FUEL STATSION BUSINESS

PLAN PROPOSAL

Promoter : - ABDI ALI, AHMED MUSTEFA &

MUHAMED ABDI
CAMPANY:- FUEL STASTION Address: PAWE
Town
 EXECUTIVE SUMMARY

The project plans to provide high quality accommodations, for modern fuel station for both
business customers and travelers to solve the shortage of fuel demand. Ethiopia’s potential puts it
among the leading tourist destinations. Tourism infrastructure, which is still inadequate, should
be developed in order to cope with the growing traffic.

The project is planned to be implemented in B/G/R/State Pawe town. The overall objective of the
project is to establish standardized modern fuel station and motel building in Pawe town and
ensuring 148,897.84 profits within one year of service delivery. In fact, the aforementioned
objective will be achieved through marvelous commitment and better aspiration of the promoter
to do business and add profit and give fuel station service and car wash as well as other service.

The most excellent strategy that will be used in doing the business or implementing the project is
customer’s energetic taking part in the overall activities of the project. Moreover, customers
leaning and swift services are the other strategies that will be used in implementing the project.

The successful achievement of the project will be done by joint endeavor of the promoter, the
community, the government, and other concerned bodies. As far as the monitoring and
evaluation process of the project is concerned, the promoter, bureau of trade and transport,
bureau of investment, and other stake holders will take part.

Massive activities will be performed at the time of project implementation. Among this the
construction of the building, recruitment of the employees, fulfillment of the necessary facilities
and delivery of the services are the major ones. Implementing the project demands more than 20
personnel’s other than the promoter at early stage of operation, which will be the manager of the
project. And the total cost of the project is to be estimated 3,000,000.00 Ethiopian birr including
the cost of construction. The sustainability of the project will be ensured by promoting modern
business management approach and aspiration of employees about the improved services that
would result unforeseen rewards from the promoter.

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 Location and Topography

The project is located in the benshangul Gumuz National Regional State, Metekel zone, Pawe
town. Metekel Zone is one of the 3 zones in Benshangul Gumuz National Regional State
occupying the south eastern portion of the region.

Moreover, the recent economic and infrastructure development brought an increased business
activity to increase the demand of fuel in the area. In addition to the regular business and leisure
travelers, many high officials, experts and tourists are coming to the area. All the above customer
potential and the increasing international tourists has made necessary to build a modern fuel
station center to provide the required high quality service.

Recognizing these facts and future trends, this investment project has been designed to fill the
gap as a modern fuel station service.

1.1.Background

Investment is a force for development and an engine for economic growth of any nation of the
world. In addressing the way of survival, investment is the activity that facilitates the provision
of goods and services in low cost and with short period of time of all citizens of any given
country. On the other hand, investment enhances the network of various investors, sophisticated
technological advancements, socio-cultural & socio-political transformations, and rapid
economic growth of the counters of the world.

Enormous countries of Africa had declared investment policy to keep equal distribution and
utilization of resources. From there good investment policy many African nations had benefitted
their peoples at large. For example, a nation South Africa had transformed her economy and
ensured high living standard of citizens through launching good investment policy.

Ethiopia, one of nation states in Africa, also had declared fantastic investment policy so that its
citizens are beneficiaries’ form the adequate provision of goods and services to play their pivotal
role in the ongoing development process.

The B/G/R/S is one of the Ethiopian regions which proclaimed the provision of investment in
various socio-economic sectors to provide goods and services for all. As the number of the

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population increases, there occur imbalanced and unfair distribution of goods and services if
there is no adequate provision of investment policy. Despite the fact, the government alone
cannot do all its best to curve the problem.

1.2. Mission statement

The project is committed to its products and employees which they believe is the recipe for fuel
staion market success to address the need of our community.

There are various urban problems existing in the town of Pawe town. The main problems
associated with this project proposal development include:

- Shortage of standardized fuel demand in Pawe town.

