Abdulaziz Agaro g+4

Project name: - ABDULAZIZ MOHAMAD MIXED USE MULTIPURPOSE
SERVICE MARKET CENTER BUILDING

Type: -Multipurpose service business building Promoter: -
ABDULAZIZ MOHAMAD
Nationality: - Ethiopia Address: - Agaro
Submitted to:- Agaro Land Administration Agency & Investment office
June 26, 2023
AGARO
CONTACT PERSON AND DETAILS

TAJAAJILA GORSAA INVEESTIMEENTII FI DALDAALA
CONSULTANCY SERVICE FOR BUSINESS AND INVESTMENT
MILKOM JIMMA በንግድና ኢንቨስትመንት ዙሪያ የማማከር አገልገሎት
ABDULAZIZ MOHAMAD BUILDING CONSTRUCTION WORK

PLC MIXED USE MULTIPURPOSE SERVICE MARKET CENTER
BUILDING
Type: -Multipurpose service business building
Promoter: - ABDULAZIZ MOHAMAD BUILDING
CONSTRUCTION WORK PLC -MANAGER :-

ABDULAZIZ MOHAMAD
Nationality: - Ethiopia
Address: - AGARO TOWN
PHONE:_09
Phone-0904463464 EMAIL—milkomfira@gmail.com Phone-0911818560

TABEL OF CONTENT
Item Page
Executive Summary ……………………………………………………… …….…5
1. INTRODUCTION ……………………………………………………………………..6
1.1. GENERAL BACKGROUND ……………………………………………………….6
1.2. OBJECTIVE OF THE PROJECT…………………………………………………. 7
1.3. PROJECT DESCRIPTION………………………………………………………….8
1.4 .PROJECT RATIONALE………………………………………………………….…9
1 .5.THE SIGNIFICANCE OF THE PROJECT………………………………………..10
1.6. PROJECT LOCATION………………………………………………………………11
1.7. INDICATORS FOR SUCCESS………………………………………………………13
2. THE MARKET STUDY ……………………………………………………………….15
2.1. MARKET ANALYSIS……………………………………………………………….15
2.2. THE DEMAND-SUPPLY GAP………………………………………………………15

2.3. CURRENT SUPPLY OF MIXED USE BUILDING………………….. …………..16
2.4. FUTURE MARKET OR DEMAND OF COMMERCIAL
BUILDING RENTAL……………………………………………………………………17
2.5. TARGET CUSTOMERS ……………………………………………………………..18
2.6. MARKETING PROMOTION AND STRATEGY …………………………………19
2.7. COMPETITION …………………………………………………………………….. 19
2.8. THE PROJECT FACILITIES AND SERVICES PLAN …………………………..20
3. TECHNICAL STUDY ………………………………………………………………….21
3.1. DESCRIPTION OF THE PROJECT
SERVICE/ PRODUCT MIXES ……………………………………………………..21
3.2. LAND USE PLAN...................................................................................................22
3.3. CONSTRUCTION WORK AND TECHNOLOGY …………………...................22
3.3.1. CONSTRUCTION SCHEDULE ……………………………………... …………23
3.3.2. ARCHITECTURAL DESIGN & LAYOUT………. ……………….. ………….23
3.3.3. STRUCTURAL DESIGN ………………………………………………………….24
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3.3.4. REINFORCED CONCRETE ………………………………………… ………….24

3.3.5.FOUNDATION DESIGN …………………………………………………………24
3.3.6.CONSTRUCTION PLAN AND PROCESS …………………………………….25
3.3.7.UTILITIES ………………………………………………………………………26
3.3.8.PROJECT IMPLEMENTATION Schedule …………………………………..27
4. ORGANIZATIONAL STRUCTURE………………………………………………….28
4.1.ORGANIZATION AND MANAGEMENT……………………………………..28
4.2.MAN POWER …………………………………………………………………….28
4.3.ORGANIZATIONAL STRUCTURE …………………………………………..28
A. THE GENERAL MANAGER’S
DUTIES AND RESPONSIBILITIES ……………………………………………30
B. BUILDING ADMINISTRATION DEPARTMENT …………………………….30
C. THE MARKETING DEPARTMENT ……………………………………………31
D. TECHNICAL AND MAINTENANCE MANAGER ………………….. ……… 31
5. FINANCIAL REQUIREMENT AND ANALYSIS…………………………..............32
5.1 FIXED INVESTMENT ………………………………………………….............33
A. LAND, BUILDING & CONSTRUCTION ……………………………………..33
B. BUILDING MACHINERIES AND EQUIPMENTS VEHICLE…………….34
C. OFFICE EQUIPMENTS ………………………………………………… ……. 34
5.2 WORKING CAPITAL …………………………………………………………..34
5.2.1. OPERATING EXPENSE AT FULL CAPACITY ………………………………35
5.2.2. OPERATING EXPENSES ………………………………………………………..35
5.2.3. PRE-SERVICE EXPENSES ………………………………………………………35
5.3 FINANCIAL ANALYSIS AND STATEMENTS ………………………………37
5.3.1 UNDERLYING ASSUMPTION ………………………………………….37
5.3.2 SOURCES OF FUND ……………………………………………………. 37
5.3.3 BANK LOAN REPAYMENT SCHEDULE ……………………...........38
5.3.4 DEPRECIATION SCHEDULE ………………………………………….39
5.4 FINANCIAL STATEMENT…………………………………………………….40
5.4.1 INCOME LOSS/STATEMENT ………………………………………… 41
5.4.2 CASH FLOW STATEMENT……………………………………………..41
5.5 FINANCIAL ANALYSIS ……………………………………………………….42

I EXECUTIVE SUMMARY
Project name: ABDULAZIZ MOHAMAD MULTIPURPOSE COMMERCIAL
BUILDING
project Type : Multipurpose service business building
Nationality: Ethiopian
Project Owner: ABDULAZIZ MOHAMAD
Project location: South West Oromia region Jimma Zone Goma wereda
Agaro Town.
Project composition: multipurpose Building (G+4) used for diverse
Business centers banking & insurance, super market, shops, restaurant,
café, beauty salon, Pharmacy and offices.
Premises Existing and requesting Area: 1000m2 area of plot of land.
Therefore, Project owner will be ask a concerned body investment
permission to develop tenure of deteriorated Keble rental houses starting
from Mole bari manafesha bread house Up To Nearer Hamza Vehicles
Maintenance Garage to undertaken these plots of land Title deed
registration by the name of Project Owner SHA’AB MOHAMAD
Total investment Cost: 50,000,000 ETB is required from this amount
30% from owner equity and the rest 70% from bank loan.
Employment opportunity: 26 individuals on permanent 20 on casual
basis
Social and Economic Benefit: provide better Building service,
Employment opportunities, generation of income and benefits for the
Local people.
Additionally Project owner will be asked Jimma zone and Agaro Wereda
administration Construction office construction permission letter to start
building construction soon.

