Business Plan On

Wholesale Trade of Baletina Products

Owner of the Business

Mis. Shewaye Debele Korma

Addis Ababa

April, 2024
Table of Contents
1. Executive Summery.................................................................................................................................................1
2. Background of the company and Location.........................................................................................................3
2.1 Business Description.........................................................................................................................................4
2.2 Mission, Vision and Objective of the Business.................................................................................................6
3. Organization and Management plan......................................................................................................................6
3.1Training Requirements:.....................................................................................................................................7
4. Marketing Plan........................................................................................................................................................7
4.1. Market Trends..................................................................................................................................................7
4.2 Marketing strategy............................................................................................................................................8
4.3 Our Target Market............................................................................................................................................8
4.4 SWOT Analysis.................................................................................................................................................. 9
4.4 Pricing..............................................................................................................................................................10
4.5 Competitors analysis.......................................................................................................................................10
4.6 Advertising & sales..........................................................................................................................................10
4.7. Sales forecast assumptions............................................................................................................................11
5. Product and Service Plan.......................................................................................................................................11
5.2 Cost and Selling price of The Products............................................................................................................13
5.3. The workforce................................................................................................................................................14
5.4 Delivery methods of product to the customers.............................................................................................14
5.5 Capacity utilization plan;................................................................................................................................14
5.6 Suppliers..........................................................................................................................................................14
5.7 Stock Management System............................................................................................................................15
6. Financial Plan.........................................................................................................................................................15
6.1 Credit Information with Bank.........................................................................................................................15
6.2 Working Capital Requirement........................................................................................................................16
6.3 Loam Amortization Schedule...........................................................................................................................19
6.4 Collateral Offered............................................................................................................................................19
6.5 Financial Projection......................................................................................................................................... 20
6.5.1 Sales forecast and assumptions................................................................................................................20
6.5.2 Projected Profit and Loss Statement.........................................................................................................20
6.5.3 Projected Cash flow Statement................................................................................................................22
6.5.4 Projected Balance sheet...........................................................................................................................23
6.5.5 Financial Analysis.....................................................................................................................................24
1. Executive Summery

Business Name Shewaye Debele Korma Wholesales Trade of Baletina Products

Business owner Shewaye Debele Korma

Type of Establishment Medium scale Wholesales Trade of Baletina Products

Nationality Ethiopian

Legal form Sole ownership

location Addis Ababa

Service Type Wholesales Trade of Baletina Products

Target Market Households, Hotel and restaurant, individuals, University Etc.

Working Capital Requirement 8,000,000 Birr

Investment capital and sources 8.1 million Birr of total investment 8 million from long term bank
of Financial loan & the remaining finance by owners’ equity.

Financial viability
The project is highly attractive with positive cash flow.
The need for business plan in our business dealing is becoming very imperative in today’s
dynamic and complex marketplace. As everyone knows, business plan is one of the integral
steps in fulfilling one’s business targets. Accordingly, this plan is developed with the intent
of ensuring effective preparation for the implementation and positioning of our programs
and allied activities that best achieve our long term and short-term goals. It will assist our
management team in setting the long-term directions and policies of our company and in
making decisions on short term priorities and resource allocations. It will also assist to
develop and implement programs by providing guidance for multiyear program plans and
budgets.

Thus, this business plan was created with the goal of directing our services. Shewaye Debele
Korma was founded and began operations in 2010 from Oromia regional state, offering
Wholesales Trade of Baletina Products including Supplying and sales of all Cereals such as
wheat, barley and oats, species, red peppers, coffee pulse such as lentils beans, peas and
vetch. The company sell the products in two ways such as unprepared and delicatessen in
the form of flour such as red pepper flour, peas flour, beans flour, oats flour. Wheat’s flour,
etc and the company also supplies food products like food oil, pasta, macaroni, rice etc to
customers from the Oromia region Gebere gurcha area and other parts of the country,
particularly to individual’s, households, hotel and restaurant and Universities, and
Government organizations etc.

In addition, the company mainly distribute its baletena products to customers by uses its
own Delphine vehicles.

Our Company mainly provide first grade quality baletina products to Various government
university and Government organization in two ways such as unprepared and delicatessen
in the form of flour such as red pepper flour, peas flour, beans flour, oats flour. Wheat’s
flour beside this the company has contractual agreement to supply baletena products
especially red pepper flour, peas flour to Fitche university.

The Company has business license with Commercial registration number

ORO/NSH/KW/1/0000577/2010 with initial paid-up capital of Birr 1,500,000 issued by
Oromia Regional Administration Trade Bureau Gebere Guracha-City which was Renewal on
2016 E.C. and Tin no 0015097450.
The Wholesales Trade of Baletina Products business is highly competitive. Each business
within this field has high capital costs, low margins, and a high intensity of competition, but
thanks to the increase in population and high demand in Ethiopia, which drives the need and
demand of high-quality Baletina Products.

