Contents

1. Executive Summary-----------------------------------------------------------------------------3

2. Introduction--------------------------------------------------------------------------------------4

2.1. Company Goal-------------------------------------------------------------------------------5

2.2. Objective of the Company -----------------------------------------------------------------6

2.3. . The Location of the Building-------------------------------------------------------------6

2.4. Content of the Study------------------------------------------------------------------------6

3. Background--------------------------------------------------------------------------------------7

3.1. Form of ownership---------------------------------------------------------------------------7

3.1. Background of the company founder-----------------------------------------------------7

3.3. SWAT analysis--------------------------------------------------------------------------------7

4. Market Analysis---------------------------------------------------------------------------------8

5. Marketing Plans---------------------------------------------------------------------------------9

5.1. The Service-----------------------------------------------------------------------------------9

5.2. Location----------------------------------------------------------------------------------------9

5.3. Target market or Potential customers---------------------------------------------------9

5.4. Price of service-------------------------------------------------------------------------------9

5.6. Marketing Strategies-----------------------------------------------------------------------9

5.6.1. Product Delivery and distribution---------------------------------------------------10

5.6.4.Promotional Strategy-------------------------------------------------------------------10

6. Capacity-----------------------------------------------------------------------------------------10

6.1. Service giving Capacity--------------------------------------------------------------------10

7. Required civil work ,Engineering Machineries & equipment----------------------------11

7.1. Planned land utilization--------------------------------------------------------------------11

7.2. Building and Civil Work-------------------------------------------------------------------11

7.3.Details Expenses for service giving--------------------------------------------------------12

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8.Organizational and office plan----------------------------------------------------------------12

8.1.Form of Organization-----------------------------------------------------------------------12

8.2.Management----------------------------------------------------------------------------------12

8.3.Man Power------------------------------------------------------------------------------------13

9.Finanacial Analysis-----------------------------------------------------------------------------13

9.1. Initial Fixed Investment cost--------------------------------------------------------------13

9.2. Total Initial Investment--------------------------------------------------------------------14

9.3. Depreciation---------------------------------------------------------------------------------14

9.5. Profit and Loss Statement-----------------------------------------------------------------14

9.6. Project Cash flow Statement--------------------------------------------------------------17

9.7. Balance Sheet-------------------------------------------------------------------------------18

Appendix 1 Assumption-------------------------------------------------------------------------20

Appendix 2: Human Resource Requirement-------------------------------------------------25

Appendix 3: Operational Cost Projection-----------------------------------------------------26

Appendix 4: Working Capital Determination-------------------------------------------------27

Appendix 5: Source of Fund and Fund Allocation------------------------------------------28

Appendix 6: Loan Repayment Schedule------------------------------------------------------29

Appendix 7: Depreciation Schedule-----------------------------------------------------------31

Appendix 8: Projected Income Statement----------------------------------------------------32

Appendix 9: Cash Flow Projection------------------------------------------------------------33

Appendix 7: Balance Sheet -------------------------------------------------------------------34

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 1. Executive Summery

Project Name Mixed-use Building

Project Owner Getacho Irana Commercial Center
Project area Adama City, Oromiya Regional State
Specific Location
Citizen Ethiopian
Project composition Mixed-Use Building used for different commercial centers like shops,
banks, café, Bar and restaurant, offices, Luxury gymnasium, and
Bed Room.
Owned land by the Owner Existing 722.68 m2 land owned by the promoter. The projected mixed
and Building use building will be B+G+3 landed on 400m2
Capital required, loan Capital required for construction, finishing works and equipment
amount, and project IRR purchase and Working Capital total cost is ETB 26,479,811 of this 18
%(4,900,000)be financed by bank the rest 82 %

(22,000,138)contribution by the owner .

Employment Opportunity The project will have an employment opportunity for the community
in different position both professional and unprofessional.
Social and Economic Provide better building service, employment opportunities,
Benefit of the project for generation of income, stimulated town economy and benefits for the
the community local people, created additional opportunity who are interested for
rent or sales of luxury commodity with in Adama City community by
providing well equipped item
Purpose of request for the The promoter interest to construct Commercial center building to
loan invest in his country and to serve the community for rental and guest
purpose.

