_________________Wollega University

ENGINEERING AND TECHNOLOGY COLLEGE FOOD TECHNOLOGY AND PROCESS DEPARTMENT NUTRITION AND FOOD SCIENCE PROGRAM (Master Program)

Course: Management of food enterpriseCourse Code: NFS- 506Name Addisu GetenetId No = SPGS/OO98/13

Business Plan

Executive Summary

Blue Nile Restaurant established by Addisu Getenet in Nekemete town near to Wollega University, and the owner has a vision to open three more restaurants in Ambo, Bedele and Bako towns after the result of Blue Nile Restaurant of Nekemete. The main costumers of the restaurants will be university students.The aim of this business is to provide quality food items for students and teachers.

ITable of ContentsTable of contents Page

Executive SummaryI

Background and History1Location 1Objectives 1Description of Products1

Market Description1

Competition1

Marketing Strategies2

Manufacturing Plans2

Financial Projections3Income Statement4Cash Flow Analysis5Balance Sheet5Financial Ratios7

Contingency Plans10

IIBackground and History

Blue Nile restaurant is established by the owner Addisu Getenet in 2014 and going to open next year in 2015. This restaurant is the first for the owner and he also planned to open three more in Ambo,Bedele and Bako towns after the result of Blue Nile Restaurant of Nekemete. The sample (prototype) is already prepared and tested and a good response was obtained.

Location The location of Blue Nile restaurant is near to Wollega University

Objective

The following are the objectives of Blue Nile restaurant To provide good service for the customers To provide restaurant options for the area To obtain income To obtain experience in restaurant business.

Description of Products

Blue Nile Restaurant will present two types main Ethiopian dishes. The first meal for veterans which includes Tegabino, Shiro feses and Beyayenet the second meal prepares form meat and meat sources which will have food items like Tibs.Kitifo,Gored gored, Key wot and Dulet

Packed raw Meat products will be presented in a kilo and 1 kilo in plastic bag and that safe for 36 hours

Market Description

The Foods in Blue Nile Restaurant will market will fall into two distinct categories: meat and meat product and plant product

Meat product the consumption of meat and its products are increasing in Nekemete/ Ethiopia. As the market need assessment indicates the meat market is increasing in 17% each year which has 42,000,000 birr market share.

1Plant products Blue Nile Restaurant confirmed that the Nekemete residence are accustomed to eat plant products (non meat products) in different months, for example two months in mid Ethiopian summer the Orthodox people the only consume plant products for religion matters, so this is a good opportunity for our restaurant. It is estimated that the majority of the residence of Nekemete cannot afford the price of meat. To attract a larger customer preparing Ethiopian traditional grain and cereal foods is available in Blue Nile restaurant.

Market Competition

There are several equivalent restaurants in Nekemete town which presents the same items of foods, but the weakness of these products is in the lack of variety none of these restaurants produce or market a flavored topping. Several of the products are also too expensive the restaurants focuses only to make large money from few consumers.The strengths of the products of Blue Nile Restaurant are the location of the restaurant (its proximity to Wollega University), the price, and the availability of all types traditional foods including the well knows indigenous spices. Also there will be 15% discount in all items.

Marketing Strategies

The restaurant is named in the very famous and beloved river of the nation, and it is located around Wollega University (which has more than 10,000 students) and 80,000 residents in Nekemete town.

The restaurant accommodates some games, service of television which includes a live football transmission, movie programmers, dessert and starter during launch time (these are not common in most Ethiopian restaurants)

Manufacturing Plans

Local injera and bread presents in slice form, all food items will be prepared in the restaurants kitchen. Such a preparation will minimize the expenses for production and increases the safety of the produce, plus the consistency and make the restaurant reliable. The raw materials and ingredients will be directly collected from the farmers, fresh and attractive food items will present for the customers

2Financial Projections

The following pages include multi-year projections for income, cash flow, balance statement, as well as estimated financial ratios. These projections are for the Whipped Dream division of Blue Nile Restaurant only.

