UNIT ONE

Executive Summary
This feasibility study is done for the newly organized business of W/ro Berhan Kibrom’s project that will
render standardized fast food services and sales for several types of customers in Bishoftu town. The
location of the project is very attractive and ideal for running such type of business in the town. The
project will occupy all the standards & requirements for its planed outputs set by the promoter as well as
concerned Governmental authorities and Agencies.
The promoter W/ro Berhan Kibrom has an ideal mix of educational background, versatile work and
business experience in a wide range of business sectors and activities’. She is fully familiar with the
envisaged project, locality area and environment. She is therefore highly enthusiastic to contribute as a
corporate citizen playing socially responsible and exemplary roles as developmental entrepreneurs.
The promoter W/ro Berhan, be also cognizant of the fact that service sector is the sector that has been
given much attention by the Government of Ethiopia and will be the mainstay of the Ethiopian economy,
in addition as the main resource of the country, it will contribute the predominant share of the GDP,
foreign currency earnings and is the source of livelihood of the majority of the population.
Berhan Fast Foods will be a moderately priced 40 seat fast food providing business; it offers family style
fast food and service. Pizza, Pasta, Macaroni, Tebese, Leblebe, Shiro, Tegbino and with classic Burgers,
Wraps and generous Salads are all on the menu. The project will offer specialty selections including a
lighter options and smaller portions for a children’s menu too.
Berhan Fast Food will be located in Bishoftu town in kebele 02/03 in central part of the town around
Bishoftu Bus Station. The restaurant will be wholly owned by W/ro Berhan Kibrom. The restaurant will
serve a variety of classic home-style favorites.
W/ro Berhan Kibrom plans to start her new business in a manner of providing the final outputs of her
products with the best quality and test based on the client’s preferences and requirements.
She will acquire a rental extent to her business around in one of the business locations in the town. She
will get a 35 - 50m2 space located around Bus Stations of the town, an existing retail center located in
Bishoftu town. The site was previously developed as one of the best business centers and locations in a
town. Although the location was previously utilized as restaurants, retail shops, mobile centers, stationary
and fast food providers, the former business persons removed the majority of the construction works,
furniture, fixtures and equipment which will need to be replaced. Hence, the current business location
will require some additional renovation to update the lavatories and increase table space in the dining
area.
The décor will feature wood accented chairs with blue and white checked table cloths. Dinner style tables
will be surrounded by wooden chairs with comfortable seating cushions.
Sales projections assume 100 customers per day (breakfast, lunch & dinner) resulting in annual sales of
just over 716,860.00 annually. This equates to around 59,738.00 monthly total incomes for the business.
As a result it can be considered as a highly desirable concept for ownership in a table service market,
where it is considered as a moderately profitable business outlet and therefore is a good investment.
Total start up costs will be 400,000, of which 100,000.00 (25%) will be contributed by the owners and
the remainder will be secured by a proposed credit & saving microfinance loan.
W/ro Berhan has a customer of Awach Credit & Saving Association since 24/12/2012 with Id
membership card number 25666. She has already deposited the required voluntary deposit level of br.
79,856.91. W/ro Berhan has purchased 2 shares of the association. The remaining balance of her capital
contribution 20,145.00 (100,000.00 – 79,856.00) is available on her hand.

