Yardstick international collage (YIC)

“Project planning and analysis”

“Investment proposal”
GROUP FOUR, MAPM Section D

R.No Group members Id.No

1 Adanech Asrat MAPM(1)341/15
2 Alem Gezahegn MAPM(1)559/15
3 Ashenafi Admasu MAPM(1)339/15
4 Ashenafi Hagos MAPM(1)308/15
5 Balew Teka MAPM(1)325/15
6 Kerebih Gualie MAPM(1)531/15
7 Nahusenay Belete MAPM(1)560/15
8 Solomon Alemu MAPM(1)283/15
9 Tizita G/Egzibaher MAPM(1)607/15

Submitted to: - Zegeye H/mariyam (Dr.)

Submission Date: - July 27, 2023 G.G.

Contents
Executive Summery.....................................................................................................................................4
Background Of The Business And Justification For The Business.................................................................4
Feasibility Study...........................................................................................................................................5
Marketing And Demand..........................................................................................................................5
Marketing Survey.................................................................................................................................5
Target Customer..................................................................................................................................5
Market Segmentation..........................................................................................................................5
Business Demand....................................................................................................................................6
Technical Analysis....................................................................................................................................6
Production of Products and Services...................................................................................................6
Future Products and Services..............................................................................................................6
Comparative Advantages in Production......................................................................................................6
Industry Analysis......................................................................................................................................6
Size of the Industry..............................................................................................................................6
Description of Key Competitors...................................................................................................................7
Strength...................................................................................................................................................7
Weakness................................................................................................................................................7
Analysis of Competitive Position.................................................................................................................7
Financial Analysis.........................................................................................................................................7
The Start-Up Expenses.................................................................................................................................8
Business Goal, Mission and Objective.........................................................................................................8
Objectives of The Business......................................................................................................................8
Vision And Mission......................................................................................................................................8
Keys to Success............................................................................................................................................9
Strategies.....................................................................................................................................................9
Pricing Strategy......................................................................................................................................10
Implementation, Resource Plan and Organizational Structure..................................................................11
Resource Plan........................................................................................................................................11
Human Resource Plan............................................................................................................................12
Organizational Structure...........................................................................................................................12
Financial Plan.............................................................................................................................................12
Cash Requirement.....................................................................................................................................13
Supporting Documents..............................................................................................................................14
References.................................................................................................................................................15
Executive Summery
This is a business plan proposal for the establishment of cafe having the name “wow coffee
house” in wessen Addis Ababa. The name Wow drives from the impression that we get from
drinking good coffee. The project envisages the establishment of coffee house at Addis Ababa
yeka sub city woreda 12. The present demand for the proposed service delivery is estimated from
different perspective and it expected to decline after five year of its operation but through
diversifying the customer service approach we intend to handle the existing customers along
with attracting new customers. The cafe will expect to create employment opportunities for 4
persons. The total investment requirement is estimated at about Birr 270,000 and out of which
Birr 90,000 is required for furniture and kitchen equipment. From the total cost investment 23%
covered by Owens capital the rest 77% will borrow money from XYZ (Dashen international
bank).

Background Of The Business And Justification For The Business

Wow coffee house is a new coffee house partnership with an expected to open in December,
2023 G.C at the main street of wessen, and expected to give a standardize service in Addis
Ababa. Wow coffee will specialize in Coffee, Tea, Fast foods, Cappuccino, homemade cookies
and other related activities. In Addis Ababa there are many coffee houses that give services to
their customers but they cannot still satisfy the need and want of the customer in terms of both
quality and quantity. In order to maximize customer satisfaction so that wow coffee decide to
open coffee house in Addis Ababa city. Wow coffee target customers are intellectuals, artists,
bankers and writers with reserved VIP seats, and students, couples, families and foreigners. Wow
coffee expected to serve this area well.

This plan offers financial institutions an opportunity to review our vision and strategic focus. It
also provides a step-by-step plan for the business start- up, establishing favorable sales number,
gross margin and profitability. Establishing this coffee house has beneficiary in maximizing the
wellbeing of the society from different perspective.

Some of them are;-

 Increase the income of the owner
 It create employment opportunity
 It satisfy the need of the customer (quality and quantity) within a reasonable price
 It provide better place for younger’s in spending their time.
 It contributes for the development of the surrounding area.
 Increasing government revenue through taxation (Business profit tax and VAT).

Feasibility Study
Marketing And Demand
Marketing Survey
Addis Ababa is experiencing a trend toward the creation of evening dining/entertainment venues.
They are popular and gaining more recognition. Evidence of this is found in local news and
magazine coverage. These venues are finding new homes in the areas close to and/or adjacent to
downtown.

Target Customer
One of Mars target customers are artists, teachers and writers who need a nice quite
cozy place to think and do their work with reserved VIP seats and for commons and
foreigners. The other target customer of Mars is couples that want to recreate themselves.
WOW coffee strategy is based upon targeting and serving:
 The typical Addis Ababa in town resident. This urban professional works long hours and has
relatively little time to cook at home. She/he has an active social life and spends a substantial
amount of disposable income maintaining it.
 The many businesses which regularly use restaurant dining as a function of conducting
business.

