Deki Liben Restaurant

Deki Liben
Restaurant

Business Plan

Owner :- Ms. DekimLiben Simpire

Location
Municipality:- Nagele Borena
Kebele :- 03

May, 2024

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TABLE OF CONTENTS
TABLE OF CONTENTS............................................................................ii
Summary of the project..........................................................................iii
1. Introduction...........................................................................................1
1.1 The project Area..............................................................................2
1.1 Location.............................................................................................2
1.2 Objectives and Mission.................................................................2
1.3. Services.............................................................................................3
1.4 Marketing and Demand Assessment.......................................4
2. SWOT-Analysis......................................................................................5
2.1 Strength.............................................................................................5
2.2 Weaknesses......................................................................................6
2.3 Opportunities...................................................................................6
2.4 Threats...............................................................................................7
3. Organizations and Management.....................................................8
4. Finance..................................................................................................10
7 Sustainability and Expansion Strategy........................................15

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Summary of the project

Key Information Highlights

Project Owner Ms. DekimLiben Simpire

Project Title Restaurant
Project Area Negele Borena town, Kebele
03
Cost Of The Project (Loan
2,500,000
Amoount)

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1. Introduction
Currently, commercial business such as hotel with standard
restaurant and beverage service are increasingly becoming one
of the dominant sub sectors of the economy and significantly
contribute to the gross domestic product (GDP) of the country.
The overall development of social and commercial activate in
the country. Existing health services and natural and cultural
tourism resources in the city, on other hands there is not
adequate services of hotel and restaurants, café and juice
services facility in the town laid down bases for this project to
be promoted in the area.
Negele Borena city, the political and commercial powerhouse
of East Borena zone generally and oromia Regional state, is a
thriving restaurant market, both domestically as well as
internationally. As a city of distinct cultural and historical
wealth it represents an important travel destination with a
balanced demand base in terms of shared and relaxation
tourism. Basically, restaurants in Negele Borena benefit from
the very good market characteristics and hence reported
remarkable performance growth during the last decade.
The city also greatly benefits from new source markets, with
strong growth rates in demand, especially from worldwide
tourists that want to visit the Oromia Regional state and their
cultures. This is mainly due to the city being home to different
nations and a lot of recreation areas associated organizations.

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Different meetings, incentives, conventions and events

segment is estimated to remain of significant importance for
tourism to Oromia Regional state indicating great future
opportunities associated with these source markets.
The aim of the Deki Liben Restaurant is basically sharing his
part in accelerating the economic development of the region
even the country. Additionally he also aims to create job
opportunity, minimize poverty, and to get reasonable profit
from the implementation of the project. Then it accelerates
prosperity to the region in particular and to the country as
whole.
In this business plan the objectives of project description
finically analyse the project management operational
procedure and the sustainability has been illustrated.
1.1 The project Area.
1.1 Location
The project area is located in Oromia Regional state Negele
Borena city.
1.2 Objectives and Mission
The main objective of the project is aimed to continue to
provide modern Hotel services that gives services of hotel and
restaurants, café services and juice house services and then
to maximize the return on the invested capital. In addition to
this, other secondary objectives will also be attained. These
are:

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 To establish a modern Hotel services that gives services

of hotel and restaurants and café services rendering
organizations following the existing favourable
investment,
 To create job opportunity for the surrounding population
temporarily & permanently during project building &
after completion commencement of the project.
 To generate income for Government in the form of income
tax payment & VAT.
 To get reasonable amount of profit from the project
 To overcome shortage of modern Hotel in the City.
1.3. Services
The following services are provided by the business:
1. Cafe and restaurant service
The hotel provides full café and restaurant services with
quality and facilitated way. The hotel provides food supply
services with best quality and relatively least cost for
customers.
2. Beverage (different Alcohol and soft drinks)
Out hotel provides Whisky bottles of different type, other
alcohols drinks, Beer and soft drink crates
1.4 Marketing and Demand Assessment.
In the country as a whole and in the Oromia regional state and
the city particularly in that area, market condition is assumed
to have positive impact on building construction works for

