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Contents
1. CHAPTER ONE- EXCUTIVE SUMMARY 3
2. CHAPTER TWO- INTRODUCTION 4
3. CHAPTER THREE- BACKGROUND AND DESCRIPTION OF THE BUSINESS 6
3.1. Background Information................................................................................................................................6
3.2. The profile of the promoter............................................................................................................................7
4. CHAPTER FOUR- GENERAL DESCRIPTION OF THE BUSINESS AREA 8
4.1. Business..........................................................................................................................................................8
4.2. The Economic significance of the project......................................................................................................8
4.3. The physical Characteristics and socioeconomic activities of the city .........................................................8
4.4. Project Description and Justification ...........................................................................................................10
4.5. Service Description.......................................................................................................................................12
4.6. Credit Relation..............................................................................................................................................12
4.7. Past Performance..........................................................................................................................................12
4.8. Mission Statement........................................................................................................................................12
4.9. Company Goals and Objectives...................................................................................................................12
5. CHAPTER FIVE- INDUSTRY OVERVIEW AND ANALYSIS 14
5.1. Industry Overview........................................................................................................................................14
6. CHAPTER SIX- TECHNICAL STUDY14
6.1. Service Description.......................................................................................................................................14
6.2. Machinery and Equipment Requirement.....................................................................................................14
6.3. Service Deliver Program and Service Capacity...........................................................................................15
7. CHAPTER SEVEN- MARKET STUDY AND ANALYSIS 16
7.1. Introduction to Marketing...........................................................................................................................16
7.2. Marketing Service Cycle..............................................................................................................................17
7.3. Market Demand and Supply Analysis..........................................................................................................17
7.4. Competitors Analysis....................................................................................................................................22
7.5. Target Customers..........................................................................................................................................23
8. CHAPTER EIGHT- LAND AND CIVIL WORK 26
8.2. Land Use Plan...............................................................................................................................................27
9. CHAPTER NINE- ACTION PLAN 28

10. CHAPTER TEN- ORGANIZATION AND MANAGEMENT 28
10.1. Organization and Management...................................................................................................................28
10.2. Organizational Structure.............................................................................................................................28
10.3. Duties and Responsibilities...........................................................................................................................29
10.4. Man Power...................................................................................................................................................30
11. CHAPTER ELEVEN- FINANCIAL STUDY AND ANALYSIS 32
11.2. Total Initial Investment Cost........................................................................................................................32
11.3. Fixed Investment...........................................................................................................................................33
11.4. Operation of services....................................................................................................................................33
11.5. Financial Analysis and Statements...............................................................................................................37
11.6. Amount and Purpose of the Requested Loan...............................................................................................37
11.6.2. Revenue Schedule 38
11.6.3. Income or Loss Statement 38
11.6.4. Pay-Back Period 39
11.6.5. Cash Flow Forecast 40
11.6.6. Break Even Analysis 41
11.6.7. Discounted Cash Flows and Net Present Value (NPV) 42
11.6.8. Profitability 43
12. CHAPTER ELEVEN- CONCLUSION 43
13. CHAPTER TWELVE- APPENDIX 44
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1. CHAPTER ONE- EXCUTIVE SUMMARY
This proposal is undertaken to evaluate the viability of establishing mixed use buildings with
very modern apartment by 04 Commercial Center’s share holders or members the list of founder
and share holders of 04 Commercial Center’s members are found or attached at the end of this
project proposal in addition to this they have different businesses with holding ample working
experience and most of the owner or member of this commercial center have been made the
business at this place for more than 20 years. 04 Commercial Center mixed use buildings with
very modern apartment study encompasses multiple aspects related to the subject, among which,
overview of commercial center industry, market study, Business operation and services,
organization and man power, financial analysis are the major ones. Finally, after thorough
examination of these aspects, a conclusive recommendation on the investment strategy,
implementation and operation is forwarded.
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The market study shows that additional others mixed use buildings with very modern and
unique apartment are required in Adama city currently. If additional mixed use buildings with
very modern and unique apartment are not established the gap will increase to 495,954 mixed
use buildings with very modern and unique apartment by the year 2022.
Since there are some mixed used building in Adama city that can accommodate the required
services of foreign and local tourists, the demand for the service is very high and attractive.
The total initial investment requirement is estimated at birr 79,355,829.78 of which
95.20% (75,545,623.52) is for building construction.
The project will create permanent employment opportunities for 41 female and 20 male from
Adama werda and surrounding the total number of employee for mixed use buildings with very
modern and unique apartment are 61 educated and non-educated persons.
The project is financially viable with an internal rate of return (IRR) of 12% and a net present
value (NPV) is Birr 1,634,328 discounted at11%.
2. CHAPTER TWO- INTRODUCTION
Tourism is a big industry comprising many sectors such as accommodation, mixed use buildings
with very modern and unique apartment and beverage services recreation and entertainment,
transportation and travel services. Each of these sectors contributes to tourism development in
various destinations, and has different structures, and performances. However, in many
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countries, only the hotel and restaurant sector is separately analyzed as being the one closely
related to tourism, also statistically separate from the others.
Adama is the city with enormous and diversified tourist attractions that include, natural,
historical and cultural sites, so it can be a potential leading tourist destination in Ethiopia.
According to the World Economic Forum, Travel and Tourism competitiveness Index 2013,
Ethiopia ranks 33rd and 82nd out of world countries in terms of Natural Resources and Cultural
Resources respectively. From the total Oromia National Regional State accounts 26.6%of the
country. Tourism is one of the major economic sector the government has labeled as a priority
sector, in part as a tool for poverty alleviation. Under the Growth and Transformation plan (GTP),
the government aims to create additional 1.08 million jobs in tourism sector and in 2015 to
increase the number of tourist to one million, in addition to making Ethiopia the top five
distinction in Africa.
According to world travel &Tourism Council (WTTC) Ethiopia 2013, the total direct and indirect
contribution of Travel and Tourism to the Gross Domestic product (GDP)Was, 88,691.2 million
birr which is 10.3 per cent of the GDP in 2013, and has forecast in to rise by 4.3 per cent in
2014, also by 4.9 per cent generating 149,832.0 million birr or 9.0 per cent of GDP in 2014.
In 2013, the total direct and indirect contribution of travel and tourism to employment, by the
industry, was 9.5 per cent of total employment at 2.4 million jobs. This was expected to rise in
2014 by 0.2 per cent and in 2014 to rise by 0.9 per cent taking 7.9 per cent of the total jobs. In
the other side, Ethiopia’s tourism potential has various bottlenecks, namely, poor historical
image because of war and famine, inefficient and disorganized promotion at the international
level, lack of skilled manpower, absence of coordination among and between stakeholders,
uncommunicative tourism service and products, among others.
Since 1991, the Government has been striving to remove these constraints relating to visa and
customs regulations, tax and customs incentives to encourage investments in hotel and tour
services. Preserve and develop tourist sites throughout the country and to infrastructure
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development, opening of different tourist service organizations, and national tourism
organizations to manage and transform the tourism industry.
Ethiopia had an experience in hotel grading and classification since 1990, the existing system is
outdated compared to the world sundered. There is a need for consistency between hotel
classification and the extent to which they reflect customer satisfaction. Customer satisfaction is
core for hotel businesses and tourist destination success also affects business profitability but
executed properly enhances customer loyalty, influences repurchase intentions and lead to
positive word –of- mouth. In Ethiopia there are more than 600 tourist standard hotels. So it is
crucial to introduce new system that shows the current true picture of the accommodation
services.
The growth tourism in Ethiopia has stimulated increased tourism supply capacity and higher
level of investment in infrastructure, human capital and technologies to manage and efficiently
transact higher levels of tourism activity. Hence, investment activities in tourism including hotel,
motel, recreation center, resort and lodges can support and propel the sector, particularly in
developing countries (Like Ethiopia) where domestic resources limited.
Moreover, the current investment flow and market in these areas are very promising that
initiates many investors to engaged in it. Furthermore, the government of Ethiopia has conducive
investment polices and regulation that further attract the private sector involvement in economic
development of the nation through the various investment and business activates.
In this regard, the promoter of the envisioned mixed use buildings with very modern and unique
apartment project, 04 Commercial Center’s founder feasibility study planned, to invest in mixed
use buildings with very modern and unique apartment in Adama City, of Oromia National Regional State
and undertaken this project study to confirm the market, technical and financial viability of this
project. The result of the study is very sound and promising for the owner to start the project in
this area.
The promoter is highly dedicated to commence the project. Hence they expected to get the
necessary support from the regional and local governments to make the project operational.
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3. CHAPTER THREE- BACKGROUND AND DESCRIPTION OF THE BUSINESS
3.1. Background Information
The mixed use building as well as very modern and unique apartment industry of Ethiopia
signifies a substantial gap between demand for mixed use buildings with very modern and
unique apartment and supply of accommodation establishments. We have learnt from different
analysis that there is an escalating demand for mixed use buildings with very modern and
unique apartment. Furthermore, the expected increasing rate of inbound tourist arrival will
create a big business opportunities for those planning to enter the hotels industry.
Therefore, increasing the supply of a good quality mixed use buildings with very modern and
unique apartment throughout the country is necessary for the subsequent improvement of the
competitiveness of the sector.
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The state does, however, retain control of much of the top-end assets in the sector and there are
strong practical and developmental reasons for a measured privatization of these assets.
The mixed use buildings with very modern and unique apartment industry may serve as a
window linking of other industries to local markets. The mixed use buildings with very modern
and unique apartment industry is interface with other sectors, such as agriculture,
restaurants, handicrafts, infrastructure and trade. Also, the mixed use buildings with very
modern and unique apartment in Ethiopia have the intention to purchase from the local market.
Improvement of productivity of other sectors can take advantage by exploiting the
characteristics of the mixed use buildings with very modern and unique apartment industry
as an interface with other industries and its purchasing power, and eventually it will
contribute to poverty reduction and the growth significantly. The improvements of the banking
system in extending financial services and the customs procedures would be helpful not only
for the mixed use buildings with very modern and unique apartment sector but also for the
economic growth of the country. Thus, the mixed use building with very modern and unique
apartment sector requires a strong commitment from the side of government and other stake
holders such as the private sector banks. Generally, the hotel industry of Ethiopia is worthy to
be availed with adequate loan able funds from both public and private financial
institutions as it is an expanding and promising industry.
The stock of mixed use buildings with very modern and unique apartment in Ethiopia has
increased sharply over the last few years. While some tourist accommodation is already
available at all the major attractions, improvement as well as new construction is taking
place.
3.2. The profile of the promoter.
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The building of 04 Commercial Center will be build by the contribution of share holders of 04
Commercial Center’s estimated birr 79,355,829.78 by the owner which is found in kebele 04
inside of 04 kebel on the road of Bole where there are no many accesses of mixed use buildings
with very modern and unique apartment but very excellent location on which the circle road of
the city across by. Members of 04 Commercial Center who has been working on more than
2,000 square meter of land owned for more than 20 years by members of 04 commercial centers
through rent from Adama city Administration. So, 04 Commercial Center set the plan to build
mixed use buildings with very modern and unique apartment which will be accomplished soon.
By the owners of the business 04 Commercial Center with initial capital of birr 79 .355 million.
The promoter is very interested in this business as he has already in the sector, Therefore, as
there is a gap in this business. Furthermore, it is also motivated by feasibility of the business as
well as the invitive of the existing government policy for investing in the sector.
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4. CHAPTER FOUR- GENERAL DESCRIPTION OF THE BUSINESS AREA
4.1. Business
04 Commercial Center’s land for Hotel is located in Oromia Regional States, Adama City
Administration, Bole Sub City on the way of zero 4 to Bole road of the city. The promoter will
plan to owned this land through investment policy from city administration. Adama, which is
100km southeast of from Addis Ababa on the high way to Djibouti has a total area of 9,616.5 m
sq and attractive city for different business sectors.
4.2. The Economic significance of the project.
The hotel and tourism business has got the following major economic importances which are
summarized as follows:
 Providing quality service for the customers on mixed use buildings with very
modern and unique apartment
 Becoming Source of revenue to the local government and national level
 For creating employment opportunity for 61 permanent individuals
 Providing Benefit for the local community
 Simulating the local economy
 Increasing the tourist attraction and source of revenue
 Changing the image of the city
4.3. The physical Characteristics and socioeconomic activities of the city
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a. History
Adama city, which is relatively an old city by Ethiopian standards, was established in 1917,
It has been serving as the center for different levels of administration at varying times. In 1946 it
became the seat of the then yarer and kereyu Awraja and later in 1988 it became the seat for the
East Shoa Administrative Region. At present, it is serving as second seat of oromia National
Regional State /Chefea Oromia, and as center for industry, Trade, Culture, Conference center.
Now, the town is being administered by Mayor and has a status of city Administration and sub-
cities directly structurally to the Oromia National Regional State especially to the president. It has
14 administrative kebeles. The city Municipal services like solid waste service begin in early of
1960’s.
Adaamaa, which is a busy transportation center as large number of trucks use this same route to
travel to and from the seaports of Djibuti and Asseb (which will start opration very soon), is
situated along the road that connects Addis Ababa with Dire dawa. Additionally, the Addis
Ababa-Djibouti railroad station which is recently started functioning in Adama city.
Adama science and Technology University (formerly Adama University) is located in Adama. The
city has also stadium which is the home of Adama City FC who are a member of the Ethiopian
Foot ball Federation league.
It is said that the city name Adama was derived from the Oromo word Adaamii, which means a
cactus or acactus -like tree. More specifically, adaamii means Euphorbia candelabrum, A tree of
the spurge family, while hadaammii would mean Indian fig.
Following World War II, emperor Haile renamed the town after Biblical Nazerth, and this name
was used for the remainder of the twentieth century. In 2008, the city officially reverted to its
original Oromo language name, Adama, through ‘’Nazereth’’ is still widely used. In 2000, the
government moved the regional capital of oromiya from Addis Ababaa to Adama, Sparking
considerable controversy. Critcs of the move belived that the Ethiopian government wished to
deemphasize Addis Ababa’s location within oromiya. On the other hand, the government
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maintained that Addis Ababa ‘’has been found inconvenient from the point of view of developing
the language, culture and history of the Oromo people.’’
On June 10, 2005, the Oromo peoples’ Democratic organization (OPDO), Part of the ruling
EPRDP, collation, officially announced plan to move the regional capital back to finfinnee (the
oromo name for Addis Ababa), This announcement occurred during the aftermath of Ethiopia’s
most democratic elections to date, in which the governing coalition lost all of its seat in Addis
Ababa’s municipal administration (see Ethiopian general elections, 2005). The opposition parties
speculated that move was intended as a way to split them along ethnic lines by including the
large non–oromo residents of Addis Ababa to oppose the return of the oromia government to the
Ethiopian Capital. The only comment from the opposition that the move inspired, however, was
that the original move to Adama had been a massive waste of money, not to mention lives, as he
government had cracked dowen on oromo students who had protested the move from Finfinnee
to Adaama. In any event, non- oromo groups did not oppose the return of oromia government
offices Addis Ababa.
b. Topography
Topography of the city is characterized by flat land that is surrounded by ridges. The plain land
is covered by lacustrine sediments and reworked volcanic, while the ridges are made of volcanic
rocks. The nature of topography has created three drainage sub catchments. One that drain to
Awash river and the other two closed basins, absence of appropriate drainage network that, lack
of natural out let and un planned human intervention have made the city venerable to flooding.
c. Geology
The city lies on quaternary volcanic rocks that are formed in associated with the formation of
rift. The sediments the floor of the rift are alluvial and lacustrine deposits. The major tectonic
lines, which are aligned in NE-SW direction in rift floor, from numerous local graven and horst
structure (rift-in –rift structures).The centeral volcanoes are rooted along these tectonic lines are
characterized by collapsed calderas, among which the Boku caldera occupies the south part of
Adama in the main.

