1.

Executive Summary
This business plan is developed for the purpose of analyzing and extracting the highly growing
potential and resulting multi faced benefit of Asefaw Argaw Welebo retailing sales of
automotive fuel and lubricant in Gas station, subletting/renting of fixed property and hotel and
tourism for the year 2023/24. We are curtained that it will assist our management team in setting
the long term direction and policies of our company. Moreover, it will help guidance for
multiyear program plans and budgets.

Assefa Argaw Welebo is the visionary and have long year experience in business sector, in
accordance with the pertinent commercial law of Ethiopian with a paid up capital of birr
55,051,500.00 by the founder, namely Assefa Argaw Wekebo. Its fuel station is found in Addis
Ababa Saria Abo beside Addesu Building.

Since, its establishment the company has registered enviable track record enabling it’s to prove
its capacity and competence to penetrate the market easily and in a short period of time to
become profitable. Comparing to its age, the achievement reveals its rush to be the leading
company especially in the retail trade of vehicles fuel (within the filling station) and lubricants in
a short period of time. In addition to the provision of fuel & lubricant, other specialized products
like modern car wash, Lub change, supermarket, café and restaurant is planned to implement by
outsourcing to other.

Assefa Argaw Welebo is organized and run by more than 20 professional and non-professional
permanent staff and management organ , which are applying their full exertion to the best growth
of the company. Assefa Argaw Welebo has an elastic plan to achieve its participation and
making a difference especially in retail business of fuel station.

In the same way, this document is developed to show our business potential of the company as
well as providing any relevant and pertinent information to the concerned stakeholder initially. It
ties to describe the prime cornerstones of our company and then it exhaustively examines the
crucial consideration which must be addressed for the success of our company as a whole.

This business will generate 1.4 billionn amounts of sales from fuel station and profit of
12million, and will pay bill 6.9 million for tax. The business would like to request loan to be

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obtained from Commercial Bank of Ethiopia as a form Overdraft birr 30,000,000.00 for the
purpose solve its working capital shortage.

2. Background and description of business

The Business plan realistically asses the Business potential and takes into account of both the
positive and negative issue that will impact on the business.

We prepared without assistance from a professional, the strategies and forecasts that are
contained in the plan are those of the promoters. The primary purpose of the business plan is to
identity the strengths and weakness of the business and give a realistic assessment of the most
probable performance of the business over the period for the plan is drawn up.

Ethiopia imports its oil and refined petroleum products from international supplies through the
Ethiopian petroleum supply enterprise (EPSE), which is an enterprise formed by the merger of
former two state owned organization, the National Depot Administration (NDA) and the
Ethiopian Petroleum enterprise (EPE). EPSE is a sole petroleum products supplier in the country
that purchases products in bulk, manage oil reserves and wholesales to distributors. Ethiopia
purchases petroleum products from two sources, bilateral agreement with foreign government
and international auctions for private own companies. Currently Ethiopia buys petroleum
products from Kuwait petroleum

Ethiopia industry, transport and commercial sector largely depend on imported fuel. The amount
of foreign currency spent for the importation of petroleum products is very significance and it is
between 23 to 28 percent of the export earnings. Very limited and very few proportion of the
population in Ethiopia have access to modern fuel. Road sector diesel consumption per capita is
about 14.36 as per World Bank report, which is one of the lowest in the world.

Assefa Argaw Welebo is a Sole proprietorship established in the year 2006 E.C with the objective
of retail trade of vehicles fuel (within the filling station) and Lubricant). The company is managed
by beneficial owner or CEO, Ato Assefa Argaw, together with other supportive qualified and
experienced management team. The owner/manager of the business has acquired adequate
experience in the business and remarkable performance registered is the witness for the caliber of
the founder

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Assefa Argaw Welebo is a registered and licensed petrol filling station. The station is located in
Addis Ababa saris abo NOC station which be situated along major roads from Debrezit strategic
location of the town special vehicle from Gelan debrezeith and Adama road. The gas station will be
seeking to expand its network so it can offer its services in major cities all around Ethiopia.

The gas station has been entrusted to retail its products services and also retail petroleum by
products used in motor engines like petrol (PMS), diesel, and engine oil, it has also retail denser
petroleum products like kerosene (AGO). The gas station has also provide more services for cars
which include car wash services, vulcanizing services, wheel balancing, and alignment services,
and also other automobile-related services.

our customers are the key to success in business, this has ensured by making our services
impeccable and customer-centric, then we have ensured quality in our products and services, we
have opened to adapting use the latest technology so it becomes easy to use and welcoming for
consumers, our customer service and other complementary services will position us to become
the most preferred petrol station wherever in Ethiopia we are set up.