- High unemployment (youth unemployment) rate in the town.
- The less revenue obtained from the existing investments.
- Customer’s dissatisfaction forms the fuel station services.
- And other associated problems in the fuel station sector.
1.3. Objective

The project has the objective of promoting the development of international standard fuel station
service to the growing urban and the increment of vakeel in the region. The owner has
demonstrated its concept, execution marketability and controls and feels confident of its ability
to successfully implement the business.

The following objectives have been established:

 Capitalize on excellent location opportunity with swift commitment to the town

development.
 Build strong market position among guests and local patrons.
 Maintain sound financial management of the venture.
1.4. Values
The project develops the following values:-
 Quality service.
 To build modern fuel station and motel building

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  Community ownership and participation.
 Environment adaptable investment.
 Profitable business.
 Customer’s satisfaction in the demand of fuel.
 Customer’s energetic taking part.
1.5. Beneficiaries of the project
The target groups of the project may include:-
 Residents of Pawe town.
 Navies to the town.
 Higher federal officials and ministers.
 Peoples living in the region.
 Tourist coming to the city.
 Others interested to visit the city of Pawe town.
1.6. Project Strategies
The following are the basic strategies of the project at implementation period.
 Community base development Approach.
 In building of modern fuel station with standard car wash area, parking and other
service
 Promoting the project to create awareness among residents of the town.
 Good partnership among the stake holders.
 Good mobilization of resource.

1.7. Project out puts

The following are expected outcomes of the project:-
 Job opportunity ensured for 20 citizens.
 Increased provision of quality motel and fuel station service.
 Environmentally responsive business ensured.
 Customer’s satisfaction ensured.
 Excellent partnership ensured among stakeholders of the project.
 Gain full business organization ensured.


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 1.8. Monitoring And Evaluation

Monitoring the project will be regularly conducted by the project promoter on daily bases and
Weakley bases. Every developmental activity needs to monitor for the betterment of the business
undertaking. The evaluation of the project will be done on quarterly bases by:

 The project owner.

 The project finance department.
 Invited senior experts of Pawe town.
 Experts from bureau of trade transport and investment, bureau of culture and tourism
and others.
Demand and supply structure

Business is closely tied to performance in the economy and will fluctuate accordingly. Overall,
however, total tourism volume has steadily risen over the past 10 years. Domestic tourism
appears to be a consistent contributor, while foreign tourism has increased.

This may increase even more over the next few years due to the recent economic development.
Despite the increase in foreign tourism, we expect that the majority of our customers will be
domestic, given our geographical placement at the heart of the town.

Entertaining their audiences with high-powered lights, sound, music and interactive
entertainment, nightclub venues are still one of the highest cash flow businesses in the world our
localized studies have shown that the average single adult will spend three to four hours per
weekend in this type of an environment and will spend on average of twenty to fifty Birr in that
time frame. As we approach the new millennium, this trend shows no signs of declining

Table1. Marketing costs

Description 1st year 2nd year 3rd year 4th year

Advertisement on:
Travel guide and directories 12,000.00 12,000.00 12,600.00 12,600.00
Local radio 8,000.00 8,000.00 8,400.00 8,400.00
Newspaper 5,000.00 5,000.00 5,250.00 5,250.00

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 Television 15,000.00 15,000.00 15,750.00 15,750.00
Website establishment & 10,000.000 10,000.000 10,500.00 10,500.00
maintenance
Signboard 11,500.00 11,500.00 12,075.00 12,075.00
Handbills distribution 3,500.00 3,500.00 3,675.00 3,675.00
Direct marketing 3,600.00 3,600.00 3,780.00 3,780.00
Sponsorship of local shows 10,000.00 10,000.00 10,500.00 10,500.00
Opening ceremony & 80,000.00
initial advertisement
Total 158,600.00 78,600.00 82,530.00 82,530.00

