Executive Summary

Youth Skateboard is a manufacturing, retailing and training company. (“Youth

Skateboard”) is in Addis Ababa and registered as partenership that will provide
sales of skateboards, apparel, and other related products to customers in its targeted
market. The Company is owned by this group.
The primary revenue centers for the company will come from the sale of
skateboards and apparel. In addition, the company gives a training on how to skate
with a safely built environment. The company will make its product through the
manufacturing warehouse, which is in CMC, Addis Ababa where the training will
take place. Currently sourcing several wholesalers and manufacturers that will be
able to provide the Company with the materials needed for production of the
products for sale to the Company’s targeted demographic of teenagers living
within the target market. The Company will also generate third streams of revenue
from the sale of bottled water, energy drinks, and small packaged snacks. The
Company will also maintain an expansive online sales platform. The third section
of the business plan will further describe the services offered by the Use
Skateboard Shop. The business is well-matched in a way that extensively used
materials are recycled products, for examples: paint buckets and plastic bottles.
The goals for the business are to build a long-term satisfying relation with key
parties-customers, suppliers, distributors- in order to retain their long-term
preferences and business. The ultimate goal for the next three years is to build on
the marketing network of the company since this kind of business is new to the
society.The corporation expect to see the business in five years with not only
giving experience through our product and service but also be a foundation for
other green opportunities. In a way that, using the rubbish and trash of the modern
age and turn it into a sustainable business. Profiting both the society and Mother
Earth. The business is built on customer experience and with time the company is
expected to flourish, with its benefits.
The target audience is teenagers, specifically teens who are interested with the
activity “skateboarding”. Also, parents who wish to give toys to their children.
Use Skateboard will be the first company to sell, produce and teach in Ethiopia.
But still the business would not need much introduction because it is a global
activity just like bicycles. Our competition lays with substitute products, but our
position in the opportunity right now gives us competitive advantage.
Youth Skateboard Shop’s mission is to become the recognized leader in its
targeted market for providing an extensive line of skateboards and help the public
on reprocessing plastic.
The Company was founded by this group. This group witnessed the opportunity.
Raeey which is a member of this group has come up with the idea to produce the
skateboards with plastic buckets which is both cost and environment friendly.
Through her insight, we will be able to bring the operations of the business to
profitability within its first year of operations. Surafel is the most familiar with the
sport which he has access to potential customers who are really interested about the
business and with his experience in skating since he was kid it will be easier for
him to teach customers. Samson, who is also a member, has informed the business
in Ethiopia to the outside world specially America which have supported the idea
and are willing to supply the need material for specific customer desires. Dagmim,
also a member has located the best location for the business to undertake.
The Founders expects that the business will aggressively expand during the first
three years of operation. Surafel intends to implement marketing campaigns that
will effectively target individuals (primarily teenagers) within the target market.
The conservative sales forecasts, based on solid market research, will yield a net
profit over birr220,000 in the first year, increasing to almost birr320,000 in year
three. To support this plan and set it in motion, the owners are contributing
birr200,000 in cash. We are seeking an additional birr250,000in short-term loans,
to be repaid over three years, to cover our start-up requirements.