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Ethiopian rift (MER).the volcanic products from the Boku volcano can be grouped as alkaline
and per alkaline rhyolite lava domes, flows, and pyroclastic falls, which cover the floor complex
ignimbiite deposits. The major products are rhyolite lava flows, obsidian flows, pumice falls, and
spatter cones with associated basaltic lava flows. After the emission of these products, the caldera
has been collapsed and given rise to post caldera (intera-caldera) the products such as scoria
cones with associated basaltic lava flows, The Boku ridge from the maximum peak in the area
rising from 1600m above the sea level to 1875m above the sea level.
d. Temperature
The mean annual temperature of the city is 21C. The city temperature can be classified as semi-
humid to semi-arid environment, which characterized the altitude range between 1300to
1800m.as.l.The hottest mouths with the maximum mean temperature of 31C, is May. The
monthly minimum temperature is Nove & Dec (11.5 c). The maximum temperature varies
between 25.8c and 31C while the minimum monthly temperature varies between 11.5C and
17C.
e. Demographics
Based on the 2007 census conducted by the central Statistical Agency of Ethiopia (SCA),this city
has a total population of 220,212, an increase of 72.25% over the population recorded in the
1994 census, of whom 108,872are men and 111,340 women. With an area of 29.86 square
kilometers, Adama has a population density of 7,374.82; all are urban inhabitants. A total of
60,174 households were counted in this city, which results in an average of 3.66 persons to a
household, and 59,431 housing units. The four largest ethnic groups reported in adama were the
Oromo (39.02%), the Amhara (34.53%), the Gurage (11.98%)and the silite (5.02%), ALL other
ethnic groups made up 9.45% of the population. Amaharic was spoken as a firest language by
59.25%, 26.25% spoke oromifa and 6.28% of the population reporting they observed this belie f,
while 24.7%of the populations Muslim, and 1o.57%were protestant. The 1994 national census
reported this town had a total population of 127,842 of whom 61,965 were males and 65,877
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reported this town had a total population of 127,842 of whom 61,965 were meals and 65,877
were females.
4.4. Project Description and Justification
4.4.1. Project Justification
Adama has had much invitation for international tourists as it has unique historical and cultural
heritage, magnificent scenery, a surprisingly warm climate, rich flora and fauna, important
archaeological sites and hospitable people. The Eastern tourist circuit known as the ‘’Historic
Route’’ comprises the most important tourist site in the country.
The city is a strategically located in the Rift Valley and therefore, many national meetings,
training and conferences are held in Adama throughout year. This creates a huge demand for
accommodation at national standard and even an increase in such a demand is expected in the
future because of the importance of Adama City in Ethiopia has been growing. Therefore, many
Regional organizations have been continuously strengthening their institutions and augmenting
their personnel in Adama.
The stock of hotels in the Adama city has increased rapidly over the last few years. While some
tourist accommodation is already available at all the major attractions, improvement as well as
new construction is taking place. The presences of a number of international standard hotel with
many meeting hall in Adama, makes the city the preferred for conducting different Workshop,
Training, conference, meeting and so on in the city throughout the year.
Many hotels in Adama are under construction, simulated by the initiative of the government of
Ethiopia and they sharp rise in demand. Since the hotel industry can create job opportunities for
enormous number of workers, the development of the hotel industry benefits not only the
tourism sector but also poverty reduction. On top of the importance of the industry itself, as
hotels are at the center of supply chain, such as food, handcrafts and tour operation, focusing on
the hotel industry provides on an occasion to over view those associated industries.
The services that are given in the industry are vital for development of the industry by creating
educate hospitality to tourists or business people that may visit the country. The hotel industry in
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Adama city has been developed very fast but there is still a big room for improvement when it
comes to the quality of service.
mixed use buildings with very modern and unique apartment will be addressed the following
economical and social objectives:
1. General reasonable income from this investment because of;
 The proximity of the mixed use buildings with very modern and unique
apartment to customers because the access for transportation, and others
infrastructures’ facility.
 The service quality and the price that will be given by the mixed use buildings
with very modern and unique apartment will be affordable and reasonable.
 Experience that the promoter of the business especially in the renting of shops for
long period and good will that have expected in the future would be continued
and the customers’ will also loyal to use their service in this newly expanded
business.
4.5. Service Description
The mixed use buildings with as well as modern and unique apartment where services like
bedroom, catering, meeting rooms, multipurpose assembly hall, Spa gymnasium, sauna and
massage, other sports facilities etc.
4.6. Credit Relation
The promoter, mixed use buildings with very modern and unique apartment, Commercial Center
has not have credit relations with any private or Government banks with this business yet but he
is going to have un executed hotel loan for accomplishment from commercial bank of Ethiopia.
In relation to his former businesses he has a long year customer with AIB.
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4.7. Past Performance
Physical production performance
The owners of 04 Commercial Center have a long year experience successful business men of
different kinds of business. In those businesses they have got ample exposure that therefore, they
are a popular business man in the city as well as in the country. Hard working was a base for this
promoter that enables him to become the popular and successful business man. Thus, he is a role
model and outshined business man.
4.8. Mission Statement
The project will be established with the mission for providing best quality services under
uncompromising quality conditions and at affordable price while still maintaining a reputation
for quality, integrity and customer satisfaction.
4.9. Company Goals and Objectives
The Company’s ultimate goal is to become a leading best service providing mixed use buildings
as well as very modern and unique apartment in the city. The services this mixed use buildings
with very modern and unique apartment provides the best quality with the customers oriented
with reasonable price and to be found conducive and the destination for the customers in the city
and the different corner of the country.
Furthermore, the company works to contribute to the sustainable development efforts of the both
country as well as the regional state of Oromia through harmonizing the economic, social and
environmental aspects within its project operations.
Above all, it will open job opportunity for many citizens as per need of the government for
lowering the unemployment rate. By and large, it contributes the transfer of knowledge in
quality providing by fulfilling the set standard in accordance. During the initial year the
company wants to achieve great profit based on the notion that as Adama city is a center of
different businesses centers and the center of multi conferences. This will ensure a profitable and
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a sustainable business venture while providing standard and quality services for its customers as
per planned goal.
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5. CHAPTER FIVE- INDUSTRY OVERVIEW AND ANALYSIS
5.1. Industry Overview
Ethiopia is a strategically important country in the Horn of Africa for most countries and
therefore, many international meetings and conferences are held in Ethiopia. This creates a huge
demand for business center at an international standard and even an increase in such a demand
is expected in the future because the importance of Ethiopia has been growing and many
international organizations have been continuously strengthening their institutions and
augmenting their personnel in Ethiopia.
6. CHAPTER SIX- TECHNICAL STUDY
6.1. Service Description