The company usually Purchase Baletina Products materials for resells using its own
resource, and it is known that the price of these Baletina Products has increased
significantly. However, recently the company competed with different customers and
universitys, so it is necessary to purchase more stock item in order to deliver the products to
the customers in a timely manner It is necessary to get a loan from the bank to overcome
this lack of purchase and sessional cash shortage.

The Company is planning to increasing sales income and Improving profitability of the
business, the company requires additional working capital financial resources for covering
its Purchase of Stock and operational costs and the plan indicate that working capital loan
from Leander institution will be obtained in order to avoid financial strain at the beginning
of the 2016 E.C. fiscal year in order to run at the expected level.

The Strategy indicated that the Company needs to invest a total of ETB 8.1 million covering
its operational costs, of which ETB 8 million obtained from bank credit facility that will be
fully settled in 4 years at an estimated interest rate of 15.5%. and the remaining finance
covered by owners’ equity. The profit of the company used to pay back the loan

For this loan, the property provided as a collateral is a Building which it worth 5 million in
the current market and this lending option will be extremely helpful to us in achieving our
goals as a company.

Beside to this, the promoter believes the loan will strengthen the relationship between the
investor and the bank. in addition to this loans and advances to various sectors of the
economy on the strength of viability and assessment of concentration risk will increase the
success of the business.
The business is financially viable with an average yearly sales growth of 35% with 25% profit
margin and Positive cash inflow over the next few years,
The Business also will create employment Advantage and will create backward linkage with
suppliers and forward linkage with the sub sectors and generate income for the
Government in terms of tax revenue and payroll tax.

2. Background of the company and Location

Shewaye Debele Korma was established to engage in Wholesales Trade of Baletina Products
business and the entity has received Principal registration No.
ORO/NSH/KW/1/0000577/2010, Oromia Regional Administration Trade Bureau Gebere
Guracha-City as at 2010 EC and with paid up capital of birr 1,500,000 and registered by the
concerned government organ to undertake domestic business in Ethiopia. It is registered in
Guracha-City and House No 909 It also received Tax Payers Registration Certificate No.
0015097450.

The Business is the brainchild of Shewaye Debele Korma, an experienced entrepreneur with
a proven track record in the Baletina Products business. Shewaye Debele Korma brings a
wealth of knowledge in operational management and customer service. The business is
structured as a privately held entity, with Shewaye Debele Korma as the primary
shareholder.

The business will be strategically located in Oromia Regional state Gebere Guracha-City
ensuring easy accessibility for both residential and commercial clients. This prime location
will enhance visibility and convenience for customers, contributing to increased foot traffic
and service uptake.

2.1 Business Description

The company offering Wholesales Trade of Baletina Products including Supplying and sales
of all Cereals such as wheat, barley and oats, species, red peppers, coffee pulse such as
lentils beans, peas and vetch. The company sell the products in two ways such as
unprepared and delicatessen in the form of flour such as red pepper flour, peas flour, beans
flour, oats flour. Wheat’s flour, etc and the company also supplies food products like food
oil, pasta, macaroni, rice etc to customers from the Oromia region Gebere gurcha area and
other parts of the country, particularly to individual’s households, hotel and restaurant and
University’s etc.

We produce quality Baletena products and spices. We distribute a fantastic range of

products prepared by trained professionals to shops, supermarkets, cafes, restaurants and
hotels.

There are a lot of Wholesales Trade of Baletina Products in Oromia that serve their
customers, but they are unable to meet what they want and need in terms of both number
and quality. Shewaye Debele Korma have decided to grow and broaden their current
company in Addis Ababa city in order to maximize client satisfaction.

The company's target customer includes particularly individual’s households, hotel and
restaurant and Universities, etc.

Some of Our products and Spies are listed Below:-

Our Products

 Red spiced Shiro | አተር ምጥን ሽሮ

 Red spiced chickpea Shiro | ሽምብራ ምጥን ሽሮ
 Pepper | 1 ኛ ደረጃ በርበሬ
 White plain shiro | ነጭ ሽሮ
 Chilli | ሚጥሚጣ
 Miten Aja | ምጥን አጃ
 Besso | በሶ
 Bulla | ቡላ
 Split lentil | ምስር ክክ
 Sorghum, Maize and Wheat Kinche | የገብስ፣ የበቆሎ እና የስንዴ ቅንጬ
 Kollo (Dabo Kollo) and others | ቆሎ (ዳቦ ቆሎ) እና ሌሎችም

Spices | ቅመማ ቅመሞች

 Cardamom | ኮረሪማ
 Mixed wot Spices | መከለሻ
 Rosemary | ሮዝመሪ
 Butter Spices | የቅቤ ቅመም
 Black or white Pepper | ጥቁር ወይም ነጭ ቁንዶ በርበሬ
 Cinnamon | ቀረፋ
 Ginger | ዝንጅብል
 Nutmeg | ገውዝ
 Mixed tea spices | የሻይ ቅመም
 Garlic | ነጭ ሽንኩርት
  Clove | ቅርንፉድ
 Cumin and others | ከሙን እና ሌሎችም

2.2 Mission, Vision and Objective of the Business

 Our vision is to become the leading Baltena production company – brand in the
wholesales of Ethiopia and to favourably compete with another leading brand in
the Ethiopia.
 Our mission Our mission is to build a Baltena production company whose
products can be found in supermarkets and Shop stores all across the Ethiopia.
We also want to want to build an international brand and export our well –
packaged Baltena products to other countries of the world.

