lOMoARcPSD|33868474

Business Plan for Wholesale trade of

Zewdinesh Stationary products

1
 lOMoARcPSD|33868474

Business plan for

Wholesale Trade of
Stationary Materials

Business Name: Wholsale Trade of Stationery materials

Business Location: Addis Ababa Adminstration, Arada Sub city,
Woreda 5 house No D/05

October, 2023
 lOMoARcPSD|33868474

Table of Contents
Executive Summary......................................................................................................................................iii

1. Information............................................................................................................................................2

The Applicant............................................................................................................................................2

The project.................................................................................................................................................2

Business Overview....................................................................................................................................2

Industry Analysis.......................................................................................................................................3

Background of the Promoter......................................................................................................................3

Current loans with other banks and MFIs..................................................................................................3

Purpose and amount of loan requested......................................................................................................3

2. Business Structure..................................................................................................................................3

3. Job Roles and Responsibilities..............................................................................................................4

Vision of the Project..................................................................................................................................7

Mission of the Project................................................................................................................................7

Project Goal...............................................................................................................................................7

4. Product/Service Description..................................................................................................................7

5. Project Beneficiaries..............................................................................................................................8

6. Market Demand.....................................................................................................................................8

Market overview........................................................................................................................................8

Competitive Analysis.................................................................................................................................8

7. Competitive Advantage.........................................................................................................................9

8. Marketing Plan.......................................................................................................................................9

Target Market.............................................................................................................................................9

Market Penetration.....................................................................................................................................9

Marketing Objectives...............................................................................................................................10

Marketing Strategy...................................................................................................................................10

Publicity and Advertising Strategy..........................................................................................................10

Pricing......................................................................................................................................................10
 lOMoARcPSD|33868474

9. Technical Study...................................................................................................................................11

Description of the project area.................................................................................................................11

Infrastructure and institution....................................................................................................................11

10. Strategic Assessment/ SWOT Analysis of the Project....................................................................11

11. Key Success Factors........................................................................................................................13

12. Organizations and Management......................................................................................................13

Business Form..........................................................................................................................................13

Proposed Organizational Structure of the organization...........................................................................13

List of Human Resource Requirement of the Project..............................................................................15

13. Financial Study................................................................................................................................16

Financial Requirement.............................................................................................................................16

Estimated Operating Cost........................................................................................................................16

Estimated of Revenue..............................................................................................................................17

The estimated revenue for the coming five years starting 2015 E.C is depicted in the following table 4.
............................................................................................................................................................... 17

Projected Profit and Loss Statement........................................................................................................18

Projected Cash flow Statement................................................................................................................19

14. Viability and Other measures of Project feasibility.........................................................................19

15. Environmental Impact Analysis.......................................................................................................20

16. Sensitivity Analysis.........................................................................................................................20

17. Socio-economic Benefits of the project...........................................................................................21

18. Conclusion and Recommendation...................................................................................................21

19. Implementation Plan of the project..................................................................................................21

20. Bank Loan Repayment Schedule.....................................................................................................22

Annex….........................................................................................................................................23
 lOMoARcPSD|33868474

Executive Summary
• Business Name Stationery Material Business
• Business Owner Zewdinesh Gizachew Worku
• Background of the W/ro Zewdinesh Gizachew wholesale trade is a business women
promoter who has lived in Addis Ababafor long period of time. Mrs.
Zewdinesh has been doing Stationery related material in the city
since 2012 E.C. Now, he wants to expand his business by
getting a loan amounting
Br.4, 800,000.00 from Commercial Bank Of Ethiopia.
• Business Type Wholesale trade
• Business Promoter The promoter of the project is the owner himself (the investor)
And those of who are benefiting from the firm.
• Nationality Ethiopian
• Business Location Addis Ababa city, Arada,
Woreda 05
• Job opportunity Permanent: Skilled 6 and unskilled 3, Total = 9
• Benefit Expected The company will buy and sell more than 33 different Stationery
Materials per year and create job opportunity for 9 individuals.
• Expected beneficiaries ➢ Traders in the city and
➢ Government and NGO’s offices of the woreda
➢ Societies of schools and overall community
➢ Individuals in getting job

