LEMLEM ALEMSEGED BUILDING MATERIALS AND ELECTRICAL EQUIPMENTS

RETAILING PROJECT PROPOSAL .......................................................................................................... 1

GENERAL INFORMATION...........................................................................................................................................1

BACK GROUND ........................................................................................... ERROR! BOOKMARK NOT DEFINED.

OBJECTIVE ....................................................................................................................................................... 2

VISION .............................................................................................................................................................. 2

GOAL ................................................................................................................................................................... 3

CHALLENGES AND OPPORTUNITIES IN LEMLEM BUSINESS ....................................................................................3

SWOT ANALYSIS .......................................................................................................................................... 4

FINANCIAL TREND ANALYSIS ............................................................................................................... 6

TREND BALANCE ........................................................................................................................................... 6

CURRENT PERFORMANCE OF OUR BUSINESS ................................................................................ 7

RENEWED OF TRADE LICENSE .................................................................................................................................8

LOCATION OF SHOP .................................................................................................................................................8

6 YEARS BUSINESS PLAN ........................................................................................................................ 9

BUILDING MATERIAL BUSINESS COST ANALYSIS ...................................................................... 9

PROFIT MARGIN ......................................................................................................................................... 10

EXPENSE IN OUR BUSINESS...................................................................................................................................11

BUILDING MATERIAL BUSINESS ........................................................................................................ 12

SOURCE OF FINANCIAL ..........................................................................................................................................12

SUMMARY’ ..................................................................................................................................................... 13

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Lemlem Alemseged Building Materials and
Electrical equipments retailing Project Proposal

General information
 Company Name—Lemlam Alemsegd Building Materials and Electrical
equipments retailing.

 Location- Mekelle, Tigrai, Ethiopia,

 Area code – Adi-Haki

 House No—New

 Phone 251910290152

Over view
Tigrai is in post Genocide era. Public and private infrastructures were
destroyed during the two years Genocidal war. Since the Pretoria agreement
for silencing the gun, the Tigrai interim administration, Ethiopian
Government as well as world communities are calling to re-construction of
the region.

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In such a pivotal time, supplying construction materials is mandatory. As we
were begun retailing Construction and electrical materials before the broke
out of the Genocidal war, Lemlem construction and electrical material is
ready to strengthen its effort to benefit from the high demand of the sector.

Lemlem Construction and Electrical Equipment Trading Company have issued

a legal processing license in 2019. In its initial time, the business sector
scored best activities especially from November 2019 to October 2020.
However, it was begun declining with the outbreak of the coronavirus and
the Genocidal war on Tigrai. In such a critical situation, leadership and
communication skills won through telephone and remotely communications.

Since the Ethiopian and Eritrean army controlled the capital of Tigrai,
Mekelle city, the city became a victim of thieves and robbers. Our shop was
not safe from the Dangers. Those, we closed our businesses to protect from
the robberies. This time was the breakdown our declined due to Ethiopian
Government banning any commodities to enter Tigrai. In that hardship, our
business focused in to a matter of Survival.

Objective
The Objective of this business plan is being a reliable, successful supplier
and distributor in the re-construction of Tigrai to maximizing profits
accordingly.

Vision
Delivering reliable service and maximizing profit, to transform from Retailing
to supplying by 2029.

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Goal
 Being a preferred supplier,

 Winning in tough competition for construction and electrical equipment

supply,

 Transition from retail to supplier over the next 6 years;

 Being a profitable and reliable business,

 Generate trusted importers and payable customers.

Challenges and opportunities in Lemlem business

Ethiopia is suffering from maximum inflation rate. The fact that, Building and
electric materials are challenging more than other sectors. Based on the IMF
inflation Rate 2023, Ethiopia increased 18.73 percent from 2006. This is
directly influenced in our business. All the imported and domestic
construction materials and electric equipment are influenced by foreign
currency.

