Asmerom Gebremedhin Abaye Household and office hardware’s wholesale trading

1.0 Executive Summary

For the Last twelve years Asmerom Gebremedhin Abaye Household and
office hardware’s wholesale trading business has vast and proven
experiences that goes through either grasping and surveyed the past and
current market opportunity and obstacle’s that grows and flourishes its
Household and office hardware stores wholesale trading business and
becomes one of the best stores located at the well-known Merkato Market.

Asmerom Gebremedhin Abaye Household and office hardware’s wholesale

store found in 2004 EC which is registered in Ethiopia, Addis Abeba, Lemmi
Kura Sub City, Woreda 08, House Number Addis B.N 422 and located at
Merkato.

Through the use of superior personal customer attention, great product

selection, and reasonable prices, Asmerom Gebremedhin Abaye Household
and office hardware’s wholesale has been capitalize on this promising and
ever-growing market opportunity. A location is being secured at the great
Merkato that offers excellent traffic with a built-in magnet for urban
household and businesses customers. The parent import businesses that
help efficiently lay out and plan the store to increase sales and give the
customers the utmost in attention. The company owner and the team have
a wealth of business, financial, and mechanical experience that will ensure
a great investment and the overall success of the venture. The projected
growth rate for Asmerom Gebremedhin Abaye Household and office
hardware’s wholesale is quite consistent and has the potential to grow
exponentially along with the increase in residential and business
development in Addis Abeba also throughout the country.

The graph of home ownership, new families and businesses have changed
radically in Addis Abeba also throughout the country new demands
projections gives confidence to the owner impact of demand increase on
Household and office hardware’s in the store sales growth one way or
another.

Today's Household and office hardware’s store, which more and more is
dominated by the wholesale businesses located at Merkato. Asmerom
Gebremedhin Abaye Household and office hardware’s wholesale is uniquely
positioned to take advantage of this past and new fact of the industry.

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Conveniently located to serve every household and businesses in Addis and

Regional cities.

This is why Asmerom Gebremedhin Abaye Household and office hardware’s

wholesale store Business needs an additional working capital to meet these
growing demands that plans and requested 20 million working capital term
loan form the Commercial Bank of Ethiopia and promises to meet all
obligations under the social and criminal code of the Federal Democratic
Republic of Ethiopia.

2. Market and Industry Overlook

Ethiopia has a large domestic market with a total population of over 120
million people (2023), making it the second most populous country in Africa
after Nigeria. Over the 15 years prior to 2019, Ethiopia’s economy had one
of the fastest growth rates in the world, averaging 9.5% per year, driven in
part by significant public infrastructure investments. Abiy Ahmed’s
appointment to the office of Prime Minister in 2018 signaled a new push
toward liberalizing Ethiopia’s economy through improving the investment
climate and privatizing leading state-owned enterprises in several sectors,
including telecoms, shipping and logistics, power, rail, and sugar. This
momentum came to a halt with the double onset of the COVID-19
pandemic and a prolonged civil conflict. However, with these events now in
the rearview mirror, the country is showing signs of a move toward recovery
and reconstruction. Key sectors, including telecoms and banking continue to
move in a more open market direction.

In 2022, Ethiopia had a real gross domestic product (GDP) of 6%, which was
greater than the 4% average for East Africa. Agriculture has historically
been the driver of the Ethiopian economy but recently the service sector has
grown to become the largest contributor to GDP. According to the National
Bank of Ethiopia (NBE), services, agriculture, and industry accounted for
40%, 32%, and 29% of GDP respectively, during the 2021/22 Ethiopian
fiscal year. Service sector growth is dominated by expansion in
communication and transport services, hotel and restaurant businesses, as
well as wholesale and retail trading. Growth in the industrial sector is
particularly due to investments in roads, railways, dams, industrial parks,
and housing.

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While we expect further economic liberalization, the country still faces

several issues that dampen foreign trade and investment, the largest being
high inflation rates and a scarcity of foreign exchange reserves.

