ADAMA ROYAL COLLEGE

ENTRPRENER SHIP
Busnes plan

NAME Biruk Milkiyas

DEPARTMENT ACCOUNTING

ID 003/19

Section A

1
Introduction
When we went to start a traditional cloth in modern style and modern
cloth garment. We must dedicate time to ward .

Our clothing business plan

_ Executive summery

_company over view

_Industry analysis objective

_ customer analysis mission

_ marketing plan key to success

_ business operation

_management team

_financial plan
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1.1Executive summery
Abyssinia traditional and modern cloth garment center.going to be
established in our Adama and Addis Ababa by young 1 st year student
from the AGHMC Campus on feb 2012.

The business idea has been conceived most of Ethiopian and others
country wearing cloth style and after speech of our entrepreneur
teacher.

Ethiopian wear has centralized itself directly in position to the

residential location and social activities of our target market we believe
that this is critical to our initial success and long term growth.

Total financial requirement for the project is estimated to birr

7,500,000with the following by charts

Center development 600,000

Purchase equipment and machine 5,132,000

Working capital 1,768,000

Total 7,500,000

The project initial investment cost will be covered by own and the half
the business loan from Adama city micro finance (WALQO) We can
provide and exist from this loan with in three (3) year from a divided of
excess profit.

The profit analysis indicated that the project is profitable and the
intervention at this specific site with envisages project activities will be
feasible both in terms of economic and financial benefits accrued by the
promoter the campus.

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1.2 Back ground information
1.3 Brief the history of the company
Abyssinia traditional and modern cloth garment center is established
2012 by three professional

Name of the business Abyssinia traditional and modern

cloth garment center

Type of business Service Giving business

Name of the project traditional and modern cloth garment center

Legal form of business partnership

States of business New

Address region ------- Oromia, Adama and addis abeba

zone ------- east shewa zone

woreda ------ Adama
town ----------- Adama
kebele ----------15 (Dada mall and Addis abeba (piyasa) and our
industry is to rent in government parks in adama

website and telephone ------------www.abby.yahoo.comm(0934380404)

1.3 Objective
To create shopping environment that caters to the apparel needs of
the urban Ethiopia and Ethiopian city. The receive a 50% profit margin
within the first year. To have a customer base of 1,500,0000 by the end
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of the first operating year. To achieve a net profit of 2,500,000 by year
two 3,500,000 and by three years 5,600,000To be an achieve and vocal
member in the community supporting agricultural events and
equestrian organization working with children.

1.4Mission
Mission is to be offer quality name brand Ethiopian wear in an
assortment of size and style to accommodate all varying body styles
and shapes. Abyssinia traditional and modern cloth garment center is a
business company with mission of basic items demanded by our country
and internationally at their disposal. We exist to serve to serve and
maintain wants role in our country transformation by the strengthen of
government link to the business sector the business also make
promoters developments practitioners which create jobs rather than
look for it by doing so it create conductive teaching learnings
environments to the our company communities there by enhance the
effective and efficiency of each and every individual in the our
community on their
1.5 Key to success
In order to succeed in the Ethiopian clothing style

_ advertise and promote in areas that our target customer base will
learn about our store

_continuously review our inventory and sales and adjust our inventory
levels.
2.1 Company over view

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The business be named Abyssinia traditional and modern cloth
garments this to identify the store with the city of Adama and in
AddisAbaba where most of the store’s inventory will be purchased. The
name is registered in Adama country under an assumed name.

Customers will save money from having to buy a complete outfit by just
purchasing pieces. They will also enjoy shopping in stores that are well
inventory and serviced minded such as

will set the pace for urban fashion for all season last year’s outfit will
be accessories to be this years out fit. People like to by clothing pieces
and accessories to continue wearing clothing that would be out-of date
otherwise

will also cater to all types of customers and for all occasion others
than routine shopping ex. Wives buying gifts for their husband friends
buying gifts for their friends etc.store will be a source of wearable gifts.

