1.

Introduction
Addis Car Wash Service
House No- New
Akaki kaliti Sub-City, kebele 11

Addis Car Wash Service will be providing car wash service for Auto mobiles,
Minibuses, and land cruisers of Addis Ababa City only. This business will include
exterior car wash and interior cleaning services.

The business is a partnership type which is established by eight partners. All are
contributed different amount of capital for investment.

Detail of the Co-Owners

S/No Name of Partner Address

1 Abiy Bekele 0911020515
2 Abeje H/Mariam 0911103879
3 Almaz Balcha 0911506882
4 Edilu Derje 0911642328
5 Hussien Abdu 0911641298
6 Kelemework Belachew 0911749074
7 Kidist Beyene 0911983928
8 Samuel Kassa 0911932282

The initial total investment required to launch the business is a total of Birr
5,204,613.00(five million two hundred four thousand six hundred thirteen) local
currency of this 2,081,845.00 or 40% will be obtained through debt financing
which is going to be paid off over 20 years and the remaining Birr 3,122,768.00
or 60% will be obtained from contribution of the co-owners. The debt will cover
machinery, office equipment & supplies costs.

This report is confidential and is the property of the co-owners listed above. It is
intended only for use by the person to whom it is transmitted and any
reproduction or divulgence of any of its contents without the prior written
consent of the company is prohibited.
2. Executive Summary
Addis Car Wash Service is a company which is going to be commenced for giving
a car wash service for home cars, Minibuses and Land Cruisers. The Main types
of services to be given are exterior car wash and interior cleaning services. For
the time being the project is designed to give the service for Addis Ababa city
residents only. Our projected venture will be located around Akaki Kaliti subcity
customarily called “Saris” area. The reason why the proposed cite is chosen for
the investment is that there are many private and governmental organizations
around, it is a way to other regional states and it is also a living area in which a
number of automobiles, minibuses, company cars, and employee services are
moving in and out.

To launch the business the initial total investment requirement to undertake the
business is a total of Birr 5,204,613.00(five million two hundred four thousand
six hundred thirteen) local currency, of this 2,081,845.00 or 40% is obtained
through debt financing which will be paid off over 20 years and the remaining
amount of Birr 3,122, 768.00 or 60% obtained from contribution from co-owners
capital. The debt will cover machinery, office equipment & supplies costs. Our
business is positioning it self as the premier car wash serving the Addis Ababa
automobiles especially around Saris area and we have forecasted a 20% market
share. Following the increasing number of automobiles launching a car wash
Service with efficiency and good service will be a promising business which
results in a good profit. The business will generate a very high margin and a
modest net margin after year one and comfortable margin after year three. By
year three the business will have developed a respectable yearly net profit. The
revenue source of the project will be from sales of the car wash and cleaning
service and rent of additional rooms.

This project is designed to fill the gap created by the unequal demand and
supply of the car wash service in the city. Even though there exists many
numbers of automobiles in the hands of individuals, business men &
organizations there is no enough and quality service given by car wash stations.
It has a mission of providing top-quality washing service with the emphasis on
gaining loyal and repeat customers as "friends" of the business. Our venture will
be working for twelve hours per day and the whole week, Monday to Sunday,
with its full capacity.

The major competitors of our projected business are those who give the car
wash service in the gas stations and those youngsters who raise money for their
living by cleaning cars around running waters. However, those competitors are
not in a good standard and take much time, one & half to two hours per car
wash, and aim to meet the needs of the price-conscious individuals who are
choosing the service simply so they do not have to clean their car themselves.
Addis Car Wash Service on the other hand targets the quality-conscious
individuals who value their car to make it look good and the time-conscious
individuals who have given value to their time.

When we look at the car wash service in Addis Ababa city, they are given as an
auxiliary to their main business to gas stations despite the fact that all stations
don’t constitute the service. Because of that reason a station can only serve a
maximum of six cars a day per a washing hole and almost all of the stations
have not more than two washing holes which doesn’t fulfill the demand. Our
business aims to fill the gap by giving the car wash service as an independent
(Specialized) Service which will have five washing holes serving fifty cars per
day with a fair price.

Addis Car Wash Service segments its market customers by the type of car
ownership believing that the type of car that a person owns says volumes about
the driving, and, therefore the car washing and cleaning requirements. We
segment our customers as new car owners, older luxury car owners’, lifetime
owners, Dealerships and local businesses in addition to Minibuses and Land
cruisers.

