BUSINESS PLAN PREPARATIONS

BROTHERS RESTAURANTS MICRO ENTERPRISE

BUSINESS PLAN

PREPARED ON BROTHERS RESTAURANTS

SCHOOL OF UNDER GRADUATE STUDIES

DEPARTEMENT OF CONSRUCTION TECHNOLOGY

DESIGN AND PREPARE OF (BUSSINESS PLAN) BROTHERS RESTOURANTS

BY
1. BEKELE ENDALE TTSR 222/10
2. ALEMAYEHU GUALE TTSR 220/10
3. MERGA BEKELA TTSR 242/10
4. JITU KETEMA TTSR 238/10
5. EBISA ALEMU TTSR 227/10

JANUARY, 2020E.C
 Executive summary
Name of business brothers restaurants micro enterprise
Legal form of Contact Address Oromia region East shoa zones Adama town , 04 kebele Tele
+251
Type of business Servicing Enterprise
Brothers restaurant will be run as a partnership between Tola Kebeda , Chala Merge
,lomi fikadu,abdi tadele,gexe fayisa..
The 20-seat restaurant will offer a Vegetarian menu and a non- vegetarian menu at
lunch times and in the evenings. At lunch time a special lunch menu will be provided
offering snacks , vegetarian dishes , salads and shoppers. The service at lunch time will
be quick , allowing for a high volume of customers.
In the evening the vegetarian menu will still be offered but a menu including popular dishes
such as steak, chicken and fish will be well presented and served with a selection of unusual
sauces and dressings. The market aimed for in the evening will be young professional people
between the ages of 18 and 30 years.

All the foods used in brothers restaurants will be additive free and natural based. The lunchtime
service will enable customers with a limited lunch break to enjoy their meal within in the time
they have , the restaurant being only a short walk or drive from where they work or shop. Car
parking facilities will also be offered.
The forecast average spend at lunch time is Br. 2.80, no more than a pub lunch but providing
an alternative to the noisy crowded and limited menus of pubs. The forecast spend in the
evening is Br.10.50 including wine, which is well within the range of the young age group. Also
provided in the evenings will be some live jazz and blues music such as piano or saxophone to
provide fairly sophisticated back ground music and atmospheres.
In the first year we forecast a loss of Br. 3,962; this mainly due to initial start-up expenses and
high advertising expenses in order to attract customers at an early stage. In years two and three
we predict a healthy profit due to a 10 percent increase in sales each year and reduced loan
interest in these periods . Due to the healthy cash position at the end of year 3 we would expect
to be able to repay the outstanding balance on the loan at the end of year 4.
The overall objective of the business are firstly to achieve and exceed sales forecasts to enable us
to be operating at capacity, so that we can extend our opening hours to includes morning coffee
and afternoon teas. We would also 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 concentrates on day-
today problems, meeting customers, mounting promotions and supervise the general running of
the restaurant in order to build up the business further. After five years we would hope to set up a
similar operation in another area.

The business will require an initial loan of Br. 20,000 repayable over 5 years to convert the
premises, equip the restaurant and pay initial administration fees. An overdraft facility of Br.
3,500 will also be required according to cash – flow forecasts to finance working capital.

By achieving forecasted sales in the first year, we would be able to repay the overdraft by the
end of the year, and also pay the interest on the loan, enabling us to start repaying the loan in the
second year of trading.

1
 [Link] Business
1.1 introduction
Brothers restaurant will be run as a partnership between Tola Kebeda, Chala Merga ,lomi
fikadu,abdi tadale,gexe fayisa.

We have lived in adama area all our lives and through our own experiences and interest in the subject
realized that there are no restaurants for young people to eat out at in the evening that provide a young .
lively. Fairly sophisticated atmosphere at prices young people can afford. i.e,a metal

