1.

Executive Summary
Tafesse Ya’u cereals whole sales project is established with the objective of distribution and shopping
cereals in chire town, of Sidama region and in Hawassa city. The firm established by Mrs. Tafesse Ya’u , who
has good experience on running private business, the project by introducing modern service and management
will distribute and supply of cereals. 4
The project under study is profitable from the outset i.e. starting from its first year with increasing profitability in
subsequent project periods as well. As per the financial projection made for the 3project years, the business is
expected to register the lowest profit of ETB 484,168.56in the first year and a maximum profit of ETB
900,446.29 at 3rd year.
The business cash flow statement indicates that at the end of initial year of operation, the annual net cumulative
cash flow balance would be ETB 4,198,225at 1st year and it is expected to reach ETB 2,348,723at the
3rd
year.

Tafesse Ya’u cereals whole sales starts with different cereals needed in local market where there is ever
growing demand for adequate distribution and supply of cereals and fast delivery need in the areas of order
including the rural and urban Ethiopian society.

The cereals distributing and supplying sector now is in its tip of benefits both to the business organization and the
country as a whole. Tafesse Ya’u cereals whole sales is planning to sales of different types of cereals materials
and planning to earn ETB 484,168.56in this fiscal year. The business organization will need one kind of loan
that facilitates to easy distribute to all sidama region on the vast regional market together with the strengths and
opportunities prevailing in the business organization, the need for short term loan will help its operation to be
easy and fruit full.
Therefore, Tafesse Ya’u cereals whole sales requests ETB 4,950,000 (four million nine hundred fifty
thousand birr) working capital from our esteem bank (Commercial bank of Ethiopia) which is one of the banks
that is working with the business organization.
Introduction
The cereals shop will be fully customized cereals outlet. It will provide some useful and needy
cereals to our customers in reasonable price. And fulfill their needs on reasonable prices. Our prime
focus will be the availability of product in time.
The cereals stock will be located in the main city area, inside Hawassa and Chire. The Stock will be
on main road side so it will attract the eyes of mostly people. Our basic strength will be that there is
no other cereals stock near to us. People from the area have to go far for the cereals and some basic

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things so this will be our main strength and we use it well for attracting our new and potential
customers.
2. Objectives
The objectives of Tafesse Ya’u cereals whole sales:
 Increase the company’s total cereals sales share.
 Create a better job opportunity for unemployed youth in the surrounding community.
 To create source of income for the owner of the project
 Contribute to the economic growth of the region and zonal town by distributing of cereals.

3. Mission
Tafesse Ya’u cereals whole sales project mission is to provide enhancement of people’s lives and
guarantee our customers: consistent, high quality, reasonable price and traceable by efficient,
customer focused, friendly and professional services. Our commitment to our customers and our
homeland, Ethiopia, will be reflected through honest and responsible business.

4. Keys to Success
The keys to success for Tafesse Ya’u cereals whole sales are:
Establish and maintain good working relationships and loan agreements with local
commercial banks and other financial institutions.
Maintain a reputable reputation in the community/area.
Quality product.
Competitive price.
Dealing with customers.
Undertake targeted promotional activities in regional and central market.
Increase our profit margin with the use of good and improved practices or management
efficiency in all business organizations shop.
Effective communication`s with potential buyers in the country.
Supply consistent quality stationery materials, assess and study customer tastes to expand
market share and work at the level of clients’ interest.

5. Company Ownership
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The initiator, Tafesse Ya’u (Tafesse Ya’u cereals whole sales) cereals whole sales business nearly 10
years ago. The cereals whole sales stock will be a sole proprietorship business running by a single
person named Ato Tafesse Ya’u , looking for mature capital and serve their customers with quality
products.
6. MISSION STATEMENT
The mission of the cereals whole sales is to provide the best cereals crops to our customers. Cereals
shop exists to attract and maintain customers. Our product and services will exceed the expectations
of our customers.
7. Competitive Comparison
We have a found a niche market in the area, there is no good cereals wholesales in this area. People
from the area found them very disturb when they should go far for very little and single things.
There are some cereals shops in the Chire town and many shops in the Hawassa area who are
offering these products and services but the area we are targeting they are far from the Chire and
Hawassa. So this will be our competitive adge and we will use this as our strength and will serve the
community with our services.

