BUSINESS PLAN

FOR
BETELIHEM CHEMDESA GENERAL BOUTIQUE
AND MATTRESS RETAIL TRADE

PROJECT OWNERS: BETELIHEM CHEMDESA NEGERA

CONTACT ADDRESS: TEL. +251 919-23-80-91

PROJECT LOCATION

OROMIA REGION, EAST WOLLEGA ZONE, NEKEMTE TOWN

PROJECT CONSULTANT:

HASHIM TUNE AUTHORISED ACCOUNTANCY & MANAGEMENT CONSULTANCY SERVICE

PHONE: +251913-31-50-38

MARCH, 2023
NEKEMTE, OROMIA, ETHIOPIA

BETELIHEM GENERAL BOUTIQUE & MATTRESS RETAIL TRADE, SOLEPROPRIETERSHIP

 Table of Contents
Executive Summary.........................................................................................................................ii
1. Background Information..........................................................................................................1
2. Description of Project...............................................................................................................2
3. Vision of the Project.................................................................................................................2
4. Market Study............................................................................................................................3
5. Technical Study........................................................................................................................4
6. Strategic Assessment/ SWOT Analysis of the Project.............................................................5
7. Organizations and Management...............................................................................................5
Table 1: Employees Requirement with their Estimated Gross Salaries and Benefits.....................6
8. Financial Study.........................................................................................................................6
8.1. Financial Requirement......................................................................................................6
8.1.1 Purchase and Revenue Plan....................................................................................................6
Table 2: Purchase & Revenue plan for the five consecutive years (2023 to 2027/28 G.C)............6
8.2 Estimates of operating expenses................................................................................................7
Table 3: Estimates of operating expenses........................................................................................7
Table 4: Estimate of Working Capital (Birr)...................................................................................7
9. Forecasted Financial Statements..............................................................................................8
9.1. Forecasted Income Statement...........................................................................................8
Table 5: Projected Profit and Loss Statement (2023 and 2027/28 G.C).........................................8
9.2. Forecasted Balance Sheet..................................................................................................9
Table 6: Forecasted Balance Sheet..................................................................................................9
9.3. Forecasted Cash Flow Statement......................................................................................9
Table 7: Projected Statement of Cash Flow (2023 to 2028 G.C)..................................................10
Table 8: Loan Repayment Schedule..............................................................................................11
10. Overall Financial Assessment.............................................................................................11
11. Environmental Impact Analysis.........................................................................................11
9. Socio-economic Benefits of the Project.................................................................................12
10. Conclusion.........................................................................................................................12
11. Recommendation................................................................................................................12

BETELIHEM GENERAL BOUTIQUE & MATTRESS RETAIL TRADE, SOLEPROPRIETERSHIP

 Executive Summary

This is a business plan of Birr 3,000,000.00 to Betelihem Chemdesa General

Boutique and Mattress Retail Trade, which is established in Oromia Region, East
Wollega Zone, and Nekemte town.

The objective of the promoters is to increase the existing retail trade of General
Boutique and mattress to other different level of closing, Mattress and related
products trade.

The market analysis of the project carried out in line with general Boutique like,
Female and male: T-shirt, Trouser, Shoes, Dress, tyte, Body, Coat, short, Jacket,
sweater and other cottons that are meant for dressing purposes that are having
heavy and constant demand in the daily use of humans. In addition to that different
brand of mattress like; A.A Foam, Sun, Star, Maleda, Blue Sky, Extra Bonded,
Royal Foam, Rainbow and many others.

Regarding the economic contribution of the business, it will create job opportunity
for 4 permanent employees including the promoter and generate an income tax for
the government which has significant contribution to the economic growth of the
country.

Finally, it is highly recommended to implement the business by getting the loan

from Sinke Bank being the business is financially, economically, and socially
feasible.