In September 2023, Moody’s downgraded Ethiopia’s credit rating from Caa2

to Caa3. Fitch and S&P also recently downgraded their ratings - Fitch in
December 2022 from CCC to CCC- and S&P from CCC+ to CCC. The
negative ratings, which have a significant effect on the country’s borrowing
costs, are due to heightened political instability and the Government of
Ethiopia (GOE)’s participation in the G20 Common Framework debt relief
initiative. During 2022, the year-on-year inflation rate gathered momentum
and rose due to price increases in both food and non-food items, peaking in
May 2022, at an annualized rate of 38%. Real interest rates in Ethiopia
remain largely negative. The minimum bank deposit rate of 7%, bond yield
of 4%, and treasury bill yield of 9.46% are lower than the annual average
inflation rate of 33%.

The Ethiopian birr is a non-convertible currency, and allocation of foreign

exchange (e.g., U.S. dollars) to the private sector is determined by the
NBE. The NBE operates within the context of a large trade deficit and the
need to meet sovereign debt obligations stemming from government
infrastructure projects funded by foreign debt, which enjoys priority for
scarce foreign currency. The birr has continued to follow a steady
depreciation, with the NBE following a crawling peg exchange rate policy.
The shortage of available dollars has led to a black-market exchange rate
close to double the official rate.

Table 2: Ethiopia Exchange rate historical data USD TO ETB

Year Exchange rate (1 US dollar to ETB) % change

2021 43.73 22.4

2022 51.76 16.8

2023 54.35 4.8

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Source: World Bank and Commercial Bank of Ethiopia

A second phase of Ethiopia’s Homegrown Economic Reform Agenda, first

introduced in 2019, is under development according to the Ministry of
Planning and Development. This forthcoming initiative is expected to include
liberalizing the banking sector, readjusting the exchange rate to strengthen
the birr’s market-based valuation, and eventually introduce a liberalized
foreign currency market. Ethiopia’s trade deficit has been widening, with
total imports rising by more than 12% annually on average during the last
11 years. The trade deficit grew to $14 billion in 2022 from nearly $11
billion in 2021, with total imports reaching $18 billion due in part to rising
imports of consumer goods, fuel, and semifinished goods. According to an
annual NBE report, 42% of total import spending ($7.6 billion) was on
consumer goods and 17% ($3 billion) was on capital goods.

Ethiopia’s imports from the United States have increased steadily throughout
the past decade. In 2022, Ethiopia imported over $1 billion worth of goods
from the United States, with transportation equipment—primarily in
aviation—comprising the largest segment, followed by construction
equipment, agricultural machinery, and engineering services. Many U.S.
companies based in the United Arab Emirates (UAE) do business in Ethiopia
using Dubai as an intermediary export platform due to proximity and
availability of reliable air shipping and air passenger services. Please refer
to the tables below for U.S./Ethiopia bilateral trade figures.

1.1 Objectives

There are four major objectives of this business plan, of which three are
immediate and the fourth is of a longer-term nature.

1. Plan and determine the next five years growth of the business.
2. Develop the strategy to manage and grow the profitability Asmerom
Gebremedhin hardware store venture.
3. Explore potential growth in the current and future market

1.2 Mission

To become A store that offers great provider and selection of household and
businesses hardware and home improvement products in a customer friendly
environment.

1.3Vision

To be the best-in-class provider of products and solution choices that drive

our members' and our co-op's profitability.

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1.3 Keys to Success

• Hardware Industry: The Home Improvement industry has been

consistently growing at a rate of 17% per year for the past decade
according to the AU Department of Commerce, with total Ethiopia
market Sales of over 3.1 billion in 2022. While the economy has
fluctuated up and down over the past decade, the growth of the
hardware industry has continued to grow at the same pace.

• Location: The current location Asmerom Gebremedhin Abaye

Household and office hardware’s wholesale trading is in the heart of
Merkato which is no needs to elaborate about the potential, the scale
and customer magnetic nature of the market and also Merkato is the
large open market in the African content.