Company Profile

Name of Entity Asefa Argaw Welebo

Office Address Saria Abo NOC station
Contact Person Asefa Argaw Welebo
Designation CEO/Owner
Types of Economic Activity Retail trade of vehicles fuel (within the filling
station) and Lubricants
Fixed property subletting/renting activities
Legal form of business Sole
Status of the business Operational
Registration Agency Addis Ababa city Administration Trade Bureau
Licensing Agency Addis Ababa city Administration Trade Bureau
Licensing No. & Date AKK/AA/06/520/703742/2010 dated 20/02/2010
06/520/566176/2006 dated 30/03/2006
Tax Paying Identification Number(TIN) 0004341597

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Mission, Vision and Objective of the Company

Vision

“To become one of the best retail trade of vehicle fuel and lubricant in the year 2025.”

Mission

 By using highly skilled professionals provide competitive and high quality products and
service for customer.
 Bring customer delight and become a trustworthy partner to customer by excelling in
every aspect of operations

Objectives

The immediate objective of the business is to participate in the purchase and distribution of
petroleum and petroleum products in the country and alleviate the problem associate with
repeated petroleum shortage thereby generating financial profits. To this effect, the owner has
established his fuel station in Addis Ababa , saris abo NOC station with agreement of NOC to
supply his petroleum.

In the long term, the owner has the objective to expand its fuel station in various locations in
Addis Ababa.

Company Values and Culture

The following are components of the company’s values and cultures.

 The company respects the values and contributions of every employee as essential for its
success.
 The company communicates openly and honestly.
 Unethical and dishonest practices have no place in the company
 The company recognizes and rewards performance
 The company believes that staff development is integral part of its success

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  The company strongly believes that teams, not individuals are the essential unit of the
organization for achieving high performance and accelerating growth.
 The company believes in societal support and community development; hence, all its
personnel will obey to this core value.
Keys to success

 Trading and management experience:

 Financial strength.
 Product quality and customer satisfaction
 Improved manpower and fair labor cost:
Beneficiaries of the Company

The social economic significance of the company can be explained in terms of the financial
contribution it makes to the economy of the country, the job it creates to the citizens and the
economic and social benefits enjoyed by citizens as the company solves the problem of fuel
shortage. Besides, the existence of the business and hence, the fact that people that het employed in
the company will have the capacity to send their children to school and will have the capacity to
consume from suppliers of goods and service in their surrounding thereby creating a positive
multiplier chain effect.

In terms of employment opportunity creation, the company has more than 20 employees both
clerical and non-clerical and pay out birr 1.6 million in wages and salary per year. The company has
paid birr 3.2 million to the government in the form of tax.

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 3. Organizational structure and manpower requirement of the company
3.1. Profile of Management
The company believes in doing business by professionals and has 20 permanent staff and more
than 10 seasonal workers. Basically, Ato Assefa Bekalu has well experienced and professional
management staffs who are managing the company. The following tables depicted the
management staff and their experience

Sr. No Name position Educational Qualification Year of

experience
1 Ato Assefa Argaw GM /owner Diploma 45+
2 Ato Henock Assefa Deputy Manager BSc 12+
3 W/r Teshaynesh Adane Finance BSc 14+
4 Ato Eyob Felek Gas Station Manager Diploma 5+
5 W/r Teshay HR Manager BSc 38+
6 Ato Shegaw Gas Station Diploma 10+
Supervisor
List of management staff and their experience

Organizational Structure

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 Chief Exc.
Officer (CEO)

Deputy Gas Station Gas Station

Finance HR Manager
Manager Manager Supervisor

4. Marketing Plan
Ethiopia imports all its petroleum consumption from abroad in a refined form through the state
owned enterprise, Ethiopian petroleum supply enterprise (EPSE). The petroleum sector is
characterized by four players, each allocate a distinct role to play in the operation. The EPSE is
the sole importer and wholesaler of petroleum product in the country. The enterprise imports and
wholesales the product to distributor from Djibouti upon calculating its own profit margin
against international market. The second player, the Federal Ministry of Trade sets periodic the
domestic price of petroleum products routinely for a specific period, usually one month. By
doing so, the Ministry determines the profit margin per liter of each product for all of the three
players, EPSE, Distributors, and retailers. The Ministry also set the transport rate of fuel.