 Objectives: The main objective of our company is to achieve our sales, gross
margins and net profit forecasts for the coming years, as outlines in this business
plan. Specifically, we will strive to achieve the following objectives

 Long-lasting relationship with diverse customer and supplier in different

countries, both in domestic and regional level.
 Forming a valid and enforcing contractual agreement
 Effective utilization of state-of-the-art machinery, and information and
communication technology for quality and speedy operation.
 Visionary and committed management.
 Skilled, experienced and motivated work force and lastly, modern strategic
management, marketing and operational management system.

 Short term goal: To secure ETB 8,000,000 bank loan facility, partially to cover
purchase of stock item and fulfill the additional working capital requirement
from Leander institution will be obtained in order to avoid financial strain and
sessional cash shortage.
3. Organization and Management plan

It is evident that for the proper and continuous profitable of the business, due consideration
has to be given to the organization and management.

The owner, being accountable to the business, will manage all activity of the business,
market information and customer needs and wants as well as providing new and quality
service that satisfy customer needs. The owners will manage all financial and operational
aspects the business.

The Following table shows all management and Employee staff description.

Basic Annual
No Name
Salary Salary
Shewaye Debele
1 15,000 180,000.00
Korma
2 Sentayehu Bacha 7,500.00 90,000.00
3 Samuel Adare 7,500.00 90,000.00
4 Adare Leniso 6,200.00 74,400.00
5 Feleke Abera 5,000.00 60,000.00
6 Liya Geberegziahber 5,500.00 66,000.00
Total 46,700.00 560,400.00

3.1Training Requirements:

Staff training programs will be implemented to ensure proficiency in handling advanced

equipment and delivering high-quality services. Periodic training sessions will address
customer service, hygiene standards, and operational best practices. Training for employees
in a café and restaurant service business is crucial to ensure that they have the necessary
skills, knowledge, and understanding of the processes involved in providing high-quality
service. Here are some key areas of training for employees in: Operations: Stock
management Techniques, Customer Service: Quality Control: Technology and Equipment
Training: Teamwork and Communication.

4. Marketing Plan
4.1. Market Trends
 Most companies that are into Baltena productions are becoming more creative when it
comes to packaging and branding their Baltena productions. The truth is that, if you can
successful package and brand your Baltena productions to meet the standards; you can
indeed successfully export your products to other countries of the world. There are Baltena
productions brands that can be found in supermarkets all across the globe.

The industry has also thrived by developing products at price points attractive enough to
weather the slow recovery, resulting in strong revenue growth. As a result of this, these
trends are expected to continue and contribute to revenue growth going forward.

4.2 Marketing strategy

The main business strategy of the company is customer driven approach and focused to
address the need and want of their valuable customers.

The Company’s strategy is therefore to supply products and service required by customers
at the quality and quantity level they demanded. The Company can also compete on prices
besides the flexibility and quality factors as it will only trading on demand and hence can
significantly reduce the stock carrying costs.

4.3 Our Target Market

We produce quality Baletena products and spices. We distribute a fantastic range of

products prepared by trained professionals to shops, supermarkets, cafes, restaurants and
hotels.

There are a lot of Wholesales Trade of Baletina Products in Oromia that serve their
customers, but they are unable to meet what they want and need in terms of both number
and quality. Shewaye Debele Korma have decided to grow and broaden their current
company in Addis Ababa city in order to maximize client satisfaction.

The company's target customer includes particularly individual’s households, hotel and
restaurant and Universities and Government organization etc.
4.4 SWOT Analysis

 Strength
 Huge Service Line with variations.
 Business will have longer hours and better prices as compared to
competitors.
 Discounts are available for customer.
 Expertise in getting new service to the market quickly.
 Expertise in providing good customer service.
 Customization available for individual customers.

 Weakness:
Huge capital required to run the business as credit is not easily available from
supplier.
 Marketing expense will be huge, to establish brand name required lot of
advertising.
 Threats

 The threats we are likely to face in this business are likely to come from a
change in government policies, slowing demand, or entry of new
competitors into the industry and political instability. However, as a
business with a vision in sight, we will be able to handle any threats that
might crop up during the course of running the business.

 Opportunities:
 We have been able to conduct thorough feasibility studies and market
survey and we know what our potential clients will be looking for when they
visit our baletena shope outlets; we are well positioned to take on the
opportunities that will come our way.