Within these challenges, there are Multiples of opportunities. The inflation

and deflation briars are equally treated the sector. Preparing this Business
plan is helpful to indicating joint foreign investors in our field. Since foreign
investors joining us, we will be the winning champions in the sector.
Because, it give as chance to get easily imported materials to supply in the
market of Ethiopia.

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SWOT analysis
Lemlem Construction materials and Electrical Equipment business engaged
the field being a competent service provider and maximizing profit.
Therefore, our plan based on the following strengths, weaknesses,
opportunities and challenges.

Strength – we able to survive by doing profitable work even in the aspect

of severe hardship in Tigrai.

 The business is running in the family level.

 Proper income and expenditure are recording.

 Monthly Auditing help as to trust building in the business.

 The business capital is r-cycling with in the shop.

 Our location is accessible to supplying markets as well as Customers.

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Weakness.

 Restricted to the outer edge of the city.

 Not being able to take advantage of opportunities to compete in the

city center.

 Limited in forecasting to working in collaboration

 We didn’t support our business by loan.

Opportunities

 Tigrai is heading towards re-construction.

 Construction materials and electric equipment business has timeless.

 Building and electrical equipment have no fashionable to expire.

 Our business has an opportunity to create venture with suppliers and

Contractors.

 Construction material manufacturing companies begun production in

Mekelle.

Threats

 The sector has Strong competition.

 Importers and distributors have gone down to Retailing.

 Illegal trade and fraud are rampant in the sector.

 Government control over the construction trade sector is not technical.

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These business plans indicates how our strength keeps and maximizing from
the opportunities on the one hand, forecasting ways of protecting threats
and learn our weakness is in the other.

Financial trend analysis

Transaction Trend from December 2019 to November 2023

years 2020 2021 2022 2023

buying 520,000 450,000 120,000 145,000
selling 754,000 471,000 123,000 343,000
profit 234,000 21,000 3,000 198,000

800,000

700,000

600,000

500,000
buying
400,000
selling
300,000 profit

200,000

100,000

0
2020 2021 2022 2023

Trend Balance
In the first year, business activity was very fast. Our business activities did
not seem new either. During the time, Construction activities were chanted.
Finishing new house and maintenance of permanent homes were active. The
net profit in the beginning year 234, 000 was realized. At the time, the 70-
square-project building was in high-rise. Since 2005, Housing projects in

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each towns of Tigrai in general, and in the city of Mekelle in particular were
more than expectation of citizens.

Home renovations and expansions were also brisk. So-called lightweight

instruments such as leads, Concrete Bricks, Gravel, sand, Aluminum
equipment’s, Iron sheets, Ceramics, shower equipment’s, Jepson and
measuring devices had high demand. Electrical goods distributed in
conjunction with the completion of houses had many buyers. This was in the
initial year 2019/2020.

Current performance of our Business

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Renewed of Trade license
 After the Pretoria Agreement, business activity in Tigrai begun with in a
limited manner. Our business, which has been declining for years begun
revived. Our business license was renewed in accordance with the laws and
orders of the city of Mekelle.

 We have rented a new facility shop and restarted business in June 2023, in
full swing.

 Construction sector in Tigrai is warming up slowly.

 A number of construction professionals have returned to work.

 70 square Homeowners are hurry to finish and the demand of electrical and
plumbing fixtures is increasing dramatically.

 Our full capacity is exerted to run the business.

Location of Shop
 We are rented shop within center of 70 square.

 Location of our shop is easily accessible to customers as most of the

construction and finishing works are done in the area.

 New home owners buy a number of house decorations and light bulbs
from us,

 Our business is focusing on the demand of finishing materials,

 Various types of paints and nails are in high demand.

 We plan lend 100,000 birr from our credit association,

 We targeted to transform our business from the Retailing level in to

Supplying in the next 6 years.

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6 years Business plan
 Our customers are begun returning to their construction field.