The mixed use building as well as very modern and unique apartment where services like shop,
office, Banks, Café and restaurant and apartment etc.
Moreover, the mixed use buildings with very modern and unique apartment at this level, are
usually of a size to support higher staffing levels, and a significantly greater quality and range of
facilities than at the lower star classifications. Reception and the other public rooms will be more
spacious and the restaurant will normally also cater for non-residents.
In this the mixed use buildings with very modern and unique apartment plan is considered to
provide local and international tourists and guests will be providing the following services. Such
as: (traditional and international), meeting rooms, multipurpose assembly hall, swimming pool,
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gymnasium, sauna/steam bath and massage, laundry and other sports facilities, children
playground and night club that the business full filed in different phases. The hotel will be
providing the following service mix;
The envisioned mixed use buildings with very modern and unique apartment will provide
quality and comfortable services for its customers. Mixed use buildings with very modern and
unique apartment will be more spacious allowing ample and generous ease of movement,
comfort and relaxation for guests, equip with latest technology.
The proposed capacity of mixed use buildings with very modern and unique apartment is 350
shops is planned to rent out and serve multiple purposes. It can be used for multi-purpose
activities by rearranging of seats and adding appropriate facilities on time and site.
6.2. Machinery and Equipment Requirement

The mixed use buildings with very modern and unique apartment needs different completion
building and finishing materials to complete the mixed use buildings with very modern and
unique apartment building are categorized (finishing materials for hotel, machinery, Vehicle’s,
equipment and furniture.) The materials required are presented in part 10 of this project
proposal.
The mixed use buildings with very modern and unique apartments need different machineries
and equipments to make the service functional. Machineries and equipments requirements are
listed based on the division of each service of the project.
6.3. Service Deliver Program and Service Capacity
The program is scheduled based on the consideration that the hotel will work 360 days at the
capacity of 80%, 90% and 100% from year one to four respectively. The potential to provide
service fully will grow to 100 percent starting from 3 rd year of the hotel. This consideration is
developed based on the assumption that market and recognition would be grown gradually
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within the first three years of operation. The next table shows the potential services provided
level of the mixed use buildings with very modern and unique apartment.
6.3.1. Utilities
A number of utilities would be put in place in order to ensure smooth functioning of the mixed
use buildings with very modern and unique apartment. These utilities include: water supply,
supplementary electricity supply, telephone line, paved road transportation and drainage facility.
The total utility quantity and its cost required are presented in financial part of this feasibility
study.
7. CHAPTER SEVEN- MARKET STUDY AND ANALYSIS
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7.1. Introduction to Marketing
Marketing may be defined as “Selling the right product, in the right place, at the right time, and
at the right price”. It can also be defined as “meeting needs profitably”. In simple words we can
say that marketing is the exchange of goods and services at a predetermined price which is
valued in terms of money.
Today hospitality industry is a multibillion dollar industry which is a fastest growing industry
not only in Ethiopia but through the world. This service sector is the biggest industry of the
Ethiopian economy because it includes multiple service components like mixed use buildings
rent and with very modern and unique apartment rent out for reducing home problem partially,
tourism and hotels. When we consider the hotel segment we find the restaurants, lodging,
transportation, cruise line, theme parks, events and many more.
Owing to the potential market in Ethiopia many mixed use buildings with very modern and
unique apartment giants are coming to Ethiopia to capture the market. These mixed use
buildings with very modern and unique apartment chains are entering the Ethiopian market by
establishing joint ventures with the Ethiopian mixed use buildings with very modern and unique
apartment, or by getting into management contracts or acquiring franchisees. Due to Ethiopia’s
wide diversity in culture, nature, and geography it has attracted many tourists from within as
well as outside Ethiopia. Due to its potential to attract large number of tourists the mixed use
buildings with very modern and unique apartment industry is now adapting to new technologies
like customer relationship management tools and latest security systems and to enter into new
segments like Medical tourism, Cruise, Casinos etc. However in Ethiopia, Adama is the most
talked state as far as its growth is concerned, be its economy or the hospitality sector. Adama is
crowned by some of the best hotels in south Ethiopia. This has made the tourists to visit here
again and again. Due to the expanding economy the state is bringing more and more number of
business travelers. Another special thing about the state is that it provides a wide range of hotels
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from ultra-luxurious hotels to the budget hotels which suits every customer irrespective of his
class or location.
As mentioned before due to the growing demand of the sector many national and international
giants are targeting Ethiopia for their business under such hectic competition the standalone
hotels have to survive and develop amid wild competition. Without having a good marketing
strategy in hand one cannot expect to be in the race. Thus in order to survive, sustain and
develop in the market mixed use buildings with very modern and unique apartment must apply
the right methods, differentiate from others and gain competitive advantage.
7.2. Marketing Service Cycle
Preparing and administering customer surveys with concern for guest satisfaction, advertising
methods, and incentive promotions.
A. Reservations—Developing and monitoring a reservation system with respect to ease of access
to toll-free numbers, fax, national reservation system, and telephone manner of personnel
handling reservations, cancellations, accommodation availability, complimentary services and
products, and general information.
7.3. Market Demand and Supply Analysis
7.3.1. The Demand of mixed use buildings with very modern and unique apartment
Industry in Ethiopia
A relative increase of investment is recently observed in the hotel and tourism sector. The hotel
industry consists of many different services, including accommodation, restaurants, and cafes
and catering. The market for the hotel industry, especially classified hotels in a developing
country like Ethiopia, is closely linked to the tourism industry, because a majority of consumers
for the sector services come from international tourists. According to the United Nations
Statistical Commission, tourism comprises the activities of persons traveling to and staying in
places outside their usual environment for not more than one consecutive year and staying at
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least 24 hours in the country visited. The total number of international tourists arriving in
Ethiopia is steadily increasing. As the gateway of all international inbound, outbound and transit
tourists/ passengers, Addis Ababa has been taking the lion’s share in the county’s tourist arrivals
hosting an estimated 95-99% of the total international tourist arrivals.
With an additional 39 million international tourists, up from 996 million worldwide in 2011,
international tourist arrivals surpassed 1 billion (1.035 billion) for the first time in history in
2012. The African continent receives approximately 5.0% of international tourist arrivals in
2011. In the same year, there were over 50.17 million international tourist arrivals to Africa, an
increase of 0.9% over 2010. Compared with other world countries, Ethiopia’s share in
international tourist arrivals, increased from 0.03% in 2005, to 0.053% in 2011.
The Inbound Tourist Arrivals in Ethiopia continued to grow from 76,844 in 1989, to 115,000 in
1999, 184,078 in 2004, 427,286 in 2009 and reaching 523,438 in 2011. During the year
2011, Ethiopia witnessed a positive tourist growth of 11.8 % over 2010. The compound annual
growth rate in Inbound Tourist Arrivals in Ethiopia during 1989 to 2011 was 9.7%. Table 1
indicates the trends of tourist flows into the country and the growth rates over the period (1989-
2011).
Table 7.3.1: The number of Inbound Tourist Arrivals in Ethiopia and the growth rate (1989 to
2011)
Year in G.C Inbound Tourist Arrivals Growth rate (%)
1989 76844
1990 79,346 3.26
1991 81,581 2.82
1992 83,213 2
1993 93,072 11.85
1994 98,070 5.37
1995 103,336 5.37
1996 108,885 5.37
1997 139,000 27.66
1998 112,000 -19.42
1999 115,000 2.68
2000 135,954 18.22
2001 148,438 9.18
2002 156,327 5.31
2003 179,910 15.09
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2004 184,078 2.32
2005 227,398 23.53
2006 330,026 45.13
2007 357,841 8.43
2008 383,399 7.14
2009 427,286 11.4
2010 468,305 9.6
2011 523,438 11.8
2012 574,211 9.7
2013 629,910 9.7
2014 691,011 9.7
2015 758,039 9.7
2016 831,569 9.7
Source: Ministry of Culture and Tourism (MoCT)
The GTP’s target on the number of tourist arrivals by the end of 2014/15 was set at 1 million in
bound tourist arrivals. However, this strategic target seems unlikely to be achieved with the
current growth rates of inbound tourist arrivals in the country. For GTP targets to be met, a
greater and conducive space for the private sector and Ethiopia’s regions, and the direct
involvement of tourism asset custodians is needed. Thus, a strong multi-stakeholder and federal-
regional dialogue as well as integration of regional development plans into tourism development
strategies will be critical. Table 6.2 below depicts arrivals of tourist at Ethiopia’s national borders,
by purpose of visit in the period from 2007 to 2011.
Table 7.3.2: Arrivals of tourist at Ethiopia’s national borders, by purpose of visit (2007 to 2011)
Source: Ministry of Culture and Tourism (MOCT).

Types of COUNT IN
Tourist 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Visiting 26,337 25,482 35,593 28,672 37,116 43,426 50,808 59,445 69,551 81,375 95,209
Page | 24
Friends and
Relatives
Business and 61,337 64,930 118,890 113,961 141,595 165,666 193,829 226,780 265,333 310,440 363,214
Professional
Business 43,455 49,209 71,374 77,816 91,064 106,545 124,658 145,849 170,644 199,653 233,594
Meetings, 17,882 15,721 47,516 36,145 50,531 59,121 69,172 80,931 94,689 110,787 129,620
Conferences,
Congresses
Other 95,736 140,351 134,733 154,258 161,719 189,211 221,377 259,011 303,043 354,561 414,836
Transit 58,916 77,572 81,481 84,229 86,020 100,643 117,753 137,771 161,192 188,594 220,655
Not Stated 36,820 62,779 53,252 70,029 75,699 88,568 103,624 121,241 141,851 165,966 194,180
Total 357,841 383,399 427,286 468,305 523,438 753,180 881,221 1,031,029 1,206,304 1,411,375 1,651,309
In the period (2007- 2011), on average about 35% of the total number of tourists that have
visited the country were for Leisure, Recreation and Holidays purpose while those who visited
the country for business and professional affairs account 23.7% of the total. Regarding the
others, transit accounts for 19.2%, visiting friends and relative 7.5%, and those who did not
stated their purpose account for 14.5% of the total.
In Addis Ababa, hotel demand conditions are buoyant particularly at the top end of market. This
reflects the lack of supply of high quality hotels and the relative lack of seasonality of conference
and business travel. Low-end hotels in Addis Ababa are used exclusively by the domestic business
market and experience much greater seasonal variation.
Accordingly, assuming 365 working days, in 2011 international standard (two and above stars)
hotels in Ethiopia had a total of 1,778,280 per annum tourist night room capacity. Based on
information from different sources the average stay of tourists in a hotel is assumed to be 4 days.
In order to project tourist arrival in to Ethiopia, the past trend in tourist arrival is considered.
During the period 1989-2011, the total tourist arrival in the country has registered 9.7%
average growth rate. Accordingly, assuming that this growth rate will continue in the future and
taking year 2011 (523,438) as a base, tourist arrival is forecasted.
Moreover, in order to compute the unsatisfied demand of the total annual capacity of
international standard hotels in Ethiopia, which computed to be 1,778,280 rooms per annum, is
taken as the existing capacity. The projected tourist room requirement, which is calculated by
Page | 25
taking the projected tourist arrival and multiplying it by the average hotel stay of tourists (4
days), the unsatisfied demand, is shown in Table 6.3 below.
Table 7.3.3: Existing hotel capacity, projected and unsatisfied demand
* Actual data for existing hotel capacity and unsatisfied demand

