A Business Plan on Edmialem Cinema

1. EXECUTIVE SUMMERY
The cinema will offer the domestic and foreign movies in each day of the week.
Simultaneously Ethio-wood cinema will offer soft drinks and fast foods for the
customers.
The 100-seat cinema hall is expected to provide service twice per day for working days
and three times per day for weekend time. In each of the cinema programs an average of
50 customers will show the movie. The average expenditure of the customer for fast food
and soft drink is estimated to be 5 birr and the entrance fee or the price of ticket for each
person.
The film shown will be second run release of the most popular movies in two targets ;families
and young adults.
All movies in the cinema will be segmented by the customer age and preference. For
example, in each of the week the morning movies especially cartoon and animation
movies will be presented for children,s, the afternoon and the evening program new
arrival foreign movies and new domestic movies will be present respectively for those
customers above the age of 17 years.
In addition to the above, the source of movies is Alem cinema for domestic movies and
Ethiopia cinema for foreign movies by paying 40% of the total receipt from ticketing or
entrance fee.

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A Business Plan on Edmialem Cinema

1. Introduction
1.1 Name of the business: Edmialem cinema
Address: Debre berhan
E-mail: [email protected]
Tell: 251929403363
1.2 Name and address of the principal
NAME ADRESS
Edmialem Belay....................................................Debre berhan university
Melke solomon…………………………………...Debre berhan university
Eshetu Molla………………………………………Debre berhan university
Biniam Tesema……………………………………Debre berhan university
Desta Abebe……………………………………….Debre berhan university

Edmialem cinema hall will run as a partnership between, Kirubel Endale , Abebe Taye,
Girma Shiwangzaw, Edmialem Belay and Mikias Belhu.
The cinema hall will offer both domestic and foreign movies for its customer with
additional services of a fast foods and soft drinks which include donant, burger, sand
witch, and reed bull and coca cola’s, other drinks.
The business will be established in order to generate profit by providing satisfactory
services for the people of Debre berhan town.
1.3 Objective
 The main objective of the Edmialem Cinema is to generate profit.
Specific objective:.
-To satisfy its customer
-To expand its business.
1.4 Mission
 The mission of Edmialem cinema is to give a delighted service to its customer and
adding value for the businesses.
 To give customers a best in entertainment experience.
 The customer will relax comfort and with high quality presentation of popular
latest movies.
 They will also provide their customer with satisfying and reasonably priced snake
foods and beverages.

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A Business Plan on Edmialem Cinema

1.4 vision; commitment to customer: showcasing of the highest exhibition standard

at its multiplier.
Our hope is that they can bring people together a community meeting place to enjoy
cinema experience that not only matches that found in commercial town cinema, but also
in terms of quality, enjoyment, and convenience exceeds it.
1.5 Key to success
 It uses difference types of incentives, promotional or inducement mechanism
to attract other customer.
1.6 Statement of financing needed
This business is established in order to get the required level of profit by delivering
satisfactory and adequate services for the people of Debre berhan town which include
both cinema program and fast foods and soft drinks.
The customers are benefited in terms of the following things:-
 Availability of foreign and domestic movies on time,
 Well-cooked fast foods and soft drinks,
 Entertain themselves
 They protect themselves from unfruitful activity...etc
2. INDUSTRIAL ANALYSIS
2.1 Future outlook and trends
Firstly they intend to start up and run a cinema in Debre berhan area by providing fast
food and movies. Simultaneously to ward good recreation purpose for local young,
couple and married people with sophisticated atmosphere.
Furthermore to find and convert suitable preemies to 100-seat cinema with desirable type
of movies, fast food and car parking facility. To build up a regular clientele and achieve
forecasted Sales by advertising and promotion and by the product and service itself.
additionally, to be able to employee full time staff member to build up a reliable and
conscientious team working in the cinema, establishing the owners to concentrate on the
day to day problems, to meet the customer demand, mounting promotions and
supervising the general running of the cinema in order to building and expand the
business future. Finally our future outlook is to purchase a second premise in different
area and set up a similar operation after five year.
2.2 Analysis of competitors
There are only two cinema hall in Debre berhan town (I.e., HIWOT CINEMA AND
DEBREBREHAN CINEMA). The major difference being that lack of fast food and soft
drinks, car parking facility, specified time schedule with the type of movies. In addition
to the above, the strengths and weakness of the cinema are listed below;

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A Business Plan on Edmialem Cinema

