TABLE CONTENTS

Executive summary …………………………………………………….. І

Profiles of the owners……………………………………………….. 1

Part one

Marketing plan……………………………………………………………………………… 2

Sales forecast ……………………………………………………………………………………

Part two

Production plan …………………………………………………………………………… 4

Row materials requirement plan……………………………………………… .6

Laborer requirement ………………………………………………………………… 6

Cost plan………………………………………………………………………………………. 7

Part Three

Organization & Management ………………………………………… ………….8.

Projected over head Expense ……………………………………… 9

Materials to be purchased &office equipment……………. 10

Office equipments………………………………………………………………. 11

Part Four

Financial plan & Loan Repayment ……………………………………….. ..12.

Balance sheet ………………………………………………………………… ………..13

Loss & Profit statement ………………………………………………. ………14

Cash flow & ratio………………………………………………………………………15

 Executive Summary

Zoma cafeteria is local cooperative business enterprise which

established for profit. The project was brought in to existence with the

opportunities of the expansion of current market trend in the Arsie Negale

Town. Thus the idea was conceived in the minds of five entrepreneurs. For

effectively running the projects, the entrepreneurs have all the required

skills and resources which they have acquired in their interaction with

different working environment. Above all the project is assumed to

contribute somewhat to generate employment opportunities for the citizens,

and also inspire other entrepreneurs to exert their effort to create their

own enterprise that in turn have a multiplier effect on the countries

economy.

The marketing plan of the enterprise i.e. it wants to penetrate the existing

market using different hot marketing strategies, like effective customer

relationship ,effectively pricing methods and the like .Concerning the

production decision the entrepreneurs planned to produce a total of

545,200 volume of to drinks, cakes ,breads, juice with the total raw
material 444,160 and ,total cost of 694,760.When we come to the

organization and management, the cafeteria is cooperative form of

organization, and its organizational structure is simple type .Generally the

organization has 18 employees who assume different responsibilities.

Generally for the implementing the project a total of start up capital is

required of which 30% or is covered by the entrepreneurs and 70% or to be

covered by the credit and financing intuitions and loan will be settled in the

subsequent years in equal payment .Moreover the cash flow of the cafeteria

is positive which indicates that the cafeteria as enough money on hand both

for settling its debt and further business expression.

Profiles of the owners

1. Zemadekune Haile –Bsc in mechanical engineering and 5th year

advance civil engineering student, has six year experience in its
related field.
Has taken a lot of training on micro and small enterprise ,Business
Development Service and now working on Micro and Small Business Agency
/in Bishoftu Trade Industry and Transport office/

2. Frehiwote haile – BSc in Accounting has two years experience in its

related field-Has taken /CEFE TOT/ Training
3. Wayeshete Haile – In Economics has 10 years experience
in related field.
 MARKETING PLAN

Zoma cafeteria service has intended to produce different

cafeteria products like coffee, milk, my Kato,tea,different soft drinks,

different cakes, burgers ,sand winches and so on. in Arsi negele Town

there are about 99 cafeterias which are rendering cafeteria services

to customers, but what takes our cafeteria unique is that we are

adding different ingredients to our products to gather with effective

customers handling. Above all our cafeteria is located on the main

roads.Hence it is ample for undertaking the cafeteria service. Our

customer includes Government employees, Different Student, and

University students, travelers, Occasional guests and etc. Moreover

our cafeteria is uniquely providing customized product to different

customers. As indicated above Arsi negele has around 230,000

populations. Therefore our cafeteria to gather with quality and

efficient customer handling will has a capital market share along with

the different competitors.

 SALES FORECAST
No Name of the prod Measurement Daily Qty per year Unit Price Total

Production Birr Cent

1. Coffee Number 200 72,000 4 00 288,000

2. Tea “” 400 114,000 1 00 144,000

3. Juice “” 100 36,000 7 00 180,000

4. Milk “” 75 27,000 4 50 121,500

5. Cakes “” 45 16,200 5 00 81,000

6. Breads “” 500 280,000 1 50 420,000

Total 545,200 814,920

Table 1: Sales forecast

For promoting the cafeteria service rendered, our company uses

different promotional tools among which, advertising through

publication of different broacher, Leaflet, board and different there

sales promotions methods that will boos the level of sales. Further

more, our company will use flexible marketing strategies for over

coming competitive position in the market. Based on the prevailing

market condition, our company is ready use flexible placing promotion

and even placing strategies

 Production plan

What makes our company unique compared to competitors is

that, they different equipments that are used for the production of

our products are of standard quality and more over very fast for

effectively satisfying customers needs. There fore, the process of

productions very short. Here under the various fixed equipments used

for the production are indicated.

