Biruktawit Tessemma Cafe

Biruktawit
Tessemma Cafe

Business Plan

Owner :- Ms. Biruktawit Tessemma

Location
Municipality:- Nagele Borena
Kebele :- 03

May, 2024
TABLE OF CONTENTS

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TABLE OF CONTENTS...........................................................ii
Summary of the project.........................................................iii
1. Introduction.......................................................................1
1.1 The project Area............................................................2
1.1 Location........................................................................2
1.2 Objectives and Mission..................................................2
1.3. Services........................................................................ 3
1.4 Marketing and Demand Assessment..............................4
2. SWOT-Analysis..................................................................5
2.1 Strength........................................................................5
2.2 Weaknesses................................................................... 6
2.3 Opportunities................................................................6
2.4 Threats.........................................................................7
3. Organizations and Management.........................................8
4. Finance............................................................................ 10
7 Sustainability and Expansion Strategy..............................15

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Summary of the project

Key Information Highlights

Project Owner Ms. Biruktawit Tessema

Project Title Café and Fast-Food

(Breakfast)

Project Area Negele Borena town, Kebele

03

Cost Of The Project (Loan

4,800,000
Amount)

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1. Introduction
In Nagele Borena town there are many cafes that give services
to their customers but they cannot still satisfy the need and
want of the customer in terms of both quality and quantity.
Our cafe target customers are students, couples, families and
foreigners.

Negele Borena city, the political and commercial powerhouse

of East Borena zone generally and oromia Regional state, is a
thriving Cafe and Fast-food market, both domestically as well
as internationally. As a city of distinct cultural and historical
wealth it represents an important travel destination with a
balanced demand base in terms of shared and relaxation
tourism. Basically, Cafe and Fast-foods in Negele Borena
benefit from the very good market characteristics and hence
reported remarkable performance growth during the last
decade.
The city also greatly benefits from new source markets, with
strong growth rates in demand, especially from worldwide
tourists that want to visit the Oromia Regional state and their
cultures. This is mainly due to the city being home to different
nations and a lot of recreation areas associated organizations.
Different meetings, incentives, conventions and events
segment is estimated to remain of significant importance for
tourism to Oromia Regional state indicating great future
opportunities associated with these source markets.

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The aim of the Biruktawit Tessema Cafe and Fast-food is

basically sharing his part in accelerating the economic
development of the region even the country. Additionally he
also aims to create job opportunity, minimize poverty, and to
get reasonable profit from the implementation of the project.
Then it accelerates prosperity to the region in particular and to
the country as whole.
In this business plan the objectives of project description
finically analyse the project management operational
procedure and the sustainability has been illustrated.
1.1 The project Area.
1.1 Location
The project area is located in Oromia Regional state Negele
Borena city.
1.2 Objectives and Mission
The main objective of the project is aimed to continue to
provide modern cafe services that gives services of Cafe and
Fast-foods, café services and juice house services and then to
maximize the return on the invested capital. In addition to
this, other secondary objectives will also be attained. These
are:
 To provide cafe services that gives services of Cafe and
Fast-foods and café services rendering organizations
following the existing favourable investment,

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 To create job opportunity for the surrounding population

temporarily & permanently during project building &
after completion commencement of the project.
 To generate income for Government in the form of income
tax payment & VAT.
 To get reasonable amount of profit from the project
1.3. Services
The following services are provided by the business:
1. Cafe and Cafe and Fast-food service
The Cafe provides full Cafe and Fast-food services mainly
breakfast foods with quality and facilitated way. The Café
provides food supply services with best quality and relatively
least cost for customers.
2.Juice
We provide different flavors of Juices
3.Coffee and Tea
4.Beverage (different Alcohol and soft drinks)
Out cafe provides Whisky bottles of different type, other
alcohols drinks, Beer and soft drink crates
1.4 Marketing and Demand Assessment.
In the country as a whole and in the Oromia regional state and
the city particularly in that area, market condition is assumed
to have positive impact on building construction works for
modern cafe. In the City the progress of building modern Cafe
work development in most urban & rural areas are growing in