With wine for Br 10.00 or under . we also discovered ; after conducting some preliminary market
research ,that there seemed to be a lack of some where where people working or shopping in the area
could go far a quick lunch or sandwiches or usually friends bar snacks
1.2 Business mission
To start up and run a restaurant in the Adama area providing a menu biased towards healthy eating
offering cheap lunches for local business people, shoppers ,and varied interesting menu in a young lively
sophisticated atmosphere for young professional people in the evenings.
1.3 Short-term objectives
To find and convert suitable freehold premises to a 30-seat restaurant with eduaquate kitchen, bar,
dinning ,storage and car parking facilities .To build up a regular clientele and achieve forecasted sales by
advertising and promotion and by the product it self ,i.e., friendly efficient service and well cooked and
presented food, resulting in a metal that is reasonable by being good value for money
. 1.4 Long- term objective
To be able to employ full-time members of staff to build up a reliable and conscientious team working in
the restaurant, enabling the partners to concentrate on the day-to-day problem, to meet customers and
suppliers, mounting promotions and supervising the general running of the restaurant in order to build and
expand the business further. after five years we would hope to purchase a second premises in a different
area and set up a similar operations

1.5 Key personal

Tola Kebeda Age 26
“A” level qualification in food and Nutrition Bsc Hones degree in Hotel, Catering and tourism
management from a highly reputed university. Practical experience gained from a variety of
establishments including pubs, pub restaurants, A la carte and fast food restaurants one year
induetrial experience as management trainee at Nazerate intercontinental hotel .

Chala Merga Age 28

Catering from a variety of catering outlets ranging from institutional catering to pubs,wine bars
and restaurants. She has a good working experience of local suppliers, professional advisors and
book-keeping experience. Her partner, Henock Mulualem, Hilton trained, will as design or
layout of kitchen facilities.
Lome FekaduFinancial advisor. Has run own succeeful engineering consultancy business for
15 years and has valuable experience in finance, VAT and book-keeping

Abdi Taddale
Bsc in hotels management, has worked in a 4- and 5 star in wabi shabele hotel, Ethiopia kitchen
in all section. Has 4 years experience in assisting in the running of his parents high class
restaurant in restaurant in Northern part of the country will be advising on general of restaurant.
Gexe Fayyisa
Trained architect and [Link] in property and planning. 2
BROTHERS REUSTRUANT ORGANIZATION sturucture

[Link]

Finance Manager Opiration Manager

Purchas Sales
Guard Food preparation
er Officer

3
2. MARKETS AND COMPETITION
2.1 selected Market Segments
Segments aimed for at lunchtime
Shoppers-predominantly housewives age 30-60 years.
Socioeconomic group-middle income living within a 10-kilometers radius of Adama town
Local businesspeople-officeworkers and employees working locally. All age of group.
Local shop workers – any age group .
Segments aimed for in the evenings
Young professional people in full-time employment, for example,,, Bank clerks, office clerks,
trainee management, Living and working in the area or commuting to Oromia to work. Most
have high disposable income to spend on eating and drinking out .
2.2 Market Segments-growth and size.
According to the survey for leisure intelligence on eating out :
Restaurant eating has fallen off among those our 45 years old and has conversely risen among
the young. The young have now become almost as important a group of restaurant users as their
elders. Reasonable prices ,nice atmosphere and special being in the mood for a particular type of
food are all important among younger adults.
The survey estimate that the market for eating out is work around Br.3.5 billion nationwide and
the survey concludes the emergency of the youth market, together with the trained to healthier
eating presents two potential target markets or for eat out operators in the future.
Population figures for the region and Oromia and its surrounding estimates predicates that bucks
will remain growing. The total population of 15-19 year olds in Adama town and its
2.3 customer benefits
Lunchtime
1. We can offer a snack lunch or a set meal which is an alternative to the usual filled rolls friend
pup lunches.

2 .We will also be catering for the ever increasing ( see section
2.1 Vegetarian and health consumers market by providing food that are natural based and additive
free 3. our average spend at lunchtime is forecasted to be 2.80 Birr which is no more expensive than
the average pub lunch and considering cheaper than most wine bar lunches
[Link] service provided will be quick and efficient and accommodate the average business man lunch brake
and for a shoppers snack.
Evening
1. we will offer the usual popular meat and fish dishes served with varied and unusually sauces dressing
and garnishes.
2. we will provide a fairly extensive vegetarian menu for the health conscious and for those wish to be a
little more adventurous
3. our average spend in the evening is forecasted to be 10.50 Birr including wine which is considerably
cheaper than the majority of restaurants in the area and consequently is good value for money.
4. the atmosphere in the evening will be lively and sophisticated and this will be achieved by the use of
live jazz and blues music and by friendly cheerful service.