• Market Destination • Governmental Offices

• Schools
• NGOs and
• Retail traders and Private Individuals
• Source of finance Out of the total working capital required for expansition (Br.
6,160,125.12) to run the business of Stationery materials; (Br.
1,160,125.12) will be equity contribution while Br. 4,800,000.00
will be obtained from Commercial Bank Of Ethiopia at an
interest rate of 15.5%
for five years.
• Recommendation The project is economically, financially and socially feasible.
For instance, financially, the project’s IRR is 85.25% which is
greater than discount rate (17%) and NPV is equal to
Br.45,698,245.34

1|Page
 lOMoARcPSD|33868474

Stationery related Material Business

Information

The Applicant
❖ Name: Zewdinesh Gizachew
❖ Address of the Business:-
• Region: Addis Ababa
• Sub city: Addis Ababa
• Woreda: 05
• Mobile: +251-912388553
Name of the project/company: Zewdinesh Gizachew Wholsale Trade of Stationery
Materials
Business License:-
- Legal form of Business: Sole Proprietorship
- Type of license: Trade
- Business Category: Wholesale Trade of Stationery, Cosmetics Appliances
- Tax paying identification number (TIN): 0019492184
- Registered capital of the project/company: 30,000 ETB birr
Business Overview
The global consumer Stationery and related industry involves the manufacture, distribution and
sale of Stationery materials such as exercise books, pen, pencils, coloring pencils, different types
of papers, offices used equipment like puncher, paper trees, dividers, note books, staplers,
different size of Posta, carbons, file holders, products etc.

2|Page
 lOMoARcPSD|33868474

Industry Analysis
Stationery Wholesale store business is part of the consumer Stationery related industry and this
industry consists of businesses that are into the sale of a wide range of offices supply materials,
students learning materials and any business firms Stationery needs.
Statistics has it that in Ethiopia alone, there are about 15,132 registered and licensed consumer
Stationery retail stores responsible for employing about 79,256 people and the industry rakes in a
whooping sum of $38 billion annually.
The industry was projected to grow at 2.2 percent annual growth within 2015 and 2023. A recent
report published by IBISWORLD shows that consumer confidence and spending grew over the
past five years, but not enough to lift the industry out of its mild decline due to fierce
competition from online Wholesalers, retailers, discount retailers and department stores.
If you are contemplating opening a consumer Stationery retail store in Ethiopia, you should
ensure that you carry out thorough market survey and feasibility studies. The truth is that, if you
get some key factors wrong before expanding your own consumer Stationery Wholesale store,
then you are likely going to struggle to stay afloat.
Background of the Business
Zewdinesh Gizachew is a business Women who is living in Addis Ababa, Arada Sub city. She
has been in the business for more than Five years. She started the business in Addis Ababa city
administration in 2012 E.C with a registered capital of Br. 30,000. Now, she wants to expand her
business by getting a loan amounting Br.4, 800,000.00 from Commercial Bank of Ethiopia.

Purpose and amount of loan requested

The loan was requested to buy Stationery materials i n l a r g e a m o u n t s and sell it to
retailers in the city wide. The amount of loan requested is Br. 4,800,000.00 since the owner has a
liquidity problem for expanding the business.

