Bereta 2nd Proposal

Project Proposal of Bereta Debela 3* Hotel Buildings
UNIT ONE
Executive Summary
Ethiopia is one of the African countries that possess the highest number of UNESCO World Heritage Sites in
Africa, with different sites spread throughout the whole country, and, therefore, has great potential to develop
itself as a tourist destination. The Government of Ethiopia (GoE) has prioritized tourism development in its
development strategy, to optimize the existing tourism resources as a driving force of economic growth for the
whole country.
Ethiopia is a strategically important country in the Horn of Africa’s foremost countries and therefore, many
international meetings and conferences are held in Ethiopia. This creates huge demand for accommodation at an
international standard and even an increase in such a demand is expected in the future because the importance
of Ethiopia has been growing and many international organizations have been continuously strengthening their
institutions and augmenting their personnel in Ethiopia. The supply of accommodation, however, is far below the
level needed to meet the demand. Since the hotel industry can create job opportunities for so-called blue collar
workers, the development of the hotel industry benefits not only the tourism sector but also has a great impact
in poverty reduction. In the past twenty years the country has shown an encouraging private investment in all
areas of economic and social activities. The private sector has been motivated by free market oriented economic
policy on the government. To stimulate private investment, the government amended the investment
proclamation several times which resulted in booming of investment in all sectors of the economy.
Considering the attractive investment climate, Ato Bereta Debela has decided to establish a three star hotel at
Bishoftu town of the Oromia regional state. The promoter Ato Bereta Debela has secured a total leased land with
the area of 394.5 Square meters. The project building will comprise G+7 & additional G+3 buildings within the
compound with a total capital of birr 122,076,086.83.
The proposed project will be managed by the owner of the project who has accumulated adequate experience in
several types of business activities within the country. In addition to this, hired employees will handle the day to
day activities of the project. It will also create employment opportunities for about 58 residents of Bishoftu town
in different types of employment designation.
This brief survey has been undertaken to assess the technical as well as economic viability of the complex outfit.
As subsequent sections of the report reveal; the project shall be financially sound while its socio-economic
contributions cannot be neglected.
The location of the project is ultimate for successfully run such type of business. The new project is located at the
center of Bishoftu town in front of Rift Valley University and adjacent to Tommy International Hotel, on the way
to the right side of the road to Addis Ababa. Since its location is on the way to the main gate of Addis Ababa
(capital of the nation), the business opportunities for the owner as well as other business persons who have a
business centers around the project is considerably high.
This new project lies on a total area of 394.5sqm of land, out of which the construction of the buildings are on
297sqm of land. The hotel building project consists of 25 rooms used for bed room services of its clients and
guests, reception area, gift shops, meeting halls, bank services, sauna & massages, bar and restaurants.
Furthermore it will have a garden and parking area for the users of the hotel & guest house. The total investment
cost of the project including its working capital requirement and contingency, furniture’s and related equipments
plus procurement of two vehicles are estimated to Birr 122,076,086.83 based on the bill of quantities prepared
by the engineers of the building and assessment of current market price of furniture’s and equipments. Out of
which about 61% accounts for Birr 73,979,758.74 is already injected to the construction work of the first G+7
building, acquisition and pre-production costs of the land, partial procurement of furniture & equipment’s and
additional working capital contribution raised from the owners own capital. The remaining balance of Birr
48,096,328.09 (39%) will be expected from Bank’s in the form of long term debt.
The investment under consideration is also equipped with the aim of establishing a modern commercial hotel and
room services complex at Bishoftu town.
Promoter – Ato Berta Debela 1

Since the area under consideration is only 44kms far from the metropolis of the country and uninterrupted
struggle of the municipality of the town, Bishoftu town had to have well developed socio-economic
infrastructures. Such as road, electric power, water sources, telephone & internet line accesses and other
infrastructures.
To take a broad view, the project is ideally located for the purpose of modern hotel and room service center.
Even though, like most other business ventures, it aims to maximize return on invested capital, it also aspire the
promoter to contribute an additional view to the town, create more job opportunities for the local people and
making its own contribution to the renaissance and development of the country as a whole.
Moreover, in a process of attaining this basic original idea, it also benefits the community by creating a new
recreational hotel compound and the youth of the town will also benefited by having a high-quality recreational
mix. The town’s administrations will also have an additional revenue/income through VAT, Profit tax and
employment income taxes.
The project will not only conducive but also offer modern facilities that will make the guests of our clients turn
into our clients. It will have the best facilities and also the right people to handle these amenities. Our staffs are
not only professionals with the added touch of competence but have the experience to anticipate the needs of
our clients.
The strong business structure has led us into deploying the best means of sourcing for and recruiting the best
staffs for the business. The project will create 58 permanent job opportunities to the community. The promoter
not only believe in recruiting the best but in ensuring that they are in tune with the vision and objectives and are
committed to seeing us achieve our goals as a company.
The promoter believe in ensuring that the employees are not only productive but that they remain happy whilst
carrying out their tasks, it is for this reason that Ato Berta has created a unique welfare package for them that is
the best in the industry amongst the category. Also, the promoter has put in place polices that will allow for the
continuous trainings of his employees in order to enhance their skills.
The project customers care service is excellent as it has those who not only have a thorough knowledge of the
industry but keep informed on current trends to handle this position and therefore help inquiring clients better
understand what they are seeking for.
Because Ato Berta know how important his clients are, he has strategies in place that will ensure that his loyal
clients get incentives which comes in form of a discount for every client they refer to him. This has made most of
his clients turn into active marketers on his behalf and has grown his revenue base tremendously.
It is clear that Ethiopia follows the free market system and this in turn needs the individuals to inject their
potentials to the economy, as a result the problems that the nation currently faced will gradually eradicated and
the national economy will also become progressively developed. It is this understanding and courage &
understanding for this project to be planned by the promoter Ato Berta Debela.
This feasibility study is meant to briefly show the project’s importance, area advantages, planned activities,
estimated project capital, its profitability and other important aspects for the concerned stakeholders.
Hence, this feasibility study is conducted to determine the viability of the project by capturing the current and
future demand and supply of hotel services at Bishoftu town - a neighborhood to Addis Ababa.
Overall Strategy: Success will depend on offering a very high quality hotel experience, including making the most
attractive setting and recreational amenities, and offering a superior customer service. A very high quality
experience – both within and outside the hotel & conference facility – will offset the extra time and cost required
to reach Bishoftu from Addis Ababa & Adama.
Target Markets: The center’s location, amenities, and ability to develop a high quality facility provide the chance
to focus on several promising niche conference markets. One key market, linked to the community’s attractive
setting, is for small & medium (100-700) executive retreats, executive training sessions, board visioning sessions,
and incentive travel and similar events. For this type of event, participants are willing to spend a bit more time
and money to have a good hotel & conference facility, a more sequestered setting, and a chance for enjoyable

extra-hotel activities. A second important market is for larger events, particularly linked to unique Governmental
& Non-governmental institutions.
Financial Performance: Once the facility is built and an initial period of time is provided to market the center and
book events, the hotel & guest house center is estimated to attract an income of birr 23.2 million & above.
Reasonable Expectations: Nearly all hotel service centers in Bishoftu, Addis Ababa and Adama do generate
enough revenue to cover annual operating costs. Hotel & guest house facilities are widely seen as valuable
community resources because they bring significant spending into the community.
Benefits to the Community: The community economic benefits expected to result from establishing a hotel &
guest house facility in Bishoftu will bring great opportunity for the residents of the town.
Major Findings of this Study
 The minimum net profit from service is expected to be Birr 129 thousand in the first year and the
maximum profit will be registered in year 10 is more than birr 17.3 million. The cumulative net cash
inflow is to be Birr 120.5 million at the end of the project life.
 Using the major investment decision techniques, the launching of the hotel project is found to be
attractive showing positive financial results, presented in financial evaluation section of this study.
 The project will create job opportunity for more than 58 workers permanently and will pay more than 1.5
million birr on the first year for its employees as a salary.
 The project will generate income to the government in the form of profit tax during its project life.
Purpose of this Study
 The objective of this study is to investigate the economical as well as social outlook for a hotel & guest
house facility to be included as one portion of the proposed project center. The hotel & guest house
center is planned as a collaborative project of the promoter Ato Berta Debela & will be considered as one
of the sister companies of his other portfolios.
 The purpose and goal of this Feasibility Study is to provide a viable option of capital for the construction
of the second G+3 buildings with additional service capacities and its necessary support spaces. This
study reaffirms the need for additional performance space as identified in the next sections of this study
and provides a program and design option to meet the increased needs of the project.
 In relation with the feasibility of this project, the other main objective of this study lies on requesting the
concerned Government Authorities to allow the promoter to bring construction materials, finishing
materials, furniture, equipments & machineries as well as two vehicles as a duty free privilege from
abroad in order to finalize the project on time and with quality materials.

UNIT TWO
Project Promoter
Legality
Project promoter: Ato Bereta Debela Hawase
Project: Three Star Hotel
Total Capital: 122,076,086.83 Birr
Address: Oromia Region, Bishoftu town, Kebele-05, H.No. -.
Telephone: +251 930 108907
Legal form of Business: Sole Proprietorship
Investment License: KIO/BMB/00032 Issued on 25/05/2008
Authorizing Office: Oromia Regional Government, Bishoftu Town Investment Bureau
Background
Ato Bereta Debela as a sole trader engaged in several types of businesses since 1980. He has started his business
activity by establishing a Mill house and cultivating different types of agricultural products in East Shoa zone,
Bishoftu town of Oromia regional state. Then after by building-up his capital, he opens a liquor store at Bishoftu
town. Considering the natural link between the former liquor store and the current standardized three star hotel
services, the promoter later on has established the current three star hotel in Bishoftu town.
Before starting the current three star hotel services, the promoter Ato Bereta has engaged in manufacturing
sector and starts a hollow section production center in Dukem town. In relation with the business Ato Bereta has
also provide several types of construction materials for different contractors, construction areas, Governmental
and Non Governmental organizations.
The manufacturing business sector has been also the main income generating businesses and has now become
an equity source for the construction of a three star hotel project under consideration.
The Project
Standard of the Hotel Project: The project under consideration is a construction of comprehensive three star
hotel located at one of the fastest growing suburb town of Bishoftu which is located about only 44 kilometers
distance from Addis Ababa on the road to Djibouti.
The new hotel will be a three star hotel so as to render high quality services and accommodation to its clients.
The Ethiopian Standards Agency has prepared new hotels rating requirements and classification directives that
will involve in the standardization process of grading hotels to different star levels.
As per the Ethiopian Standards Agency definition, Hotel is a commercial establishment which provides rooms in
which people can stay, especially to travelers and sometimes to permanent residents, and which provides food,
lodging and other services for paying guests, including the general public.
Therefore in order to gain three stars level; Ato Bereta Debela plans to include the following points as per the
standard of the agency:
 The hotel will have 25 standardized rooms with a minimum room size of 16m 2, most of them will have a
standard bed size of 1.80m x 2.00m, some of the rooms will have a double bed with a size of 0.90m x
2.00m.
 All rooms will be equipped with necessary facilities like TV sets, Refrigerator, Cupboard, Sofa, Tables and
Chairs etc
 In addition the hotel will give free internet/Wi-Fi/ services for its clients
 All furniture’s and equipments used will be selected in order to satisfy its clients and are chosen to make
the standard of the hotel factual
 Meeting hall with a capacity of 700+ persons will be available
 The construction work of the buildings will be finalized with a quality finishing materials and equipments,
acceptable decorations, harmonized and impressive wall and mirror coverings and paints, well-

constructed and professional finishes and detail on all furniture’s, quality flooring and ceilings using
outstanding materials will be used for the buildings
 An elevator will be available for the G+7 building
 The lighting system of the hotel (inside & outside) will be done as per the requirements of the standard
 There will be 58 skilled and semi skilled, qualified & certified permanent employees
 The requirements for health, safety and fire security, environmental services requirement for waste
management and will have certified documentary evidence of compliance
 The hygiene and sanitation of the kitchen and public area will be at a high standard
 The hotel will have one bar and one restaurant available for services
 There will be a separate & independent reception area ready for users 24/7
 All guest rooms will have their own bathrooms for personal use
 All rooms will be serviced including linen/towel change, removal of rubbish and cleaning 7 days a week
 There will be a contact person at a reception area 24 hrs / 7 days a week
 There will be a three meeting halls with high quality sound system and lightening
 Bank service will be also available at the gate of the hotel
 Sauna, Spa & Massage services will be available with high quality materials & professionals
 Gallery & Gift shop will be one of the hotel’s service area
 Separate Bar, Restaurant & smoking area available for clients of the hotel
 It is much available to use a taxi and is only 5 minutes far from bus station of the town
 Recreational activities like beauty center & shopping centers will be available
 Clean, neat & appropriate uniform dress will be used by all staffs with proper identifications
 Full laundry/dry cleaning service will be available for users all the time
 Sufficient car parking area will be available for users of the hotel
Vision and Mission
Vision: The vision of the project is to contribute to the development of the country through having up to date
information’s and technological products, high standard professional employees and rendering a high quality
service to its clients and consumers by maximizing and giving priority to customer satisfaction and being effective
and efficient.
Mission: Higher quality service to consumers of the business and avail for customers in a sustainable manner and
always ensures customer satisfaction through quality and brand.
 Contribute to the development of the country by providing quality and efficient services in order to
enhance the consumer satisfactions;
 Provide efficient, high quality value adding services combined with the highest ethical, safety and
environmental standards locally;
 Bring the project services to the international standard;
 Strive to operate at all times in a responsible manner which means fair and honest treatment of all those
with whom the project deals, including customers, officials, employees and the general public; and
 Provide favorable working atmosphere and opportunity for creativity and growth for employees of the
company; to encourage each employee to develop his abilities to his fullest capacity.
Objectives of the Project
Even though the major motive of any private investment is profit making, it is obvious that the role of the private
investment in the poverty alleviation endeavors to the country is indispensable. It is through the expansion of the
private investments that most citizens of the country will get a better job opportunity, and by means of which the
level of poverty will be reduced.

Project Status
Location: The main highway road crossing the town is considered to be the life line of the capital city of Ethiopia,
at the same time it is also the main gateway to the major parts and connects to most important business cities
such as Djibouti, Adama, Hawassa, Dire Dawa, Harar, Asala, etc. This indicates that the site selected for the
construction is suitable for the reason that the site is located adjacent to the main highway road from Addis
Ababa to Djibouti and on the center of Bishoftu town.
 The hotel business project site is found in Oromia Regional State East Shoa Zone, Ada Woreda, Bishoftu
Town, Kebele 05 locality area.
 The proposed project site of the hotel building is found in front of Rift Valley University, adjacent to
Tommy International Hotel.
Land: The project is implemented on a plot of land with area of 394.5 square meters. The land is acquired on
lease basis for 37 years from Bishoftu town municipality office. Per the agreement, the annual rental payment is
birr 7,890. The total lease value of the land is birr 291,930.
Buildings: The total construction cost consists of G+7 & additional G+3 hotel buildings. The total construction cost
is estimated to be Birr 85,653,305.36. Per engineers of the project, it is estimated that the building’s 65%
(55,685,327.77) was completed and ready for use. The second G+3 building construction work is already begun
and the excavation job is at the ending stage. The remaining construction work is estimated as 35%
(29,967,977.59) birr of the total construction cost.
Hotel Furnishing Items: Hotel furnishing items include machinery, equipment, soft furnishings, kitchen materials
and utensils, furniture and fixtures are determined and to be purchased from local market and imported from
abroad.
Out of the total cost of furniture, equipment & machinery (27,085,195.50), the promoter has already purchased
56% (15,156,845.00) for the first phase project of the hotel. The remaining cost is estimated as 44%
(11,928,350.50) birr.
Pre-operating Expenses: Pre-production expenditure includes interest during construction, costs of registration,
licensing and formation of the company including legal fees, commissioning expenses, architectural, structural,
electrical, sanitary, bill of quantity & feasibility studies etc. Hence the pre-operating expenses of the project
reaches birr 1,887,585.97 including land lease payments made by the promoter Ato Bereta Debela. This cost of
the project is covered from the promoter’s own source of capital.
Total investment made so far:
Investments made so far
Description Value
Hotel Buildings 55,685,327.77
Eqpmt’s, Furniture & Machinery 15,156,845.00
Working Capital 1,250,000.00
Land Acquisition & Pre-operating Expenses 1,887,585.97
Total Investment 73,979,758.74
Project Budget Summary
The project cost has been evaluated for this Feasibility Study through the comparative analysis of other relative
performance venues bid and constructed over the last few years. At this stage, the estimated total project budget
if constructed & finalized today would be approximately 122,076,086.83. Acoustical treatments, sound isolated
mechanical systems, lighting controls, site utility upgrades, and including the machinery, equipment, furniture &
fixture costs, the amount of pre-operating expenses & vehicles will all play a role in the project cost.

