Mr.
MESFIN SURMI GASITET
DUMP TRUCK (SINOTRUK)
BUSINESS PLAN
To be presented to Debub Global Bank
OWNER'S: Mr. MESFIN SURMI GASITET
Address:
Mob :_0910-12-90-03
Jan, 2025GC
Addis Abeba, Ethiopia
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TABLE OF CONTENTS
1. BUSINESS PLAN SUMMARY-------------------------------------------------------------------------------1
2. INTRODUCTION -----------------------------------------------------------------------------------------------2
3. OBEJECTIVES OF THE BUSINESS-------------------------------------------------------------------------3
3.1 GENERAL OBEJECTIVE--------------------------------------------------------------------------------------3
3.2 SPECIFIC OBJECTIVE OF THE PROJECT-----------------------------------------------------------------3
4. EXPECTED MARKET CONDITION -----------------------------------------------------------------------3
5. BUSINESS SUITABILITY STRATEGIES------------------------------------------------------------------4
6. BUSINESS BENEFICIARIES---------------------------------------------------------------------------------4
7. BUSINESS MANAGEMENET--------------------------------------------------------------------------------5
8. OPERATIONAL POCEDURE---------------------------------------------------------------------------------5
9. THE BUSINESS COST-----------------------------------------------------------------------------------------6
10. FIXED COST-----------------------------------------------------------------------------------------------------6
10.1 COST OF MACHINERIES,VEHECLES AND EQUIPMENT-------------------------------------------6
11. VARIABLE COST-----------------------------------------------------------------------------------------------6
12. WAGES AND SALARY---------------------------------------------------------------------------------------7
13. CONSUMPTION COST----------------------------------------------------------------------------------------8
14. NECESSITY COSTS-------------------------------------------------------------------------------------------8
15. SUMMARY OF TOTAL COST-------------------------------------------------------------------------------8
16. PROPORTION OF THE WORKING CAPITAL AND FIXED INVESTMENT COST--------------9
17. DEPRECIATION COST OF FIXED ASSET--------------------------------------------------------------10
18. FINANCIAL SOURCES AND LOAN REPAYMENT--------------------------------------------------10
18.1 FINANCIAL SOURCES--------------------------------------------------------------------------------------10
18.2 LOAN REPAYMENT---------------------------------------------------------------------------------------11
19. PROFIT AND LOSS STATEMENT OF THE PROJECT FOR 5 YEARS-----------------------------12
20. CASHFLOWS OF THE BUSINESS------------------------------------------------------------------------13
21. BALANCE SHEET--------------------------------------------------------------------------------------------13
22. INCOME PROJECTION--------------------------------------------------------------------------------------14
23. CONCLUSION-------------------------------------------------------------------------------------------------14
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1. BUSINESS PLAN SUMMARY
Business type Dump truck (Sinotruk)
Owner of the business Mr. Mesfin Surmi Gasitet
Mr. Mesfin Surmi Gasitet live in Bench sheko zone,Mizan Aman Town.He
is well experienced in various business sector for many years in
providing. Now, he wants to expand his business by Dump truck
(Sinotruk) rent business.
Business location ---------------------SWEPRS (South West Ethiopia Peoples
Regional State), Bench Sheko Zone,Mizan Aman Town.
Total Business capital -------------------------------------------- 10,206,250.00 birr
Owners equity---------------------------------------------5,756,250.00 birr (50%)
Bank loan (Enat Bank)----------------------------------- 4,450,000.00 birr (50%)
From the total capital birr 10,206,250.00 ( 87.2%) is allocated for fixed cost capital
and the rest 1,306,250.00 or 13.8% is allocated for working capital.
To minimize the risk amount that will face the business the owner allocated 2.5%
(222,500) insurance of the total fixed cost capital.
The bank loan is to be paid back in five years with the interest of 23.25%.From the
bank loan interest the bank will get 3,115,255.73 with in five years as an interest.
The proposed business plan shows its suitability and profitability by in the table of
income and loss statement. The project will get a net profit of more than birr 4.92
million birr annually at an average. The business will create a job opportunity for
3 permanent and 1 temporary workers.
The business man will pay a tax 35% of the net profit, and through the tax
payment the government will get more than 2.3 million birr per year.
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2. INTRODUCTION
Ethiopia has extensive opportunity in the construction industry sector ,like road,
and dam construction ,residence home development and real estate development,
commercial and industrial building construction ,water construction works and low
cost housing development. Also construction machinery and equipment rental
service are also other opportunities in the sector.