4.4 Pricing

Penetration Pricing will be the pricing strategy for our business, as our business is at the
high street of Oromia region where competition is huge, so we try to give good quality at
low price to penetrate in the market and try to achieve higher sales volume to set low price
and better-quality strategy. Once we achieve this objective then try to charge higher price
for our customized service for value addition.

4.5 Competitors analysis

The market is very competitive because they offer the same products and services, but has
different physical attributes to the Product and different costs, which buyers have choices to
choose from. Companies want to provide the best products and services to attract buyers by
lowering cost and improving products, which makes the industry very competitive

4.6 Advertising & sales

The main marketing strategy begins as a provide quality, unique and full package services;
deliver to the needs of potential customers, that will fill the needs of them. We are planning
our marketing strategy so that we ensure excellence product and Service with affordable
price.

Our promotion channels include print ads in the form of business card, brochures, fliers and
banners that keep the company name, phone and address of the company in front of the
customer.
We will give advertising in different newspaper and magazine in our country. In addition, we
intend to participate in business workshop and related exhibition.

On the other hand, Word of Mouth - By giving first-time customers great service and a fair
price, the word is sure to spread.

All marketing decisions with regard to specific media choices, frequency, size, and
expenditures will be conducted on an on-going basis with careful considerations of
returns generated.

4.7. Sales forecast assumptions

Sales forecast assumption is based on internal factors include things like sales history,
product mix, marketing strategy, and sales team in addition External factors include
things like the overall economy, industry trends, and competitor activity. It is also
important to be realistic when making assumptions forecast.
5. Product and Service Plan

The company offering Wholesales Trade of Baletina Products including Supplying and sales
of all Cereals such as wheat, barley and oats, species, red peppers, coffee pulse such as
lentils beans, peas and vetch. The company sell the products in two ways such as
unprepared and delicatessen in the form of flour such as red pepper flour, peas flour, beans
flour, oats flour. Wheat’s flour, etc and the company also supplies food products like food
oil, pasta, macaroni, rice etc to customers from the Oromia region Gebere gurcha area and
other parts of the country, particularly to individual’s households, hotel and restaurant and
University’s etc.

We produce quality Baletena products and spices. We distribute a fantastic range of

products prepared by trained professionals to shops, supermarkets, cafes, restaurants and
hotels.

There are a lot of Wholesales Trade of Baletina Products in Oromia that serve their
customers, but they are unable to meet what they want and need in terms of both number
and quality. Shewaye Debele Korma have decided to grow and broaden their current
company in Addis Ababa city in order to maximize client satisfaction.

The company's target customer includes particularly individual’s households, hotel and
restaurant and Universities, etc.

Some of Our products and Spies are listed Below:-

Our Products

 Red spiced Shiro | አተር ምጥን ሽሮ

 Red spiced chickpea Shiro | ሽምብራ ምጥን ሽሮ
 Pepper | 1 ኛ ደረጃ በርበሬ
 White plain shiro | ነጭ ሽሮ
 Chilli | ሚጥሚጣ
 Miten Aja | ምጥን አጃ
 Besso | በሶ
 Bulla | ቡላ
 Split lentil | ምስር ክክ
 Sorghum, Maize and Wheat Kinche | የገብስ፣ የበቆሎ እና የስንዴ ቅንጬ
 Kollo (Dabo Kollo) and others | ቆሎ (ዳቦ ቆሎ) እና ሌሎችም
Spices | ቅመማ ቅመሞች

 Cardamom | ኮረሪማ
 Mixed wot Spices | መከለሻ
 Rosemary | ሮዝመሪ
 Butter Spices | የቅቤ ቅመም
 Black or white Pepper | ጥቁር ወይም ነጭ ቁንዶ በርበሬ
 Cinnamon | ቀረፋ
 Ginger | ዝንጅብል
 Nutmeg | ገውዝ
 Mixed tea spices | የሻይ ቅመም
 Garlic | ነጭ ሽንኩርት
 Clove | ቅርንፉድ
 Cumin and others | ከሙን እና ሌሎችም

5.2 Cost and Selling price of The Products

The cost and selling price of our product is determined by the market . In this regard the price
by category of services will be given in current value of product in the ethiopian market. So,
this price will vary in times. Average price by category of service is given in table bellow:-

