1.

Executive Summery This is a business plan proposal for the establishment of cafe having the name

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

2. Background Of The Business And Justification For The Business Mars café is a new café partnership
with an expected to open in July, 2018 G.C at the heart of Addis Ababa, and expected to give a
standardize café service in Addis Ababa. Mars will specialize in Fast foods, Dinners, Coffee, Tea,
Cappuccino, Frozen, Ice-cream, homemade cookies and other related activities.

In Addis Ababa there are many cafe that give services to their customers but they cannot still satisfy the
need and want of the customer in terms of both quality and quantity. In order to maximize customer
satisfaction so that Mars decide to open a café in Addis Ababa city. Mars target customers are
intellectuals, artists, and writers with reserved VIP seats, and students, couples, families and foreigners.
Mars café expected to serve this area well.

1 AAITAAIT

Business Plan Proposal

This plan offers financial institutions an opportunity to review our vision and

strategic focus. It also provides a step-by-step plan for the business start- up,

establishing favorable sales number, gross margin and profitability.

Establishing this cafe has beneficiary in maximizing the wellbeing of the society from

different perspective. Some of them are,

 Increase the income of the owner

 It create employment opportunity

 It satisfy the need of the customer(quality and quantity) within a reasonable price

 It provide better place for younger’s in spending their time.

 It contributes for the development of the surrounding area.

 Increasing government revenue through taxation (Business profit tax and VAT).

In general these business increases the welfare of society and this business does not result

any environmental pollution, since it have very low by- product and if any (is use as food
for cattle’s especially for pig farms).

3. Feasibility Study

3.1 Marketing And Demand

3.11 Marketing Survey

Addis Ababa is experiencing a trend toward the creation of evening

dining/entertainment venues. They are popular and gaining more recognition.

Evidence of this is found in local news and magazine coverage. These venues are

finding new homes in the areas close to and/or adjacent to downtown.

AAITAAIT

Business Plan Proposal

Target Customer

One of Mars target customers are artists, teachers and writers who need a nice quite

cozy place to think and do their work with reserved VIP seats and for commons and

foreigners. The other target customer of Mars is couples that want to recreate

themselves.

Mars strategy is based upon targeting and serving:

 The typical Addis Ababa intown resident. This urban professional works long

hours and has relatively little time to cook at home. She/he has an active social

life and spends a substantial amount of disposable income maintaining it.

 The many businesses which regularly use restaurant dining as an function of

conducting business.

Market Segmentation

A restaurant/coffee house would provide one of the best food and beverage

opportunities for more than 30,000 per month and adjacent neighborhoods.

Market Analysis

potential customers Growth

A.A Area Residents

Year 1
4.00%

Hotel/Convention/Visitors 6%

Downtown Workers

10.6%

Total/average

6.6%

1,568

2,100

3,350

147,018

Year 2

2,725

3,915

8,020

165,660

Year 3

5,798

4,452

10,624

186,874

Year 4

7,878

5,820

11,349

211,047

Year 5

12,066

6,143

10,419
238,628

AAITAAIT

Business Plan Proposal

3.12 Business Demand

Estimated demand levels based on Central Statistics Agency household income,

consumption, and expenditure surveys as well as based on a sample survey undertaken

using observation of the current demand for existing cafés and restaurant beside the

population size.

The demand for the service is directly related with the growth of the population and

income of the society. Taking this in to consideration annual average growth of 6.6% is

applied to forecast the future demand then it expected to decline after its maturity over

the 5 year period. But through diversifying the service that provided to the customers, the

café will able to maintain keeping its customers.

3.2 Technical Analysis

Description of Products and Services

The mars café will offer high quality coffee, tea and cappuccino, fast foods and dinner at

a very reasonable price. Also sell homemade cookies, cakes, brownies, and Doughnuts,

with fair price.

Key Features of the Products and Services

All drinks will be made with filtered water and the highest quality ingredients can

get. Frozen drinks will have caramel or chocolate syrup drizzled in the glass and over

the drink. Cappuccino will have whipped cream toppings as well as the option for

candy sprinkles. Cookies will have the option of a chocolate or caramel dip and

sprinkles. also offer designer flavored cream and five kinds of sweetener, i.e. sugar,

honey, Equal, Splenda, and Sweet-n-Low. Cream and sweetener is at no extra charge.

Furthermore, the fast foods includes chips, cookies, Burger, pizza, Mushebek,

Baklaba, Halawa, Fetera, and dinner include Kitffo, Key Wott, Minchet.

4
AAITAAIT

Business Plan Proposal

Production of Products and Services

Mars will use only filtered water and will brew our coffee in commercial coffeepots that

will be thoroughly cleaned between uses. Mars will bake and cook cookies, brownies,

fast foods and dinner in our own on-site oven from proven recipes, daily.