The cafeteria’s fixed equipments are assumed to have a life of 5

years and straight-line deprecation method is employed for calculating

the deprecation expense. For purchasing of the equipments our

cafeteria has been thoroughly investigation the different suppliers of

quality cafeteria equipment like, warty, GM Techno style and different

other micro and small enterprises which are engaged in the

manufacturing of the equipments. More over the purchasing decision is

not held by a single individual rather by the committee formed by the

entrepreneurs.
 Production plan

No Name of the prod. Measurement Daily Qty per year

Production

1. Coffee Number 200 72,000

2. Tea “ 400 114,000

3. Juice “ 100 36,000

4. Milk “ 75 27,000

5. Cakes “ 45 16,200

6. Breads “ 500 280,000

Total 545,200

RAW MATERIALS REQUIREMENTS PLAN

No Type of raw Measurement Qty per day Per annum Unit cost Total cost

1. sugar Kg 25 9000 8 Birr 72,000

2. Tea Pokka 5 1800 2 Birr 36,000

3. Fruit Kg 20 7200 5 Birr 36,000

4. Yeast Pokka 2 720 3 Birr 21,60

5. Eggs Number 30 10,800 1 Birr 10,800

6. Coffee Kg 2 720 25 Birr 18,000

7. Milk Litter 5 1800 6 Birr 10,800

8. Flour Quintal 1 360 800 Birr 288,000

Total 344,160
 RAW MATERIALS REQUIREMENTS PLAN
The price of raw material is assumed to rise by 0.05 Percent per
annum by taking in to account the current inflationary and living
condition. The materials are planned to be purchased form the
local suppliers through signing contract of supply
LABOR REQUIRENENT AND COST PLAN

No Types of the labor No.in Monthly salary Annual Remark

salary

1. Coffee Machine Operator 2 300 7200

2. Beaker 2 250 6000

3. Juice squeezer 2 300 7200

4. Casher 1 300 3600

5. Janitor 2 150 3600

6. Waiter 5 200 12000

7. Guard 2 300 7200

8. Manager 1 800 9600

9. Store keeper 1 300 3600

Total 18 2,900 600,000

LABOR REQUIRENENT AND COST PLAN

 Since our country has large population it is undeniable fact that
employing labor intensive approach is abase for reducing the problem of
unemployment rate. Therefore, there is a Tremendous amount of labor in
our area for our cafeteria service moreover, compared to the
to be attractive. different competitors employment cost our salary is
deemed

Organization and Management

There are different forms of legal ownership of business enterprises
a long the available Business enterprises; we choose cooperative society.
The very reason to choose such kind of business ownership is to be
beneficiaries form the different policies and strategies of the government
in the area.
The Organization chart Sifaan cafeteria is of simple type and depicted as
follows.
 Manager

Casher Sales Store Guards

The cafeteria currently has only one branch with an intention of opening
different branches in coming future. The owners are acquired an
experience of various working environment which are the basis for
entrepreneurs before actually engaging to the business.

Pre operating activities and expenses

There are different activities that are undertaken by the
entrepreneurs before actually engaging to the business. Among the
different activities undertaken by the entrepreneurs conducting market
survey like:

 Market research
 Product research
 Location research
 Pricing research

 Competitors research

 Customers research
  Promotional research

 Distribution research and the channel research

CAFETERIA EQUIPMENT OWNED BY THE ENTEREPREUNERS

No Name of the equipment Meas Qty U/Price Total price

1 Jig No 5 60 birr 300
2 Tea cup Dozen 6 24 birr 144
3 Water cup '' 3 36 birr 108
4 Coffee cup '' 8 24 birr 180
5 Juice cup '' 5 60 birr 300
6 Tea spoon '' 5 12 birr 60
7 Spoon for juice '' 3 12 birr 36
8 Saucepan (big) No 4 15 birr 60
9 Medium No 3 12 36
10 Smallest '' 2 10 20
11 Pan '' 2 35 70
12 Chair (Plastic) No 28 75 1900
13 Tables (Coffee table) '' 10 120 1200
14 Shelf '' 2 150 300
15 Bucket '' 3 45 135
16 Plastic Pan '' 5 20 100
Total 5,849
Table 7. Cafeteria equipment owned by the entrepreneurs

MATERIALS TO BE PURCHASED (Cafeteria)

In addition to the materials owned by the entrepreneurs still there

are different equipments that are very important for running the business.

Therefore the following table shows the different equipments necessary for

rendering the cafeteria service.

No Name of the Meas Qty U/Price Total

equipment price
 1 Coffee boiler No. 2 13,00 26,000
2 Cake baking machine '' 1 26,000 26,000
3 Juice squeezing '' 1 750 750
machines
4 Cash register tape '' 1 2000 2000
5 TV 29 inch '' 1 3000 3000
6 DSTV '' 1 1300 1300
7 Refrigerator '' 1 5000 5000
Total 64,050

Table 8. Materials to be purchased

OFFICE EQUIPMENTS

There are different office equipments required for the cafeteria in

its administrative function. Hence the following table indicates the

different office equipments used for the operation of the cafeteria.