We planned to lease 800 m2 lands and construct the building which

encompasses five washing holes, an office and customers waiting room, plus
two rooms for rent having a purpose of Cafe and oil & lubricant sales. For office
use purpose the expensed equipments include office chairs & tables, guest
chairs, computer, cash register and safe box. For the high quality and timely
effective service well experienced workers will be employed with a fair salary as
compared to the expected job they will be doing. A Manager, a total of fifteen
workers for washing & cleaning cars, one employee who act as a cashier &
receptionist, a janitor and two security guards are needed as professionals &
supporting staffs.

Our projected business will be differentiated from others in a way that the car
washing service will be given as a specialized business to give quality service to
customers. As one or two workers are assigned to wash a car in other
businesses it will lead customers to wait for long period to get the service and
pay more money which is not fair with the service rendered.

When we start our business there will be five washing holes in which three
employees are assigned to each hole to wash and clean a car within one hour in
addition to the spotless and quality service given to customers. So any customer
who comes to our station will get the service required with out waiting for long
so that they can consume their time effectively.
3. Company History
As stated in the executive summary the business will give quality car wash
service to the consumers located at the targeted area. This idea is generated
from one of our members; actually we have several business ideas which can be
undertaken easily but the reason why we select this idea is because it is unusual
to our country. In fact this business plan is common in western countries.

Accordingly, our company vision, Mission, long term goals and objectives are
stated below.

3.1 Visions:-
The vision of the venture to expand its activities through our country in order to
achieve the following vital goals:

I) Create job opportunities for the working group

II) Make vital contributions to our country by paying tax.

3.2 Mission:-
The mission of the enterprise in the business environment is to give better
satisfaction to our customers by providing a standard service and by giving the
service to targeted customer in an efficient way.

3.3 Goals:-
The major goal of our business in the long term is to improve the quality of
service providing in order to satisfy the demands of our customers & attract new
customers to be users of our service.

3.4 Objective:-
The primary objective of this business plan is to successfully provide quality
service with reasonable price to pay.
4. Industry Analysis
Analyzing the industry of car washing business is a little bit difficult in the case
of our country since there is no specialized car washing service. When current
situations of the country are observed, there is a rapid growth in emergence of
car assemblies, no of imported automobiles, no of investors, road construction,
and as a whole there is a change in the no of higher class and middle class
society groups to whom an automobile becomes a necessity rather than luxury
as former times. Since the number of residents and business areas owning an
automobile are increasing from time to time, the business will have a bright
future as the no of one or more new car wash business is determined there will
be more specialized car wash businesses in the city.

4.1 Competitors
The major competitors of our projected business are those who give the car
wash service in the gas stations as an auxiliary to the main business which is
selling of petroleum and related products and those youngsters who raise
money for their living by cleaning cars around running waters. However, those
competitors are not in a good standard and take much time, one & half to two
hours per car wash, and aim to meet the needs of the price-conscious
individuals who are choosing the service simply so they do not have to clean
their car themselves. Addis Car Wash Service on the other hand targets the
quality-conscious individuals who value their car to make it look good and the
time-conscious individuals who have given value to their time.

4.2 Market Segmentation

Addis Car Wash Service segments its customers by the type of car ownership.
We believe that the type of car that a person owns says volumes about their
driving, and, therefore their car washing and cleaning requirements.
4.2.1 New Car Owners
Owners of newer cars are most likely to use a hand car washing service. These
owners take great pride in their cars and will bring them often to the wash and
clean service. The goal with these customers is to promote regular use of the
wash and clean service. The aim is to inform these customers that Addis Car
Wash Service will keep their car looking as good as it did the day they drove it
off the lot.

4.2.2 Older luxury car owners

These people have either owned their high-end luxury cars for several years or
are unable to afford the expense of a new luxury car but want the feel of relaxed
driving. Both of these groups want to keep their cars in the best shape possible.
Those who have bought second-hand cars will often spend many hours in their
cars and will place high importance on keeping their cars looking good. These
owners will bring their cars in for regular washes and to be cleaned.

4.2.3 Lifetime owners

Many of these people have owned their cars for more than five or six years,
and are more likely to be women. They are attached to their cars as friends and
though it may be more sensible for them to purchase a new car, they will bring
their car in for a wash occasionally, just when the car is dirty. They like their cars
to look presentable, and want to keep it in good shape but are not tied up in the
look of their car.

4.2.4 Dealerships
Currently the number of car dealers who import new cars from abroad and those
who used to sell used second hand cars is rising. These dealerships often use
outside car wash services to clean their vehicles before they are put up for sale.