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fast rate. The government has given special attention for the
development of constructions works and infrastructure
development of every sector.
Hence the demand for constructions works services is
increasing very highly; the proposed project will enhance the
intended development of infrastructure and other construction
works. Annually the investor can generate service fee from the
Cafe and Fast-food business at a minimum. The Cafe and
Fast-food business in very highly needed in the city
particularly in that area and in the country as a whole, it is
possible to say surely feasible.
It is understated that there will be high demand for services
rendered by the Cafe and Fast-food. Some of the factors that
fewer for the existence of demand are:-
 The site is easily accessible to any vehicles,
 It would give services at reasonable price.
 There are no many modern specialized and modern cafe
service around that area, and… etc.
2. SWOT-Analysis
As a part of the business plan we provide a SWOT analysis in
order to have a better comparison with other cafes and a
better understanding of the whole project.
The main target audience is the business traveller, tourist,
government officials and customers from surrounding that
area. The cafe will serve breakfast, lunch, dinner and access a

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catering service if needed. In addition the cafe gives service

like café, and the like.
2.1 Strength
The business offers various possibilities to differentiate the
Cafe and Fast-food from its competitors and create a
competitive advantage, as the building itself is also a
competitive advantage.
Since the target customers are business people, tourists,
governmental officials and other customers that come to the
city during different occasion like that of religious conference,
religious festivals and other occasion a contemporary cafe
might be more appealing for the average business customer.
The facility is rather big compared to main competitors in this
area (might also turn in to a weakness therefore it is also
listed under Weaknesses) which offers a higher occupancy and
thus a higher turnover but on the other hand a low occupancy
is costly.
Our Cafe and Fast-food appears as a modern cafe with a very
good price-performance ratio which is a definite strength in an
area where cafes in city. Meaning that people would seize the
opportunity if they could not find a cafe room within a
community.
Parking lots right next to the cafe increase the comfort for
travellers compared to normal cafes and mini Cafe and Fast-
foods. Targeting the business traveller, tourists both from

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domestic and abroad, government officials who come to our

cafe for different meetings and other customers as main
customer reduces seasonal effects in occupancy.
2.2 Weaknesses
The concept of this type of Cafe and Fast-food is not new. It
does not create a new market and therefore has to compete
with other cafes and other mini Cafe and Fast-foods in the
area for customers.
In general, the weakness related with cafe project will be;
 Size of the Cafe and Fast-food might turn into weakness
 Concept is not new and does not stimulate market
growth
2.3 Opportunities
The current government focus and opportunity given for
construction would good opportunity for our project. The
situation is very advantageous to do a Cafe and Fast-food
business with the current government affirmative action’s on
building and the policy on service industry is best of doing our
project. Again there is good opportunity of credit extension for
investment loan by different Banks
Generally our Cafe and Fast-food business will have the
following summarized opportunity;
 Investment loan opportunity by different Banks
 Current government focus on building construction.

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 Affirmative action’s on building and the policy on service

industry

2.4 Threats
The biggest threat is a stagnating or decreasing demand for
Cafe and Fast-food service. Since the competition is already
well established and other cafes are known and well
frequented it might become tough for such a modern Cafe and
Fast-food to get foothold in the industry. Additionally,
through the size in combination with relatively high cost of
capital (salary, infrastructure costs and other costs etc.) in our
country it takes a few years to gain a profit. If due to a bad
economic condition the cafe manages only to establish slowly.
These circumstances can endanger the whole project.
As mentioned the high price level in our country causes
difficulties. High inflation are a problem for business
travellers, governmental officials and other customers to our
cafe services may take in favour of mini Cafe and Fast-foods
and other cafes with poor quality but with low price. Tourists
occasionally also have to cancel trips due to bad economic
growth or too high costs.
In conclusion the will be summarized threat by the Cafe and
Fast-food business;
 Stagnating or even decreasing demand
 Bad economic conditions

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 High cost of capital in our country

 Reduces number of possible customers
 Strong & well established competition
3. Organizations and Management
All the activities and duties of the project will be guided
supervised and managed by the professional project manager.
The financial systems and producers will be applied and
checked at every stage of activities by internal auditor monthly
and annually.
The Weekly, monthly, quarterly and yearly progress and
financial as well as inventory report will be compiled by the
project finance administrator and be submitted to the owner of
the project.
The project has to have manager different professionals and
other experiences workers. The total workers accommodation
comprises of permanent and temporary workers of about 40
workers.
The organization structure is designed in such a way that it
can enable to fully undertake the project objectives.
It consists of manager who is accountable to owner of the
project, other professionals and supporting staff.
The required manpower, position and salary are shown in the
table below.

