WOLLEGA

UNIVERSITY

COLLEGE OF ENGINEERING
AND TECHNOLOGY
DEPARTMENT OF COMPUTER SCIENCE
PROJECT ON ENTREPRENEURSHIP AND
SMALL BUSINESS PLAN
TITLE: KUSH CAFÉ BUSINESS PLAN
GROUP MEMBER…………………………
ID_NO
1. BIKILA
HABTAMU…………………….....1004757
2. BARO GEMECHU…………………..….…
1000584
3. GALANA OLANI……………………….
….1000991
4. ABDU YIMAM………………………..
….1000531
 Table of Contents
5. BIKILTU DEREJE……………………...
….1004759
SUBMITTED
TO:DARARA
MAR, 2020
NEKEMT,ETHIOPIA

KUSH CAFÉ BUSINESS PLAN

 Table of Contents
Contents

Introductory Page__________________________________1
Executive Summary_________________________________2
Description of Venture_______________________________3
Production Plan____________________________________4
Marketing Plan_____________________________________5
Organizational Plan________________________________1
Assesment of Risks________________________________1
Financial Plan_____________________________________1
Appendix_________________________________________1

KUSH CAFÉ BUSINESS PLAN

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1.1 NAME AND ADDRESS OF THE BUSINESS

Business Name : Kush Café.

Address : Kush Café is Located in Oromia National Regional State Ghimbi Zone which is
Located at 441 Km West of Addis Ababa and The Town is accessible to Transport and the site
is just Cleared nearer to the town, at Special area called Stadium.

1.2 NAME AND ADDRESS OF PRINCIPALS

Manager : Mr. Tadele Dereje and His Friends PLC

Address : Ghimbi Zone.

1.3 NATURE OF BUSINESS

As his name it’s to serve the community by bringing what they really want in the way of
life of survival(Retail Industry).

1.4 STATEMENT OF FINANCING NEEDED

Initial financing requested is 150,000 birr loan to be paid off over 2 years. This debt will cover
buy for Different Machines, House Rental, Desk, Wi-Fi, Cooking room, Different raw
materials, and Employer’s salary and remaining will be financed by the owner. Financing
Needed is the amount of money needed to open/keep business includes account
Received, labour cost,promotion and house rent.

1.5 STATEMENT OF CONFIDENTIALITY OF REPORT

The Owner’s would like to announce to all that this business plan which is the result of all
partners effort for this reason that should not be transferred or copied to another individual or
company. If anyone fails to does this owner have responsibility to the in the individual or the
company to bring them in front of the law ‘all right reserved’ It is believed that various kinds
run in each and every aspect our country or other side of the world and this comes with
interaction of countries with other countries in all aspects of their socio economic and cultural
dogmatism with the beginning of stationery globalization.

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2.EXECUTIVE SUMMARY
Kush Cafe will be a one of a kind coffee house / café located in Ghimbi town. The café will
offer a lot of seats and is located in the middle of Ghimbi around Stadium where many man
can get café services. The area is known for its huge number of social who actually demand
light foods and hot drinks.

The Kush Cafe, aptly named for the aromatic café items tea, coffee, milk and related hot
drinks. It also offers light meals like sandwich, bread, egg sauce dishes and local shiro. The
café items will fill the cup, fills the void of original cafes in the market area, stands out from
its corporate peers with their fast food concepts and fast services. The Kush Cafe is the
alternative to fast food/commercial/coffee shops and offers a much calmer, civilized gourmet
coffee experience. There are no televisions in the café, the background music is subtle and
work from local artists will hang on the walls.

The café is well appointed with overstuffed leather chairs and sofas in a library like setting.
The café is reminiscent of times gone by – yet is cutting edge technologically with WIFI and
state of the art espresso machines.

The Kush Cafe measures its financial success in terms of increased market share and in
earnings. With a total local market of 150,000 ETB this is a tremendous opportunity! The keys
to success will be the ability to offer quality gourmet coffees, take advantage of its small size,
and reliance on an outstanding barista staff. In order to achieve these goals, the café will offer
some the area’s finest gourmet beans from local distributors. Because of its small size, the café
can enjoy larger margins in the form of lower overhead. The cafe will hand select baristas and
offer salaries comparable to the chains. In turn the baristas will be trained to cross-sell, and sell
the higher margin products.