• Urban Products: The store location in Merkato has a different product

mix than a suburban store, there are unique product demand from
urban Businesses and households. we have been a big part of
determining the mix of products that will be right for the urban market
through their IAIS concept (Inventory Always in Stock). Asmerom
Hardware will be in touch with, and focus on, the city urban market,
delivering products that are applicable to any customers,
and marketing these items at competitive prices.

• Commercial Customers: Asmerom Gebremedhin Abaye Household and

office hardware’s wholesale trading also focus on becoming the
hardware products source for every building and business in Addis and
all over the country. We will work hard to establish relationships
with property managers and service personnel. Those main business
customers are hotels, Bar and Restaurants, shopping malls, Banks and
also the Government.

• Service and Convenience: Service and Convenience are the keys to

success in this business. They are also the strengths of independent
hardware stores. The store needs to be easy to get to and easy to use
when the customer walks inside. Our personnel have experience in
high-end client hospitality. This experience will be invaluable in
dealing with customers and clients. Also keep meticulous records on
what customers are looking for that we do not currently have in stock.
On the other hand, the market to the suburban commuter who works
downtown and can take advantage of the convenience of stopping on
their way to or from work.

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2.0 Company Summary

Asmerom Gebremedhin Abaye Household and office hardware’s wholesale

store found in 2004 EC which is registered in Ethiopia, Addis Abeba, Lemmi
Kura Sub City, Woreda 08, House Number Addis B.N 422 and located at
Merkato, the business employes ten permanent and 5 contract workers.

2.1 Start-up Summary

Asmerom Gebremedhin Abaye Household and office hardware’s wholesale

store establish in 2004 EC detailed start-up cost list are explained under.

2.1.1 Start-up Expenses

The start-up costs of Asmerom Gebremedhin Abaye Household and office

hardware’s wholesale store, as detailed below, it consists primarily of
inventory, equipment and fixtures Asmerom Gebremedhin invest cash and
labor to the startup, throughout the past times successes the need for
additional working capital emerges that the company asked to secure an
WCTL of 20 million loans to be paid back on a 7-year amortization form the
Commercial Bank of Ethiopia.

Table: Start-up

Start-up
Requirements

Start-up Expenses
The Tool Room Rental Training 251,200
Salaries for Fixture Set-up 114,716
Merchandiser Cost for Regular Merchandise Set-up 2,532,000
Merchandiser Cost for Paint and Tool Shop 157,500
Set-up Salaries 222,916
Other 115,800
Total Start-up Expenses 3,394,132

Start-up Assets
Cash Required 4,000,000
Start-up Inventory 2,532,000
Other Current Assets 157,800
Long-term Assets 650,886
Total Assets 7,340,686

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Total investment 8,045,318

3.1 Our Products and Services

Asmerom Gebremedhin Abaye Household and office hardware’s wholesale

store is in the Household and office hardware’s industry to service a wide
range of clients and of course to make profits, which is why we will ensure
we go all the way to make available a wide range of hardware’s from top
manufacturing brands in the best manufacturing countries of the world.

• Sources of Income

We make sure that; we do all that under the law and of the Federal
Democratic Republic of Ethiopia to achieve our aim and ambition of the
business. Our general product sales services are;

• Selling new household and businesses hardware and accessories which

are critical to kitchen and living house products and also various products
of to the business firms

• Distributing household and businesses hardware and accessories retailers

• Various types of houses, office and business firm Decorative products

4. Our Mission and Vision Statement

• Our vision is to become one of the best wholesalers of household

and businesses hardware and accessories and décor Store in the
city and throughout the country.

• Our mission is to establish a city – best household and businesses

hardware and accessories and décor Store business that will make
available a wide range of hardware and accessories from top
brands at affordable prices to the residence of Addis Abeba, Main
Businesses and the country.

