DATE: 5/16/2023 G.

BAHIR DAR UNIVERSITY

BAHIR DAR INSTITUTE OF TECHNOLOGY
FACULTY OF MECHANICAL AND INDUSTRIAL ENGINERING
MECHANICAL ENGINERRING DEPARTMENT

BUSINESS FEASIBLITY STUDY ON: SNACK (BURGER) FOOD TRUCK SERVICE

FINAL REPORT
STUDENT NAME: ID NO:
BLEN SINTAYHU………………………………………………………... BDU-1201286
MIKIAS MENGIST …………………………………………………… BDU-1315837
HABTAMU ABAYNEH………………………………………………... BDU-1201864
NAHOM SHIMELES…………………………………………………...… BDU-1202579
SURAFEL ALENE…………………………………………………………. BDU-1203015
YASCHILAL ABU…………………………………………………………. BDU-1203297

SUBMITTED TO: MR. ZELALEM

Table of Contents

CHAPTER ONE .......................................................................................... 4

EXCUTIVE SUMMERY ............................................................................... 4
KEY SUCCESS .......................................................................................... 4
1.Description of the business................................................................... 5
1.1 Identification and exploitation about the business .......................... 5
1.2 Definition of the project and alternative scenarios & models .............. 7
1.2.1 Services ...................................................................................... 7
1.3 Relationship to the surrounding geographical area ............................ 8
1.3.1 Social and Economic Impact ....................................................... 8
1.3.2 Environmental Impact ................................................................. 9
CHAPTER TWO ....................................................................................... 10
2 MARKET ANALYSIS .............................................................................. 10
2.1 Enterprise description ...................................................................... 10
2.1.1 Size and scope of the company ................................................ 10
2.1.2 The future of our business idea ................................................. 11
2.1.3 Nature of the business .............................................................. 11
2.1.4 Life cycle of the business .......................................................... 12
2.2 Enterprise competitiveness .............................................................. 12
2.3 Market Potential............................................................................... 13
Expected demand ................................................................................. 15
CHAPTER THREE .................................................................................... 16
3. TECHNICAL FEASIBILITY .................................................................... 16
3.1 FACILITY OF OUR BUSINESS ....................................................... 17
3.2 RAW MATERIAL REQUIREMENT................................................... 18
CHAPTER FOUR ...................................................................................... 21
4. FINANCIAL FEASIBLITY ...................................................................... 21
4.1 Estimate the total capital requirements ............................................ 21
 4.1.1 Fixed Investment Cost .............................................................. 21
4.1.2 Pre-Operation cost .................................................................... 22
4.1.3. Fixed Assets............................................................................. 23
4.2 Estimate equity and credit needs ..................................................... 23
4.2.1 Inventory ................................................................................... 23
4.2.2 Accounts Receivable and Accounts Payable ............................. 24
4.2.3 Net Working Capital .................................................................. 25
4.2.4 Total Investment Costs .............................................................. 26
4.2.5 Production Costs ....................................................................... 27
4.3 Means of financing our project. ........................................................ 29
4.4 Pricing Strategy ............................................................................... 29
4.5 Profit Analysis ..................................................................................... 30
4.6 Breakeven analysis ............................................................................. 31
4.7. Returns under various conditions. ...................................................... 33
CHAPTER FIVE ........................................................................................ 35
5.1 ORGANIZATIONAL FEASIBILITY ....................................................... 35
5.2 STUDY CONCLUSION ....................................................................... 36
 CHAPTER ONE

EXCUTIVE SUMMERY
A burger food truck business can be a great idea, as burgers are a popular and well-loved food
item by many people (especially students by all age). However, the success of our business will
depend on several factors, including the quality of our burgers, our location, and our marketing
strategy.
We choose a food truck because a food truck is a mobile kitchen that allows to sell food in
different locations. Its popular option for small business owner because it requires lower
overhead cost compared to a restaurant. Also, easy to prepare, customization and can be made
quickly.
One advantage of a food truck business is that it allows to be mobile and flexible, so we can adjust
our location based on customer demand. We all want to choose a location that has a lot of foot
traffic and easily accessible for customers. It's also important to consider any local regulations or
permits that may be required for operating a food truck in our area.
In terms of pricing, we want to set our prices at a level that is competitive with other burger
vendors in our area, but also allows to make a profit. Also, we may need to experiment with our
pricing strategy to find the right balance between affordability and profitability.
Marketing our food truck business is also crucial for attracting customers. we can use social media
platforms like TikTok and Facebook to promote our business and showcase our menu items.
Additionally, consider partnering with local businesses or participating in events to increase our
visibility and reach.
Overall, a burger food truck business has the potential to be a profitable venture, as long as we
are strategic in our planning and execution. Providing high-quality food, choosing the right
location, and implementing effective marketing strategies can help to attract customers and grow
our business over time.
KEY SUCCESS
The key to success for a burger food truck business is to offer high-quality food, provide excellent
customer service, and create a
unique and memorable experience for customers. Here are some specific factors that can
contribute to the success for burger food truck business:

1. Quality ingredients: Use fresh, high-quality ingredients to make the burgers. This will help
to stand out from competitors and ensure that our customers are satisfied with their meal.

2. Consistency: We make sure that our burgers are consistent in terms of taste, size, and
presentation. This will help to build a loyal customer base and generate positive reviews and
word-of-mouth referrals.
3. Customer service: Provide excellent customer service, be friendly and engaging with our
customers, and address any concerns or complaints promptly. This will help to build a positive
reputation and foster customer loyalty.

4. Location: Choose strategic locations where there is a high volume of foot traffic and
demand for the food. We can also use social media and other marketing channels to promote our
business and attract customers to our location.

5. Innovation: Offer unique and creative menu items that set us apart from competitors. For
example, we could experiment with different burger toppings, sauces, or cooking techniques to
create a signature dish that customers will remember.
By focusing on these key success factors, we can create a thriving burger food truck business that
generates revenue, attracts new customers, and builds a loyal following over time.
1.Description of the business
1.1 Identification and exploitation about the business

A burger food truck business is a mobile food service that specializes in selling burgers from a
truck or trailer. It is a business idea that can be started by purchasing a food truck and outfitting
it with the necessary equipment and supplies, such as a grill, fryer, refrigerator, and cooking
utensils. The business owner can then choose locations to park the food truck and offer their
menu items to customers. So that we choose the business idea of a burger food truck in Bahir Dar
city that serves campus students at a low price could be a viable and potentially profitable
venture. Here are some key considerations for an entrepreneur looking to start this type of
business:

1. Location: It's important to choose a location that is convenient and appealing to campus
students, such as near a busy intersection, a popular hangout spot, or within walking distance of
the campus. The entrepreneur could also consider partnering with local businesses to increase
visibility and attract customers.