2. Company and Financing Summary

Youth Skateboard, is registered as a partnership in the CMC, Addis Ababa. Under
this group Raeey and Dagmawi will handle all merchandising while Samson will
handle all administrative duties. Training will be handled by Surafel with Beza.
All will share managerial duties.
Youth Skateboard is a business that provides experience in a fun, convenient way.
Youth skateboard is a green manufacturing and retailing company specializing in
convenient services for urban skate lovers. Our mission is to provide service,
safety and a family atmosphere, enabling parents to spend more time having fun
with their young.
Our business philosophy is integrity, fun, innovation through the sport activity
“skating”. Our vision for the long-term is to be an example for other businesses in
green investment and build an ambiance of franchise. For the short-term we will
produce quota of skateboards and penetrate the market with an attractive pricing
method.
The industry is new, but the idea is not. The first skate park was built in Lafto,
Addis Ababa. The project has even brought foreign investors of the sport and
invest in it. But due to lack of the product and expensiveness it was only an interest
for the few around the community. Youth skateboard will be effective in this
environment due to its affordability and method of production which will decrease
the headache of the government on maintenance level of salvage products. The
web will help us better communicate with the rest of the world and let them know
about the way our business is fun and green at the same time.
Currently, Youth Skateboard requires birr1,250,000 of funds. In the financial plan
is a breakdown of how these funds will be used:
The group is seeking an investment from a third party currently.
The group owns 100% of the Use Skateboard Shop, Inc. Where profit is divided
equally between everyone.
If the business is very successful, the group may seek to a third party for
significant earnings multiple. Most likely, from a foreign investor.
We will hire a qualified business broker to sell the business on behalf of the Use
Skateboard Shop. Based on other country numbers, the business could fetch a sales
premium of up to 4 times earnings.
Management has established three firm objectives it wishes to achieve in the next
five years:
 1. Four stores located in Urban areas by the end of year five.
2. Gross Margin of 55% or more.
3. Net After-tax Profit above 15% of Sales.
4. Train as many as +200 youth in the coming 4years.

3. Products and Services

Below is a description of the products offered by the Use Skateboard Shop.
3.1 Sales of Skateboards, Skateboard Apparel and Training
As stated in the executive summary, the Company intends to acquire a substantial
amount of material for skateboard production, skateboard apparel, and related
accessories which it will sell through its retail store and online sales platform.
Management expects that the business will generate gross margins of 78% on each
item sold by the Company. The Company, to a minimum extent, will also generate
income from giving training on the use of skateboard and the sale of bottled
beverages and packaged snack goods.
In addition to the retail facility, Management intends to develop an online platform
which would allow the business to aggressively sell its products on the Internet by
the type of order or preference by the customer. As many people now use the
internet to purchase goods, management sees a significant opportunity to develop a
secondary sales channel that is not overly expensive to maintain. Once the retail
operations of the business are functional, Management will hire a web
development firm to develop the online ordering platform.
Management will rely on customer feedback, suggestions, and sales reports to
introduce or eliminate certain brands, styles and sizes.

4. Marketing strategies
The target audience is teenagers, specifically teens who are interested with
the activity “skateboarding”. Also, parents who wish to give toys to their children.
As the company will be situated in the epicenter of their residential community it’s
believed they will make up the largest percentage of our customer base.
The competitors are Lafto Skate Park, Kera Skate Park and other related
entertainment avenues including game zones, movie centers, and other recreational
spaces.
The competitive advantage will be that this is an untapped market and will be a
sensibly new entertainment sector for the youths to enjoy which will push them
from other sectors of entertainment to our market.
The sample offers this company gives for first customers will be discounts up to
25% for our skate products and services.
The company will be able to provide for up to 3000 peoples on their skate park
services and will be able to sell up to 1500 skateboards per month since it is a
startup company and due to small capacity of their warehouse.
Fees charged for the product and service should be a fair reflection of the value to
the client and should recognize the following attributes:
 The quality of the product and service provided
 The excellence of the skate park provided
 The superiority of the product and service provided in respect to competitors
 The cheapness of the products while keeping their standards
On the pricing Youth skate has decided to sell our product and render service on
the base of single skateboards and rate of hour played by our customers. It charges
fee for, minimum 1000 birr and maximum depends on the customer preference per
skateboard and 50 birr per hour played. This method has been useful in the past in
working out how much to charge a customer, and it appears to be a fair and
efficient.
To promote its products, it can use the following methods.
 Through social media (Instagram, telegram, Facebook)
 Through brochures, billboards
 Through mass media (television, radio….)

