RAYA UNIVERSITY

COLLEGE OF SOCIAL SCIENCE AND HUMANITY

DEPARTMENT OF FREASH MAN

PROGRAM: UNDERGRADUATE

ASSIGNMENT OF ENTREPREUNER

TITLE: BUSINESS PLAN

PROJECT NAME: MAICHEW CAFÉ AND RESTOURENT

PREPARED BY:

NO NAME ID

1 Goyteom Alemayo 07640

2 Dargo Brhanu 07406

3 Kewanit yirga 07677

4 Abrhe Berrhe 07555

5 Nuguse Tsehaye 07726

6 Tesfay Hagos 07752

submitted to: Mr.Assefa Submission date:18/03/2016

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Table of Contents
Introduction................................................................................................................................................................................. iii
Acknowledgment....................................................................................................................................................................... iv
1. Executive Summery.............................................................................................................................................................. 1
2. Background Of The Business And Justification For The Business....................................................................2
3. Feasibility Study..................................................................................................................................................................... 2
3.1 Marketing And Demand...............................................................................................................................................2
3.11 Marketing Survey....................................................................................................................................................2
3.12 Business Demand....................................................................................................................................................3
3.2 Technical Analysis..........................................................................................................................................................3
3.3 Industry Analysis............................................................................................................................................................ 4
3.4 Financial Analysis...........................................................................................................................................................6
4. Business Goal, Mission and Objective...........................................................................................................................7
4.1 Objectives of The Business.........................................................................................................................................7
4.2 Vision And Mission........................................................................................................................................................ 7
4.3 Keys To Success.............................................................................................................................................................. 8
4.4 Strategies........................................................................................................................................................................... 8
4.4.1 Sales Strategy.......................................................................................................................................................... 8
4.4.2 Pricing Strategy...................................................................................................................................................... 9
4.4.3 Promotion Strategy...............................................................................................................................................9
5. Implementation, Resource Plan and Organizational Structure.........................................................................9
5.1 Time Plan........................................................................................................................................................................... 9
5.2 Resource plan................................................................................................................................................................ 10
5.3 Human Resource Plan............................................................................................................................................... 10
5.4 Organizational Structure..........................................................................................................................................10
6. Financial Plan........................................................................................................................................................................ 11
6.1 Sales Projection............................................................................................................................................................ 11
6.2 income projection........................................................................................................................................................11
6.3 Cash Requirement....................................................................................................................................................... 11
6.4 Source of Financing.................................................................................................................................................... 11
7. Supporting Documents..................................................................................................................................................... 11
7.1 Legal agreements.........................................................................................................................................................11
8. References.............................................................................................................................................................................. 12

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Introduction
Maichew café and restourent is the new café which is intended to be open in 2017 e.c in
the beautyfull maichew city around raya university gate way .we preferred this place since
a number of job holder have been working in raya university and we can not pay more
getting customer for our café .

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Acknowledgment

This Business plan is a part of the subject “New Enterprise and Innovation Management”. I
am glad to submit to this report which includes the practical aspect of our study raya
university. We are happy to express to my deepest gratitude to all person who spend their
valuable time and help me and in preparing of this project work. A successful challenge of
visit in any industry gave us a chance to transfer it into a result.I

We oblige raya University for providing us with a valuable opportunity to undertake

surveys of small scale industry and we also thankful to introduce us to a new horizon in
the Entrepreneurships skills and we are thankful to Mr. Assefa for guiding us towards
succesfal preparation of this project. we would like to express my opportunity to our fends
and all people who have directly or indirectly help us in this project work

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1. Executive Summery

This is a business plan proposal for the establishment of cafe having the name “ maichew
café” in maichew. The name maichew derives from the partner’s original location . This
profile envisages the establishment of a cafe for the delivery of cafeteria services. The
present demand for the proposed service delivery is estimated from different perspective
and it expected to decline after five year of its operation but through diversifying the
customer service approach we intend to handle the existing customers along with
attracting new customers. The cafe will expect to create employment opportunities for 14
persons. The total investment requirement is estimated at about Birr 344,360 and out of
which Birr 245,000 is required for furniture and kitchen equipment. From the total cost
investment 20% covered by Owens capital the rest 80% will borrow money from
commercial bank of ethiopia.