Unit
measuremen Quantit Cost Selling
No Description t y Price Price

· Red spiced Shiro | አተር ምጥን ሽሮ 200.0

1 KG 2,500.00 0 250.00
· Red spiced chickpea Shiro | ሽምብራ
ምጥን ሽሮ
220.0
2 KG 3,500.00 0 275.00

· Pepper | 1 ኛ ደረጃ በርበሬ 10,000.0 350.0

3 KG 0 0 437.50

· Pepper | 2 ኛ ደረጃ በርበሬ 311.0

4 KG 3,100.00 0 388.75

· White plain shiro | ነጭ ሽሮ 200.0

4 KG 2,300.00 0 250.00

· Chilli | ሚጥሚጣ 350.0

5 KG 1,000.00 0 437.50
185.1
· Miten Aja | ምጥን አጃ
6 KG 151 5 231.44
· Besso | በሶ
7 KG 40 60 75.00
 · Bulla | ቡላ
8 KG 60 174 217.50
· Split lentil | ምስር ክክ
9 KG 100 200 250.00
· Sorghum, Maize and Wheat Kinche |
10 የገብስ፣ የበቆሎ እና የስንዴ ቅንጬ KG 200 175 218.75
· Kollo (Dabo Kollo) and others | ቆሎ (ዳቦ
11 ቆሎ) እና ሌሎችም KG 100 80 100.00
· Cardamom | ኮረሪማ
12 KG 100 250 312.50
· Mixed wot Spices | መከለሻ
13 KG 100 125 156.25
· Rosemary | ሮዝመሪ
14 KG 50 60 75.00
· Butter Spices | የቅቤ ቅመም
15 KG 50 85 106.25
· Black or white Pepper | ጥቁር ወይም ነጭ
16 ቁንዶ በርበሬ KG 50 65 81.25
· Cinnamon | ቀረፋ
17 KG 50 25 31.25
· Ginger | ዝንጅብል
18 KG 50 20 25.00
· Nutmeg | ገውዝ
19 KG 20 35 43.75
· Mixed tea spices | የሻይ ቅመም
20 KG 25 30 37.50

5.3. The workforce

In establishing our product in Oromia region, the workforce plays a pivotal role in ensuring
the success and efficiency of our operations. Availability of skilled labor is a key
consideration, and we are committed to hiring locally to contribute to the community's
economic growth. Skilled requirements include expertise in customer care, quality control,
and customer service. Projected wages are competitive, reflecting our commitment to fair
employment practices, and we offer opportunities for career growth within the
organization. Supervision is crucial for maintaining high standards, and our management
team will provide ongoing support and guidance to foster a collaborative and productive
work environment. Comprehensive training programs will be implemented to equip our
workforce with the necessary skills and knowledge in the industry, ensuring a skilled and
customer-oriented team that aligns with our commitment to excellence.

5.4 Delivery methods of product to the customers

Our service in Oromia region offers convenient and reliable delivery methods to ensure a
seamless experience for our customers. Embracing a customer-centric approach, we provide
door-to-door delivery, allowing clients to schedule pick-ups and drop-offs at their preferred
locations. Our delivery service employs a fleet of vehicles equipped with secure. Real-time
tracking options through our website or mobile app keep customers informed about the
status of their orders, ensuring transparency and peace of mind.

5.5 Capacity utilization plan;

Our service's capacity utilization plan is carefully crafted to ensure optimal efficiency and
resource allocation. The plan takes into account the diverse needs of our customer base and
the capabilities of our product system. During peak hours and high-demand periods, the
capacity utilization plan emphasizes maximizing the output of our workforce to meet
increased service requests promptly.

5.6 Stock Management System

The company have stock management systems that are designed to monitor and control
Stock. They accurately measure and track stock inventories and how Stock in and out. This
information is then stored in systems and reported to the manager through the use of web
portals to provide this useful data.

6. Financial Plan

The Company is planning to increasing income and Improving profitability of the business, to
grow its current business location and enhance sales income and profitability. the company
requires additional Working Capital Finance for covering its Purchase of stock items and
operational costs and the plan indicate that working capital loan facility from Leander
institution will be obtained in order to avoid financial strain at the beginning of the 2016 E.C.
fiscal year in order to run at the expected level.

According to the short-term strategy, the company must finance a total of ETB 8.1 million to
cover its operating costs and the purchase of stock items. Of this amount, ETB 8 million will
come from a bank credit facility in terms of term loan which will be fully repaid in four years
at an estimated interest rate of 15.5%. and the company equity will cover the remaining
financing of birr 100,000. The income of the company used to pay back the loan.

6.1 Credit Information with Bank

The Company has no credit information history from any Bank.

6.2 Working Capital Requirement

Estimated working
Description capital
Cost of Purchase stock items 6,699,597.65
Salary and wages 560,400
Shope Rent 240,000
Transportation 450,000
Other Administration expense 150,000
Total Requirement 8,100,000

Note:- From The total working capital requirement 8 million covered by bank loan and the
remaining fund covered by owners’ equity.
Purchase Plan
As we Discus earlier in the plan stock items, particularly those procured locally, play a
pivotal role in ensuring the smooth and uninterrupted functioning of the business.
It is known that the price of these stock items and operating cost has increased significantly.
However, recently the company competed with different customers, so it is necessary to
purchase more stock items in order to deliver the service to the customers in a timely
manner It is necessary to get a loan from the bank to overcome this lack of purchase