4.2.5 Local businesses

Local businesses have company cars and small vans that must be kept clean to
maintain their company image.
These businesses will be looking for a cost effective, efficient car washing
service to perform this service, and will prefer to use a car wash service during
the week rather than during weekends, like the general public.

The strategy behind the company’s target market segmentation is to attract

customers who will be repeat users and will frequent the business in the
typically quiet times for a car wash business. It will not be difficult to attract
customers during the summer months and on the weekends, the weekdays
however, especially in the winter, people will not think about having their cars
washed. For this reason, Addis Car Wash will target people who will tend not to
be restricted to these busy times.

The main targets of our projected business plan are personal Automobiles,
Minibuses, and Land cruisers. As previously mentioned car washing service in
Addis Ababa city is given as a dependent one to gas stations despite the fact
that all stations don’t constitute the service. Because of that reason a station
can only serve a maximum of six cars a day per a washing hole and almost all of
the stations have not more than two washing holes which doesn’t fulfill the
demand. Our business aims to fill the gap by giving the car wash service as an
independent (Specialized) Service which will have five washing holes serving
fifty cars per day.

Since the required job in the car wash service business is not yet done
thoroughly, we decided to invest our capital into the car wash service business
and then generate revenue from the services given by the project. As the
number of service stations and automobiles is not comparable, it opens a good
opportunity for us to enter in to the sector to be successful as we planned since
we will be involving in a valuable business which creates unique and quality
services in meeting customers’ satisfaction to bring real benefit to the
surrounding community.
5. Description of the venture

5.1 Service Type

Addis Car Wash Service will be providing customers with exterior car wash
service and interior cleaning. It has a mission of providing top-quality washing
service and will work to keep employees satisfied in order to maintain
impeccable (faultless) customer service with the emphasis on gaining loyal and
repeat customers as "friends" of the business. Our venture will be working for
twelve hours per day and the whole week, Monday to Sunday, with its full
capacity.

5.2 Location

Our Business will be located at Akaki Kaliti Sub City, Kebele 11, and customarily
called “Saris” area. The reason why the proposed cite is chosen for the
investment is that there are many private and governmental organizations
around, it is a way to other regional states and it is also a living area in which a
number of automobiles, minibuses, company cars, and employee services are
moving in and out. There is high demand but very few car washing service is
given in that area. That is a good opportunity to launch our business around
there. Moreover, the lease price to acquire land for building our site is cheaper
than other areas. We planned to lease 800 m2 land and construct the building
which encompasses five washing holes (will be laid on the area of land 131.25
m2), an office and customers waiting room, plus two rooms for rent having a
purpose of Cafe and oil & lubricant sales(will be laid on the area of land 144
m2).

5.3 Equipments
For office use purpose the expensed equipments include office chairs & tables,
guest chairs, computer, cash register and safe box.
Capital expenditure of the project

No. Description Local Costs Foreign Costs Total

1. Land 1,215,840.00 1,215,840.00
Building 825,750.00 825,750.00
Machinery 2,500,000.00 2,500,000.00
Office furniture 3,100.00 3,100.00
Computer 12,000.00 12,000.00
Cash Register 8,000.00 8,000.00
Safe box 2,500.00 2,500.00
Sub Total 2,067,190.00 2,500,000.00 4,567,190.00
2 Initial working capital 637,423.00 637,423.00
Total 2,704,613.0 2,500,000.0 5,204,613.00
0 0

5.4 Employees
For the high quality and timely efficient service well experienced workers will be
employed with a fair salary as compared to the expected job they will be doing.
A Manager, a total of fifteen workers for washing & cleaning cars, one employee
who act as a cashier & receptionist, a janitor and two security guards are
needed as professionals & supporting staffs.

Summary of Employees Salary

No. Description No. Monthly salary Total annual

per person salary
1 Manager 1 2,500.00 30,000.00
2 Car washers 15 450.00 81,000.00
3 Cashier & Receptionist 1 800.00 9,600.00
4 Janitor 1 200.00 2,400.00
5 Security Guards 2 350.00 8,400.00
Total 131,400.00
Addis Car Wash Service will be owned by eight co-owners who are from diverse
back grounds and experiences. Currently all of us are taking Management
courses in a Degree Program which will enable us to run our business effectively.
We have planned to enter in to this business because the car washing service is
not yet given in full capacity which left a big gap to be satisfied and even didn’t
be counted as a separate business in our city at all. While more has to be done
in the area it is going to be a good profit making business. It will be legally
registered as a “Partner Ship” business which will generate revenue for the
government in the form of income tax despite the fact that it creates
employment opportunity.