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3.Description of Venture
3.1 PRODUCTS and service
The Kush Cafe’s primary offering is roasted coffee, special tea and local milk brewed coffee.
Complementing the coffee will be a smoothie line including wild berry, strawberry, peach,
mango and lemonade. Rounding out the simple menu line will be pastries obtained with an
outside supplier, freshly made and delivered daily. The pastry offerings may vary with
seasonality but the primary line will muffins, breads, cookies, scones, and rolls.
3.2 SIZE OF BUSINESS
The size of Kush Cafe Business is depending on the size of the Local in which it will operate.
The industry is operating all over the world where there are peoples in need for café service.
We believe the size of Kush Cafe depends on the number of peoples in need for cafe services
over the world. And also enough size to accommodate many customers.

3.3 OFFICE EQUIPMENT AND PERSONNEL

The Kush Cafe will have seating for 40 patrons. The rent is ETB 2,075 a month, with a two-
five-year lease available. The site consists of 1500 square feet of leased space consisting of a
dining room, a coffee bar, two restrooms, and a storage room in back. To be used as a
restaurant, this storefront needs to be plumbed and wired appropriately. Painting, new floors,
and countertops are also needed. A custom coffee bar needs to be built. With materials bought
on sale and volunteer labor, the cost to renovate will be ETB71,725. The coffeehouse
equipment will consist of two commercial espresso machines, air ports and urns, a commercial
blender, commercial brewer, top loading coffee bins, barista syrups, cold drink dispenser,
frothing equipment, a commercial refrigerator, microwave and stainless steel prep bar. The
cost for the equipment is ETB38, 275. The furniture will consist of leather couches, and chairs
(purchased at auction), coffee tables, bookcases, and window treatment. The artwork will
come from local artists and will be sold on a consignment basis. The books were secured via
donations. Total cost to furnish is ETB14, 000. Other startup expenses will be dishes,
furniture, rent deposit, and marketing.

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3.4 BACKGROUND OF ENTREPRENEUR

The Kush Cafe will be Managed 100% by Tadele Dareje. He was a graduated from Wollega
University with Computer Science department. During high school he worked as a waiter in a
local hospital coffee shop that purchased its beans from a local roaster. In addition to being an avid
coffee drinker himself, this job allowed him to learn about the business first-hand. In college,
Tadele worked in a campus coffeehouse for three years, eventually rising to the position of
assistant manager. Following graduation, Tadele secured a business development position for
regional restaurant chain, which provided additional first-hand exposure to the food and beverage
industry—especially the steps involved in establishing new locations.

4. PRODUCTION PLAN
4.1 MANUFACTURING PROCESS
• Unique products (specialized roasts, local ingredients, locally themed or named drinks,
custom drinks by the’ star’ barista, etc.)
• Games, puzzles, mind benders and other activities that encourage customers to linger over their
coffee.
• Hosting or sponsoring local events (entertainment, readings, book clubs, etc.)
• Using technology to creatively compete in marketing with the big chains — services like
Four Square, Yelp, and Google Places can increase visibility in the local market.
• Delivering amazing service from knowledgeable baristas — spend lots of time training staff
and utilize online services like the Wollega Coffee & Barista School.
• Selling coffee-related items (and track down any co-marketing opportunities with a local
community college or other student-related group in the area.

4.2 PHYSICAL PLANT

Most adult coffee drinkers said their lifelong habit began during their teenage years. In fact,
54% said they began drinking coffee between 13 and 19. Another 22% reported their coffee

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cravings started between the ages of 20 and 24. This means that 76% of adult coffee drinkers
began drinking coffee by the time they were 24. So, despite the large amount of marketing and
advertising directed at the younger age groups, savvy coffee shop owners will not forget to
cater
some of their offerings to the adult and senior market. (National Coffee Drinking Study).
The Kush Cafe will offer a unique experience for coffee aficionado by offering a quiet and
cozy yet sophisticated cafe and offer a sense of refinement and peace in an otherwise hectic
and fast paced world. While other coffee shops cater to convenience with drive through or
loud music venues late into the night, the Kush Cafe will stand apart from its competitors with
its quiet yet soothing ambience, capturing a truly unique (and much needed) market niche.