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 UNIT TWO
Business Objectives
The primary objectives of the business plan for Berhan Fast Foods are presented below:
• To be the premier home-style fast food provider in Bishoftu town
• To provide quality meals at reasonable prices with exemplary service
Mission Statement
The promoter’s mission is to provide a unique and relaxing dining experience – similar to dining at
home. She will strive to achieve this goal by:
• By providing menu items incorporating quality ingredients at reasonable prices, and
• She will be mindful of the well being of her customers and staff– treating each and everyone with
dignity and respect – just like she would at her own home
Guiding Principles
• Being Mindful of her Customers and Staffs
• Coinciding with her family values, she will treat both her customers and staff in a manner in
which she herself would want to be treated (or better!)
Gratitude
“An Attitude of Gratitude” shown to her customers, employees and vendors – because without their
input, service, labor and time, her business would not be profitable without them!
Legal Form
The business will be organized as a sole proprietorship, wholly owned and operated by W/ro Berhan
Kibrom. She resides in Bishoftu town, Woreda Adea, Kebele 01, Kurkura locality area. The legal
documents will be provided by the town’s Revenue Authority, Trade & Industry Bureau & Hotel &
Tourism Bureau.
Her Service
Provide the warm and friendly service expected from a family-style restaurant creating an informal,
comfortable environment which will make the customers satisfied and want to return again and again.
Keys to Success
• Repeat Business: Every customer who comes in once should want to return, and recommend us.
Word–of–mouth marketing is a powerful ally.
• Hire top notch chefs and offer training to keep the chef on top of her game, and pay top wages to
ensure they stay with her.
• Location: Convenience is essential to her business; she needs to be close to her market because
she is not trying to get people to travel to reach her business.
• A variety of menu offerings with a “down home” theme, reasonably priced to establish
credibility, but not so high as to limit customers.
Location and Facilities
Berhan Fast Foods business will be located around the Bus Station of Bishoftu town, where there is
ample market demand to fast foods and its related services. The business is located in a major traffic area,
at the main central part of the town.
Daily Operations and Production
Berhan Fast Food will be open 7 days a week for breakfast, lunch and dinner requiring multiple shifts.
The schedules will be written in a manner that will allow the ability to increase or decrease hourly labor
according to sales volume in order to maintain a consistent labor cost control.
Proper labeling and rotation techniques, accompanied by ample storage facilities will ensure that high
quality prepared product will be sufficiently available to meet the demands during peak business hours.
Replenishment and ongoing preparation will continue during off peak business hours.

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W/ro Berhan will be responsible for ordering, receiving and maintaining sufficient inventory to meet
production demands. Ordering schedules will be staggered with perishable products being ordered
multiple times per week to preserve freshness. Standard grocery and supply orders will be ordered less
often, according to a predetermined schedule and storage capacity.
W/ro Berhan will rely on operational checklists to verify that each work shift has been properly prepared
for and to insure the operational standards are followed before, during and after work shifts.
The restaurant layout, including the dining room, kitchen and serving line, has been designed for
efficiency and flexibility to accommodate the fluctuation in customer traffic and peak meal periods.
Upon arrival, guests will be greeted immediately by either the promoter of the business or a server/waiter
and asked for the seating preference. Drink orders will be taken and guests can munch on the business
complimentary rolls. Once the customer’s order is taken, the order will automatically be transferred to the
chef in kitchen area. The chief cook will use the order to keep track of orders and place the meal under
the heating lamps until the order is complete. The kitchen preparation line has been designed to be
operated by a minimum staff of 1 line cook and a maximum of 1 assistant cooks. This design allows line
staffing to be adjusted to the business volume. Shift changes for all staff will involve cleanup, restocking
and preparation. All duties will be settled at the end of each shift. The closing shift will involve
designated closing duties that will leave the restaurant clean and fully prepared for the next day.
Competitive Comparison
Berhan Fast Food will face a lot of competition in the market. Those competitors are found within a one
mile radius from the business location. So that the promoter of the business will confront her competition
by providing quality and testy fast foods and services as per her clients requirements and needs.
In addition, cleanness of the restaurant and customer service quality will be one of the competitive
advantages of her business.
Suppliers
Because of their years of experience combined with their existing catering business, W/ro Berhan have
established relationships with qualified suppliers. These suppliers can provide reasonably priced
products, delivered according to the schedule.
Management Controls
The promoter W/ro Berhan will practice sound management procedures in order to control costs, insure
quality of product and provide friendly customer service. The following systems will be used by her
management:
• Order Guide: The restaurant will use an item specific order guide to track order history and
maintain designated levels of product in inventory.
• Weekly Inventory: W/ro Berhan will conduct a weekly inventory to determine valuation for use
in the preparation of weekly profit and loss reports.
• Daily Inventory Tracking: Daily inventory will be taken on specific items. Movement will be
compared to sales data to ensure designated products have been properly accounted for.
Administrative Systems
With a limited staff, it is crucial that Berhan Fast Foods remain current with daily cash outlay. The
purchase of raw materials with quality and enough quantity is crucial and immensely help her with these
daily administrative reports.
• Daily Cash Control: Sales and receipts recorded by the promoter will be compared to actual cash
and credit deposits on a daily basis. Monthly totals will be compared to actual P&L statements for
accuracy. Cash sales and credit sales receipts will be deposited in a deposit slip to bank on daily
base.
• Weekly Prime Cost Report: W/ro Berhan will prepare a weekly report that shows the gross profit
margin after cost of goods sold and labor cost has been deducted from the sales revenue. Proper