Year in G.C Projection of Tourist Room Night Existing Hotels Annual capacity Unsatisfied
Arrival Demand Demand
2018 1,000,718 4,002,872 1,778,280 2,224,592
2019 1,097,787 4,391,148 1,778,280 2,612,868
2020 1,204,273 4,817,092 1,778,280 3,038,812
2021 1,321,087 5,284,348 1,778,280 3,506,068
2022 1,449,233 5,796,932 1,778,280 4,018,652
2023 1,589,808 6,359,232 1,778,280 4,580,952
2024 1,744,019 6,976,078 1,778,280 5,197,798
We can conclude from the above analysis that there are clear expanding demand situations for
international standard hotels. The expected increasing rate of inbound tourist arrival will
definitely create a big business opportunities for those who are planning to enter the hotels
industry.
7.4.1. Supply of Hotels Accommodations
Ethiopia has a small number of hotels which are, generally, of poor standard. For instance, when
we compare the number of international standard hotels in Ethiopia with hotels in countries like
Egypt, Morocco and Kenya we notice a big difference in number. According to The Embassy of
Japan in Ethiopia (2008), even by 2004 data the hotel stock amounted to more than 140,000 in
Egypt, in Morocco 80,000 and more than 65,000 in Kenya. The international hotel classification
system is adopted in Ethiopia and hotels are classified into categories with stars from one to five
and hotels without stars.
According to Ministry of Culture and Tourism (MOCT) Tourism Statistics Bulletin of 2009, the
total number of hotels in Ethiopia in the year 2009 was 426. Recent data on the number of hotels
Page | 26
in the country was unavailable. As a result, to estimate the total number of hotels in 2012, we
can take a 20% growth rates over 2009 making it 511 hotels in the country. This number
includes all five stars, four stars, three stars, two stars, one star and not classified categories of
hotels. On the other hand, the most recent comprehensive data is presented in Table 6.4 and 6.5
below.
Table 7.4.1: The Number of Room Capacity – all hotel establishments in Ethiopia (2008 to 2011)
Source: Ministry of Culture and Tourism (MOCT)
Years/ Ratings 2008 2009 2010 2011
Count % Count % Count % Count % Count
Deluxe 0 0 0 0 0 0 0 0
5 stars 469 4 794 6 794 4 794 4
4 stars 1,073 8 921 7 921 5 921 5
3 stars 1,368 10 1,691 12 1,691 9 1,692 9
2 stars 1,527 11 1,465 10 1,465 8 1,465 8
1 star 695 5 698 5 698 4 698 4
Unclassified Hotels 8,226 62 8,549 61 12,559 69 13,455 71
Total 13,358 100 14,118 100 18,128 100 19,025 100
The standard of the accommodation establishments was based on Adama classifications, which
didn’t clearly segregate according to the services they provide. However, the office is in the
process of reclassifying existing hotels and others related service provider expressed in table 6.5.
Table 7.4.2: Adama hotel No of bed and employee
No Description Their no. No of beds No of employees

1 Hotels 138 5210 2755
2 Bars 93 - 376
3 Pension 178 2492 712
4 lodge 1 33 26
Total 1135 7735 7045
Source: Culture and Tourism office of Adama City Administration report (2017/18)
7.4.3. Past Supply and Present Demand
7.4.4. Projected Demand
Hotel business will be concentrating on different market segment. This will be different
businesses classes in Adama city and the adjacent districts and Peasant Association (PA) kebele.
04 Commercial Center star hotel, Ethiopia deals with the very burning issues of hotel business
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established in where high population and high economic transaction occurs in every days. Based
on the 2007 Census conducted by the Central Statistical Agency of Ethiopia (CSA), this city has a
total population of 220,212, an increase of 72.25% over the population recorded in the 1994
census, of whom 108,872 are men and 111,340 women. With an area of 29.86 square
kilometers, Adama has a population density of 7,374.82; all are urban inhabitants. A total of
60,174 households were counted in this city, which results in an average of 3.66 persons to a
household, and 59,431 housing units. The hotel, Ethiopia business believes that the greatest
threat at the moment is in new entrants to the market who will want to capitalize on this high
growth industry.
A relative increase of investment is recently observed in the hotel and tourism sector. This hotel
industry consists of many different services, including accommodation, restaurants, and cafes
and catering. The market for the hotel industry, especially classified hotels in a developing
country like Ethiopia, is closely linked to the tourism industry, because a majority of consumers
for the sector services come from international tourists. According to the United Nations
Statistical Commission, tourism comprises the activities of persons traveling to and staying in
places outside their usual environment for not more than one consecutive year and staying at
least 24 hours in the country visited. Currently, the total numbers of hotels found in Adama city
are 45 which provided service to their customers.
The international standards tourists arriving in Ethiopia is steadily increasing. As the gateway of
all international inbound, outbound and transit tourists/ passengers, Addis Ababa has been
taking the lion’s share in the county’s tourist arrivals hosting an estimated 95-99% of the total
international tourist arrivals.
The Inbound Tourist Arrivals in Ethiopia continued to grow from 76,844 in 1989, to 115,000 in
1999, 184,078 in 2004, 427,286 in 2009 and reaching 523,438 in 2011. During the year
2011, Ethiopia witnessed a positive tourist growth of 11.8 % over 2010.
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The compound annual growth rate in Inbound Tourist Arrivals in Ethiopia during 1989 to 2011
was 9.7%. The next Table below indicates the trends of tourist flows into the country and the
growth rates over the period (1989-2011).
In year 2013/14 the total numbers tourists were arrived in Adama city is 1,620,140 from
different parts of the world and our countries different parts .From this inflows of tourist the
hotels in the city earn revenues of ETB 256,644,556. (Source: Bulletin prepared for the 6th cities
conference reported by cultural and tourism office of Adama city Administration).Then in
compared of the total income from the country Adam city share almost 26% of the hotel
industries
Table 7.4.4.Projected no. of tourist and revenue earned
Year No of tourist Revenue Earned (ETB )

2014 1,620,140 256,644,556.00
2015 1,748,131 274,609,647.92
2016 1,886,233 293,832,352.16
2017 2,035,246 314,400,616.82
2018 2,196,030 336,408,659.99
2019 2,369,517 359,957,266.19
2020 2,556,708 385,154,274.83
2021 2,758,688 412,115,074.06
2022 2,976,625 440,963,129.25
Source: from the computation estimated by office of cultural and tourism Adama city
There exist many demand factors for better resort services in Ethiopia as well as in Adama city.
The main factors include:
 Fast Economic Growth and economic growth/activity of the district
 Population growth and density, Tourism
 Geographical significance of the town
7.4. Competitors Analysis
There are different forms of competition that may face the envisaged hotel business. These are
price and non-price based competition. Moreover, there are different competitors that will
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compete with the project either directly or indirectly. But the hotel under discussion has
diversified marketing strategies that could enable it come up with the different competitors in
the market.
Moreover it will frequently conduct competitors research which focuses on, the strength and the
weaknesses, the different competitor’s strategies, the techniques they use in rendering quality
service, their customer handling methods, Use time appropriately; and others. Generally the
project has few mixed use buildings with very modern and unique apartments buildings in
which compete with it.
s/no List of Competent Mixed use Building

and Apartment
1 Awash tower
2 Minchi Commercial Centre
3 Yerosan Commercial Centre
4 Cheleleka Commercial Centre
5 Dada Tower
6 Kinfe Commercial Center
7 Nur Piyasa Commercial Centre
8 Confert international hotel
9 AB Building
10 Adama Ras
11 Kidane Mihiret
12 Batu Tower
13 Adi Building
14 Oliyad Mixed use building
15 Friendship Building
16 Markon Building
17 Place Hotel
18 Rodas Commercial Centre
7.5. Target Customers

As clearly indicated in the introductory part of this proposal, Adama city is the dynamically
growing town of Oromia regional state government and crossed by the high way road of Addis
Ababa to Djibouti. Hence, the proposed specific location is found in the direction that the country
Page | 30
used the main road for imported and exported all goods. Thus, it opens an opportunity for
reaping the maximum from very high traffic flow passing through the area. Moreover the
current mixed use buildings with very modern and unique apartment’s service in the area
cannot fulfill the gap between demand and supply.
The Adama City administration has been working hard to make the town attractive to businesses
and will create additional foot traffic. The owner believes that the new location will be a big
player in the area because of the new gas with commercial service will encourage potential
customers to stop in and visit the area. Therefore, the target customers of this envisaged mixed
use buildings with very modern and unique apartments include:
 The residents of the Adama city and surrounding populations.
 Long distance travelers
 The different occasional guests
 The government and NGOs officials
 Traders and merchants coming to the city
 Individuals all over the country who are passing through and takes rest.
 The target customers visitors travelling to the area local or foreigner, local community,
middle and upper income bracket, returning visitors to the area, business needing to hold
small overnight planning, strategy sessions, wedding parties/couples. Hence to reach
customers different marketing strategies will be used. Among the different marketing
strategies and tools for promoting and controlling the market of all will use:
 both printed and non-printed forms of advertising,
 Sponsorship of key government activities and public support mechanism.
 Using different marketing segmentation strategies and tactics.
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 Utilizing effective and customer centric marketing strategies, which are the marketing
strategies that focused on different groups of customers based on different segmentation
tools.
 Brokers by paying Commission
7.6. Marketing Promotion and Strategy
7.6.1. Promotion Strategies'
The business will be promoted as on going up business it promotes its market using among the
popular methods that the business promotes its products and sales the product ,manufacturing
factory make the promotion through different media.. To reach customers different marketing
ways will be used. Among the different marketing strategies and tools for promotion controlling
the market:
 Printed and non-printed forms of advertising, Electronic etc.
 Sponsorship of key government activities and public support mechanism.
 Seasonal discount pricing for guest houses and different others customer centric
marketing strategies will be used by the company.
The recreational resort under discussion will have diversified marketing strategies that could
enable it come up with the different competitors in the market. Moreover, best quality and
customer satisfaction will be the key marketing strategy of the building.
7.6.2. Internal marketing
As a part of the marketing mix promotion has an essential part in reaching marketing objectives
in a hotel. Internal marketing is an extension of that as it recognizes the importance that
employees have while encountering customers. This puts an emphasis on the customer-contact
employees and how well they are able to deliver the promises made during the pre-encounter
marketing. Human resource managers in the hotel are using marketing techniques more and
Page | 32
more to recruit communicative and motivated employees. It all comes down to delivering service
quality in a way that the customer is satisfied. It starts from the marketing of the products prior
the customer has even made the decision to make a reservation. But after the reservation has
been made the customer-contact employees have the biggest role in delivering the promised
product. In order for a hotel to succeed in delivering service quality it has to have motivated 39
employees who know what they are selling. The goal of internal marketing is to attain the best
possible professional skills available.
The mixed use buildings with very modern and unique apartments needs employees who have
“the right service attitude” for attitude is something that can rarely be taught as it usually comes
naturally. After an employee has been hired the hotel emphasis before it began its operation
deliver short term training after it will be began its operation the hotel provides on job trainings.
This is called induction training and how well the business succeeds in it plays an important role
in how well the hotel works inside and out. The training should not end after the induction but
continuous training and career development are usually marks of the most successful hospitality
of the business.
7.7. Pricing and Distribution channel
7.7.1. Pricing
The pricing of mixed use buildings with very modern and unique apartment’s services depends
considerably on the quality of service rendered and its location. Relatively high standard mixed
use buildings with very modern and unique apartments in Adama, which ranges from birr 500
to 1,500 per M2.
8. CHAPTER EIGHT- LAND AND CIVIL WORK