4.3 MACHINERY AND EQUIPMENT

Within 5 miles of the subject, are 37 businesses involved in the coffee industry, including
chains, restaurants, and tea houses reporting annual revenues in excess of 150,000 ETB. Of
these 37 businesses, 20 are Starbucks coffee shops capturing 800,000 ETB in revenues or 66%
of the market share. An additional 8 coffee houses are franchises capturing 18,000 ETB
represent 18% of the market share. The comparables – those closely held coffee shops/cafes
that will compete for the subject’s business represent 200,000 ETB in annual revenues or 15%
of the total market.
The Kush Cafe is targeting three primary groups residing in their direct marketing area. These
individuals prefer unique venues and avoid the big chains and franchises. They prefer their
local neighborhood and will support local businesses if the business warrants.

4.4 NAMES OF SUPPLIER OF RAW MATERIALS

The Kush Cafe has negotiated supplier agreements with several local food-service wholesalers
and coffee wholesalers in the Gafare area that have a reputation for quality and reliability:
• Mean Beans Coffee Roasters

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• Bedele Brewers
• Healthy Harvest Bread Co.
In the event that one of the aforementioned specialty suppliers cannot meet their needs, the
following national suppliers can both provide all of the food-service products that they require.
In addition, the following wholesalers will supply the café with general restaurant supplies:
• Lawrence Food Products Corp.
• Gerry Food Supply Inc.

5. MARKETING PLAN
5.1 PRICING
Our prices will be slightly higher than those of our local competitors, mainly for the reason
that we strive for quality in our products. This goes hand in hand with the market that we plan
to target that of the upper middle class, and our higher income consumers. The Kush Cafe
primarily utilizes competition based pricing. The café does not utilize coupons and discounts
(other than opening promotion) because they believe that the most valuable customer
demographic of daily coffee consumers is not influenced by discount programs or coupons.

5.2 DISTRIBUTION
Our primary way of distributing our products would be through our store. Hopefully in the
future we will be able to offer catering services, but during start up we will work out of our
own facilities. Customers will be able to walk in and use our services and goods, as well as set
and/or send orders by telephone, or through a direct in-store appointment.

5.3 PROMOTION
Cafe will implement a pull strategy in order to build customer awareness and demand. Initially
our Cafe has budgeted five thousand birr for promotional efforts which will include
advertising with service magazines and in-house promotion such as offering customers free
services. In addition to this following are also ways advertising our services:

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 Promoting by giving free service for customers

 Advertising through media
 Advertising through magazine

We hope that our idea to sell coffee and the like for half price will promote our products,
although we want to be known as a cafe that sells our fresh tea, bread and pastries.

5.4 PRODUCTION FORECAST

Our Production Forecast shows modest estimates for the first year of operations beginning in
January of 2020 E.C.  After establishing Kush 'the' place for sweets and celebrations, we
project aggressive sales increases for the following years.

1. Year-one revenue        
expectancy

  Soft Drink Coffee and Foods others

Tea

Number of units sold 2,8000 1,2000 1,600 32,000

annually

Average sales price per Br 10.00 Br 2.00 Br 40.00 Br 3.00

unit

Annual revenue per Br 280,000 Br 24,000 Br 64,000 Br 96,000

product

Total year 1 revenue Br496,000 

2. Year 1 cost of        
goods sold

  Soft Drink Coffee and Tea Foods Others

Expected gross 50.00% 40.00% 25.00% 50.00%

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margin per pro

Duct

Annual cost of Br140,000 Br 38,400 Br 16,000 Br 28,000

goods sold per
product

Total year 1 cost of goods sold Br 222,400  

3. Annual maintenance, repair, and overhaul  

Factor (%) on capital equipment 15%

4. Number of years for straight-line depreciation 5

5. If long-term debt is being used to finance operations, Br 80,000

enter the total loan value.