Machinery /Equipment

An extensive range of all quality machine, equipment and utensils are prerequisite to achieve the
envisioned goal of the prom other. The project is expected to be designated which will wake it
illegible for exemption from payment of custom duty. At this stage of the study the project
requires to purchase machines & equipment worth Birr 1,000,000.00 some of the basic
equipment and machines are:

Utilities

With respect to such utilities as water, electricity and telephone and communications systems, it
is clear that pressure is put on the systems by tourism. The tourist per capital utilization of these
resources, especially water and electricity, is much higher than that of resident populations
because of such factors in recreation as bathing. Toilet flushing, large and busy kitchens, air
conditioning, wasteful use of electricity for lighting, a telephone in every room, etc. may be a
burden to the country’s infrastructure. However, the problems will be less acute in the area due
to the growing effort of the government.

Organization and management

Form of business

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 The project ownership will be a sole proprietorship owned by Abdi Ali, Ahmed Mustefa &
Muhamed Abdi. Current effort made by the city council and the government in developing the
city opened the window for citizens to invest their fortune, participate in the development
activity, help the community and themselves. For the promoter as well as the recreation, this is
time to spend money and change.

1.3. Personnel

The cornerstone of the personnel plan is to maximize productivity and minimize the labor burden
on the company’s operating expenses. As we grow, we expect to see steady increases in our
personnel to match the increases in sales. The total headcount, including management,
administrative support, and customer service, will be 20, with a total payroll of Birr 24,050.00
per month.

4.4. Per-operating activities

The major activates expected here during the per-operational period are assigning consultant to
prepare the business plan, pre-feasibility document, architectural and related engineering
designs, completing business registration and legal licensing.

Administrative expenses

Administrative expenses include salary of the office, staffs that contribute indirect labor, office
telephone bills, fuel, oil and lubricant, stationary, insurance etc. the center overhead expenses
include such costs as repair and maintenance, cast of utilities and salary of workers related to
direct labor. The following table shows summary of all administrative expenses projected in to
each year.

TABLE 7. ADMINISTRATIVE COSTS

Description 1st year 2nd year 3rd year 4th year 5th year
Salary for indirect labor required 82,080.00 92,340.00 102,600.00 102,6000.0 102,600.00
0
Office telephone bills 17,280.00 23,040.00 28,800.00 28,800.00 28,800.00
Postal bills 1,584.00 2,112.00 2,640.00 2,640.00 2,640.00

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Fuel. Oil and lubricant 53,724.24 71,632.56 89,540.70 89,540.70 89,540.70
Stationary and printing 13,007.40 17,343.20 21.679.00 21,679.00 21,679.00
Insurance 89,057.21 89.057.21 89,057.21 89.057.21 89,057.21
Staff medication 16,200.00 21,600.00 27,000.00 27,000.00 27,000.00
Total 272,933.03 317,124.96 361.316.90 361,316.90 361,316.90
Project Location total area required

The location of the building and other facilities is of prime importance, and Locating it where is
passing trade and next to some healthy competition from nearby facilities is important. Equally
important the building is within easy access to our target customers.

The area is generally in a proximity 3,000 square meter to significant population center and
major transportation routes. The resources are also sufficiently strong and resilient provide high
standard recreation services for medium and higher class of visitors and business travelers.

Implementation plan

The milestones in achieving the development goals of the project are identified as follows:

I. Project preparation (1 months)

Feasibility project document preparation

II. Securing land (1 month).

III. Recruiting project implementing staff (1 month).
IV. Detail design of the center and contracting (1 month).

Revision of the engineering design and specification

The specification and bill of quantity prepared for tender.

The construction work tender aired and winner selected.

V. Completing financial arrangements (1 month).

Bank loan requesting and finalizing

VI. Construction of the center (18 months).

Material mobilization

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Constructing the sub structure

Super structure construction

Finishing the civil work

Vii. Furnishing and equipping the center (1 month).