1. Background Information
BETELIHEM GENERAL BOUTIQUE & MATTRESS RETAIL TRADE, SOLEPROPRIETERSHIP
 1.1. The Applicant
 Name: Betelihem Chemdesa Negera
 Address of the promoter:-
 Region: Oromia
 Zone : East Wollega
 Town: Nekemte
 Mobile: +251 9 17-37-13-08
 Name of the Business :- Betelihem General Boutique and Mattress Retail Trade
 Address:-
 Region: Oromia
 Zone: East Wollega
 Town: Nekemte
Business License:-
Legal form of Business: Sole proprietorship
Date of establishment: 6/1/2014 E.cl and
Type of license: General Boutique and Mattress Retail Trade
Licensing Organ: Oromia Regional Government
Date Licensed: 6/1/2014 E.cl
Tax paying identification number (TIN): 0074948600
Registered capital of the project: 5000.00

1.2. Current loans with other banks and MFIs

So far, the promoter of the business did not have credit history with Sinke banks and but has
credit history with other banks with good payment history repays the credit appropriately as per
the schedule and currently has no connection with other creditor bankers, and free from
indebtedness. To check further the credit history of the promoter, the financier will request CIC
report from National bank of Ethiopia Credit center.

1.3. Purpose and amount of loan Requested

The objectives of the loan required is to engage in the trade of Boutique and Mattress, purchase
and sales of clothes and mattress to the customers and surrounding community such as general
Boutique like, Female and male: T-shirt, Trouser, Shoes, Dress, tyte, Body, Coat, short, Jacket,
BETELIHEM GENERAL BOUTIQUE & MATTRESS RETAIL TRADE, SOLEPROPRIETERSHIP
sweater and other cottons that are meant for dressing purposes that are having heavy and
constant demand in the daily use of humans and different brand of mattress like; A.A Foam, Sun,
Star, Maleda, Blue Sky, Extra Bonded, Royal Foam, Rainbow and many others.

The amount of loan requested for this project is Br. 3,000,000.00 where by these amount is to be
used as a working capital for the service and purchases of the stated product.

2. Description of Project

Betelihem Chemdesa General Boutique and Mattress Retail Trade is a Sole proprietorship form
of business operated by the owner promoter Betelihem Chemdesa . The promoter of the business
is educated individual who have the desire of becoming an entrepreneur.

3. Vision of the Project

Betelihem Chemdesa General Boutique and Mattress Retail Trade aspires to be one among the
top suppliers of quality clothes, shoes, Mattress and other product to the dwellers of the Nekemte
town and especially to their surrounding customers.

3.1. Mission of the Project

The Project’s mission is to buy the General Boutique and Mattress product, and sell to the
customers (servants) so as to generate profit to the wealth of the firm.

3.2. Project Goal

The goal of this project is to generate sustainable profit by strategically engaging in business
activities of General Boutique and Mattress Retail Trade in Nekemte, and there by increases the
number of customers served by the firm leading to create employment opportunity for
individuals residing in and around the business area.

3.3. Project Objectives and Rationales

The primary objective of this project is to maximize the wealth of the business owner.

 Practice and Improve Value chain efficiency: - it is well recognized that poor
marketing services and facilities and transport in rural areas present a large constraint to

BETELIHEM GENERAL BOUTIQUE & MATTRESS RETAIL TRADE, SOLEPROPRIETERSHIP

 the dwellers of the district. Thus, the business owner aims as easy as possible at
removing these barriers.
 By creating employment opportunity for 4 permanent employees (including the promoter
in the project); contributing to the national employment opportunity creation goal.

4. Market Study

4.1. General Review of the Market for the Products

General Boutique Retail Trade businesses unquestionably have large domestic markets. The size
of Ethiopian population is currently estimated above 120 million. And the Nekemte town is
highly populated in which its center for the Western oromia.
As we also observe that as Ethiopian economy keeps developing over the past ten years;
urbanization and preference for such products are growing. The number of household, schools,
college, business organizations, and laborers are increasingly flourishing in the country
specifically in Nekemte Town which needs the accesses of clothing and mattress. There is no
doubt that such development and the corresponding changes in preference for such products
drive demand for the project’s products.
4.2. The target consumers and suppliers to the Business
The supply chain for the breakfast trade involves the following institutions with which to work:
1. For the Supply of the business in puts:
 Producer distributers and whole sellers in and around Finfinne.
 Wholesalers and retailers in and around the area, Individuals;
 Both Government and non-government organizations, such as unions.
2. For the consumption of the businesses output:
 Employee, Students, laborers and households of the Nekemte town
 Mattress; University, hospitals, Civic society, Donators for displaced people & Others

4.3. Marketing Strategy of the project

The marketing strategy of the firm is seen from the marketing mix elements as follows.

