1.

0 Executive summery

Gebeyehu Gebremikail Medhin Transport Service by road and dry freight is a Amhara region
Waghimra zone Ziquala woreda based company that aims to be one of the largest Transport
Service by road and dry freight companies in the Ethiopia. Gebeyehu Gebremikail Medhin is
initially focusing on the trucking industry with plans to diversify with new industries served.
The company has chosen the trucking industry as the growth prospects are encouraging and
stable, with trucking dominating the freight industry in this country.

Gebeyehu Gebremikail Medhin engaged in different types of business activities such as

wholesale trade in Agro community and Transport Service by road and dry freight.
This document is a summarized profile of the business plan of Gebeyehu Gebremikail
Medhin which is prepared primarily on the Transport Service by road and dry freight
capacity and market potential of the promoter's business established in 2015 E.C. With the
limitation of working capital, the promoter cannot satisfy the existing excess demand of
trucking and exploit the market to its fullest potential.
Therefore, to actively involving on Transport Service by road and dry freight to satisfy to
our customers many truckers are mandatory. To this effect, the promoter has planned to
borrow a total term loan of Birr 15,000,000.00 (Fifteen million ) from one of the government
or private owned banks. Using the fund the promoter has planned to boost the existing sales
income to Birr 15,000,000 at the initial year and to surge up to birr 15,972,,000 after three
years of operation.

1.1 Vision, Mission and Objectives

1.1.1 Vision
The vision of the company is to become well recognized Ethiopian company by providing
superior quality service and products through integrated and professional teams with
customer satisfaction as the main objectives.
1.1.2 Mission
The mission of Gebeyehu Gebremikail Medhin is to remain a leading trader and Transport
Service by road and dry freight.
• Gebeyehu Gebremikail Medhin offers quality, cost-effective Transport Service by road and dry
freight.
• The goal of Gebeyehu Gebremikail Medhin is to hire 6 additional employees as they expand
their business services.
• Gebeyehu Gebremikail Medhin will continue to provide reliable, secure, on-time services; with
an ongoing comprehensive quality control program providing 100% customer satisfaction.

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• Maintain beneficial long-term relationships with our clients. This will increase profits through
referrals and repeat business.
1.1.3 Objectives
The objectives of Gebeyehu Gebremikail Medhin are to:
 Provide the best services possible to our existing and new clients
 Purchase 10 new fuel-efficient trucks with Auxiliary Power Units
 Stay ahead of our competition by providing competitive prices
 Obtain new accounts before the end of 2019 e.t.

1.1.4 Keys to success

The company will achieve its objective by:
• Family Owned and Operated by Ato Gebeyehu Gebremikail since 2015. He has more than 1
years of experience in the Transport Service by road and dry freight industry.
• Knowledgeable staff with an excellent reputation in customer service.
• Drivers have excellent driving skills and knowledge, knowing the fastest and safest routes to
deliver on time.
Contracts with major industries and exporters across the Country.
• Competitive prices, quality services.
• Establishing and maintaining smooth working relationship and contractual agreements
with our customers.
 • Effectively communicating to current and potential customers.
 Providing differentiated service of the highest quality of service.
2.0 Company Summary
Gebeyehu Gebremikail Medhin Transport Service by road and dry freight is a sole company, with
principal offices located in Amhara region Waghimra zone Ziquala woreda . Ato Gebeyehu
Gebremikail , Manager and CEO, is the owner. He has been in the wholesale trade in agro
community and Transport Service by road and dry freight business for 1 years.

Our company is the potential wholesale trader in different agro community and Transport
Service by road and dry freight. The finest, most innovative different agro community products
are bought from factories and sold and delivered to our customers.
2.1 Background of the company

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Gebeyehu Gebremikail Medhin is a local and established company which has licensed since
2015 E.C with an initial paid up capital of Birr 7,400,000 ( Seven million four hundred
thousands birr). The company is formed and established to be engaged in different business
activities and its office is located at Amhara region Ziquala woreda.

2.2 Company Facilities

The company has many office and warehoused in different towns in Amhara region.

