose of re-distribution and to get the food into the market
 Manage and develop new customers, while maintaining existing sales within assigned customers and
a given sales territory.
 Participate in marketing events such as seminars, trade shows, and telemarketing events.
 To provide information for accountant such as production and raw material data, capital budgeting
request, capital expansion and technology plans.
4. Assistant chief
 Cook food in a timely manner
 Store and Dispose of Food
 Prepare Ingredients
 Maintain Kitchen
5. Accountant responsibility
 Prepares asset, liability, and capital account entries by compiling and analyzing account information.
 Documents financial transactions by entering account information.
 Recommends financial actions by analyzing accounting options.
 Prepares payments by verifying documentation, and requesting disbursements.

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 Summarizes current financial status by collecting information; preparing balance sheet, profit and
loss statement, and other reports.
 Maintains accounting controls by preparing and recommending policies and procedures.
 Keeping an eye on incoming payments from accounts receivable and outgoing payments from
accounts payable
 Creating company financial reports with the above information included
 Analyzing data collected in order to determine the state of the company’s financial health.

7.2.3 Estimated Annual Human Resource Costs

No Job description No of employee Monthly salary in Annual salary in

birr birr
1. General manager 1 7,000 84,000
2. Accountant 1 5,000 60,000
3. Sales person 6 4,000 288,000
4. Senior chief 1 4,000 48,000
5. Assistant chief 10 3,500 420,000
6. Driver 2 3,000 72,400
7. Security 1 2,000 24,600
Total 993,600

8. Financial Analysis and Investment

Financial analysis is the evaluation of a business in order to determine its profitability, liabilities, strengths
and future earnings potential.  It is a critical aspect of all commercial activity as it provides actionable
insights into the organization’s health and future potential. 
Finance is the allocation of assets, liabilities, and funds over time, process, and mediums to reap the most out
of the activity. In other words, managing or multiplying funds to the best in interest while tackling the risks
and uncertainties. Financial investment refers to putting aside a fixed amount of money and expecting some
kind of gain out of it within a stipulated time frame.

8.1 Estimate of working capital requirements

Our project to pay cash for all their day-to-day activities including prepaid rent. They have to pay wages, pay
for raw materials, pay bills and so on. The money available to them to do this is known as the firm’s working
capital. The main sources of working capital are the current assets. Working capital represents a
company's ability to pay its current liabilities with its current assets. Working capital is an important measure
of financial health since creditors can measure a company's ability to pay off its debts within a year. It is vital
to a business to have sufficient working capital to meet all its requirements.
Total working capital requirement
Raw material...................................................................................................................6,573,250 birr

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Salary..............................................................................................................................993,600 birr
Other (auxiliary material, utility, factory supply and civil work)....................................1, 390,800 birr
Total working capital...................................................................................................... 8,957,650 birr

8.2 Proposed capital structure and cost of capital (finance)

The initial amount of capital need for start our business is 10,500,000 birr, out of this 30 % contributed from
owners, 70% birr borrow from micro finance, and the loan which we borrow will be repaid within 8 years
with an interest rate of 10% from each payment in year. The capital structure is with debt equity ratio 3:7

Long term loan from bank .............................................................................................7,350,000birr from

owners’ contribution ......................................................................................................3,150,000 birr

Total source of capital .........................................................................................................10,500,000birr

source of capital

30%
long term loan from bank
70% owner contrbution

Production cost
Raw material...........................................................................................................6,573,250 birr
Labor.......................................................................................................................993,600 birr
Utility .....................................................................................................................158,000 birr
Interest expense ......................................................................................................36,750 birr
Depreciation expense of all fixed asset...................................................................87,850 birr
Supply.....................................................................................................................252,800 birr
Rent expense ..........................................................................................................120,000 birr
Total production cost ...........................................................................................8,222,250 birr

Estimate of fixed asset

Van (Truck).............................................................................................................450,000 birr
Fryer .......................................................................................................................25,000 birr
Stove.......................................................................................................................12,800 birr
Potato shrivel..........................................................................................................12,800 birr
Table ......................................................................................................................8,000 birr
Chair ......................................................................................................................24,000 birr
Generator................................................................................................................150,000 birr

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Water tanker ...........................................................................................................3,000 birr Total

fixed asset...............................................................................................................702,800 birr

Total Investment cost

Purchase of machinery ...........................................................................................187,800 birr

Advance rent payment.............................................................................................120,000 birr
Van .........................................................................................................................450,000 birr
Working capital.......................................................................................................8,957,650 birr
Total investment cost ...........................................................................................9,715,450 birr