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 control of the prime cost is the single most effective measure of management’s ability to operate
the business.
• Purchasing Records/Payables: A part time bookkeeper will process and record invoices and
credits daily. Reports detailing cash expenditures, payments by check, and accounts payable
transactions will be readily available.
• Payroll Processing: Payroll payments will be issued monthly. W/ro Berhan will run reports from
the time & attendance sheets, make necessary adjustments, and prepare for transfer to the payroll
system. Payroll will be processed & paid by both the bookkeeper and the promoter of the
business.
Organization and Management
Berhan Fast Foods expects to hire 4 employees. They’ll have adopted an effective interview process
designed to staff the restaurant with highly qualified people for each position. Each applicant will be
rated and evaluated according to a pre-defined set of standards designed for each position. Background
checks will be utilized for designated positions. Recruiting efforts will always center on referrals.
Description No. of Monthly Annual Salary Educational Year of
Persons Salary (Birr) (Birr) Background Experience
Accounts Clerks 1 1,500.00 18,000.00 Degree 1 Year
Waiter 1 1,000.00 12,000.00 10+ 1 Year
Chief Cook 1 2,000.00 24,000.00 Diploma 2 Years
Asst. Cook 1 1,300.00 15,600.00 Certificate 1 Year
Grand Total 4 5,800.00 69,600.00

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 UNIT THREE
Market Analysis
This analysis is based on the Standard set by Hotel & Tourism Agency of the country: Eating and
Drinking Places Establishments primarily engaged in the retail sale of prepared food and drinks for on-
premise or immediate consumption.
This industry comprises establishments primarily engaged in providing food services to patrons who
order and are served while seated (i.e., waiter/waitress services) and pay after eating. These
establishments may provide food services to patrons in combination with selling alcoholic beverages,
providing carry out services, or presenting live nontheatrical entertainment.
Demographics, consumer tastes, and personal income drive demand. The profitability of individual
companies can vary, while profit relies on efficient operations and high volume sales, efficiency relies on
high-margin items and effective marketing. Large companies have advantages in purchasing, finance, and
marketing. Small companies can offer superior food or service. The industry is labor-intensive.
Restaurants compete with companies that serve meals or prepared foods, including grocery stores,
warehouse clubs, delis, and convenience stores. In addition, restaurants compete with home cooking.
Companies carefully manage inventory of perishable food products, such as fresh seafood and dairy
goods, to reduce losses due to spoilage.
Start-Up Summary
The total capital to open the restaurant is 400,000 birr. The majority of the expenses are in furniture
fixtures and equipment totally 179,000birr. The location requires some build-out and renovation that will
cost a total of 30,000Birr with rent expenses for one year (8,000 * 12month = 96,000.00) and will require
approximately 30 days to complete. 55,000 Birr of the start-up costs will be used to purchase raw
materials & other initial working capital requirements plus 10% contingency will cost birr 40,000.00.
Out of the total capital cost required 25% (Br. 100,000.00) of the total project capital will be funded by
the owner’s own capital. The rest 75% (Br. 300,000.00) will be covered from debt equity from Awach
Credit & Saving Association.
Owners Equity Debt Equity
Type of Investment Total Cost (25%) (75%) % Share
Machineries & Equipments 69,000.00 17,250.00 51,750.00 17%
Rent Expense 96,000.00 24,000.00 72,000.00 24%
Improvements 30,000.00 7,500.00 22,500.00 8%
Furniture & Fixture 110,000.00 27,500.00 82,500.00 28%
Cost of Raw Material 55,000.00 13,750.00 41,250.00 14%
Advertisement Exp 4,000.00 1,000.00 3,000.00 1%
Contingency 36,000.00 9,000.00 27,000.00 9%
Total Investment Cost 400,000.00 100,000.00 300,000.00 100%
Positioning
Consumers believe that meals at home are healthier and higher quality than eating at restaurants. At
Berhan Fast Foods, she will position herself as the premier home-style restaurant by preparing quality
home cooked meals with simple wholesome ingredients. Berhan Fast Foods will be positioned as the
premier traditional & Modern home-style restaurant.
Marketing Strategy and Implementation
The promoter W/ro Berhan Kibrom will do this by providing quality home style meals, prepared with
quality ingredients at reasonable prices. Customers will enjoy the quaint surroundings inside with the
wood tables and checkered table cloths. Her restaurant will provide a relaxed atmosphere and when
customers walk in they will be greeted by warm smiles and greeted just as they were arriving home.