At the present time urbanization and rural construction and building of
infrastructure and social service sector being motivated by the government. For the
encouragement of such growing development work heavy duty machines,
equipment and building materials has to be supplied in the form of impact with
duty free.
Therefore, the promoter (the business owner) Mr. Getachew Shame Farka
motivated to involve Dump Truck (Sinotruk) rent by fulfilling the required to make
the business feasible. The promoter (the business owner) aims to create job
opportunities for the local community and through this it may take part of reducing
poverty, pay government tax and planed to get reasonable profit. The business
can to accelerate prosperity of the country as a whole.
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3. OBEJECTIVES OF THE BUSINESS
3.1 GENERAL OBEJECTIVE
The main objective of the project is participating and sharing part of the country's
economic development and minimizing poverty.
3.2 SPECIFIC OBJECTIVE OF THE PROJECT
To overcome shortage of Dump Truck in the local community and the region,
To create job opportunity for the local community,
To get reasonable amount of profit form Dump Truck rent,
To provide Dump Truck the general construction industry on the current
scenario of the construction.
4. EXPECTED MARKET CONDITION
In the region and the zones, market information is assumed to have positive
implication in the construction works device. In the region the growth of
infrastructure and building works. Annually the business hold a construct of
business at a price of 8.3 million as an average.
As the proposed business is highly demanded ,in the country and the region as a
whole ,there will no doubt of market access.
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5. BUSINESS SUITABILITY STRATEGIES
The proponent of this business has set this strategy for the suitability of the
business. The business office will be set at Mizan Aman town administration.
To make the business suitable ,the business have finance ,employees, Dump Truck
(Sinotruk) or inputs. To have these things the owner and the manager of the
business set to strategy to make the business feasible and suitable.
Professional driver will be hired according to their qualification and work
experience. Other worker will be hired from local community based on experience
and the necessary training will be given for the short period of time including
practical orientation. The business worker will also be motivated by being
providing 10% bonus from the annual net profit.
6. BUSINESS BENEFICIARIES
The local community will get job opportunity,
The promoter earns profit from the business,
The government will collect tax from the business and employees income
Bank will collect interest income,
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7. BUSINESS MANAGEMENET
The business main office will be opened in Mizan Aman town the center of
Bench Sheko Zone and will gives a service contractual agreement for the business
to be maintained with the employers or customers in urban and rural areas .
The man power will be assigned as their qualification with having different level
those are professional and high level experience.
All the activities and duties of the business will be guided supervised and managed
by the promoter (business owner).
The financial system and procedures will be applied at every stage of activities by
the finance administrator and also be checked by internal auditor monthly and
annually.
8. OPERATIONAL POCEDURE
The first step of the business to be implemented Dump Truck (Sinotruk) will be
purchased. At the next step the office will be opened ,the third step is recruiting
manpower that is required for the project implementation.
At the operational level the business will be improvement depending on the
demand of the market.
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o Participating in construction material dumping (Sinotruk) bid,
o After wining the bid ,making an agreement and confirm with signature,
o The required Dump Truck(Sinotruk) will be ready for the work and moved to
the site,
o Dumping the construction material based on the agreement.
9. THE BUSINESS COST
The business cost includes annual working capital and fixed costs. The total
business cost is birr 10,206,250.00
10.FIXED COST
The fixed cost includes Dump Truck (Sinotruk). The total fixed cost capital
accounts for birr 8,900,000.00
10.1 COST OF MACHINERIES,VEHECLES AND EQUIPMENT
s/no. Description Qty Unit cost Total cost
1 Damp truck (Sinotruk) 1 8,900,000.00 8,900,000.00
Total 8,900,000.00 8,900,000.00
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11.VARIABLE COST
It includes the annual salary of employee and other operating costs. The total
working capital consists of the initial operating cost will account about birr
1,306,250.00
12.WAGES AND SALARY
s/n Personal Qty Monthly Annual Remark
salary salary
1 Project manager 1 4,000 48,000.00
5 Driver 1 3000 36,000.00
8 Parking 365days 1,500 18,000.00 50birr/day
9 Assistant driver 1 2,000 24,000.00
Total 126,000.00
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16. CONSUMPTION COST
Fuel and oils--------------------------------------------------487,750.00
Repair and Maintenance --------------------------445,000.00 (5% of dump truck cost)
Telephone ------------------------------------------------------5,000.00
Total -------------------------------------------------------------937,750.00
17. Necessity costs
Bill payment ---------------------------------------------------------20,000.00
Insurance (2.5 % fixed cost )---------------------------------- 222,500.00
Total --------------------------------------------------------------------242,500.00
18. Summary of total cost
Dump TRuck--------------------------------8,900,000.00
Salary--------------------------------------------------------------------126,000.00
Necessities --------------------------------------------------------------242,500.00
Consumption-----------------------------------------------------------937,750.00
Total ------------------------------------------------------------------10,206,250.00
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17. Proportion of the working capital and fixed investment cost
Consumption, salary and necessity costs are working capital of the business cost.