Project Implementation Plan

Year Activity Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Land Acquisition, Legalization
Before Process, 1st Phase Construction, Debt
2015 - Financing, Acquisition of Hotel
2020 Furnisher, Finalizing the 1st Phase &
Inauguration
2nd Phase Construction
2021 Debt Financing
Import Process
Finalizing 2nd Phase
2022 Hiring new employees
Inauguration
As indicated in the above schedule, the project inception was started before 2015 and majority works have been
done for the last five years. The remaining works would be finalized on next year and the hotel become fully
operational on the month of March & April, 2022.
Beneficiaries of the Project
The major beneficiaries include the following:-
 Returns on investment
 Supply of quality hotel and accommodation services to clients
 Tax to the government
 Foreign currency generation
 Job opportunity for productive and unemployed labor force and
 Indirect benefits accrue to the country as a whole in the form of generating potential investment capital.
Project Rationales
The government privileged the sector by giving duty free import of appliances & equipments and availing land.
The project is very near to the capital Addis Ababa, which is known, as centre of Africa, the seat of diplomats,
suitable condition for foreign direct investment, and the attraction of tourists. Considering these favorable
market conditions, the promoter decided to construct a three star hotel in Bishoftu town.
Currently the promoter of the project needs his new business to be located in one of the first standard cities of
Oromia Regional State or near to those first standard cities, especially on Bishoftu town. According to urban
reform proclamation 65/2003 Bishoftu, Adama and Jimma towns are categorized as the first standard cities of
Oromia towns.
The land on which the new project lies was acquired by the promoter in thinking of starting a new three hotel
business in the town with a total price of birr 1,887,585.97 including its land acquisition & pre-production costs.
The terrain has a total of 394.5sqm of land for the project construction work. The promoter Ato Bereta has been
studied several places around Adds Ababa and the surrounding special zone towns of Oromia in order to start his
new business, subsequently after extensive studies was done and due to the next points he decided to start his
hotel project in Bishoftu town.
 Bishoftu town is in near distance to Addis Ababa
 Bishoftu town is on the way to the Eastern part of the country, on which he can find ample market
demands for his businesses
 The town is one of the major gate pass to Addis and outside of Addis
 There are a lot of travelers who spent their day & night time to work; rest and enjoy. They consider
the town as one of the stop-by cities on their day to day journey
 There are sufficient infrastructures to the business – electricity, water, and telephone line and
network availability has good quality

 There is a huge gap between the supply and demand of hotel and guest house business in the town
 The town is on the way to Modjo, Adama, Hawassa and other Eastern and Southern part of the
country, the town is one of the most of the weekenders of Addis Ababa spent their weekend times
 The town is favorable not only for the current business outfit but also for the Travel & Tour works,
Training and Advertisements on Hotel & Tourism of the town and surrounding areas too, on which Ato
Bereta plans to enter for the future
The above points and findings of the study made by the promoter of the project put together his vision to decide
to prefer Bishoftu town for his business spot and the main issue that creates a competitive advantage for his
project is that there is an access to transportation facilities to the business site, that will have a great impact on
the profitability of the project after being involved in the assembly and marketing process of the hotel.
Economic and Sector Review
Ethiopian Economy: The services sector of the country’s economy has—for the first time in the history—
overtaken agriculture as the largest segment of the Ethiopian economy. This reverses a centuries-long economic
structure, wherein agriculture was the dominant sector, followed in a distant second place by the services sector,
and lastly a very small industrial sector. The recent release of FY 2018/19 GDP statistics, however, revealed that
the service sector is now clearly at top, comprising 50.9percent of GDP, followed by agriculture at 37.5 percent,
and Industry at just 13.2 percent (Ministry of Finance & Economic Development). The customary shorthand
description of the Ethiopian economy as being overwhelmingly agriculture-based-has thus just becomes
obsolete. The overtaking of agriculture by services is not some statistical blip or a one-off occurrence linked to a
particularly poor crop season.
Agriculture has actually been overtaken by services at a time when crop output reached a record level of 17.1
million tons. Indeed, for close observers, the trend lines have been prevalent for almost a decade; agriculture was
more than 50 percent of GDP but started a gradual decline over the past decade, falling to about 47percent in the
middle of the decade and to a low of 43.2 percent of GDP most recently. The services share of GDP moved slowly
but consistently in the other direction, moving up from just 38 percent at the start of the decade to 45 percent of
GDP most recently.
Projected Composition of Ethiopian GDP
Services Industry Agriculture
FY 2015/16 GDP Share 45.1 13.0 43.2
FY 2016/17 GDP Share 48.0 13.1 40.2
FY 2017/18 GDP Share 49.6 13.2 38.6
FY 2018/19 GDP Share 50.9 13.2 37.5
Source: MoFED & Access Capital Projections; figures do not add up to 100 percent due to
a technical adjustment for financial intermediation services in GDP data.
As indicated in the above statistical data the service sector GDP contribution in the overall economy has grown
year after year in arrow.
Tourism and Hotel Sector
International tourism recovered strongly in 2019 according to the Advance Release of the UNWTO World Tourism
Barometer. International tourist arrivals were up by almost 7% to 935 million, following the 4%decline in 2018 –
the year hardest hit by the global economic crisis. The vast majority of destinations worldwide posted positive
figures, sufficient to offset recent losses or bring them close to this target. However, recovery came at different
speeds and was primarily driven by emerging economies.
Boosted by improved economic conditions worldwide, international tourism has recovered faster than expected
from the impacts of the global financial crisis and economic recession of late 2018 and 2019. International tourist
arrivals were up by 6.7% compared to 2016, with positive growth reported in all world regions. Worldwide, the
number of international tourist arrivals reached 935 million. While all regions posted growth in international
tourist arrivals, emerging economies remain the main drivers of this recovery. This multi-speed recovery, lower in

advanced economies (+5%), faster in emerging ones (+8%), is a reflection of the broader global economic
situation and is set to dominate 2019 and the foreseeable future.
The recovery in international tourism is good news, especially for those developing countries that rely on the
sector for much-needed revenue and jobs. Following a year of global recovery in 2016, growth is expected to
continue for the tourism sector in 2017 but at a slower pace. UNWTO forecasts international tourist arrivals to
grow at between 4% & 5% in 2020/21, a rate slightly above the long-term average.
The conference center business is becoming a popular one as new projects are opened everyday somewhere in
the country. Most businesses in the hospitality industry are also leaning towards this trend by constructing multi-
purpose halls or renovating existing facilities so as to be able to tap into the trend of hosting parties and
conferences.
Nationally according to reports, the hotel industry has also recognized the importance of having centers to host
and service meetings to its revenue base and has started expanding its offer to cover these areas. This has helped
to boost the bottom line for most of these hotels.
Asides hotels, educational institutions such as colleges and Universities have started focusing on increasing the
number of conferences centers available to clients. Other unusual institutions such as museums, theatres,
cinemas, Regional & Local Municipalities have also started making centers available to host meetings and other
events.
There are new categories of venues that are now being added which create diversity to the other services in the
market. These venues are unusual and are also growing in popularity as they are regarded as funky and edgy and
are preferred by the younger generation, especially as they do not require overnight accommodation.
Companies are now picking brands that identify with their corporate values and brands, as this is seen as being
appreciated by their customers and other stakeholders. Also, guests to these meetings are likely to see the venue
as a reflection of the company’s goals.
Venues have also begun to shift towards smarter designs that not only make them accessible but smart as well
which mean accommodating all kinds of transportation in order to save attendees added stress.
Venues have also seen the need to ensure that those attending events can connect with the outside world, by
ensuring that connectivity is being provided for at events. This has become a priority for event centers and is one
detail that clients appreciate.
Convention centers are no more focusing on just providing halls for use but also adding other services as well
such as catering, event coordination, wait staff, bartending, décor and rentals of several of equipment not
included in contract.
Ethiopia: With its diversified natural endowments can be one of those main tourist attraction countries in the
world. The main features of the natural tourist attractions of the country are its landscape with numerous scales
of topographies, attractive rivers and waterfalls, gorges, caves, rift valley, lakes, fauna and flora, monuments and
artifacts, and diverse ethnic and cultural blends. Being an ancient country it has got rich history. The famous
historical routes are Addis Ababa, Bahir Dar, Gondar, Axum, Lalibela, Mekelle, Sof-Oumer, Arba Minch, Hawassa,
etc. These areas are famous for monasteries, ritual obelisks, manuscripts, castles, rift valley and lakes, monolithic
stones, etc.
The archeological attractions are Haddar in Awash Valley, Melka Kontur, Dilla and Dire Dawa areas. Ethiopia is the
cradle of mankind where four million years old fossil remains (Selam) has been recently found. The unique
character of the country are its attractive cultures and more than 80 ethnic groups having over 200 dialect, varied
traditions and customs, very interesting music, folk songs and dancing.
In addition to this, Addis Ababa is the centre of Africa, the seat of numerous diplomatic missions and
representatives of international organizations. It is a venue of many conferences and seminars and a home for
thriving commercial community.
Former’s Travel Guides, which has been offering the best tourist destination sites for those planning the perfect
travel excursion for the last 50 years, posted on Frommer’s.com scoured the globe, and poll edits stable of

authors and experts to identify twelve surprising, thriving, or emerging travel destinations. Following this,
Ethiopia is selected one of the top ten travel destinations.
Former’s Travel Guides also disclosed Ethiopia as finally emerged out of the shadows caused by year’s political
strife, economic hardship, and famine. The improved infrastructure has made travelling in Ethiopia increasingly
popular, especially for those seeking adventure. Ethiopia is reverted for its rich history as one of the earliest
Christian country, the town of Axum which is the home of the ancient ark of the covenants as well as the
monolithic rock-hewn churches of Lalibela are some of the tourist attraction sites in Ethiopia. The country has a
unique calendar of its own and it has celebrated its own Millennium. The African Union head of states on its
summit decided the Ethiopian Millennium to be called as the African Millennium. This helps the country to
promote its tourism industry throughout the world.
Statistical report on most developing countries show that the demand for facilities such as hotels, transportation,
banking, insurance, telecommunications, road, electricity, etc are rising and should assist the growing tourism
industry. It is, therefore, high time for the country to develop and improve its tourist facilities to a level of
internationally acceptable standard.
Bishoftu Town: Favorable situation for the private sector in Bishoftu town causes to raise performance of
investment and considerable number of projects are flourished as resent facts reveled. Relatively presence of
well-developed infrastructure and its nearness to national capital makes the town highest recipient of
investment.
From time to time the increment and expansion of urban zone causes the demand of hotel & commercial
buildings are alarmingly increasing. The good governance experienced in the town is the main cause of expansion
of business movement which in turn seeks for suitable and modern working premises. Due to the presence of
high demand gap, suitability and relative advantage of Bishoftu town as industrial, commercial and residential
quarter, and personal interests of the owner of the project, Ato Bereta Debela initiates the first project for
himself and wants to be one of the pioneers in the town for constructing a three star hotel commercial
compound.
Bishoftu town is located at 44kms southeast of Addis Ababa and gate-way to the eastern and south-eastern part
of the country and is served as the main link to major economic centers of the country and has a heavy traffic
movement due to being a main transit location for heavy and medium weight travelers.
Emerged due to train station of the Ethio-Djibouti Railway, the town is established around 1915E.c in between
Dukem & Modjo towns.
Bishoftu is an Afan Oromo term that literally means ugly or stinking. As to why this term was applied to the town,
group of informants argues that it was because of the physical nature of the land surrounding the lakes, which
made them inaccessible site they are sloppy around their shore. On the other hand, others relate its name to the
stale and not potable nature of Lake Bishoftu with its ‘stinking’ foul odor.
Physical Characteristics of Bishoftu: The landscape of Dukem and Bishoftu owes its origin to the volcanism
Quaternary that gave rise to the existing peculiar geomorphology of volcanic environment. This was later
modified, to a limited extent, by recent alluvial depositions and formation. As a result, numerous cinder and
spatter cones as well as old volcanic create over within and in the vicinity of Dukem and Bishoftu. The two towns
and its immediate vicinity are surrounded by relatively highly elevated areas like Mt. Yerer to the north, Mt.
Sokour to the south, Mt. Zikuala to the south-west and some scattered cinder and spatter cones to the east and
west.
Under this setting, Dukem and Bishoftu towns are located at the northwestern tip of the G.R.V (Great Rift Valley)
within in the southern part of the Awash River Basin. Specifically, it is within the wood chat River catchments, a
tributary of the Modjo River that fall into the Awash and into the Koka Lake and Aba Samuel River.
Since Bishoftu town is one of the neighboring towns and found in between to the metropolis and Modjo,
different types of consumers should pass through Bishoftu town and that makes the town one of the most
attractive residential, recreational, business plus industrial area of the region.

What makes Bishoftu town unique is also the colorful annual ceremony for Irrechaa (Thanks giving) at Lake Hora
Arsedi as a true manifestation of Oromo religion and culture. This is part of the thousands of nationals and
international visitors. Currently, it has drawn large-scale attention and received wide media coverage. Thus, in
addition to its significant as a shrine for the worship of Oromo religion, it has a magnificent potential as valuable
source of beauty.
Population: Bishoftu is situated along the Addis Ababa - Djibouti highway and is a station on the Ethio-Djibouti
Railway. It is also found adjacent to the location of an industrial park covering 40 hectares owned and developed
by East African Group (Ethiopia), Ltd. The town has an elevation of 1950 meters above sea level. The town has a
population of more than three hundred four thousand. The growth rate ranges from 5,000 to 10,000 yearly.
Business and Finance: As Bishoftu town is becoming an established investor’s destination throughout the nation,
many state owned and private banks are opening their branch in the city to exploit the financial activity.
The town has more than thirteen private and six state owned banks.
Economic Activities: Despite its status as one of the fastest growing towns in the region for decades, Bishoftu is
physically not larger than most of zonal/woreda towns in the regional state of Oromia. Coupled with urban
agriculture, the availability of suitable flat land, infrastructure, abundant water resource, feed for animals etc. has
contributed to the establishment of agro-industrial manufacturing, recreational resorts, hotels and business
firms. Presence of a number of governmental, non-governmental organizations and private sectors, in addition to
its proximity to Addis Ababa offered and easy access to transportation of raw materials, finished goods and other
trade and commerce activities. With more to come, these are the major economic basis and potentials of the
town.
Due to its favorable area for investment, there are a lot of private investors investing on different type of
industries which create a lot of employment opportunities for the residents of the town.
Investment Overview: Existing Investment Economic Policy of the country makes Bishoftu the ideal place to
invest.
 Capital and decentralized economy
 Free Market Policy (Minimum Government Intervention)
 Encouraging investment and private capital Accumulation
 Favorable investment Policy and Conditions
 Encouragements made for Investors (Tax free, duty free and the like....) made the town one of the ideal
business locations in the nation.
Infrastructure Development: By way of infrastructure rehabilitation, Bishoftu town has undertaken various forms
and qualities of developmental schemes. Among these are asphalt and coble stone roads, draining and flood
protection structures such as walls and check dams, new and rehabilitated market places, water supply and
sewerage developments within the town.
Hotel Business Sector
Modern hotel Businesses in the country begin at the end of the 19th c, particularly during the Emperor Minelik II
period. At the end of 1890’s a modern hotel was built with the name of “Taitu Hotel” with the aim to serve the
royal families, embassy workers, envoys and tourists. In addition, Italian invention was contributed to the
development of the sector through the establishment of Italian owned hotels in major cities and towns of the
country. More specifically, they have started to establish better equipped hotels in Addis Ababa, Dire Dawa and
other towns with main objective of providing hotel services to the Italian armies and beside to this, to strength its
colonial position by introducing economic colonization. In addition, factors like the following contributed towards
the development of the sector:-
 The construction of Ethio-Djibouti railways
 The existence of various tourist sites
 The strengthening of Ethiopia’s foreign relations

 The increasing settlement of foreign citizens from countries like Armenia, Greece, Italy, and India who all
helped to bring entrepreneurial capacity to develop the hotel services locally.
 The establishment of various international organizations such as AAU and ECA in Addis Ababa which
resulted in the increase in the demand of conference tourism in the country.
Although the number of foreign travelers who were interested in the natural, cultural, and historical attractions
of Ethiopia had been increasing from year to year since Mimili’s time (late 19th century), tourism as an economic
activity and important industry was given due attention in the early 1960s. Thus, in Ethiopia, modern tourism
activity was started not more than 45 years ago.
Accordingly, the first tourist organization was established in 1961 and consequently, to develop tourism and
attract investors in the sector, the Imperial Government promulgated a decree in 1962. The main objective of the
decree was to initiate private investment in tourism sector. At this time, tourism infrastructure was very poor and
there were inadequate number of hotels to accommodate tourists. Therefore, the Imperial government
emphasized in building hotels and other infrastructure. With this view, government established various hotels
and resorts in the capital city and major tourist attraction areas. The Hilton Hotel, Ras hotel, Ethiopia hotel and
Gihon hotel counts among the hotel chains established in the capital and major tourist areas of the country
during the Imperial Hailessellassie era. During this period, tourism and hotel business was in the process of rapid
expansion. However, because of the change of government in 1974, the rapid growth of tourism had been
hindered significantly. Even during this period, though several efforts were made to develop the tourism sector,
due to the government’s ideology, the sector’s performance was left behind the pre 1974 period. Therefore, the
performance of tourism and hotel Business during the military regime had been disappointing, owing to the
hostile environment for international tourists, restrictions imposed on private sector participation, low level of
investment on tourism promotion and development, inadequate tourist facilities and poor transport and other
infrastructure (Survey of Tourism, 1998; MEDaC, 1999). All these factors accounted for the poor performance of
the sector in terms of tourist flows, foreign exchange generation, and job creation.
Finally, the military government issued ‘mixed economic policy’ in1989 and the private sector was invited to
participate in tourism business.
In 1991, after the collapse of the military government, a transitional government was established and it
campaigned for the shift from command economy to free market economy. This change of economic policy
further encouraged the participation of private investment that was already started because of the mixed
economy in 1989.Consequently, the government introduced reforms in the tourism sector and Ethiopia was open
for tourists from all parts of the world. The new policy allows the participation of private investors in the tourism
sector. As a result, several private tour operators and travel agencies have been established. Accordingly, the
hotel sector became one of the beneficiaries of the new economic policy. Thus, there is a relatively conducive
investment opportunity in hotel industry and the trend shows that tourism will be one of the main contributors
to the balance of payments as well as pro-poor economic growth opportunities in the future. Thus, the very
intent of this project is to take advantage of this opportunity and expand and improve the existing hotel business
near to the most vibrant and growing city (Addis Ababa).