Page | 33
8.1. Land, Civil Works, Design and Building
The envisaged mixed use buildings with very modern and unique apartments will be constructed
on total area of 2,000m2 that is found in Adama City Administration, Bole Sub city on the way of
Bole road in kebele 04. The executed as well as the remaining worth building and construction
as per the revised estimate of the engineer of the company for the total block area of is stated as
follows:
Table 8.1. Estimation of Building & Construction by the Engineer of the

Company
04 COMMERCIAL CENTER
No. DESCRIPTION AMOUNT BIRR
A . SUB-STRUCTURE
1 EXCAVATION & EARTH WORK 1,245,252.00
2 MASONRY WORK 14,389,740.00
3 CONCRETE WORK 3,298,548.00
SUB TOTAL 18,933,540.00

B . SUPER-STRUCTURE
2 WALLING 4,987,896.00
3 ROOF WORK 996,232.00
4 CARPENTRY AND JOINERY WORK 3,310,332.00
5 ALUMINUM WORK 4,586,408.00
6 PLASTERING AND POINTING 3,268,816.00
7 FINISHING 5,384,830.54
8 PAINTING 2,892,960.00
9 SANITARY INSTALLATION 7,679,840.00
10 ELECTRICAL INSTALLATION 2,455,528.00
SUB TOTAL 44,860,182.54
C. ELEVATORS 1,898,124.00
TOTAL A+B+C 65,691,846.54
9,853,776.98
GRAND TOTAL 75,545,623.52
Page | 34
The construction of the building will be start as soon as the land approved with accomplishment
of the legality of documentation. The engineer of the project ascertains that the mixed use
buildings with very modern and unique apartments consist of a total of 1,000 m 2.
Owner’s
Description equity % Bank loan % Total
Land, building and civil works 21,908,230.82 29% 53,637,392.70 71% 75,545,623.52
Furniture and equipment 150,000.16 30% 350,000.00 70% 500,000.16
Vehicle 525,000.00 35% 975,000.00 65% 1,500,000.00
Office equipment 360,000.00 30% 840,000.00 70% 1,200,000.00
Pre-operating exp. 70,000.00 100% 0 0% 70,000.00
Sub Total 23,013,230.98 55,802,392.70 78,815,623.68
WORKING CAPITAL 540,206.10 30% 0.00 70% 540,206.10
Total Investment 23,553,437.08 55,802,392.70 79,355,829.78
Percentage 30% 70% 100%
The mixed use buildings with very modern and unique apartments will be capable of being kept
clean and provision should be made for keeping the sewerages drained out properly and room
temperature is attained to keep healthy environment. In most environments, equipment should
be totally enclosed in a light structure where the climate is suitable. A concrete floor, which can
be swept, is usual and green and recreation area should be designed and construct based on
standard. The total cost of building and civil work is estimated at Birr 75,545,623.52.
8.2. Land Use Plan

The main justifications behind the selection of this location is that the promoter likes
 Geographical proximity to different customers ,raw material, central market
 It is the main gate/corridor for Eastern part of the nation
 Relatively advanced development in infrastructure (Power, Water, Telephone road etc.
 Environmentally favorable for hotel business
Page | 35
9. CHAPTER NINE- ACTION PLAN
The envisaged mixed use buildings with very modern and unique apartments project has the
following implementation within the following schedules. The hotel which is being
constructed that will provide hostility service in Oromia National regional state, Adama City
in Bole sub city, on the way of Bolee road of the city right in side of 04 kebele. The detailed
scheduled of the hostility operation will be scheduled as follows
Sr. No Activity Performed Implementation Schedule

1 Preparation of project proposal to Financer and December, 2018
government
2 Land processing January- February 2019
2 Loan approval and disbursement for Fixed March to May 2019
investment
3 Importing Hotel finishing materials ,machinery June to August 2019
,equipment and furniture
4 Completing un finished part of building with September to October 2019
imported finishing materials
5 Furnishing the hotel with machinery, equipment and September to October 2019
Furniture
6 Hiring employee and training October - November,2019
7 Loan disbursement for working capital October - November,2019
8 Beginning regular operation December2019-Feburary
Page | 36
2020
9 Start loan repayment after grace period September 2,020
10. CHAPTER TEN- ORGANIZATION AND MANAGEMENT
10.1. Organization and Management

The organizational structure should be in a way that the project can achieve its objectives as well
as the satisfaction of standard requirement.
10.2. Organizational Structure
04 Commercial Center organizational structure of the project is designed by including all the
necessary personnel under the right division. At the top of the organizational structure, there
will be manager with the responsibility of supervising the overall activity of the hotel.
Depending up on the nature of the center and the amount of work to be performs; there exist
auxiliary units under the general manager. Employees under each unit will be supervised by
the department head that is accountable for the general manager. General Manager is
appointed by the owner.
Page | 37
Fig Organization Structure of the 04 Commercial Centres
10.3. Duties and Responsibilities

 He/she will plan, organize, direct and control the overall activities of the hotel.
 He/she will devise policies and strategies that will enable the hotel to be profitable.
 He/she will incorporate modern technological innovation that will facilitate the service
delivery of the restaurant and bars, bed rooms, assembly hall and gymnasium services
that will increase customer’s satisfaction.
 He/she will plan, organize, direct and control the human and non-human resources of
the hotel so as to achieve the short and long run objectives of the organization.
A. Hotel Management Department
 This is the core department of the project that has five main sections (restaurant, bar and
café, bed Rooms, gymnasium, assembly hall service, gardening, game and recreation
area).
Page | 38
 The main duties of this department is to render those outlined services of the section and
manage the overall service delivery system of the center in line with the customer need
and satisfaction.
B. Administration and Finance Department
The Admin and Finance department of the hotel is responsible for undertaking the following
activities:
 Manage the human resources and control employee’s activity
 Will manage non-human resources of the hotel, which include: effective handling of the
different inventories of the hotel, and devise strategies of controlling against fraud and
damage.
 Will provide the right material or inventory to the center with right price at the right
time. Will plan, organize direct and control the financial transaction of the building by
using all the necessary documents.
 Accountant and cashers that will collect money from the customers.
 Will develop sound financial control system by developing modern financial control
systems.
 Will prepare the annual financial statements and prepare condensed reports for both the
General Manager and other concerned government body.
C. The Marketing Department
 Will handle the overall marketing activities of the organization which include planning,
organizing, directing, and controlling.
 Will develop the marketing strategies.
Page | 39
 Will develop effective customer handling strategies
 Plan and execute the promotion mix
10.4. Man Power
The total manpower required for the hotel will be 39 persons. The manpower list and the
corresponding labor cost are shown in next below table.
Table: Human Resource Required
SN postion No Qualification Monthely Annual salary

salary in birr in birr
1 General Manager 1 BA in management 5,000.00 60,000.00
2 Acc. & Adm. head 1 BA in Accounting /Management 2,600.00 31,200.00
3 Marketing head 1 Bain Marketing mang. 2,600.00 31,200.00
4 secretary 1 Dip. In secretariat Office 900.00 10,800.00
management
5 Hotel service head 1 BA IN Hotel Manage. 2,500.00 30,000.00
6 Café &restorat Supervisor 2 10+2 in hotel mag. 1,450.00 34,800.00
7 Bar servise supervisoer 1 10+2 in hotel mag. 1,450.00 17,400.00
8 Acc 1 Dip in Acc 1,200.00 14,400.00
9 Casher 1 10+2 in Book keeping 900.00 10,800.00
10 Marketin officer 1 10+2 in seales and marketing 800.00 9,600.00
11 Waiter 10 10 complete 600.00 72,000.00
12 purchaser 1 10+1 in purchasing and supply meg 800.00 9,600.00
13 Stor keeper 2 12 cop 600.00 14,400.00
14 Gured/security 8 Basic 500.00 48,000.00
15 Janitores 8 Basic 450.00 43,200.00
16 Barista 2 10 cop 600.00 14,400.00
17 Cooking Chief 2 10+2 in food preparation 1,800.00 43,200.00
18 Cookers assistant 2 Basic 650.00 15,600.00
19 ELECtrician 1 10+2in electricity 850.00 10,200.00
20 Maintenace /plumber worker 2 10+2in Building mag 850.00 20,400.00
21 Reception 1 10+1in reseption mgt. 850.00 10,200.00
22 Diriver 2 10+2in mag. 850.00 20,400.00
23 Assembly Hall Supervisor 1 Basic 1,100.00 13,200.00
24 Room worker 6 basic 500.00 36,000.00
25 Gander 2 400.00 9,600.00
Total 61 51,350.00 630,600.00
Benefit(20%)of the basic salary) 126,120.00
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Grand Total 756,720.00
11. CHAPTER ELEVEN- FINANCIAL STUDY AND ANALYSIS

11.1. Assumption Underline
The financial analysis of 04 Commercial Center is based on the data provided in the preceding
sections and the following assumptions.
Sr. /No Description Assumption

I Construction and Finance
1 Constructions period 1 year
2 Tax holiday 3 years
3 Source of finance
3.1 Owner Contribution 30%
3.2 Bank Loan 70%
4 Bank finance charge 11.50%
5 Operating Costs and raw materials Increase by 10% after year 3
6 Salary and wages increase by 10% after year 3
7 Annual Sales revenue increased by 10% after year 3
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II Depreciation used method straight line Methods
1 Building 5%
2 Machinery and equipment 10%
3 Office furniture 10%
4 Vehicles 20%
III Working Capital
1 Accounts receivable 30 days
2 Account Payable 30 days
3 Raw material local 90days
4 Cash on hand 1 5 days
11.2. Total Initial Investment Cost