5.0 The company Structure

Although our household and businesses hardware and accessories and décor
Store might not be as big as Advance other company’s but We hire people
that are qualified, honest, customer centric and are ready to work to help us
build a prosperous business that will benefit all the stakeholders (the

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owners, workforce, and customers). we have qualified and competent staff

and hands to occupy the following positions;

• General Manager Mr. Asmerom Gebremeduhen

• Store Keeper Mr. Alemayehu Melesse

• Sales and Marketing Manager Mr. Hailegebreal Rediet

• Cashier Ms. Tigist Rediet

• Sales Person Mr. Tesfaye Birhanu

5. Job Roles and Responsibilities

General Manager: Mr Asmerom Gebremeduhen

• Raises management’s effectiveness by recruiting, selecting, coaching,

counseling, and disciplining staffs; communicating values, strategies, and
objectives.

• Creates better sales operation leading the development and

implementation of the overall targets of the store.

• Accountable for fixing prices and signing business deals

Sales and Marketing Manager Mr. Hailegebreal Rediet

• Brings about external research and coordinate all the internal sources of
information to retain the organizations’ best customers and attract new
ones

• Responsible for supervising implementation, advocate for the customer’s

needs, and communicate with clients

Store Keeper: Mr. Alemayehu Melesse

• In control of managing the daily activities in the store

• Guarantees that proper records of auto parts are kept and warehouse
does not run out of products

• Ensures that the store facility is in tip top shape and goods are properly
arranged and easy to locate

• Interfaces with third – party suppliers (vendors)

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Cashier: Ms. Tigist Rediet

• Performs cash management, general ledger accounting, and financial

reporting

• Responsible for administering payrolls

• Ensures compliance with taxation legislation

• Handles all financial transactions for the organization

Service Person Mr. Tesfaye Birhanu

• Ensures that all contacts with clients (walk-In center, SMS or phone)
provides the client with a personalized customer service experience of
the highest level

• Through interaction with customers in person, uses every opportunity to

build client’s interest in the store product and services

• Consistently stays abreast of any new information to answer customer

queries regarding the store and the merchandise.

• Find out the customer’s needs, recommend, select and help locate the
right merchandise, describe a product’s features and benefits.

6. SWOT Analysis

Our intention of starting outlet of household and businesses hardware and

accessories and décor Store in Addis Merkato is to run the business
profitably for a long period of time in this regard we invest money and time
to expand the business and then in the mean future opening other outlets all
over city is our main target.

We are quite aware that there are several household and businesses
hardware stores all over Addis and even in the same location where are
settled, which is why we are following the due process of properly managing
a business.

We know that if a proper SWOT analysis is conducted for our business with
consideration of current market trend and conditions, we will be able to
position our business to maximize our strength, leverage on the
opportunities that will be available to us, mitigate our risks and be welled
equipped to confront our threats.

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• Strength:
Our location, the business model we will be operating on physical store with
varieties of payment options, wide range of household and businesses
hardware’s from different manufacturing brands from abroad and our
excellent customer service culture will definitely count as a strong strength
for Asmerom Gebremedhin Abaye Household and office hardware’s
wholesale store. Also, our team of highly qualify staff members is also a plus
for the business.

• Weakness:
Now a days it is difficult to compute in today business environment shortage
of finance hindered a business to serve customers properly and shortage of
finance is the main weakness for us.

• Opportunities:
The fact that we are going to be operating our Household and office
hardware’s wholesale store close to one of the largest markets in Addis and
the country, for us this is a great opportunity to sell our products to a large
number of individuals, businesses and retailers.

• Threat:
Just like any other business, one of the major threats that we may face is
economic downturn. It is a reality that economic downturn affects
purchasing and spending power.

7. MARKET ANALYSIS

• Market Trends
If you are conversant with this Industry, you will quite agree that the
changes in disposable income, consumer sentiment, and ever-changing
trends are major growth drivers for sales in this industry. No doubt, a
massive rise in consumer confidence has also contributed in helping the
industry experience remarkable growth, but uneven performance in these
drivers has led to slightly constrained revenue growth for the industry.

