PROJECT PROPOSAL

ON

THE ESTABLISHMENT OF MIXED USED

BUILDING

THE PROJECT TO BE IMPLEMENTED IN OROMIA

REGIONAL STATE, BISHOFTU TOWN

PROMOTER: ALIMAZ FAXANA

FEB, 2021

FINFINNE

1
Contents
EXECUTIVE SUMMARY.................................................................................................................................4
1. INTRODUCTION...................................................................................................................................5
1.2. General Background.........................................................................................................................5
1.2. Profile of the Promoter.....................................................................................................................5
1.3. Purpose of the Document.................................................................................................................6
1.4. Project Justification..........................................................................................................................6
1.5. Objective of the project....................................................................................................................7
1.6. Description of the Project.................................................................................................................8
1.7. Socio-Economic Advantage...............................................................................................................8
1.8. Location and Premises Required......................................................................................................9
2. MARKET STUDY AND SERVICE CAPACITY...............................................................................................12
2.1. Market Analysis..............................................................................................................................12
2.2. Demand and Supply Gap................................................................................................................13
2.3. Demand factors for Hotel and Recreation Center..........................................................................14
2.3.1. Fast Economy Growth...........................................................................................................14
2.3.2. Population and Population Growth (Demography).................................................................15
2.3.3. Tourism....................................................................................................................................16
2.3.4. Geographical Significance of the Area.....................................................................................16
2.4. Competitors...............................................................................................................................17
2.5. Target Customers.......................................................................................................................17
2.6. Marketing Promotion and strategy.................................................................................................17
2.7. Service Capacity and Service Delivery Program..............................................................................17
2.8. Pricing.............................................................................................................................................19
3. ORGANIZATION AND MANAGEMENT.................................................................................................20
3.1. Organizational structure...............................................................................................................20
4.2. Man Power.....................................................................................................................................23
4. FINANCIAL REQUIRMENT AND ANALYSIS.............................................................................................25
4.1. Fixed Investment............................................................................................................................26
4.2. Operating Expenses at Full Capacity...............................................................................................29
4.3. Underlying Assumption..................................................................................................................30
4.4. Source of Income............................................................................................................................30

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 4.5. Loan Repayment Schedule..............................................................................................................31
4.6. Depreciation Schedule....................................................................................................................31
4.7. Projected Revenue Schedules.........................................................................................................32
4.8. Pay-Back Period..............................................................................................................................33
5. ECONOMIC, ENVIRONMENTAL AND SOCIAL APPRAISAL.......................................................................34

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EXECUTIVE SUMMARY
1 Project Owner ALIMAZ FAXANA
2 Nationality Ethiopian
4 Project location Oromia regional state Bishoftu town.

5
Proposed project Commercial Complex Center

The project includes Bar and Restaurant, Cafe, Guest

6 Project house, Assembly hall, super Markets, Banking Service and
Composition Shops
Premises
7
5000m2
Required
The total project capital is 40,000,000 Birr from which 30%
8 Total Initial or 12,000,000 will be covered by the promoter and the rest
Investment Cost 70% or 28,000,000 birr will from financial institutions.
The total manpower required for the plant will be 120
employees at full capacity.

 Permanent workers 80

9  Skilled 60
 Unskilled 20
 Temporary workers 40
Employment  Skilled 10
Opportunity  Unskilled 30

Benefits of the Provide better Bar and Restaurant service, Contribute to

10 project For The Economic development of the Town as well as of the
region Country region.

11 Applicable The promoter will utilize the modern and standardized

Technology service level and Urban Beautification and development.

4
1. INTRODUCTION
1.2. General Background

The present dynamic economic growth of Ethiopia demands the parallel development of
tertiary sectors. These sectors are mainly related to the development of the economy in
general and tourism sector in specific situation and able to provide strong backward and
forward linkages for other sectors of economy. Besides, the growth Commercial sector in
Ethiopia has stimulated increased tourism supply capacity and higher levels of investment
in infrastructure, human capital and technologies to manage and efficiently transact higher
levels of Marketing activity .Hence, investment activities in Commercial Complex include Bar
and Restaurant, Banking Service, raining centers, Cafeteria, Guest house can support and
propel the sector, particularly in developing countries (like Ethiopia) where domestic
resources are limited

Moreover, the current investment flow and market in these areas are very promising that
imitates many investors to engaged in. Furthermore, the government of Ethiopia has
conducive investment policies and regulation that further attract the private sectors
involvement in economic development of the nation through the various investment and
business activities.

In this regard, the promoter of the Commercial Complex Center ALIMAZ FAXANA is
planned to establish Marketing Mall of G+6 in Bishoftu Town. The result of the study is very
sound and promising for the owner to start the project in this town.

The promoter is very dedicated to commence the project. Hence, the company expects to
get the necessary support from the regional and local governments for the project
implementation.

1.2. Profile of the Promoter

The owners of this envisaged project ALIMAZ FAXANA is an Ethiopian business man who
has a good business experiences and very ambitious to establish huge Commercial Complex
Center by expecting a good support and facilitation from the regional government as well

5
the town administration. In addition the promoter hopes this project to be the first among
many other developmental projects to follow as they look forward to share the
responsibility of fighting poverty, reducing unemployment here in Ethiopia .The promoter
accumulated diversified skills in the area and also adopted working with many people.
Thus, it is these experiences which primarily motivated this investor to develop the
inception of this project idea.

