BUSINESS PLAN

By:

YISAKOR YENENEH MELKE

Addis Ababa

November, 2023

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1. Executive Summary

The need for business plans in our business dealings is becoming very
imperative in today’s dynamic and complex marketplace. As everyone knows,
business plan is one of the integral steps in fulfilling one’s business targets.
Accordingly, this plan was developed with the intent of ensuring effective
preparation for the implementation and positioning of our programs and
allied activities that best achieve our long term and short-term goals. It will
assist our management team in setting the long-term directions and policies
of our company and in making decisions on short term priorities and
resource allocations. It will also assist to develop and implement programs by
providing guidance for multiyear program plans and budgets.

In the same way, this business plan is developed to portray the business
potentials of our transport company as well as provide relevant and pertinent
information to any concerned stakeholders. Initially, it tries to describe the
prime cornerstones of our company and then it exhaustively examines the
crucial considerations which must be addressed for the success of our
company as a whole. It mainly explores fundamental issues such as
background of our company since its formation, industry analysis, service
plans, competition analysis, market description, management team overview,
completed and integrated financial planning and other related issues under
them.

This business plan is, therefore, developed with the intention of guiding our
ever-rising provides transport service.

1.1. Industry Overview

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As a landlocked country, Ethiopia uses Djibouti port as its main gateway for
international trade. Rapid economic growth for over a decade coupled with
the creation of the African Continental Free Trade Area and growth of
Ethiopian cities has increased demand for freight and public transport. The
Ethiopian transport sector is heavily dominated by the public sector with road
infrastructure development, railway sector, maritime, and logistics as well as
aviation sectors heavily monopolized by the government. Private sector
involvement in the transport sector was limited to public and freight transport
services, freight forwarding and chartered flight services with small passenger
aircrafts. This situation will change in the coming years as the current
administration has shown a promising commitment to liberalize the sector for
private sector engagement in different modalities.

The Government of Ethiopia identified the transport sector as a game changer

to maintain the country’s impressive economic growth trajectory, and it
formed a National Transport Council that will lead the reform program in the
sector. The Council chaired by the Minister of Transport reports directly to
the Prime Minister, and it comprises various other Ministers including
Agriculture, Finance, Trade and Industry, and Mines in addition to other
stakeholders . In its two years life span, the Council formulated and endorsed
a national transport policy (March 2020), a national logistics strategy (2020 to
2030) and policy, and the transport sector’s 10-year perspective plan (2020 to
2030).

The reform program spearheaded by the Transport Council opens up room for
more private sector engagement in port development, railways development
and operation, maritime and logistics services, and road infrastructure
development. In the coming years, international and domestic private
investors can engage in the Ethiopian transport sector in the form of full
private ownership, joint ventures with the government or other local entities
or in public private partnership (PPP) modalities. According to the

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government’s 10-year transport perspective plan, the country envisages to
invest 3.0 trillion birr (approximately $58 billion) in the sector in the next ten
years and identified the private sector as an engine and active participant in
this development plan. Various funding sources are planned to be used for
this ambitious plan with 70 billion birr to be generated from the revenues of
the Ministry while the rest is planned to be sourced from government budget
subsidies, private sector involvement, foreign support, and grants

1.2. Company background

Yisakor Yeneneh Melke was established to engage in, Transport Service by

road and Dry freight business. The entity has received Business license No.
from Addis Ababa Trade Bureau Kolefe Keraniyo Sub City, with paid up
capital of birr 23,263. it has registered in Kolefe Keraniyo Sub City and House
No New. the owners of the Company were engaged in Transport Service by
road and Dry freight business for so long period and they do their business
successfully tile to date.

The company is mainly owned by, Yisakor Yeneneh Melke,. Who has
extensive experience in the transportation industry and trucking business?

Initially, Mr. Yisakor Yeneneh Melke will focus on transporting freight as an

independent contractor for other companies, willing to travel wherever
necessary. One of the keys to success in the trucking industry is to find a
niche and dominate it, which is why ultimately Yisakor Yeneneh Melke
Transport will specialize in the business.

Yisakor Yeneneh Melke Transport will be especially attractive to companies

in need of delivery services in the part of the country as many drivers are not
interested in tackling this area. This is largely because of the tolls, poor
parking and heavy traffic. The Company will specialize in these types of
deliveries.

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The Company seeks to raise interest in its freight trucking business and to
seek out financial support. By showing that the Company has a well thought-
out plan, Mr. Yisakor Yeneneh Melke believes that business people and
financial institutions will recognize the potential in this endeavour and will
Support it.

