Business

Plan

Prepared: by Dr.Eng. Mehari G/yohannes Business Consultant

Client: Rezene Gebremedhin Retail trade for Construction
materials
 Date 11/20/2023

Table of Content

Table of Content ii
1 Executive Summary
1.1 Business Description 1
1.2 Products and Services 1
1.3 The Market 1
1.4 The Opportunity 2
1.5 The Solution 3
1.6 Management Team 3
1.7 Capital Requirements 3
2 Business Description
2.1 Mission Statement 5
2.2 Values and Vision 5
2.3 Company Description 5
2.4 History and Current Status 6
2.5 Goals and Objectives 6
2.6 Company Ownership 7
3 Products / Services
3.1 Products / Services Description 8
3.2 Unique Features or Proprietary Aspects 8
4 Market Analysis
4.1 Market Distribution 9

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
 4.2 Market Size 9
4.3 Population Growth and Inflation 10
4.4 Target Market & Share 10
4.5 Competitor Analysis 10
4.6 Competitive Advantage & Comparative Evaluation. 11
5 Marketing & Sales
5.1 Marketing Mix 12
5.2 Distribution Channels 13
5.3 Sales Forecasts 13
6 Management
6.1 Company Organization 14
6.2 Management Team 14
6.3 Management Structure and Professional Advisory 14
7 Operations
7.1 Operations Strategy 16
7.2 Scope of Operations 16
7.3 Ongoing Operations 16
7.4 Location 17
7.5 Personnel 17
7.6 Production 17
7.7 Operations Expenses 17
7.8 Legal Environment 18
7.9 Inventory 18
7.10 Credit Policies 19
8 Financial Plan & Projections
8.1 Start-up Expenses & Funding 20

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
 8.2 Sales Forecast 21
8.3 3-Year Sales Forecast 21
8.4 Profit and Loss Projection 22
8.5 Balance Sheet 23
8.6 Cash Flow 24
8.7 Break-Even Analysis 26
9 Offering / Funding Request
9.1 Offer 28
9.2 Capital Requirements 28
9.3 Risk & Opportunity 29
9.4 Value Proposition 29
10 Implementation
10.1 Year 1 30
10.2 Subsequent years 30

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
1 EXECUTIVE SUMMARY
1.1 Business Description

Rezene Gebremedhin Retail trade for Construction materials is company engaged in sourcing
of consumer goods of construction materials from local & International manufacturers & exporters.
The firm is established in Sep’2019 at the Tigray regional state capital city of Mekelle, Ethiopia.
The company dreams of comprise of sourcing from importing, Warehousing & Logistics
operations. The core business frame of this company solves the problem of retail companies briefly
by supply of goods with reasonable price & high standard so that they can retail it with cheap
price while maintaining a healthy profit which in the pages to come are detailed. The company
would be facilitating the realization of the corporate Vision by applying centralized supply system
to retail our shops by promoting high employment rate, Extended Partnership with entrepreneurs &
applying green act throughout our operation which is anticipated to bring huge back bone for our
retail shops which bring a huge turnover.

1.2 Products and Services

We specialize in Supplying construction materials all over the region to the door step of
retail shops. The product in our inventory is estimated to be around 30,000,000 birr we
mention the main categories here:
1. Different grades of Reinforcement bars
2. Reinforcement bar’s tie wire
3. Cement
4. Corrugated iron sheet
5. Wood Formwork
6. Metal Formwork
7. Nail
8. Dispatch service

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
1.3 The Market
The markets for consumer goods have three main actors Government, Importers,
Manufacturers & retailers in general. The value chain each category has long & in some
cases sophisticate way to the market place & is run by few numbers of people who don’t
have stake in the value addition but plays crucial role in the market.
On top the market is affected by seasonality & foreign currency problem of our country.
In the sector inflation rate compared to previous year is more than 40% and increasing at
an alarming rate (Ethio. Market 2022). Again, on customer side a number of
inconveniences are affecting the shopper in the market significantly.
In the Market there is fierce competition & sabotages. wholesale & retail market in the
industry on construction category materials are manipulated by few actors which makes it
hard for new entry into the business. Frequent shortage of materials is also the common
nature of the market which disrupts price, Supply & demand.
The market size as we are living in a country with 120 million people the market is simply
huge. We intend to take around 10% of the total market size in Tigray region then branch
out to neighboring regions.