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modern hotel. In the City the progress of building modern

Hotel work development in most urban & rural areas are
growing in fast rate. The government has given special
attention for the development of constructions works and
infrastructure development of every sector.
Hence the demand for constructions works services is
increasing very highly; the proposed project will enhance the
intended development of infrastructure and other construction
works. Annually the investor can generate service fee from the
restaurant business at a minimum. The restaurant business
in very highly needed in the city particularly in that area and
in the country as a whole, it is possible to say surely feasible.
It is understated that there will be high demand for services
rendered by the restaurant. Some of the factors that fewer for
the existence of demand are:-
 The site is easily accessible to any vehicles,
 It would give services at reasonable price.
 There are no many modern specialized and modern hotel
service around that area, and… etc.
2. SWOT-Analysis
As a part of the business plan we provide a SWOT analysis in
order to have a better comparison with other hotels and a
better understanding of the whole project.
The main target audience is the business traveller, tourist,
government officials and customers from surrounding that

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area. The hotel will serve breakfast, lunch, dinner and access
a catering service if needed. In addition the hotel gives service
like café, and the like.
2.1 Strength
The new building offers various possibilities to differentiate the
restaurant from its competitors and create a competitive
advantage, as the building itself is also a competitive
advantage.
Since the target customers are business people, tourists,
governmental officials and other customers that come to the
city during different occasion like that of religious conference,
religious festivals and other occasion a contemporary hotel
might be more appealing for the average business customer.
The facility is rather big compared to main competitors in this
area (might also turn in to a weakness therefore it is also
listed under Weaknesses) which offers a higher occupancy and
thus a higher turnover but on the other hand a low occupancy
is costly. Our Restaurant appears as a modern hotel with a
very good price-performance ratio which is a definite strength
in an area where hotels in city. Meaning that people would
seize the opportunity if they could not find a hotel room within
a community.
Parking lots right next to the hotel increase the comfort for
travellers compared to normal hotels and mini restaurants.
Targeting the business traveller, tourists both from domestic

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and abroad, government officials who come to our hotel for

different meetings and other customers as main customer
reduces seasonal effects in occupancy.
2.2 Weaknesses
The concept of this type of restaurant is not new. It does not
create a new market and therefore has to compete with other
hotels and other mini restaurants in the area for customers.
In general, the weakness related with hotel project will be;
 Size of the restaurant might turn into weakness
 Concept is not new and does not stimulate market
growth
2.3 Opportunities
The current government focus and opportunity given for
construction would good opportunity for our project. The
situation is very advantageous to do a restaurant business
with the current government affirmative action’s on building
and the policy on service industry is best of doing our project.
Again there is good opportunity of credit extension for
investment loan by different Banks
Generally our restaurant business will have the following
summarized opportunity;
 Investment loan opportunity by different Banks
 Current government focus on building construction.
 Affirmative action’s on building and the policy on service
industry

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2.4 Threats
The biggest threat is a stagnating or decreasing demand for
restaurant service. Since the competition is already well
established and other hotels are known and well frequented it
might become tough for such a modern restaurant to get
foothold in the industry. Additionally, through the size in
combination with relatively high cost of capital (salary,
infrastructure costs and other costs etc.) in our country it
takes a few years to gain a profit. If due to a bad economic
condition the hotel manages only to establish slowly. These
circumstances can endanger the whole project.
As mentioned the high price level in our country causes
difficulties. High inflation are a problem for business
travellers, governmental officials and other customers to our
hotel services may take in favour of mini restaurants and
other hotels with poor quality but with low price. Tourists
occasionally also have to cancel trips due to bad economic
growth or too high costs.
In conclusion the will be summarized threat by the restaurant
business;
 Stagnating or even decreasing demand
 Bad economic conditions
 High cost of capital in our country
 Reduces number of possible customers
 Strong & well established competition