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2. Introduction

According to the policy of the former government, Housing provision had been
only from the three sources, namely the kebele, the Agency for Administration
of Rental Houses and individuals (at low level), so that the supply of rental
houses from these sources have been found extremely low to satisfy the
existing and the ever increasing demand.

unlike the policy of the former government, again although the currently
existing policy environment to participate the private sector in real estate
development activities has been encouraging, the problem is still existing which
would require more years for its solution. Hence at this point it has to be clear
that the demand for housing by residents, businessmen. Governmental and
nongovernmental organizations for residence, shops stores, offices etc. has to
be met by the provision from the private sector.

The development of infra structural facilities is very crucial for the flourish of
the private business both in cities as well as in rural areas. Infra structural
facilities that require huge investment are very complex to be managed by the
private sector, which is left for the government with regard to their provision
and development. These include electricity, telecommunication, road etc.
However, real estate development projects such as the construction of business
and residential buildings for guest could be promoted by the private sector.

Most of the time, people are unable to afford the capital for construction
buildings, where it is sound to get such facilities on rent from other groups of
investors. And others need to buy readily available building, as well. Now,
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after the private sector has been allowed to participate in every sector of the
economy, businesses are expanding and new ones are emerging in all urban
centers and surrounding areas, which would in turn increase the demand for
such real-estate facilities, rapidly

In Adama, Ethiopia the current multi economic dynamism brings many

changes on the life of its population. The dynamic socio- economic growth of
Ethiopia specifically Adama like some other urban area necessitates equivalent
growth of building and construction sector. The sector should expand rapidly
to support the overall economic development.

In the Mixed use Building sector of the economy, the multi-purpose one
become common and highly expends in urban areas including Adama of the
nation since dynamic economic development of urban economy requires the
construction of these building in towns to support the growing of business
service sectors like shops, offices, cinemas, cafeterias, restaurants,
supermarkets, beauty salons, residence houses, gymnasium, meeting hall and
other activities. In this regard, mixed used building expands in the all parts of
the country mainly in Addis Ababa and regional towns including Adama due to
it is the seat of high governmental and non-governmental offices and
organization across the nation and international communities.

The promoter of this project Getacho Irana Commercial Center planned to

construct B+G+3 Mixed use building for rental of Banks, shops and others,
undertaken this project study to check the expansion market, technical and
promising for the owner to start the project. The result of the study is very
sound and promising for the owner to start the project on the proposed area
and building.

The promoter is committed to realize the project. Hence, He expects to get the
calculated and necessary Bank Loan support from your good bank to make the
project operational. The joint contribution between the bank and the project

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promoter will create extended services to the community of the Adama City by
providing additional rent houses for Banks, shops and other purpose

2.1. Objective of the company

 To expand the existing Mixed Use Building for additional spaces and
service provision.

 To engage on Bar & restaurant, Rest room and gymnasium

service provision for better life style of the guests and project
area community Generating profit for the owner and hence
would open opportunities for re-investment.

 Solving problems related to rental

 Creating job opportunities for the surrounding population

during construction and project operation.

 Paving the way for other modern establishments around the

envisaged project area, (like shops, market centers, bars and
restaurants etc) and,

 Serving as an additional revenue source to the different

government bodies that would be collected in different forms to
taxes.

2.3. The location of the Building

The Mixed Use Building is located Oromiya Regional state, Adama city
administration, in around Peacock. The location is well located for banks,
shops, office and other purpose.

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3. Background

3.1. Form of ownership

The company form of ownership is Sole (Sole Proprietorship Company) and

registered under rules and regulations of the Ethiopian trade registration and
license procedures in Adama City.

3.2. Background of the company founder

Getacho Irana Commercial Center is an Ethiopian Company which is newly

established organization. The promoter gained a vast knowledge and skill, with
this reliable experience, the promoter knows how to manage and lead any
organization to profit and also know how to handle different challenges in the
working environment.

This project, under discussion, will therefore be the first of his vision which is
planned to be established in Adama City around Peacock. This business plan
is therefore prepared to get loan/financed by local bank for construction of the
planned Building and that is why this paper will try to analyze the overall
feasibility of it in all necessary aspects.
3.3. SWAT Analysis

3.3.1. Opportunities and Strength of the project

 Ethiopian is under transforming to change the life style of the population

which creates demand for the construction and addition service provision
both in the project area as well as national scope
 Adama is the seat of diversified high governmental and non-
governmental offices and organizations that create demand for the
project final end users both in rental and service provision.
 The owner has good business reputation and loan management in his
prevision business running.
.