1.3. Purpose of the Document

The objective of this project study is primarily to facilitate potential entrepreneurships in
project identification for investment. The project study may form the basis of an important
investment decision and in order to serve this objective; the document/study covers
various aspects of project concept development, start-up, production, marketing, and
finance and business management. The document also provides pectoral information and
brief on Government policies and international scenario, which have some bearing on the
project itself. This particular project study is regarding the Commercial Building to be
established in Bishoftu town.

1.4. Project Justification

Ethiopia is one of the ancient African counties with rich cultural diversity, heritage and
natural tourist attraction areas. Besides, it is the seat for head quarter of Africa union and
other international organizations that based in the capital, Addis Ababa

Currently, the overall Ethiopian economy has been witnessing substantive economic
growth. Since 2003/04 growth has been sustained, recording more than 11% average
growth. This growth is complemented by a strong performance in the Agriculture, Industry
(construction and manufacturing) and service sectors with an average growth rate of 10%,
10% and 13.2%, respectively.

When there exist rapid economic growth, the demand for of tertiary/service sector is very
high that result from the change of people lifestyle, consumption pattern and income
growth. Hence, the development and market linkage of this sector with other sectors like
agriculture and industry is very vital. Furthermore, the Commercial growth has a potential
to develop the sector more.

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As one part of tertiary (service) sector, Commercial centers are generating most of their
business from domestic and local traders, business persons, business men, guests and
leisure travelers etc. The services given by these centers should be better quality and
facilitates to their customers. Beside, the development of Service sector further necessity
the development of the recreation, Hotel and Marketing. Nevertheless, the development of
this sector is not enough compare with the demand and potential of the Country.

In addition to the above facts, the following points taken by the promoters for the project
justifications.

 The government of Ethiopia promising the second five year growth and transformation
development plan (2014/15-2019/2020), that will bring prosperity to its citizens with
collaboration with private sector investment actions
 The regional government conducive investment packages for development and poverty
reduction

1.5. Objective of the project

The overall objective is to develop a chain of ecologically friendly Commercial world class
building with full fledged facilities to provide all the amenities required for the promotion
of each particular area or locality.

The specific objectives are to:

 Create new Commercial facilities for sustainable trade development

 Protect and conserve the ecology in the proposed project areas

 Attract tourists without affecting the natural resources
 Contribute to the national economy by generating additional foreign currency
earnings and alleviate the poverty of the local people
 Protect the remaining natural forest and work in close cooperation with the
surrounding communities to the mutual benefit of all involved.

With this project, ecologies would like to create a business that reaps benefits to itself. The
immediate culture and society surrounding the Hotel and to the country as a whole As

7
such, every aspect of this venture will be based on these criteria.

1.6. Description of the Project

Commercial Complex is a relatively not new concept in the Commercial industry. It sets out
to promote a more responsible type of tourism, which conserves the immediate
environment and eco-system and there by insures sustainable Economic development and
growth. The development of this type of Investment is not geared toward attracting visitors
and maximizes revenue only, but also in conserving to accomplish these objectives, the
projects are designed to be located in isolated areas where the foreign Investors will enjoy
the natural beauty of the particular region and its culture, history, flora, fauna, wildlife, etc.

The Project will be fully equipped with complete accommodation, catering services with
fine cuisine, a restaurant, environmentally friendly power generating systems, potable
water and communication. It is also in the project plan to protect and conserve the flora
and fauna by planting more tress and making the area environmentally attractive. Job
opportunities for the local community will be created. The company intends to recruit
matured consultants in the training of its staff in catering and commercial services.

The design, the services, and the management of the envisaged project will be built to
specific standards. The project will promote its brand internationally and shall be affiliated
to international organizations and associations for booking and interagency affiliations.
The promoter shall promote Bishoftu town through national advertising in newspapers,
magazines, posters, Postcards, books, web sites, presentations to target groups, as well as
through other media.

1.7. Socio-Economic Advantage

One of the most pressing issues of modern time is the deteriorating condition of our
environment. At present, more and more people are concerned about the continuing
pollution of the environment. In the past, the development of tourism was less
concerned on conservation of resources. It has therefore, contributed to the pollution
of the environment and the diluting of culture around the world.

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In the last two decades, environmentally conscious tourism has increasingly become
popular by nature enthusiasts and conservationists. In fact, there is a strong
movement ad vocation against insensitive tourism that does not benefit surrounding
communities. To satisfy this demand nature friendly tourism is today being
development even in the most advanced tourism destinations around the world.