INTRODUCTION
1.GENERAL BACKGROUND
The current fast and dynamic economic growth of Ethiopia especially in urban
area necessitates equivalent growth of building and construction sector. The
sector should expand rapidly to support the overall economic development
sustainable.
In the building sector of the economy, the multipurpose in the one becoming
rapidly expanding in urban areas of the nation since dynamic economic
development of urban economy requires the construction of these buildings in
towns to support the growing of business service sectors like supermarkets,
Beauty salon, shops, offices, cinemas, Computer Center, Cafeterias,
restaurant, assembly hall, and other activities. In this regard, it needs mixed
used building expands in the all parts of the country.
Investment and property development play an important role in any emerging
markets or economies. Property generally comprises reside vial houses and
commercial real estate property (mainly mixed use building) developed for
rental business and sale. The property investment market in Ethiopia remained
under developed for several years. As a consequence, the supply of mixed used
commercial houses and non-residential real estate that can be used for
residence, office space, shopping malls and catering services in the urban
centers of the country is disproportionately low to cope with the growing
demand in the country spinning from the average growth in GDP of 5.5 percent
over the last ten years and population increase. The relatively good
performance of the macro-economy (real growth in GDP, low inflation rate and
growth in investment and export sector) has stimulated unprecedented
investment growth in the property sector over the last five years. The growth of
investment in the property market over the last five years in consistent with the
global experience suggesting that investment in the residential and commercial

property (real estate) is greatly influenced by the performance of the

macroeconomic conditions. In general, a stable macroeconomic condition leads
to economic and business growth and develops investors’ confidence. This
certainly spurs large demand in the property market for office space, shopping
malls, catering services, super market and meeting whole. Following growing
demand trends, and with the expectation of high return on their investment
capital, large number of land developers pooled their financial resources and
invested in the property market.
To this effect, the owner of the envisioned Multipurpose commercial Use
Building SHA’AB MOHAMAD who has been visiting and know business
activities for long time Agaro Town, planned to construct in Agaro town and
plane to undertaken this project study to check the market, technical and
financial feasibility of this project. The promoter is very ambitious and
committed to realize the project. Hence, they expect to get the necessary
support from the city administration to make the project to be operational.
Looking at the past trends and permits issues by the Government to the
construction of real estate properties including the mixed use building in the
major urban areas of the country especially in Agaro one can easily conclude
that the momentum is more likely to continue.
Besides, the government polices and incentives for the private sector
investment are very promising that motivates the promoter to engaged in mixed
use building business.
1.2 .OBJECTIVE OF THE PROJECT
The major goal of this project is to contribute towards the growth of the trade
sector in Agaro town. Its specific objectives include the following.
 To construct and develop modern shops, offices, super market and
restaurant & cafeteria facility that enables to provide standard services to
visitors.

 To undertake trading and other refuted business activities that enable to

generate a reasonable to the invested capital.
 To develop modern business centre that would provide services of national
standard in order to attract foreign visitors and thereby contribute towards
the generation of hard currency for the country.
 To create employment opportunities for the population in the town and
 Contribute towards the beautification of the town through the construction
of modern building infrastructure and facilities.
1.3.PROJECT DESCRIPTION
The long-term goal of the project is become the best choice in Agaro and its
surrounding areas by creating a differentiated experience capitalizing on
personal service. The proposed project will have a total area, designed to reader
a multipurpose giving business, which will in turn plays significant role
towards solving shortage of business center in Agaro town.
The historical nature of the town as business unique location in one of the
most attractive parts of the occurrence of the town along the Ethiopian South
West laid a fertile ground for future promising growth of the town. The owner
plans the project to render banking and insurance, shopping facility, bank and
cafeteria services to create high quality class to satisfy the interest of
customers in the town. Based on environmental and other considerations, the
entrepreneur has determined the type and size of the building which is already
determined by the site; conceptual planning and preliminary analysis have
been carried out by analysts.
In order to attract its clients to the service, the project will develop high
standard shop & banking rooms and office of best choices and will also save
best quality restaurant and café, national and international dish and various
types of soft drinks.
1.4 .PROJECT RATIONALE

At national level the economic growth our country is experiencing, the good
governance created and even if the town is in its nascent stage of development
this project is the first in kind in the town are feasible and would be a model
development in promoting and attracting different urban investments.
In order to respond to the created environment the town is in need of major,
basic and feasible urban projects to be developed.
The existing promising investment opportunities, the demands of service needs
along with relatively sound investment support made by the government in
such kinds of feasible projects, compelled the project promoter to initiate the
multipurpose oriented business project to be established. Despite the
promising business opportunities of the town, the trend on such kinds of
investment found to minimal. Since there is no such kind of modern tourist
facilities and business station in the town to accommodate the existing demand
of these services in the town and the surrounding areas. The mismatch
between the demand for and supply of such kind of services in easily observed
in the town.
Therefore, the existing shortage or absence in the supply of these services,
along with its commercial and administrative access, better location and
infrastructure access, escalating trend of urbanization and business activities,
thus it is with such reason that this project is identified and proposed and
assumed to be more profitable.
In general, the country’s decentralized state based economy, privatized and free
market economy; good governance creates a favorable environment for the
development of investment for private investors.
1.5.THE SIGNIFICANCE OF THE PROJECT

The envisaged project deemed to add to the economic development of the
nation in general and zone and town in specific with following ways:
A. Source of Revenue

As public policy of any nation, the government collects different forms of taxes
from different business organizations and individuals. Among the different
forms of taxes, business income taxes, payroll income tax and VAT are
collected from undertaking business activities. Therefore, the building will
serve as sources of revenue for the town as well as for the region.
B. Employment opportunity
One of the problems that our country faced is unemployment. Therefore, the
current objective of the government is working on tackling the problem of
unemployment and fostering the development process either through creating
self employment or employment in other organization. Hence, this project will
hire 26 individuals permanent and more than 20 individual temporary during
construction.
C. Sources of social service
In addition to serving as a source of employment and income for the region, the
project renders social services for different group of people. Hence, it is also
providing the following services;
 Serve as a source of mental satisfaction for the different users,
 Since, the center encompasses different recreational areas; it will divert the
attention of the users from different evil deeds.
 It deemed to minimize the demand for shops and other bundles of services
in the area.
Furthermore, it serves as the pilot experience and ground for other investor to
enter in to such kinds of urban development. It also contributes on the efforts
made on as a character given building for physical development pattern of the
townscape.
1.6. PROJECT LOCATION :
Jimma Zone is one of the 20 zones found in Oromia Regional State with
Jimma City as its capital. Jimma Zone consists of 20 districts with 513
peasant Associations (PAs). Jimma special is stood as a special zone mainly