 Market Segment and Target Market:-The firm plans to sell about 80% of its service
to the house holders, University, hospitals, students and others living in Nekemte town,
while the remaining volume will be sold to the rural dwellers of the district.
BETELIHEM GENERAL BOUTIQUE & MATTRESS RETAIL TRADE, SOLEPROPRIETERSHIP
  Product Strategy: In order to be competitive in the market place, the business promoter
will work with great focus on the quality and best variety of product that the market
prefers at most .
 Pricing strategy: since the very motive of the project owner is not merely to make profit
but also to contribute toward the socio-economic development of the society, the pricing
strategy of the firm will be market-based for the local customer, and accordingly the
pricing strategy of thirty percent (30%) conventional markup will be applied to the
purchase cost.
 Promotion strategy: The promotional technique that the firm will employ will be more
of personal selling.

5. Technical Study

5.1. Project Location

The project is located in Oromia Region, East Wollega Zone, and Nekemte town. Nekemte town
is one of the 18 District of East Wollega Zone of Oromia Regional State and it is about 331 km
away from Finfine.

5.2. Availability of Utilities and Infrastructure

Standardized asphalt has already constructed running from Finfine to Nekemte, where by the
business site is situated along the road side in the Nekemte town. Fortunately, the project site is
found in a more convenient location to transport the input throughout the four seasons, which in
turn gives the project the opportunity to easily transport the project input to store.

6. Strategic Assessment/ SWOT Analysis of the Project

Strengths:

 Tough entrepreneurial competency of the promoter

 Strong collaboration of the owner with stakeholders
 High skill and experience of the project owner on the business

Weaknesses:

BETELIHEM GENERAL BOUTIQUE & MATTRESS RETAIL TRADE, SOLEPROPRIETERSHIP

 Lack of finance

Opportunities
 Availability of cheap labor in the area;
 Availability of market for the envisaged business
 Availability of Road infrastructure
 Availability of the product in the area
Threats:
 Market volatility, due to the currently erupting ‘’COVID 19 ‘’, Inflation and political
instability

7. Organizations and Management

7.1. Business Form

Betelihem Chemdesa General Boutique and Mattress Retail Trade are established in the form of
Sole proprietorship by a committed entrepreneur; Betelihem Chemdesa the founding owner and
manager of the business.

7.2. List of Human Resource Requirement of the Project

The promoter of the project herself will take the position of manager and assisted by three
monthly salaried assistant. Monthly Salary scale for both the owner and the assistant is also
estimated as follows. An average annual increment to the salaries of the permanent workers is
planned to stand at 10%. Pension contribution from the firm will be calculated at 11% of the
salary expense based on the Federal and regional government pension regulation. Other
employees’ benefit is planned to be 10% of the salaries they earn. The summary is presented in
the following table.

BETELIHEM GENERAL BOUTIQUE & MATTRESS RETAIL TRADE, SOLEPROPRIETERSHIP

Table 1: Employees Requirement with their Estimated Gross Salaries and Benefits

S.No Position Qualifications Experience Salary scale Other Benefit Total Salary Annual

N
1 General Manager The owner 1 >5 5,000.00 500.00 5,500.00 66,000.00

2 Assistant Any one 3 >=3 2,500.00 250.00 8,250.00 99,000.00

Total Salary for a month 4 13,750.00
Total Salary Expense for a year 165,000.00

8. Financial Study

8.1. Financial Requirement

8.1.1 Purchase and Revenue Plan

Table 2: Purchase & Revenue plan for the five consecutive years (2023 to 2027/28 G.C)

Betelihem Chemdesa General Boutique and Mattress Retail Trade, purchase

and sales plan over the coming five years ( 2023, 2024, 2025, 2026 and 2027/28
S.no. Item
G.C)
2023/24 2024/25 2025/26 2026/27 2027/28
1 Purchase of Clothes & Mattress 12,650,000.00 15,180,000.00 18,216,000.00 21,859,200.00 26,231,040.00
2 Sales 15,622,750.00 19,528,437.50 23,473,181.88 28,169,771.09 33,803,822.95
Assumptions:
 97% of quantities purchased during the year are assumed to be sold out.
 Both the cost of purchase and selling price for the year following the 2023 G.C is
assumed to increase by 5% ( normal inflationary scenario)
 The selling prices of all the input category is assumed to be of 30% margin on the
purchase price.
 Both Purchase and Sales for the year following 2023 G.C is assumed to increase by 20%.