The company’s strategy will be based on building long-term customer

relationships, which will result in repeat sales. The company will manage its assets
and create profits with no debt financing. It does not anticipate any cash flow
problems. The majority owner of Youth skateboard corporation will assume
strategic management functions. Management will oversee market research and
customer support.
5. Operational plan
5.1 Production
 Raw Materials
 Most skateboard decks are made of glue and wood (usually maple), but
some are made of composites, plastic, aluminum, nylon, Plexiglas,
fiberglass, foam, and other artificial materials. For the product we will use
plastic and decorated by screen-printing.
 Skateboard trucks are usually made of aluminum or other metal (steel,
brass, or another alloy), though a few are made of nylon.
 Skateboard wheels are supplied to us the management believes with time it
will be included in production.
 Assembling is done by manufacturing department. To assemble a
skateboard, the personal needs ball bearings (usually full precision and
made of metal) and a piece of grip tape. Grip tape comes in a large piece
bigger than the deck and looks like a piece of sandpaper. It is put on the top
of the deck to provide traction.
Design
Use Skateboard decks, trucks, and wheels are designed by signature styling. The
manufacturers will use templates to impose their design on the shape of the board.
Artwork is created on computer; some is also done by hand.
The Manufacturing Process

The manufacturing result includes two type of product:

i. Decks
ii. Trucks

i. Decks

 1 A piece of plastic undergoes a treatment that allows it to be peeled into

veneers that are then delivered to the deck.
 2 Each veneer is then put into a glue machine by hand. This machine evenly
coats each veneer with a water-based glue specially designed for wood.
 The manufacturing steps to make the skateboard deck.

 3 After being coated, the veneers are numbered and stacked according to
grain and level of use. Each skateboard is made of seven layers of veneer.
The first, second, fourth, sixth, and seventh layers have the grain running
from the nose to the tail of the board. The third and fifth have the grain
running from side to side. These stacks are put into a two-part mold inside a
hydraulic press. The mold creates the nose, concave, and tail of each
skateboard. Each press makes five to 15 decks at one time. The resulting
laminate sits in the press for anywhere from a few minutes to a few hours.
The longer the time, the more naturally the wood and glue set.
 4 After the laminates are removed from the press, eight holes for the truck
mount are drilled by hand with a drilling rig.
 5 A worker—called the shaper—takes the newly drilled board and, with a
previously made template, handshapes each deck with a band saw. The deck
is hand sanded and coated with a paint or sealant.
  6 After the deck is dry, a decorative design is imposed by screen-printing.
Each color is hand painted separately on a custom screen-printing machine.
The decks are then dried and readied for shipment.

ii. Trucks

 7 With one of three materials (wood, plastic, or clay) a master truck pattern
is hand tooled. This is used to make a match plate. With the plate, a sand
mold is made for making the actual truck. A sand mold uses sand as its
primary mold material, usually with clay and water. The material is packed
around the plate then removed.
 8 Using machines, a worker heat-treats each part. The parts are then grinded,
polished, and drilled.
 9 Finally, each truck is hand-assembled with kingpins, brushings, grommets,
washers, and nuts and prepared for shipment.

Quality Control

When the components are purchased separately, the consumer must follow all
instructions for his own safety. All screws must be tightly secured so that they will
continue to hold the trucks in place while stunts are being performed.
Manufacturers continually check the finished boards to see that they are secure and
meet safety requirements.

The location of the business is in Addis Ababa, Ethiopia. In the capital a place
called CMC. The corporation composes of different fixed assists with an industrial
and retailer foundation. In addition, it has a vacant space for training use.
CMC has been chosen because of its advantage position in a way that the closest
skate park is 20km away and the city is a residence for most average income
families. So, accessibility is our motto for those communities and the employees
would be recruited for the same community to build a sustainable market with
relationship for common ground.