representing the urban parts of Jimma city and its environs. There are 41
urban centres (towns with more than 2000 inhabitants) in Jimma Zone which
mainly boost the opportunity for farmers to sell out their agricultural products
and also to buy the necessary agricultural inputs.
In terms of population, Jimma zone has a total human population of 2,607,115
of which 1,295, 764 are female. More than 80% of the population lives in rural
parts of the districts as well as district towns than in Jimma Special Zone,
which is better urbanized. The populations for the three selected districts
represent about 20% of the population of the zone.
In terms of Agro-ecology, Jimma Zone enjoys seven different types of climate
conditions which include, Moist Dega (21.675 ha), Moist Kolla (73445.047 ha),
Moist Weinadega (125216.83), Wet Dega (233401.823), Wet Kolla (99268.614),
Wet Weinadega (1280822.049) and Wet Wurch (438.173). From here, one can
easily observe that the larger part of the land lies under Wet Dega, Moist
Weinadega and Wet Weinadega.. Whereas Wet Kolla, Moist Kolla, Moist Dega
and Wet Wurch in aggregate cover less than 25% of the total existing hectares
of land of Jimma Zone. The total area of the zone is 1,812,614.217 ha.
The climate situation suits for livestock production which include small
ruminants, poultry and beekeeping. Due to the availability of perennial rivers
and seasonal streams, the potential of the zone for irrigated agriculture is
dependable.
Jimma Zone is one of coffee growing zones in the Oromia Regional State, which
has a total area of 1,093,268 hectares of land (JZARDO, 2008). Currently, the
total area of land covered by coffee in the zone is about 105,140 hectares,
which includes small-scale farmers’ holdings as well as state and private
owned plantations. Out of the 40–55 thousand tons of coffee annually
produced in the Zone (JZARDO, 2008), about 28-35 thousand tons is sent to
the central market, while the remaining is locally consumed (Alemayehu et al.,
2008). Now a day, Jimma Zone covers a total of 21% of the export share of the
country and 43% of the export share of the Oromia Region (JZARDO, 2008).
10

Coffee is the major cash crop of the Zone, which is produced in the eight
woredas namely, Gomma, Manna, Gera, Limmu Kossa, Limmu Seka, Seka
Chokorsa, Kersa and Dedo, which serves as a major means of cash income for
the livelihood of coffee farming families (JZARDO, 2008). According to the
report from the same source, 30-45 % of the people in Jimma Zone are directly
or indirectly benefited from the coffee industry.
Jimma Zone has a population of approximately 2.1 Million. The area receives
annual rainfall in the range of 1,200-2,800 mm and in normal years the rainy
season extends from February to November. The area is suitable for growing
coffee, cereals, pulses, root and fruit crops. The highlands and the swampy
areas grow maize and barley as a belg season crops using residual moisture in
the depressions.
Gomma is one of the woredas in the Oromia Region of Ethiopia. It is named after the
former Kingdom of Gomma, whose territory was roughly the same as the modern
woreda. Part of the Jimma Zone, Gomma is bordered on the south by Seka Chekorsa,
on the southwest by Gera, on the northwest by Setema, on the north by the Didessa
River which separates it from the Illubabor Zone, on the northeast by Limmu Kosa,
and on the east by Mana. Towns include Beshasha, Choche, Ghembe, and Limmu
Shaye. Guma woreda was separated from Gomma.
The altitude of this woreda ranges from 1,380 to 1,680 meters above sea level;
however, some points along the southern and western boundaries have altitudes
ranging from 2229 to 2870 meters. A survey of the land in this woreda shows that
60.7% is arable or cultivable (52.7% was under annual crops), 8.1% pasture, 4.6%
forest, and the remaining 20.1% is considered swampy, mountainous or otherwise
unusable. Land in cultivation included the two state coffee farms. Fruits, avocadoes
and spices are important cash crops.
Coffee is also an important cash crop in Gomma; over 50 square kilometers are
planted with this crop.[2] Coffee is grown in this woreda under shade trees; while the
dominant species are Albizia gummifera, which can shade as many as 150 coffee
trees, and Millettia ferruginea, other species are also used as shade trees.
11

Industry in the woreda includes 118 grain mills, 35 coffee hulling and 33 coffee
pulping mills, one sawmill, an office and furniture factory, and one edible oil mill.
There were 45 Farmers Associations with 45,226 members and 21 Farmers Service
Cooperatives with 43,088 members.[3] One micro-finance institution operates in this
woreda: the Oromiyaa Credit and Saving SC (OCS), established in 1997; its branch in
Gomma was one of the first the OCS opened. While mismanagement forced the OCS
to close that branch within the year, it was reopened in 2001 and serves customers
in Agaro and 17 of the 39 kebeles.[1] Gomma has 55 kilometers of dry-weather and
89 all-weather road, for an average of road density of 117 kilometers per 1,000
square kilometers. About 41% of the urban and 15.9% of the rural population has
access to drinking water.
Demographics
The 2007 national census reported a total population for this woreda of 213,023, of
whom 108,637 were men and 104,386 were women; 12,769 or 5.99% of its
population were urban dwellers. The majority of the inhabitants were Moslem, with
83.88% of the population reporting they observed this belief, while 14.68% of the
population said they practised Ethiopian Orthodox Christianity, and 1.34% were
Protestant.Based on figures published by the Central Statistical Agency in 2005, this
woreda has an estimated total population of 350,882, of whom 172,888 are men and
177,994 are women; 71,018 or 20.24% of its population are urban dwellers, which is
greater than the Zone average of 12.3%. With an estimated area of 1,230.16 square
kilometers, Gomma has an estimated population density of 285.2 people per square
kilometer, which is greater than the Zone average of 150.6.
whom 123,354 were men and 120,022 women; 39,663 or 16.3% of its population
were urban dwellers at the time. The five largest ethnic groups reported in Gomma
were the Oromo (79.11%), the Amhara (7.28%), the Kullo (4.2%), the Silt'e (2.6%),
and the Kafficho (2.04%); all other ethnic groups made up 4.77% of the population.
Oromiffa was spoken as a first language by 78.78%, 14.22% spoke Amharic, 2.43%
Kullo, 1.14% Silt'e, and 1.12% spoke Kafa; the remaining 2.31% spoke all other
12

primary languages reported. The majority of the inhabitants were Muslim, with
80.15% of the population having reported they practiced that belief, while 19.03% of
the population said they professed Ethiopian Orthodox Christianity.
Agaro (or Haggaro) is a town and separate woreda in south-western Ethiopia. Located
in the Jimma Zone of the Oromia Region, it sits at a latitude and longitude of 7°51′N
36°35′E, and an elevation of 1560 meters above sea level.
The road that originally connected Agaro to Jimma was "better known for its depth
than for its length" until improvements were completed in 1962. The road to Bedele,
96 km long, was completed in 1968 at a cost of 12 million dollars (Ethiopian), by the
French company Razel Frères. Agaro is one of the most important trading centers of
coffee in Ethiopia.[2] The Jimma Institute of Public Health (part of Jimma University)
operates a teaching center for health care in Agaro.
Agaro was the capital of the former Kingdom of Gomma, until Gomma was conquered
by Dejazmach Besha Abuye in 1886. By 1958, the settlement was one of 27 places in
Ethiopia ranked as a First Class Township. Fitawrari Gebre Kristos, started coffee
plantations in the 1950s on land he inherited from his grandfather Fitawrari Wossen.
Fitawrari Besha could employ up to 400 workers during high harvest season. After
the Ethiopian revolution, Gebre Kristos abandoned his plantation and retired to
Addis Ababa; his plantation was nationalized by the Land Nationalization
Proclamation of March 1975.
whom 12,946 were men and 12,512 were women. The majority of the inhabitants
were Muslim, with 60.7% of the population reporting they observed this belief, while
33.76% of the population said they practiced Ethiopian Orthodox Christianity, and
5.04% were Protestant.
The 1994 census reported this town had a total population of 23,246 of whom 11,687
were men and 11,559 were women. Therefore, the specific place of the project
implement area is Agaro town Keble ..
1.7. INDICATORS FOR SUCCESS