3|Page
 lOMoARcPSD|33868474

1. Business Structure
Ordinarily, we would have established Stationery business with few employees, but as part of
our plans to build a top flight Stationery business in Ethiopia, we have perfected plans to get it
right from the onset which is why we are going the extra mile to ensure that we have competent
employees to occupy all the available positions in our company.
The picture of the kind of Stationery business we intend to expand and the business goals we
want to achieve is what informed the amount we are ready to spend to ensure that we build a
standard business and robust distribution network. In view of that, we have decided to hire
additional qualified and competent hands to occupy the following positions at the Company;
• Warehouse Manager
• Merchandize Manager
• Information technologist
• Sales and Marketing Manager
• Accountants / Cashiers
• Customer Services Executive
• Drivers / Distributors
2. Job Roles and Responsibilities
Chief Executive Officer – CEO:
• Increases management’s effectiveness by recruiting, selecting, orienting, training,
coaching, counseling, and disciplining managers; communicating values, strategies, and
objectives; assigning accountabilities; planning, monitoring, and appraising job results;
developing incentives; developing a climate for offering information and opinions;
providing educational opportunities.
• Creates, communicates, and implements the organization’s vision, mission, and overall
direction – i.e. leading the development and implementation of the overall organization’s
strategy.
• Responsible for fixing prices and signing business deals
• Accountable for providing direction for the business
• Creating, communicating, and implementing the organization’s vision, mission, and
Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization

4|Page
 lOMoARcPSD|33868474

Warehouse Manager:
• Responsible for organizing the safe and efficient receipt, storage and dispatch of
warehoused goods
• Responsible for liaising with customers, suppliers and transport companies
• In charge of planning, coordinating and monitoring the receipt, orderly assembly and
dispatch of Stationery.
• In charge of coordinating the use of automated and computerized systems where
necessary.
• Responsible for producing regular reports and statistics on a daily, weekly and monthly
basis.
• Ensure that the warehouse facility is in tip top shape and goods are properly arranged and
easy to locate
• Supervise the workforce in the warehouse floor.
Merchandize Manager
• Manages vendor relations, market visits, and the ongoing education and development of
the organizations’ buying teams.
• Responsible for the purchase of Stationery for the organizations.
• Responsible for planning sales, monitoring inventory, selecting the merchandise, and
writing and pricing orders to vendors.
• Ensures that the organization operates within stipulated budget.
Sales and Marketing Manager

5|Page
 lOMoARcPSD|33868474

• Manages external research and coordinate all the internal sources of information to retain
the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data
generated by customer purchases
• Identifies, prioritizes, and reaches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts;
participates in the structuring and financing of projects; assures the completion of
development projects.
• Responsible for supervising implementation, advocate for the customer’s needs, and
communicate with clients
• Develops, executes and evaluates new plans for expanding sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company

Information Technologist
• Manages the organization’s website and social media
• Handles ecommerce aspect of the business
• Responsible for installing and maintenance of computer software and hardware for the
organization
• Manages logistics and supply chain software, Web servers, e-commerce software and
POS (points of sale) systems

• Handles any other technological and IT related duties.

Accountant/Cashier:
• Responsible for preparing financial reports, budgets, and financial statements for the
organization
• Provides managements with financial analyses, development budgets, and accounting
reports; analyzes financial feasibility for the most complex proposed projects; conducts
market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.

6|Page
 lOMoARcPSD|33868474

• Performs cash management, general ledger accounting, and financial reporting

• Responsible for developing and managing financial systems and policies
• Answerable to administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization
Client Service Executive
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the
client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s
interest in the company’s products and services
• Manages administrative duties assigned by the human resources and admin manager in
an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products,
promotional campaigns etc. to ensure accurate and helpful information is supplied to
customers when they make enquiries
Distribution Truck Drivers
• Assist in loading and unloading Stationery
• Keeps a record of vehicle inspections and make sure the truck is equipped with safety
equipment
• Assists the transport and logistics manager in planning their route according to a
distribution schedule.
• Local-delivery drivers may be required to sell products or services to stores and
businesses on their route, obtain signatures from recipients and collect cash.
• Inspect vehicles for mechanical items and safety issues and perform preventative
maintenance
• Complies with truck driving rules and regulations (size, weight, route designations,
parking, break periods etc.) as well as with company policies and procedures
• Collects and verifies delivery instructions
• Reports defects, accidents or violations

