1.

0 Executive Summary

Muhaba Bilal Habibe Retail Trade is established on 04th of December 2008 E.C
and engages in Retail Trade of Household and office supplies and furnishing
products such as household kitchen materials various type of office furnishing
equipment’s also home and office electronics products and other furnishing
materials.

The purpose of establishing this retailer Trade is to sale different kind of

Household and office supplies and furnishing products and have a sustainable
profit margin and business growth that help and facilitate the financial need of Ms.
Muhaba ,

The registered capital for this venture is 30,000 Br. Moreover, the company is
growing rapidly depends on the past and current market trends. However, in order
to capitalize this growing demand, the venture needs additional working capital of
4,900,000 Br injection to address this ever-growing demand and achieving increase
sales volume as well as revenue for the coming three to five years. To achieve this
vision, the owner planned and propose to get additional working capital finance of
Br. 4,900,000 that borrowing from Commercial Bank of Ethiopia.

The owner is able to lease a residential house 154-meter square enough to

accommodate the planned working capital needs the facility is located at the center
of the Addis as well as a lot of business located around the house also apartments
and new buildings.

Muhaba Bilal Habibe retail trade of Household and office supplies and
furnishing products which are Mostly originated oversize and sales in to the

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country. The store set to provide products a wide range of customers in and around
Addis Ababa City.

The store also aware that there are several similar ventures’ all-around Merkato and
Addis Ababa that is why we spent time and resources to conduct a business studies
and plan help us positioned the business to compete with all competitors through
synchronizing sales and after sales operations Ms Muhaba Bilal has more than
eight years’ proven experience in this industry that have positive impact on the
business future successful and grow just like past years milestones that the retail
store enjoys.

Through the use of superior personal customer attention, selling capability,

reasonable prices and location Muhaba Bilal Habibe retail trade will capitalize
on this promising opportunity. The location of sales store is located at the heart of
Merkato which is no needs to elaborate about the potential, the scale and customer
magnetic nature of the market and also Merkato is the large open market in the
African content.

If we meet and have the planed additional 4.9 million working capital Muhaba
Bilal Habibe retail trade management and team has a wealth of Sales,
financial, and mechanical experience that will ensure a great investment and the
overall success of the company and also fulfil every loan repayment responsibility.

2.0 Purpose of the Loan

Muhaba Bilal Habibe retail trade is expanding time to time in terms of revenue
and numbers of customers. The business is now planned to expand its business in
sales volume and numbers of customers and redesigning the sales Store. However,
the current price increment in all business sectors jump rapidly due to this fact the

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 need for additional financial injection is major instrument to be successful in this
industry also additional financial injection is a key to address customers demand by offering
variety consumer products and exceed customer expectations. Moreover, to achieve this in
internal and external current market trend and behavior of the industry additional working capital
loan is one of the major fuels ensure sustainable growth of the business. Accordingly, we request
your bank (Commercial Bank of Ethiopia) finance of birr 4.9 million for additional stock
purchase and sales operation activities and also the loan will enable us to continually purchase
under listed stocks, labor and overhead costs and portion of finance can be used on recreating
and renovating our Retail store at Merkato; Inventory Purchase and Sales plan presented in the
following tables that shows Annual Purchase and sales plan and recreating and renovating budget
sales Store for the year 2024.

Inventory Purchase Plan

Description quantity Unit Purchased amount Total Value
1 3 PCS Casserole 30 3750 112,500
2 Enamel Casserole 36 2840 102,240
3 Vacuum Flask 75 2920 219,000
4 Double Stove 93 2400 223,200
5 Caw Cap 222 2635 584,970
6 Water Glass 150 1800 270,000
7 Lunch Box 135 4200 567,000
8 Enamel Mug 60 6800 408,000
9 Kittle 51 8200 418,200
10 Storage Ball 84 6400 537,600
11 Chopper 45 6200 279,000
12 Grinder 21 7680 161,280
13 Water Set 48 2280 109,440
14 Coffee Warmer 72 4880 351,360
15 Electric Stove 169 2400 405,144

Business Reserves 151,066

Total Stock Value 4,900,000

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 Table 01 Inventory Purchase Plan