2. Pricing strategy: Offering affordable prices is a key selling point for attracting campus
students. The entrepreneur could research the prices of similar food trucks and fast-food
restaurants in the area to ensure that their prices are competitive.

3. Menu: The menu should be designed to appeal to the target market, which in this case
are campus students. The entrepreneur could offer a variety of burger options, sides, and drinks,
and consider including vegetarian and vegan options to appeal to a wider range of customers.

4. Branding and marketing: The entrepreneur should focus on creating a strong brand
identity and marketing the business effectively. This could include creating an eye-catching logo,
developing a social media presence, and participating in local events and festivals to increase
visibility and attract new customers.
5. Health and safety regulations: The entrepreneur should ensure that the food truck
complies with all health and safety regulations, including obtaining any necessary permits and
licenses, following proper food handling and storage procedures, and maintaining a clean and
sanitary environment.
To do all of this thing it must be done some necessary criteria some of them are we must obtain
the necessary permits, licenses, and insurance to operate in the area and follow any local
regulations regarding food safety and health.
Overall, a burger food truck business is a viable and potentially profitable business idea for
someone who enjoys cooking, has an entrepreneurial spirit, and is willing to put in the necessary
effort and planning to make the business successful.
Exploiting a burger food truck business idea involves taking steps to turn the idea into a profitable
and sustainable business. Here are some steps that an entrepreneur could take to exploit a burger
food truck business idea:

1. Conduct market research: Before starting a burger food truck business, it's important to
conduct market research to determine the demand for burgers in the target area, identify
potential competitors, and understand customer preferences and behaviors.

2. Develop a business plan: A well-written business plan can help an entrepreneur clarify
their vision for the business, set goals and objectives, identify potential challenges, and create a
roadmap for success.

3. Secure funding: Starting a burger food truck business requires an initial investment in
equipment, supplies, permits, and licenses. An entrepreneur can secure funding through personal
savings, loans, grants, or crowdfunding.

4. Purchase or lease a food truck: The food truck is the heart of the burger food truck
business, and it's important to choose a truck that is reliable, functional, and meets local
regulations.

5. Obtain necessary permits and licenses: A burger food truck business must comply with
local health and safety regulations and obtain the necessary permits and licenses to operate
legally.

6. Develop a menu: The menu is a critical component of a burger food truck business, and it
should be designed to appeal to the target market, offer a variety of options, and reflect the
overall theme and branding of the business.

7. Market the business: Effective marketing is essential for a burger food truck business to
attract customers and build a loyal following.
An entrepreneur could use social media, attend local events and festivals, and partner with other
businesses to promote their food truck.
8. Focus on quality and customer service: The success of a burger food truck business
depends on providing high-quality food and excellent customer service. An entrepreneur should
strive to create a positive experience for customers and develop a reputation for quality and
consistency.
By taking these steps, we can exploit a burger food truck business idea and build a profitable and
sustainable business.
1.2 Definition of the project and alternative scenarios & models
1.2.1 Services

A burger is a sandwich consisting of one or more cooked patties of ground meat, usually beef,
that is placed between two slices of bread or a bun. The patty is often seasoned with salt, pepper,
and other spices, and may be cooked on a grill, griddle, or in a pan.
Burgers can be customized with a variety of toppings, including cheese, lettuce, tomato, onions,
pickles, bacon, and various sauces such as ketchup, mustard, and mayonnaise. Some burger
variations include the cheeseburger, tuna burger, and veggie burger.
Burgers are a popular food item in many cultures and are often associated with fast food
restaurants. However, tuna burgers have become increasingly popular in recent years, with many
restaurants offering high-quality, artisanal burgers made from premium cuts of meat and unique
toppings.
Overall, burgers are a beloved food item enjoyed by many people around the world. Whether you
prefer a classic cheeseburger or a gourmet creation, a burger can be a satisfying and delicious
meal.
One types of burger menu is:

A fish (tuna) burger is a type of burger that replaces the beef patty with a fillet of fish, typically
cod, haddock, or salmon. The fish fillet is usually breaded or battered and fried, although it can
also be grilled or broiled.
Fish (tuna) burgers are often served on a bun with lettuce, tomato, and tartar sauce or other
condiments. Some fish burgers may also include cheese, onions, or other toppings.
Fish (tuna) burgers are a popular alternative to beef burgers, especially for those who prefer
seafood or are looking for a healthier option. They can be found on the menus of many fast-food
chains and restaurants and can also be made at home with fresh or frozen fish fillets.
It's worth noting that the sustainability of fish used in fish burgers is an important consideration,
as overfishing and unsustainable fishing practices can harm marine ecosystems. Many restaurants
and fish suppliers now prioritize sourcing fish from sustainable sources, so consumers can make
environmentally conscious choices when selecting a fish burger.
We primarily opt for fish instead of beef due to the abundant supply of fish in our city of BAHIR
DAR, which allows us to purchase a significant quantity of fish for a relatively low.
If a burger food truck in Bahir Dar city offered take-away options using paper packaging along
with free delivery services to campus students and residents, it could be a smart business move.
Here are some benefits and considerations:
1. Convenience: Offering take-away options and delivery services can make it easier for
customers to enjoy the food truck's offerings without having to leave their homes or dorms. This
convenience could attract more customers and increase sales.
2. Cost-effectiveness: Using paper packaging for take-away options can be a cost-effective
choice for the business, as it is generally less expensive than using plastic or other materials.
Offering free delivery to campus students and residents could also be a marketing strategy to
attract more customers and build a loyal following.
3. Branding and marketing: The food truck could use the packaging and delivery services as
a branding and marketing opportunity, by including the business logo and contact information on
the packaging and using social media to promote the delivery service.
4. Sustainability: It's important to consider the environmental impact of using paper
packaging and providing delivery services. The business could explore more sustainable packaging
options and delivery methods to reduce their environmental footprint.
offering take-away options using paper packaging and free delivery services to campus students
and residents in Bahir Dar city could be a smart business move, as long as the business is able to
balance convenience and cost-effectiveness with sustainability and customer satisfaction. cost."
1.3 Relationship to the surrounding geographical area
1.3.1 Social and Economic Impact