Basic assumption in forecasting our Purchase costs is the following:

No Description Unit Quantit Cost Total

measuremen y Price
 t

· Red spiced Shiro | አተር ምጥን ሽሮ 200.0

1 KG 2,500.00 0 500,000.00
· Red spiced chickpea Shiro | ሽምብራ
ምጥን ሽሮ
220.0
2 KG 3,500.00 0 770,000.00

· Pepper | 1 ኛ ደረጃ በርበሬ 10,000.0 350.0 3,500,000.0

3 KG 0 0 0

· Pepper | 2 ኛ ደረጃ በርበሬ 311.0

4 KG 3,100.00 0 964,100.00

· White plain shiro | ነጭ ሽሮ 200.0

4 KG 2,300.00 0 460,000.00

· Chilli | ሚጥሚጣ 350.0

5 KG 1,000.00 0 350,000.00
185.1
· Miten Aja | ምጥን አጃ
6 KG 151 5 27,957.65
· Besso | በሶ
7 KG 40 60 2,400.00
· Bulla | ቡላ
8 KG 60 174 10,440.00
· Split lentil | ምስር ክክ
9 KG 100 200 20,000.00
· Sorghum, Maize and Wheat Kinche |
10 የገብስ፣ የበቆሎ እና የስንዴ ቅንጬ KG 200 175 35,000.00
· Kollo (Dabo Kollo) and others | ቆሎ
11 (ዳቦ ቆሎ) እና ሌሎችም KG 100 80 8,000.00
· Cardamom | ኮረሪማ
12 KG 100 250 25,000.00
· Mixed wot Spices | መከለሻ
13 KG 100 125 12,500.00
· Rosemary | ሮዝመሪ
14 KG 50 60 3,000.00
· Butter Spices | የቅቤ ቅመም
15 KG 50 85 4,250.00
· Black or white Pepper | ጥቁር ወይም ነጭ
16 ቁንዶ በርበሬ KG 50 65 3,250.00
· Cinnamon | ቀረፋ
17 KG 50 25 1,250.00
· Ginger | ዝንጅብል
18 KG 50 20 1,000.00
· Nutmeg | ገውዝ
19 KG 20 35 700.00
· Mixed tea spices | የሻይ ቅመም
20 KG 25 30 750.00
Total
 6,699,597.6
5

 Salary and Wage

It is computed taking the following assumptions regarding the required number of
staff, basic salary
Table 1- Staff Salary and Wage Plan: -

Basic Annual
No Name
Salary Salary
Shewaye Debele
1 15,000 180,000.00
Korma
2 Sentayehu Bacha 7,500.00 90,000.00
3 Samuel Adare 7,500.00 90,000.00
4 Adare Leniso 6,200.00 74,400.00
5 Feleke Abera 5,000.00 60,000.00
6 Liya Geberegziahber 5,500.00 66,000.00
Total 46,700.00 560,400.00

 This shows that the Company’s annual salary and benefit expense will be
Birr 560,400 offering competitive salary and employing adequate staff.

 Rent of shop and office

● Rent Expenses- the company will pay office, Shop and store

rent which is presented as follows.

Monthly Annual
S.no Description
Rent Rent
Shop,store and
office
1 20,000.00 240,000

Total 20,000.00 240,000

 Other Administration Cost

 ● Commission- it will be significant cost element and it is expected to cost 1% of

the total cost of purchase.

● Administrative expenses- comprises stationery and printing, professional fees,

license and legal fees, travel and postage, per diem, telephone, bank charges,
etc. It is expected that administrative expenses amount to 2% of annual sales.

● Profit tax- Annual profit tax is computed assuming effective tax rate of 35%.
Income tax liability of a fiscal year is assumed to be paid in the same year.

Interest Expenses: - It is planned that the Company will obtain bank term loan of ETB 8
million to be repaid in 4 years. The loans are expected to be obtained at annual interest rate
of 15.5% and the company repayment ability is income of the company is used to pay back
the loan.