The total working capital is calculated to be birr 1,306,250.00 it is 12.89% of the
total cost. The cost of Dump Truck (Sinotruk) is the fixed cost of the business. The
allocated budget for fixed 8,900,000.00 birr 87.2% of the total cost.
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18. Depreciation cost of fixed asset
s/n Description Total price Life time Dep. Dep. Cost
1 Dump Truck (Sinotruk) 8,900,000.00 10 10% 890,000.00
Total 890,000.00
19. Financial sources and loan repayment
18.1 Financial sources
The promoter of the business contributes 50% of the total fixed cost and working
cost of the business 4,951,250.00birr (56.39%) the remaining 43.61% of the total
business and 50% of the total fixed cost (4,450,000.00birr) will be bank loan
(Debub Global Bank).
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18.2 Loan Repayment
BANK LOAN REPAYMENT SCHEDULE
Loan Duration: 5 Years
Number of Payments: 60
Interest Rate: 23.25%
Loan amount :4,450,000.00
Monthly Payment: 126,087.60 birr
Total interest due :3,115,255.73 birr
Total all payments : 7,565,255.73 birr
No. Principle Paid Interest Paid Year End loan Balance
1 532,849.13 980,202.02 3,917,150.87
2 670,829.26 842,221.88 3,24,321.61
3 844,539.06 668,512.09 2,401,782.55
4 1,063,230.63 449,820.51 1,338,551.92
5 1,338,551.92 174,499.23 0.00
Running Totals 4,450,000.00 3,115,255.73 0.00
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20. PROFIT AND LOSS STATEMENT OF THE PROJECT FOR 5 YEARS
Description Y-0 Y-1 Y-2 Y-3 Y-4 Y-5
Gross revenue 6,750,000.00 7,425,002.00 8,167,502.2 8,984,252.42 9,882,677.662
Expenses - - - - - -
Fixed Cost 8,900,000.00 - - - - -
Working capital 1,306,250.00 1,306,250.00 1,306,250.00 1,306,250.00 1,306,250.00 1,306,250.00
Depreciation 890,000.00 890,000.00 890,000.00 890,000.00 890,000.00
Total cost 10,206,250.00 2,196,250.00 2,196,250.00 2,196,250.00 2,196,250.00 2,196,250.00
Profit before tax 4,553,750.00 5,228,752.00 5,97,252.2 6,788,002.42 7,686,427.662
Tax 35% 1,593,812.5 1,830,063.2 2,089,938.27 2,375,800.847 2,690,249.6817
Net Profit 2,959,937.5 3,398,688.8 3,881,313.93 4,412,201.573 4,996,177.9803
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21. CASHFLOWS OF THE BUSINESS
Year Year 2023GC Year2024GC Year 2025GC Year 2026GC Year 2027GC
Cash from operation 2,959,937.5 3,398,688.8 3,881,313.93 4,412,201.573 4,996,177.9803
Principal payment 532,849.13 670,829.26 844,539.06 1,063,230.63 1,338,551.92
Interest payment 980,202.02 842,221.88 668,512.09 449,820.51 174,499.23
Debt service 1,513,051.15 1,513,051.14 1,513,051.15 1,513,051.14 1,513,051.15
Cash flow 1,446,886.35 1,885,637.66 2,368,262.78 2,899,150.433 3,483,126.8303
Net cash flow 1,513,051.15 1,513,051.14 1,513,051.15 1,513,051.14 1,513,051.15
22. BALANCE SHEET
Assets Liabilities
Current assets 4.45m Equity 4.45M
Fixed assets 4.45m Debt 4.45m
Total 8.9m Total 8.9m
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22. INCOME PROJECTION
The business has the capital to accomplish business annually that have the value of
8.9 million birr using the available Dump Truck (Sinotruk). The business will be
financed annually an average with a net profit of about birr 4.1 million
13.CONCLUSION
The profit and loss statement shows the profitability and suitability of the business.
The gross revenue and the working capital will grow by 10% every year.
This business has planned to be implemented by preparing and mobilizing the
required Dump Truck (Sinotruk). The fulfillment the required professionals for
successful achievement of the desired goal is the main duty. The plan shows how
to arrive to the desired objective and to gain some economic benefit for the
promoter. From the initial capital of the staff members as well as the government
financials cooperation.
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