Upon completion, this project is expected to have the following benefits;

 Offer high quality service standard throughout its chain;

 Offer tourists a real life experience of the particular locality though the distinct
architecture displayed in the Hotel
 It offer the comforts and quality of services expected of a first class Huge
Commercial Mall;
 Attract tourists who seek environmentally responsible experiences;
 Conserve and ameliorate the eco-system of project area;
 Contribute to the national economy by generating additional foreign currency;

 And contribute to the region's economy by voluntarily pledging and sharing an

officially declared amount (percentage) from the proceeds of each site towards
social project in that particular locality;

 Create employment opportunities for the surrounding community, which in turn

will improve the quality of life within the host community;
 Transfer of know-how on efficient usage of energy, waste reduction and other
conservation practices;
 Serve as a prototype for future development of eco tourism throughout the country.

1.8. Location and Premises Required

A. Project Location
The envisioned Commercial building is planned to be constructed in Bishoftu town, which

is located approximately at a distance of 110 km from Capital City to the East direction. One

of the favorable condition of the project area in terms of the topographic aspect is its'

9
flatness, which in effect, make the construction process easier and cost effective.

Climate- Ethiopia is situated within the tropics and therefore is subject to comparatively

small seasonal variations in temperature, but experiences considerable during

temperature fluctuation. However, the project area shows great seasonal variation in

rainfall and humidity. Most of the annual rainfall occurs between late June and mid

September. The driest time of the year is usually the months of November to May.

The main justifications behind the selection of this location are:

 Geographical proximity to Addis Ababa and the center for Oromia and South region.
 Relatively advanced development in infrastructure (Power, Water, Telephone road etc.)
 Environmentally favorable for Commercial business.

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B. Premises Required

For the proposed set up of the entire Commercial Mall Is, a total of 1,500 square meters
is required.

No Description Land Requirement in M2

The total Construction area Bar, Restaurant & 3500
1
bed rooms)
2 Outdoor recreation area 900

7 Security room 100

8 Parking and green area 500
Total 5000

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2. MARKET STUDY AND SERVICE CAPACITY
2.1. Market Analysis

Ethiopia with its huge potential in the travel and tourism market is now gearing towards a
point where it can make a significant contribution to its economic development. "Ethiopia -
13 months of sunshine" is the most popular tourism slogan that is being used to promote
the sector, which draws lots of tourists to the country every year, thereby, boosting the
hospitality industry of the country.

The beautiful attractions, warm people and the services have also been contributing in
boosting tourist flow to the country. The country's unique culture and history, diverse and
exotic flora and fauna as well as the magnificent scenery and archaeological sites are also
among the major tourist attractions which draw the attention of local and foreign tourists.

This nation has been seen as an important and real destination for a number of visitors. A
rich array of historical and ecological sites set it apart from most of its neighbors. It has
combined spectacular culture, history, ethnic diversity, nature and traditions dating back to
3000 years which are major sources of attraction and income.

Both local and overseas tourists flocking every year to visit the tourist attractions of the
country indisputably deserve the standard services they require. This would have not only
a momentous role in attracting additional tourists to the sites every year but also boost the
country's foreign currency earnings gripping tourists to extend their stay.

Although there were only one thousand Hotel rooms in the whole nation two decades ago,
a remarkable improvement has been witnessed in the sector particularly over the past 15
years. Currently, the number of Hotel rooms has reached above 7000 in Addis Ababa alone.
According to the Ministry of Culture and Tourism, this number would jump to 10,000.

Oromia is endowed with several natural and cultural tourist attraction resources. The
region is bounded with numerous lakes, mountain trekking, Natural Cave, Hot springs and
others. In addition to tourists and guests from other places, there are many residential and

12
other potential customers in the area Including government officials, and NGOs. This makes
the area most suitable site to develop Commercial Mall in order to provide service like,
Hotel café, and restaurant Guest House and other commercial Businesses. The services
including, house hold items bed/accommodation, wedding ceremony, hot drinks, soft
drinks, juice and food services. Also it is important to note that raw materials for cafe and
restaurant services are readily available in the area.

Nowadays, the lodge and recreation demand is very high in the country, the reasons that
the population number has been increasing and the people income level is also improving
as well. So, many people want recreation places and household items need are increasing
day to day.

It is obvious; there are few competitors in the area particularly in Hotel service and Guest
house but which are unable to satisfy the increasing demand. So, this remains in the area
where anybody with some capital can start these services. The added advantage is that the
land for such services is available.

The market demand for commercial service starts with People wants to enjoy outdoor
amenities with their children. Adults want to take different physical exercises and their
children want to play with different playing materials. That is why there are many and
large amusement and recreation resort parks in all cities in developed countries.

2.2. Demand and Supply Gap

Bishoftu town is found at the border of Arsi Regional state and Other South Nation and
nationalities region. The town is situated 260 Km from the capital Addis to the east
direction. The town is also a major business center and commercial route that attracts
thousands of business travelers. These are also the most important groups of potential
customers that include both the local and foreign tourists and the modern business
community who choose services that range from economic to high class standards. These
groups would also choose a healthy comfortable climate that combines a more traditional
type with that of modern bedrooms restaurants and cafeterias. Even though when
compared with similar towns in the region. Bishoftu seems to have no developed huge

13
Commercial Complex buildings and the existing supply is far behind the growing demand
for standard service. Hence, the project will solve the serous demand problem in the town.