Description Estimated Cost

Lease Payment and 150,000
Deposit
Furniture, Fixtures and 150,000
Equipment
Security Deposit 25,000
Maintenance 20,000
Additional Utilities 15,000
Leasehold Improvements 10,000
Miscellaneous Costs 50,000
Total

Legal Environment
The business is done under the social and legal duties of a corporation in Addis
Ababa.Legal matters are represented through external firms. The corporation will
not have a patent on its production methods because it is a green way of making
material and the management believes it should be accessed for any interested
parties.
The group will handle management of the business. The factory requires five
individuals, most work are done through machines. The factory requires personal
who have experience with the machineries. Currently the company doesn’t require
freelancers. The salary is based on the number of skateboards produced plus
commission. In addition, the company will have two employees for selling the
product. We will find the required personal using different media sources. Their
will be simple trainings given before individual start work it will compromise of
video and practical methods of training.

Management & Organization

It ensures that it hires qualified, honest, hardworking, customer eccentric and are
ready to work to help them build a prosperous business that will benefit all the
stake holders (the owners, workforce, and customers.
Currently, Youth Skateboard Firm is planning to employ: -
 Cashier
 Competent Sales Officers
 Maintenance and Repair personal
 Manufacturing personal
 Accounting and Financial Officers
Our advisors were the Commercial Bank Of Ethiopia and a foreign partner. Our
mentors engage in the business and they have experience in launching the industry.
Under this group Raeey and Dagmawi will handle all merchandising while
Samson will handle all administrative duties. Training will be handled by Surafel
with Beza. All will share managerial duties. Management’s duties include
recruiting, selecting, orienting, training, coaching, counseling, and disciplining
managers and communicating values.

Finance Department
 Responsible for preparing financial reports, budgets, and financial
statements for the organization
 creates reports from the information concerning the financial transactions
recorded by the bookkeeper
 Prepares the income statement and balance sheet using the trial balance and
ledgers prepared by the bookkeeper.
 Provides managements with financial analyses, development budgets, and
accounting reports; analyzes financial feasibility for the most complex
 proposed projects; conducts market research to forecast trends and business
conditions.
Admin and HR Manager
 Responsible for overseeing the smooth running of HR and administrative
tasks for the organization
 Regularly hold meetings with key stakeholders to review the effectiveness of
HR Policies, Procedures and Processes
 Maintains office supplies by checking stocks; placing and expediting orders;
evaluating new products.
 Ensures operation of equipment by completing preventive maintenance
requirements; calling for repairs.
 Defines job positions for recruitment and managing interviewing process
 Carries out staff induction for new team members
 Responsible for training, evaluation and assessment of employees
 Responsible for arranging travel, meetings and appointments
 Oversees the smooth running of the daily office activities.

Marketing Executive Department

 Identifies, prioritizes, and reaches out to new partners, and business
opportunities.
 Identifies development opportunities; follows up on development leads and
contacts; participates in the structuring and financing of projects; assures the
completion of relevant projects.
 Writes winning proposal documents, negotiate fees and rates in line with
company policy.
 Assessment of Risk
Strength: Since Addis Ababa only has one or two skate parks, Youth Skate Park has the
advantage of being both a skateboard shop and a skate part together.
Weakness: The skateboarding community is a tight-knit community. Because of this it, might be
difficult to attract customers in the beginning.
Opportunity: Since the skate boarding trend is increasing among teenagers and young adults,
being an all-inclusive skateboard shop and park Youth Skate Park can meet the growing
demand all at the same place.
Threats: Because of the growing trend, there might be new skate parks and shops opening up in
the near future.
Other risks the company might face are:

 Failing to attract customers.

 Failing to keep customers.
 Failing to secure bank loan.
If it comes down to these issues, the company will be forced to reduce prices and downsize the
company.

Financial Plan
Start Up Costs
The Skateboard shop requires 1,250,000 birr in funds.