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Blue Nile Restaurant

Pro Forma Income Statement

January 2015 - December 2015

Net Sales 40,000.00

Less:Cost of Goods Sold18,000.00

Gross Income Birr 22,000.00

Operating Expenses

Labor1,200.00

Utilities1,000.00

Insurance1,800.00

Sales Promotion2,000.00

Delivery and Transportation2,000.00

Miscellaneous1,000.00

Total Expenses Birr 9,000.00

Net Income Before Taxes13,000.00

Less:Income Taxes1.500.00

Net Income After TaxesBirr11,500.00

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Blue Nile Restaurant

Pro Forma Income Statement

January 2016 - December 2016

Net Sales65,000.00

Less:Cost of Goods Sold27,000.00

Gross IncomeBirr 38,000.00

Operating Expenses

Labor1,700.00

Utilities2,000.00

Insurance2,300.00

Sales Promotion2,500.00

Delivery and Transportation2,500.00

Miscellaneous1,500.00

Total ExpensesBirr 12,500.00

Net Income Before Taxes25,500.00

Less:Income Taxes2,800.00

Net Income After TaxesBirr22,700.00

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Blue Nile Restaurant

Pro Forma Income Statement

January 2017 - December 2017

Net Sales103,000.00

Less:Cost of Goods Sold42,000.00

Gross IncomeBirr 61,000.00

Operating Expenses

Salary2,000.00

Labor3,000.00

Utilities2,500.00

Insurance2,500.00

Sales Promotion3,500.00

Delivery and Transportation3,000.00

Miscellaneous2,000.00

Total ExpensesBirr 18,500.00

Net Income Before Taxes42,500.00

Less:Income Taxes3,900.00

Net Income After Taxes38,600.00

6Blue Nile Restaurant

Pro Forma Cash Flow Statement

January 2015 - December 2015

JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember TOTAL

Revenues3,0003,0003,000 3.0003,0003,0003,0003,5003,5004,0004,0004,00040,000

Expenses

Cost of Goods Sold15001500 1500 1500 15001500 1500 1500 150015001500150018,000.00

Labor100100 100100 100100100 100100100100 1001,200.00

Utilities50505050 100100100 1001001001001001,000.00

Insurance150150150 150 1501501501501501501501501,800.00

Sales Promotion150150150150 1501501501501501502502502,000.00

Delivery and Transportation150150150150 150150150 1501501502502502,000.00

Miscellaneous50505050 1001001001001001001001001,000.00

Total Cash Flow1,000.001,000.001,000.001,000.001,000.00 1,000.001,000.001,000.001,000.001,000.001,500.001,500.0013,000.00

7Blue Nile Restaurant

Pro Forma Balance Sheet

December 31, 2015

Current Assets

Cash2,000.00

Accounts Receivable3,000.00

Inventory3,000.00

Pre-Paid Expenses2,000.00

Total Current Assets10.000.00

Fixed Assets

Building3,500.00

Equipment2,000.00

Gross Fixed Assets1,000.00

Less Accumulated Depreciation1,000.00

Net Fixed Assets7,500.00

Total Assets17,500.00

LIABILITIES AND OWNERS EQUITY

Liabilities

Current Liabiliities

Accounts Payable2,300.00

Accrued Payables2,400.00

Total Current Liabilities4,600.00

Long Term Liabilities

Mortgage Payable2,200.00

Total Liabilities6,800.00

Owner's Equity10,700.00

Total Liabilities and Owner's Equity17,500.00

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Blue Nile Restaurant

Financial Ratios

December 31, 2015

Return on Equity=Net Profit before Taxes=13,000.00=82.3%

Net Equity10,700.00

Current Ratio=Current Assets=10,000.00=2.17

Current Liabilities4,600.00

Quick Ratio=Curr. Assets - Inventory=7,000.00=1.52

Current Liabilities4,600.00

Debt to Equity=Total Liabilities=6,800.00=0.63

Net Equity 10,700.00

9Contingency Plans

While careful planning was involved in setting the strategic goals for , it may be that these goals are not met. The owner have decided to set a zone of acceptability for meeting sales and financial objectives. For both sales and financial objectives, a 10% negative deviation from expected sales and projected returns on assets will be accepted. However, if sales objectives and returns on investment are less than 90% of projections, certain actions will be taken. These actions include:

1. For unacceptable sales levels during the first year: Blue Nile Restaurant will combat this problem by doubling promotions.

2. For unacceptable sales levels: After 6 months of marketing products, sales will be evaluated. If not meeting acceptable sales levels, Blue Nile Restaurant will consider additional local marketing specialists.

3. For unacceptable business liquidity: In the event that the business lacks liquidity, Blue Nile Restaurant will examine their accounts receivable procedures to ensure that payment periods are just and that payments are being received in a timely manner.

4. For unacceptable returns on equity: If returns on assets and owners equity fall below acceptable levels, Blue Nile Restaurant will first examine and compare the per-unit costs of production and marketing with sales prices.

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