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Her customers will enjoy her standard menu fare, along with seasonal menus so that she can better take
advantage of cost savings and stay current with some of the food industry trends.
At the proposed project, she plans to be the premier restaurant to work for as well. She believes that the
restaurant industry is a great place to begin one’s career or pursue full-time.
At Berhan Fast Foods, she believe that her restaurant will provide job opportunities both for the entry
level applicant was well as for the part-time worker searching for flexibly in job hours. She will be
proactive with her employees by scheduling regular performance reviews, and provide bonuses and other
incentives to motivate her staff. She will also provide her employees with the most current training
programs regarding safe food handling, and worker protection.
SWOT Analysis
Strengths
• Prime location with easy access
• Exceptional staff with the can do attitude
• Due to her small size, she believe she can provide exceptional quality by hand selecting to her
market specials when compared to larger corporate competitors
• The same concept holds true in her staffing requirements, by hand selecting her employees will
strive to offer unsurpassed service when compared to larger competitors
Opportunities
• Little barriers to entry allows for immediate business opportunities
• Offer additional catering services
Threats
• Government mandates (restaurant operation, food safety, and worker protection at the federal
level and health, sanitation, safety, fire at the local level)
• Rising operating costs
• Building/maintaining sales volume
• Supermarkets and convenience stores
• Consumers that believe that meals at home are healthier than those prepared in restaurants.
Pricing Strategy
At Berhan Fast Foods, cost accounting is important, since the profitability of individual dishes can vary
significantly and will initially determine the cost of the menu items. She will take advantage of her
excellent credit terms with her suppliers and will also update her menu to take advantage of seasonality
for example in local produce items. She will also closely monitor the Prime Cost Report which focuses
on the controllable expenses of Cost of Goods Sold and Labor.
Marketing Programs
• Her initial marketing campaign will consist of contacting her databases clients and notifying them
of the grand opening. She will seek the use of a local mailing service program to assist her in the
implementation of the campaign
• Ongoing- she will meticulously keep her database current and use the Constant Contact program
Sales Strategy
Customer service is of the utmost importance. Customer surveys estimate that only 1 in 20 customers that
have a problem in a restaurant will tell management about it. It will be her goal to provide a wonderful
home-style meal combined with superior customer service. Training programs will include teaching
materials to train her employees about service attitudes, customer perception and how to handle guest
complaints.

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 UNIT FOUR
Financial Projections & Analysis
The following sections outline the project’s financial plan:
• Required Cost of Start-Up, Income Statement, Cash Flow, Balance Sheet & Other related
Statements
Important Assumptions
• Source of finance 25 % own equity
75 % Bank loan
• Bank interest 13.5%
• Loan Period 3 Years
• Depreciation Expense 20% for Mach. & Equip., & 5% for Bldgs.
• Accounts receivable 30 days
• Cash in hand 5 days
• Accounts payable 30 days
• Repair & Maintenance 0.1% of Fixed Assets
• Meal Price range from 15.00- 50.00 br.
• Average breakfast price 20.00 br.
• Average lunch price 28.00 br.
• Average dinner price 28.00 br.
• It is assumed to serve 8, 34 & 28 meals in breakfast, lunch & dinner times.
• Cost of Goods Sold 60% Total Sales Income
• Working Days 365 days
• Price will rise by 5% each year
• The dining room will be comprised of 10 tables with a seating capacity of 40 seats and 10
available parking spaces to meet the needs of the customers.
Start-Up, Source and Use of Funds
Total start up costs will be 400,000.00 birr, out of which br. 100,000.00 will be contributed by the
owner’s and the remaining br. 300,000.00 will be secured through a proposed bank/micro finance loan.
Source and Use of Funds
Source of Funds
Owners' and other investments 100,000.00
Bank loans 300,000.00
Other loans -
Total Source of Funds 400,000.00
Use of Funds
Buildings/ Rental Expense/ 96,000.00
Shop Improvements 30,000.00
Capital Equipments - Furniture & Fixture 110,000.00
Capital Equipments - Machinery & Equipment 69,000.00
Location/administration expenses -
Opening Inventory/ Raw Materials 55,000.00
Advertising/ Promotional Expenses 4,000.00
Contingency Fund 36,000.00
Total Use of Funds 400,000.00
Total start-up costs are estimated to be 400,000 birr. The majority of the costs are associated with the
restaurant equipment, inventory and furniture and furnishings for the dining room. Total costs for these
items are reported to be 179,000 birr. The costs are associated with build out and renovation of the