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Table 1. Manpower Requirement

Monthly
Annual
SN Position No salary in
salary in Birr
Birr
1 Cashier 1 4,500.00 54,000.00
2 Chief 1 4,000.00 48,000.00
3 Cooks 2 2,500.00 60,000.00
4 Receptionist 1 3,000.00 36,000.00
5 Waitress 2 2,500.00 60,000.00
6 Cleaner 1 2,000.00 24,000.00
7 Coffee makers 1 2,500.00 30,000.00
Total 9 21,000.00 312,000.00

4. Finance Analysis
In setting up any business, the amount or cost will depend on
the approach and scale you want to undertake. If you intend
to go big by renting a place, then you would need a good
amount of capital as you would need to ensure that your
employees are well taken care of, and that your facility is
conducive enough for workers to be creative and productive.
This means that the start-up can either be low or high
depending on your goals, vision and aspirations for your
business. The tools and equipment that will be used are

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nearly the same cost everywhere, and any difference in prices

would be minimal and can be overlooked.
Biruktawit Tessema Cafe and Fast-food. is a private business
that is solely owned and financed by Biruktawit Tessema and
her family members. They do not intend to welcome any
external business partner which is why he has decided to
restrict the sourcing of the start – up capital to 2 major
sources.
These are the areas we intend generating our start – up
capital;
 Generate part of the start – up capital from personal
savings
 Apply for loan from my Bank
we are at the process to obtain a loan 4,800,000 from a
bank.

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Manpower requirements and salary

Table 1. Manpower Requirement
Monthly
Annual
SN Position No salary in
salary in Birr
Birr
1 Cashier 1 4,500.00 54,000.00
2 Chief 1 4,000.00 48,000.00
3 Cooks 2 2,500.00 60,000.00
4 Receptionist 1 3,000.00 36,000.00
5 Waitress 2 2,500.00 60,000.00
6 Cleaner 1 2,000.00 24,000.00
7 Coffee makers 1 2,500.00 30,000.00
Total 9 21,000.00 312,000.00

 Total 5 Summary of estimated project Revenue

Project year
Descriptions of item
2024 2025 2026
Revenue from food 13,380,000. 14,718,000. 16,189,800.
1
sales 00 00 00
Revenue from 1,912,000.0 2,103,200.0 2,313,520.0
2
Beverage sales 0 0 0
1,020,000.0 1,122,000.0 1,234,200.0
3 Revenue From juice
0 0 0

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Revenue from coffee 1,536,870.0 1,690,557.0 1,859,612.7

4
and Tea 0 0 0
17,848,870 19,633,757 21,597,132
Total
.00 .00 .70

B. Expenditures
Table 5 Summary of operating cost of the Project

No Descriptions of Project Year

item
2024 2025 2026
1 Purchase of Food
materials 8,028,000. 9,633,600. 10,596,960
00 00 .00
2 Cost of purchase of
Beverage 1,434,000. 1,720,800. 1,892,880.
00 00 00
3 Cost of Purchase of
Fruit 714,000.00 856,800.00 1,028,160.
00
4 Cost of purchase of
Coffee and other 922,122.00 1,106,546. 1,217,201.
40 04
Cost of
sales/services 11,098,12 13,317,74 14,735,20
2.00 6.40 1.04
1 Salary expenses
312,000.0 374,400.00 449,280.00
0
2 Uniform
25,000.00 30,000.00 36,000.00
3 Utility
50,000.00 60,000.00 72,000.00

