PROJECTED BUSINESS

PROPOSAL

HAB CAFÉ &

RESTAURANT
Owber’s Name: Tigist Getachew
Adress:Lemikura Sub City
Wereda:4
Tel. No. 09-13-44-12-32
Signature: _________________
To: Bank of Abyssiniya

Addis Ababa, Ethiopia

March, 2024
 Table of Contents
Title page
1. Introduction.......................................................................................................2
2. Executive Summary ...........................................................................................2
2.1. Business Mission ......................................................................................3
2.2. Goal & Strategies ......................................................................................3
3. Legal form of the project .....................................................................................3
4. Business Objective .............................................................................................4
5. The Key Personnel ..............................................................................................4
6. Purpose of the loan ............................................................................................5
7. Keys to Success ...........................................................................................6
8. Market and Customers .......................................................................................6
8.1. Market ......................................................................................................6
9. Competition and Buying Patterns .......................................................................7
9.1. Strengths and weakness of Competitors .....................................................7
9.1.1. Strengths: ...........................................................................................7
9.1.2. Weaknesses ........................................................................................7
10. Strategy and Implementation Summary ..............................................................7
10.1. Strategy Pyramids .....................................................................................7
11. Value Proposition ...............................................................................................8
12. Promotional Strategy ..........................................................................................8
13. Cost forecast ......................................................................................................8
13.1. Fixed assets (Tools & Equipment) Cost .......................................................9
13.2. Annual Raw Materials/Year .......................................................................9
13.3. Annual Direct labor Cost .........................................................................10
13.4. Requirement of Utilities ...........................................................................10
14. Annual Operating Cost .....................................................................................11
15. Annual Sales Forecast ......................................................................................11
Table 7- Sales.........................................................................................................11
16. Three years Financial Statement .......................................................................13
17. Income Statement ............................................................................................13
18. Balance Sheet ..................................................................................................14
19. Five years Cash Flow Statement .......................................................................14
20. Conclusion ......................................................................................................15

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 1. Introduction

Ethiopian cultural and accustomed food characteristically consists of vegetable

and often very spicy meat dishes, usually in the form of Wat, a thick stew,
served atop Injera, a large sourdough which is about 50 centimeters (20 inches)
in diameter and made out of fermented teff flour. Ethiopians eat exclusively
with their right hands, using pieces of injera to pick up bites of entrées and
side dishes. Accordingly, HAB Cafe & Restaurant plc has providing different
types of food staffs like: Enjera beshiro, Tibs, kikil, tegabino… and for breakfast
Dulet, siga firfir, omelet and other drinks also has been offereing based on the
need of the customers

2. Executive Summary

HAB Café & Restaurant is a business that was established as a Sole

proprietorship and run by w/ro Tigist Getachew providing quality and full
service delivery of café and restaurant services for clients in Addis Ababa, at
Araabsa. The owner of the business will be I (w/ro Tigist Getachew) who is
experienced in directing and managing Restaurant in Addis Ababa. So, that it
could be handled and managed well both the internal and external activities of
the business as well as customer in friendly and respected manner.

The reasons why I have decided to set up such type of business are,

The first and foremost reason is the vision that I received from my heavenly
father God who will take all the risks from the starting point to the end.

The great migration of people in to Addis Ababa from different corners. Out of
these, many of them are living in condominium houses and need provisions of
food for their existence outside their home. So, to fill these need, Café and
restaurant services are essential.

Eventhough there are few restaurants in our target areas, who supply different
types of food items for clients, but still they are questioned by their quality and
this enable me to have opportunity to get into the market. The motto that I

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used to go into a business is Quality: “Quality is remembered long after the
price is forgotten”

2.1. Business Mission

The mission of HAB Cafe & Restaurant plc is to provide the finest quality food
staffs in the most efficient time for the consumers only in Addis Ababa around
Arabsa Condominium and satisfying the peoples who are suffer from quality
services. Maximizing profit and improving personal life is an obvious and vital
mission of the business. The last but not the least one is developing the
economic status of our country by disbursing government tax and decreasing
unemployment particularly women.