The area of Bahir Dar city can have a significant impact on the success of a burger food truck
business. Here are some factors to consider:
1. Population density: Bahir Dar city has a population of around 330,000 people, which
provides a large potential customer base for a food truck business.
2. Student population: Bahir Dar is home to several universities and colleges, which means
that there is a significant student population. A burger food truck that caters to this demographic
could have a built-in customer base.
3. Tourism: Bahir Dar is a popular tourist destination due to its location on Lake Tana and
proximity to the Blue Nile Falls. A food truck that offers high-quality burgers and caters to tourists
could attract additional customers.
4. Competition: Bahir Dar has a growing food scene, with a variety of restaurants and street
food vendors. A burger food truck business would need to differentiate itself from competitors
by offering unique menu items and a memorable customer experience.
5. Local regulations: Bahir Dar, like any city, has regulations that must be followed for food
truck businesses, such as obtaining necessary permits and licenses, adhering to health and safety
guidelines, and following local zoning laws.
Bahir Dar city presents both opportunities and challenges for a burger food truck business. By
understanding the local market, competition, and regulations, an entrepreneur can develop a
business strategy that takes advantage of the city's strengths and overcomes its challenges.
1.3.2 Environmental Impact

environmental impact of a burger food truck business in Bahir Dar can be a significant
consideration for the entrepreneur. Here are some ways to minimize the environmental impact:
1. Sustainable packaging: The burger food truck can use eco-friendly packaging, such as
biodegradable or compostable materials, to reduce waste and minimize its environmental impact.
2. Waste reduction: The business can implement waste reduction measures, such as composting
or recycling, to minimize the amount of waste it generates. It can also encourage customers to
dispose of their waste responsibly.
3. Sustainable sourcing: The business can source its ingredients from sustainable sources, such
as local farmers or suppliers that use environmentally friendly practices.
4. Energy efficiency: The burger food truck can use energy-efficient cooking equipment, such as
propane grills or solar-powered refrigeration, to reduce its energy consumption and lower its
carbon footprint.
5. Water conservation: The business can implement water conservation measures, such as using
low-flow faucets and toilets, to reduce its water consumption and minimize its impact on the local
water supply.
By implementing these measures, a burger food truck business in Bahir Dar can minimize its
environmental impact and promote sustainability, which can be attractive to environmentally
conscious customers and contribute to the overall health of the community and environment.
 CHAPTER TWO

2 MARKET ANALYSIS

2.1 Enterprise description

2.1.1 Size and scope of the company

The size and scope of a burger food truck business idea can vary depending on several factors,
such as the target market, geographical location, menu offerings, and marketing strategy.
In general, a food truck business is a more affordable and flexible alternative to opening a brick-
and-mortar restaurant. Food trucks are mobile and can move to different locations depending on
market demand, which can increase the potential customer base. However, the size of the food
truck and the number of employees will determine the amount of food that can be prepared and
served each day.
The burger food truck business can target a variety of customers, such as office workers, students,
tourists, and event attendees. The menu offerings can also vary depending on the target market
and the owner's preferences. For example, the burger food truck can offer classic burgers,
gourmet burgers, vegan burgers, or a combination of these options.
Marketing strategies can include social media, flyers, word-of-mouth, and attending local events.
The size and scope of the business can also be expanded by offering catering services for private
events and corporate functions.
In terms of market distribution of our business is basically in Bahir Dar town especially in public
area. Around all campus branches and the most customer are found in collectively.
Food truck burger is not new type of business. This business is working in hotel burger house and
so on. But the distribution and the cost of the burger is insufficient and unbalanced with customer
needs. now a days burger customer is rising. So, burger supplier also must be increase.
First the business starts in 6 person and grows with in number of employment and accessible in
Bahir Dar town in many branches.
Our business idea can be dependent on several factors, including:

1. Target market: The size of the business can depend on the target market, such as office
workers, students, tourists, or event attendees.
2. Geographical location: The size of the business can also depend on the location, as some
areas may have higher demand for food trucks than others.
3. Menu offerings: The size of the business can depend on the menu offerings, as the owner
may choose to specialize in classic burgers, gourmet burgers, vegan burgers, or a combination of
these options.
4. Equipment and staff: The size of the business can depend on the size of the food truck,
the amount of cooking equipment available, and the number of employees required to operate
the business.
5. Marketing strategy: The size of the business can depend on the marketing strategy, as
effective marketing can help to increase customer awareness and demand for the business.
6. Expansion plans: The size of the business can depend on the owner's plans for expansion,
such as offering catering services or opening additional food trucks in new locations.
2.1.2 The future of our business idea

The future of the burger food truck business idea appears to be promising. Food trucks have
become increasingly popular in recent years, and many customers appreciate the convenience
and unique culinary experiences that food trucks offer. In addition, the COVID-19 pandemic has
accelerated the trend towards outdoor dining and takeout, which has further increased demand
for food trucks.
As people continue to seek out unique and diverse culinary experiences, food trucks are well-
positioned to meet this demand. The burger food truck business can continue to innovate by
offering new and creative burger options, such as plant-based burgers, tuna [fish]burgers, and
artisanal toppings. Additionally, food trucks can leverage technology to enhance customer
convenience, such as mobile ordering and payment systems.
Moreover, food trucks can continue to expand their reach by participating in festivals, concerts,
and other events that draw large crowds. Food trucks can also partner with local businesses, such
as breweries and wineries, to offer food and beverage pairings that enhance the customer
experience.
2.1.3 Nature of the business