7|Page
 lOMoARcPSD|33868474

Vision of the Project

To become one among top wholesale trade in Stationery Material businesses in Ethiopia by 2037
and thereby achieve sales and profit growth goal of 7%, in the next five years.
Mission of the Project
The company has a mission to become the recognized leader in its targeted local market in
Stationery Materials, and to give customer optimum satisfaction, through its innovative, quality,
and timely service delivery.
Project Goal
The goal of this plan is to generate sustainable and an incremental profit by selling Stationery
materials for different sectors in the different parts of the city and in Ethiopia, gradually.
Accordingly, this company will contribute a lot to the desire for the betterment of life and
livelihood of inhabitants and the economic transformation of the country and beyond.
3. Product/Service Description
Stationery related materials are the type of materials which are typically used as core materials
for students and offices materials as well as households. Students needs exercise books, pen and
pencil in their learning process. And governmental and NGO’s offices need Stationery materials
of their offices use like papers, Posta, file holders, punchers, staplers and so on. Changing
dimensions and level of functionality requires continuous efforts to develop state of the art
materials to meet the technological challenges associated with development of these materials.
The response to external stimulus is strongly correlated with the internal structure of material at
different length- scales, chemical composition, both intrinsic and extrinsic defects, as well
as dimensionality (zero, one, two or three dimensional) of the material. The field of Science and
Technology of Stationery and related Materials involve understanding these correlations, as well
as development of technologies for the synthesis/fabrication of materials with desired Stationery
properties.
4. Project Beneficiaries
The current and expected beneficiaries of this project are:
➢ Retailers living in the city and the surrounding the town
➢ Government and NGO at large
➢ Schools
➢ Society

8|Page
 lOMoARcPSD|33868474

For instance, with regard to job opportunity, currently, 9 individuals at different position were
recruited. In the future, based on the expansion of the business, more than 5 professionals and 4
nonprofessionals will be recruited that indisputably contributes towards the urge to reduce
unemployment.
5. Market Demand
Market overview
The Stationery materials market is anticipated to have a significant CAGR of 6.25% during
the period of 2022-2032. According to FMI, the Stationery materials market will expand from
55.7 billion birr in 2022 to 114.8 billion birr in 2032. Previously, the market developed at a
higher rate of 7% per year from 2015 to 2021, reaching a market size of 78.12 billion birr in
2021.
“The Stationery related materials market share is increasing due to the recent automation of
works and increased demand.”
Attributes Details
Stationery Materials Market CAGR (2022-2032) 6.25%
Stationery Materials Market Size (2022) 78.12 billion birr
Stationery Materials Market Size (2032) 114.8 billion birr

The Stationery related materials market is predicted to develop due to the rising demand for
Stationery related materials in the manufacture of papers, pens, and other necessary Stationery
related materials. Stationery materials manufacturers now have a plethora of options thanks to
technology. Furthermore, the construction and expansion of corporate enterprises are boosting
the usage of Stationery related equipment that heavily relies on Stationery materials, such as
papers, pens, and other office Stationery equipment’s.
Competitive Analysis
This is the most important sections of the business plan that you must write completely based on
study and research. Based on the analysis the sector has many competitors with similar related
products, the business in order to be competitive the business needs to bring quality and price
competitive products in order to win the fierce competitive the sector faces.