2.2. Goal & Strategies

HAB Cafe & Restaurant plc objectives are to build brand awareness and
customer service excellence, while increasing sales. Accordingly, we are
applying the following strategies to achieve these objectives:

 Developing a high-quality menu.

 Provide an excellent service experience, anticipating the needs of the
customers and delivering the best service.
 Leverage the currently available food staffs by honestly supplying the
quality, fresh and delightful cooked food items with the additional menus
and by this to increase market penetration.
 HAB Cafe & Restaurant plc aimed at reaching 60% of the target markets
in 2028 of selling and will be free from financial loan of Bank of
Abyssinia and starting to get the next layer of profit.

3. Legal form of the project

The legal form of our business is private limited company licensed by the
concerned government office.

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 4. Business Objective
HAB Cafe & Restaurant plc has both short term and long term objectives.
These are:
i. Short term objectives
 We are honestly providing quality and healthy food to the
customers by this to build good brand.
 Promoting the business by using logos
 We used fair price which is not necessarily matching with our
high quality services.
ii. Long term objectives
 Opening different branches where target markets are available.
 By taking the loan from Bank of Abyssinia, Updating the
business license and starting to engage in a big hotel business
and providing additional services like beds and recreation
centers.

5. The Key Personnel

HAB Cafe & Restaurant plc. has scientific and precise structure as follows:
I (HAB Cafe & Restaurant plc.) since experienced in running café and
restaurant, the owner is a general manager of the restaurant. Accordingly, all
the financial activities (Cash collection and purchasing of raw materials),
controlled and monitored the daily activities of the services (follow up workers,
help customers, and follow up the quality of the daily provision of the services)
and the managerial services are also currently controlled by the general
manager.
HAB Cafe & Restaurant plc. have 5 employees as initial stage: 1 main kitchen
workers, 1 assistant kitchen worker, 2 waiters and 1 guard and out of these 3
of them are females.

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 6. Purpose of the loan
As previously stated, while HAB Café & Restaurant plc is profitable, our
services are severely partial due to our limited capital and the current high cost
of raw materials. Furthermore, because our service area is not appealing, we
were unable to attract as many people as we desired.

Therefore, the financial assistance (loan) that will be facilitated by the bank of
Abyssinia will be used for:
1. The purchase of additional various cooking utensils፡ to prepare
more menus (pizza, burgers, and various fasting meals) and make our
customers happy all my old cooking utensils should be changed by new
one. Cooking utensils for the types of food that will have been planned to
prepared will also be purchased. Accordingly, the following additional
cooking materials are expected to be purchased:

Table 1: Additional materials that would be purchased

No Name of materials Unit Price Quantity Total Remarks
1 pizza oven 25,000 1 25,000
2 Blenders, Juicers & 10,000 1 10,000
Grinders
3 Freezer depth 80,000 1 80,000
4 Extra seats 1,000 12 12,000
5 Extra tables 1000 4 4,000
6 Electric Cooktop 20,000 1 20,000
7 Smoke remover 10,000 1 10,000
9 Hard plastic tin 300.000 300,000
(transparent)
Total 461,000

The remaining amount 39,000.00 birr will be used for renewing the internal
and external part of the restaurant.

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 2. For the purchase of kitchen smoke remover: because the kitchen I'm
currently using is so small, the smell from the kitchen suffocates the
dining area. As a result, this problem should be resolved by using a
kitchen smoke remover. The loan funds will thus be used to purchase
this equipment.
3. Renewing the dining room and replacing the plastic shade with
another hard and reflective sheet፡ because the dining room is so
small, I added a plastic shed as an extra service area. Meanwhile,
because the plastic I used is weak, it is vulnerable to wind and rain. This
issue can be avoided by replacing the plastic with another hard and
reflective sheet. As a result, I intend to use the loan funds provided by
Abyssinia Bank to purchase reflective tins.

Based on the above explanation, HAB Cafe & Restaurant plc. is requesting the
Bank of Abyssinia a loan of 500,000.00 birr which will be paid within 2 years.
Accordingly, the required loan repayment schedule prepared and shown on
page 13.

7. Keys to Success

HAB Cafe & Restaurant plc has identified several keys which were contributed
for our success. These are:

 Providing quality and healthy food menu with fair price.