The burger food truck business idea is a type of food service business that involves operating a
mobile kitchen in a truck or trailer and serving burgers to customers. The business can be
operated on a full-time or part-time basis and can be located in various settings, such as on the
street, at a festival, or in a parking lot.
The nature of the burger food truck business is highly mobile and flexible. Food truck owners have
the ability to move their business to different locations based on customer demand, which allows
them to reach a wider audience and adapt to changing market conditions.
The burger food truck business typically has lower overhead costs compared to traditional brick-
and-mortar restaurants, as there is no need to pay rent or utilities for a fixed location. However,
there are costs associated with purchasing and maintaining the food truck and equipment, as well
as obtaining necessary permits and licenses.
The burger food truck business also requires a certain level of creativity and innovation in order
to stand out from competitors. Owners may experiment with different burger recipes, toppings,
and presentation styles to attract and retain customers.
Generally, the nature of the burger food truck business is highly dynamic and requires owners to
be adaptable and innovative in order to succeed in a competitive market.
2.1.4 Life cycle of the business

The life cycle of our burger food truck business idea can be broken down into several stages:

1. Conceptualization: This is the initial stage where the idea for the burger food truck
business is conceived. We will research the market, develop a business plan, and determine the
feasibility of the idea.
2. Start-up: This stage involves launching the burger food truck business. we will purchase
or lease a truck, outfit it with the necessary equipment, and obtain any required licenses and
permits.
3. Growth: During this stage, the burger food truck business will begin to build its customer
base and establish a positive reputation. We may expand our menu offerings, experiment with
new locations, and hire additional staff as needed.
4. Maturity: At this stage, the burger food truck business has reached a stable level of growth
and profitability. We may focus on maintaining our customer base, refining our menu offerings,
and optimizing our operations for efficiency.
5. Decline: In some cases, the burger food truck business may experience a decline in
demand due to competition, economic factors, or changing customer preferences. We may need
to adapt our business model or exit the market entirely.
6. Revitalization: If the burger food truck business experiences a decline, our may choose to
revitalize the business by introducing new menu items, rebranding, or targeting a different
customer segment.
2.2 Enterprise competitiveness
Based on our research, Berger food Truck is a food truck business that operates in a market
setting. Food trucks are mobile businesses that sell food and beverages to customers on the
street, at events, or in designated areas. The nature of the market for Berger food Truck is dynamic
and competitive, as the food truck industry continues to grow and evolve. The market is
influenced by various factors, such as customer demand, competition, location, and regulations.
Berger food Truck's success in the market depends on its ability to differentiate itself from
competitors, provide high-quality food and service, and adapt to changing market conditions. As
a food truck business, Berger food Truck has the advantage of flexibility and mobility, allowing it
to reach customers in different locations and events. However, it also faces challenges such as
limited space and resources, weather conditions, and health and safety regulations.
The competitiveness of a burger food truck idea in Bahir Dar town will depend on several factors,
such as the local market demand, competition, and the quality of the product and service.
Bahir Dar is a growing city in Ethiopia with a significant number of young people and tourists who
may be interested in trying new and unique food options. Therefore, there may be a market for a
burger food truck business that offers high-quality burgers with unique toppings, sauces, and
presentation.
However, competition from other food trucks, restaurants, and fast-food chains may pose a
challenge. The burger food truck business will need to differentiate itself from competitors by
offering a unique product, excellent customer service, and a memorable experience.
To enhance the competitiveness of the burger food truck business, the owners can consider
partnering with local events, festivals, and businesses to increase exposure and reach a wider
audience. Additionally, the owners can leverage social media to promote their business and
engage with customers.
It is also important for the burger food truck business to maintain high standards of cleanliness
and food safety to ensure customer satisfaction and loyalty. Investing in quality ingredients,
cooking equipment, and staff training can also contribute to the competitiveness of the business.
Generally, the competitiveness of the burger food truck idea in Bahir Dar town will depend on
the ability of the owners to offer a
high-quality product, excellent customer service, and a unique and memorable experience that
sets it apart from competitors.
2.3 Market Potential
Bahir Dar is a growing city in Ethiopia with a population of over 350,000 people. The city is known
for its tourist attractions, including the Blue Nile Falls and Lake Tana, which attracts a significant
number of visitors each year. In addition, Bahir Dar has a large student population due to the
presence of several universities and colleges.
The market potential for a burger food truck in Bahir Dar city is promising. The city has a diverse
population with varying tastes and preferences, and there is a growing demand for unique and
innovative food options. Moreover, the presence of a significant number of tourists and students
creates a potential customer base for a burger food truck business.
Furthermore, the food truck industry is still relatively new in Ethiopia, and there is a growing
interest in this type of business. The low overhead costs associated with food trucks can make
them an attractive option for entrepreneurs looking to enter the food service industry.
However, market potential alone is not enough to guarantee success for a burger food truck
business. The owners will need to conduct market research to understand the local demand and
competition, as well as develop a unique and high-quality product that meets the needs and
preferences of the target market. Additionally, effective marketing and branding strategies will be
crucial in attracting and retaining customers.
Overall, the market potential for a burger food truck business in Bahir Dar city is positive, but
success will depend on several factors, including the quality of the product and service, effective
marketing, and competition within the local market.
Demand analysis

Demand analysis for a burger food truck in Bahir Dar city would involve examining the local market
to determine the potential demand for the product. This would include analyzing factors such as
population demographics, income levels, and consumer preferences.
Population demographics: Understanding the age, gender, and income levels of the local
population can help determine the potential demand for a burger food truck. For example, if the
population has a significant number of young people and tourists with disposable income, there
may be a higher demand for a unique and high-quality food option like a gourmet burger.
Consumer preferences: Conducting surveys or focus groups can help to gain insights into the types
of food that people in Bahir Dar prefer. This can help determine the potential demand for different
types of burgers, such as classic burgers, gourmet burgers, or vegan burgers.
Competition: Examining the competition within the local market can help to determine the
potential demand for a burger food truck. If there are already several established burger
restaurants or food trucks in the area, the demand for an additional burger food truck may be
lower.
Events and festivals: Bahir Dar city hosts several events and festivals throughout the year, which
can attract a significant number of tourists and locals. Analyzing the types of food vendors that
are present at these events can provide insights into the potential demand for a burger food truck.
Here is an example table of raw materials that are commonly used for burgers and their average
prices in Bahir Dar city:

raw Material Average Price (in Ethiopian Birr)