6.3 Loam Amortization Schedule

Pmt.
No. Payment Beginning Total Principal Interest Cumulative
Date Balance Scheduled Payment Ending Interest
Payment Balance
1 2024-09-01 8,000,000.0 680,244.19 680,244.19 370,244.19 310,000.00 7,629,755.81 310,000.00
0
2 2024-12-01 7,629,755.8 680,244.19 680,244.19 384,591.15 295,653.04 7,245,164.66 605,653.04
1
3 2025-03-01 7,245,164.6 680,244.19 680,244.19 399,494.06 280,750.13 6,845,670.60 886,403.17
6
4 2025-06-01 6,845,670.6 680,244.19 680,244.19 414,974.45 265,269.74 6,430,696.14 1,151,672.90
0
5 2025-09-01 6,430,696.1 680,244.19 680,244.19 431,054.72 249,189.48 5,999,641.43 1,400,862.38
4
6 2025-12-01 5,999,641.4 680,244.19 680,244.19 447,758.09 232,486.11 5,551,883.34 1,633,348.48
3
7 2026-03-01 5,551,883.3 680,244.19 680,244.19 465,108.71 215,135.48 5,086,774.63 1,848,483.96
4
8 2026-06-01 5,086,774.6 680,244.19 680,244.19 483,131.67 197,112.52 4,603,642.96 2,045,596.48
3
9 2026-09-01 4,603,642.9 680,244.19 680,244.19 501,853.03 178,391.16 4,101,789.93 2,223,987.65
6
10 2026-12-01 4,101,789.9 680,244.19 680,244.19 521,299.83 158,944.36 3,580,490.10 2,382,932.01
3
11 2027-03-01 3,580,490.1 680,244.19 680,244.19 541,500.20 138,743.99 3,038,989.90 2,521,676.00
0
12 2027-06-01 3,038,989.9 680,244.19 680,244.19 562,483.33 117,760.86 2,476,506.57 2,639,436.86
 0
13 2027-09-01 2,476,506.5 680,244.19 680,244.19 584,279.56 95,964.63 1,892,227.01 2,735,401.48
7
14 2027-12-01 1,892,227.0 680,244.19 680,244.19 606,920.39 73,323.80 1,285,306.61 2,808,725.28
1
15 2028-03-01 1,285,306.6 680,244.19 680,244.19 630,438.56 49,805.63 654,868.05 2,858,530.91
1
16 2028-06-01 654,868.05 680,244.19 654,868.05 629,491.92 25,376.14 - 2,883,907.05

Note: - The revenue generated from the company used to repay the loan indicates the
company's ability to repay it.
6.4 Collateral Offered

For this loan, the property provided as a collateral is a building registered in the name of the
owners that it worthies total amount of birr 5,000,000

 Repayment Ability:

The Company business has a strong repayment ability backed by a stable customer base,
consistent cash flow from regular operations, and a proven track record of profitability.
Financial projections and historical performance data attest to the business's ability to
service the proposed loan.
This loan application is submitted to the Commercial Bank of Ethiopia with the aim of
securing financial support to propel the business to new heights of efficiency and service
quality. The collateralization of the loan provides security for the bank, and the business is
committed to a transparent and collaborative relationship, ensuring the fulfilment of all
financial obligations. Any significant changes in the business's financial status will be
promptly communicated to the bank.

6.5 Financial Projection

6.5.1 Sales forecast and assumptions

Sales forecast assumption is based on internal factors include things like sales history,
product mix, marketing strategy, and sales team in addition External factors include things
like the overall economy, industry trends, and competitor activity. It is also important to be
realistic when making assumptions forecast.

Year 2024 2025 2026 2027

Item Total Total Total Total

Sales income
 22,943,250.00 31,432,252.50 42,747,863.40 58,992,051.49

Gross Rate 35% 37% 36% 38%

Total Sales 22,943,250.00 31,432,252.50 42,747,863.40 58,992,051.49

Note: - Previous period sales revenue was taken as base year for comparison.

6.5.2 Projected Profit and Loss Statement

The Company is planning to increasing Service income and Improving profitability of the
business and to grow its current business location and enhance service income and
profitability. It also hopes to attract more consumers, particularly from, individual’s
households, hotel and restaurant and Universities, etc.in order to meet sales targets for the
following four years.
Expected profit and loss projection from the next four Consecutive years are as follows: -

Profit and Loss

Projection
Year 2024 2025 2026 2027
Sales Revenue 22,943,250.00 31,432,252.50 42,747,863.40 58,992,051.49
Total revenue 22,943,250.00 31,432,252.50 42,747,863.40 58,992,051.49
Gross rate 35% 37% 36% 38%
Cost of Goods sold
Cost of Good Sold 11,471,625.00 20,430,964.13 27,786,111.21 41,294,436.04
Additional Purchase 6,699,597.65
Total Cost of Sales 18,171,222.65 20,430,964.13 27,786,111.21 41,294,436.04

Gross Profit 4,772,027.35 11,001,288.38 14,961,752.19 17,697,615.45

Gross margins 21% 35% 35% 30%

Administration 1,305,789.00 1,436,367.90 1,580,004.69 1,738,005.16

Expense
Total Administration 1,305,789.00 1,436,367.90 1,580,004.69 1,738,005.16
Expense
Operating margins 5.7% 4.6% 3.70% 2.95%
Net Profit/Loss Before 3,466,238.35 9,564,920.48 13,381,747.50 15,959,610.29
Tax
Profit tax 35% 1,213,183.42 3,347,722.17 4,683,611.63 5,585,863.60

Net Profit after tax 2,253,054.93 6,217,198.31 8,698,135.88 10,373,746.69

Net margins 10% 20% 20% 18%

Relevant assumptions
The following relevant assumptions are considered to draw profit and loss projections.