8.3 Estimated income statement

Enat fast food small enterprises
Income statement
For the year end Nehase 30, 2014 E.C – Nehase 30, 2018 E.C

Year 1 Year 2 Year 3 Year 4 Year 5

Revenue
sales revenue 13,792,500 17,392,010 21,739,982 29,348,876 42,375,870
Cost of goods (6,573,250) (8,596,240) (10,000,000) (15,000,000) (25,000,000)
sold (CGS)
Gross profit 7,219,250 8,795,770 11,739,982 14,348,876 17,375,870
Expense
Salary expense 993,600 993,600 1,092,960 1,092,960 1,092,960
Rent expense 120,000 120,000 200,000 200,000 300,000
Supply expense 252,800 300,000 400,500 500,960 700,000
Permit and 15,000 - - - -
license
Interest expense 36,750 69,825 93,712 102,900 110,250
Utility expense 158,000 170,000 180,000 200,000 450,000

Depreciation of 140,560 140,560 140,560 140,560 140,560

all fixed asset
expense
Other expense 59,600 50,000 25,000 35,000 40,000
Total expense (1,776,310) (1,844,485) (2,132,732) (2,272,380) (2,833,773)
Income tax 5,442,940 6,951,285 9,607,250 12,076,496 14,542,100
Income tax (1,632,882) (2,085,385) (2,882,175) (3,622,949) (4,362,630)
payable (30%)
Net income after 3,810,058 4,865,900 6,725,075 8,453,547 10,179,140
tax
45% divided to (1,714,526) (2,189,655) (3,026,283) (3,804,096) (4,580,762)
owners

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Net income 2,095,532 2,676,245 3,698,792 4,649,451 5,592,708

8.4 Estimated statement of financial position

Enat fast food small enterprises
Statement of financial position
For the year end Nehase 30, 2014 E.C – Nehase 30, 2018 E.C

Year 1 Year 2 Year 3 Year 4 Year 5

Current asset
Cash 784,550 900,000 950,500 1,500,000 1,900,000
Prepaid rent 120,000 120,000 200,000 200,000 300,000
Total current 904,550 1,020,000 1,150,560 1,700,000 2,200,000
asset
Non – current
asset
Total fixed asset 702,800 562,240 421,740 272,240 131,740
Depreciation of (140,500) (140,500) (140,500) (140,500) (140,500)
all fixed asset
Total non – 562,240 421,740 281,240 131,740 8,760
current
Total asset 1,466,790 1,441,740 1,431,740 1,831,740 2,208,760

Liability and
owners’ equity
Liability
Not payable 918,750 918,750 918,750 918,750 918,750
Interest payable 36,750 69,825 93,712 102,900 110,250
Total liability 955,500 988,575 1,012,462 1,021,650 1,029,000
Owners’ equity 551,500 453,165 419,278 810,090 1,179,760
Total liability 1,466,790 1,441,740 1,431,740 1,831,740 2,208,760
and owners’
equity

8.4 Payback Period

The payback period is the time required to earn back the amount invested in an asset from its net cash
flows. It is a simple way to evaluate the risk associated with a proposed project. Our initial investment is
birr 10,500,000.00 and the predicted cash flow on the life our project is estimated as follows in the table
below.

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Years Cash flow Cumulative cash flow Investment

to be recover
Year 0 - - 10,500,000
Year 1 3,500,000 3,500,000 7,000,000
Year 2 4,500,000 8,000,000 2,500,000
Year 3 5,000,000 - -
Year 4 6,250,000 - -
Year 5 7,350,000 - -

Payback period = 2nd year + 2,500,000/5,000,000

Payback period = 2nd year +0.5 year
Payback period =2.5 years

8.5 Net present value

Net present value (NPV) is the difference between the present value of cash inflows and the present value of
cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyze the
profitability of a projected investment or project. Our initial investment is birr 10,500,000.00 birr and the
cost of cash is 10 % then the net present value is calculated with considering the cash flow listed below in the
life of the project.