4
2.4 Competitors
Primary of competitors
These are restaurant that offer similar product or service examples are elsa restraint, yaine restaurant
geza gebresilassie restaurant, yordanos restaurant and abraha astbaha hotel the major deference being the
lack of vegetarian dishes provided on the menu. instead they offer a wide selection of salads .the price
atmospheric and markets they serve are similar to those we are aiming for. the nearest outlets o this type
are located a Adama town
Strengths
Consistent quality of food and service within known price bracket operate on a tried and tested
formula .branding very no table clientele (source survey 1999) men aged 25—64 mainly higher income
group and business entertaining and families .
Weaknesses
No variation on menu service . Limited menu standardized décor atmospheric un appealing to youth
market .
Wine bar /bistro
Strengths
Often have interesting alternative dishes on the menu designer décor and wide range of wines .
Generally have a young appeal in the evening offering an informal atmosphere.
Weaknesses
Widely varying standard of food And service often expensive for that is offered as food is used to create
extra revenue above the sale of wine . wines are often fairly expensive .
Pub restaurants
Strengths
Often have such character as part of old pub reasonably priced good location.
Weakness
Often only an extension of the [Link] usually plain and simple and unimaginative.
Fast food rastraunt
Strengths
Speed of the service, provide miniature meals strong branding, heavy advertising campaigns.
brand loyalty clean and fresh appearance. mainly youth market.
Weakness
Limited unvarying menu, standardized product, [Link] stay only unlicensed
2.5 competitive strategy
A. price
Based on market research we have concluded that there is a gap in the market for a budget priced
raustarent.
Prices are based on general 30-50 percent food cost. priced as follows
Starter ---------------------------------------Br 1.50
Main course----------------------------------Br4.00
Vegetables--------------------------------------br 1.00
Dessert------------------------------------------br 1.50
Coffee--------------------------------------------br.50
Wine---------------------------------------------br2.00
Average food----------------------------------br 10.50
However its usual in catering to vary the food cost from one it to another.
Soup, starters, deserts and coffee--------------------30%food cost
Main course and more expensive items--------------50%food cost
Wine and alcohol---------------------------------------------50% material cost

5
There for price is double the cost
Dinner
item price material cost gross profit
Starter br 1.50 0.45 30% br 1.05 70%
Main course 4.00 2.00 50% 2.00 50%
Vegetable 1.00 0.40 40% 0.60 60%
Desert 1.50 0.60 40% 0.90 60%
Coffee 0.50 0.10 20% 0.40 80%
Wine 2.00 1.00 50 5.95 56.7
Totals 10.50 4.55 43.3 5.95 56.7
lunch
item price material cost gross profit
lunch dish/stack br 1.80 0.50 30% 1.26 70%
beverage 1.00 0.50 50% 0.50 50%
totals 2.80 1.04 37.2 1.76 62.8

[Link]
opening party
to local opinion formers councilors, local mp(member of parliament)as well as the main potential
customers also members of press, senior marketing and sales people, advertising agents, travel and states
agents bank managers and leaders of industry for public relations purposes we should also invite our
neighbors.
Hand bills and posters :-In local shops, offices and industry
Press realize:-In local news papers
Value added promotions :-That is free glass of wine with a meal during slack periods one meal in ten
free for special groups or complimentary birthday cakes for celebration parties.
Special promotions :-Seasonal menu changes and special dishes. Themes to mark dates such as sty
valentines day charismas, new year, aster day and another holiday themes based on particular types of
food.
Advertising
In regional and country magazines,radios,tv,news paper and in local papers.
Leaflet drops :-Handbills distiributed door to door by local newsagents with normal delivery
[Link]
Addis alem the surrounding village and towns comprise a pocket of wea adama
The population is mainly made of
a,the elderly and retired
b,middle aged people,socio economic groups lower income middle income and higher income.
[Link] offspring who either
I,leave the area at the age of 18 for further education and never returnto area for any lengthof time
[Link] stay lving in the are and work loccaly or cmmute to adama. A high number live with their parents
as property prices are so [Link] that do rent or buy their own homes move out towards adi haki or adi
shumdhun where houses are cheaper
daylong families where the head of the hold is a young executive moving up the socioeconomic scale and
who will probably stay in the area.
Consequently the majority of the catering establiments operating at present reflect the affluent nature of
[Link] steak houses are lwer priced but have meat based limited menus,and are very standardized. Other
affordable alternatives open to young people are the fast food restaurants fishand chip shopstakeaways or
pizza and burger restaurents located in the main roads of adama.
We hope to be located in the adis alem area and research has shown that at present there is no other
resaunterent offering a similar meal experience in vicinity.
6
 D .product
The menu
We will offer a range of interesting starters,both vegetarian and non vegetarian. The main course will be
divided in to vegetarian and maet [Link] dishes will be included but will be served with a range
of diffirent and unusual sauces,accompaniments and garnshes .we also hope to offer a varied selection if
salands and home made [Link] many as possible ingredients for example kikil kitfo whole meal
flour,known rice,wholemeal pasta ,vegetable fats.
At lunch time we wiil offer a set price lunch with a choice of either sterter and main courses and sweet as
few people require a three course lunch thse [Link] also will be selads and snacks ssuch as jacket
potatoes with wholesome fillings.
All bar drinks will be available and a selection of wines offering a choice of Ethiopia, French, German
and itatlian [Link] would also like to provide a selection of home made fruit basd wines and tej.
Decor
The main color scheme will be oramge,mcream and green these color will be used in the restaurant décor
on the menu log advrts and leaflets.
The orange and cream color scheme will give a pleasant appearance to the resautrant being neutral colors
and thus fairly [Link] green will wadd color warmth and freshness and will be introduced by the use
of plants and greenery.
Atmosphere
Lunch time
Busy atmosphere with fast service and high volume of customers can be enhanced by the use of
tempo,classical music playing softly in the background.
Evenings
Slightly more relaxed atmosphere but still lively with live jazz blues piano music or saxophone music as
back ground also providing a centre piece attraction.