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4 Repair and
maintenance 50,000.00 60,000.00 72,000.00
5 Advertising and
promotion 10,000.00 12,000.00 14,400.00
10 Employee Benefits
15,000.00 18,000.00 21,600.00
12 Miscellaneous
100,000.00 120,000.00 144,000.00
Total operating
cost 562,000.0 674,400.0 809,280.0
0 0 0

C. Depreciation value of fixed asset

By assuming the project’s fixed Asset will be depreciated at 5%
yearly and its useful life is 50 years the following will be
depreciation cost of three years.
N Description Total Life Dep Yearly
o price time (%) depreciation
/years/
1 Total fixed 4,800,000 50 5% 240,000
asset
Total 4,800,000

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D. Income statement projections

Projected Income statement
For the year 2024 E.C – 2026 G.C
Project
Description year
2025 2026 2027
Revenues
13,380,000.0 14,718,000.0 16,189,800.0
Revenue from Food
0 0 0
Revenue Beverage 1,912,000.00 2,103,200.00 2,313,520.00
Revenue from Coffee
1,536,870.00 1,690,557.00 1,859,612.70
and Tea
Revenue juice house
1,020,000.00 1,122,000.00 1,234,200.00
and café
17,848,870. 19,633,757. 21,597,132.
Total Revenue
00 00 70
Less Expenses
Cost of
product/services sold
11,098,122.0 13,317,746.4 14,735,201.0
Cost of sales/services
0 0 4
6,750,748.0 6,316,010.6 6,861,931.6
Gross profit
0 0 6

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Less operating
562,000.00 674,400.00 809,280.00
expenses
Less Depreciation
240,000.00 240,000.00 240,000.00
Expenses
EBIT 5,948,748.00 5,401,610.60 5,812,651.66
Less Interest expense 453,597.11 453,597.11 453,597.11
5,495,150.8 4,948,013.4 5,359,054.5
EBT
9 9 5
Less Income tax (30%) 1,905,302.81 1,713,804.72 1,857,669.09
3,589,848.0 3,234,208.7 3,501,385.4
Profit after tax
8 7 6

E. Cash flow projections

Projected Cash flows
For the year 2024 E.C-2026 E.C
Project Life years
Description
2024 2025 2026
INFLOW

Net sales revenue 6,750,748.00 6,316,010.60 6,861,931.66

TOTAL INFLOWS 6,750,748.00 6,316,010.60 6,861,931.66

OUTFLOWS

Operating cost 562,000.00 674,400.00 809,280.00

Interest expense 453,597.1 453,597.1 453,597.11

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1 1
Income tax 1,905,302.81 1,713,804.72 1,857,669.09
TOTAL
2,920,899.92 2,841,801.83 3,120,546.20
OUTFLOWS
NET CASH FLOW 3,829,848.08 3,474,208.77 3,741,385.46

F. Long term credit reimbursement schedule

No. Period Interest Principal Balance
1. 2024 501,910.68 867,154.06 3,932,845.94
2. 2025 519,006.33 1,363,457.6 2,569,388.25
9
3. 2026 268,277.74 1,614,186.2 820,468.54
8
4. 2027 23,573.60 660,958.76 0.00

5. Sustainability and Expansion Strategy

The future of a business lies in the numbers of loyal
customers that they have the capacity and competence of the
employees, their investment strategy and the business
structure. If all of these factors are missing from a business
(company), then it won’t be too long before the business close
shop.
One of our major goals of starting Biruktawit Tessema Cafe
and Fast-food is to build a business that will survive off its

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own cash flow without the need for injecting finance from
external sources once the business is officially running.
We know that one of the ways of gaining approval and
winning customers over is to retail our wide range of goods
from different brands a little bit cheaper than what is
obtainable in the market and also to ensures that our
finished diamond can favorably compete with finished
diamonds from any part of the world and we are well
prepared to survive on lower profit margin for a while.
Biruktawit Tessema Cafe and Fast-food will make sure that
the right foundation, structures and processes are put in
place to ensure that our staff welfare is well taken of. Our
company’s culture is designed to drive our business to greater
heights and training and retraining of our workforce is at the
top burner.

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