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3. Organizations and Management

All the activities and duties of the project will be guided
supervised and managed by the professional project manager.
The financial systems and producers will be applied and
checked at every stage of activities by internal auditor monthly
and annually.
The Weekly, monthly, quarterly and yearly progress and
financial as well as inventory report will be compiled by the
project finance administrator and be submitted to the owner of
the project.
The project has to have manager different professionals and
other experiences workers. The total workers accommodation
comprises of permanent and temporary workers of about 40
workers.
The organization structure is designed in such a way that it
can enable to fully undertake the project objectives. It consists
of manager who is accountable to owner of the project, other
professionals and supporting staff. The required manpower,
position and salary are shown in the table below.
Table 1. Manpower Requirement
Monthly
Annual
SN Position No salary in
salary in Birr
Birr
1 Cashier 1 4,000.00 48,000.00
2 Chief 1 4,000.00 48,000.00
3 Cooks 2 3,000.00 72,000.00

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4 Receptionist 1 3,000.00 36,000.00

5 Waitress 2 2,500.00 60,000.00
6 Cleaner 2 2,000.00 48,000.00
7 Coffee makers 1 2,500.00 30,000.00
8 Guards 1 2,000.00 24,000.00
Total 11 23,000.00 366,000.00
4. Finance Analysis
In setting up any business, the amount or cost will depend on
the approach and scale you want to undertake. If you intend
to go big by renting a place, then you would need a good
amount of capital as you would need to ensure that your
employees are well taken care of, and that your facility is
conducive enough for workers to be creative and productive.
This means that the start-up can either be low or high
depending on your goals, vision and aspirations for your
business. The tools and equipment that will be used are
nearly the same cost everywhere, and any difference in prices
would be minimal and can be overlooked.
Deki Liben Restaurant. is a private business that is solely
owned and financed by Deki Liben and her family members.
They do not intend to welcome any external business partner
which is why he has decided to restrict the sourcing of the
start – up capital to 2 major sources.
These are the areas we intend generating our start – up
capital;

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 Generate part of the start – up capital from personal

savings
 Apply for loan from my Bank
we are at the process to obtain a loan 2,500,000 from a
bank.

Manpower requirements and salary

Table 1. Manpower Requirement
Monthly
Annual
SN Position No salary in
salary in Birr
Birr
1 Cashier 1 4,000.00 48,000.00
2 Chief 1 4,000.00 48,000.00
3 Cooks 2 3,000.00 72,000.00
4 Receptionist 1 3,000.00 36,000.00
5 Waitress 2 2,500.00 60,000.00
6 Cleaner 2 2,000.00 48,000.00
7 Coffee makers 1 2,500.00 30,000.00
8 Guards 1 2,000.00 24,000.00
Total 11 23,000.00 366,000.00

 Total 5 Summary of estimated project Revenue

Descriptions of item Project year

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2024 2025 2026

1 Revenue from food sales 12,550,000.00 13,805,000.00 15,185,500.00

Revenue from Beverage
2 1,912,000.00 2,103,200.00 2,313,520.00
sales
Revenue From juice café
3 900,000.00 990,000.00 1,089,000.00
(Coffee & tea)

Total 15,362,000.00 16,898,200.00 18,588,020.00

B. Expenditures
Table 5 Summary of operating cost of the Project

No Descriptions of item Project Year

2024 2025 2026

1 Purchase of Food
materials 7,526,000.00 9,031,200.00 9,934,320.00
2 Cost of purchase of
Beverage 2,338,400.00 2,806,080.00 3,086,688.00
3 Cost of purchase of
Coffee and other hot 695,000.00 834,000.00 917,400.00
drink and Juice
Cost of
sales/services 10,559,400.00 12,671,280.00 13,938,408.00
1 Salary expenses
366,000.00 439,200.00 527,040.00
2 Uniform
30,000.00 36,000.00 43,200.00
3 Utility
60,000.00 72,000.00 86,400.00
4 Repair and
maintenance 50,000.00 60,000.00 72,000.00