[Link]
In house sales
a, the food our most power full sales weapon will be the food itself attractively presented and displayed
it should help sell itself e.g. salad bar, self service, table or counter.
b. the menu which will be attractive ,clear,easy to read and understand and honestly priced with no
hidden extras.
c, service staff should have freiindly welcoming ,helpful attitude they can boost sales by asking the right
questions at the right time s. can be achieved by through training and selection.
d. extras aperitifs,starters ,extra vegetables,deesserts wines, coffes liqueurs,brandies,cigars are all
apottential sales and need to be actively sold.
e, service this it self can help sell a restrauant right length of time between courses efficiently.
f, changes and novelties new dishes ,new ideas ,new tables decorations. Point of salae literature to draw
attention to changes e.g table cards,bulletin boards by the entrance,poster in the window.
[Link]
4.1 General
Type Preferably a freehold premises with planning permission or already a catering establishment.
Our father will purchase thefreehold of a property and will charge us re`nt for operating our business from
there.

Location
Suitability for market
Is a secondary location easy to get to with passing traffic &shop &businesss close by preferably away
from residential areas because of parking & noise constraints must be located with in aworkable distance
form suppliers
7
 Access
The entrance must be clearly visible to encourage chance trade
Rear entrance is needed for deliveries staff access refuse removal fire regulation authorities require clear
access to car parking facilities for customers & staff is also needed one space per table plus 2 spaces for
staff are generally required
Size
The four main areas of space needed area
Seating of customers
Food preparation
Others delivery guest WCs (water closet)
Area total of % [Link]
Dindig 50 450
Food preparation 20 180
Storage 10 90
Cleaning wash up 7.5 67.5
Guest cloacks 7.5 67.5
Staff WC 5 45
Total 900 sq ft
Design and decor
Ideal shape is rectangular with walls in a ratio of 3:5 and service doors on a long wall. Attractive features
such as fire places, natural wood or brick work are also desirable . Flooring would be carpet tiles ,
wooden restaurant furniture, lots of greenery and plants. Kitchen – floors tiled. Walls around stoves lined
with stainless steel or tiled. Wash up area tiled-easy to clean.

Services
Gas, electricity, water, drainage, sewage, WCs, ventilation, space heating, water heating ,refuse
collection.

Maintenance
Would largely be carried out by my father, but on leased equipment there is usually a maintenance and
service agreement.

4.2 Key suppliers

Butcher- mezgebe Berta & sons- good quality butcher, have traded with previously.

Dairy goods - local diary.

Fruit and vegetables – local green grocer.