9|Page
 lOMoARcPSD|33868474

6. Competitive Advantage
A close study of the consumer Stationery r e l a t e d industry reveals that the market has
become much more intensely competitive over the last decade. As a matter of fact, you have to
be highly creative, customer centric and proactive if you must survive in this trade. We are aware
of the stiff competition and we are prepared to compete favorably with other leading stores in
Ethiopia. One thing is certain; we will ensure that we have a wide range of consumer Stationery
available in our store at all times. It will be difficult for customers to visit our store and not see
the type of consumer Stationery that they are looking for.
One of our business goals is to make Zewdinesh Stationery wholesale Store, a one stop
consumer Stationery and related products distributer. Our excellent customer service culture,
online store, various payment options and highly secured facility will serve as a competitive
advantage for us. Lastly, our employees will be well taken care of, and their welfare package will
be among the best within our category in the industry meaning that they will be more than
willing to build the business with us and help deliver our set goals and objectives. We will also
give good working conditions and commissions to freelance sales agents that we will recruit
from time to time.
7. Marketing Plan
Target Market
We have positioned our consumer Stationery retail store to service residents in Ethiopia and
every other location where outlets will be located. We have conducted our market research and
feasibility studies and we have ideas of what our target market would be expecting from us.
We are in business to supply a wide range of consumer Stationery to the following:
• Offices of government
• Offices of NGO
• Home Remodeling Companies
• Schools
Market Penetration
Entering the market depends on how best we can advertise the product and convinces our
customers to use the service. To make this possible the owner will do the following:
• Hire well equipped and dedicated professionals
• Render higher quality service with reasonable price
• Motivate its employees by providing different incentives
10 | P a g e
 lOMoARcPSD|33868474

Marketing Objectives
• Develop e-commerce functionality for the Company’s website
• Implement a local campaign with the Company’s targeted market via the use of flyers,
local newspaper advertisements, and word of mouth advertising.
• Develop an online presence by developing a website and placing the Company’s name
and contact information with online directories.
Marketing Strategy
➢ Establish contacts with various educational institutes & Government & Private
offices in the local market.
➢ Implement a local campaign with the Company’s targeted market via the use of
flyers, local newspaper advertisements, electronic advertisements & hoardings.
➢ Develop an online presence by developing a website and placing the Company’s
name and contact information with online directories
Publicity and Advertising Strategy
As a matter of fact, our publicity and advertising strategy is not solely for selling our products
but to also effectively communicate our brand. Here are the platforms we intend leveraging on to
promote and advertise Zewdinesh Gizachew wholesale trade;
• Place adverts on both print (community based newspapers and magazines) and electrical
Media platforms
• Sponsor relevant community programs
• Leverage on the internet and social media platforms like Instagram, Facebook, twitter, et
al to promote our brand
• Install our billboards on strategic locations all around major communities in Ethiopia
• Distribute our fliers and handbills in target areas in Ethiopia
• Position our Flexi Banners at strategic positions in the location where we intend getting
customers to start patronizing our Stationery
• Ensure that all our staff members wear our customized clothes, and all our official cars
and distribution trucks are customized and well branded
Pricing
With regard to the selling price of the Stationery r e l a t e d Materials, the owner will
follow premium pricing strategy.

11 | P a g e
 lOMoARcPSD|33868474

8. Technical Study
Description of the trade area
The envisaged expansion is going to be taken in the city mainly where there are adequate
infrastructures because location plays an important role in consumer store choice. If all other
things are approximately equal, the consumer generally will select the closest store. Likewise,
the size of an outlet is an important factor. Unless the customer is particularly interested in fast
service or convenience, she would tend to prefer larger outlets over smaller outlets, all other
things being equal
Infrastructure and institution
The trade/business area is found in Addis Ababa which has got convenient accessible road
throughout the year. The area is covered by mobile line telecommunication facilities and hence
there would be easy communication of the project affairs within the project and with the external
bodies.
9. Strategic Assessment/ SWOT Analysis of the Project
Any profitable business or a business with prospects is bound to be competitive and as an
existing business you must be ready to compete in the industry and competing in the industry
means that you must follow due process of establishing a business. We are quite aware that there
are several consumer Stationery retail stores all over Ethiopia and even in the same location
where we intend locating ours, which is why we are following the due process of establishing a
business.
We know that if a proper SWOT analysis is conducted for our business, we will be able to
position our business to maximize our strength, leverage on the opportunities that will be
available to us, mitigate our risks and be equipped to confront our threats.