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restaurant to provide updated plumbing and creating additional space in the dining area by removing a
non-supporting wall: 30,000 birr. Rent expenses are expected to be 96,000.00 (8,000.00 * 12months).
Additional starts up expenses are in the form of working capital and contingency 95,000 birr.
Loan Request
 The credit requirement that the promoter of this project presented to the association is br.
300,000.00 that can be repaid back within the next 3 years including all the interest and related
charges.
 The repayment will be made monthly due to the nature of the business.
 The requested loan amount will be paid through a monthly repayment amount of br. 10,180.59
that will lead to an annually repayment amount of br. 122,167.08.
Type of Investment Debt Equity (75%) % Share
Machineries & Equipments 51,750.00 17.25
Rent Expense 72,000.00 24.00
Improvements 22,500.00 7.50
Furniture & Fixture 82,500.00 27.50
Cost of Raw Material 41,250.00 13.75
Advertisement Exp 3,000.00 1.00
Contingency 27,000.00 9.00
Total Investment Cost 300,000.00 100%
Loan Repayment Schedule
Year Annual Interest Principal Outstanding Loan
Repayment Payment Payment Balance
0 - - - 300,000.00
1 122,167.08 35,252.47 86,914.61 213,085.39
2 122,167.08 22,765.06 99,402.02 113,683.38
3 122,167.08 8,483.54 113,683.37 0.00
Total 366,501.24 66,501.07 300,000.00 0.00
Projections
Annual Revenue Projection
Years 1 2 3
Breakfast – Dishes 8 8 8
Price 20.00 21.00 22.00
Sub Total 58,400 61,320 64,386
Lunch – Dishes 34 34 34
Price 30.00 32.00 33.00
Sub Total 372,300 390,915 410,461
Dinner – Dishes 28 28 28
Price 28.00 29.00 31.00
Sub Total 286,160.00 300,468.00 315,491.00
Grand Total 716,860.00 752,703.00 790,338.00
Projected Total Revenue Statement
The profit and loss demonstrates modest increases in revenues over the three expected years with
adjustments for inflation.
Year 1 2 3
Income from Breakfast 58,400 61,320 64,386
Income from Lunch 372,300 390,915 410,461
Income from Dinner 286,160 300,468 315,491
Total Income per Year 716,860 752,703 790,338
Associated Costs and Expenses

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Utilities Expense: The major essential utilities required for the envisaged project are electricity, water and
telephone lines. Per month-
• Telephone Expense – 150.00
• Water Expense – 700.00
• Electricity Expense – 450.00
• Utility expenses are assumed to increase by 3% annually.
Projected Years Utility Expenses
1 15,600
2 16,068
3 16,550
Supplies Expense: Br 375.00 for 1st year will be spent for different types of stationeries & printing
expenses and other supplies expenses. Then after it will have an annual increment of 2%.
Project Years
Expense Item 1 2 3
Supplies Expense 375 383 390
Insurance Expense: Is expected to be 1,280.00 per annum.
Repair & Maintenance Expense: is estimated to be 3,937.01 per annum for the projects fixed asset to be
repaired and maintained.
Depreciation Expense: Fixed assets of the project will have their proportional depreciation expenses as
per the following determination.
Fixed Assets Original Value Depreciation Rate Annual Depreciation
Hotel Buildings 0.00 5% 0.00
Machineries & Equipments 69,000.00 20% 13,800.00
Furniture & Fixture 110,000.00 20% 22,000.00
Total 179,000.00 35,800.00
Miscellaneous Expenses: includes expenses incurred for transportation, loading/unloading, fuel and
gases, cleaning and other expenses used for the project. Per annum 11,910.00 birr will be expected to be
spent for miscellaneous reasons and it will have an increment of 2% yearly.
Project Years
Expense Item 1 2 3
Miscellaneous Expense 11,910 12,148 12,391
Salary Payments: The total permanent manpower requirement will be 4, of whom all employees will be
skilled and semi-skilled. Salary will be higher than before by 5% for permanent employees every year.
Project Years
Expense Item 1 2 3
Salary Expense 69,600.00 73,080.00 76,734.00
Projected Total Operational Costs
Hence, the operational cost at almost full capacity of the project for one year is estimated to br.
167,972.21including 6.11% contingency for the year. The utility cost accounts for 9.29 percent while
repair and maintenance take 2.34 percent of the operational cost, supplies expense will cover 0.22
percent, miscellaneous expenses are also take 7.09 percent of the total working capital needed for the
project.
Out of the total operational cost of the project salary and wage expense covers 41.44 percent in addition
to that insurance expense accounts for 0.76 percent of the working capital, the rest but the most of the
working capital budget 32.74 percent will be used for purchase of several types of raw materials for the
fast food services.