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2. Background Of The Business And Justification For The Business
maichew café is a new café partnership with an expected to open in July, 2017 E.C at the
heart of maichew, and expected to give a standardize café service in maichew. Maichew
will specialize in Fast foods, Dinners, Coffee, Tea, Cappuccino, Frozen, Ice-cream,
homemade cookies and other related activities. In maichew there are many cafe that give
services to their customers but they cannot still satisfy the need and want of the customer
in terms of both quality and quantity. In order to maximize customer satisfaction so that
maichaw cafe decide to open a café in maichew city. Mars target customers are
intellectuals, artists, and writers with reserved VIP seats, and students, couples and
families . maichew café expected to serve this area well.

This plan offers financial institutions an opportunity to review our vision and strategic
focus. It also provides a step-by-step plan for the business start- up, establishing favorable
sales number, gross margin and profitability. Establishing this cafe has beneficiary in
maximizing the wellbeing of the society from different perspective. Some of them are,

 Increase the income of the owner

 It create employment opportunity
 It satisfy the need of the customer(quality and quantity) within a reasonable price
 It provide better place for younger’s in spending their time.
 It contributes for the development of the surrounding area.
 Increasing government revenue through taxation (Business profit tax and VAT).

In general these business increases the welfare of society and this business does not result
any environmental pollution, since it have very low by- product and if any (is use as food
for cattle’s especially for pig farms).

3. Feasibility Study

3.1 Marketing And Demand

3.11 Marketing Survey

Maichew is experiencing a trend toward the creation of evening dining/entertainment
venues. They are popular and gaining more recognition. Evidence of this is found in local
news and magazine coverage. These venues are finding new homes in the areas close to
and/or adjacent to downtown

Target Customer
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One of maichew café target customers are artists, teachers and writers who need a nice
quite cozy place to think and do their work with reserved VIP seats and for commons and
foreigners. The other target customer of maichew is couples that want to recreate
themselves. Maichew strategy is based upon targeting and serving:

o The typical maichew intown resident. This urban professional works long
hours and has relatively little time to cook at home. She/he has an active
social life and spends a substantial amount of disposable income maintaining
it.
o The many businesses which regularly use restaurant dining as an function of
conducting business.

Market Segmentation

A restaurant/coffee house would provide one of the best food and beverage opportunities
for more than 30,000 per month and adjacent neighborhoods

Market Analysis

3.12 Business Demand

Estimated demand levels based on Central Statistics Agency household income,
consumption, and expenditure surveys as well as based on a sample survey undertaken
using observation of the current demand for existing cafés and restaurant beside the
population size. The demand for the service is directly related with the growth of the
population and income of the society. Taking this in to consideration annual average
growth of 6.6% is applied to forecast the future demand then it expected to decline after its
maturity over the 5 year period. But through diversifying the service that provided to the
customers, the café will able to maintain keeping its customers.

3.2 Technical Analysis

Description of Products and Services

The mars café will offer high quality coffee, tea and cappuccino, fast foods and dinner at a
very reasonable price. Also sell homemade cookies, cakes, brownies, and Doughnuts, with
fair price.

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Key Features of the Products and Services

All drinks will be made with filtered water and the highest quality ingredients can get.
Frozen drinks will have caramel or chocolate syrup drizzled in the glass and over the
drink. Cappuccino will have whipped cream toppings as well as the option for candy
sprinkles. Cookies will have the option of a chocolate or caramel dip and sprinkles. also
offer designer flavored cream and five kinds of sweetener, i.e. sugar, honey, Equal, Splenda,
and Sweet-n-Low. Cream and sweetener is at no extra charge. Furthermore, the fast foods
includes chips, cookies, Burger, pizza, Mushebek, Baklaba, Halawa, Fetera, and dinner
include Kitffo, Key Wott, Minchet.