UNIT THREE
Market- Demand & Supply Analysis and Strategy
To undertake the demand and market analysis both primary and secondary data was collected from primary and
secondary sources. The primary data was collected by personal observation, and interviewing administrators,
contractors, investment bureau employees, customers and different peoples who work in similar businesses.
Secondary data was collected from governmental institutions such as investment office, ministry of tourism and
culture. These collected information’s are about market potential and shares, demand of community for both
satisfied and unsatisfied portions, pricing strategies and related impacts on the raw material and their
suppliers ,business environments (location) influences from both internal and external etc.
Bishoftu enjoys a relatively better infrastructure as compared to other towns of the administrative zone. There is
an asphalted road that connects the town to the capital city and other major towns around the metropolis and
the eastern part of the regional states. The site is well served by road transportation system. The important
supplies for development of business compounds (Electric power and water) are sufficiently available. Electric
power is supplied to the locality areas and nearby town from Koka Hydro Power Station. Social service
infrastructures are established in the locality and nearby towns with a sufficient capacity to accommodate further
development.
Since the proposed project site is located at the center of the town where there is fast growth in terms of
commercial activities it will have a fast return on investment.
More and more buildings (residential houses, offices, schools and other social and economic institutions) are
coming up to accommodate ever increasing population in our country as well as for other developmental
activities viz hotel and guest houses etc. There is good demand for hotel and guest house services due to the
increasing flow of road transportation through the town, the ever increasing number of residents within Bishoftu
town, high flow of recreational groups from both the metropolis and the nearby towns.
Recreational services now days is occupying an important position in daily life of people. The hotel & guest house
service is also used by several types of governmental offices, private companies, local area residents, travelers
etc. The demand for hotel and guest house service is increasing day by day due to the rapid development of living
standard of people and industrial and agricultural developments. The demand is also not limited to major towns
of the nation rather it’s getting more popular in small towns and villages too. Due to this fact the project will not
be faced with market problems.
To attain the project objectives, the strategies to be followed will include providing efficient & reliable customer
services, utilizing modern service facilities, strengthening the marketing wing of the company, introducing service
improvement schemes, introducing a computer-aided management information system, establishing standards
for enhanced quality of services. The project will engage in hotel business services in order to meet its sales
targets, the company has planned to create a consumer attraction and advertisement network through its
circulation plan.
Factors Influencing the Market
 Comparative price realization from the other hotel service outputs
 Carryover stocks and serve as per the demand of consumers
 Technological gains through improved facilities and management scheme
 Development of new applications and substitutes of hotel service products
Key Assumptions Affecting the Ultimate Success of the Facility
To generate the level of use and the revenue and benefits outlined on this study, the hotel & guest house facility
will need to implement the following strategies:
 Facility – superior hotel, guest house & conference services and amenities
 Food – develop a strategy to ensure clients & attendees have good food
 Access – provide good access
 Accommodations – sufficient lodging, in the right locations

 Marketing – Carry out an aggressive marketing & packaging strategy

 Conference Packaging – Address all conference needs – “one stop shop”
 Community Support – Plan & operate the facility to provide broad benefits
Our Competitive Advantage
The project intends to ensure that its business is not only established to make profit but is also able to compete
favorably with other competitors in the industry. The vision is to ensure that we not only meet but exceed the
expectations of all the clients that make use of our hotel and services, and this is one of our competitive
advantages against our competitors.
The project has modern and conducive facilities such as 2 buildings options that have various capacities of 25 to
700 guests, thereby giving our clients varied options in terms of picking something suitable for their event.
Another competitive advantage we have is the fact that the project have an individual event coordinator that will
help coordinate the events of clients’ throughout the duration of the event, thereby allowing our client have a
stress-free event.
Asides, the event coordinator, we also have a professional wait staff that have the experience of handling
different kinds of occasions that will crop up at our center. All our staff project and communicate our brand all
the time by giving excellent customer service to clients regardless of events or packages.
Another competitive advantage we have is our décor service which is also part of the services we offer. We go
beyond the average décor and give our clients a wonderful experience that is best experienced.
Finally, we are the best at caring for our employees as we offer the best salaries and welfare packages in the
whole of Bishoftu within our category as a start-up business center in the industry. We also ensure that our
employees undergo training that will enable them become better and more productive for our business.
Customers / Target Market
The target market for this industry is quite huge as there are events that are being thrown every now and then
consisting of different types of crowd, which makes for a huge customer base for event centers.
Therefore, our center cannot be restricted to just hosting weddings, parties, fundraising and business meetings
but it can host any event that our client deems worthy to celebrate or carry out. Our strategic location in Bishoftu
has offered us ample opportunity to be able to tap into the target market.
However, we intend to conduct a market research in order to fully understand our target market and know what
they expect from us, this will help us properly draft the strategies that would be needed to attract more
customers to our business.
From the result of our market research, we have found that we are in business to offer our wide range of services
to the following groups of people;
 Couples
 Business organizations
 Government agencies
 Non-profit organizations
 Religious bodies
 Educational institutions
 Financial institutions
 Celebrities
 Anchor tenants: Organizations leasing office space within the conference center
 Group hirers: Local community groups or commercial organizations wishing to hire the hall to stage their
own events or activities (usually regular).
 Personal hirers: Local people wishing to hire the hall to hold their own (usually one-off) events.
 Attendees at organized events and paying audiences at cultural, artistic, sporting or musical events or
activities.
 Members of the local community with an active interest in preserving the Centre.

In light of market research and previous experience of other businesses in the industry, our target markets are
tourists, transit tourists and Bishoftu and surrounding town residents. The detail description of our target market
is listed as follows:
Foreign Tourists: the existence of many tourist attraction sites of the country in general & that of the city in
particular are attracting a large number of tourists to the country. Hence, these tourists prefer our hotel services
since they demand international standard high quality hotel services.
In addition, participants of international conference (seminars), business travelers, transit passengers, foreign
diplomats, officials of different international organizations, NGOs and Ethiopian diasporas who came home for
different reasons are the users of our hotel services. Based on the information obtained from the Ethiopian
tourism commission, the number of tourists visiting Ethiopia is growing fast from year to year.
Residents of Bishoftu & Surrounding Towns: the hotel is located at Bishoftu town which is the nearest suburb of
the capital Addis, where most of expatriates, Diasporas, icon business men and high rank politicians are residing.
Hence, they are one of targeted customers of the hotel.
Demand and Supply Gap Analysis
Demand Analysis: Ethiopia is endowed with unique cultural heritages, striking scenery, favorable climate, rich
flaura fauna, as well as important archeological sites. These blessings coupled with the government’s initiative to
promote the tourist attraction centers demanded the country to invest on convention centers & hotel
constructions as more tourist arrival is expected in the future. The capital -Addis Ababa is the venue of Africa
being the seat of many international and regional organizations including UN-ECA, AU, over 90 permanent
residents of diplomatic missions and direct and indirect representative offices.
These diplomatic missions and organizations used to organize regular and extraordinary meetings. Participants
require standard accommodation services and meeting places in the capital. As it is well known, there are a
number of factors affecting the demand of hotel & conference center catering service. Mainly the factors are
disposable income of the population, its size, willingness and preference of the customer, quality and availability
of competitors in the sector. There are also implicit factors attributable to the general political, economical and
social activities of the country in general and the city in particular. In such circumstances, it is difficult to know the
exact magnitude of demand especially for local customers and hence what could be worked out is a demand
forecast based on historical tourist’s inbound trend to Ethiopia.
Analysis of Need
Because of the inadequacies with sufficient high ranking hotel & guesthouse centers in the town, the clients with
the demand have been forced to take their programs to be held at Addis Ababa & Adama towns. The facilities
available in Bishoftu town do not meet the demands that several Governmental & Non Governmental
organizations requires, thus limiting the types and sizes of conferences that can be held. Ato Berta has
determined through diligent examination of other hotels in the town, that the appropriate capacity for this type
of demand is not sufficient for clients.
The project has been broken down in to five primary categories based on function; Conference Halls, Hotel use,
Guest Rooms, Sport & Recreational zone & Business Shops.
The Convention Halls are programmed as a two-level design scheme that provides seating for 500 on the main
hall (G+7), 150 on the second building (G+3) with additional 50 seating capacity in its syndicate rooms. This
breakdown of seating capacities will provide more opportunity for various sized performances.
Supply Analysis: Ethiopia has a limited supply of Star and tourist standard hotels and accommodations. The
existing star hotels in the country are highly slanted towards the capital city. Hotel and accommodation service in
Ethiopia is characterized by among others, the following features:
 Low educational qualification and training system,
 Poor service quality and limited domestic consumption,
 Limited supply of star hotels and over-pricing of the existing hotels for what they offered

 Lack of hotel plain rating system, which prevents the existing licensing authority from downgrading them,
 Less access to market information and poor infrastructure,
Supply of hotel service is not a mere forecast of the number of available rooms, it includes assessment of
establishment and constructions, expansions, quality of the service and factors that deal with the process of
service delivery.
Local Market Conditions
The demographic and socio-economic characteristics of a local market are important components in assessing
the market potential for new convention center space in any corner of the world. The strength of a market in
terms of its ability to attract events and attendees, and generate revenues, is predicated, somewhat, on the size
of the regional market area population and its demographic makeup as well as the level of competition within the
regional area. Further, a community’s hospitality infrastructure in terms of hotels, restaurants, entertainment
and other such factors contribute heavily to the ability to attract non-local conferences.
From a competitive standpoint as a “destination”, some of the project’s most prominent strengths include:
 the diversity of destination in terms of visitor appeal and interests (i.e., diverse and quality mix of urban,
rural, indoor, outdoor, entertainment, scenic, and leisure amenities and attractions);
 direct driving accessibility via the capital to the town;
 conveniently-located airport with direct air service to key regional hubs will be constructed in Dukem
town in near future;
 Progressive economic development and socioeconomic attributes.
Events that rotate within a given region (e.g., conventions, conferences, and meetings hosted by associations,
government, corporate/trade groups, and non-professional organizations, such as SMERF [social, military,
educational, religious, and fraternal] groups) normally view destinations with diverse offerings, such as this
project, favorably when considering convention sites.
Marketing Strategy
Product or service marketing is a fundamental job in business operation. The services to be offered should be
properly marketed so as to achieve the desired market share. The marketing techniques to be followed arousing
the proper mixing up of the four marketing techniques.
Marketing will be focused on generating sufficient income by lettings both to commercial and community
customers to create and run a successful community asset. In the longer term an active approach will be taken to
developing a responsive programme of community events. The range of facilities gives numerous, flexible options
for income generation.
Over time the most successful types will be identified and exploited and a business-like approach will be taken. It
can be seen from the financial forecasts that considerable income can be generated, enough to cover costs and
generate a profit, to take the hall forward sustainably and to maintain it well.
Sustainability and Expansion Strategy
Every business that is established to make profit intends to use such profit in sustaining itself and possibly
expanding based on the vision and objective of the company. Our sustainability and expansion strategy at the
project is drafted in such a way as to ensure that we continue in the business for a long time to come.
First, the promoter intends to ensure that he hire only competent and professional staffs that fully understand his
core values as a company as well as the industry. Also, his staffs have the required expertise to ensure that the
business is taken to the level it should be.
To keep employees happy and productive, the project intends to ensure that it provides favorable working
environment, have great welfare packages for them and also ensure that they undergo training every now and
then that will not only enhance their skills but make them more productive for the company.
Ato Berta intends to offer various services at his business center so as to be able to build a revenue base that will
sustain him and ensure that he do not constantly go to seek for loans to be able to run the business. Various
services will also make the project stand out from its competitors whilst ensuring that have a healthy bottom line.

Finally, he intend to retain a high percentage of his clients by ensuring that he offer them the best customer
service by his trained customer executives. Asides offering excellent customer care, he also intends to ensure that
clients that refer him get an incentive and that repeat clients get a discount. These are the strategies he intends
to apply in sustaining and expanding his business venture.
Pricing Strategy
When it comes to the rates we intend to charge for our services, we have come up with a pricing strategy that
will meet with the budget of our clients. There are different packages and categories with varying rates available
for all our different clients and we have ensured that each package is not only affordable but will meet and
exceed the needs of all our different clients.
In a bid to raise awareness and also attract customers to our business, we intend to offer our customers a
discount for the first three months of business. We have ensured that the discounted rates we will offer our
clients will in no way allow us run at a loss even though we might be operating on a low profit margin for the
duration of the discounted prices.
The proposed project is going to operate with a high class hotel, guest house & convention center standard, it is,
therefore, ready to identify and monitor the price of its competitors to gain and maintain the loyalty of the
market. The best way for the project to grasp its competition is to take into account the taste and behavior of the
customers.
Price is the only element in the marketing mix that creates sales revenue. It is, therefore, important to set
reasonable price for all services by paying keen attention to cost, demand and competition:-
To determine the price of the services the project will:
 Assess the operating cost of the service
 Taking into account demand intensity and customers psychology
 Assess the price range and price movement of the conference halls & hotels through time to support
sales and profit objective and marketing positions in the target group
 The current bed room renting price in Bishoftu is very diverse even among hotels with similar star levels.
This is mainly due to the non standardized nature of the service.
Our Products and Services
The project will be the one stop hotel business center that intends to offer its various customers a beautiful
experience while also exceeding their expectations with the various services that it intends to offer them.
Therefore some of the services we intend to offer are;
 Full Hotel & Guest house services
 A Convention center for national & international wide range meetings
 Governmental & Non Governmental Conferences & meetings
 Fund raising programs & Consultancy services & Trainings
 Public/Consumer shows, Banquets & Receptions
 Weddings, Business meetings, Rehearsal dinners, Holiday parties and Corporate parties
 Sport & Recreational compounds
 Business shops
Price of Services
The hotel is being constructed to fulfill the standards of a three star hotel. Hence, the service price is to be taken
in a three star hotel standard. In order to get the desired market share, however, the prices for the hotel services
shall be set at a lower price than expected. Depending on the market response to the services and the price,
periodical revision of service price is taken into consideration.
In light of the above and the facilities availed to the bed rooms, the proposed hotel room price would be able to
fetch at least similar with the least priced hotels in the town which have the same three star standard hotels.
 Based on this & the current market price of the hotel, this study identifies & recommends that the room
price per night for the 5 standard bed rooms is 450.00 & deluxe rooms have a daily price of birr 660.00.