1.4 The Opportunity

The value chain for consumer construction materials in Ethiopia is very long and
complicated with 2-5 actors & huge wastage of around 20-50 %, the average margin of
materials will inflate from 20% to 100% from source to end user. Again, in the market
place the customer suffers greatly from market price fluctuation, scattered market place
for different goods & long value chain which inflate the price for the consumer,
Unavailability of goods due to seasonality & lack of foreign currency. The problem we are
solving here is Stream lining & sustaining supply for through partnership & wastage
reduction through storage expertise to promote price stability, Product standardization;
Operations, brand trust, availability & partnership, efficient replenishment & logistics
system so that the goods arrive at the most convenient time, place, price & quality standard

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
 of the goods. Which makes is easier for customer to avoid price fluctuation, Inflation,
theft & high overhead cost, customer ordering by call center for purchase & receiving
the goods at promised delivery date would make the retailers life easy which in return this
opportunity with make our company grow & expand.

1.5 The Solution

Our solutions to the problems are brought forward by connecting the /Primary vendor to
retail shops place /Avoiding middle man/ thereby cutting the cost of owning goods &
hence sustaining supply (Inventory), price, quality, standard, low cost of purchase,
proximity & transport service avoiding unnecessary actors on the value chain of the
goods in our domain and dispatch packed, standardized & labeled products to the doors
of our retailing shops with a 5-10% market improvement. This approach of supply
makes our company have a unique solution for the customer.

1.6 Management Team

Table 1 Management team table

Name Position Background Skills

Management,
Entrepreneur, Technical & business
Rezene G/medhin General Manager Planning &
development & management
execution
Worked with the biggest wholesaler Planning, Sourcing,
Zeslas Hayleslase Procurement Head
in Ethiopia as a procurement expert. Negotiation
Quality assurance Storage: Standard
Merhawit G/medhin Certified quality manager
& supervision Head & Lab evaluation
Have closed multiple company ERP, IFRS,
Samuel Belay Finance Head
financial closing. Budgeting

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
1.7 Capital Requirements
So far 1.3-Million-birr cash has been injected as working capital & material cost of value
15 million birr is spent on this company for the purchase of construction materials.

Table 2 Source of Funds: How much is invested already.

Sources Amount Percentage

Owner’s Contribution 15,000,000.00 100%

Total 15,000,000.00 100%
Table 3 Source of Funds: How much loan is requested.

Sources Amount How it’s used

New Equity 30,000,000.
For buying construction materials
Financing 00
30,000,000.
Total 100%
00

Table 4 Capital Requirements

Sources Amount How it’s used

Owner’s 15,000,000.0 For buying construction

Contribution 0 materials
30,000,000.0 For buying construction
Loan
0 materials
45,000,000.0
Total
0

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
2 BUSINESS DESCRIPTION
2.1 Mission Statement
• Our mission is to source, process & supply Consumer goods in and surround
the Tigray region by stream lining the supply line with the best possible TOC
/total cost of owning /, top standard & quality with just in time inventory flow
then dispatch to our retail shops.
• Engage on partnering with small & medium enterprises,
• Continually advance in information technology & system automation.
• Expand our warehouse locally & neighboring region.

2.2 Values and Vision

 Synergy  Quality
 Trustworthiness  Green Resilient
 Responsiveness  Social Responsibility
 Partnership with loyalty,  Sustainability
 Just in time  System Oriented Operation
 Standardization

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
 With the above values we intend to reach to our vision stated below.
Be the world top 5 construction material retailing & consumer goods supply
warehouse & transport company operating In Tigray, Afar and Amhara regions owning
1000 warehouse & facility, thousands business partners & 1 thousand employees
selling 1 billion birr annually by 2033GC

2.3 Company Description

Our company as a supply and retailing company primarily focuses on availing goods to our retail
shops with the best possible price, quality standard & controlled inventory movement. By cutting
the value chain critically. In the back end of our company there will be around 100 thousand
partners working on construction industry. While in the front end of our company there will be
at least 1,000 shops to supply in and around Tigray, our company’s bank bones for achieving the
above business will be the use of state-of-the-art ERP system.