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 Description Amount in Birr %age Share
Utility Exp. 15,600.00 9.29%
Supplies Exp. 375.00 0.22%
Insurance Exp. 1,280.00 0.76%
Salary Exp. 69,600.00 41.44%
Repair & Main. Exp. 3,937.01 2.34%
Misc. Exp. 11,910.00 7.09%
Contingency 10,270.20 6.11%
Purchase of Raw Materials 55,000.00 32.74%
Total Working Capital Required 167,972.21 100%
Projected Total Cost Table
Project Year
Cost Items 1 2 3
Utility Exp. 15,600 16,068 16,550
Supplies Exp. 375 383 390
Insurance Exp. 1,280.00 1,280.00 1,280.00
Salary Exp. 69,600 73,080 76,734
Repair & Main. Exp. 3,937.01 3,937.01 3,937.01
Misc. Exp. 11,910 12,148 12,391
Contingency 10,270 10,690 11,128
Operational Costs 112,972 117,585 122,411
Depreciation Exp. 35,800.00 35,800.00 35,800.00
Bank Interest Exp 35,252.47 22,765.06 8,483.54
Non-oper. Costs 71,052 58,565 44,284
Total Cost 184,025 176,150 166,694
Projected Income Statement
Berhan Fast Foods
Forecasted Profit & Loss Statement of the Project (in Birr)
For the Year Ended XXXX
Description Project Years
1 2 3
Income from Breakfast 58,400 61,320 64,386
Income from Lunch 372,300 390,915 410,461
Income from Dinner 286,160 300,468 315,491
Gross Income 716,860 752,703 790,338
Cost of Goods Sold 430,116 451,622 474,203
Operational Costs 112,972 117,585 122,411
Gross Profit 173,772 183,496 193,725
Depreciation Exp. 35,800 35,800 35,800
Interest Payment 35,252 22,765 8,484
Non-operational Costs 71,052 58,565 44,284
Profit Before Tax 102,719 124,931 149,441
Less: Profit Tax 18,900 26,019 34,304
Net Profit after Tax 83,819 98,912 115,137

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Projected Cash Flow

Berhan Fast Foods

Forecasted Cash Flow Statement of the Project (in Birr)
For the Year Ended XXXX
Description Project Years
0 1 2 3
Cash Inflow
Equity/Beg. Cash Bal. 100,000 95,000 76,091 57,206
Bank loan 300,000 - - -
Income from Breakfast - 58,400 61,320 64,386
Income from Lunch 372,300 390,915 410,461
Income from Dinner - 286,160 300,468 315,491
Total Inflow 400,000 811,860 828,794 847,544
Cash Outflow
Fixed Inv. 179,000 - - -
Rent & Improvement Expense 126,000 - - -
Pre-operating Costs - - - -
Purchase - 481,730 505,816 531,107
Operating Expense - 112,972 117,585 122,411
Bank Repayment - 122,167 122,167 122,167
Tax Payment - 18,900 26,019 34,304
Total Outflow 305,000 735,769 771,588 809,989
Net Cash Balance 95,000 76,091 57,206 37,555