Production of Products and Services

maichew will use only filtered water and will brew our coffee in commercial coffeepots
that will be thoroughly cleaned between uses. Maichew will bake and cook cookies,
brownies, fast foods and dinner in our own on-site oven from proven recipes, daily. Future
Products and Services Within the next three to five years we expect to branch out into
catering and offer homemade pies, whole or by the slice. Comparative Advantages in
Production maichew low overhead and cheaper pricing will be the key to maichew
success.

3.3 Industry Analysis

Size of the Industry

In maichew, the industry is quite small, for example in Piassa there ar low cafeterias, we
can.t found cafeterias in average almost 50 meter apart but around car station there are a
a lot of cafeterias.

Key Industry Trends

This industry is booming at the present time, there is a trend toward small cozy places and
away from the large generic chain. The cafeteria business does not show signs of slowing
down. With new innovations such as flavorings and additives, it should continue for some
time Mars customers will be attracted by service in addition to this they may be attracting
through standardize customer approach, building, chairs, tables, glasses and strategic
placement. The restaurants and cafes that make up the community of establishments in the
area surrounding. Their concepts range from typical fast food/chain venues to expensive
fine dining establishments. However, the predominating nature of the immediately
surrounding restaurants and ccafeteria is casual/upscale. Description of Key Competitors

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Of the few cafeterias in the area, some are large chain with a very expensive product, others
are really home style cafeterias, the last one, and competitors are a traditional store with a
"tea room". maichew Located in the heart of maichew, while its location near many
longstanding restaurants and cafeteria would seem to offer considerable overflow, the café
is easily seen from the street and parking is at a premium. Its concept has received very
favorable press in raya university.

Strength

Consider quality of food and service with a reasonable price, and its skilled manager
together with its bright waiter can attract customers, so it has acceptance (brand name) by
the customer

Weakness

No variation on menu or service it provides. Most of its activities like the menu are limited.
Shawit hotel: Located in the janction . The location is on the street and can be perceived as
a marginally safe area. Nevertheless, the café remains wildly popular given the parking
difficulties.

Strength

Often have interesting alternative dishes on the menu and designer décor. The evening
atmosphere is also so attractive and suitable for customers.

Strength

This cafeteria has relatively many customers because of its good location. Weakness

The quality of the goods, not giving evening service and are not that much satisfactory
beside the low price

Analysis of Competitive Position

None of these establishments features a coffeehouse atmosphere or live or recorded

evening entertainment. Relative to the location of these establishments, the center of town
is centrally geographically located. Its location will easily allow for passengers from those
who came others area. .

maichew pricing strategy and comfortable atmosphere will be the key to our success. None
of the other cafeteria in the area can offer this. Competitive Edge Maichew will position
itself as unique cafeteria where its customers can not only enjoy a cup of perfectly brewed
coffee but also spend their time in an ambient environment. Comfortable sofas and chairs,

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dimmed light and quiet relaxing music will help the customers to relax from the daily
stresses and will differentiate Maichew cafeteria from current competitors.

3.4 Financial Analysis

maichew want to finance growth mainly through cash flow. Maichew recognize that this
means we will have to grow more slowly than we might like. The most important indicator
in maichew inventory turnover. And have to make sure that food inventory turnover stays
at approximately four turns per month. Maichew do not want to let average collection days
get above 45 under any circumstances. This could cause a serious problem with cash flow,
because our working capital situation is tight. Most credit sales will be via credit and debit
cards. Also do have plans to initiate direct billing for law firms and other businesses
conducting regular visits. Maichew must target a net profit of 14% at the least, and hold
marketing costs to no more than one to three percent of gross sales.

The Start-Up Expenses

Include:

o LEGAL expenses for obtaining licenses and permits as well as the accounting
services totaling Birr3,000
o Marketing promotion expenses for the grand opening of Java Culture in the
amount of Birr3,000 and as well as flyer printing (1160 flyers at Birr0.50 per
copy) for the total amount of Birr3,580.
o Consultant’s fees of Birr3, 000 paid to ABC Espresso Services for the help
with setting up the coffee bar.
o Insurance (general liability, workers' compensation and property casualty)
coverage at a total premium of Birr2, 400.
o Pre-paid rent expenses for one month total amount of Birr 20,400.
o Premises remodeling in the amount of Birr10, 000.
o Other start-up expenses including stationery (Birr800) and phone and utility
deposits (Birr 3,500).

Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the
following table. The key underlying assumptions are:

o Assume a slow-growth economy, without major recession

Assume of course that there are no unforeseen changes in technology to make equipment
immediately obsolete.

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4. Business Goal, Mission and Objective

4.1 Objectives of The Business

Maichew café primary goals over the next year are:

o Renovate our space in maichew city.

o Acquire equipment necessary for business, i.e. coffee pots, cappuccino
machines, blenders, etc.
o Make agreement with the supplier of Mars raw material and bakery vendors.
o Create a cozy, artist friendly environment (i.e. choice of colors, choice of
music, decor)
o Open for business and become the most popular café in the area.
o Expand our business in different in area of the country
o Targeting and maintaining a net profit of at least 14 % by the second year.
o To generate monthly sales to reach Birr 15000 by the end of forth month of
operation, and Birr 30000monthly by the end of the first year of operation.
Mars use different attractive methods to get morecustomers over time. For
instance we provide less price compare to the another cafeterias and we also
provide some entertainment activities for the customers like showing DSTV,
inviting music bands for special days like Valentine ’s Day and there will also
be candle night on Sunday. This plan includes chapters on the company,
products and services, market focus, action plans and forecasts, management
team and financial plan.

4.2 Vision And Mission

Maichew cafe will become the foremost coffee shop in the area. We will serve a perfect
product at a very reasonable price. We will also be a meeting place for every individual that
want to use cafeteria service. Mars will create an atmosphere conducive to creative
expression and promote the creative process. The cafe's aim is simple. It will provide a
completely sophisticated, sensual, yet casual dining and/or coffee house experience for the
many Addis people and visitors who frequent the city's casual dining spots and
entertainment venues. Maichew café aim to be able to employ several full time members of
staff and build up a team so that the partners can be clear of routine tasks and consentret
on day to day activities like meeting customer, supervising the cafeteria, holding extensive
promotion activity and so on which help the business to develop well.

4.3 Keys To Success

The keys to success in this business are:

1. Product quality: Food, coffee-based beverages, and entertainment are our products. They
must be of the high quality and value.

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2. Service: Mars patrons are paying to have a good time. Their experience will suffer if
service is not of the highest caliber. Each member of the staff will be courteous, efficient,
and attentive.

3. Marketing: Mars will need to target our audience early and often. While the business is
located in a central and accessible location, many people will have to be re-introduced to
the neighborhood .

4. Management: maichew café will need to have a firm grasp on food, beverage, and labor
costs. The dining/entertainment/coffeehouse experience must be delivered in a fashion
that will not only inspire repeat business, but encourage word-of-mouth recommendations
to others. Proper inventory, employee management, and quality control is key.

5. The greatest locations - visibility, high traffic pattern, convenient access.

6. The finest reputation - word-of-mouth advertising, promotion of our community mission

of charitable giving.

4.4 Strategies

4.4.1 Sales Strategy

My sales strategy includes:

 Establish coffee service at local businesses

 Sell gift cards, frequency cards, pre-paid cards, and offer discounts to
key groups
 Create an ongoing sampling program
 Conduct a consistent, aggressive marketing program
 Be an active member of the community; be visible at charitable
functions
 Solicit customer feedback to constantly improve and streamline our
operation
 Staff salaries that are 10% above the industry average in order to
attract the best people
 Hiring for attitude so that maichew café always have a friendly,
enthusiastic staff to make customers feel welcome and appreciated;
constant staff training to assure the best quality possible
 To reduce customer waiting time, and create efficient product
ordering
 Create a mobile kiosk to take Dark Roast Java into the community at
special events, farmer's markets, art shows, etc.

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4.4.2 Pricing Strategy
Food, drinks, and entertainment options are priced to give us an attractive margin while at
the same time offering value to the consumer. Maichew café want repeat business. And
also want the experience to remain fresh. Within lies why the food, beverages, and
musical/entertainment programming will be relatively flexible. Comparing with other
competitive cafeterias we will provide fewer prices to our customers. Maichew will offer
two sizes of drinks, small Birr 4.00 and large Birr 7.00. Our cookies and brownies will sell
for Birr 12.00 each.