Ground beef 500-600 per kg

fish 40-60 each

Lettuce 20-30 per head

Tomato 30-40 per kg

Cheese 100-120 per kg

Onion 20-30 per kg

Pickles 30-40 per jar

Ketchup 60-80 per bottle

Mayonnaise 100-1200 per bottle

Note that these prices are approximate and may vary depending on the location and availability
of the raw materials. Additionally, the prices may fluctuate over time due to factors such as supply
and demand, inflation, and currency exchange rates. It is important for a burger food truck
business to regularly monitor the prices of raw materials and adjust their menu pricing
accordingly to ensure profitability.
Expected demand
Here is an example table showing the expected demand for a burger food truck in Bahir Dar city
based on population demographics and market research:

Target Market Expected Demand

Young adults High

Tourists Medium to High

Students Medium to High

Families Medium

Working professionals Medium

Note that the expected demand is based on several factors, such as the age and income levels of
the target market, as well as local competition and consumer preferences. This table is meant to
provide a general idea of the potential demand for a burger food truck in Bahir Dar city and should
be used as a starting point for further market research and analysis.
 CHAPTER THREE
3. TECHNICAL FEASIBILITY
The technical feasibility of a burger food truck in Bahir Dar city would involve assessing the
technical requirements needed to operate the business. This would include examining the
following:

1. Food truck design and equipment: The food truck design should be optimized for the type
of food being served, with adequate space for food preparation, cooking, and storage. The
equipment needed would include a grill or griddle, refrigeration units, and storage for utensils
and food supplies.

2. Power source: The food truck will need a reliable and sufficient power source to operate
the cooking equipment and refrigeration units. This can be achieved through a generator, battery,
or connection to the local power grid.

3. Water supply and wastewater disposal: The food truck will need a sufficient supply of
clean water for cooking, cleaning, and handwashing. Wastewater will need to be disposed of in a
way that complies with local regulations.

4. Permits and licenses: The food truck will need to obtain all necessary permits and licenses
from local authorities, including a food service permit, health permit, and business license.

5. Safety and hygiene: The food truck will need to adhere to strict safety and hygiene
standards to prevent foodborne illnesses and ensure customer satisfaction. This will involve
regular cleaning and sanitization of cooking equipment and food preparation surfaces, as well as
proper food handling and storage practices.

As a conclusion, the technical feasibility of a burger food truck in Bahir Dar city will depend
on the ability of the owners to obtain the necessary equipment, permits, and licenses, as well as
maintain high standards of food safety and hygiene. A thorough assessment of the technical
requirements will be crucial in ensuring the success and sustainability of the business.
3.1 FACILITY OF OUR BUSINESS
The facilities required for a burger food truck business in Bahir Dar city will depend on the size of
the business and the equipment needed to operate it. Here are some key facility requirements to
consider:
1. Food truck: The food truck itself is the primary facility for the business. The truck should
be designed to efficiently accommodate the cooking equipment, storage, and preparation
space required for the business. The truck should also be well-maintained and regularly
cleaned to ensure compliance with food safety regulations.

2. Commissary kitchen: A commissary kitchen is a separate facility where the food truck can
prepare and store food when it is not in use. The commissary kitchen should be equipped
with cooking equipment, storage space, and hand washing facilities. The kitchen should
also be registered with the local health department and comply with food safety
regulations.

3. Storage space: The burger food truck business will require adequate storage space for
food supplies, such as ground beef, buns, and condiments. The storage space should be
clean, dry, and well-organized to ensure that food is stored at the appropriate
temperatures and remains fresh.

4. Preparing area: The burger food truck business will require a designated preparing area
for preparing toppings, sauces, and other ingredients. The prep area should be clean, well-
lit, and have access to hand washing facilities.

5. Service area: The service area is where customers will place orders and receive their food.
The service area should be designed to efficiently serve customers and may include a
serving window or counter, as well as seating and trash receptacles.

When operating a burger food truck business in Bahir Dar city, it is important to compare
your product with other burger options available in the local market. Here are some
factors to consider when making a comparison:
 6. Quality of ingredients: The quality of the ingredients used in your burgers can set your
product apart from competitors. Using fresh, high-quality beef and produce can make a
significant difference in the taste and overall quality of the burger.

7. Price: The price of your burgers should be competitive with other burger options in the
local market. It is important to consider the cost of ingredients, overhead costs, and profit
margins when determining your pricing strategy.

8. Menu variety: Offering a variety of burger options, such as classic burgers, gourmet
burgers, and vegan burgers, can appeal to a wider range of customers and differentiate
your product from competitors.

9. Unique selling points: Identifying and highlighting unique selling points of your burgers,
such as homemade sauces or unique toppings, can set your product apart from
competitors and attract customers.

10. Convenience: Convenience is an important factor for customers, especially those who are
on the go. Ensuring that your food truck is easily accessible and has efficient service can
increase customer satisfaction and loyalty.
3.2 RAW MATERIAL REQUIREMENT

• Ground beef: This is the primary ingredient in most burgers. The quantity required will
depend on the expected demand and the size of the burgers being served.

• Buns: Burger buns are a necessary component of most burgers. The quantity required will
depend on the expected demand and the type of buns being used.

• Lettuce, tomato, onion: These are common toppings for burgers. The quantity required
will depend on the expected demand and the size of the toppings being served.

• Cheese: Cheese is a popular topping for burgers. The quantity required will depend on the
expected demand and the type of cheese being used.

• Condiments: Common condiments for burgers include ketchup, mustard, and

mayonnaise. The quantity required will depend on the expected demand and the size of
the condiment packets being used.
 • Cooking oil: cooking oil is necessary for cooking the burgers. The quantity required will
depend on the expected demand and the type of oil being used.

• Seasonings: Seasonings such as salt, pepper, and garlic powder may be used to flavor the
burgers. The quantity required will depend on the expected demand and the size of the
burgers being served.

In addition to the raw materials required for making burgers, a burger food truck business in
Bahir Dar city may require other inputs. Here are some other key inputs to consider:

✓ Fuel or power source: A food truck will require fuel or a power source to operate. This
may include gasoline for a generator or electricity to power cooking equipment and
refrigeration units.

✓ Utensils and cookware: The food truck will require a range of utensils and cookware,
such as spatulas, tongs, knives, and cutting boards. The quantity required will depend on
the expected demand and the number of staff members working in the food truck.

✓ Cleaning supplies: The food truck will require a range of cleaning supplies, including dish
soap, sanitizer, and cleaning cloths. Regular cleaning and sanitization of cooking
equipment and food preparation surfaces is essential for food safety.