2.4 History and Current Status

Though the company was legally established & started operation in 2019 the vision and
dedication towards achieving started in 2015 with a primary objective of filling the gab of
supplying construction materials in Tigray region which are highly abused by brokers &
Sabotages. Now, the company has annual sales of 30,000,000 birr.

2.5 Goals and Objectives

The very objectives & goals we follow are based on solving the society problem through
consumer goods supply chain and is motivated by the visionary founder of the company each and
every goal shall and is intended to take us to solving the society problem and hence achieving our
vision. Therefore, a strategic goal has been set to be cascaded down to each department of the
company with measurable values converted into KPI to follow & evaluate the progress. Below
are the brief goals set from different perspective of our company.

Perspective Strategic Goals

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
 • Increasing turnover
Finance
• Reducing Cost

• Increasing product assortment & Asveza brand products

Customer
• Maximizing market improvement

• Maximizing information AI & data management.

• Improving inventory movement & management.

• Optimizing distribution & transport management

Internal Process (IP)
• Enhancing order management

• Improving quality & standard

• Micro Franchising with small enterprises

• Improving Research & Development capability

Learning & growth • Enhancing Human Capability

(L & G) • Improving ICT facility use

• Partnering with enterprises.

Table 5 KPI /Key performance Indicator

Strategic goals KPI UOM Baseline

Net profit Birr 9%

•Increasing turnover
Reducing Cost Net Profit % 9%
•Increasing product assortment product onboard # 2
Maximizing market improvement Ave. Market Improve. % 10
Improving inventory movement & management. Gross Margin % 15%
Optimizing distribution & transport No. of inventory turns Ratio 2

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
management
Enhancing order management Delivery time/Lead time hour 24
Improving quality & standard No of returns # 1
Expanding facilities No of facilities # 2
Micro Franchising with small enterprises No of contracts # 2
Enhancing Human Capability No of trainings # 2
Improving ICT facility use System utilization # 30%

2.6 Company Ownership

Ownership of the Company is Ato Rezene Gebremedhin with initial
investment of Birr 10,000,000.

3 PRODUCTS / SERVICES
3.1 Products / Services Description
As 20% of our construction materials bring 90% of our turnover we list those: Products
not to list more than 3,000 consumer goods there may be: Therefore, only with inventory
movement of more than 90% are listed below

 Reinforcement bars

 Tie wire

 Cement

 Nail

 Metal formwork

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
  Wood formwork

 Corrugated iron sheet

Services
 Dispatching

 Storage

 Micro franchising Service

3.2 Unique Features or Proprietary Aspects

Perspective Unique features Competitive advantage
created
Procurement From primary vendor to retail Lower cost of purchase & traceability.
Method shops
Quality Inspection All goods purchased are inspected Promotes health & trustworthiness
& tested by Lab

Table 6 The unique feature of our products

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
4 MARKET ANALYSIS
General situation of the market is analyzed as follows

4.1 Market Distribution

The market distribution shows that 87% of the channel for the market goes
to the KIOSK which is a shop retailer a customer group of our focus.

Row Labels Sum of Grand Total

Governmental 20%
Contractors 50%
NGO 10%
Public 20%
Grand Total 100%

4.2 Market Size

Category
spend per month per person
Reinforcement bar
1200
Tie wire
300
Nail
200
Cement
1500
Still formwork
300
Wood formwork
200
Corrugated iron sheet 300

The above data was taken from M.G business study

So, the market size will be the summation of the number of customers per our shop

Rezene Gebremedhin Retail Trade for Construction

Materials Business Plan
 4.3 Population Growth and Inflation
The trend of population growth is estimated to be 3.5% and inflation rate of 45%. Never in
history of consumer goods/construction material market there will be reduction in price but
increment as construction materials is a regional issue all items tend to increase in price.

4.4 Target Market & Share

Our target market is Contractors, government, NGO’s & Public & the total share we intend to
take is 50 million indirect customers we approach through estimated supply of goods to
hundreds of shops.