Future Products and Services

Within the next three to five years we expect to branch out into catering and offer

homemade pies, whole or by the slice.

Comparative Advantages in Production

Mars low overhead and cheaper pricing will be the key to Mars success.

3.3 Industry Analysis

Size of the Industry

In Addis, the industry is quite large, for example in Piassa there are many cafeterias, we

can found cafeterias in average almost 50 meter apart but around sadist kilo there are a

few cafeterias.

Key Industry Trends

This industry is booming at the present time, there is a trend toward small cozy places

and away from the large generic chain.

The cafeteria business does not show signs of slowing down. With new innovations such

as flavorings and additives, it should continue for some time.

AAITAAIT

Business Plan Proposal

Mars customers will be attracted by service in addition to this they may be attracting

through standardize customer approach, building, chairs, tables, glasses and strategic

placement.

The restaurants and cafes that make up the community of establishments in the area

surrounding. Their concepts range from typical fast food/chain venues to expensive
fine dining establishments. However, the predominating nature of the immediately

surrounding restaurants and ccafeteria is casual/upscale.

Description of Key Competitors

Of the few cafeterias in the area, some are large chain with a very expensive product,

others are really home style cafeterias, the last one, and competitors are a traditional

store with a "tea room".

Mars Located in the heart of Addis, while its location near many longstanding

restaurants and cafeteria would seem to offer considerable overflow, the café is

easily seen from the street and parking is at a premium. Its concept has received very

favorable press in Sidist kilo.

Strength

Consider quality of food and service with a reasonable price, and its skilled manager

together with its bright waiter can attract customers, so it has acceptance (brand

name) by the customer.

AAITAAIT

Business Plan Proposal

Weakness

No variation on menu or service it provides. Most of its activities like the menu are

limited.

Romina Restaurant: Located in Arat kilo . The location is on the street and can be

perceived as a marginally safe area. Nevertheless, the café remains wildly popular

given the parking difficulties.

Strength

Often have interesting alternative dishes on the menu and designer décor. The

evening atmosphere is also so attractive and suitable for customers.

Weakness

Even if there is widely varying standards of food and service, they are often

expensive which does not consider the buying capacity of the customers.
Oasis cafe: Located on nearer to Addis Ababa Institute of technology, this is a corporate

coffeehouse which provides coffee, tea, cakes and sandwich service.

Strength

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

Weakness

The quality of the goods, not giving evening service and are not that much

satisfactory beside the low price

AAITAAIT

Business Plan Proposal

Analysis of Competitive Position

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

evening entertainment.

Relative to the location of these establishments, the center of town is centrally

geographically located. Its location will easily allow for passengers from those who

came others area. .

Mars pricing strategy and comfortable atmosphere will be the key to our success.

None of the other cafeteria in the area can offer this.

Competitive Edge

Mars will position itself as unique cafeteria where its customers can not only enjoy a

cup of perfectly brewed coffee but also spend their time in an ambient environment.

Comfortable sofas and chairs, dimmed light and quiet relaxing music will help the

customers to relax from the daily stresses and will differentiate Mars cafeteria from

current competitors.

3.4 Financial Analysis

Mars want to finance growth mainly through cash flow. Mars recognize that this

means we will have to grow more slowly than we might like.

The most important indicator in Mars inventory turnover. And have to make sure

that food inventory turnover stays at approximately four turns per month.
Mars do not want to let average collection days get above 45 under any

circumstances. This could cause a serious problem with cash flow, because our

AAITAAIT

Business Plan Proposal

working capital situation is tight. Most credit sales will be via credit and debit cards.

Also do have plans to initiate direct billing for law firms and other businesses

conducting regular visits. Mars must target a net profit of 14% at the least, and hold

marketing costs to no more than one to three percent of gross sales.

The Start-Up Expenses

Include:

 LEGAL expenses for obtaining licenses and permits as well as the accounting services

totaling Birr3,000

 Marketing promotion expenses for the grand opening of Java Culture in the amount

of Birr3,000 and as well as flyer printing (1160 flyers at Birr0.50 per copy) for the

total amount of Birr3,580.

 Consultant’s fees of Birr3, 000 paid to ABC Espresso Services for the help with setting

up the coffee bar.

 Insurance (general liability, workers' compensation and property casualty) coverage

at a total premium of Birr2, 400.

 Pre-paid rent expenses for one month total amount of Birr 20,400.

 Premises remodeling in the amount of Birr10, 000.

 Other start-up expenses including stationery (Birr800) and phone and utility

deposits (Birr 3,500).

Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the

following table. The key underlying assumptions are:

 Assume a slow-growth economy, without major recession.