Sales Plan
Description quantity Unit sales price Total Revenu
1 3 PCS Casserole 30 5790 173,700
2 Enamel Casserole 36 4260 153,360
3 Vacuum Flask 75 4380 328,500
4 Double Stove 93 3600 334,800
5 Caw Cap 222 3950 876,900
6 Water Glass 150 2700 405,000
7 Lunch Box 135 5880 793,800
8 Enamel Mug 60 9520 571,200
9 Kittle 51 10660 543,660
10 Storage Ball 84 8960 752,640
11 Chopper 45 8680 390,600
12 Grinder 21 10752 225,792
13 Water Set 48 3420 164,160
14 Coffee Warmer 72 7320 527,040
15 Electric Stove 169 3360 567,202
Total Sales 6,808,354
Table 02 Sales Plan

3.0Business Plan

Having a proper financially attainable and practically achievable marketing, sales

and cost-effective business Plan is one of the foundations of the future business
growth, The plan laid down the ways to achieve the aim. It also helps us to
concentrate our activity into one direction. It helps to cope up with unexpected
challenge of the industry. By knowing these we developed vision, Mission and
related statements like below.

3.1 Objectives

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There are four major objectives elaborated on this business plan, of which three are
immediate and the fourth is of a longer-term nature.

1. Determine and elaborate the future growth and profitability of the business,
also increase performance on selling capacity.

2. Develop and implement the strategy to create, manage and grow a profitable
business that Muhaba Bilal Habibe retail trade should have.

3. Establish a firm budget to operate and manage the business from concept to
consistent import and sales operation, with good cash flow and sustainable
profit.

4. Explore potential growth in Household and office supplies and furnishing

market and exploit sources to have sustainable income from the business
with respect of the society culture and norms.

3.2 Mission

Muhaba Bilal Habibe retail trade mission is to rebuild and improve a Household
and Office Supplies retail trade store that is reliable and convenient. A store that
offers quality products and home improvement products in a customer friendly
environment.

3.3 Keys to Success

 Location: The current location Muhaba Bilal Habibe retail trade in the heart
of Merkato which is no needs to elaborate about the potential, the scale and
customer magnetic nature of the market and also Merkato is the large open
market in the African content.

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  Customers: Muhaba Bilal Habibe retail trade will also focus on
becoming the Household and office supplies and furnishing products source
for every Household, building and business in city. We will work hard to
establish relationships with medium house building contractors and gust
house owners as a current demand, there are also plans to set up a delivery
service to the market making it even easier for customers to get the products
they need, when they need them.

 Sales Service and Convenience: Sales Service and Convenience are the
keys to success in this business. They are also the strengths of independent
hardware stores, our sales personnel have experience in high-end client
hospitality This experience will be valuable in dealing with customers and
clients.

4.0 Company Profile and Management

Muhaba Bilal Habibe retail trade established on 04th of December 2008 E.C and
engages in retail trade of Household and office supplies and furnishing products
such as household kitchen materials various type of office furnishing equipment’s
also home and office electronics products and other furnishing materials and
employed more than ten employees both permanent and contract level.

 Legality and address of the company

No Name Tin Number

1 Muhaba Bilal Habibe Household and office 0047463367

supplies and furnishing products Retail trade

2 Phone Number 251937613260

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3 Address Addis Abeba, Addis Ketema Sub city
Woreda 01 House # G 004

 Management and staff’s status and educational qualification

Ms Muhaba Bilal Habibe General Manager and owner
Mr Ziyad Bilal Habibe Deputy General Manager
Ms Semira Bilal Marketing manager
Mr Kemil Ahmed sales Person
Ms Hderet Bilal Store Keeper

5.0 Overall Market Analysis, Outlook and Size of Ethiopia Market

Ethiopia has a large domestic market with a total population of over 120 million
people (2023), making it the second most populous country in Africa after Nigeria.
Over the 15 years prior to 2019, Ethiopia’s economy had one of the fastest growth
rates in the world, averaging 9.5% per year, driven in part by significant public
infrastructure investments. Abiy Ahmed’s appointment to the office of Prime
Minister in 2018 signaled a new push toward liberalizing Ethiopia’s economy
through improving the investment climate and privatizing leading state-owned
enterprises in several sectors, including telecoms, shipping and logistics, power,
rail, and sugar. This momentum came to a halt with the double onset of the
COVID-19 pandemic and a prolonged civil conflict. However, with these events
now in the rearview mirror, the country is showing signs of a move toward
recovery and reconstruction. Key sectors, including telecoms and banking continue
to move in a more open market direction.