13

Project owner will be asked Jimma Zone and Agaro administration

Construction office construction permission letter to start building
construction soon.
There are numerous indicators for the success and effectiveness of the Mixed
used commercial building project which include the following:
1. The administration of Agaro town has provided a peaceful and secure

environment for the project. :
2. The Central Government Representative and Regional Government

Representative of Jimma zone is behind the facilitation of any recommendation
for assistance from the Government, and Ministry of Urban development and
Municipality in particular.
3. The local community in the City and surrounding has provided moral and is
ready to provide the necessary help it can afford. (Community Contribution).
4. The Building construction is situated between a Police Post and a Worada
court Army Detachment for the assurance of Security.
5. The project owners are well experience in the business activity and participate on
different investment activity play great role in the implementation of a project. Some
of the investment they achieved effectively and efficiently are as the following;-
i. They have high commitment to implement this project since he was ahead
accumulating construction material in the stock.
ii. They have different experience by visiting business activity of foreign country.
iii. They was educated Business person those have Business Plan by utilizing a
fertile ground of Rule and Regulation of investment proclamation of the country.
iv. They have deposited of cash birr immediately to starting construction.
v. They are customer of Ethiopian Commercial Bank Jimma branch for long period of
time and they can get loan priority with in short period of time.
14

vi. They are also involving on various tertiary economic activity

v ii. Most Building materials are locally available and are relatively affordable..
Viii. Expertise’s (surveyor and Engineer) are available and reliable for such a Job
with maximum commitment and efficiency.
Viiii. Man power is undoubtedly available from the whole Keble and beyond, and the
work can be done at a reasonable speed.
15

2. THE MARKET STUDY
2.1 MARKET ANALYSIS

There are a number of factors which affects the demand of standardized mixed
use building. Of these factors, the most important to have influence is
population growth and the level of income. The currently expanding coffee
processing industry in the town and around the town has been inviting skilled
and unskilled labor forces to the town; in addition, the number of both
government and non government offices has been increasing. Above all the
increase in the number of population of the town increases for the provision of
different services. Nowadays, most of the private business organizations need
their own small-medium offices in order to give their services and provide their
products, and they prefer the place that found in the center of the town or
close to the road.
As clearly indicated in the introductory part of this proposal, and Agro in the
dynamically growing town of West Oromiya. Though the market demand gap
for mixed use building in Agaro is not clearly understand there is wider gap for
such demand as many merchants, organizations and higher institutions are
flouring to the town every day. From prior business experiences, the demand of
mixed use building in Agaro is very high and hence the demand and the supply
gap is very wide.
2.2.THE DEMAND-SUPPLY GAP
Agaro town is situated in very centre of Ethiopian Coffee production area which
is highly known for its quality coffee and special flavor. These days Gomma
wereda is brand name Commercial route of South Western Ethiopia. Agaro
town is also a major business center and commercial route that attracts
thousands of business travelers. These are also the most important groups of
potential customers that include both the local and foreign tourists and the
16

modern business community who choose services that range from economic to
high class standards. These groups would also choose a healthy comfortable
climate that combines a more traditional type with that of modern shops,
offices, bedrooms restaurants and cafeterias. Even though when compared
with similar towns in the region Goma wereda Agaro town seems to have no
developed mixed use building, the existing supply is far behind the growing
demand for standard service. Hence, the project will solve the serous demand
problem in the town.
Over the last decade, there has been a significant growth in the number of local
and international trades across the country. This increase is mainly associated
with the stimulation of economic activist and partly due to an increase in the
flow of international and local traders in to the town. Since Agaro is an
important commercial center in addition there is a significant increase in
business activates and hence increasing the number of traders to the town.
Even though there is a lack of quantitative estimates that number of traders to
the town and Even though there is a lack of quantitative estimates that depict
the actual demand and also the annual growth rate Hotel facilities and urban
commercial facilities are scarce in the city. So far in the town there is no
development of such kind standard building and it is the first of its kind in the
town and will promote other investors from the town and the surrounding
areas. They are mostly villa type premises modified as show rooms and sailing
posits. As a result there is a large gap between the developed and that of the
supply for modern bed rooms; Bank and cafeteria accommodation hence this
project would not face any problem of demand scarcity for it business centre
and it would provide good service to customers.
2.3. CURRENT SUPPLY OF MIXED USE BUILDING
Commercial building/office sector has shown a dynamic change in the past few
years. The reason for this could be rapid economic growth and a supporting
public infrastructural development. Other factors relevant in the specific case
17

of commercial buildings are the large increases in national and international

businesses, particularly firms in the services sector.
The business of multipurpose buildings in Agaro town in booming highly due
to the recent rapid growth experienced in Ethiopia. As a result, a good number
of local and international organizational are coming in place. Government
offices which used to operate in limited spaces all over the city are also
concentrating on leasing new and modern buildings. Increasing numbers of
international organization and NGOs which in the past had typically converted
residences into office space are now moving towards renting whole floors or
even multiple floors in modern city-center commercial buildings.
2.4.FUTURE MARKET OR DEMAND OF COMMERCIAL BUILDING
The demand for office space is a derived demand because firms rent space as
an input to the production of services or goods they provide to businesses and
households in the local regional or national economy.
Following our survey of business activity space users in Agaro, mainly firms
providing banking, cafeteria and restaurants, bed room, supermarkets service,
computer Center Crevice. The different customers for commercial buildings
also include shops and offices that are currently renting out to provide their
goods and services.
Future demand for business activity space is actually driven from growth in
number of business activity in the city which in turn is influenced by the
macro-economic growth in the country. Following the government five year
growth and transformation plan (GTP), the Ethiopian economy is expected to
increase by 11% for base case scenario and 14% under the optimistic case
scenario.
Assuming that demand for business activity space is directly related to the
growth in the economy, the forecast for office space demand is shown in the
following table;
Table: business activity Space Demand Forecast
18