 Employ strict financial control
 Handling customers properly

8. Market and Customers

8.1. Market
As it is identified, people need the services of café and restaurant for their
survival and sometimes for relaxation. In addition, many people are migrating
to Addis Ababa and many of them are living in condominium houses.
Currently, many business centers are opening in the condominiums and all
these people need the services of café and restaurants. In connection with this,
many buildings are constructing around these condominium houses. Besides

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this, many laborers are moving towards the sites to work and they need food
services. Therefore, when we see the current situation of café and restaurant
market in Addis Ababa (Arabsa Condominium), it is very attractive and this
indicates that there are a lot of demands for the market which could not be
covered by our services.
Therefore, to cover the existing demands, we should improve our services. by
renewing our service areas and improve the existing menus, and purchase
additional materials. See table 1.
9. Competition and Buying Patterns

Competition must be expected when initiating a business. Competition occurs

when two or more organizations act independently to supply their products or
services to the same group of consumers. Consequently there are many
competitors who are currently supplying the varieties of menu that are
challenging us and that are why we need additional capital for improvement.

9.1. Strengths and weakness of Competitors

9.1.1.Strengths:

The followings are the strengths of the current market competitors:

 They have sufficient capital;

 They have loyal customers;
 They are already known by the markets
 They are providing different types of menus

9.1.2.Weaknesses
 High prices which are not contest with the quality of their services,
 There is a problem in communicating and handling customers

10. Strategy and Implementation Summary

10.1. Strategy Pyramids
Based on the above strengths and weaknesses of our competitors HAB Cafe &
Restaurant plc used the following strategies:

 Reduce the existing price of the competitors.

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  Keep the sanitation of our café & restaurant
 Providing entrepreneurial training to the workers on how to
communicate internal and external customers.
 Providing organic coffee,
 Updating the existing menu

11. Value Proposition

HAB Cafe & Restaurant plc concept is that the customer drives up, places the
order, and receives a high quality service at a competitive price, and drives
away, having wasted little time in the process.

Accordingly, HAB Cafe & Restaurant plc has been providing a substantial value
proposition in that the customers are not paying for transportation and when
they order for special occasion like Wedding Ceremony, spiritual program,
meeting, special training etc., they are calling to us and we are delivering the
ordered as per their request where ever they are around Arabsa condominium.

12. Promotional Strategy

HAB Cafe & Restaurant plc has implemented a systematic and a low cost
advertising/promotion campaign which could involve providing quality service
to the new customers by this to attract the next layer of customers. We also
used our logo as one of the promotional strategies.

13. Cost forecast

HAB Cafe & Restaurant plc has employed fixed assets like different types of
machines, tools and equipment, raw materials and hired professional workers.

The details are listed below with their expected cost prices. All the materials
are old and existed in our café and restaurant. Based on this, their value is
calculated after the depreciation has been deducted.

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 13.1. Fixed assets (Tools & Equipment) Cost
Table 1. Fixed assets
No Items Unit price Qnt. Total Price Remark

1 የየየ የየ የየየ 100,000 00 1 100,000 00

2 Deep freeze 10,000 00 1 10,000 00
3 Pot 5 00 8 40 00
4 Metibesha 50 00 2 100 00
5 Service Tree 50 00 10 500 00
6 Chilfa 5 00 8 40 00
7 Spoon 10 00 20 200 00
8 Cash register machine 2,000 00 1 2,000 00
9 Office Chair 150 00 4 600 00
10 Counter 1,500 00 1 1,500 00
11 Shelf 2,000 00 2 4,000 00
Total 118,980 00

13.2. Annual Raw Materials/Year

Table 2- Cost of raw materials
No Item Unit Qun./day Unit Cost Monthly Annual cost
price cost price price
1 Coffee Kilo ½ 225 00 6,750.00 00 81,000 00

2 Sugar Kilo 1 120 00 3,600.00 00 43,200 00

3 Milk letter 1 80 2,400.00 00 28,800 00

4 Butter vegetables Kilo ½ 175 5,250.00 00 63,000 00

5 Oil letter 5 1000 00 360,000 00

30,000.00
6 Berbere Kg. 1 260 7,800.00 00 93,600 00

7 Shiro Kg. 1 150 4,500.00 00 54,000 00

8 Miscellaneous exp. … 100 3,000.00 00 36,000 00

9 Enjera No 100 18 00 3,000.00 00 36,000 00

10 Vegiable Kg. - 1000 540.00 00 6,480 00

11 Tea Pkt 1 65 30,000.00 00 360,000 00

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Coffee 00 23,400 00
Kilo ½ 225 1,185,480 00