4.5 Competitor Analysis

Table 7 Competitive Analysis Table
I Big
Compa Strengt Weakne Manufactur Importance
Factor importer Wholesale
ny h ss ers to Customer
s rs
Very
Products High High High High
High
Very
Price High High Medium Very High
High

Quality High High High Medium

Service High Medium High Medium High

Very
Reliability Medium High Medium Very High
High

Stability High Low Medium Low High

Very
Expertise High High Medium High
High
Company
Very High/ High/
Reputatio Low High
High Medium Medium
n

Location High

Legality &
Medium/
sustainabi High High Low Medium/High
Low
lity
Sales Very
High High High High
Method High
Credit
High Medium Low Medium High
Policies
Product Very
High Low Low Low High
Assortme High

Rezene Gebremedhin Retail Trade for Construction

Materials Business Plan
nt
Very
Image
High

4.6 Competitive Advantage & Comparative

Evaluation.

Having seen the above competitive analysis table, we draw the following evaluation.
The most competitive advantage of our company over importers and manufacturers is that our
business model is totally different from that of the others in a way the product assortments, our
customers & our source witness sustainability in the field.

Rezene Gebremedhin Retail Trade for Construction

Materials Business Plan
5 MARKETING & SALES
5.1 Marketing Mix
Our market is primarily driven by our competitive advantages and sustainable partnership
with the Customer/Shop & supply chain. The relationship with our customer is based on
mutual destiny of vision on non-negotiable terms which are listed as follows:
Parameters
Rezene Gebremedhin Retail Trade for Const.
mat.
Price Price is labeled with fixed gross margin which is 15% & customer is given
5-10% market improvement for each material.

Product Each product supplied conforms to the government Standard, Quality is

assured and for any shortcoming an efficient purchase & sales policy will
be applied.
Promotion Products with promotion package are given away to customers free of
charge; Other promotions like car branding will be promoted by our
company.
People The human capital 100% focuses on the primary vendor, product &
services and system to be executed for the ongoing interaction with the
retail customer & the supply vendor.
Process The process of supply scope will be from procurement of the product or
service to dispatch of the goods to the door step of the customer.
Physical Our organization have sufficient infrastructure like warehouse, System &
Environmen dedicated staffs through these resources we receive orders instantly which
t makes it easier for the customer to follow & analyze progress.
Brief Notes:
 Customer is supplied with a quality & standard product.
 All vendor agreements on purchase policies are signed.
 All payment terms are applied as agreed.
 The designated gross margin & net profit will be set on common understanding.

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
  Inventory replenishment is in a way there will be 0 stocks out product in the shop.
 All products are fully finished for end user.

5.2 Distribution Channels

As a standard Rezene Gebremedhin Retail will distribute sold
construction materials to our retail shops with the concept of for every
10 shops there will be 1 warehouse & 2 delivery vehicles Our
distribution channel are warehouses to be located at 5 areas of Mekelle
in the first milestone then branching to other states of the country.

5.3 Sales Forecasts

Prepare a month-by-month sales forecast for a projected -month period
(March-July).

Category UOM March April May June July

Reinforceme 71.18 4,331,956. 6,497,934. 8,663,913.1 10,829,891. 12,995,869.

nt % 58 87 6 45 74
Cement 16.82 1,023,603. 1,535,404. 2,047,206.5 2,559,008.1 3,070,809.7
% 26 89 2 4 7
Corrugated 7.84% 476,856.78 715,285.1 953,713.55 1,192,141.9 1,430,570.3
iron sheet 6 4 3
Tie wire 2.56% 155,517.81 233,276.7 311,035.62 388,794.53 466,553.43
2
Nail 0.27% 16,380.00 24,570.00 32,760.00 40,950.00 49,140.00

Formwork 1.34% 81,509.50 122,264.2 163,019.00 203,773.75 244,528.50

5
100% 6,085,823. 9,128,735. 12,171,647. 15,214,559. 18,257,471.
92 89 85 81 77

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
6 MANAGEMENT
6.1 Company Organization
The company is an individual company and has the right over all commercial codes &
policies and is entitled to branch out in different locations.
The company is directed by Ato Rezene Gebremedhin & closely regulated by private
management consultancy plc. for its
 Legal
 Finance
 HR
 Consultancy requirements of the company.

6.2 Management Team

Name Position Age

Rezene G/medhin General Manager 35
Zeslas Hayleslase Procurement Head 38
Merhawit Quality assurance &
28
G/medhin supervision Head
Samuel Belay Finance Head 32

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
6.3 Management Structure and Professional
Advisory
The company is directed by Ato Rezene Gebremedhin & is closely supported, regulated &
compensated by Dr.Eng. Mehari G/yohannes Business consultancy. Basic support
points are listed below.
 Legal
 Finance
 HR
 Consultancy requirements of the company.
The top management of the companies is displayed below and middle & lower
management team extends downwards.
For the size and scope of our current operation the below structure functions well but when
expansion is done the structure is open for modifications depending on the scope of work
in place.