Retail profits can be as high as 65-85 perception clothing and

accessories pieces. The sales and profit margins in a specialty clothing
and accessories store are higher than the average retail store we have
the opportunity to profit successfully.

The urban clothing market is the most existing fastest growing market
for consumer they will always look unique clothing pieces and they will
not hesitate to buy them.
2.3Company ownership
The business will be retail sales of urban clothing and associated
product Abel will hold so percent ownership and it will be startup a

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partnership a start –up and the phase in to a limited liability
corporation by the second year.
3.3 Industry Analysis
Apparel industry consist of companies that design and sell clothing fuot
water and accessories.

Readymade garments is a successful starry for gov’t industry in in

Adama and started in the late 2010s expanded heavily in the 2011 and
blamed 2012. The quick expansion of the industry was possible because
of the following unique nature of industry

The technology is less complicated (easy to transfer)

machineries are cheer and easy to operate (sewing machines)
Alarge female labor force that is easy to train is readily available
Beside the cost labor one of the major factors behinds the success of
RMG is the availability of share financing for world forced pursed inputs
through back to back letter of credit under the special bounded ware
house scheme presence of foreign buyers is also a major factor that
introduce the system of international subcontracting foreign buying
houses not only bring the international market to the dear step of local
entrepreneur they also ensure the availability essential inputs such as
imported fabrics and accessories for the idustry.
3.1Swot analysis
We have seen and demand technical aspect of the services, social
aspects, environmental analysis and competition position of our
business. Based on these and other assessment of a business related to

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strength, weakness, opportunities and threats is done. Accordingly
business strategy are designed

Strengths Weakness

One of the strength -dependence on

behind is the our others for raw
company is the material
availability of -low productivity
- A low cost labor -limited knowledge in
compared to international
other country in marketing
the region information
- The labor rate in -poor infrastructure
textile industry -political instability
- Given the fairly Distributive trade
long learning Unions in efficiency in
curve in in our part of management
industry
extensive
- Experience in
dealing with
foreign buyers
of share
bankers
- Shippers and
clears
forwardingasse
nt is a valuable
asset for the
exports of
Ethiopia.
Opportunities Strategies using Strategy’s to revers
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 strength to our weakness to our
location standard location standard
Some of opportunities Ways to take Ways to ensure
are advantage of weakness to hamper
- Excess demands business strength e.g opportunities e.g
which can be Promoting good - Hiring an
repeal costumers service to experienced
- Future market attract competitors c marketers up
potentials and costumers skill staff
its growth -optimum utilization - Networking
- Access to micro of the credit and fast suppliers and
and small repayment to get our location
enterprisecredit additional fund for community
expansion

Threats Strategies to counter Strength to fix

threats with strength vulnerability
External issues that Ways to use business Ways to address
could affect the strengths so that areas where the
success of the threats are not a business may be
business e.g problem vulnerable e.g
-frequent change is - Launching a -utilizing a new
price because sudden new product to technologies or social
change in costs and revitalize media to reach
others factors consumer potential customers
- limited operating demands
history - Information dis
- production closer along
uncertainty with the social
service division

4.1Customer analysis
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 To get a better understanding of consumer acceptance in apparel e
comers in our country and to find out the the factors that are vital for
establishing consumer acceptance in apparel e commerce as well as
investigate how important certain factors are applicable for consumer
acceptance of on line purchase in order to find relevant consumer
acceptance establishing factors reviewed and searched literature on
consumers acceptance of apparel e-commerce in our country. The
factors that were found to be relevant guided our statically research.
Conductinga online survey in form of consumer in form of a questioner,
which seemed like the most suitable strategy, to be able to get a bigger
a picture of consumer opinion in the matter.We have used to
datacollection method namely: secondary data and primary data
collection methods. Different sources of secondary data such as a
books,publication, articles and internet has been used to mainly search.