Market Segmentation
A coffee house would provide one of the best coffee, food and beverage opportunities for more
than 30,000 per month and adjacent neighborhoods.
Business Demand
Estimated demand levels based on Central Statistics Agency household income, consumption,
and expenditure surveys as well as based on a sample survey undertaken using observation of the
current demand for existing cafés and restaurant beside the population size. The demand for the
service is directly related with the growth of the population and income of the society. Taking
this in to consideration annual average growth of 6.6% is applied to forecast the future demand
then it expected to decline after its maturity over the 5 year period. But through diversifying the
service that provided to the customers, the coffee house will able to maintain keeping its
customers.

Technical Analysis
Description of Products and Services
Wow coffee will offer high quality coffee, tea and cappuccino, fast foods and dinner at a very
reasonable price. Also sell homemade cookies, brownies, and Doughnuts, with fair price.

Production of Products and Services

Wow coffee will use only filtered water and will brew our coffee in commercial coffeepots that
will be thoroughly cleaned between uses. Mars will bake and cook cookies, brownies, fast foods
and dinner in our own on-site oven from proven recipes, daily.

Future Products and Services

Within the next two to three years we expect to branch out into catering and offer homemade
pies, whole or by the slice.

Comparative Advantages in Production

Wow coffee low overhead and cheaper pricing will be the key to our success.

Industry Analysis
Size of the Industry
In Addis, the industry is quite large, for example in megenagna there are many coffee house we
can found coffee house in average almost 50 meter apart but around wessen there are a few
coffee house.

Description of Key Competitors

Of the few coffee house in the area, some are large chain with a very expensive product, others
are really home style cafes, the last one, and competitors are a traditional store with a "tea room".
Wow coffee Located in the heart of Addis, while its location near many longstanding restaurants
and cafeteria would seem to offer considerable overflow, the café is easily seen from the street
and parking is at a premium. Its concept has received very favorable press in wessen.

Strength
Consider quality of coffee and service with a reasonable price, and its skilled manager together
with its bright waiter can attract customers, so it has acceptance (brand name) by the customer.
The evening atmosphere is also so attractive and suitable for customers.

Weakness
No variation on menu or service it provides. Most of its activities like the menu are limited. The
location is on the street and can be perceived as a marginally safe area. Nevertheless, the coffee
house remains wildly popular given the parking difficulties.

Analysis of Competitive Position

None of these establishments features a coffeehouse atmosphere or live or recorded evening
entertainment. Relative to the location of these establishments, the center of town is centrally
geographically located. Its location will easily allow for passengers from those who came others
area.

Financial Analysis
Wow coffee want to finance growth mainly through cash flow. Wow coffee recognize that this
means we will have to grow more slowly than we might like.The most important indicator in
Wow inventory turnover. And have to make sure that food inventory turnover stays at
approximately four turns per month. This could cause a serious problem with cash flow, because
our working capital situation is tight. Most credit sales will be via credit and debit cards. Wow
must target a net profit of 20% at the least, and hold marketing costs to no more than one to three
percent of gross sales.

The Start-Up Expenses

Include:
 LEGAL expenses for obtaining licenses and permits as well as the accounting services
totaling Birr3,000
 Marketing promotion expenses for the grand opening of Java Culture in the amount
of Birr3,000 and as well as flyer printing for the total amount of Birr3,580.
 Insurance (general liability, workers' compensation and property casualty) coverage
at a total premium of Birr2, 400.
 Pre-paid rent expenses for two month total amount of Birr 20,000.
 Premises remodeling in the amount of Birr10, 000.
 Other start-up expenses including stationery (Birr800) and phone and utility
deposits (Birr 3,500).

Business Goal, Mission and Objective

Objectives of The Business
Wow coffee primary goals over the next year are:
 Renovate our space in Addis Ababa, wessen.
 Acquire equipment necessary for business, i.e. coffee pots, cappuccino machines,etc.
 Make agreement with the supplier of Mars raw material and bakery vendors.
 Create a cozy, artist friendly environment (i.e. choice of colors, choice of music, decor)
 Open for business and become the most popular café in the area.
 Expand our business in different in area of the country
 Targeting and maintaining a net profit of at least 20 % by the second year.
 To generate monthly sales to reach Birr 25,000 by the end of forth month of operation, and
Birr 40,000 monthly by the end of the first year of operation. Wow use different attractive
methods to get more customers over time. For instance we provide less price compare to the
coffee houses and we also provide some entertainment activities for the customers.

Vision And Mission

Wow coffee will become the foremost coffee shop in the area. We will serve a perfect
product at a very reasonable price. We will also be a meeting place for every individual that
want to use our service. Wow coffee house will create an atmosphere conducive to creative
expression and promote the creative process.
Wow aim is simple. It will provide a completely sophisticated, sensual, yet casual coffee house
experience for the many Addis people and visitors who frequent the city's casual entertainment
venues.

WOW aim’s to be able to employ several full time members of staff and build up a team so that
the partners can be clear of routine tasks and focus on day to day tasks like meeting customer,
supervising the cafeteria, holding extensive promotion activity and so on which help the business
to grow well.