Years Cash flow PV of 1 birr @ 10% Total present value

Year 1 3,500,000 0.909 3,181,500
Year 2 4,500,000 0.826 3,717,000
Year 3 5,000,000 0.751 3,755,000
Year 4 6,250,000 0.683 4,268,750
Year 5 7,350,000 0.621 4,264.350
Total present value of inflow 19,186,600

Net present value = total present value of inflow – total present value of outflow
= 19,186,600 birr – 10,500,000 birr
Net present value = 8,686,600 birr

8.6 Internal Rate of Return

The internal rate of return (IRR) is the annualized effective compounded return rate that can be earned on the
invested capital i.e. the yield on the investment. Put another way, the internal rate of return for an investment
is the discount rate that makes the net present value of the investment's income stream total to zero. It is an
indicator of the efficiency or quality of an investment. A project is a good investment proposition if its IRR is
greater than the rate of return that could be earned by alternate investments, our internal return will be
calculated as follows.
1st compute average cash flow

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Average cash flow = 3,500,000+4,500,000+5,000,000+6,250,000+7,350,000

5
Average cash flow = 26,600,000
5
Average cash flow = 5,320,000
2nd divide the investment with average cash flow = 10,500,000 = 1.973
5,320,000
We get the starting point from annuity table and discount rat
We get 1.973684 = 1%
Starting point = 1%

Years Cash flows Present value of 1 birr @ 1% Total present value

Year 1 3,500,000 0.990 3,465,000
Year 2 4,500,000 0.980 4,410,000
Year 3 5,000,000 0.970 4,800,000
Year 4 6,250,000 0.960 6,000,000
Year 5 7,350,000 0.951 6,989,850
Total present value of inflow 25,714,850
Total present value of outflow (10,500,000)
Net present value 15,214,850

The value of net present value is positive so we use a higher discount rate

Years Cash flows Present value of 1 birr Total present value

@ 2%
Year 1 3,500,000 0.980 3,430,000
Year 2 4,500,000 0.961 4,324,500
Year 3 5,000,000 0.942 4,710,000
Year 4 6,250,000 0.923 5,768,750
Year 5 7,350,000 0.905 6,651,750
Total present value of inflow 24,885,000

Total present value of outflow (10,500,000)

Net present value 14,385,000

Interpolation method
1% 2%
25,714,850.................................24,885,000
Total distance between 1% and 2 %:
= 25,714,850 – 24,885
= 829,850

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Distance between 2 % and 10,500,000:

= 24,885,000 – 10,500,000
= 14,385,000
Percentage of distance between 2% and 10,500,000:
= 14,385,000/829,850
= 17.33
 Internal Rate of Return (IRR) = 17.33% +2%
= 19.33%

8.7 Benefit cost ration

Benefit cost ratio (BCR) = Total PV inflow

Initial investment

= 19,186,600
10,500,000
= 1.8273
Net benefit cost ratio (NBCR) = Net Present Value
Initial investment

= PV of inflow – PV of out flow

Initial investment
= 19,186,600 – 10,500,000 = 8,686,600
10,500,000 10,500,000
NBCR = 0.8273

8.8 Break Even Analysis

A break-even analysis is a financial tool which helps to determine at what stage our company, or a new
service or a product, will be profitable.it is useful in studying the relation between the variable cost, fixed
cost and revenue. For calculate breakeven point of we need to distinguish our fixed cast and variable costs.
Our fixed and variable cost is listed bellows:-

Fixed cost

Our fixed costs include expenses that must be paid regardless of production or sales volume. A few common
fixed costs include:

 Marketing costs (promotion cost)

 Licenses and permits
 Factory supplies
 Utility
 Rent expense
 Rough estimate of cost of Technology.

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 Communication tools like a phone system and internet

Variable cost

Variable costs vary in proportion to production. Our variable costs also take into consideration anything that
gets more expensive as a result of more business. Variable costs may include: 

 Food and drink costs (raw materials)

 Cleaning supplies
 Labor costs (salary)
 Disposables and garbage.

Our project break even analysis is calculated bellow and in break even the amount of related capacity is 50%,
60%, 70%, 80% and 90% respectively for year 1 , 2, 3, 4and 5.

Year 1 Year 2 Year 3 Year 4 Year 5

Fixed cost 1,192,800 2,000,000 2,500,000 3,450,000 5,000,000
Sales @ 13,792,500 17,392,010 21,739,282 29,348,879 42,375,870
1,557,000 units
Variable cost 8,405,850 9,500,000 10,000,000 10,110,000 13,000,000

Estimated break even analysis for year 1

Selling price per unit = annual sales / annual unit produced

Selling price per unit = 13,792,500 / 1,557,000

Selling price per unit = 8.86

Variable cost per unit = annual sales / variable cost

Variable cost per unit = 13,792,500 / 8,405,850

Variable cost per unit = 1.64

Contribution margin in unit = Selling price per unit - Variable cost per unit

Contribution margin in unit = 8.6 – 1.64

Contribution margin in unit = 7.22

Contribution margin in birr = annual sales – variable cost

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Contribution margin in birr = 13,792,500 – 8,405,850

Contribution margin in birr = 5,386,650

Breakeven point in unit =FC/CM (unit)