 Be creative in our media choices –such as in usual avenues like – fax

newsletters, mall kiosk,fax on demands, publicity stunts, on line
marketing, anything un usual to reach our target.

Small classified ads

Track our result
 Keep all our customer/prospect in a database and stay in touch with
them regularly

Gradually increase the size of our ad and tract the result

Customer loyalty is much more important to our country satisfaction.
We will serve our customer so well they will brag about our country to
others. This will keep them loyal, and also provide a continual happiness
by using our self- Evaluation program.
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Self-evaluation program asks the following questions.
 Are our country/company products the best they can be?
 Is the appearance of our cashiers, managers, business surrounding,
and appearance of our store professional?
 Can we clearly describe our business in 25 words or less? Can our
costumer describe our business in 25 words or less?
 Do our costumer know about all of our products and services
 Do we have a well-developed marketing plan that we follow on a
consistent basis?
 What If our marketing plans works?Will we be able to handle the
increased volume of sales without harming our customers or the
quality of our work products?
 Do we treat others with honesty and respect at all time?
Advertising and promotional strategy

In our country will try our promotion on a small portion of our target
audience before we roll out the promotion to the rest of the target
market.

Our test will include variation on our basic offer, on the text or
composition of our messege, and on our presentation. The benefits
from testing will provide to use early feedback on the response and
omit the not –so-successful ones. With our promotion we will compare
results, analyze track response, and measure profitability to insure our
promotion are profitable.

Our advertising budget will be equal to 2or 3 percent of our project

gross sales which average out be 100,000 or $333 a month after initial
startup. The budget will be based on the cost method which theorize

11
that an advertiser can’t afford to spend more than he or she has we will
increase this amount for our grand opening.

We have taken the following steps to insure our birr will be wisely spent
on advertising.

1 established our target market by asking ourselves who our

customers are and therefore whom want to reach with our

2 setting a rough for budget broadcast advertising

3 contacted sales managers at TV and radio station in our area arrange

to have a salesperson visit us.

4 Talked to other business people in our area about their experience

with broadcast advertising.

5 Asked about the “audience delivery “of the available spots.

We then compared various proposal and looked at the cost per

thousand and negotiated the most attractive deal based on which
outlets offers the most cost-effective way of reaching our audience. We
will also buy time well in advance to lower cost.

Our direct mail camping will begin by getting our name on as many
mailing lists as possible. We will then take note of our reaction to each
pieces of mail we received and save the ones that communicate most
effectively, noticing the colors, key words and types of insert that can be
adapted to our own mailer. To get the readers involved we will include
stickers that say yes or not to be pasted on order form. We will continue
to build our direct mailing program with the source from the direct
marketing association (DMA).

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We plan to target our advertising to focus as narrowly as possible to
the media that will reach our customers. Our customer’s location,
age,income, interest, and other information will be used to guide us to
the right media.

Our printed ads attract through a truly arresting headline and visual
element. It will appeal to the reader’s self-interest or announce news.it
will be communicate our company’s unique advantage and it will prove
our advantage over our competitors. Finally it will motivate readers to
take action. Our printed ads will not be a hard sell but it will be an all-
out attempts to attract, communicate with,and motivate the readers.all
of our ads will answer the customers numbers one question is “what is
it for me?’

Our radio and televisionads well deliver our message to more

costumersthan any other type ad campaign we have a clear
understanding of our market so the money spent on broadcast
advertising isn’t wasted.

For television ads,we will stick to 30sec spot which are standard in the
industry.which are traditionally slow seasons for many businesses.we
will try to avoid paying full rates during the rest of year or during
popular shows or prime time.we will also stretch our birr by bartering
our products for airtime.

Our other methods of marketing will include direct mail, in compassing

a wide variety of marketing material, including brochures, catalogs,
postcards, news latters, and sales latters.

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Point – of –purchase(pop) advertising appears in various forms inside
our retail store. It is designed to influence the buying behavior of our
customers. Pop advertising may take many forms in our store.

