1- Executive Summary

This is a business plan proposal for the establishment of cafe having the
name "Espresso essence café" in Addis Ababa. 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 Dashen
international bank.
2- Background Of The Business And Justification For The
Business
Espresso essence café is a new café partnership with an expected to
open in July, 2018 G.C at the heart of Addis Ababa, and expected to
give a standardize café service in Addis Ababa. Espresso essence will
specialize in Fast foods, Dinners, Coffee, Tea, Cappuccino, Frozen, Ice-
cream, homemade cookies and other related activities.
In Addis Ababa 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 Espresso essence decide to open a café in
Addis Ababa city. Espresso essence target customers are intellectuals,
artists, and writers with reserved VIP seats, and students, couples,
families and foreigners. Espresso essence 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 .
3- Feasibility Study
3.1 Marketing And Demand
3.1.1 Marketing Survey
Addis Ababa 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
One of Espresso essence 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 Espresso essence is couples that want to recreate
themselves.
Espresso essence strategy is based upon targeting and serving:
 The typical Addis Ababa in town 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.
 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 espresso essence 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.
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

Espresso essence will use only filtered water and will brew our coffee
in commercial coffeepots that will be thoroughly cleaned between
uses. Espresso essence 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
Espresso essence low overhead and cheaper pricing will be the key to
Espresso essence success.
3.3 Industry Analysis
Size of the Industry
In Addis, the industry is quite large, for example in Piassa there are
many cafeterias, we can found cafeterias in average almost 50 meter
apart but around sadist kilo there are a few 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.
Espresso essence 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 cafeteria is casual/upscale.
Description of Key Competitors
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".
Espresso essence Located in the heart of Addis, 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
Sidist kilo.
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.
Romina Restaurant: Located in Arat kilo . 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.
Weakness
Even if there is widely varying standards of food and service, they are
often expensive which does not consider the buying capacity of the
customers.
Oasis cafe: Located on nearer to Addis Ababa Institute of technology,
this is a corporate coffeehouse which provides coffee, tea, cakes and
sandwich service.
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..
Espresso essence 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
Espresso essence 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, dimmed light and quiet relaxing music
will help the customers to relax from the daily stresses and will
differentiate Espresso essence cafeteria from current competitors.
3.4 Financial Analysis
Espresso essence want to finance growth mainly through cash flow.
Espresso essence recognize that this means we will have to grow more
slowly than we might like.
The most important indicator in Espresso essence inventory turnover.
And have to make sure that food inventory turnover stays at
approximately four turns per month.
Espresso essence 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. Espresso essence 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:
 LEGAL expenses for obtaining licenses and permits as well as the
accounting services totaling Birr3,000
 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.
 Consultant's fees of Birr3, 000 paid to ABC Espresso Services for
the help with setting up the coffee bar.
 Insurance (general liability, workers' compensation and property
casualty) coverage at a total premium of Birr2, 400.
 Pre-paid rent expenses for one month total amount of Birr
20,400.
 Premises remodeling in the amount of Birr10, 000.
 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:
 Assume a slow-growth economy, without major recession.
 Assume of course that there are no unforeseen changes in
technology to make equipment immediately obsolete.
4- Business Goal, Mission and Objective
4.1 Objectives of The Business
Espresso essence primary goals over the next year are:
• Renovate our space in Addis Ababa, Sidist kilo.
 Acquire equipment necessary for business, i.e. coffee pots,
cappuccino machines, blenders, etc.
 Make agreement with the supplier of Espresso essence raw
material and bakery vendors.
 Create a cozy, artist friendly environment (i.e. choice of colors,
choice of music, decor)
 Open for business and become the most popular café in the area.
 Expand our business in different in area of the country
 Targeting and maintaining a net profit of at least 14 % by the
second year.
 To generate monthly sales to reach Birr 15000 by the end of forth
month of operation, and Birr 30000 monthly by the end of the
first year of operation. Espresso essence use different attractive
methods to get more customers 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
Espresso essence 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. Espresso essence 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.
Espresso essence 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:
 Product quality: Food, coffee-based beverages, and
entertainment are our products.
They must be of the high quality and value.
  Service: Espresso essence 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.
 Marketing: Espresso essence 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 reintroduced to
the neighborhood.
 Management: Espresso essence 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.
 The greatest locations - visibility, high traffic pattern, convenient
access.
 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 Espresso essence 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.
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. Espresso essence 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. Espresso essence 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 Espresso essence 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.
Espresso essence 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.
Espresso essence 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
Espresso essence cafeteria. Subsequently, free postcards with Espresso
essence 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 2018 after
certain pre-request activities are accomplished.
The time schedule is stated as follows:
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 follows:

5.4 Organizational Structure
Espresso essence 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/consultants.
 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 Espresso essence 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
 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
Table of contents:
Executive summary_____________________________ 1
Background of the business_______________________ 1
Feasibility study________________________________ 2
Business goal, mission, and objective_______________ 11
Implementation, resource plan and organizational structure_ 17
Financial plan_______________________________________21
Supporting documents_______________________________23
References_________________________________________ 24