Keys to Success
The keys to success in this business are: -
1. Product quality: Food, coffee-based beverages, and entertainment are our products. They
must be of the high quality and value.
2. Service: - WOW coffee patrons are paying to have a good time. Their experience will suffer if
service is not of the highest caliber. Each member of the staff will be courteous, efficient, and
attentive.
3. Marketing: WOW coffee will need to target our audience early and often. While the business
is located in a center of wessen and accessible location, many people will have to be
reintroduced to the neighborhood.
4. Management: WOW coffee will need to have a firm grasp on coffee based beverage, food and
labor costs. The entertainment coffeehouse experience must be delivered in a fashion that will
not only inspire repeat business, but encourage word-of-mouth recommendations to others.
Proper inventory, employee management, and quality control is key.

5, The greatest locations - visibility, high traffic pattern, convenient access.

6. The finest reputation - word-of-mouth advertising, promotion of our community mission of
charitable giving.

Strategies
Sales Strategy
Our sales strategy includes:
 Establish coffee service at local businesses
 Create an ongoing sampling program
 Conduct a consistent, aggressive marketing program.
 Be an active member of the community; be visible at charitable functions.
 Solicit customer feedback to constantly improve and streamline our operation.
 Staff salaries that are 5 % above the industry average in order to attract the best people.
 Hiring for attitude so that Wow coffee always have a friendly, enthusiastic staff to make
customers feel welcome and appreciated; constant staff training to assure the best quality
possible.
 To reduce customer waiting time, and create efficient product ordering, etc.

Pricing Strategy
Food, drinks, and entertainment options are priced to give us an attractive margin while at the
same time offering value to the consumer. We want repeat business. And also want the
experience to remain fresh. Comparing with other competitive coffee houses we will provide
fewer prices to our customers.

We will offer three sizes of beverages;-

Beverage kinds Small Small take Medium Medium Large cup Large take
cup away cup take away away

Tea 14 19 20 24 25 29

coffee 18 25.99 27.50 34.50 34.50 39.50

Milk 25 29.99 35.50 39.50 44.50 49.50

Makito 23.5 28.50 34.60 39.50 43.70 48.50

WOW special 31 37.50 41.75 45.90 49.65 54.99

Implementation, Resource Plan and Organizational Structure

Time Plan
The operation of the project will start at the beginning of 2018 after certain prerequest activities
are accomplished.
The time schedule is stated as follows;
No activities Time period

1 Developing the project Sep1- Oct 1

2 Obtaining license from responsible body Oct 1 – Nov 1

3 Rent the house and Purchasing material Non 1 – Nov 25

4 Promotion and start running the business Dec 2023

Resource Plan
No Item Cost (birr)

1 Coffee boiler machine 60000

2 Kitchen and house materials 2000

3 Refrigerate 28000

4 Rental for building 24000

5 Labor cost 12000

6 Miscellaneous expanse 26000

Total cost 270000

Human Resource Plan

The personnel plan calls for hiring 4 full-time salaried employees at start-up. Any additional
hires will be part time and devoted to the expansion of any catering function, as well as increased
capacity/operation of a private party function.

Organizational Structure
Wow coffee organizational structure will be a simple vertical structure. Owners putting in as
much work as the employees. An additional managers (owners) will assist in maintaining and
reviewing operations of the coffee house and the entertainment art shows.

Financial Plan
Sales Projection

The most important indicators in our case are daily seating "counts" and weekly sales numbers.
Also make sure that we are turning our inventory rapidly so as to avoid coffee based beverages
and snack food spoilage. Our project to perform at limited year’s projects .from those out of
which one would be a small scale and others would be of an intermediate implementation. The
source of sales would be the fees for the feasibility studies.

Income from 1st year 2nd year 3rd year

Hot drinks Beverages 718400 1048125 1283900

cookies 108000 115000 122000

Fast foods 243750 296250 367800

Total income 1070150 1459375 1773700

Cash Requirement
The business at least needs 344,360.00 birr for business establishment, commencement
of operations and liquidity support. The shareholders will have equal share and business are
obtained in two ways.
 From shareholders 23 % or 62100
 From Bank 77 % or 207900

financing Wow coffee

bank shareholder

Source of financing
The finance for this business would be obtained from shareholders and banks. From bank Wow
coffee provide the start up cash of 207900 birr it have interest from bank. Each members of the
company should buy share by 6210 Hard work is expected from us to be successful in
competition and to return birr taken from the bank with interest.

Supporting Documents
Legal agreements
The following agreements hold for all partners involved in the venture:
 In case one partner wants to part ways from the company he or she must inform the company
one month ahead of time
 All company secrets should be protected by all members of the organization
 Salaries of employees would be paid when revenues of the organization exceed 50% of first
months cost
 Dissolving of partnership is allowed if the venture has returned the costs involved ahead of the
six month.

References
 Ethiopian business development service network (EBDSN), How to write a
business plan 2005/6 E.C
 YIC business research method lecture note (Dr. Addis Mekonen).
 YIC project planning and analysis lecture note(Dr. Zegeye H/mariyam)