2.3. Demand factors for Commercial Complex

There exist many demand factors for modern Commercial complex or Marketing Mall in
Oromia as well as in Bishoftu town. The main factors are:

 Fast Economic Growth & economic growth/activity of the district

 Population growth and density,
 Tourism
 Geographical significance of the town

2.3.1. Fast Economy Growth

The Ethiopian economy has been experiencing dynamic and double digit growth that
experienced annual average growth of 11.4% in past 8 years. According to Ministry of
Finance and Economic Development (MoFED), the forecasted economic growth the
economic growth (GDP at constant basic price) for 2011/2012 is estimated to be 10.4 %.
As per the estimates, annual growth rates of the major sectors, i.e. Agriculture, industry
and service were 7.6 %, 10.6 % and 13.0 %; respectively and their shares out of the total
GDP were 42%, 13% and 45 %, respectively. This continuous and a-two-digit high growth
would place Ethiopia among the fast growing countries in the world.

As sectors of the economy, the agriculture and construction sector also grows with
double digit with the average annual growth 10.31 % and 12% respectively in the past 8
years. As shown in the table below the growth of the sectors directly related with the
economy as parts of the economy.

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Major Economic Indicators Trends in Performance of the Economy: Growth Rates (%)
2002/0 2003/0 2004/0 2005/0 2007/0 2008/0 2009/1
Item 2006/07
3 4 5 6 8 9 0
GDP in
1999/00                
Prices -2.1 11.7 12.6 11.5 11.5 11.6 10 10.4
Agriculture -10.5 16.9 13.5 10.9 9.4 7.5 6.4 7.6
Industry 6.5 11.6 9.4 10.2 10.2 10.4    
O/w:
Manufacturing 0.8 6.6 12.8 10.6 8.3 7.1    
Construction 13.6 19.5 7.5 10.5 10.9 11.3 11.7 10.9
Services 6 6.3 12.8 13.3 14.3 17    
O/w: Banking
and Insurance 10.8 19.7 24.2 28.7 15.1 24.9 16.5 13.7
Distributive
services 5.5 6.4 14.7 14.2 16 15.2    
Other services
real GDP PER
CAPITA 6.5 6.1 10.9 12.5 13.1 14.2    
PER capita
GDP -4.6 10.7 9 8 7.5 7.6    

Inflation 15.1 8.6 6.1 10.6 15.8 25.3    

Source: MOFEO & NBE
This fast growth of these sectors resulted from different bodies like government, non
government and private activities in Ethiopia is growing in the fastest rate. Moreover, the
current five years Ethiopian Growth and transformation plan will expand the economic
growth paramount level by harnessing the resource and expanding industrialization.

2.3.2. Population and Population Growth (Demography)

The rate of urban population growth is increasing from year to year. The latest report of
the population estimation revealed that Ethiopia’s population has reached 100 million,
which puts Ethiopia as the second most populous country in Africa. According to the
Central Statistics Authority (CSA), current population growth is estimated to be 2.8% per
annum, and the growth rate is expected to remain above 2% for the next 20 years. Rural
population is growing at about 3.0% while the urban population is growing at about 4.3%.
Total population is projected to reach 129 million by 2030. In Ethiopia, of the total
population, about 16.0% is estimated to reside in the urban areas. The trend suggests that
the size of urban population is likely to continue to grow at a high speed in the future. The
share of urban population will rise from 16.0% in 2005 to about 23% by 2030. Nearly 30

15
million of the total 129 million will live in cities and towns by 2030. In this regard Addis
Ababa has the largest population in the nation (which is estimated to be more than 3.5
million).

In general having a huge population is a potential for business especially for Hotel business
since people naturally demands for cafe, restaurant, bar bed rooms and recreational center
services.

2.3.3. Tourism

Ethiopia is a land of wonder and enchantment, a country with one of the richest histories
on the African continent, a land of contrasts and surprises, of remote and wild places, home
to cultured and friendly people who are descended from some of the world's oldest
civilizations. The country is endowed with unique combination of natural and cultural
heritage, impressive scenery, suitable climate, rich flora and fauna and recognized
archaeological sites. There exists many kinds of flora and wild life and more than 800
species of birds reside in Ethiopia of which 23 are endemic to the country.

There are more than 100 mammals species, of which seven of the big mammals are unique
to Ethiopia. Ethiopia's many national parks enable the visitor to enjoy the country's
scenery and its wildlife, conserved in natural habitats, and offer opportunities for travel
adventure unparalleled in Africa.

All these could be enough to make Ethiopia fascinating place to visit and travel through, but
Ethiopia has so much to offer. Generally speaking, the improved political, social and
economic climate observed in recent years has created favorable conditions for
development of tourism in the country. This can be evident from the trend that tourist
arrived for different purposes has shown an increment over recent years.

2.3.4. Geographical Significance of the Area

The project area has adjacent to Bishoftu and Harare town which encourages people to
visit the town in weekends and holidays that creates a demand for the envisioned
Commercial Mall.

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2.4. Competitors
The envisioned Marketing Mall will have a competition from few commercial centers and
recreational centers developed in the town. However, the project will have its own
marketing strategy and utilize its competitive advantages to be successful.

2.5. Target Customers

The target customers for the envisioned project will be new 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.