Office space demand Office space demand under

under base case economic high case economic
Years Growth Growth
2010/201 9,916,543 11,304,859
1
2011/201 11,007,363 12,057,416
2
2012/201 12,218,173 12,953,878
3
2013/201 13,562,173 13,963,577
4
2014/201 15,054,011 14,554,534
5
2015/201 16,709,952 14,987,431
6
Source: G Two estimation based on GTP’s forecasted Ethiopian Economic
Growth
2.5.TARGET CUSTOMERS
The target customers of this envisaged project include:-
2. business Community
3. Nearby business organization
4. the government bureau
5. small accounts SME
6. Nongovernmental organizations
7. Jimma university and other higher institution students ,staff and
students family
2.6.MARKETING PROMOTION AND STRATEGY
In order to penetrate and gain considerable market share, one of the major
marketing strategies for the project is consistently rendering quality service to
19

its tenants. Due emphasis must be placed on improving quality of service and
facilities. The major marketing strategies to promote the project and gain
considerable market share include:
 Advertising through different means focusing on the existing service and
facilities
 Promote in association to the key location and nearby business
 Working on sustained promotional work.
 Working on public relations to reach and influence key personas and
organization with a capacity of making decision.
 Keeping the quality of its service/ facilities and consistently improving
with changing situations.
 Seasonal discount pricing different others customer centric marketing
strategies will be used by the company.
2.7.COMPETITION
There are different forms of competition that may face the envisaged mixed use
building. These are price and non price based competition. Moreover, there are
different competitors that will compete with the project either directly or
indirectly. But the mixed use building under discussion has diversified
marketing strategies that could enable it coupe up with the different
competitors in the market. Moreover it will frequently conduct competitors
research which focuses on, the strength and the weaknesses, the different
competitors’ strategies, the techniques they use in rendering the service, their
customer handling methods, and others. Generally the project has many other
projects all over Ethiopia which compete with it.
2.8.THE PROJECT FACILITIES AND SERVICES PLAN
In order to provide mixed use business center building services of a high
standard, it has been planned to construct and develop the infrastructure and
facilities that would viable to meet the requirements of an international
standard business center. Accordingly, various buildings and facilities will be
20

constructed phase by phase starting with the most needed ones that are
essential to commence the operation of its business activities. With the
completion of construction, the building will provide a combined service such
as shops, restaurant and café service as well as modern business center that
primarily serve its guests and major clients.
The plan is that the ground will be partitioned in to different rooms:
Building Description
Ground Supermarket
1st floor Beauty salon, shop, Computer Center, Cafeteria &
Restaurant
2nd floor Pharmacy, Meeting and training hall, Bank and
Insurance offices and other offices by rental
3rd floor Bed rooms
4th floor Bed rooms
Ground Parking Service and Greenery sevice
Since the project will be engaged in mixed building the main sources of its
annual revenue would be from the rental of building spaces such as shops,
offices, and banking, café & restaurant bedrooms. Therefore, the sources of
revenue have been classified in to one category namely the rental of banking &
supermarket, offices, shops, restaurant and café based on these classifications.
Based on the market price of similar mixed use building in the area, the
envisioned buildings set the following fair price (Before VAT) for its service,
hence when the building construction fully get operational it is assumed to
generate a yearly income of
ETB 5,675,000.
21

3. TECHNICAL STUDY
3.1.Description of the project Service/ Product mix
The envisioned mixed purpose building will provide different rental services to
the different customer groups for different purpose. The building will have
basement, ground and one floor. The purpose of the building explained as
follows;
 the ground floor, first floor and second floor designed for different
business centers like banks, supermarket, beauty salon(man and
women), Computer center, pharmacy, internet café, boutiques, different
shops and other business activities,
 Third and Fourth floors used for Bed rooms
Besides, the buildings will have enough parking facility for its customers and
green area in its compound.
3.2.LAND USE PLAN

The total land required for the envisioned project is estimated to be 1000m 2.
The total area for the construction of the building will be 660m2, as revealed
below.
Table land utilization Plan
SN Description
Ground and floor building area total
coverage
1 Building (G+4)
1.1 Basement 35x20
22

1.2 Ground 35x20

1.3 First floor 35x20
1.4 Second floor 35x20
1.5 Third floor 35x20
1.6 Fourth floor 35x20 700
1.7 Parking 300
1.8 Green area and 70
infrastructure
Total 1000M2
3.3.CONSTRUCTION WORK AND TECHNOLOGY

3.3.1.CONSTRUCTION SCHEDULE
The construction project is proposed to be started on june 2023, and is
expected to be finished on February 2025. as seen in the abbreviated
construction schedule above, a majority of the schedule’s time is made up of
five major activities; Concrete, building Enclosure, masonry, mechanical
&HVAC and Electrical install. Concrete activities include processes such as
placing foundations and slab on deck. The Building Enclosure Phase includes
erecting the scaffolding that will allow for exterior sheathing installation and
bricklaying.
Mechanical and Electrical install coincide with each other due to the need for
coordination between the two divisions. There are several periods of
construction during the schedule in which there are multiple construction
activities occurring at the same time.
The construction site must be organized accordingly as these processes take
place. As with any construction project, the goal of the schedule was to
complete all construction activities before the required Date of completion.
This date of completion is practical based on the time of year in which the
building will be completed. The team allowed a two week contingency for any
23

setbacks. Typically, summer construction tends to cause unforeseen delays

that negatively impact a construction project. These conditions can and will
almost undoubtedly impact the project schedule by causing unforeseen delays
and project inefficiency.
3.3.2.ARCHITECTURAL DESIGN & LAYOUT

Although functional spaces for the project were laid out in significant detail,
the rest of the building had designated spaces but no set layouts. It was at the
discretion of the project promoter to devise typical layouts for the non-detailed
commercial and office spaces. To make sure that the building’s layouts were
practical, the project owner researched typical architectural layouts for
laboratory and executive office spaces.
The walls and partitions throughout the floor were congruent with the
structural frame and column locations.
3.3.3. STRUCTURAL DESIGN

One of principle deliverables of our project is the structural design of the
building. The structural bays were coordinated with the layout of the building
adjustments were made to the bays if specific layouts are necessary. The frame
was made up of a grid with repeating standard structural bays. Included in the
structural system are bay sizes, shape and size of structural members, floor
compositions and curtain walls. These elements were established to resist
gravity and lateral loads as appropriate.
The gravity load design was completed for two frames; one of structural steel
and one of reinforced concrete. The structural steel frame was chosen for
further design based on cost per square foot, local availability of material and
constructability considerations, such as erection and fabrication. The steel
system was then designed for lateral loading with necessary adjustment being
made to framing.
3.3.4.REINFORCED CONCRETE
24