Description Estimated Cost

Lease Payment and Deposit 150,000
Working Capital 400,000
Furniture, Fixtures and Equipment 150,000
Opening Supplies 50,000
Security Deposit 25,000
Company Vehicle 300,000
Marketing Budget 75,000
Leasehold Improvements 50,000
Miscellaneous Costs 50,000
Total 1,250,000
 Sources of Funds
In order to start Youth Skate Park, it is going to need financing. The partners in this business venture
have determined they are going to need 1,750,000 birr to finance the full operation and are going to use
two financing options.

6. Equity Financing (Internal)

All the partners have equal share in the business with all contributing a starting capital of 200,000 birr
each. This makes a total of 1,000,000 birr.

7. Debt Financing (External)

The partners are going to apply for loans from banks for a total of 750,000 birr.

Equity Financing
Partner Investments 250,000

Total Equity Financing 250,000

Debt Financing
Bank 1,000,000

Total Debt Financing 1,000,000

Total Financing 1,250,000

Financial Statements
 Cash Flow Analysis
 Proforma Profit and Loss Statement
 Balance Sheet
 Youth Skate Park
Cash Flow Analysis
3 Years

Year 1 2 3
Cash from Operations 1,522,25 2,222,170 2,892,620
0
Cash from Receivables 0 0 0
Operating Cash Flow 1,522,25 2,222,170 2,892,620
0

Other Cash Flow

Equity Investment 250,000 0 0
Increased Borrowings 1,250,00 0 0
0
Sales of Business Assets 0 0 0
A/P Increases 370,020 435,870 501,250
Total Other Cash Inflows 1,879,02 435,870 501,250
0

Total Cash Inflows 3,401,27 2,658,040 3,393,880

0

Cash Outflows
Repayment of principal 80,790 88,370 96,660
A/P Decreases 248,970 298,760 358,520
A/R Increases 0 0 0
Asset Purchases 1,125,00 555,540 723,160
0
Dividends 1,065,58 1,555,520 2,024,840
0
Total Cash Outflows 2,520,34 2,498,200 3,203,170
0
 Net Cash Flow 880,930 159,850 190,710
Cash Balance 880,930 1,040,780 1,231,490

Youth Skate Park

Proforma Profit and Loss Statement
3 Years
Year 1 2 3
Sales 6,552,903 7,142,664 7,785,506
Cost of Goods Sold 655,294 714,272 778,558

Operating Income 5,897,609 6,428,392 7,006,948

Expenses
Payroll 2,430,009 2,502,901 2,737,123
General and 144,007 149,763 155,752
Administrative
Marketing Expenses 137,615 150,005 163,505
Professional Fees and 250,003 257,507 265,239
Licenses
Insurance Costs 75,001 78,759 82,694
Travel and Vehicle 150,000 165,002 181,504
Costs
Rent and Utilities 175,008 183,754 192,942
Miscellaneous Costs 49,156 53,576 58,397
Payroll Taxes 364,504 375,448 410,571
Total Operating Costs 3,775,303 3,916,715 4,247,727

EBITDA 2,122,306 2,511,677 2,759,221

Income Tax 806,502 908,118 1,005,954
Interest Expense 131,071 121,973 112,029
Depreciation Expense 58,930 58,930 58,930
 Net Profit 1,125,803 1,422,656 1,582,317

Youth Skate Park

Balance Sheet
3 Years
Year 1 2 3
Assets
Cash 880,935 1,040,783 1,231,495
Amortized Development Cost 525,009 580,552 652,877
Inventory 350,007 627,771 989,356
Furniture, Fixtures and Equipment 250,004 472,225 761,489
Accumulated Depreciation 80,361 160,716 241,078
Total Assets 1,925,594 2,560,615 3,394,139

Liabilities and Equity

Accounts Payable 130,054 267,163 409,901
Long Term Liabilities 1,169,216 1,080,845 992,473
Other Liabilities 0 0 0
Total Liabilities 1,299,270 1,348,008 1,402,374

Net Worth 626,324 1,212,607 1,991,765

Total Liabilities and Equity 1,925,594 2,560,615 3,394,139
Appendices