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In 2022, Ethiopia had a real gross domestic product (GDP) of 6%, which was
greater than the 4% average for East Africa. Agriculture has historically been the
driver of the Ethiopian economy but recently the service sector has grown to
become the largest contributor to GDP. According to the National Bank of
Ethiopia (NBE), services, agriculture, and industry accounted for 40%, 32%, and
29% of GDP respectively, during the 2021/22 Ethiopian fiscal year. Service sector
growth is dominated by expansion in communication and transport services, hotel
and restaurant businesses, as well as wholesale and retail trading. Growth in the
industrial sector is particularly due to investments in roads, railways, dams,
industrial parks, and housing.

While we expect further economic liberalization, the country still faces several
issues that dampen foreign trade and investment, the largest being high inflation
rates and a scarcity of foreign exchange reserves.

In September 2023, Moody’s downgraded Ethiopia’s credit rating from Caa2 to

Caa3. Fitch and S&P also recently downgraded their ratings - Fitch in December
2022 from CCC to CCC- and S&P from CCC+ to CCC. The negative ratings,
which have a significant effect on the country’s borrowing costs, are due to
heightened political instability and the Government of Ethiopia (GOE)’s
participation in the G20 Common Framework debt relief initiative. During 2022,
the year-on-year inflation rate gathered momentum and rose due to price increases
in both food and non-food items, peaking in May 2022, at an annualized rate of
38%. Real interest rates in Ethiopia remain largely negative. The minimum bank
deposit rate of 7%, bond yield of 4%, and treasury bill yield of 9.46% are lower
than the annual average inflation rate of 33%.

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The Ethiopian birr is a non-convertible currency, and allocation of foreign
exchange (e.g., U.S. dollars) to the private sector is determined by the NBE. The
NBE operates within the context of a large trade deficit and the need to meet
sovereign debt obligations stemming from government infrastructure projects
funded by foreign debt, which enjoys priority for scarce foreign currency. The birr
has continued to follow a steady depreciation, with the NBE following a crawling
peg exchange rate policy. The shortage of available dollars has led to a black-
market exchange rate close to double the official rate.

Table 3: Ethiopia Exchange rate historical data USD TO ETB

Year Exchange rate (1 US dollar to ETB) % change

2021 43.73 22.4

2022 51.76 16.8

2023 54.35 4.8

Source: World Bank and Commercial Bank of Ethiopia

A second phase of Ethiopia’s Homegrown Economic Reform Agenda, first

introduced in 2019, is under development according to the Ministry of Planning
and Development. This forthcoming initiative is expected to include liberalizing
the banking sector, readjusting the exchange rate to strengthen the birr’s market-
based valuation, and eventually introduce a liberalized foreign currency
market. Ethiopia’s trade deficit has been widening, with total imports rising by
more than 12% annually on average during the last 11 years. The trade deficit
grew to $14 billion in 2022 from nearly $11 billion in 2021, with total imports
reaching $18 billion due in part to rising imports of consumer goods, fuel, and

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semi-finished goods. According to an annual NBE report, 42% of total import
spending ($7.6 billion) was on consumer goods and 17% ($3 billion) was on
capital goods.

Ethiopia’s imports from the United States have increased steadily throughout the
past decade. In 2022, Ethiopia imported over $1 billion worth of goods from the
United States, with transportation equipment—primarily in aviation—comprising
the largest segment, followed by construction equipment, agricultural machinery,
and engineering services. Many U.S. companies based in the United Arab
Emirates (UAE) do business in Ethiopia using Dubai as an intermediary export
platform due to proximity and availability of reliable air shipping and air passenger
services. Please refer to the tables below for U.S./Ethiopia bilateral trade figures.

6.0 Market Analysis

This report presents a comprehensive overview of the Ethiopian Household and
office supplies and furnishing products market, the impact of COVID-19 on it, and
a forecast for the market development in the medium term. The report provides a
strategic analysis of the Household and office supplies and furnishing products
market in Ethiopia and describes the main market participants, growth and demand
drivers, challenges, and all other factors, influencing the development of the
market.

The report covers Household and office supplies appliances - including waffle
irons, blenders, mixers and food processors, juicers, deep fryers and egg cookers;
excluding coffee machines, garbage disposals, microwave ovens, toasters or grills,
house and office furnishing products.

6.1 Marketing, Advertising and Promotion

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Muhaba Bilal Habibe Retail trade acknowledge marketing programs are second to
none in the industry. They include every tool needed to be successful in the Import
and sales of Household and office supplies and furnishing business. They include
Expo Events, interior and exterior signage, and custom circulars as well as Muhaba
Bilal Habibe Retail trade ‘The field marketing strategies begins with overall
understanding of the market to determine the needs and issues for each sale of
Household and office supplies store and. We look at the market penetration and
awareness in the market. As this information is gathered, a list of strengths and
weaknesses is developed and programs designed to work on each of the objectives
in order to give us a competitive advantage.