So also, the rising demand for parts manufactured by a third-party

manufacturing company, as a result of increasing disposable income and
consumer sentiment, will result in revenue growth, but profit margins will

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increase as household and businesses hardware’s and décor is always high

because of everchanging nature of human behavior.

Lastly, in recent time, the household and businesses hardware’s stores

landscape has seen tremendous changes in the last 20 years; it has grown
from the smaller outlets to a more organized and far-reaching venture. The
introduction of franchise and online store makes it easier for a retailer to
reach out to a larger market far beyond the areas where his physical auto
parts retail store is located.

8. Target Market

Perhaps it will be safe to submit that the auto household and businesses
hardware’s and décor stores industry has one of the largest ranges of
customers; almost every Household and business would have one reason or
the other to purchase various types of accessories.

In view of that, we have positioned our household and businesses

hardware’s and décor stores at Merkato to service the wide range of home
and businesses in the city and every other location we are planning to open
other outlet and will be located key cities in the city.

Beside past experience we conducted our market research and studies and
we have additional ideas of what our target market would be expecting from
us. We are in business to retail a wide range of household and businesses
hardware’s and décor stores to the following groups of people and corporate
organizations;

• Any family or person who have home

• Retailers of household and businesses hardware’s and décor stores

• major businesses like Hotels, Bar and Restaurants, Banks, Hospitals, and
others

• House rentals and Real-estates

• The Government

Our competitive advantage

A close study of the household and businesses hardware’s and décor stores
industry reveals that the market has become much more intensely

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competitive over the last decade. As a matter of fact, you have to be highly
creative, customer centric and proactive if you must survive in this industry
and we fully aware of the stiffer competition and we are well prepared to
compete favorably with other Wholesale stores.

Our household and businesses hardware’s and décor stores are located at the
largest market in Addis Abeba. And also, we have enough parking spaces that can
accommodate well over 10 cars per time.

One thing is certain; we will ensure that we have a wide range of materials from
leading auto parts manufacturers available in our store at all times. It will be
difficult for customers to visit our auto parts retail store and not see the type of
auto parts and accessories they are looking for.

One of our business goals is to make the store a one stop shop for family or person
who have home, Retailers, major businesses like Hotels, Bar and Restaurants,
Banks and Hospitals, online store, various payment options and highly secured
facility will serve as a competitive advantage for us.

9.0 Marketing and Sales Strategy

we conduct a thorough market survey and study in order to be able to penetrate

the available market and become the preferred choice.

We have detailed information and data that we were able to utilize to structure our
business to attract the numbers of customers we want to attract per time.

We hired experts who have good understanding of the household and businesses
hardware’s and décor stores business to help us develop marketing strategies that
will help us achieve our business goal of winning a larger percentage of the
available market in the city.

In other hand to continue to be in business and grow, we must continue to sell the
household and businesses hardware’s and décors that are available in our store
which is why we will go all out to empower or sales and marketing team to deliver.
In summary, Asmerom Gebremedhin Abaye Household and office hardware’s
wholesale store that adopt the following sales and marketing approach to win
customers over;

• Redesign our wholesale store in a grand style with a party for all

• Introduce our auto store by sending introductory letters alongside our

brochure to organizations, households, retailers and other key stake holders
in Addis Abeba.

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• Ensure that we have a wide range of accessories from different brands at all
times.