No. Types of Equipment Meas Qty Unit Total Remarks

cost cost
1 Computer No 2 6000 12000
2 Computer desc '' 2 500 1000
3 Office shelf '' 2 1200 2400
4 Gust chair '' 8 100 800
5 File cabinet '' 1 1000 1000
6 Tables '' 2 600 1200
7 Chair '' 10 120 1200
Total '' 19,600

Table 9. Office Equipments

The office equipments are assumed to stay for 12 years and the
straight line depreciation method will be employed

And assumed salvage value is 3000, and hence the annual deprecation's 1950.
 FINANCIAL PLAN

For implementing this project totally 51278 Eth. Birr is required from

which 30% or 153,835.5 Eth Birr to be covered by the entrepreneurs and

70% or 353,949.50 Eth covered by the financial institutions. The said

amount will assumed to be repaid in the coming five years with the equal

payment including the interest rate. As a guarantee we have prepared

500m2 of land as collator for the bank.

Hence the following table shows the capital contribution schemes of

the entrepreneurs.

No Name of Amount to be contributed Total

Entrepreneur In cash In kind
1 Tigist Dogiso 49,670 16 1608 33 51278 49
2 Zewdinesh Lera 49,670 16 1608 33 51278 49
3 Tesfaneash Leka 49,670 16 1608 33 51278 49
Total 153,835 50

Table 10. Capital sharing schemes of entrepreneurs

 LOAN REPAYMENT SCHEDULE

The amount of the loan is 458,949.00 which will be paid in the coming

five years. The payment will be on equal installment basis and the interest

rate is 10%

Year Principal+ Rate of Payment Remaining

interest Interest Balance

2002 538,424 25 10% 107,684 85 430,739 40

2003 430,739 40 10% 107,684 85 323,054 55

2004 323,054 55 10% 107,684 85 215,359 70

2005 215,369 70 10% 107,684 85 107,634 85

2006 107,684 85 10% 107,684 85 107,765 90

Table 11. Loan repayment schedule

Sifaan cafeteria Project Balance Sheet

December
Asset
Current Asset 1,2003
Cash 607,960 00
Inventory of raw materials 444,160 00
Total Current Asset 952,120 00
Fixed Asset
Office Equipment 29,600 00
Cafeteria Equipment 64,875 00
Total Fixed Asset 84,475 00
Total Asset 926,595 00
Liability
Account payable 458,949 50
Owners Equity
KATON Capital 667,645 50
Total Liability and Owners' 926,594 00
Table 12. Projected Balance Sheet

The deprecation method employed is straight line deprecation method. The

expected life of office equipment is 10 years, with the salvage value of

3000. For cafeteria equipments the expected life sis 5 years and the

salvage value is 30,000.

Sifaan Cafeteria

Profit/loss Statement

For year ended September 30,2003

Revenue
Sales 698,100 00
Purchase of Raw Material 344,160 00
Net Sales 353,940 00
Operating Expenses
Rental 4800 00
Direct and Indirect Labor Costs 59,400 00
Water 2400 00
Electricity 3600 00
Transport 1200 00
Deprecation Expense 8735 00
Licensing Expense 150 00
Feasibility Study 200 00
Advertising 4600 00
Telephone Expense 600 00
 Others 12,000 00
Interest Expense 35,894 95
Total Expense 133,579 95
Profit before tax 220,360 05
Tax (10%) 22,036 00
Net Profit 198324 05
Table 13. Profit/Loss Statement
Moreover the Sifaan cafeteria has the following cash `flow projection for
the year 2003
The cash flow is made on the quarterly bases.

1st Quart 2nd Quart 3rd Quart 4th Quart

Cash on hand 149,010.50 486,598.79 540,402.58 409,341.37
Equity 4825 0 0 0
Loan 358,949.5 10,340 10,340 10,340
Collection from sales 174,525 174,525 174,525 174,525
Cash available for use 687,310 671,463.79 540,402.58 594,206.37
Cash payment
Material Purchases 86,040 86,040 86,040 86,040
Wage and Salary 14,850 14,850 14,850 14,850
Investment 69,650 - - -
Rent 1200 1200 1200 1200
Transport 300 300 300 300
Telephone Expense 300 300 300 300
Loan Repayment 26,921.21 26,921.21 26,921.21 26,921.21
Advertising Expense 1150 1150 1150 1150
Other Expenses 300 300 300 300
Total Payment 200,711.21 131,061.21 131,061.21 131,061.21
Cash Surplus/Deficit - - - -
Cash on hand 486,598.79 540,402.58 409,341.37 463,145.16
Table 14. Cash flow Statement

Ratio Analysis

1. Current Ratio= Current asset/Current Liability=

852,120/358,949=2.374

2. Return on capital Employed= Net profit (before interest and tax)*

100/Capital employed= 220,361*100/74.475=295.88%

3. ROI= Net Profit (before tax and interest)* 100/shareholder

Investment=220,361/567,645.50=38.82%

Therefore, as clearly observed from the ration analysis the project is

deemed to be viable. So, the fate of success of this cafeteria service

with the entrepreneurs' motivation of work is very promising for any

financial institution and farther more strengthen the health relationship

between the business and financial institutions.