12 | P a g e
 lOMoARcPSD|33868474

Strength:
• Excellent quality product.
• All stationery products under one roof.
• Fully spacious & customers can easily navigate
• Well trained sales persons
• Within reach of people
• Near educational institutes & universities
Weakness:
➢ Capital shortage
➢ Credibility problem may affect initial sales
➢ Underdeveloped Supply Chain
➢ Lack of adequate utilities
Opportunities:
Products sold by consumer Stationery stores are often discretionary. Therefore, a rise in per
capita disposable income increases consumers’ propensity to purchase industry goods, leading to
growth in demand. Per capita disposable income is expected to increase in the coming year,
representing a potential opportunity for the industry.
We have been able to conduct thorough feasibility studies and market survey and we know what
our potential clients will be looking for when they order consumer Stationery from us; we are
well positioned to take on the opportunities that will come our way.
➢ Enormous market for the Stationery Business
➢ Growth of educational institutes & universities
➢ Demand of boutique stationeries
Threat:
Online retailers are major competitors to industry operators. These retailers sell consumer
Stationery and appliances, often at lower prices than consumer Stationery stores due to the lack
of fixed costs, attracting customers away from industry players. The percentage of services
conducted online is expected to increase in the coming year, representing a potential threat to the
industry. And also inflation and instability is the major threat of our business.

13 | P a g e
 lOMoARcPSD|33868474

10. Key Success Factors

In order to succeed in the western wear apparel industry Jubilant Western Wear must:
➢ Carry an assortment of stationery supplies to fit the more ample frames of their
customer
➢ Provide customers with top notch personalized customer service in an atmosphere
of hospitality
➢ Advertise and promote in areas where the target customer
base is available.
➢ Continuously review our inventory and sales and adjust our inventory levels
accordingly.
➢ Offer every customer 100% satisfaction.
➢ Design and employ strict financial controls.

14 | P a g e
 lOMoARcPSD|33868474

11. Organizations and Management

Business Form
This business was established in the form of Sole Proprietorship and owned by Zewdinesh
Gizachew Worku who has rich experience in the area of business.
Proposed Organizational Structure of the organization
Fig.1: Organizational Structure for Zewdinesh Gizachew Worku Stationery Trade

Owner/Manager

Administrative s t a f
Operational Staff f

Sales Executive Accounting

Helpers
Sales & Marketing

Note that this organizational structure depicts the overall flows of accountability and reporting structure
of the organization.

Number of Personnel
Year 1st year 2nd Year 3rd year 4th Year 5th Year
Owner 1 1 1 1 1
Accountant 1 1 1 1 1
Human resource Manager 1 1 1 1 1
Sales & marketing Manager 1 1 1 1 1
Merchandise manager 1 1 1 1 1
Customer Service manager 1 1 1 1 1
Helpers 3 3 3 3 3
Total 9 9 9 9 9

15 | P a g e
 lOMoARcPSD|33868474

12. Financial Study

Financial Requirement
The total financial requirement of the business for undertaking Working Capital is Br.
4,800,000.00 which will be obtained through loan from Commercial Bank of Ethiopia.
3 Utilities expenses
8,400.00 8,820.00 9,261.00 9,724.05 10,210.2
4 Per diem expenses
30,000.00 31,500.00 33,075.00 34,728.75 36,465.1
5 Stationary expenses
2,650.00 2,782.50 2,921.63 3,067.71 3,221.0
6 Miscellaneous expenses
18,690.00 19,624.50 20,605.73 21,636.01 22,717.8
Sub total operating costs 16,376,868.00 17,195,711.40 18,055,496.97 18,958,271.82 19,906,185.4

Estimated Operating Cost

SN Item Year 1 Year 2 Year 3 Year 4 Year 5

1
Salaries and Wages 233,580.00 245,259.00 257,521.95 270,398.05 283,917.9
2 Stationary Material 16,083,548.00 16,887,725.40 17,732,111.67 18,618,717.25 19,549,651
Purchase

NOTE THAT operating expenses were calculated yearly basis.

16 | P a g e
 lOMoARcPSD|33868474

Projected Profit and Loss Statement

As it is indicated in table 6, the firm is highly profitable. The interest rate assumed is 15.5% for
five years of loan duration.