 Procuring and mobilizing all equipment, furniture and utensils.

viii. Recruiting the operating staff (1 month).

 Employing the required staff and

 Empowering with training.

ix. Commission the center and set for service delivery (2 month)

 Commissioning
 Promoting the center
 Starting the center with an opening ceremony.

Total project implementation time will be 2 years & 3 months. The company will, after construction,
continually adjust in order to sustain our business in all the different departments. The implementation
Strategies focus in developing brand recognition through the use effective advertising. Marketing
communications and promotion as well as increase revenues and reduce costs.

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 Financial Plans

7.1. Project cost

Fixed Investment

The major fixed investment capital costs of this project are construction civil work, machineries,
equipment, furniture, utensils and vehicles.

TABLE 9. Summary of Fixed Investment Expense

No Particulars Investment Expense

1 Civil work site work 1,700,000.00
2 Machine, equipment, Furniture, Utensils 1,300,000.00
,Vehicles, and Miscellaneous
Total 3,000,000.00

Working Capital

For proper running of the project raw materials and ready sash for overhead expenses of at least
two months is required in required in addition to receivable revocable revenues. The project in its
first year of implementation call for Ethiopian Birr of about 886,250.00

TABLE 10. Working Capital Determination

Years
Particulars 0 1st year 2nd year 3rd year
Cost of raw materials stock for 1 moth for 300,000.00 300,000.00 300,000.00
the hotel
Cost of finished goods kept in stocks 300,000.00 300,000.00 300,000.00
Cost of work –in process 300,000.00 300,000.00 300,000.00
Cost of goods already sold but accounts 300,000.00 300,000.00 300,000.00
receivable (4% of Staley)
Amount of ready cash needed for overheads 300,000.00 300,000.00 300,000.00
Total working Capital 1,500,000.00 1,500,000.00 1,500,000.00
Increase in working capital 1,500,000.00 1,500,000.00 1,500,000.00

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Pre Operating Expense

The Project will need operating expenses such as registration & license fee, training of
employees before the project starts operation, consultancy and cost of transport &
accommodation expenses.

Investment Capital

The Total Capital investment required to implement this project is divided in to fixed costs
which is further sub divided in to construction of all civil works, equipment , furniture, bed room
amenities, utensils, vehicles and miscellaneous the working capital need constitutes cost of
goods and services given and raw materials in stock, un received sales, overheads and others, the
above costs need in to each of national year is determined taking ratios of total annual sales of
goods and services. And the of overheads are calculated based on each annual operational
expense of salary, fuel oil litigant & maintenance, insurance, utilities, supplies and other
miscellaneous expenses.

TABLE 12. INVESTMENT CAPITAL REQUIREMENT

Particulars Amount (Birr)

Fixed Investment costs 1,100,000.00
Working Capital need 500,000.00
Pre-operating expense 400,000.00
Total investment Capital 2,000,000.00

7.2. Financing plan

The financial need for the project is expected to be gained from the owner 30% and from bank
loan. The interest rate of the bank loan will be detailed by another document (bank statement)
that will be submitted to the bank.

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 7.3. Income statement

As the profit and loss table shows, we expect to become barely profitable in the fourth year of
initial investment or first of business operation, and to make a significant profit in the years
after. The scope of sales of services is project to increases by 20% for the 1st and 2nd years and
will remain constant, for calculations at this stage of project study, for the rest of the project
years. The project within its operational periods is expected to earn a mean annual profit of ETB
3,112,038.63 in 10 years, the minimum ETB 548,897.84 in the first year.

ANNEX 2. VEHICLES AND AUTOMOBILES

Items Unit Quantity Unit Price Total cost

Modern PCS 1 400,000.00 400,000.00
Transport
Total 400,000.00

ANNEX 3. SUMMARY OF COST OF UTEENSILS

Description Total Cost

Office & others 500,000.00
Other utensils 400,000.00
Total 900,000.00

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