5.5 CONTROLS

Kush is a limited liability partnership engaged in the Cafe business. It is equally owned by 10
partners and managed by one. The business is controlled and managed by Partner. Tadele who
is going to be graduated in Economics in Wollega University and has extensive experience in
sales, marketing, and management, The owners has the capacity to utilize traditional and more
advanced Cafe technologies to produce locally-adapted technologies. The partnership intends
to hire two full-time service to handle customer service and day to day operations.

6. ORGANIZATIONAL PLAN
6.1 FORM OF OWNERSHIP
The kush café will be formed as an S-corporation wholly Managered by Mr. Tadele.

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Manager

KEY WORKERS

CASHER AUDITOR

USHER BARISTA

OPERATOR

Figure 1.KUSH Cafe organizational structure.

6.2 IDENTIFICATION OF PARTNERS AND PRINCIPAL SHARE HOLDERS

Kush will be a limited liability partnership between Tadele and his Friends, who will also act
as operators. All partners will share equal ownership and income sharing of the company.
We will require 150,000 ETB for start-up cost, and from which 80,000 will be placed fully on
bank long term loan, but we predict that the debt will be paid after two years. In the beginning

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we will only need 5 minimum-wage workers aside from the all us participating in the business
to run the cafe but more may be added as finances allow it and demand requires it.

6.3 AUTHORITY OF PARTNERS

Most partners has extensive experience in sales, marketing, finance, accounting,

administration and management. As the personnel plan shows, Kush expects to make
significant investments in sales, sales support, and product development personnel.

6.4 MANAGEMENT TEAM BACKGROUND

The Kush cafe will rely on its POS (Point of Sale) system to generate daily accounting and
cost activity reports. Mr. Tadele will supply these to an outside bookkeeper for preparation of
annual income taxes.

6.5 ROLES AND RESPONSIBILITY OF MEMBERS OF ORGANIZATION

Initially the café will hire 1 manager,1 casher,1 Auditor,1 Operator, 6 baristas, and 2 part time
servers. In Year 2, the café plans to hire 1 additional full time barista.

MR. TADELE FIROM ABEBE HAWI, BIKILTU BADA

SA SA EBISE
AYANTU,SARA
DAWIT
RAHEL,METI
Manager Casher Auditor Barista Operato Par-
r time

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7 ASSESSMENT OF RISKS
7.1 EVALUATION OF WEAKNESS OF BUSINESS
 Franchises are the easiest way and often the safest conduit to start a café; the café will
not have the backing of one of these established entities.
 The Kush Cafe has a minimal budget and is competing against larger and more
established coffeehouses for market share.
 Start up costs are only estimates
 Funding a small business could be difficult
 Experience in marketing our product is minimal
 Lack of brand relation as Cafe start up business
 Limited marketing budget available to create awareness

7.2 NEW TECHNOLOGIES

In the future we intend to adapt through marketing and technology to sustain our modern edge
to be as customer-friendly as possible and provide the best products in our field. We also plan
to continue to invest in our community through partnerships with other businesses and non
profit organizations and after five years we would hope to set up similar operation in another
area

7.3 CONTINGENCIES PLAN

Expected of risk to the business may be loss of income from expired and store during
operation may happen in the future, hence no one is certain about future, the other expected
loss is attributed to fluctuation of market price (devaluation inflation deflation)
The business also don’t use advanced technology whenever there appropriate technology that
with go operation, is ready.

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8. FINANCIAL PLAN
8.1 PRO FORMA INCOME STATEMENT
The management of our business forecast:
Annual revenue from sales of cafe………...........……120,000 ETB
Revenue from utility service……………………….…..…….30,000 ETB
Total expected revenue………………………………………150,000 ETB

8.2 CASH FLOW PROJECTIONS

Cash flow is most important financial statement for small business and it’s actually quite
simple to develop. It use all the account found on our income statement but take out any non-
cash item such as depreciation, add any capital expenditure such as buying new equipment at
the business start-up and add any capital received from financing.