Breakeven point in unit = 1,192,800 / 7.22

Breakeven point in unit = 165,208

Breakeven point in birr = BEP in unit * SP/u

BEP in birr = 165,208 * 8.86

BEP in birr = 1,463,743
BEP in terms of capacity = FC * related capacity
CM
BEP in terms of capacity = 1,192,800 *50%
536650
BEP in terms of capacity =0.11 or 11%

Like estimated breakeven point of first year, the remaining four year including first year the value of
breakeven analysis is listed in the following tables:

Year 1 Year 2 Year 3 Year 4 Year 5

BEP in unit 165,208 215,054 212,044 216,300 208,681

BEP in birr 1,463,743 2,402,153 2,960,134 4,077,255 5,680,297

BEP in terms of 11% 15.2% 14.9% 14.4% 15.3%

capacity

9. Implementation Schedule

9.1 Implementation Time Schedule

The operation of the project will start at the beginning of 2014 E.C after certain pre-request activities are
accomplished. The time schedule is stated as follows;

Number Activities Time schedule

1. Establishing rules and regulations September 1 – September 5

2. Obtaining the license from concerned body September 6 – October 3
3. Purchase materials and renting the production house October 4 – October 12
4. Interior design for production house and van October 13 – November 30

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5. Employee harling December 1 – December 20

6. Promotional activity December 21 – December 24
7. Official running the business January 1, 2013 E.C

10. Conclusion

10.1 Major advantage of the project

Our business contains different type of advantage with different perspective. The perspective of the business
is listed bellows:-

Social perspective

 Easily accessible by consumers with affordable price and quality.

 It saves cooking time of the individual consumer.
 Crate personal satisfaction to consumer.
 For those unemployment people (special women’s) it becomes not so expensive to get their own
business.
 It still puts eating choices in hands of the consumers.

Economic perspective

 To required simple skill, basic facility and small amount of capital.

 Generating income and employments
 To survive demand and supply for consumption of people.
 Consumers are attracted by convenes and low price may over look aspect of hygiene and sanitation.
 It creates a job opportunity for the owner of a business man
 Means of income for the owners in the form of dividend.

Government perspective

 Means of income for the government in the form of tax.

 To get promotion from government related to our domestic product.
 To use government opportunities of work creativity for remove our country unemployment.
 To get economic development of our country

10.2 Major drawbacks of the project

The major drawback of our project is Eating food on the streets hasn’t always been “accepted” in
Ethiopian customs. It makes difficulty to success of our project. So based on this drawback our businesses
try to create a good awareness about importance of eating fast food on street related to save a cooking time of
fast food in urgent time and it still put eating choice in the hand of consumer. In addition to the above idea
difficulty to success of our project or Major drawbacks of the project is listed bellows:-

 Shortage of sales promotion strategies efficient and effective communication.

 Poor business management technical skill.
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 Lack of selected and utilize technology related tools.

 Evaluation focused on price rather than long term value for money and achievement of business
benefits.
 Lack of management allocation of scare resource.
 Failure to see that management must use lean methods to change the culture. The usual view of lean
is that it is a narrow technical means to save cost. It is a highly integrative socio and technical
strategy.
 Poor management handling.
 Lack of define and collect operational metrics to support project and owners decision making.
 Poor project team integration between clients, the supplier team and supply chain.
 Inability to differentiate stage of project development and implementation.
 Lack of clear defines of project scope creep.

10.3 Chances of Implement the Project

Our project will be implemented within short period of time because of the project by taking estimated value
of initial capital of birr 10,500,000.00 and its estimated annual revenue will be in the first year is 13,792,500
birr and increase from year two to year within the percentage of 15%, 25%, 35% and 45% respectively and
its Internal rate of return (IRR) is 19.33%, Net present value (NPV) is 8,686,600 birr and payback period is 2
years with five month, the above information shows that the project will be feasible and can be applicable.
The Chances of Implement the Project more detail information is listed blows:

 Now a day the people of addis abeba especially the youth and the office workers are exhibiting high
interest of consuming homemade like street fast foods.
 There are an extremely small number of traditional foods that cannot be matched with the population
growth. This is a huge gap that can be fulfilled using our project.
 Our project location or site will be more helpful to our project due to the existence of high demand
for the service that we want to provide.

Appendix
 Project Analysis and Evaluation Hand Out

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 https://addisfortune.net/articles/one-for-the-road-the-life-and-times-of-a-french-fries-vendor/
 https://www.thereporterethiopia.com/article/alternative-serving-snack-and-drink-streets
 http://www.goorsha.net/ethiopian-street-food/

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