9
AAITAAIT

Business Plan Proposal

 Assume of course that there are no unforeseen changes in technology to make

equipment immediately obsolete.

4. Business Goal, Mission and Objective

4.1 Objectives of The Business

Mars primary goals over the next year are:

 Renovate our space in Addis Ababa, Sidist kilo.

 Acquire equipment necessary for business, i.e. coffee pots, cappuccino machines,

blenders, etc.

 Make agreement with the supplier of Mars raw material and bakery vendors.

 Create a cozy, artist friendly environment (i.e. choice of colors, choice of music,

decor)

 Open for business and become the most popular café in the area.

 Expand our business in different in area of the country

 Targeting and maintaining a net profit of at least 14 % by the second year.

 To generate monthly sales to reach Birr 15000 by the end of forth month of

operation, and Birr 30000 monthly by the end of the first year of operation. Mars use

different attractive methods to get more customers over time. For instance we

provide less price compare to the another cafeterias and we also provide some

entertainment activities for the customers like showing DSTV, inviting music bands

for special days like Valentine ’s Day and there will also be candle night on Sunday.

This plan includes chapters on the company, products and services, market focus,

action plans and forecasts, management team and financial plan.

4.2 Vision And Mission

Mars cafe will become the foremost coffee shop in the area. We will serve a perfect

product at a very reasonable price. We will also be a meeting place for every

10

AAITAAIT
Business Plan Proposal

individual that want to use cafeteria service. Mars will create an atmosphere

conducive to creative expression and promote the creative process.

The cafe's aim is simple. It will provide a completely sophisticated, sensual, yet casual

dining and/or coffee house experience for the many Addis people and visitors who

frequent the city's casual dining spots and entertainment venues.

Mars aim to be able to employ several full time members of staff and build up a team

so that the partners can be clear of routine tasks and consentret on day to day

activities like meeting customer, supervising the cafeteria, holding extensive

promotion activity and so on which help the business to develop well.

4.3 Keys To Success

The keys to success in this business are:

1. Product quality: Food, coffee-based beverages, and entertainment are our products.

They must be of the high quality and value.

2. Service: Mars patrons are paying to have a good time. Their experience will suffer if

service is not of the highest caliber. Each member of the staff will be courteous,

efficient, and attentive.

3. Marketing: Mars will need to target our audience early and often. While the business

is located in a central and accessible location, many people will have to be re-

introduced to the neighborhood .

4. Management: Mars will need to have a firm grasp on food, beverage, and labor costs.

The dining/entertainment/coffeehouse experience must be delivered in a fashion

that will not only inspire repeat business, but encourage word-of-mouth

recommendations to others. Proper inventory, employee management, and quality

control is key.

11

AAITAAIT

Business Plan Proposal

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

mission of charitable giving.

4.4 Strategies

4.4.1 Sales Strategy

My sales strategy includes:

 Establish coffee service at local businesses

 Sell gift cards, frequency cards, pre-paid cards, and offer discounts to key groups

 Create an ongoing sampling program

 Conduct a consistent, aggressive marketing program

 Be an active member of the community; be visible at charitable functions

 Solicit customer feedback to constantly improve and streamline our operation

 Staff salaries that are 10% above the industry average in order to attract the best

people

 Hiring for attitude so that Mars always have a friendly, enthusiastic staff to make

customers feel welcome and appreciated; constant staff training to assure the best

quality possible

 To reduce customer waiting time, and create efficient product ordering

 Create a mobile kiosk to take Dark Roast Java into the community at special events,

farmer's markets, art shows, etc.

12

AAITAAIT

Business Plan Proposal

4.4.2 Pricing Strategy

Food, drinks, and entertainment options are priced to give us an attractive margin

while at the same time offering value to the consumer. Mars want repeat business.

And also want the experience to remain fresh. Within lies why the food, beverages,

and musical/entertainment programming will be relatively flexible.

Comparing with other competitive cafeterias we will provide fewer prices to our

customers. Mars will offer two sizes of drinks, small Birr 4.00 and large Birr 7.00. Our
cookies and brownies will sell for Birr 12.00 each.

4.4.3 Promotion Strategy

The first step that Mars take in promoting our cafeteria is conducting an opening

ceremony. On this ceremony different well known peoples will be invited and some

part of the customers will also be invited. Also invite our neighbors to have a good

public relationship.

Intend to advertise in the local newspapers and offer a "frequent drinkers club"

discount to our best customers. We will also send out advertise through direct mail,

which will include cents off coupons.

Mars will promote our company name and label almost more than the product itself,

because to be successful besides have to stand for brand-name integrity, excellent

menu offerings, and first class entertainment and fun.