• Make use of attractive handbills to create awareness and also to give

direction to our wholesale store

• Position our greeters to welcome and direct potential customers

• Engage in direct marketing and sales

• Encourage the use of Word-of-mouth marketing (referrals)

➢ Payment Options

The payment policy adopted by Asmerom Gebremedhin Abaye Household

and office hardware’s wholesale store is all inclusive because we are quite
aware that different customers prefer different payment options as it suits
them but at the same time, we will ensure that we abide by the financial
rules and regulation of the Federal Democratic Republic of Ethiopia.
• Payment via bank transfer

• Payment with cash

• Payment via credit cards / Point of Sale Machines (POS Machines)

• Payment via online bank transfer

• Payment via check

• Payment via mobile money transfer

10.0 Purpose of The Loan

Accordingly, we request your bank (Commercial Bank of Ethiopia)

finance of birr 20 million for additional stock purchase and sales operation
activities and also the loan will enable us to continually purchase under listed
stocks, labor and overhead costs and; the under listed assumptions take in
to account for Inventory Purchase and Sales plan presented in the following
tables that shows Annual Purchase and sales plan and recreating and
renovating budget the sales Store for the year 2024.

Therefore, we are requesting 20 million of Working capital loan from

the Commercial Bank of Ethiopia. When the loan is approved, we
merge it with 1,938,681 additional capital that financed by our self-
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savings and trade creditors that provide us stocks with after sales
payment methods, these collaborate finance 21,938,681 million will
allow us to increasing the stock by purchasing all the row materials,
supplies and equipment we needed to catalyzed on increasing sales
volume in order to maximize additional profits.

➢ Assumptions
➢ The stock purchase and sales plan are calculated and forecasted four-month
revolving assumption
➢ four-month purchase plan share of to the total Revenue will be 33.3% for each
portion of the physical year
➢ four-month sales plan share of to the total Revenue will be 33.3% for each portion of
the physical year
➢ Additional finance from the owner will be 1,938,681 which may use to the first four-
month purchase plan
➢ Total cost of Goods sold will be re-used to revolve the second and third purchase
plane
➢ The above assumption may be affected by market trend and consumer reaction to
the market offerings
➢ There will be around a sales revenue loss of (15,000) because of decimal losses of
stocks

Four Month Revolving Inventory Purchase Plan

Description quantity Unit Purchase price Total Purchased amount
1 Gear and Steering box 307 31,021 9,513,139
2 Shaft Axle and crank Shaft 176 25,902 4,550,199
3 Piston and Spindle 234 18,724.07 4,375,191
4 Bearing and Slider Head 345 10,155 3,500,152
Total Inventory Purchase 12,324 9,509 21,938,681
Four Month Revolving Sales Plan
Description quantity Unit Sales amount Total Revenue
1 Gear and Steering box 307 36,517 11,198,419
2 Shaft Axle and crank Shaft 176 33,005 5,797,834
3 Piston and Spindle 234 23,858.09 5,574,840
4 Bearing and Slider Head 345 12,940 4,459,873
Total Sales 27,030,967
less sales loss Adjustments -15,000
Adjusted Total Sales 27,015,967
Gross Profit 5,077,285

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10. Sales Forecast

One thing is certain when it comes to Household and office hardware’s

wholesale store, if your store is well stocked with various types of product
and accessories and your store is locationally well positioned, that always
attract customers and that will sure translate into increase in revenue
generation for the business.
We have been able to critically examine the Household and office hardware’s
wholesale store business and we have analyzed our chances in the industry
and we have been able to come up with the following sales forecast. The
sales projections are based on information gathered from the Audited
financial statement and on the field proven experiences.
9.1 Main products Sales Plan

We are planning to increase our sales by 55%. Our sales for cast are made
based on Audited financial statement of the business, all forecast is made
based of the past trend of the business and current situation assessing
different study made by different scholar’s.

Main Product Unit sales Price Year 1 Year 2 Year 3

Gear and Steering box 920 920 920
Shaft Axle and crank Shaft 527 527 527
Piston and Spindle 701 701 701
Bearing and Slider Head 1034 1034 1034
Total 3,182 3,182 3,182
Main Product Unit sales Price Year 1 Year 2 Year 3
Gear and Steering box 31,021.11 46,531.66 69,797.49
Shaft Axle and crank Shaft 25,902.46 38,853.69 58,280.54
Piston and Spindle 18,724.07 28,086.11 42,129.16
Bearing and Slider Head 10,155.18 15,232.77 22,849.16
Total 90,890 135,426 201,785
Main Product Total Price Year 1 Year 2 Year 3
Gear and Steering box 28,539,418 42,809,128 64,213,691
Shaft Axle and crank Shaft 13,650,596 20,475,895 30,713,842
Piston and Spindle 13,125,573 19,688,360 29,532,539
Bearing and Slider Head 10,500,456 15,750,684 23,626,026