Strength
 They have experience in this area throughout their operation time
 They also have a good capital as compared with others , due to their income that
is generated before
 The cinemas are known by the people of Debre berhan town because of their
seniority
 They know the consumer preference and wants by their experience
 They facilitate strong connection with financial institutions and investors
Weakness
 There is no fast food and soft drink service as the customer demanded
 Their services do not include or consider children need and want
 Low advertising and sales promotion
 No parking facility
 There is no facility layout for those who are physically disabled
 low sophisticated atmosphere for the customer
 Limitation in terms of on time movies
2.3 Industrial forecasts
The cinema customer has estimated in Debre berhan town is about 35% of the whole
population and the growth of the customer is increasingly, due to the existence of new
technological improved domestic and foreign movies. Before starting this business
plan, they conduct some opinion of Debre berhan town people about their attitude
toward the demand of movies, most of them said that the number of customer is
increased time to time. However, the numbers and service of cinema whole cannot
match with the customer in Debre berhan; due to their forecasts about the industry is
the market or demand increase in the future.
3. DESCRIPTION OF VENTURE
 Product
An average prices with desirable quality and standard this Includes fast food like
donat, burger, sandwich and soft drink like Red Bull, coca cola and Pepsi.
 Service
Their most power full service is the movies itself; which are new, technically
improved, desired and ethical for foreign and domestic sources. And also
providing a good situation in parking facility with security, easy ticketing
system and satisfactory delivery of fast food and soft drink.
 Size of business
The size of business is a small business; its initial capital is around 100,000 and
the capital structure is 60%-40% i.e., 60% of the total capital is covered by the

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A Business Plan on Edmialem Cinema

members and the remaining 40% is comes from loan. It has five (5) part time
workers in security, weightier, kitchen worker, casher and technical person
respectively. A cinema hall has 100 seats to the maximum, have a parking
facility pace.
 Office equipment, kitchen ware and personnel
 Office equipment
Office table, chair, computer and shelves.
 Kitchen ware
Refrigerator, Stove, cans, and related material to cook fast food and for
presentation of soft drinks
 Background of the entrepreneurs
 Kirubel Endale
Who is a third year student of Debre berhan University in tourism department and have
an experience in cinema service organization for two years
 Edmialem Belay
Who have BA Degree in information technology and have good relationship with many
people in Debre berhan town.
 Mikias Belhu
Who have good experience in maintaining electronic materials such as DVD player,
Television, Projector, screen and others.
 Abebe Taye
Have good knowledge in purchasing equipment’s, sales management and have Exposure
to the outside marketing environment.
 Girma Shiwangzew
Have a good experience as financial manager on the business.

4. PRODUCTION PLAN
As their product is both tangible and intangible means that it is product and service. In
order to operate or run their production they procure or buy some necessary movies from
local supplier Ethiopia cinema.Those tangible products like fast food and soft drink will
be purchase from local retailers to produce or cook fast foods. For soft drink their
responsibilities is only presenting and keep refrigerated.
4.1 Physical plant
There some equipments and physical plant those have to be purchased or rent in
order to operate their production. The following are the major one.
1. Projector
To display the movies a bigger large size

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2. DVD player
In order to play the movies
3. Speaker system
Ampliphayier
To transform the sound from DVD player to speakers
Speakers
To magnify the sound in order to provide good sound that can be heard by
any customers.
4. Hall
Type: preferable a free hold premise to rent from another business people.
Location: around the entrance of Debre Berhan town from Addis Ababa which is
preferable to attract more customers and get a good transportation service for the
customer.
Size: 100-seat hall with three by three meter kitchen
5. Generator
To safeguard when there is no electric power.
5. Name of supplier of raw material
Soft drink
Coca Cola and Moha company’s wholesalers
Fast foods
They are will procure a raw material like bred and Other – like meat, oil,better,cake
powder, vegetable and etc are for concerned supplier in order to cook fast food.
6. MARKETING PLAN
6.1. Pricing
The sensitivity of the customer due to price change is less because there is no alternative
or no many competitors in the market and the price of ticket and fast food are relatively
low and it can be afford by any socio economic group of the people.
They use these pricing strategies in order to operate their business,to gain attractive profit
and delivery service in a most affordable way.
Item Measurement Amount Price
1. ticket Number 1 15 birr
2. soft drink Quantity 1 4 birr
3. burger Quantity 1 20 birr
4. sandwich Quantity 1 15 birr
5. Donat Quantity 1 5birr