The business will also require additional Working Capital for cover operating
costs, including Fuel, insurance, maintenance, and salaries to meet a growing
demand for its services and increase the profitability of the business and the
company will create 20 jobs for both professional and non professional
citizens of Ethiopians. On average the Company’s sales is estimated to ETB
75,546,152.11 which will increase by an average of 30% in the coming years
under operation and serve many customers per week resulting in the
expected total sales for next year.

The total cash required for Working Capital. Estimated to be ETB 25,000,000
to cover operating costs. From the total costs required birr 25,000,000 will be
Provide by Bank as a loan.

1.3. Company culture

Our culture begins with our people; we like to think of ourselves as

one big family working together toward one goal. Our company
culture is a mix of hard work, fun, mutual respect and a strong
commitment to our customers. There is close friendship among the
employees of this company that adds value to their working and
personal lives. We strive to maintain an open, family-like atmosphere
in our offices and on our job sites. Like most families, our expectations
are high, we recruit and retain only the most talented and
enthusiastic employees. In addition, the company encourages
teamwork and collaboration, support and reward individual
initiative and resource fullness. We value problem solvers and

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 effective Communicators and acknowledge and celebrate the
contributions and accomplishments of others -fellow employees as
well as our esteemed customers

1.4 Customers

Yisakor Yeneneh Melke Transport intends to operate as a general carrier of

merchandise for companies and individuals, especially in Ethiopia. As such,
it is difficult to determine the average customer of the Company as Yisakor
Yeneneh Melke Transport will have the licensure and the ability to effectively
move almost any type of merchandise.

2. Mission Statement
The mission of Yisakor Yeneneh Melke Company is to become the leading
provider of transport service in Ethiopia. The company is dedicated to
building long-term relationships with customers through provision of quality
services, and wants to be recognized as the leading transport service in
Ethiopia. The company’s goals are to grow steadily, becoming profitable from
year to year of its operations.

3. Business Objectives
The primary objectives of the business plan are presented as below:

 Obtain working capital funding (essentially, expand existing business)

 Providing an easily accessible location for customers.
 Offering clients a wide range of service in one setting, and extended
business hours.
 Achieve strong annual revenue within the first year.

4. Guiding principles
i. Being mindful of our customers and our staff

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 Coinciding with our Company values, we will treat both our customers
and staff in a manner in which we ourselves would want to be treated
(or better!)
ii. Gratitude

“An attitude of gratitude” shown to our customers, employees and

vendors – because without their input, service, labor and time, our
business would not be here without them!
iii. Our Service
Provide the reliable, warm and friendly service expected from
Customers creating an informal, comfortable environment which will
make the customers satisfied and want to repurchase and consume
again and again.

5. Keys to Success
 Repeat business. Every customer who comes and contact us once
should want to return, and recommend us. Word–of–mouth marketing
is a powerful supporter.

 For the transport businesses and other services we provided we hire

skilled employees and offer training to keep the employees on top of
his/her game, and pay competitive wages to ensure they stay with us.

 We hiring the most known and skilled professionals and pay the top
wages to them.

 Provide and supply up-to-date service.

 Location. The convenience of a location is essential to our business; we

need to be close to our market because we are not trying to get people
to travel to reach us.

 Expanding customer base through expansion into other geographic

areas to retain a sufficient level of profitability.

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  A variety of offerings system will be developed for each business
customers. .

6. Brief profile of the owners and the business

Yisakor Yeneneh Melke Transport was founded by Yisakor Yeneneh

Melke, who has extensive experience in the transportation and trucking
industries. Through his expertise, he will bring the operations of the
business to profitability within its first year. Mr. Yisakor Yeneneh Melke
owns 100% of the company and he is well respected by the trucking
professionals with whom he has worked.

6.1. Company Profile

Company’s Legal Name:- Yisakor Yeneneh Melke
Business Registration Number: AA/KLK/05/1/0003705/2012
Business license number: KIK/AA/14/667/4044497/2007
Business Type:- Transport Service
Year of Registration: 2007 E.C
TIN Number: 0043836881
Type of Organization: Sole Proprietorship.

6.1 Ownership
Yisakor Yeneneh Melke is owners of the company and it was established
since 2007 EC, with an initial investment capital ETB 23,263.

6.2 Legal Form

The above stated company is organized as a Sole proprietorship and legally
registered and operating in Ethiopia.