BETELIHEM GENERAL BOUTIQUE & MATTRESS RETAIL TRADE, SOLEPROPRIETERSHIP

 8.2. Estimates of operating expenses
The operating expenses that are required to make the smooth flows of the business are
assumed to be the percentages of the annual purchase plan; and sales plan and hence a wise
estimate is made about the transportation, loading unloading expense and other
miscellaneous expenses as 2.5% , 1.5% and 1% respectively .

Table 3: Estimates of operating expenses

S.no Items/costs Estimates Amount
1 Transportation 2.5% of planed Annual purchase 316,250.00
2 Loading Unloading Expense 1.5% of planed Annual purchase 189,750.00
3 Mescellanous expense 1%of planed annual purchase 126,500.00
4 Salary and Wage Expense 4 employee 165,000.00
5 Depreciation Expense 172,500.00
Total 970,000.00

Table 4: Estimate of Working Capital (Birr)

S. No. Type of cost Amount (Birr)
1 Purchase of Clothes & Mattress 12,650,000.00
2 Transportation expenses 316,250.00
3 Salaries and Wages 165,000.00
4 Loading Unloading Expense 189,750.00
5 Miscellaneous Expense 126,500.00
Total 13,447,500.00

NB: The Sinke Bank is expected to finance 22% of the whole working capital at a rate of 17.5%
per annum and the promoter of the business is planning to repay the loan amount and the
interests there of over the coming three years on Semiannually bases for 6 semiannual.

BETELIHEM GENERAL BOUTIQUE & MATTRESS RETAIL TRADE, SOLEPROPRIETERSHIP

 9. Forecasted Financial Statements

9.1. Forecasted Income Statement

Profit/loss statement presents the results of business’s operations during a period of time. It
shows income earning from the business and expenses incurred in attaining the income. The
business will show a profit in the first year which will continue to grow. This is expected to due
to high gross margins of selling high quality product items through competitive sales staff and
the increasing demand of the organization services and products. The following table presents
the estimated income statements.

Table 5: Projected Profit and Loss Statement (2023 and 2027/28 G.C)
BETELIHEM CHEMDESA GENERAL BOUTIQUE AND MATTRESS RETAIL TRADE
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED FEBRUARY 28, 2024 TO 2028
Item 2023/24 2024/25 2025/26 2026/27 2027/28
Gross revenue 15,622,750.00 19,528,437.50 23,473,181.88 28,169,771.09 33,803,822.95
Less: Cost of Goods Sold
Beginning Inventory 0.00 632,500.00 790,625.00 950,331.25 1,140,476.56
Purchase of inventory (Cereals) 12,650,000.00 15,180,000.00 18,216,000.00 21,859,200.00 26,231,040.00
Inventory available for Use and 12,650,000.00 15,812,500.00 19,006,625.00 22,809,531.25 27,371,516.56
Ending Inventory 632,500.00 790,625.00 950,331.25 1,140,476.56 1,368,575.83
Cost of Goods Sold 12,017,500.00 15,021,875.00 18,056,293.75 21,669,054.69 26,002,940.73
Gross profit 3,605,250.00 4,506,562.50 5,416,888.13 6,500,716.41 7,800,882.22
Less: operating Expenses 970,000.00 1,067,000.00 1,173,700.00 1,291,070.00 1,420,177.00
Operating Profit 2,635,250.00 3,439,562.50 4,243,188.13 5,209,646.41 6,380,705.22
Less:Interest
489,887.78 336,880.82 155,926.18 0.00 0.00
(3,000,000.00*0.175*t)
Profit before Tax 2,145,362.22 3,102,681.68 4,087,261.95 5,209,646.41 6,380,705.22
Less: Tax (PBT*Rate-Deduction) 732,876.78 1,067,938.59 1,412,541.68 1,805,376.24 2,215,246.83
Net Income 1,412,485.44 2,034,743.09 2,674,720.27 3,404,270.16 4,165,458.39

Note: the loan amount will be settled within Three years period ( the principal and interest will
be paid at the end of every six months, whereas the interest expense for the first year is computed
Starting here after march 2023 for 6 semiannual.