 The profit and loss plan are prepared taking into account the internal
capability, overall economy, industry trends, and competitor activity as well
environmental opportunities and threats.
 The previous year's financial performance serves as the key forecasting basis
for the years under consideration.
 The fiscal year refers to a period of 12 months covering from Hamle 1 to Sene
30 of Ethiopian Calendar.
 To the growth in sales, it is projected that, the company will secure additional
loan in the form of term loan.
 Interest rate on the loan is assumed to be 15.5% per annum
 Previous period sales revenue was taken as base year for comparison. Based
on this scenario, the 2016 E.C sales will grow by 35% as per critical
assumptions explained previously in this paper.
 For long-term assets, the business employed the straight-line deprecation
method.

 Administrative expense is expected average amount of 4% from annual sales.

 Gross margin is Assumed as average 30%.
 Administrative expense is significantly increase when sales is increase.
6.5.3 Projected Cash flow Statement

Year 2024 2025 2026 2027

Cash Inflow
Beginning Cash 2,767,675.00
Income 22,943,250.00 31,432,252.50 42,747,863.40 58,992,051.49
Term Loan 8,000,000.00
Total Inflow 33,710,925.00 31,432,252.50 42,747,863.40 58,992,051.49
Cash outflow
Cost of Sales 18,171,222.65 20,430,964.13 27,786,111.21 41,294,436.04
Administration Expense 1,305,789.00 1,436,367.90 1,580,004.69 1,738,005.16
Profit tax 1,213,183.42 3,347,722.17 4,683,611.63 5,585,863.60
Total Outflow 20,690,195.07 25,215,054.19 34,049,727.53 48,618,304.80
Net Cash Flow 13,020,729.93 6,217,198.31 8,698,135.88 10,373,746.69

The cash flow projection is made assuming that:

 ● The Company will obtain ETB 8,000,000 loan finance at the beginning of operation,

● Interest rate assumed 15.5 %.

● Beginning cash balance taken from Previous year Audited financial statement.

● All purchases are on cash basis.

● The annual sales of the company will be collected in the current year,

● Profit tax of the fiscal year will be paid in the same year.

Overall, the projected cash flow shows that the Company will generate series of surplus
cash flows after covering all operational and financial commitments that confirms its
liquidity.

6.5.4 Projected Balance sheet

STATEMENT OF PROJECTED BALANCE SHEET

Currency in Ethiopia
Birr
Beginning of the
Year 2024
ASSETS
Current assets
Cash and cash equivalent 2,767,675 1,458,789
Debtors and pre-payment 319,644 1,258,741
Inventories 0 5,856,258

Total current assets 3,087,319 0 8,573,788

Non-current assets

Property, plant and equipment 3,688,597 3,873,027

3,688,597 3,873,027

Total non-current Assets 3,688,597 3,873,027

 Total assets 6,775,916 12,446,815

Liabilities and equity

Current liabilities
Trade payable 0 325,852
Profit tax 1,021,039 1,213,183
Total current liabilities 1,021,039 1,539,035

Non-current liabilities

8,000,00
Bank Loan - 0.00
8,000,000.
Total non-current liability - 00

Total liabilities 1,021,039 9,539,035

Equity
Capital 1,000,000 1,500,000
Owners account -5,600,152
Retained Earning 4,754,876 7,007,931

Total equity 5,754,876 2,907,779

Total equity and liabilities 6,775,916 12,446,814

Notes and Explanations

 Given the information from the above balance sheet table, where the total assets of
The company are 12,446,815, and the sum of total liabilities is 9,539,035 ETB, the
balance sheet implies a positive net worth. In this case, the company has a surplus of
assets over its total liabilities.
 This positive net worth provides a cushion against financial risks and indicates the
potential for the business to weather economic challenges.
 The company financial position indicates that the company has sufficient current
asset to cover its short-term financial obligation.

6.5.5 Financial Analysis

A financial analysis is used to calculate a company’s financial status or production against

other firms. It is a tool used by investors to analyses and gain information about the finance
of a company’s history or the entire business sector. To calculate financial ration, numbers
are taken from the balance sheet, income statement, and cash flow statement. The financial
ratio is not a calculation but an explanation of the economic status of a company, in terms
of profit, liquidity, leverage, and market valuation. A ratio may serve as an indicator, red flag
or clue for various issues.
1.192056
Return on Equity = Net Profit before tax 3,466,238.35 8
Net Equity 2,907,779.43
5.570884
Current ratio = Current asset 8,573,788.00 1
Current Liability 1,539,035.42
1.765735
Quick ratio = Current asset- Inventory 2,717,530.00 8
Current Liability 1,539,035.42

3.280522
Debit to Equity = Total Liability 9,539,035.42 4
Net Equity 2,907,779.43

General conclusions

Based on the forecast assumptions for the company, the financial outlook appears positive,
with strong indicators of profitability. The positive net income and healthy gross profit
margin are encouraging signs for the business's financial stability.