The total amount of money that is required for finishing and equipment 04 Commercial
Center is estimated to be 79.355 million the summary in below table is the financial resource
required for fixed investment and working capital. From this Birr 3.200 million or 4.03% of
total investment require foreign currency.
Foreign
Local Currency Currency (in
S/No Description (Birr) Birr) Total
1 Land, building and civil works 75,545,623.52 75,545,623.52
2 Furniture and equipment 500,000.16 500,000.16
3 Vehicle 1,500,000.00 1,500,000.00
4 Office equipment 1,200,000.00 1,200,000.00
5 Pre-operating exp. 70,000.00 70,000.00
6 WORKING CAPITAL 540,206.10 540,206.10
Percentage 95.97% 4.03% 100.00%
11.3. Fixed Investment
A. Building and Construction
Table 11.3. Estimation of Building & Construction by the Engineer of the

Company
04 COMMERCIAL CENTER THREE STAR HOTEL
No. DESCRIPTION AMOUNT BIRR
A . SUB-STRUCTURE
1 EXCAVATION & EARTH WORK 1,245,252.00
2 MASONRY WORK 4,389,740.00
Page | 42
SUB TOTAL 8,933,540.00
B . SUPER-STRUCTURE
2 WALLING 4,987,896.00
3 ROOF WORK 996,232.00
4 CARPENTRY AND JOINERY WORK 3,310,332.00
5 ALUMINUM WORK 3,586,408.00
6 PLASTERING AND POINTING 3,268,816.00
7 FINISHING 3,384,830.54
8 PAINTING 2,892,960.00
9 SANITARY INSTALLATION 3,649,877.00
10 ELECTRICAL INSTALLATION 2,405,520.00
SUB TOTAL 32,780,211.54
C. ELEVATORS 1,898,124.00
TOTAL A+B+C 43,611,875.54
6,541,781.33
GRAND TOTAL 50,153,656.87
11.4. Operation of services

11.4.1. Description and operation of services and facilities
The mixed use buildings with very modern and unique apartments will offer a perfect
combination of a mixed use buildings with very modern and unique apartments services. The
building design will meet minimum requirements of a mixed use buildings with very modern
and unique apartments and will have building structure with supper style.
11.4.2. Design of the building
The mixed use buildings with very modern and unique apartments are designed to offer a
perfect combination of a Commercial Center services. The building will have B+G+7 floors, from
floor 5-7 have 10 various standard Apartments, on ground there will be rented out for Bank,
Shops, Café and restaurants and from floor 1 up to 4 it may rented out for sauna and steam
baths, bar and restaurants, conference halls, business center, Office and beauty salon. The major
services design and location is presented in the following table.
11.4.3. Front Office Operation
The front Office is the back bone of mixed use buildings with very modern and unique
apartments equipped appropriate information system and Computerized to enhance checking in

Page | 43
and checking out of guest’s .The front office coordinates reservation, room assignments and in
view of treating guests courteously solves guest’s complaints and problems to their ultimate
satisfaction. The front office will be staffed with receptionists, information and reservation clerks
and other service personnel like bellboys and bell captains.
The office plans operational activities in terms of daily, weekly, Monthly, quarterly, semi
quarterly or annual bases to achieve hotel objective sand goals. Cost and market based pricing
approaches, yield management and booking forecast and other policies and procedures, and
functions will be practiced to ensure optimum operation and profitability of the hotel.
Both semiautomatic and computerized system will be implemented to handle interdepartmental
communications such as between the office and beverage, food department or finance.
Computers, especially C-net system, are hence used to track guests bill, reservation, room
assignments, etc semi automation system would enable the office to meet customer needs and
supply the necessary information if the computer system fails. The front office department
prepares and supply daily, weekly and monthly reports to the management.
11.4.4. Management information system
The mixed use buildings with very modern and unique apartments will put in place a modern
management information system, i.e, C-net system, to handle its day to day functions. Programs
applicable to the hospitality industry will be selected and put in to use. The system would
enhance customer care and effective management of operations in various departments. Among
the major features and benefits of the information automation processes are:
 Make reservation easy and help to manage check in and check out.
 Help to know occupancy and credit status of all guests.
 Overall sales and stock management will be easily processed.
 Automatic update of the hotel account based on various sources of transactions.
 Handle detailed employment information of hotel personnel.
 Facilitate the work of night auditors and to check day to day transaction.
Page | 44
 Facilitate analysis of cost centers and enhance measures of profit.
A. Accounting and Finance modules
In view of consolidating and managing the multiple financial transactions of the different
departments and the mixed use buildings with very modern and unique apartments at large, the
accounting and finance module will facilitate the following:
 Manage mixed use buildings with very modern and unique apartments charges, taxes, surcharges,
and guest folios.
 Reports on direct billings and transfers direct bill balance to the back office module.
 Show high account balances, and guest ledger balancing
 Travel agent commission with transfer to the accounts payable ledger in the back of office
module.
 Complete detailed charges report, with summary totals for posting to general ledger.
 Daily revenue report for all mixed use buildings with very modern and unique apartments
activities, show room and other charges, receipts by method of payment.
 Transfers checked out guests to history and checked the integrity of data fillies.
 Ensure proper accounting control and balance work sheets.
 Check integrity of front office accounts
 Facilitate production of accounting and management report. The final module is also for
the night auditing to check daily accounting and operation.
 Cash receipts and payments of mixed use buildings with very modern and unique apartments
activities
 A detailed management and analysis of operation cost
 Profit and loss statement preparation
 Balance sheet and trial balance and automated general ledger and other accounts
 Summary of departmental accounts.
Page | 45
 A system to prepare various management reports, i.e daily, weekly, monthly, quarterly
and annual report and other accounting details will be put in to use.
B. Travel agent, reservation and marketing modules
The modules in this case will help to manage:
 Individual and group management system of customers with booking flexibility.
 Frequent tour groups.
 Report generation for reservation information, market analysis and analysis.
 Guest name, address and market sources information and analysis.
 Set up of all travel agents by name, address, telephone, email etc... To increase occupancy.
 Report generation of past and future booking pattern by travel agent and improve
opportunity for targeted marketing efforts.
 Send detail messages for reservation of special events, daily rates etc.
C. Administrative and personnel module
Personnel module handles the history of employees such as their Personnel information, address,
employment, salary, employee’s contract, appraisal, terminations, leave management, payments,
and payroll preparation. Information about organizational structure and manning could be also
managed here.
i. Salary Expense
Human power Requirement, Monthly and Annual Salary of KEBEDE CHUKAL trading company
SN position No Qualification Monthly Annual

salary in birr salary in birr
1 General Manager 1 BA in management 5,000.00 60,000.00
2 Acc.&Adm. head 1 BA in Accounting 2,600.00 31,200.00
/Management
3 Marketing head 1 Bain Marketing mang. 2,600.00 31,200.00
4 secretary 1 Dip. In secretariat & Office 900.00 10,800.00
management
Page | 46
5 Hotel servise head 1 BA IN Hotel Manage. 2,500.00 30,000.00
6 Café &restorat Supervisor 2 10+2 in hotel mag. 1,450.00 34,800.00
7 Bar service supervisor 1 10+2 in hotel mag. 1,450.00 17,400.00
8 Acc 1 Dip in Acc 1,200.00 14,400.00
9 Casher 1 10+2 in Book keeping 900.00 10,800.00
10 Marketing officer 1 10+2 in seales and marketing 800.00 9,600.00
11 Waiter 10 10 complete 600.00 72,000.00
12 purchaser 1 10+1 in purchasing and supply 800.00 9,600.00
meg
13 Stor keeper 2 12 cop 600.00 14,400.00
14 Gured/security 8 Basic 500.00 48,000.00
15 Janitors 8 Basic 450.00 43,200.00
16 Barista 2 10 cop 600.00 14,400.00
17 Cooking Chief 2 10+2 in food preparation 1,800.00 43,200.00
18 Cookers assistant 2 Basic 650.00 15,600.00
19 Electrician 1 10+2in electricity 850.00 10,200.00
20 Maintenance /plumber 2 10+2in Building mag 850.00 20,400.00
worker
21 Reception 1 10+1in reception mgt. 850.00 10,200.00
22 Deriver 2 10+2in mag. 850.00 20,400.00
23 Assembly Hall Supervisor 1 Basic 1,100.00 13,200.00
24 Room worker 6 basic 500.00 36,000.00
25 Gander 2 400.00 9,600.00
Total 61 51,350.00 630,600.00
Benefit(20%)of the basic salary) 126,120.00
Grand Total 756,720.00
ii. Other initial operating costs
SN Description Annual Cost in birr Assumption Used
1 Property Insurance 100,120.33 1% of fixed Investment Cost
2 Uniforms 23,400.00 39*600 br
3 Telephone, fax and postal 12,000.00 1000 per month
4 Repair and maintenance 100,120.33 1 % of the Fixed Cost
5 Advertisement 30,000.00 .% of sales
6 Stationery and other office supplies 8,400.00 700 per month

Electricity 5,000.00
7
Water
8 3,000.00
9 Fuel 50,000.00
10 Gas Oil and lubricant 5,000.00 10% of fuel cost
Page | 47
11 Miscellaneous Expense 25,992.00 2166 birr per month
Total 363,032.67
11.5. Financial Analysis and Statements
Source of Income
Financial structure
Owner’s
Description equity % Bank loan % Total
Land, building and civil works 21,908,230.82 29% 53,637,392.70 71% 75,545,623.52
Furniture and equipment 150,000.16 30% 350,000.00 70% 500,000.16
Vehicle 525,000.00 35% 975,000.00 65% 1,500,000.00
Office equipment 360,000.00 30% 840,000.00 70% 1,200,000.00
Pre-operating exp. 70,000.00 100% 0 0% 70,000.00
Sub Total 23,013,230.98 55,802,392.70 78,815,623.68
WORKING CAPITAL 540,206.10 30% 0.00 70% 540,206.10
Percentage 30% 70% 100%
11.6. Amount and Purpose of the Requested Loan
From the total project cost of 79.355 million birr, the amount of money required in the form of
loan is 55.802 million birr (which is about 70% of the total project cost). The loan has been
requested for unexecuted construction, for purchasing of Furniture and equipments. In addition
to this, the loan will be used as working capital to purchase the raw materials for hotel whose
availability is highly limited to the harvest period of the crop.
11.6.1. Depreciation Schedule
Original Value In Depreciation Depreciation