Distributor

Distributor are responsible for purchasing in bulk from EPSE and sell in bulk to the retailer
which are affiliated to them with predetermined buying and selling prices and margin per product
per liter. Distributor are also required to old minimum reserves of 500 cubic meter of refined
products at their depots to avoid fuel shortage during imports, uploading and transportation of
products to retailer. Distributor are also the major players in the sector to promote their company

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brands to attract customers to their brand, services and oil and lubricants they distribute under
their name and logo.

Fuel Market

There are some licensed petroleum distribution and marketing companies, in the country, out of
which five (Total, Oil Libiya, Kobil, Nile Petroeum, and Wadi Al Sundus) are foreign based and
the other (National oil Co of Ethiopia, Yetebaberut Petroleum, TAF oil, and various recent
entrant) are locally established companies after the enactment of a law that enabled local
companies to participate in the petroleum business since 2004. However, out of all companies,
they are currently operating in Ethiopia, 904 percent of petroleum distribution is done by four
companies, NOC(National Oil Companies), Oil Libia, Total and YBP.

Two third of petroleum imports are used for transport sector consumption, while the remaining
portion is used for industries and urban area cooking purposes.

Fuels are generally homogeneous products from the same source, transported the same way and
are generally sold in similar manner. The market for fuel is therefore very competitive since
product differentiation is closely tied to the marketer’s corporate reputation.

Therefore, Asefa Argaw Welebo identifies itself as retail trade receiving petroleum from NOC.

Retailers

The retailer business of petroleum product in Ethiopia is run by fuel station owners and operators
are required to be distinct from ful distribution and marketing companies. On the other hand
distribution companies are required to establish at least to fuel stations before they commence
operation and the number of fuel station under their trade mark has o each at least six in five
years. If distributors construct themselves, they would need to transfer the retail operaion to
another person through rent

Demand for Petroleum

Petroleum is one of the most traded items in the world. Petroleum is a necessity product and the
nature of its demand is inelastic. Unlike other business whose demand is impacted by price and
other economic variables, the face of any economic slowdowns. Demand for petroleum products

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such as Fuels and Lubricant in Ethiopia is massively growing at an average rate of 10% over the
last five years.

Supply of Petroleum

Ethiopia petroleum supply enterprise (EPSE) is the sol supplier of petroleum products for the
nation, the enterprise bulk purchase refined dispel, jet fuel, kerosen, Gasoline (Benzene), light
fuel oil from international suppliers and sell to the distributor in bulk. The distributor, then,
dispatch to their affiliate retailer (Fuel Station) when it comes to other petroleum products than
fuel oils. Fuel oils are bulk sold to commercial and industrial consumers without the involvement
of fuel station. On the other hand the other petroleum by products such as LPG, Bitumen,
Lubricant oil and grease are imported directly by distributing companies and sold to the
consumers/user through the retail station and other retail outlet shops. Distributors have the
prerogative to determine the profit margin and selling prices on products they import on their
own (without MOT involvement)

There is repeated outcry about the shortage of petroleum products supply in the country due to
the weakness of distributors and transporters. Some distributors have limited financial capacity
to address the market demand whereas the transportation suffers from old and inefficient fleet
vehicle. Petroleum shortage are also observed during month-ends because of the desire of the
retailer to speculate price increase on stock on their hands on hand and on another to escape loss
on lower price change effects in case the consumer price are revised up by the Ministry of
Trade(MOT)

Due to the above mentioned bottlenecks on the transportation and distribution, the supply of
petroleum is usually less than the demand for the product. This fact is depicted on the petroleum
import data of the country for the last nine years in which the supply for some petroleum
products has been, though irregular, increasing at a lower rate than the increase in quantity
demanded. The data obtained from EPSE shows the average growth rate for all petroleum
products during the nine years period as 8%

Furthermore, number of vehicle in the country is increasing with significantly in big cities
mainly due to the relative increase in number of middle class society and the need for private
commuting following the economic growth in the country. The cause for increasing number of

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private vehicle in the county may also be interpreted as low development of mass transportation
means commensurate with population growth and demand for the transportation services.
Increase in the number of vehicle for transport of people and good, will apparently increase the
demand for petroleum in the future insight.

SWOT Analysis

During its business engagement, Asefa Argaw Welebo has its own strength, Weakness,
opportunity and Threats (SWOT) in the business transaction. Due to that there is an internal and
external strength and weakness face in each business year.