 The hotel service will also earn revenues from the sale of food and drinks and other hotel services
especially the night bar will earn more revenue to the hotel. The total revenue earned from this service is
estimated at 70%, 80% & 90% percent of the revenue obtained from room service income for the first
three years
 The conference halls will occupy 70%, 80% & 90% percent of their total holding capacity with an initial
95.00 birr service charge per person without additional services daily.
 The Gift and gallery shop will earn revenue of 10 percent of the revenue gained from room services.
 The rent income from Bank’s is 550.00/m2; the total area rented out is 180m2.
 Price will be revised and adjusted every two years with an increment of 5%.
 In addition meeting halls are expected to be hired 300 days per year.
Promotion
Promotion is vital for any business. The services of the convention center should be advertised through the
electronic and print Medias. The project will also develop its existing and new marketing links with touring
companies, international organizations, and Airliners. The project’s name will be printed in a specialized news
papers such as Selamta, the Ethiopian Tourism and Culture Ministry publications. Sponsoring of events,
conferences and symposiums will also be the other techniques to promote the convention center.
It is the intention to establish a readily identifiable brand image and corporate identity which can be easily
recognized in the area, building on the community status. This will help to maximize the existing high profile and
promote the venue at every turn.
Together with the new brand, a range of promotional tools will be used:
Personal Selling: Use existing contacts to build upon customers for the center. A high conversion rate is expected.
Public Relations: Existing good links with local media will be exploited. Stories will be given to local press and
radio announcing opening of the hotel and availability for hire, exploiting the current high profile and maximizing
human interest stories as they develop.
Website: A website, vital to any project today will be established.
Direct Marketing: Attractive leaflets and posters will be produced and distributed widely and carefully targeted
campaigns run to the numerous organizations and supporters who so strongly support the project.
Technical Analysis
Land and Location: The project is located in Bishoftu town suburb to east of Addis showing fastest growth. The
project site is adjacent to main road stretched between Addis and Djibouti. A leased land area of 394.5 square
meters allocated for the hotel project is adequate to accommodate the hotel building with its facilities and
enough for parking spaces.
Infrastructures: The project area is designed by professional engineers. The building designed was taken keen
attention for architectural, structural, sanitary and electrical layouts. The project site is availed with water,
electrical light and power with excellent access road.
Service Capacity: The Hotel is designed to rank a three-star hotel. It is planned to cater all hotel facilities. The
building floors are designed to give different services as detailed in the table below.
 Assuming pre-marketing period, both deluxe & standard rooms are assumed to be occupied in a capacity
of 80%, 90% and 100% in the 1st, 2nd, 3rd and thereafter years, respectively.
 Food & Beverages will have a capacity of 70%, 80% & 90% of the room service income for the first three
years and thereafter.
 The meeting halls will be occupied 300 days per year.
 The gift shops will have a capacity to generate an income of 10%, 20% & 30% for the first three years and
thereafter.
Land Utilization Plan: The project has been established on a 394.5sqm area of land. The project has a total of 25
standardized guest rooms/bed rooms, Bar & Restaurants, Reception area, Meeting Hall, Gift Shop and Offices.

The hotel business will be run by the General Manager Ato Bereta Debela and additional hired professional hotel
manager.
Out of 394.5sqm of land about 47.4% of land (187sqm) is allocated for the main hotel and guest rooms building
(G+7) & 27.88% (110sqm) of land is assigned for the second building of G+3, which is currently under
construction.
The rest 24.71% (97.50sqm) of land will be used for garden and additional parking areas. In general the planned
project will respect the cities rules and master plan instruction and acts accordingly.
The overall land use pattern is described as follows:
Building Unit Plan of the Project (G+7 Building):
SN Description Unit area (m2) Qty Remark
G+7 Building
1 Ground Floor 187 1 Bank Service, Mini-Bar
2 1st Floor 187 1 Office & Rooms
nd
3 2 Floor 187 1 Office & Rooms
4 3rd Floor 187 1 Office & Rooms
5 4th Floor 187 1 Office & Rooms
th
6 5 Floor 187 1 Office & Rooms
7 6th Floor 187 1 Meeting Hall
th
8 7 Floor 100 1 Meeting Hall
Grand Total 1,409m2
Building Unit Plan of the Project (G+3 Building):
SN Description Unit area (m2) Qty Remark
G+3 Building
1 Ground Floor 110 1 Bar & Restaurant, Kitchen
st
2 1 Floor 110 1 Shops
3 2nd Floor 110 1 Sauna & Massage
4 3rd Floor 110 1 Meeting Hall
Grand Total 440m2
Capital and Employment
The project is established at a total capital of Birr 122,076,086.83 in Bishoftu town, Ada woreda around Tommy
International Hotel. The project has been previously constructed the 1 st phase G+7 building. The ground floor is
already rented to Lion Bank Bishoftu Branch. In addition to that there is bar, offices and store in the ground floor.
The first floor of the G+7 building is also finalized and gives services to clients of the hotel, there are five
standardized rooms which are all furnished and start generating income for the business. Each room currently
has a price of 450.00. In addition, twenty deluxe rooms are ready for service with the current marketing price of
birr 660.00.
The second G+3 building was under construction and the excavation work is almost done.
Taking the bill of quantities of the building under consideration, finished works have a cost of birr 55,685,327.77
and remaining works of the project has a cost of birr 29,967,977.59. The promoter Ato Berta has already injected
birr 15,156,845.00 for the first phase furniture, equipment & machinery costs.
The current business project will create job opportunity for 58 permanent and additional temporary employees
will be hired as needed at the time of commencement.
The company will keep records of transaction for Audit by applying Generally Accepted Accounting Principle
more over the project will prepare quarterly and annual reports for concerned parties and management of the
hotel business.

Evaluation & Monitoring

Each element of the project’s strategy will be recorded, measured and evaluated, so the most effective tools can
be identified and used to best advantage.
Sales Projection of the Project
This industry is one that will never dip as there are always events that are usually conducted every now and then,
thereby resulting in the booking of event centers.
Our location in Bishoftu has us quite optimistic in that the project will not only met its set revenue generating
target in the first year but that it will make marginal profit that will allow to grow the business and eventually
expand it during the second year.
However, to be able to make a factual sales projection, the promoter have been able to take a critical look at the
industry in order to analyze his chances and come up with a sales forecast that he can use to adequately plan and
draft strategies for his business.
The sales projection was however gathered based on information and assumptions that were peculiar to hotel
business center start-ups here in Bishoftu, Adama & Addis Ababa. Therefore below are accurate sales projections
for the three star hotel business center’s based on the location of the business and several other assumptions;
Room Services: the room services are classified in to two grades, Deluxe & Standard rooms. The hotel business
center has 20 deluxe & 5 standard rooms available for guests.
This study assumes 80%, 90% & 100% accommodation rate for the first, second & third year of operation.
The price will be 660.00 birr for deluxe rooms & 450.00 birr for standard rooms. The price for accommodation
will increase by 5% in every two years.
Income from Deluxe Rooms:
Year Deluxe Rooms Rate No. of Rooms Rented Price Working days/Yr. Total Income/Yr.
1 20 0.8 16 660 365 3,854,400.00
2 20 0.9 18 660 365 4,336,200.00
3 20 1 20 693 365 5,058,900.00
4 20 1 20 693 365 5,058,900.00
5 20 1 20 728 365 5,311,845.00
6 20 1 20 728 365 5,311,845.00
7 20 1 20 764 365 5,577,437.25
8 20 1 20 764 365 5,577,437.25
9 20 1 20 802 365 5,856,309.11
10 20 1 20 802 365 5,856,309.11
Income from Standard Rooms:
Year Standard Rooms Rate No. of Rooms Rented Price Working days/Yr. Total Income/Yr.
1 5 0.8 4 450 365 657,000.00
2 5 0.9 5 450 365 739,125.00
3 5 1 5 473 365 862,312.50
4 5 1 5 473 365 862,312.50
5 5 1 5 496 365 905,428.13
6 5 1 5 496 365 905,428.13
7 5 1 5 521 365 950,699.53
8 5 1 5 521 365 950,699.53
9 5 1 5 547 365 998,234.51
10 5 1 5 547 365 998,234.51
Conference Halls: Assuming that the Halls are available for hire daytime and evening every day of the year, the
total number of possible occupants for the conference halls will be 70%, 80% & 90% of the total capacity of
conference halls starting from its first year, second & third year respectively. Then after, the total demand will be

90% of its total capacity. Realistically, no hall is ever used to anything near to full capacity, and the feasibility
needs to be assessed at a much lower level of occupancy.
The price per individual will be birr 95.00 per person without food & beverage services. The price will increase by
5% in every two years.
Based on the assessment of this study the conference halls will be occupied 300days every year.
Years 1 2 3 4 5 6 7 8 9 10
No of
users 490 560 630 630 630 630 630 630 630 630
Price/
Person 95 95 100 100 105 105 110 110 115 115
Working
Days 300 300 300 300 300 300 300 300 300 300
Income
from Halls 13,965,000 15,960,000 18,852,750 18,852,750 19,795,388 19,795,388 20,785,157 20,785,157 21,824,415 21,824,415
Food & Beverages: this study identifies that out of the total room service income, only 70%, 80% & 90% will be
generated as Food & Beverage income for the project for the first three years and thereafter.
Years 1 2 3 4 5 6 7 8 9 10
Room
Income 4,511,400 5,075,325 5,921,213 5,921,213 6,217,273 6,217,273 6,528,137 6,528,137 6,854,543.62 6,854,543.62
Capacity 0.70 0.80 0.90 0.90 0.90 0.90 0.90 0.90 0.90 0.90
F&B
Income 3,157,980 4,060,260 5,329,091 5,329,091 5,595,546 5,595,546 5,875,323 5,875,323 6,169,089 6,169,089
Gift Shops, Sauna & Massage: 10%, 20% & 30% of the room service income will be generated for the first three
years & thereafter.
Years 1 2 3 4 5 6 7 8 9 10
Room
Income 4,511,400 5,075,325 5,921,213 5,921,213 6,217,273 6,217,273 6,528,137 6,528,137 6,854,544 6,854,544
Capacity 0.10 0.20 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30
Other
Income 451,140 1,015,065 1,776,364 1,776,364 1,865,182 1,865,182 1,958,441 1,958,441 2,056,363 2,056,363
Rent Income: the project rented out 180m 2 of the ground floor of the 1 st G+7 building to Lion Bank S.c with
550.00 birr /m2. So the total income generated from rent income is presented below.
Years 1 2 3 4 5 6 7 8 9 10
Rental Income -
m2 180 180 180 180 180 180 180 180 180 180
Price/m2 550.00 550.00 577.50 577.50 606.38 606.38 636.69 636.69 668.53 668.53
Rental Income 1,188,000 1,188,000 1,247,400 1,247,400 1,309,770 1,309,770 1,375,259 1,375,259 1,444,021 1,444,021
Environmental and Social Impacts
 The hygiene of the employees /both clerical and non clerical/, the type of outputs and rendered to the
domestic / local markets will be keep up based on the standards and directives stated by Ministry of
Health
 There will be no environmental pollutions affecting the area with relation to the proposed project
 The Eco system of the area will not be degraded by the project work

Developmental Impact of the Project in Socio-economic

Given the multi-sectoral nature of the hotel and guest house business economic sector in Ethiopia and as a major
gear to enhance the renaissance and transformation of the country, a valuable impact will be create since every
economic sector needs sufficient supply of credit facilities, land, infrastructures, fuel and gas as well as
transportation services.
The project will help the sector to minimize the current market price of convention center and guest house
rooms. In addition to that the project will create extra recreational center for the youth of Bishoftu.
If it is assisted by the government, banks and related parties to extensive involvement of hotel & guest house
business center and other multi-purpose service outputs, the project will create additional job opportunity to the
community. Help for the foreign exchange earner of the country.
In relation with the social & economical impact of the project, it is planned to deliver clean water to the society
free of charge from the bore-hole it organized at the compound.
Additionally, the project will create additional demand for room services within Bishoftu town.
As a whole it will have significant socio-economic developmental impact for several types of stakeholders.

UNIT FOUR
Justification of the Project & SWOT Analysis
Bishoftu is clearly a thriving town in terms of community activity, particularly when it comes to performing arts,
sports & other social & economical events. However, the needs of many of these groups are not currently met by
the facilities available, which are relatively small and not always fit for purpose. The Hotel & Guest House
Business Center development probably represents the best opportunity for decades (and for years to come) to
meet much of this need in one large, purpose-built commercial building.
The proposal for a new hotel & guest house in Bishoftu cannot be considered in isolation, as it raises the wider
strategic issue of what commercial facilities are needed in the town as it grows, as well as what will be
sustainable in times of austerity. Building a new hotel business in addition to what already exists will create more
capacity than is needed, and threaten the viability of all venues. Since there is good evidence that co-location of
facilities and services in urban areas helps to ensure sustainability of the industry, consideration should be given
by all local stakeholders to ‘consolidating’ a number of facilities & services within the one new project.
One of the clear consequences of urban development is increase demand for urbanized multi-use hotel &
guesthouse service. Mismatch between supply and demand of hotel buildings has caused problems that could be
reflected in the socio-economic, health, sanitation, environment and well being of the community in general.
Hotel & Guesthouse Business building problem is seriously felt in any urban centers of the country both
quantitatively and qualitatively. As it is common to Ethiopian towns, Bishoftu town suffer from such a problem as
there is a large gap between the demands on one hand and the lack of supply and stock to services of multi-use
hotels & guest house commercial buildings on the other hand.
The increasing human population in the town and the rate of urbanization indicates that there will be substantial
need to improve service giving institution like that of multi-use convention center, hotels, modern shopping
centers, standardized supermarkets, cafeteria and different business centers.
Since the town was included in to urban reform program, the city administration has been undertaking various
investment promotions encouraging private sectors to invest their wealth and knowledge, is the driving force of
the development of the town. However there are no sufficient modern hotel business center services giving
organizations. For the demand of modern hotel & guesthouse center services citizens are exposed to extra costs
by travelling to the surrounding towns like that of Adama, Addis Ababa and Hawassa. Therefore this project is
intended to solve such problems and to serve the ever increasing number of residents of the town, travelers and
weekenders mainly from the capital city and others.
Why Invest in Bishoftu?
1. Access to market because of its geographical location
2. Peace and Stability is always in the town and around
3. Cheap Potential Resources (Human and Natural Resources)
4. Infrastructure is at its best (Transportation, Power, Telecommunication, Water are adequately available)
5. Conducive Environment Policy
6. Tourism Center – are some of the reasons to initiate the emotion of the promoter Ato Bereta Debela to
invest his capital and knowledge in Bishoftu town.
Technology and Special Amenities
Many Hotel & Guesthouse Business center operators agreed that offering technology and special amenities can
enhance the attractiveness and use of a facility. Suggestions include:
 Wireless Internet or multiple areas where Internet can be accessed.
 High quality projectors and screens – having multiple large screens in bigger rooms is particularly
successful in their main conference space.
 High quality and consistently reliable sound equipment.
 Wireless microphones were recommended by several interviewees (easy to use, set up).

 Sound protection between partitions and individual sound equipment for each section for conference
areas that can be split into multiple sections.
 Outsourcing of AV services and/or has staff dedicated to ensuring that all equipment is functional
throughout a meeting or conference.
 Commercial kitchen allowing catered events to be done in-house - with a warming kitchen, there will be a
limit to who can cater particular events because of the logistics of transferring prepared foods from the
catering location to the conference facility while also meeting permitting requirements.
 Flexible spaces for a wide range of group sizes and activities and the ability to offer breakout rooms. As is
discussed in other sections of this study, demand for small conferences (50-100 people) is greater than
demand for gatherings for 500 or more people.
 Small nooks or dedicated space for networking, conducting business, and small two to four person
meetings is essential for tapping into the larger conference market.
SWOT Analysis
Like every successful business out there, the promoter intends to ensure that his business center is of the
required standard whilst also offering the best services and so to ensure that he attain this, he hired a reputable
business consultant here in Bishoftu, to help his business critically look through his business concept and
determine if he had what it takes to become a standard company.
Due to his request, the hired business consultant had to use the SWOT analysis in taking stock of strengths,
weaknesses, opportunities and threats to determine how the business were likely to fare in the industry fare in
the industry here in Bishoftu and in the whole of the Region as well as the Country. Below is the result of the
critical analysis conducted on behalf of Berta Debela Hotel Business Center;
Strength: the strength lies in the fact that we offer diverse services that will meet any requirements by our
clients, which allows us stand apart from our competitors. Also, we have professional and competent staffs at
hand to ensure that every event no matter the kind is conducted smoothly.
Our halls are not only well designed but also convenient as well as we also have the grounds for customers who
want an outdoor ceremony. Finally, the expertise of the prompter, Ato Berta Debela who not only has amassed
several years of experience but also has several qualifications, is another strength at the business of his project.
 The existing promising market for the service
 Availability of labor for the project
 Geographical location of the project area
 Bishoftu town is a busy town connection with different major & small towns and peasant association
Weakness: this industry is not saturated with these kinds of businesses; however, we intend to stand apart from
our competitors by offering unique services that will attract the customers and offering excellent customer care
that will retain most of our customers. Therefore there is no significant weakness identifies on the project.
Opportunity: there are various opportunities that abound for us because the halls can be converted to any kind
of event that intends to be hosted by our clients. The hotel also can cater to religious bodies who intend to use
the halls for regular meetings.
 Existence of good policy environment for investment
 Government incentive for investment
 Existence of high demand for improved and equipped modernized hotel service buildings
 Availability of professionals around project area
 Existence of several standardized hotels and resorts in the town
 There are 7 lakes in Bishoftu town
 Premium prices can be obtained by providing quality service
Threats: there are various threats that exist to every business in general, and so the probability of facing threats
is not alarming to us. The threats are likely to face in the course of starting and running the business is the off-
peak periods, where there are less likely events to be thrown.