Services
The trucking industry provides transportation services for persons or companies looking to haul heavy
things. Gebeyehu Gebremikail Medhin agro community trading and Trucking enables someone to
lease a truck, of any size, for any project that needs hauling. We will provide this service to the whole of
the Amhara region area, and hope to expand from this base area within the first three years of
operation.

This service is provided on two bases: for-hire and private carriers. Of these two segments, Gebeyehu
Gebremikail Medhin Trucking will concentrate on the for-hire carriers, and, more specifically, the
truckload (TL) and less-than-truckload (LTL) segments. The services offered, and the markets being
targeted, are discussed throughout the following section.

Market Analysis Summary

Gebeyehu Gebremikail Medhin agro community trading and Transport Service by road and dry
freight has an opportunity to entrench its competitive position in the regional transportation market by
selectively focusing its target market on the exporters. The company has already had experience in
servicing such clients and it believes that there is a growing demand for reliable transportation solutions
in this customer segment.

Market Segmentation
There are several potential customer segments that we will provide our transportation services to.
Major customer segments include the trucking industry, Agro community wholesalers and retailers,
Hotels and bar and restaurants . The table below outline the current market size and growth estimates
for these customer segments in Amhara region.

Large established companies in the afore-mentioned segments have their own truck fleets, while smaller
players outsource the transportation function. The latter vary in the scale of their operations, but have a
steady demand for reliable transportation solutions. We will actively solicit such customers.

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Table: Market Analysis

Market Analysis
2016 2017 2018 2019 2020
Potential Growth
Customers
Wholesale 10% 3,000 3,300 3,630 3,993 4,392.30
Retailers 10% 1,500 1,650 1,815 1,996.50 2,196.15
Exporter 10% 1,500 1,650 1,815 1,996.50 2,196.15
Industries 10% 1,500 1,650 1,815 1,996.50 2,196.15
Total 10% 7,500 8,250 9,075 9,982.50 10,980.75

Target Market Segment Strategy

Gebeyehu Gebremikail Medhin Transport Service by road and dry freight will focus its marketing
budget on a selected industry niche. A narrow-served market focus will help strengthen the company's
reputation of a reliable transportation services provider and will generate favorable referrals.

The major customer segment the company is focusing on is the exporters. Companies in this segment
have varying needs, and Gebeyehu Gebremikail Medhin Trucking has already gained valuable
experience serving such customers. The company management believes that by increasing its truck fleet
it can capture additional clients and provide better service to existing clients.

Industry trends

While a driver shortage continues to plague the TL sector, the LTL carriers have adapted to changing
market conditions in order to capitalize on growth opportunities. Intermodal shippers also stand to
benefit from market trends. And the evolution of electronic commerce stands to intensify competition
among all carriers.

Truckers Dominate Freight Market

Based on value of service, trucking (excluding warehousing and logistics) accounted for 79%, or some
$344 million , of Ethiopian commercial freight revenues in 2022, but only 45% of total ton miles. This is
because products transported by truck tend to be lightweight, manufactured goods that move short
distances, rather than the heavy, long haul, bulk commodities that travel by rail and barge.

Motor carriers specialize in higher-value freight that moves 750 kilometers or less and for which delivery
is required within three days. Some 36% of truck freight (measured by shipping cost) never crosses state
lines. Examples of this type of freight are consumer staples delivered locally, and manufactured goods
shipped between commercial establishments or delivered to consumers or retail outlets.

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Truckers have the largest share of the freight market. Unlike railroads, pipelines, or water carriers, they
don't face geographic limits caused by physical constraints, and can offer door-to-door service. They also
pay relatively little to use the nation's highway system. Railroads, by contrast, must build, maintain, and
police their rights-of-way.

The Transport Service by road and dry freight industry consists of two broad segments: private and
for hire. In turn, for-hire truckers fall into two broad categories: truckload and less-than-truckload
carriers.

Competition and Buying Patterns

Although there are major players in each of the commercial carrier market segments, the market
remains highly fragmented. According to the Amhara region, there are numerous companies providing
different kinds of the Transport Service by road and dry freight. Major competitors for Gebeyehu
Gebremikail Medhin Transport Service by road and dry freight are those companies who have
comparable truck fleets and are also targeting the trucking industry.