The project group prepared hand structural design calculations for a typical
bay of a reinforced concrete frame. In all reinforced concrete bay designs, a
superimposed dead load of 300 birr per square foot was assumed for
mechanical equipment, floor coverings and ceilings.
Similarly, the design of the typical bay accounted for the use of different
commercial space, in which a live load of 5000 birr per square was assumed.
Loads were calculated based on the requirements of the minimum Design loads
for Buildings and other Structures.
3.3.5.FOUNDATION DESIGN
The design of a superstructure may be accurate, have considered all
possibilities and still fail because the substructure is incapable of distributing
the applied loads to the supporting soil.
Foundation design takes more into consideration than merely the loading from
the columns. While the main part of the project focused on the structural
frame and its alternate designs, a preliminary foundation plan was designed
based upon maximum load carried from the superstructure through the
columns. The foundation design conducted by the project team consisted of the
selection of foundation type, determination of the bearing capacity and the
design for typical interior and exterior spread footings.
3.3.6.CONSTRUCTION PLAN AND PROCESS
The project team developed a coordinated project schedule and construction
plans that would reflect the expectations for an actual construction project.
The project schedule was developed using the preliminary designs given to the
project team.
Additionally, the group considered typical construction activities and durations
taken from similar construction projects as well as realistic constraints on
building development. For instance, it is necessary for the structural frame to
be completed before concrete can be placed for the slab on deck. Hand drawn
construction plans detailing site entrances and storage areas were coordinated
25

with the project schedule to give the reader visualizations of the construction
site set up through various periods of the construction process.
The construction process for this project is normally a disjointed three mages
development by which the conceptualized need of the promoter of this project
is translated into a functional facility that will meet their needs in terms of
time, cost and quality.
Based on a general program of the project owners the consultant who is going
to be hired makes site studies, develops structural designs, prepares drawings
and specifications, determines quantities involved and estimated the resultants
costs. All these activities will be done in the first phase of the project which is
the design stage after the document are produced by the designers have been
received, and the works secured the project is supposed to enter the tendering
stage. At this stage contractors study the project document analyze and
subsequently determine the construction methods, built up their unit rates
and submit their bids for the works. The promoter of this project intends to
compare the bids and award the contract for the lowest responsible bidder.
This, is of course, presupposes that the favorable proposal does not exceed the
allocated budget.
After the award is made and the contract signed between this project owner
and the contractor, the project constructor is expected to prepare and submits
a detailed construction program which includes material schedule, manpower
requirement and cash flow forecast.
After the award is made and the contract signed between this project owner
and the contractor, the project constructor is expected to prepare and submits
a detailed construction program which includes material schedule, manpower
requirement and cash flow forecast.
3.3.7.UTILITIES
A number of utilities world be put in place in order to ensure smooth
functioning of the project. These utilities include:
26

 Water Supply,
 Supplementary Electricity supply.
 Telephone line Internet Broadband
 Fuel, Oil and lubricant
 Drainage Facility
3.3.8.PROJECT IMPLEMENTATION SCHEDULE
The project’s implementation is expected to take 24 months. The major
activities include Bank loan processing, construction of the building, cleaning
the area around the building, Procurement of equipments and start rendering
services. The time schedule for the above matured major activities is presented
below:
Table: project Implementation schedule
SN Activities Date
1 Building construction June, 2023
permission request processing
2 Building Design approval June, 2023
3 Bank loan processing July, 2023
4 Site Development August, 2023
5 Building and construction work September, 2023- February 2025
6 Preparation for service March, 2025
7 Service execution March, 2025
27

4. ORGANIZATIONAL STRUCTURE
4.1. ORGANIZATION AND MANAGEMENT
The organizational structure should be in a way that the company able to
achieve its objectives as well as the satisfaction of standard requirement. In
addition to this, the structure should fit the dynamics of all customers in the
building ranging from small business to large tenants.
4.2.Man Power
The total manpower required for the building will be 26 persons. The
manpower list and the corresponding labor cost are shown in part four of this
document.
4.3.organizational Structure
The organizational structure of the project is designed by including all the
necessary personnel under the right division. At the top of the organizational
structure, there will be manager with the responsibility of supervising the
overall activity of the building. Depending up on the nature of the center and
the amount of work to be performs; there exist auxiliary units under the
general manager.
Employees under each unit will be supervised by the department head that is
accountable for the general manager. General Manager is appointed by owner.
Owner
General 28
Manager
Building Admin Marketing Technical and

maintenance
manager
IT, Electricity
HRM and finance and plumper
Cashier Purchas
er
Fig 4: organization structure of the Building

As clearly shown in the organizational structure, the center organization has
one general manager and three main sections. Under the general manager
there are the, marketing Department, maintenance and building
administration department. Under building admin dept there exist two sections
i.e., HRM & finance and general service. Further sub sections are also
organized under technical and maintenance manager. The following section
deals with the duties and responsibilities of each department.
A. The General Manager’s Duties and Responsibilities
 He/she will plan, organize, direct and control the overall activities of the
building.
 He/she will devise policies and strategies that will enable the center to be
profitable.
 He/she will incorporate modern technological innovation that will facilitate
the service delivery of the building to increase customer’s satisfaction.
29

 He/she will plan, organize, direct and control the human and non-human
resources of the building so as to achieve the short and long run objectives
of the organization.
B. Building Administration Department
The building Administration Department of the multipurpose building has two
main sections (HRM and Finance and General Service section). It has
responsible for undertaking the following activities;
 Manage the human resources and control employee’s activity
 Well non human resources of the project, which include; effective
handling of the different resources of the building, and devise strategies
of controlling against fraud and damage.
 Will provide the right material or inventory to the center with right price
at the right time.
 Will plan, organize direct and control the financial transaction of the
building by using all the necessary documents.
 Accountant and casher that will collect money from the customers.
 Will develop sound financial control system by developing modern
financial control systems.
 Will prepare the annual financial statements and prepare condensed
reports for both the General Manager and other concerned government
body.
 Follow the overall status of the business and provide maintenance and
repair services
C. The marketing Department
 Will handle the overall marketing activities of the organization which
include planning, organizing, directing, and controlling.
 Will develop the marketing strategies for future multipurpose building
development
 Will develop effective customer handling strategies.
 Execute the promotion methods.
30

D. Technical and maintenance manager

 Will handle the overall physical maintenance and related issues
 Will make sure electricity and back up is organized.
 Follow up security issues and educate tenants
 Works in collaboration with general service to make sure tenants are well
served
Table 4.2.The total manpower required

SN Position No Qualification
1 General manager 1 BA in management
2 Building admin 1 BA in Acct/Mgt
3 Secretary 1 10+2 in secretariat science
4 HRM Officer 1 10+2 in HRM/Management
5 Technical and 1 Diploma in building
maintenance manager maintenance
6 Finance head 1 BA in Accounting
7 IT Technician 1 Diploma in computer science/IT
8 Marketer 1 Diploma in marketing
9 Accountant 1 Diploma in accounting
10 Guards/Security 4 Basic
11 General Service head 1 Diploma in Management
12 Purchaser 1 Diploma in purchasing &Sup
Mgt
13 Electrician 1 10+2 in general electricity
14 Plumber 1 10+2 in general mechanic
15 Casher 1 10+1 in bookkeeping
16 Cleaner 5 Unskilled
31

17 Maintenance officer 1 10+2 in General mechanic

18 Driver 1 10 completed
Total 26
5. FINANCIAL REQUIREMENT AND ANALYSIS

The financial resource is a prime resource for undertaking any activities. Hence
for implementing this mixed use building a total of 15,000,000 ETB is required.
From this 30% birr will be covered by the promoter of the project while the rest
70% will be covered through loan from bank at the prevailing interest rate.
Therefore the said amount of finance is needed for undertaking the following.
5.1. fixed Investment
D. Land, Building & Construction
S.N Description of works Total Cost in birr
1 Building construction 13,700,000.00
2 Site Development 25,200.00
3 Design and supervision 56,239.5
Total 13,781,439.5
E. Building Machineries and Equipments