Whole foods – Beans and wheels – local whole food , and health food co-free delivery service
Dry good cleaning materials – Mahler and Hemlock pvt Ltd , Co.
equipment - various

8
 4.3Quality control
[Link] recipes will be tested initially

1. To give a standard recipe to work to

2. So customers are given a constant product
3, So food costs can be checked exactly
4, Different ingredients and different qualities can be tested
5, To enable us to specify accurately the raw materials to be purchased
6, To test one yield of each batch of ingredients
7, To help decide the portion size for each item
8, To establish the waste on items on items in preparation and cooking

B. Portion Control
To help control food costs accurately
To enable preparation of portions in advance
Method
Use of standard sized scoops, ladles, serving, plates ,bowls ,etc.
Use of proportioned foods, e.g.,gateaway.

C .Checking of deliveries
Check for -quality
Portion
Size ,e.g., eggs, steaks
damaged goods

4.4 Staffing
Initially my partner and I will be the only full time staff in the restaurant with perhaps 1 casual
staff in the kitchen and 1 in the restaurant. On week –end evenings this may be increased to 2
in each area , depending on trade.

4.5 Wages
Br. 2.00 per hour for 4-hour shift lunchtime and 5-hour shift evening 6.30-11.30 pomp plus tips.

9
 5. Financial data and forecasts

 5.1 Cash-flow for first year-assumptions

 Sales forecasts based on a 30-seat restaurant in Digger worked area. Sales figures are
high in first month due to opening advertising campaign , opening party and initial
curiosity. Second month figures lower as traditionally February is a quiet month in
catering. Peak time is in 12th month (December) due to Christmas.
 Drawings @ Br.50 per week each, National Insurance is included in the wages figures.
 Food and drink purchases @ 40% of sales.
 Rent is based on our fathers mortgage repayment on free hold premises @ 15% interest
on Br.100,000=Br.15,000.
 Rates estimated to be Br.3,000 p.a.
 Wages @ Br.2.00 per hour
4-hour lunch shift
5- hour dinner shift
Based on employing part-time kitchen help for the first 6 months on Friday and Saturday
evenings and one week-night, also Sunday lunch

3 nights = 15 hours
1 lunch = 4 hour
19 hours @ Br. 2.00
= Br.38.00 per week
= Br.152.00 per month
After 6 months we would hope to employ a restaurant helper as well, both kitchen and
restaurant staff would be employed for Friday and Saturday nights and Sunday lunch,
only cutting out week- night help.
2 nights = 10hrs*2 =20 hours
1 lunch = 4hrs*2 =8 hrs
= 28 hrs@Br per hrs
= Br 56 per week
= Br 224 per month
Loan intrest on a Br 20000 5 –year term loan@14% intrest=Br 2800
Loan repayment delayed until 2nd year
Over draft interest worked out on the highest over draft figure for the quarter
@15%interst

10

Monthly cash flow statement for first year of trading including Vat [Link] tax
Receipts 1 2 3 4 5 6 7 8 9 10 11 12 tota
Rest sales 4.830 2.968 4.088 5.096 5.628 6.160 6.902 7.378 7.854 8.064 8.120 8.498
Total receipt 4.830 2.968 4.088 5.096 5.628 6.160 6.902 7.378 7.854 8.064 8.120 8.498 75.
Payments
Vat(payment 930 1.321 1.732 1.933 5.9
Accounts fee 500 500
Repair costs 200 200
Petrol/motor 100 100 100 100 100 100 100 100 100 100 100 100 120
expense
Drawings 400 400 400 400 400 400 400 400 400 400 400 400 480
Food and 2.25 2.95 3.141 3.225 3.24 3.399 30.
drink purch 1.932 1.18 1.635 2.038 1 2.464 2.760 1 8
@40%of 7
sales
Heat and 350 350 350 350 140
light
Rent 1.250 1.250 1.250 1.250 1.250 1.250 1.250 1.250 1.250 1.250 1.250 1.250 150
Rates 250 250 250 250 250 250 250 250 250 250 250 250 300
Tel.&post 100 100 100 100 400
Advert&print 200 200 200 200 200 200 200 200 200 200 200 200 240
Wages groos 152 152 152 152 152 152 224 224 224 224 224 224 225
Sundries 100 100 100 100 100 100 100 100 100 100 100 100 120
Capital costs 200 200
Loan 233 233 233 233 233 233 233 233 233 233 233 233 279
interests
@14%
Over draft int 247 203 450
@15%
Total 4.617 3.872 5700 4723 4936 7567 5517 5708 8283 5982 6005 9039
payments
Opening bank 1293 1506 602 (1010) (637) 55 (1352) 33 1703 1274 3356 5471
balance
Surplus deficit 213 (904) (1612) 373 692 (1407) 1385 1670 (429) 2082 2115 (541)