2.6. Marketing Promotion and strategy

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 bed rooms and different other customer centric marketing
strategies will be used by the promoter.
The project 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 project.

2.7. Service Capacity and Service Delivery Program

The program is scheduled based on the consideration that the envisaged Mall will give
service 360 days that means the non-operational days are for maintenance only. During
the first year of operation the project will operate at 60 percent capacity and then it grows
to 80 percent in the 2nd year.

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Service capacity of the Mall at full capacity in third year of operation
SN Description Measurem Daily Monthly Annual
ent Service Service Services
Capacity Capacity
1.       Hotel Service        
1.1 Coffee & Sypris Cup 300 9000 108,000

1.2 Tea Cup Cup 350 10500

1.3 Milk Cup Cup 300 9000
1.4 Macchiato Cup 300 9000 108000
1.5 Soft Drink Bottle Bottle 400
1.6 Juices Cup Cup 200 6000
1.7 Cake No. No. 200 6000
1.8 Different Food Items No. 400 12000
1.9 Fast Food No. 300 9000
2 Bar Service
2.1 Beer & Beverage Bottle 600 18,000.00
2.2 Different Alcoholic Drink Bottle 20 2,000.00
3 Guest house
3.1 Single Bed Bed 20 2,400.00 28,800.00
3.2 Double Bed Bed 10 1,500.00 18,000.00
3.3 Suit Bed Bed 5 60 1,800.00
3.4 Family Bed Bed 10 900 10,800.00
4 Assembly Hall service
Assembly Hall service1
4.1 Day/Seat 1/2000 1/1000 1/1000
4.2 Assembly Hall service2 Day/Seat 1/1500 1/500 1/500
5 Gymnasium & Fitness Person/ 100 100 100
center month
6 Children Game Game 300 9000 108,000
Spa, Massage, Sauna &
7 Beauty Salon Person - 20 600 7200
8 Tennis or Basket court Game - 100 360

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The capacity will grow to 100 percent starting from the 3 rd year that is the full capacity of
the Mall. This consideration is developed based on the assumption that market and
logistics barriers would be eliminated gradually within the first two years of operation.

2.8. Pricing

Based on the market price of similar project in Bishoftu town, the envisioned Mall set the
following fair price for its services as indicated below;
SN Description Measurement Unit Price in Br.
With VAT
1. Hotel Service
1.1 coffee Cup 20
1.2 Tea Cup 10
1.3 Milk Cup 20
1.4 Macchiato Cup 17
1.5 Soft Drink Bottle 20
1.6 Juices Cup 40
1.7 Cake No. 36
1.8 Different Food Items No. 140
1.9 Fast Food No. 50
2 Bar Service
2.1 Beer & Beverage Bottle 30
2.2 Different Alcoholic Drink Bottle 2100
3 Bed Service
3.1 Single Bed Bed 500
3.2 Double Bed Bed 1000
3.3 Suit Bed Bed 800
3.4 Family Bed Bed 1200
4 Assembly Hall service
4.1 Assembly Hall 1 Day/Seat 5000
4.2 Assembly Hall 2 Day/Seat 1500
4.3 Assembly Hall 3 Day/Seat 2,200
5 Gymnasium ^ Fitness center Person /month 1,000
Children Game Game 20
Spa, Massage, Sauna & Beauty Salon Person 300
Swimming Service Person 50
Weeding Ceremony Wedding 2500

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 3. ORGANIZATION AND MANAGEMENT
3.1. Organizational structure

An organization is an entity established to organize activities, resources and manpower so

as to achieve the intended objectives in a given time. Organizational structure is a tool
designed to allocate the planned activities, responsibilities and accountabilities to man
power of the organization based on their qualification and experiences. Hence the
following organization structure is designed for the proposed project management
depending up on services in Commercial and main section in Marketing industry.

General Manager

As General Manager

Room division Dep’t Supportive Dep’t Food & Beverage Dep’t

Front Office House Keeping Security Personnel Food & Beverage Food & Beverage
section section marketing production service
section

 Support Dept includes security, Marketing &sales, engineering & Hotel

Maintenance, finance and accounts, purchase and general store and
personnel sections

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A. The General Manager's

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.

B .Assistant G. Manager

 He represents the General Manager.

 He leads the technical department.
 He leads supportive Department.
 He operates Additional work from G. Manager.
 Submit reports to G. manager.

c. Finance & accounts section manager

The Admin & Finance Department of the Hotel IS responsible for undertaking the following
activities:

 Will manage non human resources of the Mall, 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.

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 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.

D. Food and beverages Service Manager

 Coordinate Food & beverage service sections (Bars, restaurants, banquets, room
service, garden or roof top restaurants).
 Evaluate and support food and beverage operation
 Plan & implement to bring superior customer service
 Submit operational report for Ass. General manager

E. Food and Beverage production section manager (Executive Chef)

 Coordinate food and beverage production sections

 Support and control food and beverage operation
 Plan and implement for quality operation of food & beverages
 Submit on time request about inputs for production
 Provide on job Training staffs for better performance

F. The Marketing and sales section manager

 Will handle the overall marketing activities of the organization which include planning,
organizing, directing, and controlling.
 Will develop the marketing strategies.
 Will develop effective customer handling strategies
 Plan and execute the promotion mix

G. House Keeping section Manager (Executive house keeper)

 Coordinate all housekeeping operation.