4.4.3 Promotion Strategy

The first step that maichew take in promoting our cafeteria is conducting an opening
ceremony. On this ceremony different well known peoples will be invited and some part of
the customers will also be invited. Also invite our neighbors to have a good public
relationship. Intend to advertise in the local newspapers and offer a "frequent drinkers
club" discount to our best customers. We will also send out advertise through direct mail,
which will include cents off coupons. Maichew will promote our company name and label
almost more than the product itself, because to be successful besides have to stand for
brand-name integrity, excellent menu offerings, and first class entertainment and fun.
Maichew will have Happy Hour, price reduction for special days, like holidays, Valentine’s
Day. As well as provide special Torta cake for those of who celebrate their birthday parties
in our cafeteria with low price. One thousand one hundred sixty flayers will be distributed
in the adjacent neighborhood, on the University campus, at the malls and in the selected
office buildings within two weeks prior to the opening of Mars cafeteria. Subsequently, free
postcards with Maichew endorsement will be printed to increase the company visibility
among the patrons

5. Implementation, Resource Plan and Organizational Structure

5.1 Time Plan

The operation of the project will start at the beginning of 2017 after certain pre-request
activities are accomplished. The time schedule is stated as follows

No Activity involved Time schedule

1 Developing the project 10/3/2016 E.C
2 Obtaining license 20/4/2016 E.C
3 Purchase material 7/7/2016 E.C
4 Promotional strategy 22/10/2016 E.C
5 Staring up business 1/1/2017 E.C

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5.2 Resource plan

5.3 Human Resource Plan

The personnel plan calls for hiring 14 full-time salaried employees at start-up. Any
additional hires will be part time and devoted to the expansion of any catering function, as
well as increased capacity/operation of a private party function. Employee salaries are as
follow

5.4 Organizational Structure

Maichew café organizational structure will be a simple pyramid style with the owners
putting in as much work as the employees. An additional manager (to be hired) will assist
in maintaining and reviewing operations of the restaurant and the entertainment
venue/bar. A chef (to be hired) will manage kitchen operations and be crucial to
maintaining food inventory stability and assistance in menu development. An assistant
manager/senior server (to be hired) who will be a salaried employee will provide regular
table service as well as assistance to the manager and the general manager. A
sous-chef/line cook (to be hired) will perform secondary management functions in the
kitchen as well as provide assistance to the chef in main kitchen/cooking functions. Part-
time personnel will be hired to handle bartending, serving, and dishwashing functions. The
marketing and accounting function will be handled by independent contractors/consultant

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6. Financial Plan

6.1 Sales Projection

The most important indicators in our case are daily seating "counts" and weekly sales
numbers. Also make sure that we are turning our inventory rapidly so as to avoid food
spoilage. Our project to perform at five years projects .from those out of which one would
be a small scale and others would be of an intermediate implementation. The source of
sales would be the fees for the feasibility studies.

6.2 income projection

6.3 Cash Requirement

The business at least needs 344,360.00 birr for business establishment, commencement of
operations and liquidity support. The shareholders will have equal share and business are
obtained in two ways.

 From shareholders 20%

 From Bank 80%

6.4 Source of Financing

The finance for this business would be obtained from shareholders and banks. From bank
Mars provide the start up cash of 275,485.00 birr it have interest from bank. Each members
of the company should buy share by 11,478.60. Hard work is expected from us to be
successful in competition and to return birr taken from the bank with interest.

7. Supporting Documents

7.1 Legal agreements

The following agreements hold for all partners involved in the venture:

 In case one partner wants to part ways from the company he or she must
inform the company one month ahead of time

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  All company secrets should be protected by all members of the
organization
 Salaries of employees would be paid when revenues of the organization
exceed 50% of first months cost
 Dissolving of partnership is allowed if the venture has returned the costs
involved ahead of the six month.

8. References
 Ethiopian business development service network (EBDSN), How to write a

business plan 2005/6 E.C

 AAIT Entrepreneurship for Engineers lecture note/ Zerihun G.

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