Balance c/fwd 1506 602 (1010) (637) 55 (1352) 33 1703 1274 3356 5471 4930
Balance carried forward 4930

11
Profit and Loss account for year 1
 Br. Br.
Sales (Net of VAT ) 65,727
Less cost of sales
Opening stock sock 500
Purchases 26,288
Less closing stock (500)
Cost of sales 26,288
Gross profit 39,439
Less expenses
Planning permission 50
Accountancy fees 700
Solicitors fees 600
Advertising 3,400
Printing 200
Heat & light 1,400
Insurance 500
Motor vehicle expense 1,450
Sundries 1,400
Repair & maintenance 2,347
Depreciation 2,652
Telephone 400
Drawings 4,800
Wages 2,256
Rent 15,000
Rates 3,000
Loan interest 2,796
Overdraft interest 450

43,401
Loss before tax (3,962)

12
Opening Balance –sheet
 Br. Br.
Fixed Asset 13060
Stock 500
Cash 1293
1793
14853
Loan (20,000)
5147
Represented by [Link] 5147
to date

Balance-Sheet as at end of year 1

Br. Br.
Fixed Asset 13260
Less depreciation (2652)
10608
Stock 500
Cash 4930
5430
Loan creditor (20,000)
(14570)
3962
Loss in first year of trading 3962
Quarterly cash –flow for second year assumptions
1. Assume sales increase by 10%
10%increase in sales =Br. 7,559
Therefore total sales
For second year =Br.75,586
Br.83,145
First year quarter sales figures
Jan,feb,march/ apr,may,june/ july,aug,sept/ oct,nov,dec.
Total sales 11886 16884 22134 24682
22% increase 14501 30% 19079 8% 23905 4% 25670
=Br83155 =10% over all increase
[Link] costs increase by 3%(rate of inflation )
[Link] increased from Br.50per week each to Br.60 per week each
=Br.480 per month
= Br. 1440 per quarter
=Br.5760 p a
4. Capital cost Doubles for extra equipment =Br .400
5. loan repayment =Br.20000 over 4 Year
=Br.5000 per year
=Br.416 per month
=Br.1248 per quarter
[Link] interest calculated @14%on outstanding loan at end of each quarter 13
Cash –Flow for third Year assumptions
[Link] sales increase by 10%
[Link] costs increase by 3%
[Link] increased to Br.70 per week each
=Br.140 per week
=Br.560 per month
[Link] increased by 5%
[Link] cost doubled for extra equipment =Br.800
[Link] repayment still Br. 1248 per quarter paid at beginning of each quarter
7. Loan interest calculated @14%on outstanding loan at end of each quarter

Quartry cash flow statement for second yaer of trading

Q1 Q2 Q3 Q4 total
3 year
rd

Receipts
Restraunt sales---------------------------14501 19079 23905 25670
91471
Total reseipts----------------------------14051 19079 23905 25670
83155 91471
Payments
Vat(payment)----------------------------1135 1493 1871 2009 6508
7159
Accounts fee----------------------------- 515 515
530
Repair costs------------------------------ 206 206
212
Petrol motor expenses---------------309 309 309 309 1236
1273
Drawings @Br [Link]---------1440 1440 1440 1440
5760 6720
Food and drink purchase @40%sale--5800 7632 1952 10268
33262 36588
Heat and light-----------------------------360 360 360 360 1440
1485
Rent----------------------------------------3862 3862 3862 3862
15448 15913
Rates-------------------------------------772 772 772 772 3088
3183
Telephone and postage------------103 103 103 103
412 424
 Advirtesing and printing---------618 618 618 618
2472 2546
Wages------------------------------581 581 581 581 2324
2440
Sundries---------------------------309 309 309 309 1236
1273
Capital costs---------------------- 400 400
800
Loan payment-------------------1248 1248 1248 1256
5000 5000
Loan interest---------------------656 613 569 525
2363 1663
Total payment-------------------17193 19946 21604 22927
81670 87209
Opening bank balance----------4930 2238 1371 3672
6415
Surplus or deficint-------------(2692) (867) 2301 2743
4262
Balance c/fwd-------------------2238 1371 3672 641