Here are a few examples:

-Counter cards and displays

-window displays

-floor stands and cutouts

-animated displays run by electricity

-pennants, banners, plaques, streamers

5.1 Competitive analysis

our location is very important competitive edge. Right at the point of
existing down town in Adama and adissabeba. The nearest competitor
is at list 20 miles away.

The other competitive edge we have developed is the atmosphere and

reputation. In Adama city will bring a part of in adissabeba. And others
urban clothing experience to others Connecticut.

That is why we are developing our fashion shows. musical guest

appearances. Etc.this advantage is important to us because our prices
are slightly higher than other urban wear store locations in Connecticut.
We will also offer more personal attention to our customer than the
larger mall retail stores. We have direct connection to one of the top
urban wear retailers in Adama. AddisAbeba. And others country called
ventures.
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5.2Sale strategy
It is the intent to start the business selling the clothing people need to
create a unique image of themselves. This includes various prints,
colors, and styles. To increase sales and promote in Adama store,
special events will be held that please people, stimulate interest, pursue
leisure, involve social participation, and occur within a specific,
prescribed time frame. Some of our special events will include

Anniversaries
Bazaars
Celebrations
Concerts
Conferences
Contests
Conventions
Exhibits
Festivals
Grand openings
Open houses
Premieres
Sports show
Trade shows

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Special events give in Adama / Addis Ababa powerful vehicle to
promote our image, products, merchandise, services, and to generate
good will to the public.

Our company will use these special events to attract customers, sell
products, earn profits, make market aware of new development, and
make communities aware of their policies, goals, and purpose.

We will not be offering credit to our customers. We will accept checks

with the assistance off a check verification company.this check
verification company offers check verification and check guarantees.
So,if a check has been approved by this company and it turns out to be
bad.the company will reimburse as for the value for the check,
eliminating our risk of gating paid.

We will accept all major credit card.acceptingcredit cards will increase

the probability, speed, and size or our customers sales.it will give us the
chance to increase sales by enabling customers to make impels buys it
will be improve our cash flow because we will receive the money within
a few days. It also guarantees we will be paid. All potential sales will be
attended to in a timely fashion and long term sales person/customer
relationship will be a major goal of our company.
6.1Marketing Plan
Approximately 13% of Ethiopian people 47% in Ethiopian country totally
20% people are to use new fashion especially females are follow
fashion. For inventory valuation we will use the in first out method. We
will sell the most recently purchased inventory first the method will also
help us pay less in taxes.

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-our inventory control system will tell us when to buy replacement
inventory what to buy what not to buy and how much to buy

- Suppliers will be independent crafts people import sources, distributors

and manufactures
6.2 Inventory
Inventory tracking system will tell management what such systems are
customers satisfaction and management system are surely managed
6.3 Product
Urban wear has increased popularity as the number of new fashion

Increased the quality of the products take to the market by its quality
and amounts attract the demand of the consumption make fashionable
of our work style
6.4Marketing analysis
Are known to have high sales once established business plan may be
some what cyclical for that reason.

Start-up plan

Start-up expenses

Grant opening ------------------------------------------------ 90,000

Rent deposit ---------------------------------------------- 155,560

Salaries&wage -----------------------------------------------56,000

Payroll taxes -------------------------------------------------- 87,000

Insurance ---------------------------------------------------- 110,000

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Telephone deposit -------------------------------------------- 2,100