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
7 OPERATIONS
7.1 Operations Strategy
Our operation strategy comprises of the following.

Sourcing Sourcing from primary vendor. /Sourcing from source/.

In house value addition on some goods & micro
Processing franchising to small & medium enterprises for most of
our products.
Quality & standard conformity is inspected before
Quality Inspection
purchase & during packing & dispatch.
Apply best warehouse operation backed with
Warehousing
technology & efficient warehouse networking.
Packing operation for bulk processed goods at
Packing
warehouse.
Using a low-cost operating EV for dispatching goods
Dispatching
with state-of-the-art dispatch system implementation.

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
 7.2 Scope of Operations
To state is briefly the scope of our operation starts from the primary vendor & ends at the
dispatch point of our retail shops.

7.3 Ongoing Operations

Sourcing: /processing few commodities/: Warehousing: packing & dispatching. These are
the ongoing operations so far, but we will soon add commercial farming, Cold chain
service & spice processing operation into our scope.

Sourcing Sourcing Processing Warehousing Sales/Dispatching

Handling Sales/Dispatching

Value Adding Receiving

Receiving Call center
Planning Call center
Value Adding Packing Shelving
Shelving
Contracting Micro-franchise Order taking
Order taking
Micro-franchise Loading Packing
Packing
Negotiating In-house Planning
Planning
In-house Transporting Shipping
Shipping
Partnering Processing Dispatching
Dispatching
Processing Handling W.H
W.HNetwork
Network

Sourcing 7.4 Location

The location of our warehouse & office is based at Mekelle kebele 15, H.NO new with
rental agreement. Besides Lachi & Hawelti are among the prime location sited for future
expansion.

7.5 Personnel
The total numbers of employees we have are currently 4 Management top and middle
with 17 labor force: currently the training requirement is being assessed but overall our
employees have good discipline & skill for the jobs they are entitled. The salary of staffs is
according to the company policy which can be revised depending on the expansion size of
our company.

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
7.6 Production
According to the purchase policy we have there are steps taken as standard. Primary
vendor: quality Inspection: purchase committee Decision: Purchase: Logistics: unloading:
warehousing: Dispatching. Key standards in our supply.
Parameters Technique
Production technique Sourcing from source
Cost Low TOC/Total cost of owning
Quality Inspection before purchase & during sales.
Call center or ERP Purchase order request for
Customer service
ordering & delivery to shop for delivery method.

7.7 Operations Expenses

The operating cost structure for our current state is both Fixed & variables.
Fixed cost
 Salary
 Employee income tax & pension contribution.
 Employee benefits
 Warehouse Rent.

Variable
 Cost of purchase / phone calls loading, transporting & other custom charges.
 Fuel & transport cost.
 Shrinkage, wastage & expiry.
 Utilities cost
 Selling cost.

7.8 Legal Environment

Describe the elements that apply to your business (permits, licensing, trademarks,
copyrights, patents etc.). Our companies have legal elements that apply like:

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
  Insurance
 Trademark registration
 Product conformity assessment.
 Joint Venturing
 Micro franchising

7.9 Inventory
Basically, all operations and merchandizing business of our company use ERP system to
control replenish & transfer inventories. The basic parameters considered are
 Maximum Stock
 Safety Stock
 Minimum Stock
 Reorder point
 Maximum reorder quantity
 Lead Time &
 Expiry date are the parameters controlled by our ERP and inventory movement
ration is calculated weekly from our sales.

These parameters are entered on item card and automated control will be implemented.

7.10 Credit Policies

About our credit policies its implemented both on supply & sales side. As a beginner we
have limited interaction with our policies. Currently we give 30 days’ credit for selected
goods to our customer & we purchase credit from supplier of some commodities, In the
years to come we intend to onboard credit suppliers.

ACCOUNT RECEIVABLE /Customer/.