14

Profit and loss accounts

Year 2 Year 3
Br. Br. Br. Br.
Sales 72309 79540
Less cost of sales
Opening stock 500 500
Purchases 28924 31816
Less closing stock 500 500
28924 31816
Gross profit 43385 47724
Less Expenses
Accounts ‘ fee 515 530
Repairs 206 212
Motor Expenses 1236 1273
Drawings 5730 6720
Heat and light 1440 1485
Rent 5448 5913
Rates 3088 3183
Telephone and post 412 424
Advert.& printing 2472 2546
Wages 2324 2440
Sundries 1236 1273
Loan interest 2363 1663
Depreciation 2732 2892
(39232) (40554)
Profit for year 4153 7170
Retained earning B/f (3962) 191
Retained earning C/f 191 7361

15

Balance-sheet as at end of years 2 and 3

Year 2 Year 3
Br Br Br Br
Fixed Assets 13660 14460
Less depreciation (5384) 8276
8276 6184
Stock 500 500
Cash 6415 10677
Loan (15000) 10000
8085 1177
191 7361
Represented by
Retained profits 191 7361

Break-even Calculation
Total number of meals sold in 1st year 10660
Average prices of Br.6.65 Br 70889
Cost of one meal Br.2.90
 Therefore total cost of meals Br.2.90x10660=30914
Therefore gross profit Br.70889-30914=39975
Gross profit margin GP/Sales X100=56,4%
=Br.39975/70889X100=23600

Overheads(fixed Cost )for 1st Year Br.23600

Therefore break –even turnover Overhead/G,[Link] X100
23600/56.4 X100=41845
Break even gross profit margin Overheads/sales X100
23600/70889X100 =16.7%

16
5.2 financing requirements—loans overdraft
In order to find the initial requirements of the business we would require the following financing
[Link] –Term loan (5 year )Birr 20,000
This loan will be used for
A, purchase of restaurant ,bar and kitchen equipment
B, initial solicitors and accountancy fees
C, purchase of dry goods and bar stock
D, pre-opening advertising
2, over draft facility (Short-term )of Birr .1500
This facility will only be required for the first six months of trading to finance necessary working capital
requirements
Break down of loan expenditure
Br Br Br
Loan Expenses 20,000
Planning permission 50
Solicitors 600
Accountant 200
Advertising 1000
Printing 200
Insurance 500
Tax and insurance 250
Sundries and extras 200
Restaurant repairs and maint 1628
Kitchen repair maint 519
Expenditure item 5147
Capital additions
Van 2000
Restrnt Equip 7833
Kitchen equipment 3227
13060
Stock 500
Cash remaining 1293

20000

17
Contents page
Executive summary-------------------------------------------------------------1
[Link] business--------------------------------------------------------------------2
1.1 introduction------------------------------------------------------------------2
1.2 busines mission---------------------------------------------------------------2
1.3 short term objective--------------------------------------------------------2
1.4 long term objective----------------------------------------------------------2
1.5 key personal-------------------------------------------------------------------2
1.6 organization structure-------------------------------------------------------3
2 Market and competition-------------------------------------------------------4
2.1 select market segments------------------------------------------------------4
2.2 market segments growth size-----------------------------------------------4
2.3 customer benifets--------------------------------------------------------------4
2.4 competitores--------------------------------------------------------------------5
2.5 competition strategy-----------------------------------------------------------5
3 sellig---------------------------------------------------------------------------------7
4 premises----------------------------------------------------------------------------7
4.1 general----------------------------------------------------------------------------7
4.2 key supplerys--------------------------------------------------------------------8
4.3 quality control-------------------------------------------------------------------9
4.4 staffing-----------------------------------------------------------------------------9
4.5 wages------------------------------------------------------------------------------9
5 financial dat and for cast---------------------------------------------------------10
5.1 cash flow for first year assumption------------------------------------------10
Monthly cash flow statement--------------------------------------------------11
Profit and loss account for year one---------------------------------------------12
Opening balance--------------------------------------------------------------------13
Cash flow for 3rd year assumption------------------------------------------------14
Profit and loss account --------------------------------------------------------------15
Balance sheet at end ofyear 2 and 3----------------------------------------------16
5.2 financing requirement loans over draft---------------------------------------17