Utilities ------------------------------------------------------ 9,500

Office supplies ---------------------------------------------- 85,655

Advertising -------------------------------------------------- 42,000

A counting /legal -------------------------------------------- 20,000

Fixtures -------------------------------------------------------7,500

Expensed equipment -------------------------------------89,000

Repair& main tance ---------------------------------------20,500

Corpet ---------------------------------------------------------9,900

Flour title -----------------------------------------------------2,600

Sign ------------------------------------------------------------4,500

Counter -------------------------------------------------------15,000

Travel ---------------------------------------------------------43,500

Other ---------------------------------------------------------0

Total start-up expense ----------------------------------- 806,815

No Item of Unit of Unit price

equipment measuremen
t
Birr Cent
1 Cotton Kg 212,23 00
7
2 Lillian Ton 222,23 00
7
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 3 Lesser Kg 212,23 00
7
4 Button Kg 172,00 00
0
5 Ink Kg 172,00 00
0
Total 961,18 00
5

Total expensive capital ---------------------------------------- 1,768, 000

Short term liabilities
Unpaid expenses-----------------------------------------------0

Short term loans -----------------------------------------------150,250

Interest free short loans-------------------------------------0

Subtotal short-term liabilities------------------------------150,250

Long-term liabilities-------------------------------------------0

Total liabilities--------------------------------------------------150,250

Loss at short-up------------------------------------------------125,400

Total capital-----------------------------------------------------75,125

Total capital & liabilities-------------------------------------85,625

Check line--------------------------------------------------------0
7.1 Business operation

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 While a clothing retail store is not unique not self this business will
have one of a kind items & provide personal one-on-one attention to
costumer after hours when needed customers can buy sweaters, dress ,
slocks dress shirt, costs,habeshan dressing, jogging suits, jean, outfits,
children items catalog items, and more. The store hours will be 7 days
week, store hours will be from 1 am to 10 PM. Monday through
Saturday and 11:00 am to 8:00pm on Sunday.
8.1 Management team
We will have to full time employees, the wages for these employees and
6:00 hours, we will not be offer of benefits for this first couple of years,
employees will do the cleaning of the building.

Mr. Yosephasfaw has over seven years of experience in retail sales and
over five years of managerial experience. he has held positions of
responsibility which required meeting company objects. She receives a
sufficient salary from her current job support her during the incubation
period of her business. She will oversee the store on a daily basis. She,
along with co-owner Mr. MikiasGulilat, will hire two staff persons to
work full-time in the store. One person will be responsible for operating
the cash register and loss prevention. The other person will be
responsible for customer service and inventory control. Ms. Mikias will
oversee day-today operations along with Ms. Yoseph.

Both owners believe very strongly that relationships should be forth

right, work should be structured with enough room for creativity, and
pay should commensurate with the amount and quality of work
completed. No person is better than another, except in ability,
knowledge, and experience.

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8.2Personal plan
Our company understands the impact hiring and managing our store’s
staff will have on our business success. Therefore, we have taken the
time to make sure all those overseeing the store and those working
directly in the store have the qualifications needed to help build our
professional image.

It is the intent for the owners to be the key manpower in starting the
business. They will be assisted by two full-time employees resources
include the local university and career Alliance. Employee’s age is not a
factor unless they are under 18, they then would need a worker’s
permit.

The following two employees will be hired:

The sales clerk/Loss prevention manager will be TekalignAyalew.

Tekalign has seven years of retail management experience in the area
of cashier and loss prevention.

The customers service/inventory control manager will be yohannis.

Yohannis has nine years of experience in the area of customer service
and inventory control.

Both of these employees have an exceptionary high level of retail

experience and professionalism needed to deliver excellent customers
and management of our store.

List of machinery in our company needed

It is cost of setting up the business and make it ready for use. It
include the costs of the necessarily materials for service provision and
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utilities needed for startup of our company the amount is temporary
for know. The detail is presented below
Table 8.3 is summery of business setting up cost
No Item Uni Amount Unit cost Total cost
. t
BIRR CENT BIRR CENT
1 Swing machine No 2 270,000 00 540,000 00