No Item Cost
1 Labour cost 37,000
2 Utility 33,000
3 Promotion 5,000
4 House rent 1,000
5 Miscellaneous expense 5,000
6 Total 80,000
7 Tax 15%

Item real Forecast real

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1.intial cash 500,000 200,000

2.Inflow
2.1 sales 0 180,000
2.2other 0 80,000
2. total inflow 0 270,000
m3.outflow
3.1 labour
3.2 promotion
3.3 rent
3.4 utility
3.5 other
3.Total out flow 377240 250,000
4.net flow return -377240 10,000
5.Final cash flow 123770 210,0000

8.3 PRO FORMA BALANCE SHEET

A balance sheet shows the position of an organization. The balance sheet of Kush Cafe is
described below as follows:

ASSETS
CASH…………………………………………..120,000
SUPPLIES……………………………………..10,000
IVENTORY…………………………………….20,000
TOTAL CURRENT ASSET………………………….237, 000
LONG TERM ASSETS
EQUIPMENT……………………………………………..200,000
TOTAL ASSET............................................................200,000
LIABILTY AND OWNER EQUITY

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LONG TERM LIABILTY ..................................................150,000

KUSH’S CAPITAL .....................................................350,000
TOTAL LIABILITY AND AWNERS EQUITY.......................500,000

8.4 BREAK EVEN ANALYSIS

Break even is useful tool in business analysis. The breakeven point occurs when total revenue
is equal to total cost .Kush’s Break-even Analysis is based on the average of the first-year
figures for total sales by units, and by operating expenses. These are presented as per-unit
revenue, per-unit cost, and fixed costs. These conservative assumptions make for a more
accurate estimate of real risk. Kush should break even by the second year of its operation as it
steadily increases its sales.

Breakeven point=total fixed cost divided by weighted average contribution margin

The total no of All sold in the first year

2800+1200+1600+28,000=33,600

Weighted average contribution margin =wb1cmb1+wb2cmb2+wb3cmb3+wb4cmb4

2800/33600*50+1200/33600*32+1600/33600*10+28000/33600*1

4.166+1.142+0.4762+0.8333=6.6

BEP quantity=FC/WACM=22,500/6.6=34,090 All

All 1 2 3 4

No be sold 2840 1217 1623 28,408

Selling 100 80 40 2
price

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Sales 284,000 97,360 64,930 56,816

Total sales=503,106 Birr

8.5 SOURCE AND APPLICATION OF FUNDS

SOURCE AND APPLICATION OF FUNDS

OWNER’S
30,000
PARTNERS
120,000

TOTAL SOURCE OF FUNDS

150,000
APPLICATION OF FUNDS
FIXED ASSETS
125,000
OPERATING CAPITAL
25,000
TOTAL APPLICATIONS OF FUNDS
150,000

9. APPENDIX
9.1 LETTERS
To write this business plan document we use only the following supporting documents:
1. The “employee’s benefit business plan” from internet.
2. The entrepreneurship hand out.
3. Previous business plan workers from documentation.
9.2 MARKET RESEARCH DATA

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During the current period of strong economic growth, Northwind Traders can capitalize on the
many significant opportunities in the travel industry.
Some interesting research about our research is that we dedicated to serve our community.
Our size of market for product and service is that it’s enough when we compare to others
market.
Customer Research: As we Interview some clients from that area we got suggestions like
That place is the right place to open café.

Competitor Research: By Using their weakness we can overcome some their weakness by
improving them to social. Our competitive edge will be in attracting and retaining our
customers with the most highly trained and well-informed individuals we can recruit

9.3 LEASES AND CONTRACTS

First, we have a two-year agency agreement with Mean Beans Coffee Roasters ,Bedele
Brewers
,Healthy Harvest Bread Co, which gives us access to all their existing raw products as well as
any new ones. This contract is dependent on Kush Café’s achieving sales of at least 250 raw
packages a year. We intend to Negotiate similar agreements with future suppliers, although
sales targets with them will be lower to reflect their relative market position.

9.4 PRICE LISTS FROM SUPPLIERS

Price Lists are depending on the Agreement we deals with them .
Price Lists from Suppliers : Mean Beans Coffee Roasters.
Cost :30,000
Type Of Cover :Rice, Beans and other raw materials.
Price Lists from Suppliers : Bedele Brewers.
Cost :10,000
Type Of Cover :Brewers, soft drinks like pepsi, coca, mirinda.

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