6.2 Products
Muhaba Bilal Habib Retail trade sales traditional and new designed manufactured
Household and office supplies hardware. products include

1. 3 PCS Casserole
2. Enamel Casserole
3. Vacuum Flask
4. Double Stove
5. Caw Cap
6. Water Glass
7. Lunch Box
8. Enamel Mug
9. Kittle
10. Storage Ball
11. Chopper
12. Grinder
13. Water Set
14. Coffee Warmer
15. Electric Stove

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Muhaba Bilal Habibe Retail trade will work to develop and have the right product
mix. The initial order of inventory has taken into account the fact that this is an
urban and suburban Household and office supplies hardware store and the product
mix may contain different items than a urban and suburban store should have.
Muhaba Bilal Habibe Retail trade will rely on Building consistent sales capacity,
knowledge, and ideas on inventory management in the cost-effective manner.

6.3 Pricing
Muhaba Bilal Habibe Retail trade have ideas on current market fact to deliver the
correct pricing for the market. Over all low cost is the main factors for customers
to make a purchase at a convenient store so we focus on competitive price with low
operation cost by calculating overall operational cost and set selling price with a
fare and customer centric profit margin.

6.4 Target Market and Segmentation

There are three major market segments:

 Addis Abeba City Residents: Around city Residents will make up as much
as 60% of the potential business of the company. This is an ever growing
and expanding group Households. Moreover, study shows that Ethiopian
Household Resident income and capacity levels increases at the moderate
trajectory. There are which have a great demand our products.

 Major companies and Businesses: Those major companies are Hotels, Bar
and Restaurants, Banks, Government offices and also retail and gust house
rental businesses.

 Real state builders and contractors: As stated earlier, there is a lot of new
residential units under construction in the last years and now days. The

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 company will work to become a reliable Household and office supplies
hardware supplier to these target customers.

 Government: Building proper capacity to meet the demand of Govt needs

in office supplies hardware which help us to grow the business, we intended
to maintain our good relationship with the Government.

7.0 SWOT Analysis

We have conducted SWOT analysis to position our business to maximize our
strength, to share the maximum existing opportunity, to work on our weakness,
shape our strategy to coup up the existing challenge at the sector and related.

Strength

 Our business is strategically accessible to the customer when we compare to

our competitors
 We Provide quality Manufactured Products to our customer we give
excellent service to our customers
 We try to have updated information about the sector, we control expenses in
order to have reasonable price
 The business manages by experienced and young entrepreneur.
 The owners have more than 5 years' experience
Opportunity

 Given its sizable and population and rapid economic development, the
country needs supplies of household and office supplies related Product and
service
 Given discretionary income of individual and organization high demand for
our work. We are creating business relationship with different investor and
the government

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 Weakness

 Now a days it is difficult to compute in today business environment if you

don't serve customers properly and shortage of finance hindered us to deliver
products on time
Threat

 Our business has plenty of competitors who are strongly affirmed in terms of
finance, these may affect negatively in the future
 Shortage of working capital and High inflation rate on Materials
8.0 Sales and Financial Forecast
Our financial projection will include expenses, sales, income statement and cash
flow. Our projection will base recent financial statement of the business and also,
we will consider the external environment for projection.

 Basic Assumptions for Sales Financial Forecast

The assumptions used for financial analysis purposes are based on the fact that
business Potential and Overall working environment which can be assumed that it
is possible to increase the sales volume and possible to expand the business in
accordance with our expansion plan. The assumptions we used to forecast the
financial plan are presented as follows.

 Assumptions for the Forecasts

 The bank will finance 4.9 million

 Average sales revenue will increase by 62 % per year
 Assuming the finance injected after June 30,2024.
 The average cost of the sale is 75%
 The profit of the business will be fully retained
 The profit tax rate is 35%
 The loan will be repaid within seven years with quarterly annually

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  All expenses will be increased by 18 percent

8.1 Sales, Cost of Goods Sold and Groos Profit Forecast

We are planning to increase our sales by 62 %. Our sales forecast is made based on
Provisional financial statement of the business, all forecast is made based of the
past trend of the business and current situation assessing in the Market The sales
projections start in the month of June 2024, the immediate goal is to achieve robust
sales in the first year. It is thought that double digit percentage total sales
increases can be achieved and maintained throughout the two years of this business
plan.