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5 Advertising and
promotion 10,000.00 12,000.00 14,400.00
10 Employee Benefits
28,000.00 33,600.00 40,320.00
12 Miscellaneous
80,000.00 96,000.00 115,200.00
Total operating cost
624,000.00 748,800.00 898,560.00

C. Depreciation value of fixed asset

By assuming the project’s fixed Asset will be depreciated at 5%
yearly and its useful life is 50 years the following will be
depreciation cost of five years.
N Description Total Life Dep Yearly
o price time (%) depreciation
/years/
1 Total fixed 4,000,000 50 5% 200,000
asset
Total 4,000,000

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D. Income statement projections

Projected Income statement
For the year 2024 E.C – 2026 G.C
Project
Description year
2025 2026 2027
Revenues
12,550,000.0 13,805,000.0 15,185,500.0
Revenue from Food
0 0 0
Revenue Beverage 1,912,000.00 2,103,200.00 2,313,520.00
Revenue juice house
900,000.00 990,000.00 1,089,000.00
and café
15,362,000. 16,898,200. 18,588,020.
Total Revenue
00 00 00
Less Expenses
Cost of product/services
sold

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10,559,400.0 12,671,280.0 13,938,408.0

Cost of sales/services
0 0 0
4,802,600.0 4,226,920.0 4,649,612.0
Gross profit
0 0 0
Less operating
624,000.00 748,800.00 898,560.00
expenses
Less Depreciation
200,000.00 200,000.00 200,000.00
Expenses
EBIT 3,978,600.00 3,278,120.00 3,551,052.00
236,2 236,2 236,2
Less Interest expense
48.51 48.51 48.51
3,742,351.4 3,041,871.4 3,314,803.4
EBT
9 9 9
Less Income tax (30%) 1,291,823.02 1,046,655.02 1,142,181.22
2,450,528.4 1,995,216.4 2,172,622.2
Profit after tax
7 7 7
E. Cash flow projections
Projected Cash flows
For the year 2024 E.C-2026 E.C
Project Life years
Description
2024 2025 2026
INFLOW

Net sales revenue 4,802,600.00 4,226,920.00 4,649,612.00

4,802,600.0 4,226,920.0
TOTAL INFLOWS 4,649,612.00
0 0

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OUTFLOWS

Operating cost 624,000.00 748,800.00 898,560.00

236,248 236,248
Interest expense 236,248.51
.51 .51
Income tax 1,291,823.02 1,046,655.02 1,142,181.22
TOTAL 2,152,071.5 2,031,703.5
2,276,989.73
OUTFLOWS 3 3
2,650,528.4 2,195,216.4
NET CASH FLOW 2,372,622.27
7 7

F. Long term credit reimbursement schedule

5. Sustainability and Expansion Strategy

The future of a business lies in the numbers of loyal
customers that they have the capacity and competence of the
employees, their investment strategy and the business
structure. If all of these factors are missing from a business
(company), then it won’t be too long before the business close
shop.

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One of our major goals of starting Deki Liben Restaurant is to

build a business that will survive off its own cash flow
without the need for injecting finance from external sources
once the business is officially running.
We know that one of the ways of gaining approval and
winning customers over is to retail our wide range of goods
from different brands a little bit cheaper than what is
obtainable in the market and also to ensures that our
finished diamond can favorably compete with finished
diamonds from any part of the world and we are well
prepared to survive on lower profit margin for a while.
Deki Liben Restaurant will make sure that the right
foundation, structures and processes are put in place to
ensure that our staff welfare is well taken of. Our company’s
culture is designed to drive our business to greater heights
and training and retraining of our workforce is at the top
burner.

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