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7.1 Location and Addressed

Name of the company City Woreda Hou.No

Yisakor Yeneneh Melke
Kolfe 05 New
Keraniyo

Contact Address:-
General Manager (Owner)-Miss. Yisakor
Yeneneh Melke +251936496091

7. Our Services and Business Model

In the beginning, the Company will travel wherever necessary to obtain
business but plans to ultimately specialize in country deliveries. Yisakor
Yeneneh Melke Transport will be especially attractive to companies in need
of delivery services in the part of the country as many drivers are not
interested in tackling this area. This is largely because of the country
unstable tolls fee, poor parking and heavy traffic. The Company will specialize
in these types of deliveries.

We are optimistic that everyone who makes use of our facility will definitely
derive value for their money. These are the services and amenities that will be
made available to our clients:

Our aim is to be able to supply quality service to all our customers here in
Addis Ababa, Ethiopia, and in locations around the state as well.

We are also established to make profit, and in order to ensure that we

generate enough revenue to make profit, we intend to create multiple sources
of income by offering other services as well as creating a franchise for those
who intend to use our service model when starting up rather than start from

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scratch. All our sources of income will be subject to all the legal and
permissible laws of the Ethiopian government.

After the first 2 years in business, the company plans to expand its services
by entering into contracts directly with vendor as opposed to only serving as
an independent contractor for other trucking companies. This will allow the
company to increase revenue while having more freedom in job selection.

We are also planning to expand its income capacity by getting a loan from the
bank. After getting a bank loan, we will increase our annual income, which is
estimated at Birr 75,546,152.11 which will increase by an average of 30% in
the coming years under operation and serve many customers per week
resulting in the expected total sales for next year.

7.1. Price

Penetration Pricing will be the pricing strategy for our business, as our
business is at the high street of Addis Ababa where competition is huge, so
we try to give good quality at low price to penetrate in the market and try to
achieve higher sales volume to set low price and better quality strategy. Once
we achieve this objective then try to charge higher price for our customized
service for value addition.

7.2. Promotion

Every business that is established to generate revenue and make profit does
so in addition to be able to favourably compete with its other competitors
either in the same environment or in other strategic locations that would have
an impact on its own business. Drafting publicity and advertising strategies is
very important for any business that intends to survive in the business
environment.

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In most cases, the company advertises its service through social networking
sites, among which are Face book, Telegram, etc., and by using this
advertising method, it has enabled it to generate more customers.

In addition, the service that the company offers to the market are of high
quality and standard, so the company has made it preferred by customers

8. Competitors
There are so many local competitors in Ethiopia and Addis Ababa related to
each business. However, Yisakor Yeneneh Melke well experienced in
Transport business sectors more than 10 Years. Thus, this experience makes
it competitive and able it to win the battle. Moreover, the owners are focusing
on skilled personnel and customer centric approaches to easily win the rivalry
competitors in the business sector.

The Company offers the following advantages to customers

 Quality Service. Customers will be provided with courteous, prompt,

and dependable service. The Company will develop a reputation for
timely deliveries and intends to build upon that.
 Competitive rates. The Company will be able to provide competitive
rates to customers because of its low cost inputs.
 Package handling. By maintaining dependable and safe equipment, the
company will ensure that there is no damage to customer's cargo.
 Experience. Another major competitive advantage for the Company is
the vast industry experience and solid reputation of its owners.

Most importantly, the company will establish a competitive edge through its
dogged focus on on-time deliveries. Software systems, communication
systems, operational choices and marketing materials will all be oriented
around this goal. By making customers more assured of on-time delivery with
our company than with competitors, they will be more likely to hire the

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Company, as they can never be sure when a few hours can make an
incredible difference to their potential revenues or expenses.

8.1. Suppliers
Because of its years of business experience combined with its existing
capabilities, Yisakor Yeneneh Melke has established relationships with
qualified suppliers for its service. The suppliers can provide at reasonable
prices each service and also delivered according to the schedule. Each
business unit has its own supplier.

9. Management Controls
The owners are practicing sound management procedures in order to control
business costs, insure quality of service and provide friendly customer
service.
The company currently has 8 staff members which are permanent employees,
and three other members are employees on contract basis of the company.

The man power requirement for this transport company consists of General
Manager, Driver, Accountant, cleaner and other daily laborer those works on
loading unloading.
No Position No Monthly Annual
Salary Salary
1 Manager 1 18,000 216,000

2 Driver 4 14,500 174,000

3 Facilitator 1 6,500 78,000

4 Casher 1 8,000 96,000

5 Cleaner 1 3,700 44,400

6 Other daily laborer 13 4,500 54,000

Total 55,200 662,400

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9.1. Marketing strategy:

The marketing concept is oriented to economically active citizen. The

transporting Business unit provides services in Addis Ababa city and outside.
Currently many regional trading networks (and also some federal networks)
appeared and are being fixed on the city market. Conducted market research
and negotiations are indicative of the fact that the sale will be booming.
The company is located on those area where customers that can easily pay for
the services they needs and wants. This is the fastest growing segment of all
the customers requiring our services at affordable and reasonable price.
The main business strategy of Yisakor Yeneneh Melke is customer driven
approach and focused to address the need and want of their valuable
customers.