S Description Measur Qty Unit cost Total cost in
N ement in Birr Birr.
1 Generator Unit 1 120,000.00 60,000.00
2 Carpentry Set 1 17,000.00 17,000.00
tool box
3 Electrician Set 1 18,500.00 18,500.00
32

tools box
4 Plumber Set 1 12,300.00 12,300.00
tools kit
5 Fire Unit 10 6,000.00 60,000.00
extinguisher
(Security
Equipment)
6 Total 167,800.00
F. Vehicle
SN Descr UOM Qty Unit Cost Total cost Rem
iption in Fr. in Birr ark
1 Mini- Unit 1 500,000.00 300,000.00 Duty
Bus Free
Total 500,000.00
G. Office Equipments
SN Description Measurement Qty Unit cost Total cost
in birr in Birr
1 Managerial Unit 5.00 2,600.00 13,000.00
tables
2 Managerial Unit 5.00 1,950.00 9,750.00
chairs
3 Office table Unit 7.00 1,350.00 9,450.00
with chair
4 Secretarial Unit 1.00 1,450.00 1,450.00
table with
chairs
5 Computer Unit 3.00 15,000.00 45,000.00
33

with chairs
6 Shelf Unit 3,500.00 3,500.00
7 Filing Unit 1.00 1,500.00 1,500.00
cabinets
8 Guest chairs Unit 1.00 900.00 4,500.00
9 Fax & Unit 5.00 1,300.00 1,300.00
Telephone
machine
10 Carpet and LS 1.00 23,000.00
Curtain
Total 112,450.00
5.2. Working Capital

5.2.1. Operating Expense at full Capacity2
a. salary Expense
SN Position No Qualification Monthly Annual
salary in salary in
Birr Birr
1 General 1 BA in management 300.00 36,000.00
manager
2 Building 1 BA in Acct/Mgt 2500.00 30,000.00
admin
3 Secretary 1 10+2 in secretariat 900.00 10,800.00
science
4 HRM Officer 1 10+2 in 950.00 11,400.00
HRM/Management
5 Technical 1 Diploma in building 1500.00 18,000.00
and maintenance
maintenance
34

manager
6 Finance head 1 BA in Accounting 2500.00 30,000.00
7 IT 1 Diploma in computer 1150.00 13,800.00
Technician science/IT
8 Marketer 1 Diploma in marketing 1150.00 13,800.00
9 Accountant 1 Diploma in accounting 1150.00 13,800.00
10 Guards/ 4 Basic 500.00 24,000.00
Security
11 General 1 Diploma in Management 1500.00 18,000.00
Service head
12 Purchaser 1 Diploma in purchasing 1150.00 13,800.00
&Sup Mgt
13 Electrician 1 10+2 in general 1000.00 12,000.00
electricity
14 Plumber 1 10+2 in general 1000.00 12,000.00
mechanic
15 Casher 2 10+1 in bookkeeping 850.00 20,400.00
16 Cleaner 5 Unskilled 450.00 27,000.00
17 Maintenance 1 10+2 in General 1000.00 12,000.00
officer mechanic
18 Driver 1 10 completed 850.00 10,200.00
Total 26 327,000.00
Benefit 65,400.00
(20%)
Grand Total 392,400.00
5.2.2. Operating Expenses

SN List of Items Annual cost in Assumptions Used
35

birr
1 Audit and legal fee 24,000.00 2000 bir/per ,month
2 Stationery 6,000.00 500 br/month
supplies
3 Promotional Cost 40,000.00 Lump sum annual
cost
4 Property 168,018.00 1% of the building
Insurance
5 Cleaning Supplies 10,800.00 900 br. Per month
6 Uniforms 1,670.00 180 per pes for 16
people
7 Water 5,000.00 2500 m3 by 3.15 br
consumption
8 Electric 6,000.00 20000KWH By
consumption Br.0.4736
9 Fuel 42,672.00 2032 lit per year by
Br. 21
10 Oil & Lubricants 4,267.20 10% of fuel cost
11 Telephone & fax 18,000.00 1500 per month
12 Repair expense 72,018.00 2% of building cost
13 Miscellaneous 20,000.00 3000 per month
costs
Total 518,444.20
5.2.3. Pre-service Expenses

SN Description Cost in birr
1 Project proposal 8,000.00
2 Licensing fee and others
36

Total 8,000.00
Summary of Total initial investment cost

SN Description Cost in Birr
1 Land, building & construction 15,732,429.50
2 Building machines & Equipments 227,800.00
3 Vehicle 300,000.00
4 Office Equipment 112,450.00
5 Total fixed investment cost 1,872,679.50
6 Salary expense 392,400.00
7 Operation Expense 334,436.20
8 Pre service Expense 10,000.00
9 Total Working capital 731,836.00
10 Sub total 1,804,532.00
11 Contingency (10%) 190,453.20
Total initial investment capital 15,000,000.00
5.3. FINANCIAL ANALYSIS AND STATEMENTS

5.3.1. UNDERLYING ASSUMPTION
The financial analysis of the mixed use building is based on the data provided
in the preceding sections and the following assumptions.
A. construction and finance
Construction period 1 Years
Source of finance 30% equity and 70% loan
Bank interest rate 10%
B. depreciation
Building 10%
37

Building machinery and equipment 10%

Office Equipments 10%
5.3.2. Sources of Fund
The source of fund to finance the project is planned to be from two sources.
These are promoter’s equity and bank loan. The loan is expected to be obtained
from one of the local lending institutions. Since the project is expected to take
some times to repay all its debts, the bank loan is assumed to obtain on long
term credit basis. Taking the financial position of the promoters into account,
equity contribution and bank loan to finance the total investment outlays of
the project are assumed to be 30% and 70% respectively. Accordingly, the total
financial requirement from the two sources will be;
SN Description Percentage share Amount
Owners Share 30% 4,500,000.00
Bank Loan 70% 10,500,000.00
Total 100% 15,000,000.00
5.3.3. Bank loan Repayment Schedule

Year Principal Interest (10%) Total annual Remaining
Payment Payment in Balance
ETB
0 0 00 00 14,000,000.00
1 2800000 280000 3,080,000 10,920,000.00
2 2800000 280000 3,080,000 7,840,000.00
3 2800000 280000 3,080,000 4,760,000.00
4 2800000 280000 3,080,000 1,680,000.00
5 1,680,000 168,000 1,848,000 00
5.3.4. Depreciation Schedule

SN Description Original Depreciation Depreciation
38

Value in Birr rate in % per year in Birr

1 Construction and 1,700,000.0 10 170,000.00
Building 0
2 Bldg. machines & 227,800.00 10 22,780.00
Equipments
3 Vehicle 300,000.00 5 60,000.00
4 Office Equipment 112,450.00 10 11,245.00
Total 2,105,108.0 264,025.00
0
5.4. FINANCIAL STATEMENT