TOTAL CURRENT 30 DAYS 60 DAYS 90 DAYS +90 DAYS

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
ACCOUNT
RECEIVABLE 400,000 178,000.00 yes
AGING

ACCOUNT PAYABLE /Vendor/

TOTAL CURRENT 30 DAYS 60 DAYS 90 DAYS +90 DAYS

ACCOUNT 4,500,000.0
PAYABLE 645,000.00 Yes
AGING
0

ACCOUNT 30,000,000.
PAYABLE Yes
AGING
00

8 FINANCIAL PLAN & PROJECTIONS

8.1 Start-up Expenses & Funding
ACTUAL BUDGETED
START-UP COSTS
Cheque Issued Commission 250
Merchandise Purchase 1,074,040.0 2,000,000.00

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
 Printing & Duplicating 7,370.00
Cash
Decorating
Deposits for Utilities
Equipment 13,786.00
Taxes 689,642.00
Headhunting or Other Hiring Costs
Installation of Equipment
Insurance
Legal Costs
Licenses and Permits 1,823.00
Moving
Office Supplies
Print Design
Printing
Remodeling, Build out
Rent Deposits
Salaries 167,015.2

Signs
Software
Starting Inventory
Unanticipated expenses
Vehicles
Website
Other 19,100
Total Start-Up Costs 1,973,026.20

8.2 Sales Forecast

Product Janury Feburary March Aprile May June July August Sep Oct Nov Dec
Reinforcement 1,082,866 2,165,945 4,331,956.58 6,497,934.87 8,663,913.16 10,829,891.45 12,995,869.74 14,078,641 15,161,613 16,244,586 17,327,558 18,410,530
Cement 255,884 511,818 1,023,603.26 1,535,404.89 2,047,206.52 2,559,008.14 3,070,809.77 3,326,816 3,582,725 3,838,633 4,094,542 4,350,451
Corrugated iron sheet 119,270 238,564 476,856.78 715,285.16 953,713.55 1,192,141.94 1,430,570.33 1,550,668 1,669,950 1,789,232 1,908,514 2,027,797
Tie wire 38,945 77,899 155,517.81 233,276.72 311,035.62 388,794.53 466,553.43 506,341 545,290 584,239 623,188 662,138
Nail 4,108 8,216 16,380.00 24,570.00 32,760.00 40,950.00 49,140.00 53,403 57,511 61,619 65,727 69,835
Formwork 20,386 40,775 81,509.50 122,264.25 163,019.00 203,773.75 244,528.50 265,038 285,425 305,813 326,200 346,588
Total 1,521,306 3,042,912 6,085,824 9,128,736 12,171,648 15,214,560 18,257,472 19,778,928 21,300,384 22,821,840 24,343,296 25,864,752

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
8.3 3-Year Sales Forecast

Total Sales Year 1 Year 2 Year 3

Reinforcement 21,352,700.69 23,915,024.78 24,871,625.77
Cement 5,045,612.46 5,651,085.95 5,877,129.39
Corrugated iron sheet 2,351,390.35 2,633,557.20 2,738,899.48
Tie wire 767,482.58 859,580.49 893,963.71
Nail 80,908.22 90,617.21 94,241.89
Formwork 401,905.69 450,134.37 468,139.75
Total 30,000,000.00 33,600,000.00 34,944,000.00

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
 3-Year Sales Forecast
40,000,000.00
35,000,000.00
30,000,000.00 Tie wire
25,000,000.00 Corrugated iron sheet
Formwork
20,000,000.00
Birr in

Nail
15,000,000.00 Cement
10,000,000.00 Reinforcement

5,000,000.00
0.00
Year 1 Year 2 Year 3
Year

8.4 Profit and Loss Projection

INCOME 2023/24 % of OI 2025 % of OI 2026 % of OI

Operating Income
Reinforcement 12,779,130 71.2% 14,312,626 71.2% 14,885,131 71.2%
Cement 3,019,690 16.8% 3,382,053 16.8% 3,517,335 16.8%
Corrugated iron sheet 1,407,256 7.8% 1,576,127 7.8% 1,639,172 7.8%
Tie wire 459,322 514,440 535,018
Nail 48,422 54,232 56,402
Formwork 240,532 1.3% 269,396 1.3% 280,172 1.3%
Total Operating Income (OI) 17,954,352 100.0% 20,108,875 100.0% 20,913,230 100.0%
Non-Operating Income
Interest Income
Rental Income
Gifts Received
Donations
Total Non-Operating Income 0 0 0
17,954,35 100.0 20,108,87 100.0 20,913,23 100.0
Total INCOME
2 % 5 % 0 %
EXPENSES
Operating Expenses
Accounting and Legal - - -
Advertising 100,000 0.6% 100,000 0.5% 100,000 0.5%
Depreciation - - -
Dues and Subscriptions - - -
Insurance 20,000 0.1% 20,000 0.1% 20,000 0.1%
Interest Expense - - -