 Achieving high profits annually by providing effective and efficient

services to our customers,

 Establish reliable lines of business with cumulative increases in each

year,

 Build trust with suppliers and customers,

 Establish close links between building material manufacturers and

electrical distributors in our line of business,

 Transform our business from its current size in to supplier level by

2029,

 Creating ventures with local manufacturers of construction equipment

and electrical goods,

Building material business cost analysis

Based on our objective, Lemlem Construction and electric equipment
materials retailing is set to satisfy our customers and maximizing our profit
from the service we have delivered.

The cost of building materials and electric equipment’s are projected for the
next 6 years based on the current price.

RN material curre 2024 2025 2026 2027 2028 2029

nt

Cement 1200 1380 1587 1825.0 2098.85 2402.63 2762.25

per Qut

Nails per 170 195.5 224.83 258.6 297.4 342 393.3

kilo

Gypsum 720 730.8 840.42 966.5 1111.5 1278.2 1469.9

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 per quit

Paint per 810 931.5 1071.2 1231.9 1416.7 1627.2 1871.9

gallon

electric 4350 5002.5 5752.9 6615.8 7608.2 8749.4 10062

wire
2.5mm

Average Projection of market inflation for the next 6 years based on the past 5 years
experiences.

Inflation Projection
12000
10000
8000
6000
4000
2000
0
1 2 3 4 5 6 7

RN material 1. Cement per Qut

2. Nails per kilo 3. Gypsum per quit
4. Paint per gallon 5. electric wire 2.5mm

When the market inflation will be infiltrating by 15% for the next 6 years,
our business must be changing in each year. Thus, our income must be
increasing by 15% to tackle the market as well as value adding in living
standards.

Profit margin
Finance is the back bone of our business. Even though we faced challenges
in Ups and downs due to the Genocidal war, our initial journey was healthy.
Currently we are base on 145,000 birr.

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R Initial Current 2024 2025 2026 2027 2028 2029
N capital base
2019

120,000 145,000 261,000 587,250 1,057,050 3,424,842 6,164,715 11,096,488

Estimating 15% increment in each 72 Months.

12000000

10000000

8000000

6000000 Series2
Series1
4000000

2000000

0
1 2 3 4 5 6 7 8 9

Expense in our business

 Rent, salary and tax are our known expense

 The current shop must be changed.

 Sales should be modernized.

Title of 2023 2024 2025 2026 2027 2028 2029

R Expense
N

1 Goods 145,000 261,000 587,250 1,057,050 3,424,842 6,164,715 11,096,488

Rent 4,000 5,000 6,000 12,000 30,000 30,000 35,000

Salary 2,000 2,500 3,000 3,500 7,000 7,000 8,000

Tax 2,300 2700 47,587 68,145 349,618 405,385 733,315

Net 25,000 106,300 269,663 386,115 1,981,174 2,702,873 4,155,458

profit

Net profit projection of 6 years plan

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 18000000
16000000
14000000
12000000 4. Net profit
Axis Title

10000000 3. Tax
8000000 2. Salary
6000000 1. Rent
4000000 1 Goods
2000000 RN Title of Expense
0
1 2 3 4 5 6 7
Net profit

Building material business

In healthy market, 15% profit and 25% service charges are common.
Hence, our business is in post Genocide, we designed our business plan to
earn profit by providing reliable supply. Thus, we plan the lowest profit
margin considering the purchasing capacity of our customers. As a result,
target profit margin for 2029 will be birr, 4,155,458.

Source of financial
 Profit is our prioritized source of our business.

 Loan, we have right of loan 8X our saving capacity.

 Cooperation, business partners is mandatory in creating healthy supply

chain. This is helpful to creating stock and item exchange.

 Tender, Tigrai is under Re-construction after the Genocidal war.

Regional, Federal and international Communities are in high demand of
suppliers.

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Summary’
Demand of constriction materials and electric supply is tune. There is no a
nation that has finished everything. Construction nature is changing with
time. Even in the developed world, maintenance and re-designing of
buildings are common.

When we involving the construction business, it is understood the nature of

the sector needs cooperation to be profitable. Thus, we designed this
business plan to maximizing our profit.

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