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6.2 Distribution
Edmialem cinema distributes its product and services for the customer in its premise
or cinema hall. Because it is impossible to provide door-to-door service due to the
nature of their service cinema.
6.3 Promotion
As they mention earlier those competitors lack promotion and advertising technique in
order benefit from these their Edmialem cinema use billboards, pamphlets, TV and radio
station working in Debre berhan town,face book,e-mail, newspaper and magazines in
order to promote the cinema program to its customer. The reasons behind to select these
promotion system are:-
 Their competitors does not familiar with this kinds of promotinal techniques
 The cost of these promotional system are less cost than other promotion system
 The value or contribution of these promotion is higher to the company
 Most of the people are familiar with this entertainments
 These promotion mechanisms are effective to introduce as well as to promote
the company’s service.
 These promotion mechanisms are available in Debre berhan town
6.4Product forecast
As their customers increases the products and services of the cinema hall in the future
time will growth increasingly in terms of the following factors:-
Quality: - The type of movies, technology of equipments like 3D technology, projector
system techniques used the cinema hall.
Frequency: - Currently the company plan to provide 16 movies per week. However, it is
not large enough, so in the future the number of movies and the frequency of the program
will increase.
6.5. Controls
In order to control the quality, nature and type of movies all movies must be seen
initially to evaluate each movies in terms of their cultures, norms and perceptions
before presenting for their customer. If there is any defect (i.e., sound, image and
ethics) the movie does not present to the customer rather returned to their suppliers.
On the other hand to control the quality of fast foods the company conducts the
customer’s advice, coments, and suggestion about the products to avoid the problem
related with the product.

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7. ORGANIZATIONAL PLAN
7.1. Form of ownership
Edmialem cinema will be run their partnership between Edmialem Belay, Kirubel
Endale,Abebe Taye,Mikias Belhu and Girma Shwangzew. Each of partners shares the
income depending on the amount of contribution to establish the business. I.e. each of
partners contributes 12000 birr equally. So they share will be equal.
a. Authority of principals
Because of the nature of partnership all principals of the business have equal
authority to decide related with the following factors
 To procure or purchase material or equipment for the business.
 To hire employees or fire from the business.
 To make a contract with supplier or others.
7.2. Role and responsibility of members of organization
Security
 To protect the material or equipments from damage, theft and other
hazard.
 To protect the property of customers like bicycle, car, or motors,taxi …etc.
 To keep the security of cinema hall from disturbance customers.
Weightier
 To give seat for customer
 To deliver fast food and soft drinks for the customer.
 To treat customers in a suitable way
Kitchen worker
 To cook fast foods,
 To keep soft drink refrigerated,
 To give for the weight if any order is available and,
 To protect the cleanness of the kitchen ware.
Casher
 Receiving any cash flow and to make a payment.
Technical person
 Control noises,lightning system,
 Arrange the schedule of movies,
 Check the sound and image quality,
 Avoid unnecessary voice which interrupts the customer,
 Control electric supplies.
8. ASSESSMENT OF RISK

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8.1. Evaluation of weakness of business

There might be many problems or weakness like, absence of customer, un able to get
the required level of profit, and other related problem raised due to the following
reasons:-
 competitors effectiveness
 Lack experience
 Lack of capital equipment that are technically advanced
 Because of consumer test change
 technoligical change …etc.
8.2. New technology
The risk of new technology is not that much series that can affect the business
severely. Most of Ethiopian cinema hall are currently use what they want to use in
their business. So there is no risk exposed to the business due to new technology.
9. FINANCIAL PLAN
Based on the following assumption
 An average customer per movie are 50
 Entrance fee 15birr
 Average expenditure of the customer for fast food and soft drinks are 5birr
 In one week 16 movies will be presented
 Loan interest 10%
 Depreciation 10% per year
 Cost of movies 40% of the total receipt from ticketing
 Cost of fast foods and soft drinks 50% from the total sales of fast foods and
soft drinks
 Advertising expense 6000birr for the first two months and 3000for the
remaining months
 Transportation cost 1000birr per month
 Administrative cost 1500birr per month
 Hall rent 10000birr per month
 Salary 2100birr per month for five workers
 The sales amount from ticketing and sales of fast foods and soft drinks will
10% within three months due to

Edmialem Cinema

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A Business Plan on Edmialem Cinema