2 Knitting machine No 2 136,000 00 272,000 00

3 Double needle bar No 1 150,000 00 150,000 00

machinery

4 Braiding machines No 2 75,000 00 150,000 000

5 Painting machine No 2 230,000 00 460,000 00

6 Sketch machine No 2 320,000 00 640,000 00

7 Cutting machine No 2 80,000 00 160,000 00

8 Button hole No 1 120,000 00 120,000 00

making the
machine

9 Button sketch No 2 180,000 00 360,000 00

10 Pressing machine No 2 140,000 00 280,000 00

Total 19 1,701,00 00 3,132,00 00

0 0
Our products

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NO Types of Amou Unit cost Total Unit price Total revenue
cloth/ite nt in expensive in in month
m month month
Birr Ce Birr Ce BirrCe Birr Cen
nt nt nt t
1 T– shirt 2550 125 99 318,750 00 160 00 408,000 99
2 Dress 3500 235 99 822,500 00 295 00 1,032,50 99
0
3 Trouser 1500 250 99 375,000 00 325 00 487,500 99
4 Coat 1500 300 99 450,000 00 400 00 600,000 99
5 Shirt 2550 180 99 459,000 00 220 00 561,000 99 00
6 Scurvy 4000 80 99 320,000 00 100 00 400,000 99 00
7 T- 1000 120 99 1,200,0 00 150 00 1,500,00 99 00
Habesha 0 00 0 0
n female
drees
8 T- 1550 450 99 697,500 00 500 00 775,000 99 00
Habesha
n male
dress
9 Bag 500 190 99 95,000 00 230 00 115,000 99 00
10 Belt 1500 45 99 67,500 00 60 00 90,000 99 00

9.1Financial plan
Our financial plan anticipates the following

 Growth will be moderate, cash flows steady

 Marketing will remain below 25% of the sales
 The company will invest residual profits into financial markets and
not company Expansion (unless absolutely necessary)

 $449.4 thousand each month

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  $103.7 thousand each day
 $1,477 each hour (ten-hour business day
Men’s and boy’s clothing

 $323.4 thousand each month

 $74.6 thousand each week
 $10.6 thousand each day
 $1063 each hour (ten-hour business day)

The consumer spending patterns report states that the average amount
spent on clothing per household is

Per year per week

Women’s apparel $1060 $28.38

Men’s apparel $636 $12.22

Girl’s apparel $265 $5.09

Boy’s apparel $219 $4.21

9.2 Strategy and implementation summary

Our company uses a strategy of total market service. our promise is in

our location and the product we sell, the people we attract, and the
atmosphere we create.

We will create an atmosphere that lures the hardcore urban clothing

fans.

Ultimately,we aren’t selling either clothing or accessories. We are

selling the look. We want to be part of the activity, part of the memory,
part of tradition of dressing in latest fashions.

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 1. Every person is a potential customer and all potential market
experience growth.
2. Marketing to one segment of the population will lead to an
expansion in overall market growth

Plan month Year 1 Year2 Year3

Current 10.00% 10.00% 10.00%

interest
rate
Long term 25.00% 25.00% 25.00%
interest
rate
Tax rate 25.42% 25.00% 25.42%

Others 0 0 0

9.3Projected profit and loss

Sales Year1 Year2 Year3

560,000 856,000 1,560,000
direct cost 256,546 298,546 345,654
of sales
Others 0 0 0

9.4 Project cash flow

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 Year1 Year2 Year3
Cash received 256,546 298,546 345,654
Cash from 256,546 298,546 345,654
operation
Cash sales 256,546 298,546 345,654
Sub-total cash 769,638 895,638 1,036,962
spent
New cash flow 0 0 0
Cash balance 0 0 0

Total cost of 256,546 298,546 345,654

sales
Gross margin 312,234 354,456 465,543
Cross margin 75,00% 75,00% 75,00%

Expenses 650,000 743,567 1,546,765

profit before
interest&
taxes
Interest 650,000 743,567 1,546,765
expense
Taxes include 755,655 945,545 1,875,565
Net profit 650,000 743,567 1,546,765
Net 654,435 768,435 1,435,435
profit/sale

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