 Support and control on site housekeeping operation

22
 Plan and implement strategies for better housekeeping performance.
 Submit input request on time for housekeeping operation
 Submit report for top leader

4.2. Man Power

The total manpower required for the plant will be 120 employees at full capacity.

 Permanent workers 80
 Skilled 60
 Unskilled 20
 Temporary workers 40
 Skilled 10
 Unskilled 30

Sr. No of Monthly
Job Title Qualification Job Annual Salary
No salary
titles
A Permanent      
Employees
1 General Manager  
1 22,000 264,000
1.1 Secretary BA in secretary
Since/Office Mgt 1 3,000 36,000
2 As General Manager MA. In Marketing Mgt
1 18,000 216,000
3 Room division Dep’t BA/MA in marketing
Mgt 1 13,000 156,000
3.1 BA/MA in Bus. Mgt
Front Office section 6 10,000 720,000
3.2 House Keeping BA/MA in Hotel Mgt
section 2 10,000 240,000
4 Supportive Dep’t BA/MA in Hotel Mgt
1 15,000 180,000
4.1 security Military science
training 5 3,000 180,000
4.2 Marketing &sales BA. In Marketing
&sales Mgt 6 10,000 720,000
4.3 Engineering & Hotel BSC/MSC in Civil
Maintenance Engineering 4 15,000 720,000
4.3.1 Sanitary technician level III in sanitary
3 8,000 288,000
4.3.2 Electrician level III in electricity
3 8,000 288,000
4.3.3 carpentry level III in carpentry
3 8,000 288,000

23
Sr. No of Monthly
Job Title Qualification Job Annual Salary
No salary
titles
4.3.4 construction level III in construction
technician 2 8,000 192,000
4.4 finance and accounts BA/MA in finance and
accounting
4 10,000 480,000
4.5 purchase and general BA/MA in Supplies Mgt
store 4 10,000 480,000
4.6 personnel sections BA/MA in HRM
6 10,000 720,000
5 Food & Beverage BSC in Food &
Dep’t Beverage preparation
1 15,000 180,000
5.1 Food & Beverage level III in Food &
production Beverage preparation 8 10,000 960,000
5.2 Food & Beverage level III in Hotel
service service 18 10,000 2,160,000
      216,00
80 0 9,468,000
B Casual Employees     -
Architecture BSC/MSC in
Architectural
7 Engineering 1 10,000 120,000
Civil Engineer BSC/MSC in Civil
8 Engineering 1 10,000 120,000
Construction BSC/MSC in
Management Construction
9 Management 1 10,000 120,000
Electrical Engineer BSC/MSC in Electrical
10 Engineering 1 10,000 120,000
Sanitary Engineer BSC/MSC in Sanitary
11 Engineering 2 12,000 288,000
Land Scape Engineer BSC/MSC in Land
12 Scape Engineering 2 12,000 288,000
laborers
13   32 3,000 1,152,000
  Casual total   40   2,208,000
  Grand Total   120   11,676,000
11,676,000

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4. FINANCIAL REQUIRMENT AND ANALYSIS

The Financial analysis include insight to the total capital outlay required for the project
which would consist of total fixed investment cost, and pre- production costs; the source of
finance for the total planned initial investment cost requirement and other parameter of
feasibility analysis including projection of profit/loss statement, cash flow statement and
payback analysis. Hence, the total initial investment cost for implementing this project is
estimated at ETB 40,000,000. Out of the total budget of the project 30% or ETB
12,000,000 will be covered by the owner equity; while the rest 70% Eth birr 28,000,000
will be covered by financial institutions.

Table Summary of Total initial Investment cost

SN Description Cost in Birr
8,000,000
1 Land, Building & Construction
4,000,000
2 Machines & Equipments
4,000,000
3 Vehicles
531,687
4 Office Equipment
16,531,687
- Total Fixed Investment Cost
300,000
5 Pre service Expense
3,260,000
6 Raw materials(Six Month Cost)
11,676,000
7 Salary
4,595,949
8 Operating Expense
19,831,949
  Total Working capital
36,363,636
  Total
3,636,364
  Contingency (10%)

40,000,000
  Total Initial Investment Capital

25
4.1. Fixed Investment

The fixed investment cost of the project consists of land acquisition and development,
construction costs of building and civil works, costs for purchase of plant machinery and
equipment, cost of purchase of vehicles, purchase of other fixed asset and other pre
production capital expenditure. Accordingly the fixed investment cost constitutes the
resource required for land acquisition, site preparation and development, design and
engineering cost, building construction cost, civil works (service facilities), purchase of
Hotel machinery and equipment, purchase of transportation vehicles, purchase of office
furniture and equipment and capital costs required for other fixed assets.