Income statement
Dec 30, 2019
REVENUE
Sales of ticket 668304
Sales of fast food and soft drink 222769
Total revenue 891073
EXPENSES
Salary 25200
Hall rent 120000
Advertising 42000
Cost of movies 267321.6
Cost of fast food 89107.2
Transportation 12000
Administrative 18000
Tele and post 3600
Interest expense 1200
Fuel 1800
Depreciation 7000
Miscellaneous 600
Total expense 587828.8
Profit before tax 303244.2
9.3. OWNER’S EQUITY FOR THE END OF YEAR ONE

Edmiale Kirubel Mikias Abebe Girma Total

m belay Endale Belhu Taye Shwangzew
Beginning 12000 12000 12000 12000 12000 60000
owner`s equity
Add: Net 75645.75 75645.75 75645.75 75645. 75645.7 378228.75
income 75
Less: 9000 9000 9000 9000 9000 45000
Withdrawals
Ending 83295.8 83295.8 83295.8 83295. 83295.8 416479
owner`s Equity 8

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Edmialem Cenima
Beginning Balance sheet
Beginning of the first year
Beginning asset
Asset
Cash 30000
Equipment 70000
Total asset 100000
Liability
Loan 40000
Owner’s equity
Edmialem Belay 12000
Kirubel Endale 12000
Abebe Taye 12000
Girma Shwangzew 12000
Mikias Belhu 12000
Total owner’s equity 60000
Total equity and liability 100000
Edmialem Cenima
Ending balance sheet
End of the year
Asset
Cash 292243.2
Equipment 700000
Less: depreciation 7000
Equipment after depreciation 63000
Total asset 355243.2
Liability
Loan 40000
Less: loan payment 12000
Total liability 28000
Edmialem Belay 5600
KirubelEndale 5600
Abebe Taye 5600
Girma Shwangzew 5600
Mikias Belhu 5600
Owner’s equity 327243.2
Total owner’s equity and liability 355243.2

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9.5. BREAK-EVEN ANALYSIS FOR YEAR ONE

At the point of break even the TC/total cost/ of the cinema will be equal with its total
revenue/TR/.
BEP => TC = TR
TC = FC+VC
Where, FC = fixed cost
VC = variable cost
TR = PX
Where, p = price
X = number of customer
Total cost of the cinema hall (TC)
TC = FC + VC
FC = the summation of all fixed costs for the cinema
I.e. salary 25200
Hall rent 120000
Advertising 42000
Interest expense 1200
Fuel 1800
Administrative 18000
Tele and post 3600
Miscellaneous 600
Total 224400
VC = 60% of revenue from ticketing and 50% of revenue from sales of fast food
and soft drinks.
VC = 0.4p1x + 0.5p2x
Where; x= number of customer
P1= price of ticket =15birr
P2= price of fast food and soft drinks= 5birr
= (0.4p1 + 0.5p2) x
= (0.4*15 + 0.5*5) x
= (6 + 2.5) x
VC = 8.5x
Therefore TC = 224400 + 8.5x
Total revenue of the cinema (TR)
TR = the summation of all receipts both from ticketing and sales of fast foods and soft
drinks.

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TR= p1x + p2x

Where, x= number of customer
P1= price of ticketing
P2 = price of fast food and soft drinks
TR= 15x + 5x
TR = 20x
Beak even point and quantity
BEQ = TR = TR
224400 + 8.5x = 20x
224400 = 20x – 8.5 xs
224400 = 11.5x
BEQ = X = 19513 customers
BEP = XP = 19513 * 20 =390260
GRAPHICALLY
Cost and revenue

Revenue
Total cost

390260 Break-even point

224400

19513 Number of customer

Fig. breakeven analysis of the company’s (cinema’s)

In order to cover the total yearly cost of the cinema there should be
19513 customer of revenue of 390260 Birr.

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9.6. Sources and application of funds

Initial capital requirement
Item Measurement amount Price per unit Total
Projector Quantity 1 15000 15000
DVD Quantity 2 500 1000
Speaker system Quantity 1 40000 40000
Kitchen ware Quantity - 2000 2000
Office equipment Quantity - 6000 6000
Generator Quantity 1 6000 6000
Cash Quantity - - 30000
Total Quantity - - 100000birr
Sources of capital requirementss
40000 birr will be from creditors by paying 10% interest and the remaining 60000
will from the owner’s capital.
APPENDEX;
 our partners have debt of 40,000 from awash bank
 the partners almost known by all parts of debreberhan town
 the government encourages small business since , our business is a capital
structure of 60%by 40% then the partner will have a chance of gets a license
from city administer.
 the partner gets information from the existing company, research, development
government groups and from potential customers.

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