Strength

 Has reach and experienced staff in each field

 Ample fixed assets
 The company employed high caliber, diligent, motivated, experienced and customer
oriented staff and professionals
 Easily trained labor
 Considerable resource base
 established strong market
 up to date leather technology installed
 Good reputation of customer handling
 Good supply chain with NOC

Weakness

 Shortage of finance
 Underutilized capacity
 Shortage of resource

Opportunities

 There is a high demand of the products

 The company has known consistent customers
 Ability to grow because of increase in market demand
 Currently fuel is the only source of energy for vehicles, industries and etc

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  priority sector well recognized by government

Threat

 shortage of products in the country due to foreign currency requirement

 low profit margin for the sector
5. Product and service
Asefa Aregaw Welebo fuel station is located in Addis Ababa in Akaki Kality subcuty around
saris abo. The owner has planned to expand number of fuel station in the long run. The fuel
station has three tanks, one for Benzene and the other two are for Gasoline (Nafeta) with holding
capacity of 50,000.00 liter per tank.

The business on average receives Benzene one vehicle with capacity of 48,000 lite within five
days and Gasoline (Nafta) two vehicles in every two days.

Fuel receiving Capacity and receiving price

The current capacity of the fuel station is as follow
 Regular receiving (1 Tank) – has 50,000 liter receiving capacity but actual 48,000
liter receives within every 5 days with price of birr 60.4212 but it will vary as per the
government regulation
 Gasoli receiving (2 Tank) – has 100,000 liter receiving capacity but actual 48,000
liter/Vehicle receives within every 2 days with price of birr 66.4312 but it will vary as
per the government regulation
1. Forecasted cost of Sales for (2023/24)
Cost of Cost per liter liter to be recive Number of Total Cost
Sales days Fuel
Recived

Regular 60.3 48000 91 263,390,400.00

Gasolin 66.3 96,000.0 183 1,164,758,400.00

e

Total 126.6 144,000.0 274.0 1,428,148,800.0

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 2. Forecasted Sales for (2023/24)

Sales price
Sale liter to be sold Total Sales
per liter
Regular 61.5 4,368,000.00 268,632,000.00

Gasoline 67.5 17,568,000.00 1,185,840,000.00

Total 129 21,936,000.0 1,454,472,000.0

6. Financial Plan
The following assumptions are developed considering the historical performance of the business
and other market parameters

 The plan life is assumed to be 5 years

 The Sales of the business is expected to increase by 20% on wards the second year and,
the cost of Sales and the selling price is assumed to increase similarly by 20% and
 Administrative Expense is assumed to increase by 5% from the 2014 administrative cost
 Interest rate is assumed to be 14 % per annum
 Income tax is assumed to be 35%

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 1. Projected Income Statement

Asefa Argaw Welebo

Projected income Statement

Year
Item
1st 2nd 3rd 4th 5th
Renenue 1,454,472,000.00 1,745,366,400.00 2,094,439,680.00 2,513,327,616.00 3,015,993,139.20

Cost of sales 1,428,148,800.00 1,713,778,560.00 2,056,534,272.00 2,467,841,126.40 2,961,409,351.68

Gross Profit 26,323,200.00 31,587,840.00 37,905,408.00 45,486,489.60 54,583,787.52

Administrative
4,903,195.50 4,903,195.50 4,903,195.50 4,903,195.50 4,903,195.50
cost

Profit before
21,420,004.50 26,684,644.50 33,002,212.50 40,583,294.10 49,680,592.02
interest and tax

Interest 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00

Profit before
19,920,004.50 25,184,644.50 31,502,212.50 39,083,294.10 48,180,592.02
tax
Tax 6,972,001.58 8,814,625.58 11,025,774.38 13,679,152.94 16,863,207.21

Profit after tax 12,948,002.93 16,370,018.93 20,476,438.13 25,404,141.16 31,317,384.81

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 2. Projected Cash Flow Statement

Asefa Argaw Welebo

Projected Cash Flow Statement

Items per year 1st 2nd 3rd 4th 5th

cash inflow

Beginning
42,948,003 16,370,019 20,476,438 25,404,141
Balance

loan granted 30,000,000.00

Sales 1,454,472,000 1,745,366,400 2,094,439,680 2,513,327,616 3,015,993,139

1,745,366,400.0 2,513,327,616.0
Total Inflow 1,484,472,000.00 2,094,439,680.00 3,015,993,139.20
0 0

Cash outflow

C.G.S 1,428,148,800 1,713,778,560 2,056,534,272 2,467,841,126 2,961,409,352

Administrative
4,903,195.50 4,903,195.50 4,903,195.50 4,903,195.50 4,903,195.50
cost

Interest 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00

Tax 6,972,002 8,814,626 11,025,774 13,679,153 16,863,207

Total outflow 1,441,523,997 1,728,996,381 2,073,963,242 2,487,923,475 2,984,675,754

Net cash flow 42,948,003 16,370,019 20,476,438 25,404,141 31,317,385

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