The promoter however has come up with other services that will generate income for the business during these
periods. Another threat is having a major competitor offering same services in the same location. He has
proactive measures in place that will ensure that he remain unique and different in all the services that he would
be offering.
 Government policies and procedures may be could be characterized as a threat
 Market share competitors
Organization and Management
Organizational Structure: Structuring is an internal arrangement of an organization to achieve the optimum
arrangement of functions among many possible alternatives. In order to make the structure efficient and cost
effective there are a number of management principles and logical parameters by which the process of
structuring should be governed.
In the current competitive business environment the hotel business needs a simple functional structure that can
respond and adapt to rapidly changing market conditions. The structure should fit the envisaged project’s
objectives.
Thus the structure should accommodate the following points:
 Start up operation should follow the phase from simple to complex based on market growth,
 Organizational growth must be anticipated in the future and this should be reflected in the structure, and
 The structure must consider the ability to pay for employees.
There are different types and approaches in structuring an organization. The following are some of the commonly
used approaches:
 Functional Organization,
 Product or market oriented organization structure, and
 Matrix organization structure
Whatever organizational structure is chosen the essential points in structuring should consider the organization’s
strategy. To achieve the objective set to it, what is needed for the hotel is a structure that could enable it to be
agile and responsive to environmental changes. Thus, simple functional structure with low complexity and
normalization is necessary for the hotel to be successful in achieving its objectives and solving problems.
Departments: Based on the principles mentioned above, the hotel will be organized based on a simple functional
organization structure principle. The hotel will have three departments and one service unit under the hotel
manager. The hotel manager will be professional in Hotel management who will be authorized fully to run the
hotel with standards set for three star hotels.
The three department managers will also be professional in their respective area. Under the departments there
will be sections. The functional departments are Administration and Finance, Front Manager and Market
development and promotion managers.
Sections: Under the Finance and Administration Department Manager there will be accounts section and chief
casher. The Front Operation Department is responsible for food and beverage section, accommodation and
cleaning sections. Food and beverage section is responsible for the supply of foodstuffs and beverages. These
departments are also responsible for kitchen, beverage and “barista” operations. The organizational structure of
the hotel is pictorially shown below.

GENERAL MANAGER
AUDITOR LEGAL ADVISOR
HOTEL MANAGER
SECRETARY
MARKET DEV’T & FRONT OPERATION DEP’T FIN. & ADMIN. DEP’T
PROMOTION DEP’T
FOOD & BEVERAGE ACCOMODATION & ACCOUNTS SECTION CHIEF CASHER

SECTION CLEANING SECTION
Manpower Requirement and Salary of the Project
The Hotel will be run by a hired manager who has experience in managing well recognized hotels. The
department managers will also be competent and experienced managers.
The hotel manager will be fully responsible for the day to day operation of the hotel. The responsibility of the
owner/General Manager will be limited to the hiring and firing of the hotel manager, and determination of the
hotel manager’s remuneration. They will also review and approve the budget and performance of the hotel. This
mode of management system enables the hotel to attain a three star hotel standard which is one criterion for
grading.
The manpower needs of the hotel project and the related salary &benefits payments for professional as well as
support staff is presented in the following table.
The salary scale will be made based on a three-star hotel standard.
Description No. of Monthly Annual Educational Year of
Persons Salary (Birr) Salary (Birr) Background Experience
Hotel Manager 1 7,000 84,000 BA Degree 4 Years
Department Managers 3 4,500 162,000 BA Degree 2 Years
Secretary 1 3,000 36,000 Diploma 2 Years
Legal Advisor 1 4,200 50,400 BA Degree 2 Years
Head Accounts 1 4,500 54,000 Diploma 2 Years
Accounts Clerks 1 2,800 33,600 TVET 1 Year
Cashiers 2 2,000 48,000 TVET 2 Years
Receptionist 2 2,000 48,000 Certificate 1 Year
Auditor 1 3,500 42,000 Diploma 1 Year
Purchaser 1 2,500 30,000 Diploma 2 Years
Store Keeper 1 2,300 27,600 Certificate 1 Year
Massagist & Spa Professional 2 2,500 60,000 Diploma 2 Years

Sales Girls (For Shop Sales) 4 2,000 96,000 Diploma 2 Years

Nurse 1 3,700 44,400 BA Degree 1 Year
Laundry Man 1 1,600 19,200 Certificate 1 Year
Bar Man 1 1,500 18,000 10+ 1 Year
Head-waiters 1 3,000 36,000 Diploma 2 Years
Waiter 10 1,200 144,000 10+ 1 Year
Chief Cook 1 4,000 48,000 Diploma 2 Years
Ass. Cookers 2 2,200 52,800 Certificate 1 Year
Gardner 2 1,300 31,200 10+ 1 Year
Bill Boy 1 1,500 18,000 10+ 1 Year
Electrician 1 3,000 36,000 Diploma 1 Year
Plumber 1 3,000 36,000 Diploma 1 Year
Sales Promotion Expert 1 3,000 36,000 Certificate 1 Year
Telephone Operator 1 1,500 18,000 Certificate 1 Year
Property Administrator 1 3,000 36,000 Diploma 1 Year
Cleaners 6 1,200 86,400 8+ 1 Year
Guards 6 1,200 86,400 8+ 1 Year
Grand Total 58 78,700 1,518,000
As shown above the project will have a total of 58 employees working at different level. The annual salary to be
paid is about 1,518,000.00 birr. This will grow by 5% per annum.

UNIT FIVE
Financial Projections & Analysis
The financial analysis of the project is based on the data provided in the previous chapters and the following
assumptions:-
 Construction period (Remaining) 1 year
 Source of finance 61 % own equity
39 % Bank loan
 Tax holidays 0 years
 Bank interest 16.5%
 Loan Period 10 Years
 Insurance Expense 0.2% of Fixed Assets
 Repair & Maintenance 0.1% of Fixed Assets
 Depreciation Expense 20% for Mach. & Equip., & 5% for Bldgs.
 Accounts receivable 30 days
 Work in progress 365 days
 Raw material (perishable) 3 days
 Raw Material (non perishable) 30 days
 Cash in hand 5 days
 Accounts payable 30 days
Loan Request
 The credit requirement that the promoter of this project presented to the bank is 48,096,328.09 that can
be repaid back within the next 10 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 utilized for the remaining construction work of the building, finishing
works, working capital, gardening works, fence and earthworks plus purchasing of machineries, office
equipments and furniture’s for the hotel & guest house service plus acquisition of two vehicles. 1.46%
will be used for its working capital and contingency requirements for six months and 24.8% of the loan
will be used for purchase of machineries, equipments, fixtures and furniture’s, for purchase of vehicle
11.44% will be utilized, the rest 62.31% of the loan will be used to finalize the construction work of the
building.
Equity Finance Bank Finance
Description Total cost % age Value % age Value
Hotel Buildings 85,653,305.36 65.0% 55,685,327.77 35.0% 29,967,977.59
Eqpmt’s, Furniture & Machinery 27,085,195.50 56% 15,156,845.00 44% 11,928,350.50
Vehicles 5,500,000.00 0% - 100% 5,500,000.00
Pre-operating Expenditure 1,887,585.97 100% 1,887,585.97 0% -
Total Fixed Investment 120,126,086.83 61% 72,729,758.74 39% 47,396,328.09
Other Investments - 0% - 0% -
Initial Working Capital 1,950,000.00 64% 1,250,000.00 36% 700,000.00
Total Working Capital 1,950,000.00 64% 1,250,000.00 36% 700,000.00
Total Equity & Bank Finance 122,076,086.83 61% 73,979,758.74 39% 48,096,328.09
Loan Repayment Schedule
 The banks are assumed to charge an interest rate for the term loans which lasts for ten years is 16.5% per
year as per the present scenario.
 Hence the requested project loan will be paid within the scheduled period through monthly repayment
amount of 820,726.80 that leads to an annual repayment amount of 9,848,721.60, the related interest
charges and principal payments are presented below.

Years Annual Repayment Interest Payment Principal Payment Outstanding Balance

0 - - - 48,096,328.09
1 9,848,721.60 7,784,396.71 2,064,324.89 46,032,003.21
2 9,848,721.60 7,416,806.25 2,431,915.35 43,600,087.85
3 9,848,721.60 6,983,759.63 2,864,961.97 40,735,125.88
4 9,848,721.60 6,473,601.21 3,375,120.39 37,360,005.50
5 9,848,721.60 5,872,599.84 3,976,121.76 33,383,883.74
6 9,848,721.60 5,164,579.29 4,684,142.31 28,699,741.43
7 9,848,721.60 4,330,482.83 5,518,238.77 23,181,502.66
8 9,848,721.60 3,347,860.38 6,500,861.22 16,680,641.44
9 9,848,721.60 2,190,264.19 7,658,457.41 9,022,184.04
10 9,848,721.60 826,537.57 9,022,184.03 0.00
Total 98,487,216.00 50,390,887.91 48,096,328.09 0.00
Fixed Investment Costs
Fixed investment costs include constriction /civil work/ cost, Pavement, Garden and Parking area construction
cost, sewerage and electricity installation costs, machinery cost, vehicle and different equipment costs, while
annual operating cost /working capital requirement/ includes the costs that will be expend per annum for the
operation of the project to cover running cost of the whole project. The existing total project costs requirement
of this project is calculated as follows.
The construction cost is the major cost incurred in an establishment of any project. The building has G+7 & G+3
buildings that have an additional basement floor. As per the bill of quantities prepared by the concerned
professional persons the total cost of the buildings including their final stage will take 85,653,305.36. Out of
which the project needs 35% (29,967,977.59) only for construction cost; the rest 65% (55,685,327.77) birr is
already covered by the project owners.
Next to the construction cost of the project the promoter needs to furnish the guest rooms with quality
equipments and furniture’s in order to be a competitor and succeed the current market competition, the costs
that will be incurred to purchase for machineries, furniture’s and related equipments are also expected to be
acquired at the time of commencement of the project with an estimated total cost of birr 27,085,195.50. Out of
which the project needs 44% (11,928,350.50) of purchasing costs.
In addition the project needs 1 double cabin pick-up & one 30 seat capacity Bus to run the business successfully
with a total cost of 5,500,000.00. The other main cost of the project is the related working capital requirements
that will be used after the completion of the whole project including contingencies, the total working capital need
of the project after completion is birr 1,950,000.00. Out of which the project needs 36% (700,000.00) of the
working capital cost; the rest 64% (1,250,000.00) birr is already covered by the project owners.
Ato Bereta costs a total of birr 1,887,585.97 for acquisition of land & pre production expenses; all are covered
from his own capital contribution. This pre operating expenditures includes broker commission, fees made for
owner certificate transfer, architectural, structural, electrical, sanitary, bill of quantity, feasibility study and other
charges. Therefore the total cost of the project will be birr 122,076,086.83.
No Fixed Investments m2 Total cost
2
1 Construction Cost 1,749 m
2 Parking, Gardening & Fence Works 97.5 m2
3 Sewerage & Sanitation -
4 Electrical Installation - 85,653,305.36
Sub total 85,653,305.36
5 Purchase Cost - 0.00
6 Pre-operating Costs - 1,887,585.97
7 Equipments, Furniture’s & Fixtures - 27,085,195.50

8 Vehicles - 5,500,000.00
9 Working Capital + Contingency - 1,950,000.00
Sub total 36,422,781.47
GRAND TOTAL - 122,076,086.83
* N.B: Pre-production expenditure includes interest during construction, costs of registration, licensing and formation of the
company including legal fees, commissioning expenses, architectural, structural, electrical, sanitary, bill of quantity &
feasibility studies etc.
Items to be Purchased Total Cost Owners Equity (61%) Debt Equity (39%) % Share
Buildings 85,653,305.36 55,685,327.77 29,967,977.59 70.16
Furniture & Equipment 27,085,195.50 15,156,845.00 11,928,350.50 22.19
Vehicles 5,500,000.00 - 5,500,000.00 4.51
Pre-production Cost 1,887,585.97 1,887,585.97 - 1.55
Working Capital + Contingency 1,950,000.00 1,250,000.00 700,000.00 1.60
Total Investment Cost 122,076,086.83 73,979,758.74 48,096,328.09 100.00
Annual Revenue Projection
The revenue of the project is expected to be generated from rent of 25 guest rooms, Food & Beverage Services,
Night bar services, Gift Shop sales, Rental Income and the income generated from the meeting hall services.
Based on the current market assessment and demand for bed room services made by this feasibility study, each
guest room will be equipped at 80% rate of its total number of rooms per day for the first year, 90% for second
operational year and will be equipped at 100% rate starting from third year.
Each room will be given to customers at a price of birr 450.00 per day for standard rooms & 660.00 birr for deluxe
rooms. The price for the guest rooms will rise by 5% every two years.
It is assumed that the Food and Drinks revenue including the night bar service will be equal to 70% of the income
generated from room services and the gift shop revenue will be 10% of the room service income produced for the
first year. It is expected that 40% of the total sales from Food, Drink & Night bar Services and Gift Shop sales will
be considered as gross profit, so that cost of goods sold will be 60% of the sales.
Meeting Hall is expected to be rented 300 days on a year for several types of events on average and price will rise
by 5% every two years.
Accordingly the project is assumed to generate annual total income of birr 23,273,520.00 on the first year.
Revenue generated from Deluxe Room Service:
No. of Rooms Working Total
Years Deluxe Rooms Rate Rented Price days/year Income / Yr
1 20 0.8 16 660 365 3,854,400.00
2 20 0.9 18 660 365 4,336,200.00
3 20 1 20 693 365 5,058,900.00
4 20 1 20 693 365 5,058,900.00
5 20 1 20 728 365 5,311,845.00
6 20 1 20 728 365 5,311,845.00
7 20 1 20 764 365 5,577,437.25
8 20 1 20 764 365 5,577,437.25
9 20 1 20 802 365 5,856,309.11
10 20 1 20 802 365 5,856,309.11
Revenue generated from Standard Room Service:
Standard No. of Rooms Working Total
Years Rooms Rate Rented Price days/year Income / Yr
1 5 0.8 4 450 365 657,000.00
2 5 0.9 5 450 365 739,125.00