6. Service Plan
The major machineries and equipments for a washing business are those
machines which lift up the car with its all accessories, High-power water pumps,
Generator which is used in times when the power is off, washing towels and
powder soaps. The machine which is used for lifting up the cars (Large Crick) to
make them ready to be washed and the high-power water pumps will be
imported from abroad.

7. Marketing Plan
The existing supply of the service in the town is not satisfactory. The situation
has called for participation of the partners to establish the above mentioned
project. The target markets are the potential users of the service who are
categorized in the middle and high class society groups. Presently, the average
price charged to wash a personal automobile, Minibus and Land Cruiser is Br
45.00, 55.00 and 65.00 correspondingly. It is our plan to serve with a maximum
potential and efficiency and to reduce the time for washing a car to one hour &
will charge to wash a personal automobile, Minibus and Land Cruiser Br60.00,
70.00 and 80.00 respectively.

Since it is a new venture, we will be using price reduction for a month in addition
to word-of-mouth advertising and using brochures and posters. Our business is
positioning it self as the premier car wash serving the Addis Ababa automobiles
especially Saris area. We have forecasted a 20% market share. The business will
generate a very high margin and a modest net margin after year one and
comfortable margin after year three. By year three the business will have
developed a respectable yearly net profit. The revenue source of the project will
be from sales of the car wash and cleaning service and rent of additional rooms.

8. Organizational Plan
The planned project is going to have a partnership form of ownership. All the
legal requirements starting fro registration will be conducted before the business
starts to run. All the eight partners have our background of being Accountants,
Purchasers, Business men, Soccer Players, and so on. According to our
experience side by side to the Management stuff we all will take part of the job
to be done like paper works, Accounting works and customer attractions.

9. Assessment of Risk
As we have tried to mention earlier the automotive industry is growing than
before in our country. Many people are having cars and following the increase in
number of residents of Addis Ababa city from time to time, there is a need to
increase transportation vehicles like minibuses. When we watch out the number
of tourists attracted to Ethiopia is also growing which may cause an increase in
need of Land cruisers. As long as there are a number of vehicles in the town,
there will be a high demand of car washing and cleaning service in line with
having a need to keep their cars clean.

Since the switching costs in the car washing industry is low, we will be aware
and work hard to develop and keep repeat customers. In order to avoid the loss
of customers to other competitors we would put a great deal of emphasis on
creating a system that is both fast and efficient which will keep costs in terms of
time spent per car to a minimum.
10. Financial Plan

10.1 Investment Cost of the project

The total invested cost of the proposed project is estimated to be Birr
5,204,613.00 of Local Currency.

10.2 Source of fund

The project source of finance is based on owner’s equity, 40% of the total
investment, and loan, 60% of the total investment.

The amount of funding is given below

Source % Amount

0 Owner equity 60 3,122,768.0

1 % 0
0 Loan 40 2,081,845.0

2 % 0
Total 5,204,613.0

List of share per owner

No Amount of
. Name share %
1 Abiy Bekele 343,504.48 11
2 Abeje H/Mariam 530,870.56 17
3 Almaz Balcha 437,187.52 14
4 Edilu Dereje 499,642.88 16
5 Hussien Abdu 374,732.16 12
6 Kelemework Belachew 405,959.84 13
7 Kidist Beyene 343,504.48 11
8 Samuel Kassa 187,366.08 6
Total owner equity
share 3,122,768.00 100
10.3 Projected Financial Statement

10.3.1 Projected Income Statement

ADDIS CAR WASH
PROJECTED INCOME STATEMENT
Description Y1 Y2 Y3
REVENUE
1,176,000.0 1,449,000.0
Income from sales service 0 1,260,000 0
Income from shop Rent 36,000.00 39,600.00 45,540.00
1,212,000.0 1,299,600.0 1,494,540.0
Total revenue 0 0 0
EXPENSE
Payroll 131,400.00 144,540.00 158,994.00
Deprecation expense 280,850.00 280,850.00 280,850.00
Utilities 41,400.00 45,540.00 50,094.00
Insurance 15,000.00 15,000.00 15,000.00
Supplies 550,000.00 577,500.00 635,250.00
1,018,650.0 1,063,430.0 1,140,188.0
Total operation expense 0 0 0
Gross Income 193,350.00 236,170.00 354,352.00
Interest expense (86,600.00) (86,600.00) (69,280.42)
Income before I/Tax 106,750.00 149,570.00 285,071.58
Income tax (30%) 32,025.00 44,871.00 85,521.47
Net profits 74,725.00 104,699.00 199,550.11
Net profit/Sales 6% 8% 13%
10.3.2 Projected Balance Sheet