BETELIHEM GENERAL BOUTIQUE & MATTRESS RETAIL TRADE, SOLEPROPRIETERSHIP

 9.2. Forecasted Balance Sheet
The balance sheet table shows the overall financial position of the company as of specific date
during the consecutive five years of operation. The balance sheet reports the composition of
liability and owners capital to own the total asset of the business over the five years.

Table 6: Forecasted Balance Sheet

BETELIHEM CHEMDESA GENERAL BOUTIQUE AND MATTRESS RETAIL TRADE
STATEMENT OF FINANCIAL POSITION
AS OF FEBRUARY 28, 2024, 2025, 2026, 2027 AND 2028
FEBRUARY 28 FEBRUARY 28 FEBRUARY 28 FEBRUARY 28 FEBRUARY 28
Year 2024 2025 2026 2027 2028
Current Asset:
Cash 5,071,287.30 7,963,221.30 11,312,596.55 16,532,7 21.40 22,47 6,080.53
Inventory 632,500.00 790,625.00 950,331.25 1,140,476.56 1,368,575.83
Total Current Assets 5,703,787.30 8,753,846.30 12,262,927.80 17,673,197.96 23,844,656.36
Fixed Asset:
Total Fixed Asset Values 3,224,375.00 2,966,375.00 2,708,375.00 2,450,37 5.00 2,192,37 5.00
Total Assets 8,928,162.30 11,720,221.30 14,971,302.80 20,123,572.96 26,037,031.36
Liability and Capital:
Bank Loan 3,000,000.00 2,162,322.86 1,171,638.77 0.00 0.00
Repayment (837,677.14) (990,684.10) (1,171,638.76) 0.00
Loan Liability 2,162,322.86 1,171,638.77 0.00 0.00
Current income tax Payable 732,876.78 1,067,938.59 1,412,541.68 1,805,376.24 2,215,246.83
Total Liability 2,895,199.64 2,239,577.35 1,412,541.68 1,805,376.25 2,215,246.83
Capital:
Partners Capital 500,000.00 500,000.00 500,000.00 500,000.00 500,000.00
Retained Earning 6,265,839.44 10,048,582.53 14,471,302.80 19,623,572.96 25,537,031.36
Total Capital 6,765,839.44 10,548,582.53 14,971,302.80 20,123,572.96 26,037,031.36
Total Liability and Capital 8,928,162.30 11,720,221.30 14,971,302.80 20,123,572.96 26,037,031.36

9.3. Forecasted Cash Flow Statement

The cash flow table shows the business becoming cash flow positive during the consecutive five
years of operation. Excess cash will be retained in the business and invested in short term
holdings in preparation for expansion of the business. Long term Debt will be paid over the first
three years of operation with a grace period for the first three months. Some current asset must
be replenished each year, and long term assets must be replaced beginning in the second year as
some equipment ages. So the cash flow statement is estimated with assumption of no expansions
of the business and other investment.

BETELIHEM GENERAL BOUTIQUE & MATTRESS RETAIL TRADE, SOLEPROPRIETERSHIP

Table 7: Projected Statement of Cash Flow (2023 to 2028 G.C)