3 5 1 5 473 365 862,312.50

4 5 1 5 473 365 862,312.50
5 5 1 5 496 365 905,428.13
6 5 1 5 496 365 905,428.13
7 5 1 5 521 365 950,699.53
8 5 1 5 521 365 950,699.53
9 5 1 5 547 365 998,234.51
10 5 1 5 547 365 998,234.51
Revenue generated from Assembly Halls:
Years 1 2 3 4 5 6 7 8 9 10
No of users 490 560 630 630 630 630 630 630 630 630
Price/Person 95 95 100 100 105 105 110 110 115 115
Working Days 300 300 300 300 300 300 300 300 300 300
Halls Income 13,965,000 15,960,000 18,852,750 18,852,750 19,795,388 19,795,388 20,785,157 20,785,157 21,824,415 21,824,415
Revenue generated from Food & Beverage Service:
Years 1 2 3 4 5 6 7 8 9 10
Room Income 4,511,400 5,075,325 5,921,213 5,921,213 6,217,273 6,217,273 6,528,137 6,528,137 6,854,543 6,854,543
Capacity 0.70 0.80 0.90 0.90 0.90 0.90 0.90 0.90 0.90 0.90
F&B Income 3,157,980 4,060,260 5,329,091 5,329,091 5,595,546 5,595,546 5,875,323 5,875,323 6,169,089 6,169,089
Revenue generated from Rental Service:
Years 1 2 3 4 5 6 7 8 9 10
Rental - m2 180 180 180 180 180 180 180 180 180 180
Price/m2 550.00 550.00 577.50 577.50 606.38 606.38 636.69 636.69 668.53 668.53
Rental Income 1,188,000 1,188,000 1,247,400 1,247,400 1,309,770 1,309,770 1,375,259 1,375,259 1,444,021 1,444,021
Revenue generated from Gift Shops, Sauna & Massage Service:
Years 1 2 3 4 5 6 7 8 9 10
Room Income 4,511,400 5,075,325 5,921,213 5,921,213 6,217,273 6,217,273 6,528,137 6,528,137 6,854,544 6,854,544
Capacity 0.10 0.20 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30
Other Income 451,140 1,015,065 1,776,364 1,776,364 1,865,182 1,865,182 1,958,441 1,958,441 2,056,363 2,056,363
Projected Total Revenue Table
Years 1 2 3 4 5 6 7 8 9 10
Deluxe
Rooms Inc. 3,854,400 4,336,200 5,058,900 5,058,900 5,311,845 5,311,845 5,577,437 5,577,437 5,856,309 5,856,309
Standard
Rooms Inc. 657,000 739,125 862,313 862,313 905,428 905,428 950,700 950,700 998,235 998,235
Conference
Halls Inc. 13,965,000 15,960,000 18,852,750 18,852,750 19,795,388 19,795,388 20,785,157 20,785,157 21,824,415 21,824,415
Hotel
Service Inc. 3,157,980 4,060,260 5,329,091 5,329,091 5,595,546 5,595,546 5,875,323 5,875,323 6,169,089 6,169,089
Other
Income 451,140 1,015,065 1,776,364 1,776,364 1,865,182 1,865,182 1,958,441 1,958,441 2,056,363 2,056,363
Rental
Income 1,188,000 1,188,000 1,247,400 1,247,400 1,309,770 1,309,770 1,375,259 1,375,259 1,444,021 1,444,021
Grand Total 23,273,520 27,298,650 33,126,818 33,126,818 34,783,158 34,783,158 36,522,316 36,522,316 38,348,432 38,348,432

Associated Costs and Expenses

Utilities Expense: The major essential utilities required for the envisaged project are electricity, water, internet
and telephone lines. Per month-
 Telephone Expense – 800.00
 Water Expense – 3,700.00
 Electricity Expense – 2,350.00
 Utility expenses are assumed to increase by 3% annually.
Projected Years Utility Expenses
1 82,200.00
2 84,666.00
3 87,205.98
4 89,822.16
5 92,516.82
6 95,292.33
7 98,151.10
8 101,095.63
9 104,128.50
10 107,252.36
Supplies Expense: Br 28,500.00 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 4%.
Project Years
Expense Item 1 2 3 4 5 6 7 8 9 10
Supplies Expense 28,500 29,640 30,826 32,059 33,341 34,675 36,062 37,504 39,004 40,564
Insurance Expense: Is expected to be 0.2% of the value of total fixed assets owned by Ato Bereta. 236,447.00 will
be assumed as an annual insurance expense of the project (118,238,500 * 0.2% = 236,447.00).
Repair & Maintenance Expense: is estimated to be 0.1% of the projects fixed asset, which will be birr 118,238.50
per annum (118,238,500 * 0.1% = 118,238.50). After five years of operation repair & maintenance costs of the
project is expected to rise to 0.2% of fixed assets and will become birr 236,447.00 per year.
Type of Expenses Rate Fixed Assets Value of Expense
Insurance Expense 0.20% 118,238,500.86 236,477.00
Repair & Maintenance Expense 0.10% 118,238,500.86 118,238.50
Repair & Maintenance Expense 0.20% 118,238,500.86 236,477.00
after five years of operation
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
Buildings 85,653,305.36 5% 4,282,665.27
Machineries, Equipments & 27,085,195.50 20% 5,417,039.10
Furniture’s
Vehicles 5,500,000.00 20% 1,100,000.00
Total 118,238,500.86 10,799,704.37
Miscellaneous Expenses: includes expenses incurred for transportation, loading/unloading, fuel and gases,
cleaning and other expenses used for the project. Per annum 142,920.00 birr will be expected to be spent for
miscellaneous reasons and it will have an increment of 5% yearly.
Project Years
Expense Item 1 2 3 4 5 6 7 8 9 10
Miscellaneous Expense 142,920 150,066 157,569 165,448 173,720 182,406 191,526 201,103 211,158 221,716

Salary Payments: The total permanent manpower requirement will be 58, of whom 32 will be skilled and semi-
skilled the rest 26 employees will be unskilled manpower. The list of the manpower requirement is presented
above along with monthly and annual salaries and wages.
Salary will be higher than before by 5% for permanent employees every year.
Expense Item
Projected Years Salary Expense
1 1,518,000.00
2 1,593,900.00
3 1,673,595.00
4 1,757,274.75
5 1,845,138.49
6 1,937,395.41
7 2,034,265.18
8 2,135,978.44
9 2,242,777.36
10 2,354,916.23
Projected Total Operational Costs
Hence, the operational cost at almost full capacity of the hotel building for one year is estimated at Birr
2,338,969.00 including 9.09% contingency for the year. The utility cost accounts for 3.51 percent while repair and
maintenance take 5.06 percent of the operational cost, supplies expense will cover 1.22 percent, miscellaneous
expenses are also take 6.11 percent of the total working capital needed for the project.
Out of the total operational cost of the project salary and wage expense covers 64.90 percent in addition to that
insurance expense accounts for 10.11 percent of the working capital.
The rest but the most of the working capital budget will be used for purchase of several types of selling items for
the gift shop, sauna bath & massage services used by clients will cost birr 2,425,328.64 per annum.
Projected Total Cost Table
Project Year
Cost Items 1 2 3 4 5 6 7 8 9 10
Utility Exp. 82,200 84,666 87,206 89,822 92,517 95,292 98,151 101,096 104,129 107,252
Supplies
Exp. 28,500 29,640 30,826 32,059 33,341 34,675 36,062 37,504 39,004 40,564
Insurance 236,477.00 236,477.00 236,477.00 236,477.00 236,477.00 236,477.00 236,477.00 236,477.00 236,477.00 236,477.00
Exp.
Salary Exp. 1,518,000 1,593,900 1,673,595 1,757,275 1,845,138 1,937,395 2,034,265 2,135,978 2,242,777 2,354,916
Repair &
Main. Exp. 118,238.50 118,238.50 118,238.50 118,238.50 118,238.50 236,477.00 236,477.00 236,477.00 236,477.00 236,477.00
Misc. Exp. 142,920 150,066 157,569 165,448 173,720 182,406 191,526 201,103 211,158 221,716
Contingency 212,634 221,299 230,391 239,932 249,943 272,272 283,296 294,863 307,002 319,740
Operational
Costs 2,338,969 2,434,286 2,534,303 2,639,251 2,749,375 2,994,995 3,116,254 3,243,498 3,377,024 3,517,143
Depr. Exp. 10,799,704 10,799,704 10,799,704 10,799,704 10,799,704 4,282,665 4,282,665 4,282,665 4,282,665 4,282,665
Bank Interest
Exp 7,784,397 7,416,806 6,983,760 6,473,601 5,872,600 5,164,579 4,330,483 3,347,860 2,190,264 826,538
Non-oper.
Costs 18,584,101 18,216,511 17,783,464 17,273,306 16,672,304 9,447,245 8,613,148 7,630,526 6,472,929 5,109,203
Total Cost 20,923,070 20,650,797 20,317,767 19,912,556 19,421,679 12,442,239 11,729,402 10,874,024 9,849,954 8,626,346

Determination of Working Capital Requirement

From the total investment cost of 122,076,086.83; 1.6% will be utilized for working capital requirement of the
project including its contingencies. The working capital can be used for six months from where the project
commences its operation.
%age W.C for 6
Description Annual W.C Share Months %age Share
Utility Exp. 82,200.00 1.73% 41,100.00 2.11%
Supplies Exp. 28,500.00 0.60% 14,250.00 0.73%
Insurance Exp. 236,477.00 4.96% 118,238.50 6.06%
Salary Exp. 1,518,000.00 31.86% 759,000.00 38.89%
Repair & Main. Exp. 118,238.50 2.48% 59,119.25 3.03%
Misc. Exp. 142,920.00 3.00% 71,460.00 3.66%
Contingency 212,633.55 4.46% 106,316.78 5.45%
purchase of Goods 2,425,328.64 50.91% 782,168.49 40.08%
Total Working Capital
Required 4,764,297.69 100% 1,951,653.01 100%

Projected Income Statement of the Project

Bereta Debela Hawase
Forecasted Profit & Loss Statement of the Project (in Birr)
For the Year Ended XXXX
Description Project Years
1 2 3 4 5 6 7 8 9 10
Room Service Income 4,511,400 5,075,325 5,921,213 5,921,213 6,217,273 6,217,273 6,528,137 6,528,137 6,854,544 6,854,544
Meeting Hall Income 13,965,000 15,960,000 18,852,750 18,852,750 19,795,388 19,795,388 20,785,157 20,785,157 21,824,415 21,824,415
Food & Beverages 3,157,980 4,060,260 5,329,091 5,329,091 5,595,546 5,595,546 5,875,323 5,875,323 6,169,089 6,169,089
Other Income 451,140 1,015,065 1,776,364 1,776,364 1,865,182 1,865,182 1,958,441 1,958,441 2,056,363 2,056,363
Rental Income 1,188,000 1,188,000 1,247,400 1,247,400 1,309,770 1,309,770 1,375,259 1,375,259 1,444,021 1,444,021
Gross Income 23,273,520 27,298,650 33,126,818 33,126,818 34,783,158 34,783,158 36,522,316 36,522,316 38,348,432 38,348,432
Cost of Goods Sold 2,165,472 3,045,195 4,263,273 4,263,273 4,476,437 4,476,437 4,700,258 4,700,258 4,935,271 4,935,271
Operational costs 2,338,969 2,434,286 2,534,303 2,639,251 2,749,375 2,994,995 3,116,254 3,243,498 3,377,024 3,517,143
Gross Profit 18,769,079 21,819,169 26,329,242 26,224,294 27,557,347 27,311,727 28,705,804 28,578,559 30,036,136 29,896,018
Depreciation Exp. 10,799,704 10,799,704 10,799,704 10,799,704 10,799,704 4,282,665 4,282,665 4,282,665 4,282,665 4,282,665
Interest Payment 7,784,397 7,416,806 6,983,760 6,473,601 5,872,600 5,164,579 4,330,483 3,347,860 2,190,264 826,538
Non-operational
costs 18,584,101 18,216,511 17,783,464 17,273,306 16,672,304 9,447,245 8,613,148 7,630,526 6,472,929 5,109,203
Profit Before Tax 184,978 3,602,658 8,545,778 8,950,988 10,885,042 17,864,482 20,092,656 20,948,034 23,563,207 24,786,815
Less: Profit Tax 55,493 1,080,797 2,563,733 2,685,296 3,265,513 5,359,345 6,027,797 6,284,410 7,068,962 7,436,044
Net Profit 129,485 2,521,861 5,982,045 6,265,692 7,619,530 12,505,138 14,064,859 14,663,624 16,494,245 17,350,770

Projected Cash Flow Statement

This study applies a decomposition approach of projection of cash inflows and outflows of Ato Bereta Debela.
Cash flows rather than profits are used in financial analysis for the following three reasons.
 Cash is what ultimately counts; profits are only a guide to cash availability: they cannot actually be spent.
 Profit measurement is subjective, the time period on which income and expenses are recorded, and so
on, are a matter of judgment.
 Cash is used to pay the term loans and owners equity, owners equity are the ultimate method of
transferring wealth to the project holders as a dividend at the time of official declaration of the members.

Projected Cash Flow Statement:

Forecasted Cash Flow Statement of the Project (in Birr)
For the Year Ended XXXX
Description Project Years
0 1 2 3 4 5 6 7 8 9 10
Cash Inflow
Equity/Beginning Cash 73,979,759 700,000 9,305,007 19,829,234 33,234,428 46,413,111 60,319,051 71,885,539 84,150,793 96,032,190 108,558,410
Balance
Bank loan 48,096,328 - - - - - - - - - -
Room Service Income - 4,511,400 5,075,325 5,921,213 5,921,213 6,217,273 6,217,273 6,528,137 6,528,137 6,854,544 6,854,544
Meeting Hall Income - 13,965,000 15,960,000 18,852,750 18,852,750 19,795,388 19,795,388 20,785,157 20,785,157 21,824,415 21,824,415
Food & Beverages - 3,157,980 4,060,260 5,329,091 5,329,091 5,595,546 5,595,546 5,875,323 5,875,323 6,169,089 6,169,089
Shop Income - 451,140 1,015,065 1,776,364 1,776,364 1,865,182 1,865,182 1,958,441 1,958,441 2,056,363 2,056,363
Rental Income - 1,188,000 1,188,000 1,247,400 1,247,400 1,309,770 1,309,770 1,375,259 1,375,259 1,444,021 1,444,021
Total Inflow 122,076,087 23,973,520 36,603,657 52,956,051 66,361,245 81,196,269 95,102,209 108,407,855 120,673,110 134,380,622 146,906,842
Cash Outflow
Fixed Inv. 118,238,501 - - - - - - - - - -
Other Outflows - - - - - - - - - - -
Pre-operating Costs 1,887,586 - - - - - - - - - -
Purchase - 2,425,329 3,410,618 4,774,866 4,774,866 5,013,609 5,013,609 5,264,290 5,264,290 5,527,504 5,527,504
Operating Expense 1,250,000 2,338,969 2,434,286 2,534,303 2,639,251 2,749,375 2,994,995 3,116,254 3,243,498 3,377,024 3,517,143
Bank Repayment - 9,848,722 9,848,722 9,848,722 9,848,722 9,848,722 9,848,722 9,848,722 9,848,722 9,848,722 9,848,722
Tax Payment - 55,493 1,080,797 2,563,733 2,685,296 3,265,513 5,359,345 6,027,797 6,284,410 7,068,962 7,436,044
Total Outflow 121,376,087 14,668,513 16,774,424 19,721,623 19,948,135 20,877,218 23,216,670 24,257,062 24,640,920 25,822,212 26,329,413
Balance 700,000 9,305,007 19,829,234 33,234,428 46,413,111 60,319,051 71,885,539 84,150,793 96,032,190 108,558,410 120,577,429

Projected Depreciation & Amortization Schedule

Depreciation & Amortization Expense Schedule
Depreciation & Amortization Schedule
Rate Depreciation Project Years
Description Original Value % Amount 1 2 3 4 5 6-10 Years
Machineries,
Furniture &
Equipments 27,085,195.50 0.2 5,417,039.10 5,417,039.10 5,417,039.10 5,417,039.10 5,417,039.10 5,417,039.10 0
Vehicles 5,500,000.00 0.2 1,100,000.00 1,100,000.00 1,100,000.00 1,100,000.00 1,100,000.00 1,100,000.00 0
Buildings 85,653,305.36 0.05 4,282,665.27 4,282,665.27 4,282,665.27 4,282,665.27 4,282,665.27 4,282,665.27 4,282,665.27
Total 118,238,500.86 10,799,704.37 10,799,704.37 10,799,704.37 10,799,704.37 10,799,704.37 10,799,704.37 4,282,665.27