✓ Packaging and serving supplies: The food truck will require packaging and serving
supplies, such as plates, napkins, and disposable cutlery. The quantity required will
depend on the expected demand and the type of packaging and serving supplies being
used.
✓ Staff: A burger food truck business will require staff members to operate the food truck
and serve customers. The number of staff required will depend on the expected demand
and the size of the food truck.

✓ Marketing and promotion: To attract customers, a burger food truck business may
require marketing and promotional materials, such as flyers, posters, and social media
advertisements. The quantity required will depend on the marketing strategy and the
expected reach.
 CHAPTER FOUR
4. FINANCIAL FEASIBLITY
Financial feasibility refers to the ability of a project or business to generate enough revenue to
cover its costs and earn a profit over the long term. It involves analyzing the financial
resources required to start and operate a project or business, as well as the potential revenue
that can be generated from it.

To determine financial feasibility, various factors such as capital investment, operating

expenses, revenue projections, and cash flow are taken into consideration. A feasibility study is
often conducted to assess the financial viability of a project or business before committing to it.
This study involves analyzing the costs and benefits of the project and determining if it is
financially viable in the long run.

4.1 Estimate the total capital requirements

Total capital requirement refers to the total amount of funds needed to start and operate a
business or project. It includes both the initial investment required to start the business or project
and the ongoing operating expenses required to keep it running.

The initial investment may include expenses such as purchasing or leasing equipment, acquiring
property or land, paying for permits and licenses, and other start-up costs. Ongoing operating
expenses may include salaries and wages for employees, rent or mortgage payments, utilities,
marketing expenses, and other costs associated with running the business or project.

To determine the total capital requirement, it is important to conduct a thorough analysis of all
the costs associated with starting and operating the business or project. This analysis can be
included in a feasibility study or a business plan, which can help potential investors or lenders
understand the financial needs of the project and make informed decisions about providing
funding.

4.1.1 Fixed Investment Cost

Fixed investment cost refers to the initial capital required to start a business or undertake a
project. This includes all the expenses that are required to get the business up and running, such
as purchasing equipment, leasing or buying property, hiring staff, obtaining necessary licenses
and permits, and other start-up costs.
Fixed investment costs are called "fixed" because they do not vary with changes in the level of
production or sales. These costs are incurred upfront and are not expected to change in the short
term.

Here are some common fixed investment costs that may be incurred when starting food truck
burger food business.

Description Total Amount (ETB)

Kitchen Equipment (Stove, cabinet, sink, 106,000
refrigerator...)
Food Vehicle (modified body with wheels) 100,000
Permits and License 17,000
Initial inventory (Food, Beverage, packaging) 11,000
Branding and Marketing 10,000
Contingency fund (Unexpected Expense) 50,000
TOTAL 294,000

4.1.2 Pre-Operation cost

Pre-operation costs refer to the expenses incurred prior to the start of commercial operations of
a business or project. These costs are incurred during the planning and development phase of a
project and are typically considered as part of the initial investment required to get the business
or project up and running.

Some common examples of pre-operation costs include:

Description Total Amount (ETB)

Business plan development 1000

Site preparation 3500

 Feasiblity Studies 1000

Legal and Regulatory cost 2000

(Legal advice)
Total 7500

4.1.3. Fixed Assets

Fixed assets are tangible or intangible assets that a business owns and uses for its operations with
the expectation of using them for more than one year. Fixed assets are also known as property,
plant, and equipment or capital assets.

Technically it is the sum of fixed investment cost and pre operational cost.

Description Total Amount (ETB)

Fixed Investment Cost 294,000

Pre-Operational Cost 7500

Total 301,500

4.2 Estimate equity and credit needs

4.2.1 Inventory

The cost of starting a movable burger snack food business can vary depending on several factors
like the size of the truck, the equipment needed, the cost of permits and licenses, and the cost of
ingredients and supplies. Here is a rough estimate of the inventory cost to start a small-scale
burger snack food business:

1.Beef: 2500-5000 ETB

2.Fish: 1000-2000 ETB

3.Veggietables: 500-1000 ETB

4.Cheese slices 1500-2000 ETB

5.Lettuce: 200-300 ETB

6.Tomatoes: 200-500 ETB

7.Onions: 500-800 ETB

10.Ketchup, mustard, mayonnaise, BBQ sauce, hot sauce: 500-1000 ETB

11.French fries: 1000-1800 ETB

13.Soft drinks (Coke, Pepsi, Sprite, etc.): 2500-5000 ETB

14.Bottled water: 1000-2000 ETB

15.Napkins, paper plates, plastic utensils, hand sanitizer: 1000-2000 ETB

16.Cash box: 500 ETB

The total initial inventory cost for a movable burger snack food business could range from
approximately 11400 ETB.

4.2.2 Accounts Receivable and Accounts Payable

Accounts Receivable (AR) refers to the money that a business is owed by its customers for goods
or services that have been delivered but not yet paid for. In the case of a movable burger snack
food business, this would typically include sales made on credit, such as when a customer buys
food but pays later. When a business extends credit to a customer, it creates an account
receivable, which is recorded as an asset on the balance sheet. The business will need to keep
track of these accounts and follow up with customers who have not paid on time.

Accounts Payable (AP) refers to the money that a business owes to its suppliers for goods or
services that have been delivered but not yet paid for. In the case of a movable burger snack food
business, this would typically include payments to suppliers for ingredients, packaging,
equipment, and other expenses. When a business incurs a payable, it creates a liability that is
recorded on the balance sheet.

The business will need to keep track of these accounts and pay the suppliers on time to avoid
penalties or interest charges.

To manage accounts receivable and accounts payable, a movable burger snack food business
should establish clear payment terms with its customers and suppliers, keep track of invoices and
receipts, and maintain accurate financial records. This will help the business to maintain good
cash flow and avoid financial difficulties. A good accounting software can be helpful in keeping
track of these accounts. It is also recommended to hire an accountant or bookkeeper to help with
the management of accounts receivable and accounts payable.