The company intends to maintain a marketing campaign that will ensure

maximum visibility for the business in its targeted market.

Below is an overview of the marketing strategies and objectives of

The company:

 Establish relationships with freight brokerages and transportation

companies in need of freight delivery services within the targeted
market.
 Develop an online presence by developing a website and placing the
Company’s name and contact information with online directories.

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9.2. SWOT Analysis
 Strength
 Huge Service Line with variations.
 Business will have longer hours and better prices as
compared to competitors.
 Discounts are available for customer.
 Expertise in getting new service to the market quickly.
 Expertise in providing good customer service.
 Customization available for individual customers.

 Weakness:
 Huge working capital required to start business as credit is not
easily available from supplier in start.
 Threats
 Possible new regulations
 Rising costs of fuel, maintenance and repairs
 Possible weather, country un stability that makes driving a truck
difficult/impossible.

10. Financial Plan

10.1 Working Capital Requirement

The Company’s revenues are also sensitive to certain external factors. For
example, should the cost of Fuel, Salary and maintenance increase
significantly

The company influence the external factors its require additional Working
Capital birr 25 million for cover operating costs, including Fuel, insurance,
maintenance, and salaries to meet a growing demand for its services and

Therefore for the companies required a total Working capital cost of

ETB 25,000,000 from bank as a loan and the bank will allows this
amount of birr as offered collateral and the repayment period will at list
five years period.

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.

Table: Summary of Working Capital Requirement

Items Total Cost

6,836,851
Fuel
5,741,258
Repair and Maintenance
2,163,150
Salary and Wage
10,258,741

Other Operating Cost

25,000,000
Total

10.2 Financial Analysis

10.3 Expected income projection from the next four Consecutive

years
Expected income projection from the next four Consecutive years. The
analysis shows the presence of promising future demand for service. The
demand for each item is growing fast as the economy is growing. This result
also in lined with high rate of population and national growth. As it is known
Ethiopia is one of the fast growing economies in the world and. These are an
advantage for Yisakor Yeneneh Melke business to its future investment. In
addition the government’s political commitment to help and encourage the
transport sector is also a driving force to invest in business.

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 I Expected income projection
Profit and Loss Total
Projection
Year 2016 2017 2018 2019
Revenue 74,983,680.00 93,729,600.00 112,475,520.00 134,970,624.00 416,159,424.00
Total revenue 74,983,680.00 93,729,600.00 112,475,520.00 134,970,624.00 416,159,424.00

Cost of Service
Cost of Service 59,986,944.00 74,983,680.00 89,980,416.00 107,976,499.20 332,927,539.20
Total Cost of Sales 59,986,944.00 74,983,680.00 89,980,416.00 107,976,499.2 332,927,539.20
0
-
Gross Profit 14,996,736.00 18,745,920.00 22,495,104.00 26,994,124.80 83,231,884.80
-
Administration Expense -
Salary & Benefits 2,163,150.00 2,487,622.50 2,860,765.88 3,289,880.76 10,801,419.13
Communication 34,787.50 40,005.63 46,006.47 52,907.44 173,707.03
Stationary & office 7,988.60 9,186.89 10,564.93 12,149.66 39,890.08
supplies
License & registration fee 2,087.25 2,400.34 2,760.39 3,174.45 10,422.42
Deprecation 7,656,648.31 8,805,145.56 10,125,917.39 11,644,805.00 38,232,516.27
Utilities 10,436.25 12,001.69 13,801.94 15,872.23 52,112.11
Miscellaneous 139,150.00 160,022.50 184,025.88 211,629.76 694,828.13
Total Expense 10,014,247.91 11,516,385.10 13,243,842.87 15,230,419.30 50,004,895.18
Net Profit/Loss Before 4,982,488.09 7,229,534.90 9,251,261.13 11,763,705.50 33,226,989.62
Tax

Projected Income Assumption

According to the projected income statement underlying assumption, the

company is generating profit in first year of operation and sales turn over
well be increased average (25%) with average profit margin (20%)

 The Income Projection well increased year to year in the assumption of

the new Transport industry index in Ethiopia shows market growth will
increasers 15 to 20% average
 The company Will also have some negotiation with Big Customers in
the future period.
 Establish relationships with freight brokerages and transportation
companies in need of freight delivery services within the targeted
market.