Table 6: projected Profit and Loss Statement

Item Year 1 Year 2 Year 3 Year 4 Year 5

Gross
revenue
18,496,080.20 19,420,884.21 20,391,928.42 21,411,524.84 22,482,101.08
Less:
16,083,548.00 16,887,725.40 17,732,111.67 18,618,717.25 19,549,651
CGS
Gross
Profit
2,412,532.20 2,533,158.81 2,659,816.75 2,792,807.59 2,932,450.08
Less
Operatin 293,320.00 307,986.00 323,385.31 339,554.57 356,532.00
g
Expenses
Profit
before 2,119,212.20 2,225,172.81 2,336,431.44 2,453,253.02 2,575,918.08
Interest
Less:
Interest
705,043.80 591,364.90 459,014.90 304,927.20 125,531.40
Profit
before 1,414,168.40 1,633,807.91 1,877,416.54 2,148,325.82 2,450,386.68
Tax
Less: Tax
(35%)
476,958.94 553,832.77 639,095.79 733,914.04 839,635.34

Net 937,209.4 1,079,975.1 1,238,320.

Income
1,414,411.78 1,610,751.34
6 4 75

17 | P a g e
 lOMoARcPSD|33868474

Projected Cash flow Statement

Table 7: Projected Cash flow Statement

13. Viability and Other measures of Project feasibility

Financial Profitability: The envisaged business is financially profitable as shown by the
projected profit and loss statement. The net income is progressively increasing. There is a
positive net income provided by the business over the five years business period. Based on data
from cash flow statement above, the following criteria of business feasibility are presented.
Net Present Value (NPV):- This is the sum of present values of all the net cash flows that are
projected to occur over the life of the business. The formal selection criterion for the NPV
measure of business worth is to accept all independent businesses with a positive NPV when
discounted at the opportunity cost of capital, here 17%. In this case, given the business has
positive value of Br. 19,456,777.52. it means that the business will contribute Br.
19,456,777.52.toward the wealth maximization of the business owner, hence it is financially
feasible.
Internal Rate of Return (IRR): This is the discount rate that makes the present value of all
expected future cash flows equal to zero; or, in other words, the IRR is the discount rate that
causes NPV to equal Br.0. It is a yield—what we earn, on average, per year. The internal rate of

18 | P a g e
 lOMoARcPSD|33868474

Return (IRR) of the project is 85.25% after tax discounted at 17%. The project is viable being
85.25% is greater than 17%.
Benefit Cost Ratio (BCR):- BCR is the ratio of the discounted values of benefits to the
discounted value of costs. A ratio of at least one is required for acceptability and the ratio of one
indicates that the NPV of zero at a particular discount rate. In this business case, BCR of Birr
BCR=5.2 shows, for every one Birr invested in this business, the return would be Birr 3.07,
which is significantly acceptable.
Net Benefit Cost Ratio (NBCR):- NBCR is the ratio of net present value to the present value of
cost. A ratio greater than zero (0) is needed for the business to be financially acceptable; in this
business, the ratio of 4.4 is in excess of the hurdle rate required to make the business financially
feasible.
14. Environmental Impact Analysis
The benefits that accrue by virtue of this project are very much gleaning as it results in benefits
that are both prompt and latent. These include the creation of good-paying jobs. Moreover, the
environmental benefits of this project are high in the sense that it consults on the environmental
impacts of the various projects (both governmental and non-governmental) having an interaction
with the socio-economic and physical environment. The benefits of environmental protection are
often less evident and immediate, but are nonetheless important as natural resources continue to
become scarce and threats to environmental and human health are ever-present. Yet, trade-offs
between economic development and environmental protection need not continue. This type of
business has no significant impact on the environment. However, the prompter is very conscious
about what is going to be diffused to the environment from the store to the environment so that
he can conserve the environment in line with the country’s environmental policy.
15. Sensitivity Analysis
In the event of an economic downturn, the business may have a decline in its revenues.
Consumer Stationery and related goods are purchased with discretionary income, and during
times of economic recession, the business may see a decline in its top line income. However, the
business will earn substantial margins from its product sales, and the business will be able to
remain profitable and cash flow positive despite moderate declines in revenue