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Total 65,816,044 98,724,066 148,086,099

Main Product Unit Cost of Sales Year 1 Year 2 Year 3
Gear and Steering box 36,516.58 56,600.70 87,731.09
Shaft Axle and crank Shaft 33,004.75 51,157.36 79,293.91
Piston and Spindle 23,858.09 36,980.04 57,319.06
Bearing and Slider Head 12,939.67 20,056.49 31,087.56
Total 106,319 164,795 255,432
Main Product Total Cost of Sales Year 1 Year 2 Year 3
Gear and Steering box 33,595,256.88 52,072,648.16 80,712,604.65
Shaft Axle and crank Shaft 17,393,503.25 26,959,930.04 41,787,891.56
Piston and Spindle 16,724,521.09 25,923,007.69 40,180,661.92
Bearing and Slider Head 13,379,618.78 20,738,409.11 32,144,534.12

Total 81,092,900 125,693,995 194,825,692

Main Product TOTAL NET SALES Year 1 Year 2 Year 3
Gear and Steering box 5,055,838 9,263,521 16,498,913
Shaft Axle and crank Shaft 3,742,907 6,484,035 11,074,050
Piston and Spindle 3,598,948 6,234,648 10,648,123
Bearing and Slider Head 2,879,163 4,987,725 8,518,508

Total Net Sale 15,276,856 26,969,929 46,739,593

11.0 Sales and Financial Projections

Our financial projection will include sales, cost of goods sold and gross profit,
income statement, cash flow and Break-Even Analysis. Our projection will
base recent financial statement of the business and also, we will consider the
external environment for projection.
• Basic Assumptions for Sales and Financial Projections

The assumptions used for financial analysis purposes are based on the fact
that business Potential and Overall working environment which can be
assumed that it is possible to increase the sales volume and possible to
expand the business in accordance with our expansion plan. The
assumptions we used to forecast the financial plan are presented as follows.

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Assumptions

• The bank will finance 20 million

• The sales revenue will increase by 55% per year
• Assuming the finance injected after July 01,2024.
• The average cost of the sale increase by 70%
• The profit of the business will be fully retained
• The profit tax rate is 35%
• The loan will be repaid within five years with quarterly annually
• All expenses will be increased by 15%

8.1 Sales and gross profit Forecast

The sales projections start in the month of July01, 2024, the immediate goal
is to achieve robust sales in the first year. It is thought that double digit
percentage total sales increases can be achieved and maintained throughout
the five years of this business plan.

Year 2024 2025 2026

81,092,900 125,693,995 194,825,692

Revenue

65,816,044 98,724,066 148,086,099

Cost of Good Sale

15,276,856 26,969,929 46,739,593

Gross profit

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 Asmerom Gebremedhin Abaye Household and office hardware’s wholesale trading

12.0 Profit and loss and Income and expense Forecast

The projected profit and loss, Income and expense and Cash Flow Statement
are expected to show the ability of a business to serve its debts. To project
profit and loss, Income and expense of this business the above assumptions
are taken to account.

Year 2024 2025 2026

81,092,900 125,693,995 194,825,692

Revenue

65,816,044 98,724,066 148,086,099

Cost of sales

15,276,856 26,969,929 46,739,593

Gross Profit

7,463,682 8,583,234 9,870,719

Expenses

Profit before 7,813,174 18,386,695 36,868,874

tax

Profit tax 2,734,611 6,435,343 12,904,106

(35%)
5,078,563 11,951,352 23,964,768
Profit after tax

8.6 Cash Flow Forecast

The company will generate a net positive cash flow in its first
year. Repayment of debt is a significant factor in the amount of cash that
gets paid out. short-term debt is on a 5-year amortization.