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  Develop an online presence by developing a website and placing the
Company’s name and contact information with online directories.

 Previous period sales revenue was taken as base year for comparison.
Based on this scenario, the 2016 E.C sales will grow by 20%

 Sales will increase by average 25% every year after 2016 E.C.

II The projected Cash Flow

The cash flow projection is made assuming that:

● The Company will obtain ETB 25,000,000 loan finance at the

beginning of operation,.

● The annual sales of the company will be collected in the consecutive

year,

● Profit tax of the fiscal year will be paid in the same year.

Overall, the projected cash flow shows that the Company will generate series of
surplus cash flows after covering all operational and financial commitments that
confirms its liquidity.

Year 2016 2017 2018 2019

Cash Inflow
Beginning Cash 852,369.00
Income 74,983,680.00 89,980,416.0 107,976,499.2 129,571,799.0
0 0 4
Loan 25,000,000.00
100,836,049.0 89,980,416.0 107,976,499.2 129,571,799.0
Total Inflow 0 0 0 4
Cash outflow
Cost of Sales 59,986,944.00 74,983,680.0 89,980,416.00 107,976,499.2
0 0

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Salary & Benefits 2,163,150.00 2,487,622.50 2,860,765.88 3,289,880.76
Communication 34,787.50 40,005.63 46,006.47 52,907.44
Stationary & office 7,988.60 9,186.89 10,564.93 12,149.66
supplies
License & registration 2,087.25 2,400.34 2,760.39 3,174.45
fee
Utilities 10,436.25 12,001.69 13,801.94 15,872.23
Miscellaneous 139,150.00 160,022.50 184,025.88 211,629.76
Interest expense 3,672,102.00 4,222,917.30 4,856,354.90 5,584,808.13
Profit tax 1,743,870.83 14,001.97 16,102.26 18,517.60
Total Outflow 67,760,516.43 81,931,838.8 97,970,798.63 117,165,439.2
1 3
Net Cash Flow 33,075,532.57 8,048,577.19 10,005,700.57 12,406,359.81

(III). Projected Balance Sheet

YISAKOR YENENEH MELKE

STATEMENT OF PROJECTED BALANCE SHEET
Currency in Ethiopia Birr
Beginning of
Year, 1
the Year
ASSETS
Current assets
852,3 33,075,5
Cash and cash equivalent
69 33
3,090,1 2,036,8
Account Receivable
23 04
Prepayments
- -
Inventories
- -
Other current assets
-

-
3,942,4 35,112,3
Total current assets
92 37

Non-current assets

66,070,2 79,284,2
Property, plant and equipment
48 98
66,070,2 79,284,2
48 98

66,070,2 79,284,2
Total non-current Assets
48 98

70,012,7 114,396,6
Total assets
40 34

Liabilities and equity

Current liabilities
526,7 3,672,1
Accounts payable
96 02
Tax payable 3,356,7 2,512,3

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 20 37
Other current liabilities
- -
3,883,5 6,184,4
Total current liabilities
17 39

Non-current liabilities

25,000,0
Bank Loan
- 00
25,000,0
Total non-current liability
- 00

3,883,5 31,184,4
Total liabilities
17 39

23,2 23,2
Capital
63 63
52,201,0 67,198,3
Owners account
84 25
13,904,8 15,990,6
Retained Earning
76 07
66,129,2 83,212,1
Total equity
23 95
70,012,7 114,396,6
Total equity and liabilities
40 34

12.6. Financial Ratios

A financial ratio is used to calculate a company’s financial status or
production against other firms. It is a tool used by investors to analyze and
gain information about the finance of a company’s history or the entire
business sector. To calculate financial ration, numbers are taken from the
balance sheet, income statement, and cash flow statement. The financial ratio
is not a calculation but an explanation of the economic status of a company,
in terms of profit, liquidity, leverage, and market valuation. A ratio may serve
as an indicator, red flag or clue for various issues.

Return on Equity = Net Profit before tax 7,229,534.90 0.11

Net Equity 66,129,223.00

Current ratio = Current asset 3,942,491.76 1.02

Current Liability 3,883,516.88

Quick ratio = Current asset- Inventory 3,942,491.76 1.02

Current Liability 3,883,516.88

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Debit to Equity = Total Liability 3,883,516.88 0.06
Net Equity 66,129,223.00

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