SN Description Birr rate in % Per year
50,153,656.7
1 Land, building and civil works 4 5% 2,507,682.84
17,231,505.2
2 Furniture and equipment 0 10% 1,723,150.52
6,140,000.0
3 Vehicle 0 10% 614,000.00
Page | 48
150,350.0
4 Office equipment 0 10% 15,035.00
Pre-operating exp. 70,000.00
73,745,511.9
Sub Total 4 4,859,868.36
11.6.2. Revenue Schedule
Based on the services providing potential of the envisioned company indicated in previous chapter,
the total revenue of the project is projected as indicated in the table below;
Project Year
S.N Source of Revenue From 1 2 3 4 5
1 Building and Apartment
Rent 8,472,000.00 9,666,000.00 10,860,000.00 11,940,000.00 11,940,000.00
Total 8,472,000.00 9,666,000.00 10,860,000.00 11,940,000.00 11,940,000.00
In making the financial analysis all prices have been assumed to be constant (using current
prevailing prices) throughout the ten-year analysis period, because; any changes in prices that
may occur as a result of inflation are assumed to affect both costs and revenues by the same rate.
11.6.3. Income or Loss Statement
The project revenue and production costs are listed and compared to evaluate whether the
project generate profit or loss. Accordingly, the forecasted income statement has shown that the
project is profitable throughout its life. As shown in the next table, in average, the project earns
the profit of greater than 18.87 million birr in starting from the first year up to the project life.
Table: Income –loss statement of the project

Page | 49
PROJECTED INCOME STATEMENT
FOR THE YEARS ENDED OF JUNE 30, …..
Service Year
Description 1 2 3 4 5
Total Revenue 8,472,000 9,666,000 10,860,000 11,940,000 11,940,000
Total Direct Cost 2,118,000 2,416,500 2,715,000 2,985,000 2,985,000
Gross Profit 6,354,000 7,249,500 8,145,000 8,955,000 8,955,000
Gross margin (%) 75% 75% 75% 75% 75%
Operating Expense
Salary and wage 756,720 794,556 834,284 875,998 919,798
Pension Payable 83,239 87,401 91,771 96,360 101,178
over time and holiday pay 75,672 79,456 83,428 87,600 91,980
Repair and Maintenance 10,058 10,058 10,058 10,058 10,058
Advertizing expense 15,000 15,750 16,538 17,364 18,233
land / lease/ rent 8,500 8,925 9,371 9,840 10,332
Municipality fee 15,000 15,750 16,538 17,364 18,233
Depreciation Expense 3,714,928 3,714,928 3,714,928 3,714,928 3,714,928
Worker Uniform & Protective 7,000 7,350 7,718 8,103 8,509
Insurance 6,251 6,563 6,892 7,236 7,598
Utilities Expense 30,000 30,000 30,000 30,000 30,000
Miscellaneous Expense 20,000 21,000 22,050 23,153 24,310
Total Operating Expense 4,742,368 4,791,737 4,843,576 4,898,004 4,955,157
Profit before interest & tax 1,611,632 2,457,763 3,301,424 4,056,996 3,999,843
Interest 409,852.93 409,852.93 409,852.93 409,852.93 409,852.93
Profit before tax 1,201,779 2,047,910 2,891,571 3,647,143 3,589,991
Profit tax (35%) 420,623 716,769 1,012,050 1,276,500 1,256,497
Net Income 781,156 1,331,142 1,879,521 2,370,643 2,333,494
11.6.4. Pay-Back Period
The investment cost and income statement projection are used to project the pay-back period.
The project's initial investment will be fully recovered within the third year.
Page | 50
PROJECTED BALANCE SHEET
YEARS
DESCRIPTION 1 2 3
ASSETS
CURRENT ASSETS
Cash 781,156.21 1,331,141.65 1,879,520.89
Inventory 0 1,332,718
Total Current Assets 781,156 1,331,142 3,212,238
Fixed Assets
Building 9,511,432 9,035,860 8,584,067
Furniture and fixiture 5,369,535 5,101,058 4,846,005
Ganerator & Vehicles 0 0 0
Total Fixed Assets 14,880,967 14,136,918 10,421,990
Total Assets 15,662,122.98 15,468,060.08 13,634,228.58
Liabilities & Capital
Bank Loan 526,413 526,413 526,413
Sub Total 526,413 526,413 526,413
Capital
Owner's Equity 5,322,458 5,322,458 5,322,458
Additional Investment 9,032,096 8,288,048 5,905,837
Retained Earnings 781,156.21 1,331,141.65 1,879,520.89
Sub Total 15,135,710 14,941,647 13,107,816
Total Liabilities & Capital 15,662,122.98 15,468,060.08 13,634,228.59
11.6.5. Cash Flow Forecast
The cash flow analysis provides a look at the movement of cash in and out of the project. It is
important to determine whether or not the project has enough cash to pay its bills, handle
expenses and acquire asset. Consequently, it is important to give due attention to identify
whether a total cash inflows of the project have the capacity to cover all cash outflows during its
operational period so that liquidity problem must not face the project which could force , if
happened, to fail.
Page | 51
The forecasted cumulative cash balance shows a positive cash flows in each year, and a balance
of birr 21 million in the first year and will grow up to birr 24.9 million in the forth year and
so on , demonstrating that the project will not face liquidity problem to finance its operational
costs as well as debt obligations. Here is the detail of the cash flow analysis, which is provided in
the next table.
Table: Cash Flow Statement

PROJECTED Cash Flow Statement
Description Project Year
A. Cash Inflow 1 2 3 4 5
Revenue 8,472,000.00 9,666,000.00 10,860,000.00 11,940,000.00 11,940,000.00
Total Cash Inflow 8,472,000.00 9,666,000.00 10,860,000.00 11,940,000.00 11,940,000.00
B. Cash Outflow
Direct Expenses 2,118,000.00 2,416,500.00 2,715,000.00 2,985,000.00 2,985,000.00
Total Expenses
excluding
Depreciation 3,145,440.04 3,493,308.60 3,843,648.23 4,168,075.40 4,225,228.28
Loan Repayment 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00
Total Cash Outflow 6,263,440.04 6,909,808.60 7,558,648.23 8,153,075.40 8,210,228.28
C.Net Cash Flow 2,208,559.96 2,756,191.40 3,301,351.77 3,786,924.60 3,729,771.72
Cumulative cash flow 2,208,559.96 4,964,751.37 8,266,103.13 12,053,027.73 15,782,799.45
11.6.6. Break Even Analysis
The break-even analysis predicts the minimum sales volume, at a given price, required to cover
all costs of operations. The break-even sale is useful to make the company conscious or alert
about the minimum sales required to exist in the business. If the company sales below the
breakeven sales, this means that the company is performing under loss.
Break Even Sales = Total Indirect Expenses + Interest Charges
Page | 52
Gross Profit %
Thus, summarizing the income loss statement tables as:

Table: Comparison of Sales and Break Even Sales of the project
Description Year 1 Year 2 Year 3 Year 4 and above
Sales of products 8,472,000 9,666,000 10,860,000 11,940,000
B.E.S 6,323,157.70 6,388,982.45 6,458,101.97 6,530,671.53
Fig. . Comparison of Sales and Breakeven sales of the project
As can be seen from the next graph, the sales graph is laying above the break even sales graph,
showing the company is profitable. The rate of profitability is also increasing due to the fact that
the sales graph is increasing without interruption while the break sales graph is decreasing
down ward starting from 2nd years.
Fig. Analysis of sales and break even sales
Page | 53
11.6.7. Discounted Cash Flows and Net Present Value (NPV)
Net present value (VPV) is defined as the total present (discounted) value of a time series of cash
flows. NPV aggregates cash flows that occur during different periods of time during the life of a
project in to a common measuring unit i.e. present value. It is a standard method for using the
time value of money to appraise long-term projects.
NPV is an indicator of how much value an investment or project adds to the capital invested. In
principal a project is accepted if the NPV is non-negative.
Accordingly, the net present value of the project at 11% discount rate is found to be birr
25,445,552, which is acceptable. (See the next table)
Table: The NPV of the envisaged project

Net cash flow,=
r @
Year Benefit (B) Cost © ( B-C) 11% DF DNCF(NPV)
0 0 50,153,656.74 -50,153,656.74 0.11 1 -50,153,656.74
1 0.900
8,472,000 3,145,440.04 5,326,559.96 0.11 9 4,798,702.67
2 0.811
9,666,000 3,493,308.60 6,172,691.40 0.11 6 5,009,894.61
3 0.731
10,860,000 3,843,648.23 7,016,351.77 0.11 2 5,130,296.07
4 0.658
11,940,000 4,168,075.40 7,771,924.60 0.11 7 5,119,607.66
5 0.593
11,940,000 4,225,228.28 7,714,771.72 0.11 5 4,578,341.31
6 0.534
11,940,000 4,225,228.28 7,714,771.72 0.11 6 4,124,631.72
7 0.481
11,940,000 4,225,228.28 7,714,771.72 0.11 7 3,715,884.60
8 0.433
11,940,000 4,225,228.28 7,714,771.72 0.11 9 3,347,643.89
9 0.390
11,940,000 4,225,228.28 7,714,771.72 0.11 9 3,015,895.59
10 0.352
11,940,000 4,225,228.28 7,714,771.72 0.11 2 2,717,023.02
Total
-8,595,736
Page | 54
11.6.8. Profitability
According to the projected income statement, the project starts generating profit starting from
the 1st year of operation. Important ratios such as profit to total sales, net profit to equity
(Return on equity) and net profit plus interest on total investment (return on total investment)
show an increasing trend during the lifetime of the project. The income statement and the other
indicators of profitability show that the project is financially viable.
12. CHAPTER ELEVEN- CONCLUSION
In conclusion the project is justified based on the following criteria:

 It shows a decent Return on Investment.
 It has a healthy cash flow over the plan period.
 It has a positive role to play in Ethiopian socioeconomic development.
It is therefore, recommended that the project should receive the active support of all stakeholders
to ensure its successful implementation.
Page | 55
13. CHAPTER TWELVE- APPENDIX
Page | 56
PROJECTED INCOME STATEMENT
Service Year
Description 1 2 3 4 5
Total Revenue 8,472,000 9,666,000 10,860,000 11,940,000 11,940,000
Total Direct Cost 2,118,000 2,416,500 2,715,000 2,985,000 2,985,000
Gross Profit 6,354,000 7,249,500 8,145,000 8,955,000 8,955,000
Gross margin (%) 75% 75% 75% 75% 75%
Operating Expense
Salary and wage 756,720 794,556 834,284 875,998 919,798
Pension Payable 83,239 87,401 91,771 96,360 101,178
over time and holiday pay 75,672 79,456 83,428 87,600 91,980
Repair and Maintenance 10,058 10,058 10,058 10,058 10,058
Advertizing expense 15,000 15,750 16,538 17,364 18,233
land / lease/ rent 8,500 8,925 9,371 9,840 10,332
Municipality fee 15,000 15,750 16,538 17,364 18,233
Page | 57
Depreciation Expense 3,714,928 3,714,928 3,714,928 3,714,928 3,714,928
Worker Uniform &
7,000 7,350 7,718 8,103
Protective 8,509
Insurance 6,251 6,563 6,892 7,236 7,598
Utilities Expense 30,000 30,000 30,000 30,000 30,000
Miscellaneous Expense 20,000 21,000 22,050 23,153 24,310
Total Operating
4,742,368 4,791,737 4,843,576 4,898,004 4,955,157
Expense
Profit before interest &
1,611,632 2,457,763 3,301,424 4,056,996 3,999,843
tax
Interest 409,852.93 409,852.93 409,852.93 409,852.93 409,852.93
Profit before tax 1,201,779 2,047,910 2,891,571 3,647,143 3,589,991
Profit tax (35%) 420,623 716,769 1,012,050 1,276,500 1,256,497
Net Income 781,156 1,331,142 1,879,521 2,370,643 2,333,494
PROJECTED BALANCE SHEET
YEARS
DESCRIPTION 1 2 3
ASSETS
CURRENT ASSETS
Cash 781,156.21 1,331,141.65 1,879,520.89
Inventory 0 1,332,718
Total Current Assets 781,156 1,331,142 3,212,238
Fixed Assets
Page | 58
Building 9,511,432 9,035,860 8,584,067
Furniture and fixiture 5,369,535 5,101,058 4,846,005
Ganerator & Vehicles 0 0 0
Total Fixed Assets 14,880,967 14,136,918 10,421,990
Total Assets 15,662,122.98 15,468,060.08 13,634,228.58
Liabilities & Capital
Bank Loan 526,413 526,413 526,413
Sub Total 526,413 526,413 526,413
Capital
Owner's Equity 5,322,458 5,322,458 5,322,458
Additional Investment 9,032,096 8,288,048 5,905,837
Retained Earnings 781,156.21 1,331,141.65 1,879,520.89
Sub Total 15,135,710 14,941,647 13,107,816
Total Liabilities & Capital 15,662,122.98 15,468,060.08 13,634,228.59
PROJECTED Cash Flow Statement
Description Project Year
A. Cash Inflow 1 2 3 4 5
Revenue 8,472,000.00 9,666,000.00 10,860,000.00 11,940,000.00 11,940,000.00
Page | 59
Total Cash 9,666,000.0
Inflow 8,472,000.00 0 10,860,000.00 11,940,000.00 11,940,000.00
B. Cash Outflow
Direct Expenses 2,118,000.00 2,416,500.00 2,715,000.00 2,985,000.00 2,985,000.00
Total Expenses
excluding
3,493,308.6
Depreciation
3,145,440.04 0 3,843,648.23 4,168,075.40 4,225,228.28
Loan Repayment 1,000,000.0
1,000,000.00 0 1,000,000.00 1,000,000.00 1,000,000.00
Total Cash 6,909,808.6
Outflow 6,263,440.04 0 7,558,648.23 8,153,075.40 8,210,228.28
C.Net Cash Flow 2,756,191.4
2,208,559.96 0 3,301,351.77 3,786,924.60 3,729,771.72
Commulative cash
flow 2,208,559.96 4,964,751.37 8,266,103.13 12,053,027.73 15,782,799.45
Page | 60
Loan Amortization Schedule
Pmt. Payment Beginning Scheduled Cumulative
Total Payment Principal Interest Ending Balance
No. Date Balance Payment Interest
1.00 43,250.00 12,526,412.60 709,816.25 709,816.25 229,637.10 480,179.15 12,296,775.50 480,179.15
2.00 43,373.00 12,296,775.50 709,816.25 709,816.25 238,439.85 471,376.39 12,058,335.65 951,555.54
3.00 43,495.00 12,058,335.65 709,816.25 709,816.25 247,580.05 462,236.20 11,810,755.61 1,413,791.74
4.00 43,615.00 11,810,755.61 709,816.25 709,816.25 257,070.61 452,745.63 11,553,684.99 1,866,537.38
5.00 43,738.00 11,553,684.99 709,816.25 709,816.25 266,924.99 442,891.26 11,286,760.00 2,309,428.63
6.00 43,860.00 11,286,760.00 709,816.25 709,816.25 277,157.11 432,659.13 11,009,602.89 2,742,087.77
7.00 43,981.00 11,009,602.89 709,816.25 709,816.25 287,781.47 422,034.78 10,721,821.42 3,164,122.54
8.00 44,104.00 10,721,821.42 709,816.25 709,816.25 298,813.09 411,003.15 10,423,008.33 3,575,125.70
9.00 44,226.00 10,423,008.33 709,816.25 709,816.25 310,267.59 399,548.65 10,112,740.74 3,974,674.35
10.00 44,346.00 10,112,740.74 709,816.25 709,816.25 322,161.18 387,655.06 9,790,579.55 4,362,329.41
11.00 44,469.00 9,790,579.55 709,816.25 709,816.25 334,510.70 375,305.55 9,456,068.86 4,737,634.96
12.00 44,591.00 9,456,068.86 709,816.25 709,816.25 347,333.61 362,482.64 9,108,735.25 5,100,117.60
13.00 44,711.00 9,108,735.25 709,816.25 709,816.25 360,648.06 349,168.18 8,748,087.19 5,449,285.79
14.00 44,834.00 8,748,087.19 709,816.25 709,816.25 374,472.90 335,343.34 8,373,614.28 5,784,629.13
15.00 44,956.00 8,373,614.28 709,816.25 709,816.25 388,827.70 320,988.55 7,984,786.59 6,105,617.68
16.00 45,076.00 7,984,786.59 709,816.25 709,816.25 403,732.76 306,083.49 7,581,053.83 6,411,701.16
17.00 45,199.00 7,581,053.83 709,816.25 709,816.25 419,209.18 290,607.06 7,161,844.64 6,702,308.23
18.00 45,321.00 7,161,844.64 709,816.25 709,816.25 435,278.87 274,537.38 6,726,565.77 6,976,845.60
19.00 45,442.00 6,726,565.77 709,816.25 709,816.25 451,964.56 257,851.69 6,274,601.22 7,234,697.29
20.00 45,565.00 6,274,601.22 709,816.25 709,816.25 469,289.87 240,526.38 5,805,311.35 7,475,223.67
21.00 45,687.00 5,805,311.35 709,816.25 709,816.25 487,279.31 222,536.94 5,318,032.04 7,697,760.61
22.00 45,807.00 5,318,032.04 709,816.25 709,816.25 505,958.35 203,857.89 4,812,073.69 7,901,618.50
23.00 45,930.00 4,812,073.69 709,816.25 709,816.25 525,353.42 184,462.82 4,286,720.27 8,086,081.33
24.00 46,052.00 4,286,720.27 709,816.25 709,816.25 545,491.97 164,324.28 3,741,228.30 8,250,405.60
25.00 46,172.00 3,741,228.30 709,816.25 709,816.25 566,402.49 143,413.75 3,174,825.80 8,393,819.35
26.00 46,295.00 3,174,825.80 709,816.25 709,816.25 588,114.59 121,701.66 2,586,711.21 8,515,521.01
27.00 46,417.00 2,586,711.21 709,816.25 709,816.25 610,658.98 99,157.26 1,976,052.23 8,614,678.27
28.00 46,537.00 1,976,052.23 709,816.25 709,816.25 634,067.58 75,748.67 1,341,984.65 8,690,426.94
29.00 46,660.00 1,341,984.65 709,816.25 709,816.25 658,373.50 51,442.75 683,611.15 8,741,869.69
30.00 46,782.00 683,611.15 709,816.25 683,611.15 657,406.06 26,205.09 - 8,768,074.78
Appartama
Page | 61
INVESTMENT PROJECT
PROPOSAL
ON
MIXED USED BUILDING
WITH
Modern apartment
PROJECT LOCATION:
IT WILL BE IMPLEMENTED IN OROMIA REGIONAL
STATE, EAST SHOA ZONE, ADAMA CITY BOLE SUB-
CITY KEBELE 04.
Page | 62
PROMOTER- 04 COMMERCIAL CENTER GURARA
SEPTEMBER, 2018
OROMIA, ADAMA
Page | 63

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Contents

1. CHAPTER ONE- EXCUTIVE SUMMARY 3

2. CHAPTER TWO- INTRODUCTION 4

3. CHAPTER THREE- BACKGROUND AND DESCRIPTION OF THE BUSINESS 6

3.1. Background Information................................................................................................................................6

3.2. The profile of the promoter............................................................................................................................7

4. CHAPTER FOUR- GENERAL DESCRIPTION OF THE BUSINESS AREA 8

4.2. The Economic significance of the project......................................................................................................8

4.4. Project Description and Justification ...........................................................................................................10

4.5. Service Description.......................................................................................................................................12

4.6. Credit Relation..............................................................................................................................................12

4.7. Past Performance..........................................................................................................................................12

4.8. Mission Statement........................................................................................................................................12

4.9. Company Goals and Objectives...................................................................................................................12

5. CHAPTER FIVE- INDUSTRY OVERVIEW AND ANALYSIS 14

5.1. Industry Overview........................................................................................................................................14

6. CHAPTER SIX- TECHNICAL STUDY14

6.1. Service Description.......................................................................................................................................14

6.2. Machinery and Equipment Requirement.....................................................................................................14

6.3. Service Deliver Program and Service Capacity...........................................................................................15

7. CHAPTER SEVEN- MARKET STUDY AND ANALYSIS 16

7.1. Introduction to Marketing...........................................................................................................................16

7.2. Marketing Service Cycle..............................................................................................................................17

7.3. Market Demand and Supply Analysis..........................................................................................................17

7.4. Competitors Analysis....................................................................................................................................22

7.5. Target Customers..........................................................................................................................................23

8. CHAPTER EIGHT- LAND AND CIVIL WORK 26

8.2. Land Use Plan...............................................................................................................................................27

9. CHAPTER NINE- ACTION PLAN 28

10.1. Organization and Management...................................................................................................................28

10.2. Organizational Structure.............................................................................................................................28

10.3. Duties and Responsibilities...........................................................................................................................29

10.4. Man Power...................................................................................................................................................30

11. CHAPTER ELEVEN- FINANCIAL STUDY AND ANALYSIS 32

11.2. Total Initial Investment Cost........................................................................................................................32

11.3. Fixed Investment...........................................................................................................................................33

11.4. Operation of services....................................................................................................................................33

11.5. Financial Analysis and Statements...............................................................................................................37

11.6. Amount and Purpose of the Requested Loan...............................................................................................37

11.6.2. Revenue Schedule 38

11.6.3. Income or Loss Statement 38

11.6.4. Pay-Back Period 39

11.6.5. Cash Flow Forecast 40

11.6.6. Break Even Analysis 41

11.6.7. Discounted Cash Flows and Net Present Value (NPV) 42

12. CHAPTER ELEVEN- CONCLUSION 43

13. CHAPTER TWELVE- APPENDIX 44

examination of these aspects, a conclusive recommendation on the investment strategy,

implementation and operation is forwarded.

The total initial investment requirement is estimated at birr 79,355,829.78 of which

95.20% (75,545,623.52) is for building construction.

modern and unique apartment are 61 educated and non-educated persons.

value (NPV) is Birr 1,634,328 discounted at11%.

2. CHAPTER TWO- INTRODUCTION

related to tourism, also statistically separate from the others.

uncommunicative tourism service and products, among others.

organizations to manage and transform the tourism industry.

developing countries (Like Ethiopia) where domestic resources limited.

3.1. Background Information

competitiveness of the sector.

Improvement of productivity of other sectors can take advantage by exploiting the

institutions as it is an expanding and promising industry.

3.2. The profile of the promoter.

sq and attractive city for different business sectors.