13.3. Annual Direct labor Cost

Table 3. Cost of labor
Monthly
No Items payment Qun. Annual Price Remark
1 Main Wetbet 4,500 00 1 54,000 00
2 Assistant Wetbet 3,000 00 1 36,00 00
3 Barista 7000 00 1 84,0000 00
Total 894.000 00

Table 4. Direct & Indirect Labor

No Items Qun. Monthly Annual
payment Payment
1 Hotel Manager 1 10,000 00 120,000 00
2 Guard (shared) 1 500 00 6,000 00
3 Casher 1 3000 00 36,000 00
4 Waiters 1 3500 00 42,000 00
5 Cleaner 1 1,500 00 18,000 00
Total _ _ _ 222,800 00

As indicated in the two tables, the annual total labor cost will be birr
1,116,000.00

13.4. Requirement of Utilities

Utilities required for all services that we delivered that consist of electricity and
water, Electricity is required for, power sockets, and lighting points. Water is
required for drinking, preparation food and related items for café and
restaurant, sanitation, and for cleaning purposes. The annual requirement of
utilities with related costs is given in Table 4 below.

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 Table 5. Utilities

No. Description Cost/month Cost/year

1 Electricity (kWh)
2,000.00 24,000.00

2 Water (M3)
250.00 3,000

3 Telephone bill (Wi-Fi)

1,140.00 13,680.00

4 Loading & unloading

1,500.00 18,000.00

Total 3,740 58,680

14. Annual Operating Cost

Table 6. Annual Operating cost

Annual Cost
Description
Labor cost 1,106,000 00
Cost of raw materials 1,185,480 00
House rent 20,000 00
Utilities 58,680 00
Maintenance 15,000 00
Depreciation 86,997 00
Total 2,472,157 00

15. Annual Sales Forecast

Table 7- Sales

N0 Menu Unit Qun./day Unit Price Sales/month Total price/year

Breakfast, Lunch & dinner

00
2 የየየ No 10 150 45,000 00 540,000.00
00 00
3 የየየ የየየየ No 10 160 48,000 576,000.00
00 00
4 የየየየየ የየየ No 6 100 18,000 216,000.00
00 00
5 የየየየ የየየየ No 15 90 40,500 486,000.00
00 00
7 የየየ No 6 170 30,600 367,200.00
00 00
8 የየየ No 20 100 60,000 720,000.00
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 የየየየየየ
00 00
9 የየየ የየየ No 20 100 60,000 720,000.00
00 00
10 የየየ የየየ No 15 150 67,500 810,000.00
00 00
11 የየየየየየ No 20 100 60,000 720,000.00
00 00
11 የየየየ No 15 90 40,500 486,000.00
00 00
5,641,200.00
Fast food
00 00
15 የየ No 5 90 13,500 162,000.00
00 00
16 የየ የየየየ No 5 100 15,000 180,000.00
የየየየየ 00 00
17 No 5 90 13,500 162,000.00
የየየየየየ
የየየየየ 00 00
18 No 7 100 21,000 252,000.00
የየየየ
00 00
19 የየየየየ የየየ No 8 120 28,800 345,600.00
00
1,101,600.00
Hot drinks
00 00
20 የየየየ No 5 35 5,250 63,000.00
00 00
21 የየየየ የየ No 15 20 9,000 108,000.00
00 00
22 የየ የየየየየ No 5 30 4,500 54,000.00
00 00
23 የየየ No 5 40 6,000 72,000.00
00 00
24 የየ የየየየ No 20 20 12,000 144,000.00
00 00
25 የየየየ የየ No 5 40 6,000 72,000.00
00 00
26 የየየ No 15 40 18,000 216,000.00
00
729,000.00
Cold drinks
00 00
28 የየ 1 የየየ No 12 30 10,800 129,600.00
00 00
29 የየ 2 የየየ No 12 35 12,600 151,200.00
00 00
30 የየ 1/2 የየየ No 12 25 9,000 108,000.00
00 00
31 የየ 1/3 የየየ No 12 15 5,400 64,800.00