A. Building & Construction

SN DESCRIPTION Total Cost in Br

Hotel Building (bed rooms, bar ,
restaurant , cafeteria and gym,
1 assembly halls) 5,332,000
2 Wedding Shade & Gardening 930,000
3 Generator House 60,500
4 Parking & green area 300,000
5 Open recreation area 751,500
6 Children Play Ground 326,000
7 Design and Supervision 300,000
  Total 8,000,000

26
B. Machinery and equipment’s
Unit Price Total Price in
SN Description Measurement Qty
in Br Br
  Hotel Service Machineries        
equipment
1 Laundry Machine with all No 2 200,0 400,0
accessories 00 00
2 Bar table No 20 5,0 100,0
00 00
3 Bar chare No 50 2,5 125,0
00 00
4 Dining Tables No 50 4,4 220,0
00 00
5 Dining Chairs No 50 2,2 111,5
30 00
6 Coffee Tables with chairs Set 80 2,5 200,0
00 00
7 Bed with all accessories for No 15 30,0 450,0
Family Room 00 00
8 Bed with all accessories No 20 25,0 500,0
for Double Room 00 00
9 Bed with all accessories for No 10 17,5 175,0
Suit Room 00 00
10 Beds with all accessories No 20 15,0 300,0
for Single room 00 00
11 Comfort Chair(sofa) for No 1 25,0 25,0
reception 00 00
12 LCD 32” TV for Bed room Unit 25 15,0 375,0
00 00
13 LCD 60” TV for Restaurant Unit 3 30,0 90,0
café and Bar 00 00
14 Kitchen Equipments LS    
-
15 Refrigerator No 5 20,5 102,5
00 00
16 Balcony & alcohol display Set 5 50,0 250,0
00 00
17 Satellite Dish No 2 9,2 18,5
50 00
18 Satellite Receiver No 157 2,5 392,5
Equipment /Decoder 00 00
19 Public addressing system Unit 3 55,0 165,0
of auditoria type 00 00
  Grand Total       4,000,0

27
 00

A. Vehicles
Total Price
SN Description Qty Unit Price Remark
in Br
1 V8 or similar standard car 1 1,600,000 1,600,00 Duty free
for General manager 0
 3 Double cup for 1 600,000 600,000 Duty free
department heads
4 Min Bus Van 1 600,000 600,000 Duty free
5 Mid Bus 1 1,200,000 1,200,00 Duty free
0
Total     4,000,00  
0

D. Office Equipment
Unit Price in Total Price
SN Description Measurement Qty
Br in B
1 Office chairs Unit 30 2000 60,000
2 Office tables Unit 20 3000
2,0003000 60,000
3 Computer Unit 12 15000
3,000 180,000
4 Printer Unit 6 6000
15,000 36,000
Computer table with 12 6,000
5,000 60,000
5 chairs Set
Managerial Chair 6 8,000 48,000
6 with table Set
7 File Cabinet Unit 5 4000 20,000
8 Office Shelves Unit 5 5000
4,000 25,000
9 Telephone Set Unit 10 768
5,000 7,680
Decoration (Curtain 10 3,500 35,000
10 carper) set
  Total     531,687
531,680
E. Pre – Service Expense
SN Description Cost in Br.

1 Project proposal 15,000

2 Licensing fee and others 50,000
3 Environmental Assessment Impact 50,000
4 Staff Capacity Building 185,000
Total 300,000

28
4.2. Operating Expenses at Full Capacity

I. Raw materials
Cost per
Total Annual
SN Description Measurement Month in
cost Br.
Br
Raw Materials for 1,672,81
1 restaurant and Cafe LS 9 1,672,819
2 Raw materials for Bar LS 1,173,181 1,173,181
Other raw materials & 414,00
3 inputs LS 0 414,000
  Total   3,260,00 3,260,000
0
NB. The cost of raw material is revolving budget throughout the year. Thus we fill the
monthly and annual budget the same figure.

II. Other Operating Expenses

SN Description Annual Cost br. Assumption Used

1,048,590 1 % of fixed Investment Cost
1 Property Insurance
54,000 3000 per month
2 Audit & Legal Fee
60,000 200*300 br.
3 Uniforms
26,818 2000 per month
4 Telephone, fax and postal
60,000 5000 per month
5 Cleaning goods supplies
2,197,181 2 % of the Fixed Cost
6 Repair and maintenance
500,000 % of sales
7 Advertisement
18,000 1000 per month
8 Stationery and supplies
94,000 0.47 br*200,000KWh per year
9 Electricity
50,000 3*10,000 M3 per year
10 Water
257,600 14000 lit*18.4 br
11 Fuel
85,760 10% of fuel cost per year
12 Oil and lubricant
144,000 12,000 per month
13 Miscellaneous Expense
4,595,949  
  Total

29
4.3. Underlying Assumption

The financial analysis of the envisioned Project is based on the data provided in the
Preceding sections and the following assumptions.