19 | P a g e
 lOMoARcPSD|33868474

16. Bank Loan Repayment Schedule

Pmt. Beginning Scheduled Ending Cumulative

Year

No. Balance Payment Principal Interest Balance Interest

1 1 4,800,000.00 349,294.11 163,294.11 186,000.00 4,636,705.89 186,000.00

2 4,636,705.89 349,294.11 169,621.76 179,672.35 4,467,084.12 365,672.35

3
4,467,084.12 349,294.11 176,194.60 173,099.51 4,290,889.52 538,771.86
4
4,290,889.52 349,294.11 183,022.15 166,271.97 4,107,867.37 705,043.83
Total Yearly Payment 1,397,176.46 692,132.63 705,043.83
5
2 4,107,867.37 349,294.11 190,114.25 159,179.86 3,917,753.12 864,223.69
6
3,917,753.12 349,294.11 197,481.18 151,812.93 3,720,271.94 1,016,036.63
7
3,720,271.94 349,294.11 205,133.58 144,160.54 3,515,138.36 1,160,197.16
8
3,515,138.36 349,294.11 213,082.50 136,211.61 3,302,055.86 1,296,408.78
Total Yearly Payment 1,397,176.46 805,811.51 591,364.94
9
3 3,302,055.86 349,294.11 221,339.45 127,954.66 3,080,716.41 1,424,363.44
10
3,080,716.41 349,294.11 229,916.35 119,377.76 2,850,800.06 1,543,741.20
11
2,850,800.06 349,294.11 238,825.61 110,468.50 2,611,974.44 1,654,209.70
12
2,611,974.44 349,294.11 248,080.10 101,214.01 2,363,894.34 1,755,423.71
Total Yearly Payment 1,397,176.46 938,161.52 459,014.94
13
4 2,363,894.34 349,294.11 257,693.21 91,600.91 2,106,201.13 1,847,024.62
14
2,106,201.13 349,294.11 267,678.82 81,615.29 1,838,522.31 1,928,639.91
15
1,838,522.31 349,294.11 278,051.38 71,242.74 1,560,470.93 1,999,882.65
16
1,560,470.93 349,294.11 288,825.87 60,468.25 1,271,645.07 2,060,350.90
Total Yearly Payment 1,397,176.46 1,092,249.27 304,927.19
17
5 1,271,645.07 349,294.11 300,017.87 49,276.25 971,627.20 2,109,627.15
18
971,627.20 349,294.11 311,643.56 37,650.55 659,983.64 2,147,277.70
19
659,983.64 349,294.11 323,719.75 25,574.37 336,263.89 2,172,852.07
 lOMoARcPSD|33868474

20
336,263.89 349,294.11 336,263.89 13,030.23 0.00 2,185,882.29
Total Yearly Payment 1,397,176.46 1,271,645.07 125,531.39

17. Socio-economic Benefits of the project

The socio-economic significance of implementation of this project can be seen from its
contribution to employment opportunity, its contribution to government revenue in the form of
tax, and its contribution to foreign currency earning. Accordingly, this project creates job
opportunity for 6 permanent workers and for 3 daily laborers. Likewise, it contributes to
government revenue in the form of income tax which in turn helps to insure distribution of
resources among citizens.

18. Conclusion and Recommendation

Stationery materials are the materials used in all governmental and non-governmental offices,
schools and enterprises inside the society in aspects are our major market center so that we try to
provide all stationary materials as need by our customers.
Hence, it is highly recommendable to engage in Stationery business as its importance is
aforementioned above and obtain loan from Commercial Bank of Ethiopia.

19. Implementation Plan of the expansion

S.N Activity 2022/2023
November December January
1 Submission of Business plan
2 Obtain the loan
3 Start the Services
lOMoARcPSD|33868474
lOMoARcPSD|33868474