3.3.2. Challenges
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The company expect the under listed challenges and work to tackle from all
aspects of the problems.

 Building rental and guest rental management and rent collection needs
serious follow up and collection.
 Some rental agreements will leads to court and handing of these cases
needs professional and time taking.
 Power interruption cost to run electric standby generator is high due to it
is mandatory for a mixed use Building

4. Market Analysis

At present, it is clear that the area around the proposed project is highly
developing in different aspects of socio economic establishments. If we see the
development trend of the area, due to the government's high investment
promotional activities and number of projects have been under construction.
However, although there is no available figurative data showing the current
supply and demand of these services, there are different aspects to consider in
analyzing the project's future market prospects:

a. Due to high congestion of urban centers like Finfine as a result of high

population growth, it is becoming more preferable, and safe to live on the
peripheral areas like the area under consideration.

b. Since few years back a number of Ethiopians who live in different

counties abroad are returning and others are preparing to do so. Most of
these people highly need to have such residential houses.

c. Due to absence of adequate land for huge industrial projects within the
town, most of recent land requests are being entertained at those areas
our of the town. Such a condition will allow a number of workers to
move to the area around.

d. The existence of relatively better infrastructural facilities (like road) is

attracting more and more people to such areas.

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 Hence, the above mentioned conditions and other related ones confirm that
there is a reliable prospect in overall development activities so that this will in
turn show the existence of positive market prospect for the envisaged project
under consideration.

5. Marketing Plans
5.1 The Service
The promoter is engaged on mixed use building rental and guests’ rest room
service provision sectors. The services details as well as service provision
processes will be discussed on service description and service provision
processes part of this business plan.
5.2 Location

The Mixed Use Building is located Oromiya regional state, Adama city
administration, around Peacock.

5.3 Target Market or Potential Customers

 Shop: The Building is rented for banks & shops the shops will be located
at the ground floor , 1st floor and 2nd floor
 Banks: bank will be located at the Ground
 Guests Rest room/Bed Service: starting the fro 3rd
floor.

5.4 Price of Services

The price of all services are considered the under listed conditions and the
project pricing strategy.

 The project visited and collect prices of various buildings found in the
project area to assess
 The price of services.
 Guests Rest room/Bed Service price also set by the market and
project area competitive price.

5.5. Marketing Strategies

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 The marketing strategies suggested in this part explain the pricing, product
distribution and promotion strategies of the project. It makes the company
competitive, reachable and branded on the market. The ultimate goal of these
strategies is to create demand for all rental banks, Shops and Guests within
the area of the project location.

5.5.1. Service Delivery and distribution strategy

The company will be used on project location services sales strategy. As the
nature of the business the end users or customers will be served and rented on
the mixed used building location.

5.5.2. Promotional Strategy

The company will promote its services direct to the users using cost effective
promotional activities and tools. The project will use

 Grand opening ceremony will introduce and promote the opening of the
project services on the building.
 Digital marketing tools will be used to promote the company as well as
the services providing.
 Local and regional Radio and Television commercials will be on air to
address the potential customers.
 Promotional through magazines will be used to address the service
customer throughout operational times.
 Commission for sales agents to rent the building during the initial period
of the service giving.

6. Capacity

6.1 Service Giving Capacity

Service giving capacity of the company is a base for the assumption of sales
forecast. The capacity is also mastered by the space of the building which is ready
for serviceable /rental area, number of guesthouse ready for rent and finally the on
time accommodating capacity of the building. The followings are capacities and
assumptions taken in to consideration for the forecast of projected sales.

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 The building will have basement, Ground and 3 Floors
 The first floor including will be used for rental service for banks & shops.
 The guest/bed service will have 3 floors individual room, which is room with
single /double bed.
.
 The service sales forecast of the g will be 70%, 80%, 90%, and 100% in the
first Four years service giving.
 Annual working days will be 360 days as per the nature of the business and
service giving standard of ministry of trade and industry assumption on this
business sector.

7. Required civil works, Engineering, Machineries & Equipment

7.1 Planned land utilization

The Promoter of the project will construct B+G+3 mixed use building. The
building is landed on 400 m2 with a total owned compound 722.68m2. This
project is it helps the owner of the project to provide rental services for banks,
shops, and guest’s rest room service for the community
7.2 Building and Civil Works

The total building BOQ estimation is about ETB 14,675,461. The purpose
of this loan is to construct the building. As per the engineer estimation
presented on the BOQ the following table indicated the total cost of the
building.