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 የየየየ የየየየ 00 00
27 No 10 35 10,500 126,000.00
የየየየየ
00 00
32 የየየ No 6 45 8,100
97,200.00

676,800.00
ጠጠጠጠ ጠጠጠ 8,148,600.00 00

16. Three years Financial Statement

The followings are the detail explanations of the financial Analysis (Balance
Sheet, Income statement, Cash Flow Statement and the five years loan
Repayment Schedule)
The income statement is calculated based on the following assumptions:

 Annual income will increase by 25%

 Annual expense will increase by 15%
 Annual Loan interest will be assumed 5% and declining method is
applied,
 Salary payment is assumed to be increased by 15%
 Depreciation expense is calculated based on straight line method and
after 20 years the salvage value it will be zero. Accordingly, the
depreciation expense of the major fixed assets for the last three years is
28,999 X 3= 86,997.00
 Income tax is assumed to be 30% of the total Income

17. Income Statement

HAB Cafe & Restaurant plc
Income Statement
2020 – 2022

Description 1st year 2nd year 3rd year

Revenue
Revenue from Sales 8,148,600 10,185,750 12,732,188
Operating Expense 2,472,157 2,842,981 3,269,428
Profit Before Tax 5,676,443 7,342,769 9,462,760
Income tax (30%) 1,702,933 2,202,831 2,838,828
Net Income 3,973,510 5,139,939 6,623,932

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 18. Balance Sheet
The balance sheet shows our business’s assets, liabilities, and owner’s equity
at a specific point of time. Put simply, a balance sheet shows what our
company owns (assets), what it owes (liabilities), and how much owners and
shareholders have invested (equity). Accordingly, our balance sheet is shown
below:

HAB Cafe & Restaurant plc

Balance Sheet
2020 - 2022
Description 1st year 2nd year 3rd year
Fixed Asset
Machine and Equipment 579,980 550,981 521,982
Current Assets
Cash received from loan 50,000 62,500 78,125
Total Assets 629,980 613,481 600,107
Current Liabilities
Loan payable 50,000 50,000 50,000
Total Liabilities 50,000 50,000 50,000
Owners Capital 579,980 563,481 550,107
Total Liability and Capital 629980 613481 600107

19. Five years Cash Flow Statement

A cash flow statement for a restaurant business plan is a financial document

that tracks the flow of cash in and out of the business over the given time. It
helps restaurant owner understand how his operations affect her cash position
and is crucial for managing liquidity.

Accordingly, this section of the cash flow statement shows how much cash is
generated from the intended services of the restaurant. Based on this, the cash
flow statement below shows, 4,036,010.1ETB in the first year, birr
5,218,063.6 in the second year and steadily increasing. This shows that the
business financial activities are in a healthy condition.

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 BH Café & Restaurant plc
Cash Flow Statement
2020 - 2022
Description 0 year 1st year 2nd year 3rd year
Cash from loan (in
bank) 50,000.00 62,500 78,125 97,656.25
Cash inflow
cash collected from
sales 8,148,600 10,185,750 12,732,188
Total Cash inflow 8,211,100 10,263,875 12,829,843.75
Cash Outflow
Operating expense 2472157 2842980.55 3269427.633
Income Tax 1,702,933 2,202,830.84 2,838,827.96
Total Cash Outflow 50,000.00 4,175,089.90 5,045,811.39 6,108,255.59
Net Cash in flow 50,000 4,036,010.1 5,218,063.6 6,721,588.2
20. Conclusion

First of all, I would like to express my sincere gratitude to Abyssinia Bank for
the facilitation of the loan on low interest bases. Based on this, I promise to
pay back the loan given to me that will be paid back within three years,
explaining that I need at least 500,000.00 Birr in order to provide superior
service to HAB Cafe and Restaurant, which is currently based on small capital
and is still trying to join the ranks of those with middle income. The loan will
be used to renew the internal and external part of the café and restaurant and
to buy additional cooking materials.

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