8. Duty/ Responsibility of Owners

The cereals stock will be running by a single person named Mr. Tafesse Ya’u , he will be the single
owner of this stock. He will open the shop in the morning and then a salesman will come and
handle the shop till the owner comes back to the shop. There will be three corners in the shop one
will be the customer reception, other with measuring the cereals corner and the third one will be the
cash corner. There will be two boys working with the owner for the maintenance of the shop. The
owner will be sitting on the counter side and he will also manage the start for managing the cash
accounts and selling the basic cereals. One of the boys will be in cereals corner dealings with all
kinds of cereals and stuff, and the other guy will be handlings with measuring the sales cereals
9. Service Description
The cereals shop will be located at main city area targeting the main city segment because there is a
need in the area for this shop. Cereals shop will be given the best quality products for Universities,
colleges, Hotels, and for home consumption use. The shop will be always remaining nimble enough
to respond to the needs of the community in which it service.

10. Technology

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Since technology has no serious impact on our business because this business is really not concern
with the technology. But since it is a factor with affect the business. So we will use the best available
technology for our measuring balance, transportation and warehouse. Other than that we will also
use the best and latest technology for our record keeping and for cash transactions.

11. Marketing Plan

13.1 Introduction
The marketing plan will entail identification and introduction of the services to potential clients
while enlisting strategies that would retain the existing clients within the existing facility. A critical
analysis of competition is being done to give the business a competitive edge as much as possible.
Quality shall underpin the marketing plan. Goodwill developed through integrity and ethics of the
business will all be integrated into the marketing plan, the marketing initiative will encompass our
potential partners in the stationery shop business who facilitate some of our operation to ensure they
also meet their stated goals.
13.2 Potential Clients
A preliminary market survey revealed the existence of three categories of clients; individual,
institutional and commercial clients, with discrete rationalization on the basis of low, middle level
and high end clients in collaboration with some of our major partners such as Output Based Aid
(OBA), University and college, Hotels and others Individual clients will be the main focus of the
business. This is due to their high service requirements at frequent intervals. Health care service
seeking institutions are the leading clients in this category. A reach out campaign would be initiated
this would be undertaken by the employee who shall comprise the temporary field workers that

would be deployed during the initial operating phase of the business.

12. MARKETANALYSIS SUMMERY

14.1 Market Segmentation
We will be focused on meeting the local need for the cereals shop with in the main city are.
Market Segmentation
 Geographical
 Demographic
 Lifestyle

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14.2 Universities and Colleges
This section will be our main focus. The area where our shop is located is full of govt. Universities.
(Hawassa University especially Daye campus and Dilla University) There are many students
studying in those Universities so we have to target this segment. We will keep cereals according to
the need for student meals in the universities. We will also keep those attractive and interesting
things which catch the eyes our new customers.
14.3 Hotel and restaurants
We will also focus on this segment. There is large amount of Hotel and restaurants in the town area
especially in Hawassa town. So we will give special service for those customers especially on teff .
Because the hotel and restaurants are always needs a good quality teff production so we will give
them with reasonable price.

13. Organization and Management Plan

The business intends to have personnel policies regarding human resource planning, recruitment,
training and development, remuneration and allowances, promotion, and staff welfare. This is
cognizant of the fact that human resource is the most important aspect of a merchandise business
and it determines its success or failure. The focus on employment creation recognizes job creation as
a vital intermediate result. To motivate staff, performance appraisal will be done annually, with
periodic staff development through training and staff development via strategic human resource
initiatives.
14. General Description
The business proposal intends to earn the net profit of Birr 484,168.56, 679,236.53 and
900,446.29at the 1st , the 2nd and the 3rd year respectively from the selling and distribution
of cereals items of 2000 quintals by mobilizing all the organization’s work force. The details of the
fiscal operational activities and the expenses associated with as well as all the details of gross
revenue, cereals items purchase, operating expenses, statements of cash flows, balance sheet and
profit and loss statement, are stated as follows.