S/N Description Amount in ETB

A. SUB STRUCTURE
1 Excavation and earth work 640,085
2 concrete work 1,626,802
3 Stone Masonry Work 197,200
  SUB TOTAL 2,464,087
B. SUPER STRUCTURE
1 concrete work 5,339,156
2 Block Work 485,100
3 Roofing Work 402,670
4 Carpentry and joinery 1,082,486
5 Metal Work 553,500
6 Finishing Work 3,824,170
7 Glazing 22,500

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 8 Painting Work 111,240
9 Electric Installation 0
10 Sanitary Installation 390,552
  SUB TOTAL 12,211,374
  TOTAL (A+B) 14,675,461
(15% VAT) 2,201,319.15
Grand Total 16,876,780.15

7.3. Details Expenses for Service Giving

The cost of service or expenses required for the envisaged service is majorly
maintenance, repair, administration and some cleaning materials. The
followings are cost of services details excluding direct and indirect labor costs.

Cost of consumable inputs

The following table shows annual inputs for consumption for the 1 st year of the
business

Sr.No Description Unit of Quantity Unit Price Total Price

Measure (Birr) (Birr)

Power and        
utilities
1 Fuel (for Ltr 15,000 38 570,000
standby
Generator)
  2 Electric Lump 1 18,017.75 18,017.75
sum
  Grand Total       588,017.75

8. Organizational and Office plan

8.1. Form of organization

The company form of organization is private limited company. It registered

under rules and regulations of the Ethiopian trade registration and license
procedures.

8.2. Management

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The business is owned and directed by the owners of the project. The company
appoints a general manager of this and other sister company businesses. The

operation of the rental, and Guest rest room service provision will be run and
supervise by employees who has proven experience on the area of businesses.

8.3. Manpower

As per the nature of the service the company hires employees, who will engage
directly on the service provision by experience. On the other hand there will be
also other workers who will assign on back office and engage on marketing,
finance, and other supporting activities.

S/No Job Title Req. Unit Total salary per

No Salary year
Per
Month
1 General Manager 1 12,000 144,000
2 Accountant and Cashier 2 5,000 120,000
3 Receptionist 1 3,000 36,000
4 Cleaner 4 1,500 72,000
5 Driver 1 2,000 24,000
6 Guard 4 2,100 100,800
  Total     496,800
7 Employees Benefit 5%     24,840
  Total 15   521,640
8. Financial Analysis

8.1 Source of Finance

The total amount capital required for the furnishing and completing of the
building is .The source of finance is bank loan and type of loan request is for
Mixed Use building construction completing, finishing and furnishing for the
planned service provision.

Table 9.1 Initial Fixed Investment Cost

Summary of Fixed Asset Investment Cost

S.no Description Total Cost
1 B+G+3 Building & Construction Cost 16,876,780.15
2 Loan from Bank to complete the building 4,900

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 ,000.00
  Total 21,776,780.15

Table 9.2. Total initial Investment

Total Investment Cost

S.no Description Total Cost

1 Fixed Investment Cost 25,276,780.15

2 Working Capital 1,623,357.70

  Total 26,900,137.85

9.3 Depreciation

The Depreciation Schedule wills analysis annexed in this document.

9.4 Loan Payment schedule

The total loan amount requested is about ETB 18% of the total Investment
amount 4,900,000.00 Equity Share 82% amount 22,000,138.00.

9.5 Profit and Loss Statement

The 5 years profit loss analysis annexed in this document

Revenue Projection

S/No Service   Unit QTY m2 Projected Annual

Type Price in ETB Income

1 Space per m2/month 380 400 152,000 1,824,000

Rental
ground
2 Space per m2/month 400 600 240,000 2,880,000
Rental 1st
3 Space per m2/month 440 350 154,000 1,848,000
Rental 2nd
4 Space per m2/month 440 300 132,000 1,584,000
Rental 3rd
5 Bed Service per m2/month 300 300 9,000 108,000
Icome
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 687,000 8,244,000

4 Years Projected Profit and Loss Statement for all Service Year

Description 1 2 3 4

Sales Revenue 14,014,800 14,839,200 15,663,600 16,488,000

Direct Cost 942,480 1,028,160 1,113,840 1,199,520

Utility Cost
18,017 36,036 54,053 72,071
Manpower Salary
496,800 521,640 547,722 575,108
Fringe and Benefit
24,840 26,082 27,386 28,755
Travel and Perdiem
24,840 26,082 27,386 28,755
Uniform and
Protective 18,000 18,000 18,000 18,000