Description Total Amount (ETB)/Month

Electricity Charges 4000

Water Charges 3000

Salary 6000

Telephone Expense 300

Total 13,300

4.2.3 Net Working Capital

Net working capital is a measure of a company's ability to meet its short-term financial
obligations. It is calculated by subtracting a company's current liabilities from its current assets.
In the case of a movable burger snack food business, the calculation of net working capital would
include the following:

Current Assets:

Inventory (food, supplies, etc.)

Accounts Receivable (sales made on credit)

Cash on hand
Current Liabilities:

Accounts Payable (payments owed to suppliers)

Short-term Loans

Accrued Expenses (such as wages payable, rent payable, etc.)

The formula for Net Working Capital is:

Net Working Capital = Current Assets - Current Liabilities

Net Working Capital = 301,500 – 13300 (ETB)

Net Working Capital = 288,200 (ETB)

A positive net working capital means that a company has enough current assets to cover its
current liabilities, which indicates a healthy financial position. A negative net working
capital means that the company may have difficulty meeting its short-term obligations, which
could lead to financial difficulties.

For a movable burger snack food business, the net working capital will depend on the size of the
business, the level of sales, the inventory turnover, and the payment terms with suppliers and
customers. It is important for the business to maintain a positive net working capital to ensure its
financial stability. The business can improve its net working capital by increasing sales, improving
inventory management, and managing accounts receivable and accounts payable efficiently.

4.2.4 Total Investment Costs

Total investment cost refers to the total amount of money required to start or operate a business
or to invest in a particular asset or market. This includes all the expenses incurred in the process,
such as the cost of purchasing equipment, hiring employees, marketing and advertising, legal
fees, and any other expenses necessary to get the business or investment up and running. Total
investment cost is an important consideration for businesses and investors, as it can impact the
profitability and success of the venture. Understanding the total investment cost allows
businesses and investors to plan and budget accordingly, and to determine the feasibility of the
venture.

Description Total Amount (ETB)

Fixed Assets 301,500

 Net working capital 288,200

Total project cost 589,700

4.2.5 Production Costs

Production cost refers to the total cost of producing a good or service. The production cost for a
burger food truck will depend on several factors, including the cost of ingredients, labor,
packaging, and equipment. Here are some of the costs that we consider:

Ingredients: The cost of ingredients will vary depending on the quality of the meat, vegetables,
buns, and condiments you use. You will need to factor in the cost of purchasing these ingredients
in bulk, as well as any delivery or shipping fees.

Labor: The cost of labor will depend on how many employees you have and how much you pay
them per hour. You will need to factor in the cost of wages, payroll taxes, and any benefits you
offer.

Packaging: You will need packaging materials such as wrappers, napkins, and containers. The cost
will depend on the type and quality of packaging you choose.

Equipment: You will need cooking equipment such as grills, fryers, and ovens, as well as utensils
and cleaning supplies. The cost will depend on the quality and quantity of the equipment you
need.

Overhead expenses: You will also need to consider overhead expenses such as fuel, maintenance,
insurance, and permits.

To calculate the production cost per burger, we add up all of these costs and divide them by the
number of burgers produced. The production cost per burger will vary depending on the specific
ingredients and equipment used, as well as the volume of production.
 Description Total Amount (ETB)/Month

Ingredients 60,000

Fish 4000

Labor 3000

Packaging 2400

Cleaning supplies 6000

Accounts payable (Electricity, water) 3600

Permits 500

Total production cost (For Beef Burger) 75500

Total production cost (For Tuna Burger) 29500

The production cost per burger, assuming 70 beef and 50 tuna burgers sold in a day

75500
Cost/unit (for Beef burger) = ; 36 ETB/Burger
2100

29500
Cost/unit (for Tuna burger) = ; 20 ETB/Burger
2100
4.3 Means of financing our project.
There are means of financing our burger food truck business:

Personal savings: Is one common way to finance a small business like a food truck. This can be a
good option since we want to cover some of the startup cost.

Business loans: we decide to apply for a business loan from a bank (Ethiopian Development Bank)
or other financial institution to finance our food truck business. We need to provide a business
plan and financial projections to show that your business is viable and can generate enough
revenue to repay the loan.

The business is financed using these two options in a ratio of 3:2 which means.

o Personal Saving = 40% of 589,700 = 235,880 (ETB)

o Bank Loans = 60 % of 589,700 = 353,820 (ETB)

4.4 Pricing Strategy

Pricing strategy refers to the approach a business takes to determine the price of its products or
services. A well-planned pricing strategy can help a business maximize sales and revenue, while
also remaining competitive in the marketplace.

For a small burger food truck business, a combination of cost-plus pricing and value-based pricing
can be an effective pricing strategy. Here's how you can implement this pricing strategy:

Cost-plus pricing: Calculate the total cost of producing each burger, including the cost of
ingredients, labor, packaging, and overhead expenses such as fuel, maintenance, and insurance.
Add a markup to determine the price of each burger. The markup should take into account the
profit margin you want to achieve.

Value-based pricing: Consider the perceived value of your burgers to your customers. This
includes factors such as the quality of the ingredients, the taste, and the overall experience of
purchasing from a food truck. Set your prices, accordingly, considering the prices of competitors
in the market.
From the previous production cost calculation the cost of producing a beef and tuna burger costs
35 ETB & 20 ETB. Considering profits here are the price for different foods that are served by our
business.

Menu PRICE (ETB)

Beef Burger 95

Tuna Burger 75

4.5 Profit Analysis

Profit analysis is the process of evaluating the financial performance of a business. It involves
analyzing the revenues, costs, and expenses associated with a business to determine its net
income or profit.

The purpose of profit analysis is to assess the financial health of a business and identify areas
where improvements can be made to increase profitability. By examining factors such as sales,
expenses, and margins, business owners and managers can gain insights into how their business
is performing and make informed decisions to improve profitability.

Total cost of the business for the first year= Total investment cost + (Total Production cost*12)

Total cost of the business for the first year= 589,700+ (105,000*12)

Total cost of the business for the first year = 1,849,700 ETB

The total estimated sale for the first year is calculated assuming 70 beef and 50 tuna burgers sold
in a day.

Total estimated sale for the first year= ((70*30*95*) + (50*30*75)) *12

Total estimated sale for the first year = 3,744,000 ETB

Total cost of the business for the first 1,849,700

year
Total estimated sale for the first year 3,744,000

PROFIT 1,849,300 ETB

4.6 Breakeven analysis
Break-even analysis is a financial tool used to determine the minimum level of sales a business
needs to generate to cover its total costs and break even, without making a profit or incurring a
loss.