15. Cereals Purchase Schedule

Total Birr Total Birr Total Birr
Description MOU (1st year) (2nd year) (3rd year)
Tefff Lamb sum 2,215,500 2,326,275 2,326,275
Wheat Lamb sum 659,138 692,095 692,095
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 Maize Lamb sum 910,088 955,592 955,592
Miscellaneous items Lamb sum 1,286,775 1,351,114 1,351,114
Total 5,071,500 5,325,076 5,441,390

16.Months cereals Purchase

Total Birr Total Birr
Months MOU Total Birr (2nd year) (3rd year)
(1st year)
September Lamb sum 520,000 546,000
573,300
October Lamb sum 510,000 535,500
562,275
November Lamb sum 500,000 525,000
551,250
December Lamb sum 500,000 525,000
551,250
January Lamb sum 580,000 609,000
639,450
February Lamb sum 570000 598,500
628,425
March Lamb sum 515000 540,750
567,788
April Lamb sum 510200 535,710
562,496
May Lamb sum 446300 468,615
492,046
June Lamb sum 420000 441,000
463,050
Total 5,071,500 5,325,075 5,591,329

17 Cereals and Operation

A company that purchases of cereals items to be transported Chire town (sidam regional stat) is
responsible to cover the transportation charge needed to transport cereals items to respective sites.
The company expects to transport a total of 2,000 quintals of cereals items in total. With the
assumption that one quintal costs 100 birr, taking the freight fluctuation in to consideration, the total
amount for 2000 quintals is calculated to be 2000 X 100 = ETB 200,000.

After the purchased cereals items is insured and dispatched to Chire town vehicle’s and delivery
procedures have been handled by our customs and forwarding agent, finally be sent to our storage.
Thus, to execute these activities respective expenses are attached and presented as follows.

 For laborers who loading and unloading of cereals items, one quintals will loaded on truck and
unloaded from truck for Birr 50, hence 2000 quintals X Birr 50 = ETB 100,000 is needed.

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 Delivering and warehouse clearing service charge Birr 1,000/trips. Hence 10 trips X Birr 1,000 =
ETB 10,000
18.Salary, Travel and Per diem , Fuel and Transport Allowance
As there would be no immediate plan to recruit new employee to cater the Chart of Organization,
the existing staff would assume additional responsibilities in a manner Site manager, machine
operator are stated as follows.
20.1. Important monthly salary, per diem, transport allowance, oil & fuel, parking, maintenance,
mobile allowance and other miscellaneous expenses are presented in the table below
Table 12:- Salary and Allowance
Fuel Transport
S.N Title Salary Allowance Allowance Total
15 General Manager 5,500 1,000 0 6,500
2 Cashier 2,000 1,000   3,000
3 Purchaser 3,000 0 500 3,500
4 Secretary 2,000 500 0 2,500
5 Accountant 3,000 500 0 3,500
6 Sales person 1,500 0 300 1,800
7 Cleaner 600 0 0 600
8 Guards 700 0 0 700
Total 18,300 3,000 800 22,100

Note:
 If monthly expense is Birr 22,100 then 22,100 X 12 = ETB 265,200 is needed per annum.
 The salary is income tax inclusive.

19.Telephone, Internet, Fax and Postal Service Expenses

 Telephone/mobile 2 / Birr 450 per month = Birr 900

 Cell phone/1 line/ Birr 1500 per month = Birr 1500
Total Birr 2,400

Total Birr 2400 X 12 months = Birr 28800

20. Loan Settlement Plan

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The business organization plans to settle its loan through the sale of cereals items during the year.