Projected Depreciation & Amortization Schedule of the Project:

Berhan Fast Foods

Depreciation & Amortization Expense Schedule
Original Rat Depreciatio Project Years
Description Value e % n Amount 1 2 3
13,800.0 13,800.0 13,800.0
Machineries & Equipments 69,000.00 0.2 13,800.00 0 0 0
110,000.0 22,000.0 22,000.0 22,000.0
Furniture & Fixture 0 0.2 22,000.00 0 0 0
Buildings 0.00 0.05 0.00 0.00 0.00 0.00
179,000.0 35,800.0 35,800.0 35,800.0
Total 0 35,800.00 0 0 0

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Projected Balance Sheet

Berhan Fast Foods

Forecasted Balance Sheet of the Project (in Birr)
PROJECT YEARS
DESCRIPTION 0 1 2 3
ASSETS
CURRENT ASSETS
Cash 95,000 76,091 57,206 37,555
Inventory 0 51,614 54,195 56,904
Total Current Assets 95,000 127,705 111,401 94,459
FIXED ASSETS
Building and Civil Work 0 0 0 0
Machineries, Furniture & Equipments 179,000 179,000 179,000 179,000
Accu. Depreciation - Bldg 0 0 0 0
Accu. Depr.-Mac, Fur & Eqpmt’s 0 -35,800 -71,600 -107,400
Total Fixed Assets 179,000 143,200 107,400 71,600
Total Assets 274,000 270,905 218,801 166,059
LIABILITIES
Bank Loan 300,000 213,085 113,683 0
Tax Payable 0 18,900 26,019 34,304
Total Liabilities 300,000 231,985 139,703 34,304
CAPITAL
Owner's Equity -26,000 -44,900 -19,814 16,618
Current Year Profit 0 83,819 98,912 115,137
Total Capital -26,000 38,920 79,098 131,755
Total Liabilities and Capital 274,000 270,905 218,801 166,059

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 UNIT FIVE
Financial Evaluation
Profitability
Based on the projected profit and loss statement, the project will generate a profit throughout its
operation life. Annual net profit after tax will be Birr 83,819.00 at the first year of its operation and at the
end of the project year it will have a profit of birr 115,137.00.
Liquidity
The cash flow projection also shows an incremental cumulative cash balance from Birr 76,011.00 of the
first project year to Birr 37,555.00 of the last projection period implying that the project will not face
liquidity constraint to finance its operational costs and at the same time its debt obligation.
Break-even Analysis
The break-even analysis establishes a relationship between operation costs and revenues. It indicates the
level at which costs and revenue are in equilibrium. To this end, the break-even point of the project
including cost of finance when it starts to operate at full capacity is estimated by using income statement
projection.
BE = Fixed Cost = 1.03%
Sales – Variable Cost
Payback Period
The payback period, also called pay–off period is defined as the period required recovering the original
investment outlay through the accumulated net cash flows earned by the project. Accordingly, based on
the projected cash flow it is estimated that the project’s initial investment will be fully recovered within
its project life time.
Economic Benefits
The project can create employment benefit for 4 permanent employees at the time of operation and more
than 5 temporary laborers under the inception period.
In addition to supply of the domestic needs of standardized fast foods service and narrow the gap, the
project will generate birr 79,223.00 in terms of profit tax revenue for the Government within the
projected years of time. Moreover, the Regional Government can collect Employment Income Tax and
Sales Tax Revenue.

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 UNIT SIX
Conclusions & Recommendations
Since the service sector in Ethiopia is in a low level progress, growth and improvement of the service
sector can substantially contribute to the economic development at National, Regional and Family level.
The project promoter believes that, the project will contribute its own part to the modern fast foods
trading system of the town as well as will confirm sustainability of the firm’s growth and development.
By investment in advanced technologies, standardized fast foods/restaurants machineries and equipments
and by implementing codes of conducts of the town and regional government more added values can be
generated to the towns marketing system.
As shown in the above analysis, the project will pay back its debt equity within three years as per the
scheduled time table. Create a job opportunity for not less than 4 permanent residents of Bishoftu town.
Contribute to the government significant revenue in the form of income tax and sales tax.
Therefore, the project is beneficial both for the owner, residents of the town, the town administration and
the regional government as a whole.
Hence this study believes and recommends that financing W/ro Berhan Kibrom’s project and replying the
requests of the promoter has a great impact for the development of the town and will have a direct and
indirect positive effect on the project owners wealth, the development and renaissance of the region and
the country as a whole.
The credit association will also be profitable from the loan it injects to this project by generating an
interest of 66,501.07 within the project loan period.
As a result this study believes that financing this project will have a direct and indirect positive effect on
W/ro Berhan Kibrom’s wealth, the residents lived in Bishoftu town, other stakeholders and yet the
project will have a great impact to the development and renaissance of the country as a whole.