Year of operation year 1 year 2 year 3 year 4 year 5

March 2023 to September 2023 March 2024 to September 2024 March 2025 to September 2025 March 2026 to September 2026 March 2027 to September 2027
Description August 2023 to February 2024 August 2024 to February 2025 August 2025 to February 2026 August 2026 to February 2027 August 2027 to February 2028
Beginning cash balance 122,979.00 4,263,134.04 5,071,287.30 6,786,851.72 7,963,221.30 10,039,705.68 11,312,596.55 14,474,072.04 16,532,721.40 20,204,094.08
Cash in flow
Bank Loan 3,000,000.00
Sales 7,030,237.50 8,592,512.50 8,787,796.88 10,740,640.63 10,562,931.84 12,910,250.03 12,676,396.99 15,493,374.10 15,211,720.33 18,592,102.63
Total cash in flow 10,030,237.50 8,592,512.50 8,787,796.88 10,740,640.63 10,562,931.84 12,910,250.03 12,676,396.99 15,493,374.10 15,211,720.33 18,592,102.63
Total cash Available 10,153,216.50 12,855,646.54 13,859,084.18 17,527,492.34 18,526,153.14 22,949,955.71 23,988,993.54 29,967,446.14 31,744,441.73 38,796,196.71
Cash Out Flow 0.00
Purchase 5,692,500.00 6,957,500.00 6,831,000.00 8,349,000.00 8,197,200.00 10,018,800.00 9,836,640.00 12,022,560.00 11,803,968.00 14,427,072.00
Operating Expense (466,200.00) (569,800.00) (422,550.00) -516,450.00 -374,535.00 -457,765.00 -321,718.50 -393,211.50 -263,620.35 -322,202.65
Loan Repayment 401,282.46 436,394.68 474,579.21 516,104.89 561,264.07 610,374.69 0.00 0.00
Interest Payment 262,500.00 227,387.78 189,203.25 147,677.57 102,518.39 53,407.79 0.00 0.00
Tax Expense 732,876.78 - 1,067,938.59 0.00 1,412,541.68 0.00 1,805,376.24 0.00 2,215,246.83
Total cash out flow 5,890,082.46 7,784,359.24 7,072,232.46 9,564,271.05 8,486,447.46 11,637,359.16 9,514,921.50 13,434,724.74 11,540,347.65 16,320,116.18
Net Cash Balance 4,263,134.04 5,071,287.30 6,786,851.72 7,963,221.30 10,039,705.68 11,312,596.55 14,474,072.04 16,532,721.40 20,204,094.08 22,476,080.53

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 Table 8: Loan Repayment Schedule
Loan Repayment Schedule:
Beginning
Principal Interest Total semiannual
Period Loan Received Balance of Ending Balance
Repayment Payment Repayment
Principal Loan
1 3,000,000.00 3,000,000.00 401,282.46 262,500.00 663,782.46 2,598,717.54
2 - 2,598,717.54 436,394.68 227,387.78 663,782.46 2,162,322.86
3 2,162,322.86 474,579.21 189,203.25 663,782.46 1,687,743.66
4 1,687,743.66 516,104.89 147,677.57 663,782.46 1,171,638.77
5 1,171,638.77 561,264.07 102,518.39 663,782.46 610,374.70
6 610,374.70 610,374.69 53,407.79 663,782.46 0.00
Total Repayment 3,000,000.00 982,694.78 3,982,694.76

10. Overall Financial Assessment

The overall financial performance of the business is appealing as shown by the above three
forecasted financial statements. When evaluated in terms of its profitability, there is steady
increase in after tax net income showing that the business would remarkably contribute towards
wealth maximization of the owner. Similarly, the forecasted balance sheet shows extraordinary
attractive financial position of the firm over the same period. In addition, when viewed in terms
of the sources and uses of money (cash flow statements), there is steady increase in the net cash
provided by the business cash receipts after covering the cash payments required to sustain the
business . Furthermore, the business has the following financial performance measured in
different investment decision criteria.

11. Environmental Impact Analysis

As the business operation seems to have responded to climate and environmental urgencies
taking in to consideration the natural resources, energy conservation and preservation of the
global environment through the uses of environmentally friendly business practices.
Furthermore, as the project has no negative effects on natural reserve territory, monuments of

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cultural heritage, public buildings like hospitals, schools it is hence supposed to have
insignificant negative impact on the environment.

12. Socio-economic Benefits of the Project

The socio-economic significance of implementation of this business can be seen from its
contribution to employment opportunity, its contribution to government revenue in the form of
tax. Accordingly, this project creates job opportunity for four permanent workers. Likewise, it
contributes to government revenue in the form of income tax over the coming five years which in
turn helps to insure distribution of resources among citizens.

13. Conclusion
The engagement in to General Boutique and Mattress Retail Trade businesses has got promising
benefit for the promoter as well as the country in providing job opportunity and generate profit
taxes over the coming three years.

14. Recommendation
Based on facts discussed above, undertaking of this project will have positive contribution to the
overall development of the country as it enables the country to exploit idle economic resources
more wisely at a large scale and optimally. Thus, the project deserves to get the necessary loan
and technical assistance from the institution, Sinke Bank.

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