Market research shows that customers in the trucking industry are price sensitive, and they value on-
time deliveries, special handling capabilities, and less-than-truckload orders. Customer referrals and
carrier's reputation are believed to strongly influence the buying decision.

Financial Risks and Contingencies

The company recognizes that it is subject to both market and industry risks. The two primary risks to the
company are:

 Industry concentration risk. The company is mainly focused on trucking industry businesses in
the Ethiopia. This position is favorable since the industry is fairly stable. Any slow down in the
agricultural product would have negative repercussions for Gebeyehu Gebremikail Medhin
Transport Service by road and dry freight. To mitigate this risk, the company is looking at
diversifying its Transport Service by road and dry freight business to include other industries
as well.

 Operational risk. Gebeyehu Gebremikail Medhin Transport Service by road and dry
freight recognizes the fact that there is an inherent risk in transporting cargo. Any damage to
cargo may undermine the profitable of the company. To reduce this risk, the company maintains
all necessary insurance.

Strategy and Implementation Summary

The strategy of Gebeyehu Gebremikail Medhin Transport Service by road and dry freight is to
consolidate its good customer and client service by making timely deliveries, hiring the best drivers and
having a competitive pricing structure. The company's goal in the next year is to become an
independently-run business entity without having any contracted services. We would like to fully

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manage our Transport Service by road and dry freight operation, from hiring drivers to sourcing
business. The company's goal within the next five years is to operate a full-service Transport Service
by road and dry freight business with a fleet of trucks, "hot-shot" trucks, and minifloat loads. Mike's
Transport Service by road and dry freight would like to be in a position to handle any job available at
this stage.

Value Proposition

Gebeyehu Gebremikail Medhin Transport Service by road and dry freight offers the following
advantages to customers.

 Quality Service. We provide our customers with courteous, prompt, and dependable service.
The company has a reputation for timely deliveries and the best drivers in the industry, and
intends to build upon that.
 Competitive rates. We will provide competitive rates for our customers because we have low
cost inputs.
 Package handling. By maintaining dependable and safe equipment, we will ensure that there is
no damage to customer's cargo.

Competitive Edge
Our major competitive advantage is the vast industry experience and solid reputation of its owner, Ato
Gebeyehu Gebremikail. His company is also well known among its clients for going that extra mile in
the customer-service department.

Marketing Strategy

We markets our services as solutions to the many companies requiring cargo to be transported promptly
and efficiently. The company's future marketing plans will be nationwide, emphasizing haulage
capabilities for any cargo. The overall marketing plan for services is based on the following
fundamentals:

 The segment of the market(s) planned to reach.

 Distribution channels planned to reach market segments: television, radio, sales associates, and
mailings.
 Share of the market expected to capture over a fixed period of time.

Pricing Strategy
At the time of this writing, Gebeyehu Gebremikail Medhin Transport Service by road and dry
freight has a lease arrangement with various companies. The company's pricing is based on kilometers
per thousands of kilograms of cargo transported. We will be able charge competitive rates, as we have
minimal overhead compared to our competition.

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Marketing Programs

Market Responsibilities. Gebeyehu Gebremikail Medhin Transport Service by road and dry freight
is committed to an extensive promotional campaign. To accomplish initial sales goals, the company will
require an extremely effective promotional campaign to accomplish two primary objectives:

 Attract quality sales/service personnel with a desire to be successful.

 Attract customers that will consistently look to Gebeyehu Gebremikail Medhin Transport
Service by road and dry freight for their hauling needs.

Promotion. In addition to standard advertisement practices, Gebeyehu Gebremikail Medhin Service

by road and dry freight will gain considerable recognition through these additional promotional
mediums:

 Press releases sent to radio stations, newspapers, and magazines.

 Radio advertising on secondary stations.
 We plan to advertise nationally, in magazines and newspapers, on television and radio, and on
billboards.

Incentives. As an extra incentive for customers and potential customers to remember the name,
Gebeyehu Gebremikail Medhin Transport Service by road and dry freight plans to distribute
coffee mugs, T-shirts, pens, and other advertising specialties with the company logo.

Sales Strategy
The company will base its sales strategy on increasing the sales from its existing customers, and also to
target new businesses. For the latter purpose, we will employ a part-time sales representative.