Projected Balance Sheet of the Project

Forecasted Balance Sheet of the Project (in Birr)
PROJECT YEARS
DESCRIPTION 0 1 2 3 4 5 6 7 8 9 10
ASSETS
CURRENT ASSETS
Cash 700,000 9,305,007 19,829,234 33,234,428 46,413,111 60,319,051 71,885,539 84,150,793 96,032,190 108,558,410 120,577,429
Inventory 0 259,857 365,423 511,593 511,593 537,172 537,172 564,031 564,031 592,233 592,233
Total Current Assets 700,000 9,564,864 20,194,657 33,746,021 46,924,704 60,856,223 72,422,711 84,714,824 96,596,221 109,150,643 121,169,662
FIXED ASSETS
Building and Civil Work 85,653,305 85,653,305 85,653,305 85,653,305 85,653,305 85,653,305 85,653,305 85,653,305 85,653,305 85,653,305 85,653,305
Machineries, Furniture &
Equipments 27,085,196 27,085,196 27,085,196 27,085,196 27,085,196 27,085,196 0 0 0 0 0
Vehicles 5,500,000 5,500,000 5,500,000 5,500,000 5,500,000 5,500,000 0 0 0 0 0
Accumulated
Depreciation - Bldg 0 -4,282,665 -8,565,331 -12,847,996 -17,130,661 -21,413,326 -25,695,992 -29,978,657 -34,261,322 -38,543,987 -42,826,653
Accumulated
Depreciation - Mac, Fur &
Eqpmt’s & Vehicle 0 -6,517,039 -13,034,078 -19,551,117 -26,068,156 -32,585,196 0 0 0 0 0
Total Fixed Assets 118,238,501 107,438,796 96,639,092 85,839,388 75,039,683 64,239,979 59,957,314 55,674,648 51,391,983 47,109,318 42,826,653
Total Assets 118,938,501 117,003,660 116,833,749 119,585,408 121,964,387 125,096,202 132,380,025 140,389,473 147,988,204 156,259,961 163,996,314
LIABILITIES
Bank Loan 48,096,328 46,032,003 43,600,088 40,735,126 37,360,005 33,383,884 28,699,741 23,181,503 16,680,641 9,022,184.04 0.00
Tax Payable 0 55,493 1,080,797 2,563,733 2,685,296 3,265,513 5,359,345 6,027,797 6,284,410 7,068,962 7,436,044
Total Liabilities 48,096,328 46,087,497 44,680,885 43,298,859 40,045,302 36,649,396 34,059,086 29,209,299 22,965,052 16,091,146 7,436,044
CAPITAL
Owner's Equity 70,842,173 70,786,679 69,631,003 70,304,505 75,653,393 80,827,276 85,815,801 97,115,315 110,359,529 123,674,570 139,209,500
Current Year Profit 0 129,485 2,521,861 5,982,045 6,265,692 7,619,530 12,505,138 14,064,859 14,663,624 16,494,245 17,350,770
Total Capital 70,842,173 70,916,164 72,152,864 76,286,549 81,919,085 88,446,806 98,320,939 111,180,174 125,023,153 140,168,815 156,560,270
Total Liabilities and
Capital 118,938,501 117,003,660 116,833,749 119,585,408 121,964,387 125,096,202 132,380,025 140,389,473 147,988,204 156,259,961 163,996,314

UNIT SIX
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 129,485.00 at the first year of its operation and at the end of the project
year it will have a profit of birr 17,350,770.00.
Liquidity
The cash flow projection also shows an incremental cumulative cash balance from Birr 9,305,007.00 of the first
project year to Birr 120,577,429.00 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.
Ratios
In financial analysis financial ratios and efficiency ratios are used as an index or yardstick for evaluating the
financial position of a firm. It is also an indicator for the strength and weakness of the firm or a project. Using
the year-end balance sheet figures and other relevant data, the most important ratios such as return on sales
which is computed by dividing net income by revenue, return on assets (operating income divided by assets),
return on equity (net profit divided by equity) and return on total investment (net profit plus interest divided by
total investment) has been carried out over the period of the project life and all the results are found to be
satisfactory.
Acid Test Ratios: Is a strength indicator that determines whether a firm has enough short-term assets to cover
its immediate liabilities without selling inventory. The acid-test ratio is far more strenuous than the working
capital ratio, primarily because the working capital ratio allows for the inclusion of inventory assets. As per the
determination of this ratio it shows that the project has an acid test ratio of 0.20 at the beginning of the project
year and 16.22 at the end of its projected years.
Debt Ratio: A financial ratio that measures the extent of a company’s or consumer’s leverage. The debt ratio is
defined as the ratio of total debt to total assets, expressed in percentage, and can be interpreted as the
proportion of a company’s assets that are financed by debt.
The higher this ratio, the more leveraged the company and the greater its financial risk. As per this ratio
indicates that at the end of first year the projects debt ratio shows 0.39 and then will decline as long as the loan
is paid regularly, finally at the end of its project life the debt ratio will become 0.00.
Asset Turnover Ratio: The amount of sales or revenues generated per birr of assets. The Asset Turnover ratio is
an indicator of the efficiency with which a company is deploying its assets.
Generally speaking, the higher the ratio, the better it is, since it implies the company is generating more
revenues per birr of assets. At the first the project will record a 0.20 asset turnover ratio and finally will reach
0.23 at the end of its project life.
Gross Profit Margin: A financial metric used to assess a firm's financial health by revealing the proportion of
money left over from revenues after accounting for the cost of goods sold. Gross profit margin serves as the
source for paying additional expenses and future savings. This study proves that the project will amount 0.91
gross profit margins at the beginning and 0.87 at the end of its project life.
Return on Assets/Return on Investment: An indicator of how profitable a company is relative to its total assets.
ROA gives an idea as to how efficient management is at using its assets to generate earnings. Calculated by
dividing a company's annual earnings by its total assets, ROA is displayed as a percentage. Sometimes this is
referred to as "Return on Investment". The project reaches 0.20 percent of Return on Asset/Investment at the
beginning and finally will reach 0.23 percent of Return on Assets/Investments at the end of its project life.
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 = 6.3%

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 58 permanent employees at the time of operation and more
than 70 temporary laborers under the construction period.
In addition to supply of the domestic needs of standardized hotel service and narrow the gap, the project will
generate birr 97,597,247.00 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.
The financing bank will also generate an interest income of birr 50,390,887.91 within the projected years.

UNIT SEVEN
Conclusions & Recommendations
Conclusions of Berta Debela Three Star Hotel facility project’s feasibility can be assessed in various ways,
including:
Market Feasibility: the facility’s ability to attract and support levels of event activity and patronization that are
consistent with or in excess of industry standards.
Financial Feasibility: the ability of the facility to “break-even” or generate an operating profit focusing only on
direct facility-related operating revenues and expenses.
Economic Spending: the facility’s ability to generate new spending activity in the local community (i.e., direct
and indirect spending that is attributable to out-of-town visitors that would not otherwise occur in the local
area).
Tax Generation: the ability of the facility to generate new tax revenue for the local area (i.e., tax revenue
resulting from direct, indirect and induced spending that is attributable to out-of-town visitors that would not
otherwise occur in the local area).
Costs/Benefits/Return on Investment: the facility’s ability to generate new revenues (i.e., from taxes, operating
income and ancillary facility related revenues, etc.) in excess of quantifiable facility-related costs (i.e.,
construction costs, operating costs, marketing costs, public sector contribution, etc.).
Intangible Benefits/Public Good: the ability of the facility to represent an important resource for the local
community, regardless of financial or economic concerns. These types of benefits add to the local community’s
“quality of life” in the same way that libraries, museums and recreational parks do, without consideration of the
economic impacts that the facility might generate.
Therefore, 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 hotel & guest house
business center trading system of the town as well as will confirm sustainability of the firm’s growth and
development.
By investment in advanced technologies, standardized 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 ten years as per the scheduled
time table. Create a job opportunity for not less than 58 permanent residents of Bishoftu town. Contribute to
the government significant revenue in the form of income tax and VAT.
Therefore, the project is beneficial both for the owner, residents of Bishoftu town, the town administration and
the regional government as a whole.
Hence this study believes and recommends that financing the project of Ato Berta Debela 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 owner’s wealth, the development and renaissance of the region and the country as
a whole.
The bank will also be profitable from the loan it injects to this project by generating an interest of 50,390,887.91
within the project loan period.
 This project study believes that, Berta Debela hotel & guest house business center building will have its
own part to the modern plus standardized hotel services in Bishoftu town.
 The financial analysis confirms sustainability of the firm’s growth and development.
 By investment in customary hotel & guest house buildings and by implementing codes of conducts of
the region and the town, more added values can be generated.

 Loan should be obtained in order to manage the cash flow during the construction period. The loan
would cover only 39% of the project value and therefore pre-finance request from the project owners
shall be presented to the bank on time.
 Ethiopian Customs Authority should reply to the request of the promoters on time and respond to the
request of the promoter to allow his duty free privileges as per his requirement.
 The Investment agency of the town should also give a hand to the project by renewing the Investment
license and paves the way to facilitate duty free privileges to the promoters on time.
 The strong management capacity is one of the main aspects to accelerate the process of acting
according to business plan indicators.
 In order to increase loyalty of employees and other stakeholders towards the projects aim and goal, the
communication flow shall be strengthened. Loyalty and membership feeling within the stakeholders is
important aspects to increase accountability and responsibility of employees.
As a result this study believes that financing this project will have a direct and indirect positive effect on Ato
Berta Debela’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.

Vehicles, Machinery, Furniture & Equipment Requirement and Costs

Sr. Description Unit of Qty Unit Price Total Price Total Price
No. Measure (Birr) (Birr) (USD)
Vehicles
1 One Double Cabin Pick-up Vehicle - 3,000cc Pcs 1 3,500,000.00 3,500,000.00 83,333.33
2 One Service Bus - 30 Seats Capacity Pcs 1 2,000,000.00 2,000,000.00 47,619.05
Building Construction Materials
1 Granite Stair Riser - 1.6 * 0.15m Pcs 270 2,500.00 675,000.00 16,071.43
2 Granite Stair Tread - 1.6 * 0.34m Pcs 270 2,600.00 702,000.00 16,714.29
3 Granite Frame - 20cm Meter 188 1,950.00 366,600.00 8,728.57
4 Granite Frame - 30cm Meter 105.25 2,120.00 223,130.00 5,312.62
5 Ceramic Tiles - 60cm * 60cm Sqm 1,546 1,500.00 2,319,000.00 55,214.29
6 Ceramic Tiles - 30cm * 60cm Sqm 600 1,100.00 660,000.00 15,714.29
7 Ceramic Tiles - 30cm * 30cm Sqm 145 800.00 116,000.00 2,761.90
8 Ceramic Riser - 20cm Meter 1,300 600.00 780,000.00 18,571.43
Bed Rooms, Sauna & Jacuzzi Furniture & Equipment's
Bed sets - 2 by 0.90m (for double bed Pcs 20 23,850.00 477,000.00 11,357.14
1 rooms)
2 Bed -2*1.90 (for 20 deluxe rooms) Pcs 20 16,500.00 330,000.00 7,857.14
3 Bed-1.2*1.90 for staffs Pcs 10 13,500.00 135,000.00 3,214.29
Bed side armoires-wood with 2 chest Pcs 50 2,650.00 132,500.00 3,154.76
4 drawers
5 Wall mirror (1x 1.5mt) Pcs 40 1,385.00 55,400.00 1,319.05
6 Color TV 21" & antenna Pcs 30 12,745.00 382,350.00 9,103.57
Digital satellite dish with all accessories + Set 1 15,000.00 15,000.00 357.14
7 DSTv
Sofa- single seat upholstery 2 for each Pcs 50 6,245.00 312,250.00 7,434.52
8 room
Coffee table- round glass top for deluxe Pcs 20 2,800.00 56,000.00 1,333.33
9 rooms
10 Chair- wooden Pcs 60 1,760.00 105,600.00 2,514.29
11 Writing Table- wooden with drawers Pcs 35 3,150.00 110,250.00 2,625.00
12 Luggage rack- movable & flexible Pcs 2 3,700.00 7,400.00 176.19
13 Rack Cabinet Pcs 1 5,500.00 5,500.00 130.95
14 Wardrobe – wooden built-in with partitions Pcs 35 11,745.00 411,075.00 9,787.50
15 Bed side lamps Pcs 50 750.00 37,500.00 892.86
16 Hair Dryer Pcs 30 1,450.00 43,500.00 1,035.71
17 Coat hunger Pcs 35 1,200.00 42,000.00 1,000.00
18 Telephone line & Accessories Set 50 650.00 32,500.00 773.81
19 Shower Box Pcs 25 38,000.00 950,000.00 22,619.05
20 Tele Shower Pcs 30 1,400.00 42,000.00 1,000.00
21 Toilet Seat with Wash Pcs 40 15,000.00 600,000.00 14,285.71
22 Towel Handle Pcs 25 2,120.00 53,000.00 1,261.90
23 Soft Handle Pcs 25 750.00 18,750.00 446.43
24 Soap Handle Pcs 40 520.00 20,800.00 495.24
25 Shattaff Pcs 40 250.00 10,000.00 238.10

26 Center Piece for Toilet Pcs 40 200.00 8,000.00 190.48

27 Jacuzzi Pcs 4 55,000.00 220,000.00 5,238.10
28 Steam Iron Pcs 6 18,800.00 112,800.00 2,685.71
29 Sauna Pcs 1 35,000.00 35,000.00 833.33
30 Lighting Set for Rooms Pcs 50 6,000.00 300,000.00 7,142.86
31 Lifting Set for Corridors Pcs 40 3,500.00 140,000.00 3,333.33
32 Sockets Pcs 150 180.00 27,000.00 642.86
33 Switches Pcs 130 150.00 19,500.00 464.29
34 Led Strip Light Meter 1,500 350.00 525,000.00 12,500.00
35 Card Operated Hotel Lock Pcs 30 14,800.00 444,000.00 10,571.43
36 Finger Print Operated Door Lock Pcs 2 16,500.00 33,000.00 785.71
37 Carpet for Rooms Set 25 3,000.00 75,000.00 1,785.71
38 Mini Refrigerator for Rooms Pcs 25 4,500.00 112,500.00 2,678.57
39 Alarm Clock Pcs 25 600.00 15,000.00 357.14
40 Beauty table with Mirrors Pcs 35 5,410.00 189,350.00 4,508.33
41 Wall watch Pcs 35 535.00 18,725.00 445.83
Laundry Center
1 Laundry center - comprising of Washing Set 2 115,440.00 230,880.00 5,497.14
machines, drying machine, squeezing
machine, Ironing (pressing) machines,
steam drying machines electrical hydro-
extractor and sewing machine. 40kg.
2 Wall attached shelf Pcs 4 7,300.00 29,200.00 695.24
3 Chair- wooden Pcs 5 1,760.00 8,800.00 209.52
4 Table Pcs 2 3,150.00 6,300.00 150.00
5 File Cabinet Pcs 1 4,505.00 4,505.00 107.26
6 Cub Board Pcs 2 11,745.00 23,490.00 559.29
Multi-Purpose Assembly Halls
1 Foldable Chair Pcs 350 440.00 154,000.00 3,666.67
2 Meeting Hall Chairs Pcs 250 1,760.00 440,000.00 10,476.19
3 Guest chair with arm seat Pcs 20 2,350.00 47,000.00 1,119.05
4 Laminated conference table Pcs 4 13,250.00 53,000.00 1,261.90
5 Crystal Light for Restaurant & Meeting Halls Pcs 5 6,000.00 30,000.00 714.29
6 Conference Sound System for Meeting Halls Pcs 3 19,500.00 58,500.00 1,392.86
7 Carpet for Conference Halls Set 3 3,000.00 9,000.00 214.29
8 Window curtain Set 10 11,500.00 115,000.00 2,738.10
9 Stage lighting (decorative quartz flood Set 2 10,400.00 20,800.00 495.24
lights and spot lights) (assorted)
10 Audio Visual Projectors and equipments Set 2 19,480.00 38,960.00 927.62
11 Sound Evacuation Systems Set 3 13,400.00 40,200.00 957.14
12 Translation Equipments Set 3 13,660.00 40,980.00 975.71
13 Air Conditioning Machines Pcs 5 20,400.00 102,000.00 2,428.57
14 TV with stand Table 60 inch Pcs 3 25,755.00 77,265.00 1,839.64
15 Multimedia projector Set 3 12,500.00 37,500.00 892.86
16 Overhead projector Pcs 3 8,500.00 25,500.00 607.14
17 LCD projector with Screen Pcs 3 11,000.00 33,000.00 785.71