Therefore, the loan installment method is as described below

8.4 LOAN REPAYMENT SCHEDULE

Table 10:- Loan repayment schedule
Year Principal Interest @ 14 % Total Payment Outstanding
Balance
0
- - 4830000
1 675213.72 338100 1013313.72 4154786.29
722478.67 290835.04 1013313.71 3432307.61
2026627.43
2 773052.18 240261.53 1013313.71 2659255.43
827165.83 186147.88 1013313.71 1832089.60
2026627.42
3 885067.44 128246.27 1013313.71 947022.16
880770.61 66291.55 947062.16
1960375.87

21.Monthly cereals Sales Schedule

Total Birr Total Birr
Months MOU Total Birr (2nd year) (3rd year
(1st year)
September Lamb sum 744,240 781,452 820,525
October Lamb sum 744,135 781,342 820,409
November Lamb sum 742,350 779,468 818,441
December Lamb sum 742,140 779,247 818,209
January Lamb sum 741,090 778,145 817,052
February Lamb sum 740,198 777,208 816,068
March Lamb sum 739,620 776,601 815,431
April Lamb sum 740,145 777,152 816,010
May Lamb sum 739,883 776,877 815,721
June Lamb sum 739,200 776,160 814,968
Total 7,413,000 7,783,651 8,172,835

24. MENGISTU YOTORA CEREALS WHOLE SALES

FORECASTED PROFIT AND LOSS STATEMENT

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 FOR THE YEAR ENDING 2015- 20117 E.C

Description / Year 1st year 2nd year 3rd year

Cereals sales 7,413,000 7,783,651 8,172,835

5,071,500 5,325,075 5,591,329

Cost of Goods Sold

Gross Profit 2,341,500 2,458,576 2,581,506

Operating Expenses    
Salary and Benefits 265,200 278,460 292,383
Rent Expense 288,000 302,400 317,520
Transportation Expense 200,000 210,000 220,500
Communication 28800 30,240 31,752
Loading and unloading 100,000 105,000 110,250

Total Operating Expense 882,000 926,100 972,405

Net Income before tax and

1,459,500 1,532,476 1,609,101
interest

Interest Expense 714,625.29 487,496.72 223,799.02

1,385,301.98
Net Income Before Tax 744,874.71 1,044,979.28

484855.693
Provision for Tax(35%) 260706.1485 365742.748

Net Income After Tax 484,168.56 679,236.53 900,446.29

MENGISTU YOTORA CEREALS WHOLE SALES

FORECASTED CASH FLOW STATEMENT
FOR THE YEAR ENDING 2015-2017 E.C

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 Description / Year 1st Year 2nd year 3rd year

Cash Inflow
-
Bank Loan 4,950,000 -
Received From Customers
7,413,000 7,783,651
8,172,835

Total Cash Inflow 12,363,000 7,783,651 8,172,835

Cash Outflow
5,591,329
Cost of Goods Sold 5,071,500 5,325,075

Operating Cost 882,000 909,660

955,143

Principal Repayment 1,410,681.72 1,637,810.29

1,825,075.84
Interest Charge
714,625.29 487,496.72
223,799.02
Provision for Tax
260706.1485 365742.748
484855.693

Total Cash Outflow 8,339,513 8,725,785 9,080,203

Net Cash Flow
4,023,487 (942,134)
(907,368)
Beginning Cash
174,738.26 4,198,225
3,256,091

Cumulative Cash Flow 4,198,225 3,256,091 2,348,723

13. CONCLUSION AND RECOMMENDATIONS

We have seen from earlier sections that there is a huge gap in the demand and the supply
for the cereal categories planned in this particular project. In fact with the
improvements in the living standard of the people and the growth of regional as the
national economy, the need for high class quality and standard services for various
customers shall continue to increase much more that the present state. This clearly
implies that market will not saturate in the short run due to pressure from competition
and also from lack of market demand.

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However; due to capital shortage & the license, the company could not achieve my strong
ambition to do successful business. If I could obtain support from you, I could easily solve
my problems and the operation of this business activity shall contribute its share to the
growth of the city and furthermore, it will hire 22 employees thereby helping them to
become food secure. I assure you that I am determined to show maximum effort for
collective success and firmly believe that your organization shall officer due support.

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