5.4.1. INCOME LOSS/STATEMENT
Project revenue and production costs are listed and compared to see whether
the project generate profits or not. Starting from first year of the project
operation, the project will generate a reasonable amount of net profit for the
owners throughout its life period. Profit and loss statement shows that the
project will generate net profit of ETB 1,044,584.093 in the first year and
increase to ETB 1,147,790.945starting from the end of five year of the project
life and hence it is found to be profitable.
Mixed use Building profit/Loss Statement
Revenue Year 1 Year 2 Year 3 and
after
Rental Income 5,785,000.00 6,363,500.00 6,999,850.00
Expenses
Salary Expense 235,440.00 313,920.00 392,400.00
Bank loan payment 3,080,000 3,080,000 3,080,000
Operating Expenses 200,661.06 267,548.08 334,436.20
Deprecation Building 323,242.95 323,242.95 323,242.95
39

Deprecation Bld. 22,780.00 22,780.00 22,780.00

Machineries and
Equip.
Deprecation of Vehicle 60,000.00 60,000.00 60,000.00
Deprecation office 11,245.00 11,245.00 11,245.00
Equip
Interest Expense3 354,548.95 319,094.055 177,274.475
Lease payment4 4,819.05 4,819.5 4,819.05
Total Expense
4,292,737.01 4,402,649.59 4,406,197.68
Profit before Tax 1,492,262.99 1,040,968.75 1,639,701.35
Tax (30%) 447,678.897 312,290.625 491,910.405
Net profit 1,044,584.093 728,678.12 1,147,790.945
5
5.4.1. Cash flow Statement

Year Year 0 Year 1 Year 2 Year 3 and
after
Equity Capital 6,000,000.0
0
Loan principal 14,000,000.
00
Net sale 5,785,0 6,363,500. 6,999,850.00
00.00 00
Total Cash in 5,064,985 178500 2380000 2,975,000
flow 0
Cash payment
Salary Expense 0 235,440 313920 392,400
Investment 20,000,000. 0 0 0
00
Pre operating 5,000 0 0 0
40

Expense
Operating Cost 0 200,661 267,548.8 334,436.20
.6
Loan repayment3 0 709,097 673,643 531,823
.9
Lease payment 0 4,819.5 4,819.5 4,819.5
Tax payment 0 166,218 312,290.6 491,910.405
.0 25
Total payment 3,877,679. 131623 1,572,221 1,755,389.10
5 7.3 .925 5
Cash surplus/ 1,187,305.5 468762. 807778.07 1219611
deficit 7 5
Cumulative cash -332190 136572. 944350.77 3919350.775
flow 7 5
5.5. FINANCIAL ANALYSIS

I. Profitability
According to the projected income statement the project will generate profit
beginning from the second year of operation. Ratios such as he percentage of
net profit to total sales, return on equity and return on total investment are
1%, 1% and 18% in the first year and considerably rises in the subsequent
years. Furthermore, the income statement and other profitability indicators
show that the project is viable.
II. Breakeven Analysis
The breakeven point of the project is estimated by using income statement

projection.
Accordingly, the project will break even at 15.4% of capacity utilization.
41

III. Payback Period
Investment cost and income statement projection are used in estimating the
project payback period. The projects will payback fully the initial investment
less working capital in 5 years.
IV. Simple Rate of Return
For the envisaged business the simple rate of return equals to 45.6%
VI. Internal Rate of Return and Net Present Value
Based on cash flow statement described in the annex part, the calculated
IRR of the project is 35.7% and the net present value at 18 % discount is
Birr 2,000,000.00
VII. Sensitivity Analysis
The envisaged plant incurs loss (only for the first year of operation) of Birr
158,047.98 when the assumed cost of production increases by 10%. Such
result is likely to take place as the start up capacity of the envisaged plant is
set at a very low level (35%) due to the market barrier problem that is expected
to take place in the first few years of operation. Nonetheless, the rental
maintains to earn profit starting from the second year of operation.
42

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Project name: - ABDULAZIZ MOHAMAD MIXED USE MULTIPURPOSE

SERVICE MARKET CENTER BUILDING

CONTACT PERSON AND DETAILS

ABDULAZIZ MOHAMAD BUILDING CONSTRUCTION WORK

Promoter: - ABDULAZIZ MOHAMAD BUILDING

CONSTRUCTION WORK PLC -MANAGER :-

Phone-0904463464 EMAIL—milkomfira@gmail.com Phone-0911818560

1.7. INDICATORS FOR SUCCESS………………………………………………………13

2. THE MARKET STUDY ……………………………………………………………….15

2.1. MARKET ANALYSIS……………………………………………………………….15

2.2. THE DEMAND-SUPPLY GAP………………………………………………………15

Phone-0904463464 EMAIL—milkomfira@gmail.com Phone-0911818560

3.3.4. REINFORCED CONCRETE ………………………………………… ………….24

Phone-0904463464 EMAIL—milkomfira@gmail.com Phone-0911818560

Phone-0904463464 EMAIL—milkomfira@gmail.com Phone-0911818560

Phone-0904463464 EMAIL—milkomfira@gmail.com Phone-0911818560

property (real estate) is greatly influenced by the performance of the

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 To undertake trading and other refuted business activities that enable to

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development of investment for private investors.

1.5.THE SIGNIFICANCE OF THE PROJECT

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Phone-0904463464 EMAIL—milkomfira@gmail.com Phone-0911818560

Phone-0904463464 EMAIL—milkomfira@gmail.com Phone-0911818560

Phone-0904463464 EMAIL—milkomfira@gmail.com Phone-0911818560

Phone-0904463464 EMAIL—milkomfira@gmail.com Phone-0911818560

1.7. INDICATORS FOR SUCCESS

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Project owner will be asked Jimma Zone and Agaro administration

1. The administration of Agaro town has provided a peaceful and secure

2. The Central Government Representative and Regional Government

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vi. They are also involving on various tertiary economic activity

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2. THE MARKET STUDY

2.1 MARKET ANALYSIS

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of commercial buildings are the large increases in national and international

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Office space demand Office space demand under

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Phone-0904463464 EMAIL—milkomfira@gmail.com Phone-0911818560

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3.2.LAND USE PLAN

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1.2 Ground 35x20

3.3.CONSTRUCTION WORK AND TECHNOLOGY

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setbacks. Typically, summer construction tends to cause unforeseen delays

and project inefficiency.

3.3.2.ARCHITECTURAL DESIGN & LAYOUT

3.3.3. STRUCTURAL DESIGN

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for Buildings and other Structures.

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Phone-0904463464 EMAIL—milkomfira@gmail.com Phone-0911818560

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Building Admin Marketing Technical and

Fig 4: organization structure of the Building

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Phone-0904463464 EMAIL—milkomfira@gmail.com Phone-0911818560