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 UNIT SEVEN
Furniture, Fixture, Machinery & Equipment Requirement and Costs
Sr. Description Name of Supplier Unit of Qt Unit Price Total Price
No. Measure y (Birr) (Birr)
FURNITURE & FIXTURE
1 Café Chair Abdulnaim Musa Importer Pcs 60 355.00 21,300.00
2 Café Table Abdulnaim Musa Importer Pcs 15 540.00 8,100.00
3 Display Board Abdulnaim Musa Importer Pcs 1 8,200.00 8,200.00
4 Balcony Abdulnaim Musa Importer Pcs 1 18,900.00 18,900.00
5 Shelf Abdulnaim Musa Importer Pcs 1 20,000.00 20,000.00
6 Kitchen Drawer Abdulnaim Musa Importer Pcs 1 16,500.00 16,500.00
7 Kitchen Board Abdulnaim Musa Importer Pcs 1 17,000.00 17,000.00
Sub Total 110,000.00
MACHINERY & EQUIPMENT
1 Power Supply Haile G/Silassie Mobile Pcs 1 2,500.00 2,500.00
2 Welcome Carpet HPL Trading Pcs 1 180.00 180.00
3 Soup spoon HPL Trading Pcs 20 24.00 480.00
4 Tea Spoon HPL Trading Pcs 20 25.00 500.00
5 Fork HPL Trading Pcs 20 22.00 440.00
6 Water Glass HPL Trading Pcs 10 45.00 450.00
7 Coffee Cup HPL Trading Pcs 25 26.00 650.00
8 Milk Cup HPL Trading Pcs 20 23.00 460.00
9 Makiyato Cup HPL Trading Pcs 20 20.00 400.00
10 Spris Glass HPL Trading Pcs 20 20.00 400.00
11 Wine Glass HPL Trading Pcs 15 65.00 975.00
12 Water Jar HPL Trading Pcs 2 240.00 480.00
13 Pitcher 2.5 liter HPL Trading Pcs 2 510.00 1,020.00
14 Permuz 4 liter HPL Trading Pcs 2 450.00 900.00
15 Big Metal dish HPL Trading Pcs 4 590.00 2,360.00
16 Small Metal dish HPL Trading Pcs 4 340.00 1,360.00
17 Big Pan HPL Trading Pcs 2 1,190.00 2,380.00
18 Middle Pan HPL Trading Pcs 2 530.00 1,060.00
19 Small Pan HPL Trading Pcs 2 350.00 700.00
20 Middle Chopping Board HPL Trading Pcs 1 300.00 300.00
21 Small Chopping Board HPL Trading Pcs 1 215.00 215.00
22 Waiter Circle Service HPL Trading Pcs 3 110.00 330.00
Waiter Rectangle HPL Trading Pcs 3 180.00 540.00
23 Service
24 Food Heater HPL Trading Pcs 1 4,770.00 4,770.00
25 Tea Glass HPL Trading Pcs 20 18.00 360.00
26 Mica Dish Circle Shumbeza Asefa Bldg Mat. Pcs 20 60.00 1,200.00
27 Oven 60 * 90 Anud Abdo Retail Electron Pcs 1 18,400.00 18,400.00
28 Tv 32" Anud Abdo Retail Electron Pcs 1 8,560.00 8,560.00
29 HD Decoder Anud Abdo Retail Electron Pcs 1 1,600.00 1,600.00
Midea Chest Freezer Kalkidan Sisay Belay Pcs 1 14,600.00 14,600.00
30 HS-670 (512L)
Dish with socket KANU Elect. Buil. Mat. Pcs 2 215.00 430.00
31 Shop
Sub Total 69,000.00

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Grand Total 179,000.00

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