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
Maintenance and Repairs 200,000 1.1% 200,000 1.0% 200,000 1.0%
Office Supplies 150,000 0.8% 150,000 0.7% 150,000 0.7%
Payroll Expenses 300,000 1.7% 300,000 1.5% 300,000 1.4%
Postage - - -
Rent 1,000,000 5.6% 1,000,000 5.0% 1,000,000 4.8%
Research and Development - - -
Salaries and Wages 100,000 0.6% 100,000 0.5% 100,000 0.5%
Taxes and Licenses 2,000 0.0% 2,000 0.0% 2,000 0.0%
Telephone 24,000 0.1% 24,000 0.1% 24,000 0.1%
Travel - - -
Utilities 50,000 0.3% 50,000 0.2% 50,000 0.2%
Web Hosting and Domains - - -
Total Operating Expenses 1,946,000 10.8% 1,946,000 9.7% 1,946,000 9.3%
Non-Recurring Expenses
Furniture, Equipment &
20,000 0.1% 20,000 0.1% 20,000 0.1%
Software
Gifts Given 10,000 0.1% 10,000 0.0% 10,000 0.0%
Total Non-Recurring Expenses 30,000 0.2% 30,000 0.1% 30,000 0.1%
Total EXPENSES 1,976,000 11.0% 1,976,000 9.8% 1,976,000 9.4%
Net Income Before Taxes 15,978,352 18,132,875 18,937,230
Income Tax Expense 5,592,423 6,346,506 6,628,030
10,385,92 11,786,36 12,309,19
NET INCOME
9 8 9
Owner Distributions /
Dividends
Adjustment to Retained
10,385,929 11,786,368 12,309,199
Earnings

8.5 Balance Sheet

Assets 2023 2024

Current Assets
Cash
Accounts receivable 15,002,481
Inventory
Prepaid expenses
Short-term investments
Total current assets 15,002,481 0
Fixed (Long-Term) Assets
Long-term investments 15,000,000

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
Property, plant, and equipment 7,000,000
(Less accumulated depreciation)
Intangible assets
Total fixed assets 22,000,000 0
Other Assets
Deferred income tax
Other
Total Other Assets 0 0
Total Assets 37,002,481 0

Liabilities and Owner's Equity

Current Liabilities
Accounts payable
Short-term loans
Income taxes payable 689,642
Accrued salaries and wages
Unearned revenue
Current portion of long-term debt
Total current liabilities 689,642 0
Long-Term Liabilities
Long-term debt 30,000,000
Deferred income tax
Total long-term liabilities 30,000,000 0
Owner's Equity
Owner's investment 30,002,481
Retained earnings
Total owner's equity 30,002,481 0
Total Liabilities and Owner's Equity 60,692,123 0
{42}
Common Financial Ratios
Debt Ratio (Total Liabilities / Total Assets) 0.83
Current Ratio (Current Assets / Current Liabilities) 21.75
Working Capital (Current Assets - Current Liabilities) -
14,312,839
Assets-to-Equity Ratio (Total Assets / Owner's Equity) 1.23
Debt-to-Equity Ratio (Total Liabilities / Owner's Equity) 1.02

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
8.6 Cash Flow
A cash flow statement identifies monthly inflows and outflows of cash.
It reveals whether a company will have enough money to meet its needs
on a monthly basis.
CASH BALANCE 2024 2025 2026
Date 12/30/202 12/30/202 12/30/202
Ending 4 5 6
Cash at
18,133,14
Beginning 1,521,306 9,431,705
5
of Period
Cash at
18,133,14 27,704,72
End of 9,431,705
5 8
Period