The break-even point is the level of sales at which a business's total revenue equals its total costs.
Beyond this point, the business begins to generate a profit. Below this point, the business is
incurring a loss.

To conduct a break-even analysis, a business needs to determine its fixed costs, which are costs
that do not vary with the level of output, and its variable costs, which are costs that increase or
decrease with the level of output. The business also needs to determine its selling price per unit
and the expected number of units to be sold.

Once these figures are determined, the break-even point can be calculated using the following
formula:

Break-even point = Fixed costs ÷ (Selling price per unit - Variable costs per unit)

By calculating the break-even point, we can determine the level of sales it needs to achieve to
cover its costs. This information can be used to set sales targets and make decisions about
production levels and cost control.

Fixed costs and variable costs are two types of costs that businesses incur in their operations.

Fixed costs: Fixed costs are costs that do not change with changes in the level of production or
sales. They are expenses that a business must pay regardless of how much it produces or sells.
Examples of fixed costs include rent, salaries of employees who are not directly involved in
production, insurance, property taxes, and loan payments.

Variable costs: Variable costs are costs that vary with changes in the level of production or sales.
They are expenses that increase or decrease as the volume of production or sales increases or
decreases. Examples of variable costs in a manufacturing business may include the cost of raw
materials, direct labor, and production supplies. In a service business, variable costs may include
the cost of labor and supplies used to provide services to customers.

Understanding fixed and variable costs is important for businesses to manage their expenses
effectively. By analyzing their costs, businesses can determine the cost of producing each unit of
product or providing each unit of service, and make informed decisions about pricing strategies,
production levels, and cost control measures.
Referring the previous calculation fixed and variable costs can be calculated as the following:

Fixed cost: 589,500 ETB;

Variable cost: 105,000 ETB; 105,000/3600 = 30 ETB/Burger

Average Price/unit= 85 ETB/Burger

Total cost, Tc=Fc + Vc *Q…………………… (1)

Where Q- is the service quantity

Total revenue Tr=Q*P………………………… (2)

At break-even point Tc=Tr

Fc + Vc * Q = Q * P

Q=Fc/(P-Vc)

Q= 589,500/(85-30)=10718.18 Burgers need to be sold to reach break even point

Thus the break even point quantity Q=10718.18

 Graph: Break-even Analysis of the business

4.7. Returns under various conditions.

The returns of a burger food truck business can vary depending on a variety of factors, such as
location, competition, pricing strategy, and marketing efforts. Here are some examples of
potential returns under different conditions:

1. Busy location, low competition, and effective marketing: In this scenario, a burger food truck
business may be able to generate high sales and profits. By operating in a busy location with little
competition and implementing effective marketing strategies, such as social media and word-of-
mouth advertising, the business may be able to attract a large customer base and generate
significant revenue.

2. Competitive location, low prices, and high volume: In this scenario, a burger food truck business
may need to rely on high volume sales to generate a profit. By setting low prices and offering
quick service to customers, the business may be able to attract a large volume of customers and
generate high sales. However, profit margins may be lower due to the low prices.

3. Niche market, high prices, and unique offerings: In this scenario, a burger food truck business
may be able to charge higher prices by offering unique and high-quality menu items, such as
gourmet burgers or locally sourced ingredients. By targeting a niche market and offering premium
products, the business may be able to generate high profits despite lower sales volume.

4. Unfavorable location, high competition, and low prices: In this scenario, a burger food truck
business may struggle to generate significant returns. By operating in an unfavorable location with
high competition, the business may struggle to attract customers and generate sales. Lowering
prices may attract more customers, but profit margins may be slim.

Overall, the returns of a burger food truck business will depend on a variety of factors, and success
will require careful planning, effective marketing, and a willingness to adapt to changing market
conditions.
 CHAPTER FIVE
5.1 ORGANIZATIONAL FEASIBILITY

The organizational structure for a movable food truck burger business in Bahir Dar city would
depend on the size of the business, the number of employees, and the goals of the business.
Here is a possible organizational structure for a small to medium-sized food truck business:

1. Owner/Manager: The owner/manager would be responsible for overseeing all aspects of the
business, including managing finances, purchasing supplies, hiring employees, and developing
the menu. They would also be responsible for marketing and promoting the business to attract
customers.

2. Cooks/Food Prep Staff: Cooks and food prep staff would be responsible for preparing the
food, maintaining the quality of the ingredients, and ensuring that all health and safety
regulations are followed. They would work closely with the owner/manager to develop and
refine the menu.

3. Servers/Cashiers: Servers and cashiers would be responsible for interacting with customers,
taking orders, and handling cash and credit card payments. They would also be responsible for
keeping the food truck clean and organized.

4. Driver/Logistics Coordinator: The driver/logistics coordinator would be responsible for driving

the food truck to different locations, managing the inventory of food and supplies, and ensuring
that the truck is properly maintained and cleaned.

In our business, one person may perform multiple roles, such as the owner/manager also
serving as the cook or cashier. As the business grows, additional staff members may be hired to
take on specific roles.

It is important to ensure that all staff members are properly trained and equipped to perform
their roles effectively. Regular communication and coordination between team members are
also essential for the smooth operation of the business.
5.2 STUDY CONCLUSION

Based on the results of the feasibility study for a food truck burger business in Bahir Dar, it can be
concluded that the business has the potential to be successful. The study found that there is a
high demand for affordable, convenient, and high-quality fast food options in Bahir Dar, and a
food truck business can provide these options to customers.

The study identified several key factors that will contribute to the success of the business,
including a strategic location, a unique and appealing menu, efficient operations, and effective
marketing strategies. Additionally, the study found that the startup costs for a food truck business
in Bahir Dar are reasonable, and the potential returns on investment are promising.

However, the success of the business will depend on the ability of the owner to overcome several
challenges, including obtaining necessary permits and licenses, sourcing high-quality ingredients,
managing cash flow, and maintaining consistent quality and service.

Overall, the feasibility study suggests that a food truck burger business in Bahir Dar has the
potential to be a profitable and sustainable venture, provided that the owner is willing to invest
the necessary time, effort, and resources into the business.