Sales, CGS and Gross Profit Forecast

100,000,000
90,000,000
80,000,000
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
-
Year 2024 Year 2025

Sales Costs Groos Profit

year Sales Costs Groos Profit

Year 2024 58,519,630 43,889,722 14,629,907
Year 2025 92,461,015 69,345,761 23,115,254

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 8.2 Profit and Loss Forecast.
The Forecasted Profit and Loss statement makes it very clear which areas will need
attention. Salary and Rent is by far the largest expense the company incurs
(besides cost of goods sold). Management will need to be managed and wage cost
must correlate to sales.

Two Years Profit and Loss Forecast

INCOME 2024 2025
Sales Income
58,519,630 92,461,015
Total Sales Income (OI) 58,519,630 92,461,015
Cost Of Good Sold
Cost Of Good Sold 43,889,722 69,345,761
Total Non-Operating Income 43,889,722 69,345,761
Total INCOME 14,629,908 23,115,254
EXPENSES
Operating Expenses
Salaries, wages and allowances 389,046 459,074
Pension 0 0
Rent 355,804 419,849
Communications 0 0
Insurance 0 0
Repair and maintenance 8,947 10,557
Utility 98,235 115,917
Depreciation 145,768 172,006
Professional Fee 6,586 7,771
Printing and stationery 6,195 7,311
License, municipality and other taxes 14,046 16,574
Travel and transport 0 0
Miscellaneous 11,704 13,811
Other 272,472 321,517
Total Operating Expenses 1,308,803 1,544,387
Total EXPENSES 1,308,803 1,544,387
Net Income Before Taxes 13,321,105 21,570,867
Income Tax 4,662,387 7,549,803

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 NET INCOME 8,658,718 14,021,063
Adjustment to Retained Earnings 8,658,718 14,021,063

8.3 Forecasted Cashflow

The company will generate a net positive cash flow in its first year. Repayment of
debt is a significant factor in the amount of cash that gets paid out. short-term
debt, when we see table the business will have positive cashflow in the coming
years.

Two Years Cash Flow Forecast

Year Year
CASH BALANCE 2024 2025
Cash at Beginning of Period 1,815,355 8,658,718
Cash at End of Period 8,658,718 14,021,063
CASH INFLOWS 2024 2025
Cash from Operations
Receipts sales from Customers 58,519,630 92,461,015
Total Cash from Operations 58,519,630 92,461,015
Cash from Financing
Total Cash from Financing - -
loan 4,900,000 0
Total Cash from Investing 4,900,000 0
Total Cash Inflows 63,419,630 92,461,015
CASH OUTFLOWS 2024 2025
Operations
Cost Of Sales 43,889,722 69,345,761
General Operating Expenses 1,308,803 1,544,387
Income Taxes 2,334,182 3,521,250
Total Outflows from Operations 47,532,707 74,411,398
Repayment of Loans 2,450,000 2,450,000
Dividends Paid
Total Outflows from Financing 2,450,000 2,450,000
Investing
Purchase of Property and Equipment 4,748,934 4,748,934

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 Total Outflows from Investing 4,748,934 4,748,934
Total Cash Outflows 54,731,641 81,610,332
NET CASH FLOW 8,687,989 10,850,682

8.4 Break-even Analysis

The Break-even Analysis has determined approximate break-even sales as shown

below. There will be a constant monitor on this number in an attempt to lower it.
Once again, it is believed that efficiencies, experience, and knowledge will help in
decreasing the break-even number.

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 Break-Even Analysis
Total Selling Price (per unit) 57,074,701
FIXED COSTS
Salaries, wages and allowances 389,046
Pension 0
Rent 355,804
Communications 0
Insurance 0
Repair and maintenance 8,947
Utility 98,235
Depreciation 145,768
Professional Fee 6,586
Printing and stationery 6,195
License, municipality and other taxes 14,046
Travel and transport 0
Miscellaneous 11,704
Other 272,472
Total Fixed Costs 1,308,803
VARIABLE COSTS Per Unit
Variable Costs based on dollar amount per unit
Cost of Goods Sold 42,806,025
Direct Labor
Overhead
Other (specify)
Total 42,806,025
Variable Costs based on percentage per unit
Commissions 0
Other (specify)
Total 0
Total Variable Cost per Unit 47,086,628
Contribution Margin per Unit 9,988,073
Contribution Margin Ratio 0
Break-Even Point
Break-Even Sales 7,478,873

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