CASH INFLOWS 2024 2025 2026

Cash from Operations
Receipts
from 25,864,75 28,451,22 31,296,35
Customer 2 7 0
s
Gross
Rents
Total
Cash from 25,864,75 28,451,22 31,296,35
Operation 2 7 0
s
Cash from Financing
Issuance
of Stock
Borrowing
Total
Cash from 0 0 0
Financing
Cash from Investing
Sale of
Property
and
Equipmen
t
Collection
of

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
 Principal
on Loans
Sale of
Investmen
t
Securities
Total
Cash from 0 0 0
Investing
25,864,75 28,451,22 31,296,35
Total Cash Inflows
2 7 0

CASH OUTFLOWS 2024 2025 2026

Operations
Wages
Inventory
Purchases
General
Operating
Expenses
Interest
Income
Taxes
Total
Outflows
from 0 0 0
Operation
s
Financing
Repayme
nt of
Loans
Repurchas
e of
Stocks
Dividends
Paid
Total
Outflows
0 0 0
from
Financing
Investing
Purchase 17,954,35 19,749,78 21,724,76
of 2 8 6
Property

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
 and
Equipmen
t
Making
Loans to
Other
Entities
Purchase
of
Investmen
t
Securities
Total
Outflows 17,954,35 19,749,78 21,724,76
from 2 8 6
Investing
17,954,35 19,749,78 21,724,76
Total Cash Outflows
2 8 6

NET CASH FLOW 7,910,399 8,701,439 9,571,583

8.7 Break-Even Analysis

Provide a calculation for the break-even point and units for the business.

Include all assumptions upon which your break-even calculation is

based.

Assumptions

Monthly end customer expenditure

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
Categories Spend per month per customer
Reinforcement bar 1200 ETB
Tie wire 300 ETB
Nail 200 ETB
Cement 1500 ETB
Formwork 300 ETB
Corrugated iron sheet 300 ETB

Total Expenditure/Person/Month 3,800 ETB

Monthly Shop expansion

Shops Customer /Shop Total ETB /Customer/Month Total Revenue
Customer

5 2,368 11,842 3,800 ETB 45,000,000 ETB

Breakeven Analysis Summary

Amount

Variable Cost per Unit 35,895,652

Fixed Cost (Total) 450,000.00

Expected Sales (in Units) 11,842

Price (per Unit) 3800

Total Revenue 45,000,000

Total Variable Costs 35,895,652

Profit 9,104,348

Profit by Unit Sold 768.81

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
9 OFFERING / FUNDING REQUEST
9.1 Offer

Perspectives Value Narration

Amount of cash 30,000,000.00 Total capital for
merchandizing.
Structure of the The structure of the deal
deal follows the company structure
above.
Anticipated return This amount will be net profit
2,000,000.00 in 5-month time

9.2 Capital Requirements

Cash Disbursement
S. No Description Value
1 Total Credit Value 15,002,481.00
2 Stock Available 1,991,597.33
3 Budget Requested 45,000,000.00
Net Budget Due 30,000,000.00

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
9.3 Risk & Opportunity
Things to focus Opportunity Threat
Political Unrest, Ethnic issue, Rule
Political None
of law
Social Cheap labor Lack of skill & Expertise

The ever-growing economy of

Economical High competition
Ethiopia & the increasing demand

Availability of High Tec ERP Failure to Utilize it efficiently

Technological
system & IT infrastructure Down time of work due to system
Weather conditions for farm
Chance to use renewable energy
Environmental products & Limitation on forecast &
like solar, wind, EV & others
mitigation technology in the field.

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan
9.4 Value Proposition

The below indicates the value of the business and how we determines
this value.

10 IMPLEMENTATION

10.1 Year 1
Summarize the key tasks to be completed during the first year of your
business plan. Be short and concise.

Goal 1: Improve purchase price of all goods

Goal 2: Improve gross margin from 5% to 15%

Goal 3: Organize a dispatch team & vehicle for moving sales goods to the
retail shops.
Goal 4: Full usage of Vendor, Item & customer cards.

Goal 5: Add another 2,000 m2 of storage area.

10.2 Subsequent years

Implementation plan for the subsequent years Strategic tasks.

Goal 1: Expand to two 5 warehouse around Mekelle

Goal 2: Develop 1 branch warehouse at Wukro

Goal 3: Partner with Farmers & Small enterprises

Rezene Gebremedhin Retail Trade for

Construction Materials Business Plan