A customer survey has shown that currently Gebeyehu Gebremikail Medhin Transport Service by
road and dry freight is losing sales from its existing clients because the company cannot provide certain
types of services. The customers have also shown interest in giving more business to Gebeyehu
Gebremikail Medhin Transport Service by road and dry freight once the company increases its
truck fleet to handle special orders. Once the new trucks are purchased, we will notify our clientele of
the new services and pitch our services to the new businesses. We will further continue our policy of
only accepting jobs which can be delivered with high customer satisfaction. Orders that require
outsourcing will be gradually eliminated so that we can provide total quality control over the services we
render.

Sales Forecast
The following table and charts show our projected sales for the next three years.

Table: Sales Forecast

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 Sales Forecast
2016 2017 2018 2019
Sales
Trucking Services 12,000,000 13,200,000 14,520,000 15,972,000
Other 0 0 0 0
Total Sales 12,000,000 13,200,000 14,520,000 15,972,000

Direct Cost of Sales 2016 2017 2018 2019

Trucking Services 6,000,000 6,600,000 7,260,000 7,986,000
Other 0 0 0 0
Subtotal Direct Cost of Sales 6,000,000 6,600,000 7,260,000 7,986,000

Management Summary
The company's management is minimal in order to reduce the overhead. Ato Gebeyehu
Gebremikail, the company owner and Manager, makes all executive decisions. At the moment,
he also generates most of the sales leads. Ato Gebeyehu Gebremikail works as an executive
secretary who answers phone inquiries and maintains the customer database. A part-time sales
representative will be hired to solicit new business once the company acquires new trucks. In the
years 2017-2018, the administrative staff is planned to increase in order to handle the higher
sales volume. In the future, a sales manager will be hired to allow Ato Gebeyehu Gebremikail
more time to dedicate himself to company management.
Management Team
The management of Gebeyehu Gebremikail Medhin Transport Service by road and dry freight is
highly experienced and qualified. Ato Gebeyehu Gebremikail Medhin, Manager and CEO, has been
involved in the Transport Service by road and dry freight industry for 1 years. He is well respected by
the Transport Service by road and dry freight professionals with whom he has worked. All
administrative functions are performed by Ato Awoke Simeneh, who has worked with Ato Gebeyehu
Gebremikail for the last two years. He possesses extraordinary customer service and database
management skills.

The company's management philosophy is based on responsibility and mutual respect. Gebeyehu
Gebremikail Medhin maintains an environment that stimulates productivity and emphasizes respect
for customers and fellow employees. The company structure is linear, which lends the staff
responsibilities and decision-making power.

Personnel Plan
Table: Personnel

Personnel Plan
2016 2017 2018 2019
Gebeyehu Gebremikail 240,000 264,000 290,400 319,440
Awoke Simeneh 120,000 132,000 145,200 159,720
Other 0 120,000 240,000 264,000

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 Total People 2 3 4 4

Total Payroll 360,000 516,000 675,600 743,160

Financial Plan

Source of finance

The company maintains initial cash balance of birr 7,400,000 and wants to obtain its remaining
working capital from its initial investment from financial institution or banks. As its shown
below the company needs birr 15,000,000 term loan to run its operation.

Important Assumptions
The following table highlights the important general assumptions of Gebeyehu Gebremikail Medhin
Transport Service by road and dry freight. Interest rates, tax rates, and personnel burden are based
on conservative assumptions.

Table: General Assumptions

General Assumptions
2016 2017 2018 2019
Plan Month 1 2 3 4
Current Interest Rate 19.00% 19.00% 19.00% 19.00%
Long-term Interest Rate 19.00% 19.00% 19.00% 19.00%
Tax Rate 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0

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Projected Cash Flow
The projected cash flow is presented in the chart and table below. The long-term loan in the amount of
15,000,000 is expected to be received in September , 2016, which is reflected in the increase of the
long-term borrowing row for that month. The company is planning to purchase one trucks.