Mars will have Happy Hour, price reduction for special days, like holidays, Valentine’s

Day. As well as provide special Torta cake for those of who celebrate

their birthday parties in our cafeteria with low price.

13

AAITAAIT

Business Plan Proposal

One thousand one hundred sixty flayers will be distributed in the adjacent

neighborhood, on the University campus, at the malls and in the selected office

buildings within two weeks prior to the opening of Mars cafeteria. Subsequently, free

postcards with Mars endorsement will be printed to increase the company visibility

among the patrons

5. Implementation, Resource Plan and Organizational Structure

5.1 Time Plan

The operation of the project will start at the beginning of 2018 after certain pre-

request activities are accomplished.

The time schedule is stated as follows;

No
Activities

Developing the project

Obtaining the license from concerned body

Purchase materials and renting the building

Promotional activity

Start running the business

Time schedule

Dec 1- jan25

Jan27- Feb 20

Feb 21-May 10

May 12-June 16

July 1 2018

14

AAITAAIT

Business Plan Proposal

5.2 Resource Plan

No

Item

6
7

Coffee boiler machine

Kitchen equipment

Refrigerator

Sofas and chairs (furniture)

Rental for building

Labor cost

Miscellaneous expenses

Total cost of the business

Cost

30,000

80,000

10,000

165,000

20400

25960

13000

344,360

5.3 Human Resource Plan

The personnel plan calls for hiring 14 full-time salaried employees at start-up. Any

additional hires will be part time and devoted to the expansion of any catering

function, as well as increased capacity/operation of a private party function.

15

AAITAAIT

Business Plan Proposal

Employee salaries are as follows:

No. Sr.

Manpower

1
2

Sub total

Benefits (10% basic salary)

Total

General manager

Chief

Line cook

Waiter

Dishwashers/Bussers

Guards

No.

14

Monthly Salary (Birr) Annual Salary (Birr)

3,500

42000

1500

1200

1700

1500
1500

23600

2360

25960

18000

28800

122400

54000

18000

283200

28320

311520

5.4 Organizational Structure

Mars organizational structure will be a simple pyramid style with the owners putting

in as much work as the employees. An additional manager (to be hired) will assist in

maintaining and reviewing operations of the restaurant and the entertainment

venue/bar.

A chef (to be hired) will manage kitchen operations and be crucial to maintaining

food inventory stability and assistance in menu development.

An assistant manager/senior server (to be hired) who will be a salaried employee

will provide regular table service as well as assistance to the manager and the

general manager. A sous-chef/line cook (to be hired) will perform secondary

management functions in the kitchen as well as provide assistance to the chef in

main kitchen/cooking functions.

Part-time personnel will be hired to handle bartending, serving, and dishwashing

functions. The marketing and accounting function will be handled by independent

contractors/consultants.

16

AAITAAIT
Business Plan Proposal

6. Financial Plan

6.1 Sales Projection

The most important indicators in our case are daily seating "counts" and weekly sales

numbers. Also make sure that we are turning our inventory rapidly so as to avoid food

spoilage. Our project to perform at five years projects .from those out of which one would

be a small scale and others would be of an intermediate implementation. The source of

sales would be the fees for the feasibility studies.

6.2 Income Projection

Income from

1st year 2nd year

Hot drinks & Beverages 121875 148125

Cakes & cookies

Fast foods

Lunch & Dinner

Total income

121875 148125

243750 296250

162500 197500

183900

3rd year 4th year

202650

183900

367800

245200

202650

405300

270200

5th year
223462

223462

446926

297950

650,000 790,000 980,800 1,080,800 1,191,800

17

AAITAAIT

Business Plan Proposal

6.3 Cash Requirement

The business at least needs 344,360.00 birr for business establishment, commencement

of operations and liquidity support.

The shareholders will have equal share and business are obtained in two ways.

 From shareholders 20%

 From Bank 80%

6.4 Source of Financing

The finance for this business would be obtained from shareholders and banks. From bank

Mars provide the start up cash of 275,485.00 birr it have interest from bank. Each members of

the company should buy share by 11,478.60. Hard work is expected from us to be successful in

competition and to return birr taken from the bank with interest.

18

AAITAAIT Business Plan Proposal

7. Supporting Documents 7.1 Legal agreements The following agreements hold for all partners involved
in the venture:

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

 All company secrets should be protected by all members of the organization  Salaries of employees
would be paid when revenues of the organization exceed 50% of first months cost

 Dissolving of partnership is allowed if the venture has returned the costs involved ahead of the six
month.

8. References
 Ethiopian business development service network (EBDSN), How to write a business plan 2005/6 E.C

  AAIT Entrepreneurship for Engineers lecture note/ Zerihun G. /