ADDIS CAR WASH

PROJECTED BALANCE SHEET

Assets Y1 Y2 Y3
C/A
Cash 150,373.40 269,409.55 232,912.44
A/R 10,500.00 23,058.00 37,800.00
Supplies 50,000.00 30,000.00 20,000.00
T.C.A 327,693.40 515,790.55 603,096.03
Long-term Asset
Building 825,750.00 825,750.00 825,750.00
Acc.Dep 30,850.00 61,700.00 92,550.00
2,500,000.0 2,500,000.0 2,500,000.0
Machineries 0 0 0
Acc.Dep 250,000 500,000.00 750,000.00
Office equipment 25,600 25,600.00 25,600.00
Acc.Dep 7,533 15,066.00 22,599.00
1,215,840.0 1,215,840.0 1,215,840.0
Land leased 0 0 0
4,278,807.0 3,990,424.0 3,702,014.0
T.L.T Asset 0 0 0
4,606.500.0 4,506,214.5 4,305,137.0
Total Assets 4 5 3
Liab & Capital
C/L
A/P 48,633.00 202,739.45 202,739.45
Long-term liab.
Bank loan 866,005.26 692,804.21 519,603.16
Lease payable 924,038.40 875,404.80 526,771.20
1,838,676.6 1,770,948.4 1,249,113.8
Total Liab. 6 6 1
2,693,097.8 2,630,567.0 2,856,473.1
Paid in Cap. 3 0 1
Retained Earning 74,725.00 104,699.00 199,550.11
2,767,822.8 2,735,266.0 3,056,023.2
Total Capital 3 0 2
Total Liab. and
Cap. 4,606,499.49 4,506,214.46 4,305,137.03
 10.4 Projected Cash Flow

ADDIS CAR WASH

POROJRCTED CASH FLOW

CASH FLOW Y1 Y2 Y3
Cash from operations
1,180,500.0 1,257,558.0
Cash sales 0 0 1,435,572.00
Cash from receivable 31,500.00 42,042.00 58,968.00
1,212,000.0 1,299,600.0
Sub total cash from operation 0 0 1,494,540.00
Expenditure from operation
Cash spending 737,800.00 782,580.00 859,338.00
Lab. pay 48,633.60 202,739.45 202,739.45
Cash balance 425,566.40 314,280.55 432,462.55
Lease 20% paid 243,168.00 0.00 0.00
Tax Paid 32,025.00 44,871.00 199,550.11
Net cash 150,373.40 269,409.55 232,912.44
11. Annex
Reference

 Addis Ababa Municipality

 Addis Ababa Transport Authority

 Gas Station

 Internet
 Table of Content
Page
1. Introduction.................................................................................................... 1
2. Executive Summary ...................................................................................... 2
3. Company History........................................................................................... 5
3.1 Vision ................................................................................................ 5
3.2 Mission .............................................................................................. 5
3.3 Goals.................................................................................................. 5
3.4 Objective............................................................................................ 5
4. Industry Analysis ........................................................................................... 6
4.1 Competitors....................................................................................... 6
4.2 Market Segmentation.........................................................................6
4.2.1 New Car Owners..........................................................................7
4.2.2 Older luxury car owners...............................................................7
4.2.3 Lifetime owners............................................................................7
4.2.4 Dealerships.................................................................................. 7
4.2.5 Local businesses..........................................................................7
5. Description of the venture .............................................................................9
5.1 Service Type ...................................................................................... 9
5.2 Location............................................................................................. 9
5.3 Equipments........................................................................................ 9
5.4 Employees......................................................................................... 10
6. Service Plan.................................................................................................... 11
7. Marketing Plan ............................................................................................... 11
8. Organizational Plan ....................................................................................... 12
9. Assessment of Risk ........................................................................................ 12
10. Financial Plan............................................................................................... 13
10.1 Investment Cost of the project..........................................................13
10.2 Source of fund................................................................................... 13
10.3 Projected Financial Statement...........................................................14
10.3.1 Projected Income Statement.......................................................14
10.3.2 Projected Balance Sheet..............................................................15
10.4 Projected Cash Flow..........................................................................16
11. Annex .......................................................................................................... 17