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 Asmerom Gebremedhin Abaye Household and office hardware’s wholesale trading

The Coming Three Years Cash Flow Projection

Of Asemerom Gebremedihen Wholesale Trading
Year Year Year
CASH BALANCE 2024 2025 2026
Date Ending 9/3/2024 9/3/2025 9/3/2026
Cash at Beginning of Period 2,107,100 5,078,563 11,951,352
Cash at End of Period 5,078,563 11,951,352 23,964,768

CASH INFLOWS 2024 2025 2026

Cash from Operations
Receipts sales from Customers 81,092,900 125,693,995 194,825,692
Total Cash from Operations 81,092,900 125,693,995 194,825,692
Cash from Financing
Total Outstanding loan with interest 25,308,470 16,846,006 8,383,542
Borrowing - - -
Total Cash from Financing 25,308,470 16,846,006 8,383,542
Cash from Investing
Sale of Property and Equipment 0 0 0
Total Cash from Investing 0 0 0
Total Cash Inflows 106,401,370 142,540,001 203,209,234
CASH OUTFLOWS 2024 2025 2026
Operations
Wages 2,612,800 3,004,720 3,455,428
Inventory Purchases 65,816,044 98,724,066 148,086,099
General Operating Expenses 4,850,882 5,578,514 6,415,291
interest expense 2,780,177 1,846,893 760,323
Income Taxes 2,734,611 6,435,343 12,904,106
Total Outflows from Operations 78,794,513 115,589,536 171,621,247
Financing
Repayment of Loans 5,682,287 6,615,571 7,623,220
Dividends Paid
Total Outflows from Financing 5,682,287 6,615,571 7,623,220
Investing
Purchase of Property and Equipment 1,500,000 500,000 350,000
Making Loans to Other Entities
Total Outflows from Investing 1,500,000 500,000 350,000
Total Cash Outflows 85,976,801 122,705,107 179,594,466
NET CASH FLOW 20,424,570 19,834,894 23,614,768

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 Asmerom Gebremedhin Abaye Household and office hardware’s wholesale trading

Loan Payment schedule;

Payment schedule is based on with 15.5% interest assumption will be paid in three
years quarterly manner that elaborated in the under table:

Three-year Loan Repayment Schedule

Pmt. Payment Beginning Scheduled Total Ending Cumulative
Principal Interest
No. Date Balance Payment Payment Balance Interest

1 31/06/2024 20,000,000 2,115,616 2,115,616 1,340,616 775,000 18,659,384 775,000

2 30/09/2024 18,659,384 2,115,616 2,115,616 1,392,565 723,051 17,266,819 1,498,051

3 31/12/2024 17,266,819 2,115,616 2,115,616 1,446,527 669,089 15,820,292 2,167,140

4 30/03/2025 15,820,292 2,115,616 2,115,616 1,502,580 613,036 14,317,713 2,780,177

5 31/06/2025 14,317,713 2,115,616 2,115,616 1,560,805 554,811 12,756,908 3,334,988

6 30/09/2025 12,756,908 2,115,616 2,115,616 1,621,286 494,330 11,135,622 3,829,318

7 31/12/2025 11,135,622 2,115,616 2,115,616 1,684,111 431,505 9,451,511 4,260,824

8 30/03/2026 9,451,511 2,115,616 2,115,616 1,749,370 366,246 7,702,141 4,627,070

9 31/06/2026 7,702,141 2,115,616 2,115,616 1,817,158 298,458 5,884,983 4,925,528

10 30/09/2026 5,884,983 2,115,616 2,115,616 1,887,573 228,043 3,997,410 5,153,571

11 31/12/2026 3,997,410 2,115,616 2,115,616 1,960,716 154,900 2,036,694 5,308,470

12 30/03/2027 2,036,694 2,115,616 2,036,694 1,957,772 78,922 - 5,387,392

Total Payment 25,308,470

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