18 Projector screen with portable tripod Pcs 3 4,400.00 13,200.00 314.29

(250x250)
19 Wall mounted projector screen (300- Pcs 1 6,500.00 6,500.00 154.76
350x300-350)
20 Meeting room chairs with arm seat Pcs 50 1,760.00 88,000.00 2,095.24
21 Meeting room table (200x100x125) Pcs 6 3,150.00 18,900.00 450.00
22 White board (200x150) Pcs 5 900.00 4,500.00 107.14
23 Public Addressing System, Auditoria type Set 1 16,500.00 16,500.00 392.86
Reception & Waiting Areas
1 Multimedia service - Server Network Set 1 18,550.00 18,550.00 441.67
accessories (Terminals, patch cords, patch
panels, switches/hubs, cables, cable trays,
etc) Tele broad band service line etc.
2 Cannon Ir2420 photocopy machine Pcs 1 45,000.00 45,000.00 1,071.43
3 Binding machine Pcs 1 3,500.00 3,500.00 83.33
4 Laminating machine Pcs 1 3,800.00 3,800.00 90.48
5 Cash safe box Pcs 2 15,000.00 30,000.00 714.29
6 Chair with arm seat Pcs 4 1,760.00 7,040.00 167.62
7 Sofa Seat for Reception Pcs 2 22,000.00 44,000.00 1,047.62
8 Metallic storage cabinet, slide Pcs 1 5,500.00 5,500.00 130.95
9 Brand Desktop Computer Pcs 8 15,000.00 120,000.00 2,857.14
10 Laptop Computers Pcs 2 20,000.00 40,000.00 952.38
11 Laser jet printer Pcs 2 11,000.00 22,000.00 523.81
12 Fax machine (with scanner) Pcs 1 14,100.00 14,100.00 335.71
13 Electronic type writer Pcs 1 12,600.00 12,600.00 300.00
14 Carpet, woolen strip for Reception Set 3 3,000.00 9,000.00 214.29
15 Window curtain, Blind vertical fabric 1st Set 2 11,500.00 23,000.00 547.62
grade
16 Tables Pcs 4 3,150.00 12,600.00 300.00
17 TV 85 inch 4k uhd with stand for reception Pcs 1 70,000.00 70,000.00 1,666.67
18 Telephone with its Accessories Set 3 650.00 1,950.00 46.43
19 File Cabinet Pcs 2 4,505.00 9,010.00 214.52
20 Balcony Pcs 2 13,700.00 27,400.00 652.38
21 Shelf attached with wall Pcs 1 9,750.00 9,750.00 232.14
22 Receptionist Swivel chair Pcs 3 7,500.00 22,500.00 535.71
23 Coat Hunger Pcs 2 1,200.00 2,400.00 57.14
24 Traveler Equipments for Guests Luggage Pcs 2 2,700.00 5,400.00 128.57
25 Air conditioner with its accessories Pcs 1 30,400.00 30,400.00 723.81
26 Wheel Chair Pcs 2 8,000.00 16,000.00 380.95
27 Dollar Checker Machine Pcs 1 8,100.00 8,100.00 192.86
28 Passport Scanner Machine Pcs 1 5,700.00 5,700.00 135.71
29 Note/Birr Counter Machine Pcs 1 10,000.00 10,000.00 238.10
30 Vandlayer Lamp - Big /used for reception Pcs 1 33,000.00 33,000.00 785.71
area/
Other Furniture & Equipment's
1 Cabinet for coffee, tea cups, spoons etc Pcs 1 15,500.00 15,500.00 369.05

2 Sink with two bay for washing tea and Pcs 3 2,900.00 8,700.00 207.14
coffee cups, draft glasses, water glasses etc
3 Steel legged adjustable height chairs Pcs 15 3,055.00 45,825.00 1,091.07
around the balcony
4 Plastic chair Pcs 200 650.00 130,000.00 3,095.24
5 Oval shaped plastic table Pcs 50 800.00 40,000.00 952.38
6 Umbrella Pcs 10 1,405.00 14,050.00 334.52
7 Presidential desk (75x32x100cm) Pcs 1 17,000.00 17,000.00 404.76
8 Law back swivel chair Pcs 3 7,500.00 22,500.00 535.71
9 Laminated conference table Pcs 2 14,500.00 29,000.00 690.48
10 Guest chair with arm seat Pcs 7 2,350.00 16,450.00 391.67
11 Sofa guest chair with arm seat Pcs 3 22,500.00 67,500.00 1,607.14
12 Oval coffee table Pcs 2 3,000.00 6,000.00 142.86
13 Open shelf and sliding door office cabinet Pcs 2 4,800.00 9,600.00 228.57
14 Open book shelf (151x78x35) Pcs 1 5,900.00 5,900.00 140.48
15 Wooden filling cabinet, four drawers Pcs 2 8,500.00 17,000.00 404.76
16 Coat hunger Pcs 1 1,200.00 1,200.00 28.57
17 Office Chair high back ergonomic Pcs 8 7,500.00 60,000.00 1,428.57
18 Executive sec. Desk and chair Set 1 11,600.00 11,600.00 276.19
19 Arc joint table (75x75) Pcs 1 12,500.00 12,500.00 297.62
20 Computer table (90x75x75) Pcs 8 5,800.00 46,400.00 1,104.76
21 Office Table Pcs 4 8,500.00 34,000.00 809.52
22 Group Table Pcs 2 14,500.00 29,000.00 690.48
23 Mobile drawer Pcs 2 2,290.00 4,580.00 109.05
24 Swivel chair for staffs Pcs 3 3,500.00 10,500.00 250.00
25 Office desk (180x75) with mobile 3 drawers Pcs 2 6,100.00 12,200.00 290.48
26 Managerial chair, high back Pcs 1 15,500.00 15,500.00 369.05
27 Wooden office shelf (165x30x180) Pcs 2 6,500.00 13,000.00 309.52
28 Stand By Generator Set With Canopy And Pcs 1 540,000.00 540,000.00 12,857.14
Accessories (100 KVA)
29 Water Pump Pcs 4 19,500.00 78,000.00 1,857.14
30 Fire Extinguisher Equipments Set 4 8,500.00 34,000.00 809.52
31 First Aid Medical Equipments Set 4 3,000.00 12,000.00 285.71
32 Meeting room chairs with arm seat Pcs 15 2,300.00 34,500.00 821.43
33 Meeting room table Pcs 2 5,750.00 11,500.00 273.81
34 White board Pcs 2 1,300.00 2,600.00 61.90
Bar & Modern Restaurant
1 Beverage shelve/ cupboard Pcs 2 23,500.00 47,000.00 1,119.05
2 Beverage dispenser Pcs 20 1,150.00 23,000.00 547.62
3 White wine glass Pcs 50 80.00 4,000.00 95.24
4 Red wine glass Pcs 50 80.00 4,000.00 95.24
5 Wine cooler Pcs 5 320.00 1,600.00 38.10
6 Ashtray Pcs 50 175.00 8,750.00 208.33
7 Tables- round Pcs 20 800.00 16,000.00 380.95
8 Restaurant Chairs Pcs 100 650.00 65,000.00 1,547.62
9 Sofa Seat for VIP Bar Pcs 1 65,000.00 65,000.00 1,547.62

10 TV set for Bar & Restaurant Pcs 10 11,000.00 110,000.00 2,619.05

11 Side service tables Pcs 15 3,450.00 51,750.00 1,232.14
12 Service trolleys Pcs 5 4,500.00 22,500.00 535.71
13 Cupboards Pcs 2 13,600.00 27,200.00 647.62
14 Main dish Plate with rim- 20 cm Pcs 150 55.00 8,250.00 196.43
15 Soup cup with saucer Pcs 50 30.00 1,500.00 35.71
16 Salad plate Pcs 100 50.00 5,000.00 119.05
17 Bread plate Pcs 100 65.00 6,500.00 154.76
18 Salt & pepper – set Pcs 30 40.00 1,200.00 28.57
19 Butter holder/dish Pcs 30 80.00 2,400.00 57.14
20 Coffee cup with saucer Pcs 50 35.00 1,750.00 41.67
21 Tea cup with saucer Pcs 50 35.00 1,750.00 41.67
22 Soup spoon Pcs 100 24.00 2,400.00 57.14
23 Main dish knife Pcs 100 68.00 6,800.00 161.90
24 Forks Pcs 100 24.00 2,400.00 57.14
25 Salad knife Pcs 100 200.00 20,000.00 476.19
26 Dessert bowl Pcs 100 320.00 32,000.00 761.90
27 Water glass Pcs 100 39.00 3,900.00 92.86
28 Champagne glass Pcs 50 160.00 8,000.00 190.48
29 Liqueur glass Pcs 100 70.00 7,000.00 166.67
30 Cocktail glass Pcs 50 220.00 11,000.00 261.90
31 Beer glass Pcs 100 60.00 6,000.00 142.86
32 Wine cooler with stand Pcs 25 340.00 8,500.00 202.38
33 Wine storage shelf Pcs 1 12,600.00 12,600.00 300.00
34 Bar stool (counter chairs) Pcs 20 3,300.00 66,000.00 1,571.43
35 Mixer & Juicer Pcs 2 4,500.00 9,000.00 214.29
36 Sugar dispenser size 6 Pcs 15 49.00 735.00 17.50
37 Juice glass Pcs 30 70.00 2,100.00 50.00
38 Tea spoon Pcs 50 15.00 750.00 17.86
39 Coffee spoon Pcs 50 15.00 750.00 17.86
40 Oil & vinegar holder Pcs 10 155.00 1,550.00 36.90
41 Ice bucket Pcs 1 12,500.00 12,500.00 297.62
42 Ice cream machine Pcs 1 21,500.00 21,500.00 511.90
43 Washing basin unit Set 1 5,500.00 5,500.00 130.95
44 Hand Dryer Machine Pcs 4 3,850.00 15,400.00 366.67
45 Coffee machine 2olt. Pcs 1 75,000.00 75,000.00 1,785.71
46 Refrigerator, 240 ltr Pcs 2 25,000.00 50,000.00 1,190.48
47 Deepfreeze 500lt Pcs 3 35,000.00 105,000.00 2,500.00
Coffee Service Materials
1 Coffee shop counter unit- custom built Pcs 1 10,950.00 10,950.00 260.71
2 Long-leg counter stool Pcs 5 2,250.00 11,250.00 267.86
3 Chair with coffee table (set) Pcs 4 3,650.00 14,600.00 347.62
4 Coffee cup with saucer Pcs 25 45.00 1,125.00 26.79
5 Coffee table- round glass top Pcs 2 2,150.00 4,300.00 102.38
6 Tea cup with saucer Pcs 20 45.00 900.00 21.43
7 Sugar holder (for outlets) Pcs 12 55.00 660.00 15.71

Kitchen
1 Electrical & gas grill with six burners Pcs 1 24,000.00 24,000.00 571.43
2 Sink with two bay(for the kitchen) Pcs 2 2,855.00 5,710.00 135.95
3 Kitchen working table with drawers, 3m Pcs 3 6,500.00 19,500.00 464.29
x90cm
4 Kitchen cabinet Set 1 59,000.00 59,000.00 1,404.76
5 Cabinet for coffee, tea cups, spoons etc Pcs 2 15,480.00 30,960.00 737.14
6 Sink with two bay for washing tea and Pcs 1 2,600.00 2,600.00 61.90
coffee cups, draft glasses, water glasses etc
7 Refrigerator, 240 ltr Pcs 1 25,000.00 25,000.00 595.24
8 Deepfreeze 500lt Pcs 1 35,000.00 35,000.00 833.33
9 Gas burner with cylinder, 12kg,two gas and Pcs 1 20,000.00 20,000.00 476.19
two electric stoves
10 Electric Operated Stove/Oven Pcs 1 22,000.00 22,000.00 523.81
11 Frying pans Pcs 1 16,000.00 16,000.00 380.95
12 Dishes with two handle Pcs 10 2,600.00 26,000.00 619.05
13 Pressure cooker (1 up to5 bars) Pcs 4 4,500.00 18,000.00 428.57
14 Medical Equipment, tools, instruments and Set 1 3,000.00 3,000.00 71.43
furniture for the Hotel
15 Microwave oven-20nos Pcs 1 25,000.00 25,000.00 595.24
16 Deep fryer Pcs 2 15,000.00 30,000.00 714.29
17 Mixer Pcs 2 3,500.00 7,000.00 166.67
18 Hot – water bath ( Bain maire) Pcs 2 3,000.00 6,000.00 142.86
19 Freezer Pcs 2 4,800.00 9,600.00 228.57
20 Stock pot(50 liters) Pcs 2 3,890.00 7,780.00 185.24
21 Sauce pan Pcs 2 2,850.00 5,700.00 135.71
22 Sauce pot(50 liters) Pcs 2 2,400.00 4,800.00 114.29
23 Boiler( 30 liters) Pcs 1 6,560.00 6,560.00 156.19
24 Baking pan Pcs 1 7,850.00 7,850.00 186.90
25 Bakery Machine Pcs 1 28,000.00 28,000.00 666.67
26 Cake maker Pcs 1 23,000.00 23,000.00 547.62
27 Noodle-Lasagna maker Pcs 1 14,500.00 14,500.00 345.24
28 Pizza machine Pcs 1 15,100.00 15,100.00 359.52
29 Air conditioner machine Pcs 1 30,400.00 30,400.00 723.81
30 Roasting pan Pcs 1 7,500.00 7,500.00 178.57
31 Scale(portion) Pcs 1 3,500.00 3,500.00 83.33
32 Measuring spoons Pcs 6 325.00 1,950.00 46.43
33 Chef’s Knife (10 in.) Pcs 10 450.00 4,500.00 107.14
34 Salad knife (6 in.) Pcs 10 285.00 2,850.00 67.86
35 Vegetable knife (2in.) Pcs 10 244.00 2,440.00 58.10
36 Boning (6in.) Pcs 4 1,800.00 7,200.00 171.43
37 Slicer knife (12in.) Pcs 10 225.00 2,250.00 53.57
38 Bucher’s knife(12in.) Pcs 10 450.00 4,500.00 107.14
39 Cleaver (4in.) Pcs 6 660.00 3,960.00 94.29
40 Vegetable peeler (set) Set 2 740.00 1,480.00 35.24
41 Cutting Board – hard rubber Pcs 6 1,140.00 6,840.00 162.86

42 Pastry wheel Pcs 1 2,200.00 2,200.00 52.38

43 Kitchen spoon ( perforated) Pcs 15 25.00 375.00 8.93
44 Kitchen spoon( solid) Pcs 15 35.00 525.00 12.50
45 Grater (normal size) Pcs 4 550.00 2,200.00 52.38
46 Strainer Pcs 4 245.00 980.00 23.33
47 Can opener Pcs 4 190.00 760.00 18.10
48 Sink unit (900 / 1600mm) Pcs 2 2,400.00 4,800.00 114.29
49 Wall attached shelves Pcs 2 8,580.00 17,160.00 408.57
50 Hot cupboard (warmer) Pcs 1 8,750.00 8,750.00 208.33
51 Toaster Pcs 1 5,250.00 5,250.00 125.00
52 Dishwashing machine Pcs 1 15,950.00 15,950.00 379.76
House Keeping Materials
1 Supplies and linen storage shelf unit Pcs 2 11,850.00 23,700.00 564.29
2 Wet and dry floor cleaning machine Pcs 6 4,100.00 24,600.00 585.71
3 Vacuum cleaner (upright) Pcs 4 9,600.00 38,400.00 914.29
4 Cleaning trolley Pcs 4 2,400.00 9,600.00 228.57
5 Mop trolley with squeezer Pcs 4 1,900.00 7,600.00 180.95
6 Fire extinguisher equipments Set 1 6,580.00 6,580.00 156.67
7 Cloth shelf Pcs 2 7,600.00 15,200.00 361.90
8 Ceramic and tiles cleaner machines Pcs 4 3,890.00 15,560.00 370.48
9 Buckets big size Pcs 4 3,900.00 15,600.00 371.43
10 Buckets small size Pcs 4 2,950.00 11,800.00 280.95
Security, Garden & Recreation Area
1 Water sprinklers Pcs 4 2,400.00 9,600.00 228.57
2 Security Camera IPIP Outdoor Pcs 6 25,000.00 150,000.00 3,571.43
3 Security Camera IPIP Indoor Pcs 24 15,500.00 372,000.00 8,857.14
4 Decoder & Recorder for Security Camera Pcs 2 18,000.00 36,000.00 857.14
5 X-Ray Machine for Entrance Pcs 1 350,000.00 350,000.00 8,333.33
6 Gardener kit Set 1 6,000.00 6,000.00 142.86
7 Fountain Materials (Set) Set 1 23,500.00 23,500.00 559.52
8 Foldable Rest chair Pcs 10 2,100.00 21,000.00 500.00
9 Contingency 2,462,290.50 58,625.96
Grand Total 27,085,195.50 644,885.61

Bereta 2nd Proposal

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Project Proposal of Bereta Debela 3* Hotel Buildings

Promoter – Ato Berta Debela 1

Promoter – Ato Berta Debela 2

Promoter – Ato Berta Debela 3

Promoter – Ato Berta Debela 4

Promoter – Ato Berta Debela 5

Promoter – Ato Berta Debela 6

Project Implementation Plan

Promoter – Ato Berta Debela 7

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 Marketing – Carry out an aggressive marketing & packaging strategy

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Evaluation & Monitoring

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Developmental Impact of the Project in Socio-economic

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AUDITOR LEGAL ADVISOR

FOOD & BEVERAGE ACCOMODATION & ACCOUNTS SECTION CHIEF CASHER

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Sales Girls (For Shop Sales) 4 2,000 96,000 Diploma 2 Years

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Years Annual Repayment Interest Payment Principal Payment Outstanding Balance

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3 5 1 5 473 365 862,312.50

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Associated Costs and Expenses

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Determination of Working Capital Requirement

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Projected Income Statement of the Project

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Projected Cash Flow Statement

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Projected Cash Flow Statement:

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Projected Depreciation & Amortization Schedule

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Projected Balance Sheet of the Project

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BE = Fixed Cost = 6.3%