Entrepreneurship and Enterpris development

Assignment 01

Course Instructor: Dr. Bezuye (Phd)

Name of Business: Cultural home-style restaurant (CHR)

Your university/college_____________________________

Owners’ Names_________________________________________

Phone_____________, e-mail________________

Date_________

Addis Ababa, ETHIOPIA

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 1. COMPANY’S MAIN OBJECTIVE (WHY DOES THE COMPANY EXIST?)

The objective of this restaurant is:

 To be premier home-style restaurant in Kulubi town
 To provide quality meals at reasonable prices with exemplary services
 to satisfy the need for restaurant services mainly for heavy truck drivers and customers
of dry port by providing preferable standard services around Kullubi restaurant and
maintaining drinkers and demanders:-

2. FINANCIAL GOALS
2.1. To have a sales revenue amounting to ETB 1,232,209, by 30/3_/2024.
2.2. To obtain a profit margin of 22.2%.
2.3. To obtain a profit per business partner of ETB 253,698.2.

3. DESCRIPTION OF THE PRODUCT OR SERVICE

 Shiro, keywet, tibs, kitfo,

 Beyaynet, agelgil, along with classic hamburgers and generous food for all on the
menu.

4. IDENTIFICATION OF THE CUSTOMERS

 The cultural home-style restaurant (CHR) will be located in Kullubi town, on the road
to Harar and Dire Dawa city in east of Addis Ababa. The restaurant is located in a
major trade area which is host different drivers.
 Local customers
 During holiday
 Has an estimated total population of 35,000.

5. IDENTIFICATION OF THE COMPETITION

LOCAL COMPETITORS within a city are as follows:-

 IMAN RESTAURANT- This is a full service family restaurant established in 1999.The

restaurant run as a sole proprietorship, has 5 employees and generates Br. 180,000 annual
revenue. Price of services offered are higher than the price we set in advance for our
products and range from 15-300 birr entrees.
 TAYE RESTAURANT- This is a restaurant offering standard fare and generates Br130,
000 revenue annually. Entrees range from br. 50 - br.250.
 SUMEYA RESTAURANT-This is a sole proprietorship also offering standard fare. it
also used as a bar and as a club. Entrees range from br. 100-br.300.

Strengths/weaknesses of the competition

Strengths

 They are in market

 Familiar with customers
 have enough capital to marginalize market

Weaknesses:

 They are not managed by educated person

6. ADVANTAGES AND DISADVANTAGES OF THE PRODUCT AND YOUR

COMPANY

Price: moderated when compared with lefts

Quality: more quality than others

Payment Methods: Cash/ account for contract signed

Customer Service: give more value for customers

7. MESSAGE TO BE COMMUNICATED TO THE CUSTOMERS

 we serve our customers with best quality of our products

Medias to be used:

 phone
 social media

8. MARKETING AND MEANS OF COMMERCIALIZATION

 Face to face
 time 6:00 am to 5:00 pm

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 9. Production Cost Estimation

Graphic logo and name creation…………………………1,000

Permits + lease rent expense …………………………………1,200

Contingency…………………………………………………..10,000

Building improvement………………………………………..30,000

Outdoor sign……………………………………………………3,000

Maintenance expense…………………………………………..120,000

Advertisement expense ………………………………………..14,800

Total start-up expense Br. 180,000

10. Organizational and Human Resource Structure

Organizational structure

Human Resource Structure

S.No. Responsibilities Educational Experience Salary/ Annual
Status month salary (Birr)
(Birr)

1 Employee salary 15000

2 Other costs of 260000

production

3 Total 275000

11. Total Cost projection

Items Costs/expense (Birr)

Merchandize or raw material and Machinery or other 180,000

related asset costs

Production costs (salary, fuel, packaging, promotion) 275,000

Total 455,000

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 12. Sales forecast

I expect a 5% increase in sales revenues annually over the next three (3) years. The growth is
adjusted for inflation. With the addition of catering revenues, sales will increase by 12.93%
in year 2 and 6.04% in year 3.

The following table shows expected sales forecast for the next 3 years:
Annual sales forecast
Sales year 1 year 2 year 3
Food & beverage revenue…..1,038,300 1,090,215 1,144,726
Additional revenue…………..73,054 82,500 87,483
Total sale…………………..1,070,300 1,172,715 1,232,209

13. Financial Forecast

Income (Profit And Loss) Statement Forecast

Year 1 year 2 year 3

Sales 1,038,300 1,090,215 1,144,726 Less:

cost of goods sold 536,700 637,500 617,900

Gross profit 501,600 412,715 526,286

Less: operating expenses

Wage expenses 15,000 15,000 15,000

Rent expense (land lease) 30,000 30,000 30,000

Bad debt expense 2,000 700 7,000

Credit card fee 400 400 400

Advertizing expense 14,800 - -

Depreciation exp on equip 20,000 20,000 20,000

Misc. expenses 17,800 2,000 27,000

Permits 80,000 22,000 65,000

Total operating expense 180,000 90,100 164,400

Operating income 321,600 322,612 362,426

LESS: income tax (30%) 96,480 96,783.6 108,727.8

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NET INCOME 225,120 225,828.4 253,698.2

Cash Flow Statement

year 1 year 2 year

From operating activity

Cash receipt

Sales……………………….…. ….1036,300 1,078,215 1,144,726

Cash collected from receivables…….0 2,300 12,000

Sales tax received (vat)……………..155,745 163,532.25 171,708.9

Cash Payment for expense& purchase (980,000) ( 921,000) (842,000)

Net Cash from operation…………… 212,045 323,,047.25 486,434.9

From investing activities

Purchase building…………………..30,000 0 0

Purchase equipment………………...113,000 118,000 125,000

Purchase fixtures …………………83,000 79,000 67,000

Other minor purchases……………200,000 - -

Net from investing activities (426,000) (97,000) (192,000)

From financing activities

Initial investment 255,000 - -

Borrowing …………………………200,000 - -

Net from financing activities 455,000 - -

Total cash flow…………………… 241,045 226,047.25 294,434.9

Add: beginning cash balance………….0 241,045 467,092.25

ENDING CASH BALANCE……….241,045 467,092.25 761,527.15

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 12. Balance Sheet

ASSET

Cash…………………… ……..241,045

A/receivable ………………......2,300

Supplies..……………………..26,000

Equipment……………………13,000

Building……………………….30,000

Fixture………………………....83,000

Other restaurant assets………...59,655

TOTAL ASSET 455,000

LIABLITIES AND EQUIRIES

Notes payable…………………………………………………..200,000

Capital (contributed)………........................................................255,000

TOTAL LIABLITY AND EQUITY……………………………455,00

Total Asset= Liability + Owners Equity

13. FINANCIAL LOAN

Owner`s and other investment…………………255,000

Bank loan………………………………………200,000

Other investment………………………………..0

Total source of fund Br. 455,000

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Appendix

Here below are the documents that support the related information in this business plan:

1.
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2.
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3.
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