The total initial investment cost for implementing this project is estimated at ETB
40,000,000. Out of the total budget of the project 30% or ETB 12,000,000 will be covered
by the owner equity; while the rest 70% Eth birr 28,000,000 will be covered by financial
institutions.
A. Construction and Finance
Construction period 2 years
Source of finance 30% equity and 70% loan
Bank interest rate 10%
Operation Costs and raw materials increase by 5% after year 3
Salary and wages increase by 5% after year 3
Annual Sales revenue increased by 5% after year 3
B. Working Capital
Accounts receivable 30 days
Work in progress 5 days
Cash in hand 5 days
Account payable 30 days

4.4. Source of Capital

SN Description % share Amount (in Birr)
1 Owners Share 30 12,000,000

2 Bank Loan 70 28,000,000

Total 100 40,000,000

30
4.5. Loan Repayment Schedule
Principal Total Annual
Year Interest -10% Remaining Balance
Payment Payment
0 0 0 0 28,000,000
1 2,800,000 2,800,000 5,600,000 25,200,000
2 2,800,000 2,520,000 5,320,000 22,400,000
3 2,800,000 2,240,000 5,040,000 19,600,000
4 2,800,000 1,960,000 4,760,000 16,800,000
5 2,800,000 1,680,000 4,480,000 14,000,000
6 2,800,000 1,400,000 4,200,000 11,200,000
7 2,800,000 1,120,000 3,920,000 8,400,000
8 2,800,000 840,000 3,640,000 5,600,000
9 2,800,000 560,000 3,360,000 2,800,000
10 2,800,000 280,000 3,080,000 0

4.6. Depreciation Schedule

SN Description Original Value Depreciation Deprecation

in Birr rate in % Per year
1 Construction and Building 8,000,000 5 400,000.00
2 Machines & Equipments 4,000,000 10 400,000.00
3 Vehicle 4,000,000 20 800,000.00
4 Office Equipment 531,687 10 53,168.70
  Total 16,531,687   1,653,169

31
4.7. Projected Revenue Schedules

Based on the production capacity of the envisioned Commercial Complex center indicated
in previous chapter, the total revenue of the project is projected as indicated in the table
below;

Annual
Unit Price Total price
SN Description UOM Service
in Sr.
Capacity
in Sr.
1 Hotel Service        
1.1 Coffee Cup 10,800 25 270,000
1.2 Tea Cup 12,600 15 189,000
1.3 Milk Cup 10,800 25 270,000
1.4 Macchiato Cup 10,800 20 216,000
1.5 Soft Drink Bottle 14,400 30 432,000
1.6 Juices Cup 7,200 40 288,000
1.7 Cake No. 7,200 36 259,200
1.8 Food No. 14,400 200 2,880,000
1.9 Fast Food No. 10,800 50 540,000
  Sub Total       5,344,200
2 Bar Service        
2.1 Beer Bottle 1,800 50 90,000
  Beverage       -
2.2 Alcoholic Drink Bottle 200 2500 500,000
  Sub Total       590,000
3 Bed Service       -
3.1 Single Bed Bed 2,800 800 2240000
3.2 Double Bed Bed 1,800 1500 2700000
3.3 Suit Bed Bed 2,160 1000 2160000
3.4 Family Bed Bed 1,080 1500 1620000
  Sub Total       8,720,000
4 Assembly        
  service        
4.1 Assembly Hall 1 Day/Seat 360/100 5,00 500,000
4.2 Assembly Hall 2 Day/Seat 360/150 0
3,50 525,000
4.3 Assembly Hall 3 Day/Seat 1/500 0
2,20 330,000
  Sub Total       0 1,355,000
Person/ 1,00
5 Gymnasium mont 100 0 100,000

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 Annual
Unit Price Total price
SN Description UOM Service
in Sr.
Capacity
  Fitness center h      
6 Weeding Wedding 360/52 2,50 900,000
  Ceremony       0  
  Total       5,320,000

According to the projected income statement, the Mall will start generating profit in the 1 st
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
viable.

4.8. 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 eight years after the
time of operation.

Every business undertakings be it large or small should have future development plan. It is
a plain fact that business activities are undertook in a dynamic business nature and
different environment. Therefore, the project will have an expansion phase to include
Cinema, and other additional services in the future.

33
5. ECONOMIC, ENVIRONMENTAL AND SOCIAL APPRAISAL

Economic: the potential source of revenue generated from commercial sector will appear
extremely attractive to local communities. It is hoped that the ecotourism project will raise
sufficient funds to convince local communities to protect the reserve and that the funds will
act as suitable compensation.

Environment: The project plays important roles in terms of the environmental service that
it provides. The conservation value and the area as enormous due to its ability to stabilize
the ecosystem, control soil erosion (by making terraces) and water dynamics and provide
vital resources. The owners will preserve the remaining natural plants and provides refuge
and breeding grounds for creatures that encourage seed dispersal, pollination and control
plant and animal. The control of local climate condition is another important service that
would be lost through the destruction of the ecosystem.

Social: the project will ensure social development though employment and job creation
which is about 120 individuals get hired. The training of workers and skill up grading
programs will enable the local people fit or efficient performance in their activities.

The Marketing Mall component is a new, exciting and potentially successful method of
generating funds for conservation and community development. The project will promote
the outstanding natural beauty of the area and encourage further investment in projects of
a similar nature around Oromia. The pilot phase will allow us to draw up clear guiding
principles for marketing business development which can be applied widely elsewhere in
order to take advantage of Ethiopia's in particular Oromia's enormous tourism potential.
Hence, the Commercial Complex center opens new ground in pioneering the establishment
of a fully environmentally friendly project in the area.

34