Insurance 154,384 154,384 154,384 154,384

Spar Parts 105,000 105,000 105,000 105,000

Repair and
Maintenance 343,768 343,768 343,768 343,768

Office Supplies 12,366 12,366 12,366 12,366

Telephone, Postage
& Internet 24,000 24,000 24,000 24,000

Audit and Legal

Fees 24,000 24,000 24,000 24,000
Administrative
Expense 15,600 15,600 15,600 15,600

Cleaning Expense 35,600 35,600 35,600 35,600

Miscellaneous
Expense 30,000 30,000 30,000 30,000
Depreciation
expense 1,638,087 1,638,087 1,638,087 1,638,087
Loan margin cost
762,424 590,622 387,228 146,432
Total Expense 4,670,206 4,629,427 4,558,420 4,451,446

Net Income 9,344,594 10,209,773 11,105,180 12,036,554

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 Less: Taxation(35% 3,270,608 3,573,421 3,886,813 4,212,794

Net profit after tax 6,073,986 6,636,352 7,218,367 7,823,760

The revenue will be increase 70% in 1ST year, 80% in the 2nd year, 90% in the
3rd year and 100% in the 4th year annual

Depreciation

5 Years depreciation schedule for the building and other equipment

Description Year 1 Year 2 Year 3 Year 4
16, 843,83 843, 843,
Building cost
876,780.15 9 839 839

Furniture and
equipment 942,480 94,248 94,248 94,248

Car - 70 7 7
Revolution 3,500,000 0,000 00,000 00,000

21,319,
260.15
Total 1,638,087 1,638,087 1,638,087

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 Cash Flow Statement

4 Years Projected Cash Flow Statement

Descriptions Year 0 Year 1 Year 2 Year 3 Year 4

Cash Inflows          

22,000,
Owner's Equity        
138

4,900,
Loan        
000

6,073, 6,63 7,218, 7,823

Net Profit  
986 6,353 367 ,760

1,638, 1,63 1,638, 1,638

Depreciation  
087 8,087 087 ,087

26,900, 7,712, 8,274 8,856,4 9,461,

Total Cash Inflows
138 073 ,440 54 847

Cash out Flows          

22,000,
Existing assets        
138

Furniture and 4,900,

       
Fixture 000

1,623,
Working Capital        
358

Increase in Working 5 57,2 58,

Capital - - 5,884 50 685

934, 1,10 1,309, 1,550

Loan Repayment  
253 6,054 448 ,245

1,822, 1,99 2,165, 2,347

Withdrawal (30%)  
196 0,906 510 ,128

28,523, 2,756, 3,152 3,532,2 3,956,

Total Cash Outflows
496 449 ,844 09 058

(1,623,3 4,955, 5,12 5,324, 5,505

Net Cash Flow
58) 624 1,596 245 ,789

Cumulative Cash   4,955, 10,077 15,401,4 20,907,

Balance 624 ,220 65 255
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 4,251, 4,64 5,052, 5,476
Retained Earning  
790 5,447 857 ,632

Cumulative Retained 4,251, 8,897 13,950,0 19,426,

 
Earning 790 ,237 94 726

Cash Inflows          

PROJECTED BALANCE SHEET

   
Asset  
  Current Asset  

  Cash at Bank 1,203,031.00

  Prepayments 0.00
  Overhead Expense  

Total Current Asset           1,203,031.00

Fixed Asset  
Building &
  constructions 16,876,780.15
  Acc depn Buildings (0.00)
Vehicle 3,500,00.00
Acc.Depn on Vehicle (0.00)
Machineries &
  Equipments 942,480.00
Acc Depn Machineries & (0.00)
  Equipments

Total Fixed Asset 21,319,260.00

Total Asset 22,522,291.00

Liability  
  Current Liabilities  

  Account Payable -

Total Current Liabilities           -

Long term Liabilities  

  Bank Loan 4,900,000.00

Total Long term
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 Liability 4,900,000.00

Total Liability         4,900,000.00

Capital  

  Equity 17,622,291.00

  Retained Earnings -

  Total Capital 17,622,291.00

Total Liability and Capital 22,522,291.00

   
               

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