The annual cash flow can be found in the table below

Table: Cash Flow

Pro Forma Cash Flow

2016 2017 2018 2019
Cash Received

Cash from Operations

Cash Sales 1,920,000 2,112,000 2,323,300 2,555,520
Cash from Receivables 550,000 575,000 610,100 643,000
Subtotal Cash from 2,570,000 2,687,000 2,933,400 3,198,520
Operations

Additional Cash Received

Sales Tax, VAT 0 0 0 0
New Current Borrowing 2,700,000 2,700,000 2,700,000 2,700,000
New Other Liabilities 0 0 0 0
(interest-free)
New Long-term Liabilities 15,000,000 0 0 0
Sales of Other Current Assets 0 0 0 0
Sales of Long-term Assets 0 0 0 0
New Investment Received 0 0 0 0
Subtotal Cash Received 20,270,000 5,387,000 5,633,400 5,898,520

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 Expenditures 2016 2017 2018 2019

Expenditures from Operations

Cash Spending 360,000 516,000 675,600 743,160
Bill Payments 0 0 0 0
Subtotal Spent on Operations 360,000 516,000 675,600 743,160

Additional Cash Spent

Sales Tax, VAT 0 0 0 0
Principal Repayment of 0 0 0 0
Current Borrowing
Other Liabilities Principal 0 0 0 0
Repayment
Long-term Liabilities Principal 3,750,000 3,750,000 3,750,000 3,750,000
Repayment
Purchase Other Current Assets 0 0 0 0
Purchase Long-term Assets 15,000,000 0 0 0
Dividends 0 0 0 0
Subtotal Cash Spent 19,110,000 4,266,000 4,425,600 4,493,160

Net Cash Flow 1,160,000 1,121,000 1,207,800 1,405,360

Cash Balance 1,160,000 1,121,000 1,207,800 1,405,360

Projected Profit and Loss

The table below summarizes our projected income statement for the first three years of plan
implementation, fiscal years 2016, 2017, 2018 ,2019. As with the other tables, the Profit and Loss table
is projected to be quite conservative.

Table: Profit and Loss

Pro Forma Profit and Loss

2016 2017 2018 2019
Sales 12,000,000 13,200,000 14,520,000 15,972,000
Direct Cost of Sales 6,000,000 6,600,000 7,260,000 7,986,000
Other 0 0 0

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Total Cost of Sales 6,000,000 6,600,000 7,260,000 7,986,000

Gross Margin 6,000,000 6,600,000 7,260,000 7,986,000

Gross Margin % 50.00% 50.00% 50.00% 50.00%

Expenses
Payroll 360,000 516,000 675,600 743,160
Sales and Marketing and Other 36,000 39,600 43,560 47,916
Expenses
Depreciation 840,000 840,000 840,000 840,000
Utilities 20,400 30,000 35,000 39,240
Insurance 110,000 120,000 130,000 140,000
Payroll Taxes 54,500 67,000 77,500 84,734
Other 0 0 0 0

Total Operating Expenses 1,420,900 1,612,600 1,801,660 1,895,050

Profit Before Interest and Taxes 4,579,100 4,987,400 5,458,340 6,090,950

EBITDA 0 1,210,370 3,205,300 6,028,638
Interest Expense 2,850,000 2,137,500 1,425,000 712,500
Taxes Incurred 518,730 854,970 1,210,002 1,613,535
Net Profit 1,210,370 3,205,300 6,028,638 9,793,553
Net Profit/Sales 10.00% 24.28% 41.50% 61.31%

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Projected Balance Sheet
The table below shows Gebeyehu Gebremikail Medhin Transport Service by road and dry freight
balance sheets for 2016-2019.

Table: Balance Sheet

Pro Forma Balance

Sheet
2016 2017 2018 2019
Assets

Current Assets
Cash 1,160,000 1,121,000 1,207,800 1,405,360
Accounts Receivable 550,000 575,000 610,100 670,000
Other Current Assets 6,950,000 6,950,000 6,950,000 6,950,000
Total Current Assets 8,660,000 8,646,000 8,767,900 9,025,360

Long-term Assets
Long-term Assets 15,000,000 15,000,000 15,000,000 15,000,000
Accumulated 840,000 1,680,000 2,520,000 3,360,000
Depreciation
Total Long-term Assets 14,160,000 13,320,000 12,480,000 11,640,000
Total Assets 22,820,000 22,820,000 22,820,000 22,820,000

Liabilities and Capital 2016 2017 2018 2019

Current Liabilities
Accounts Payable 609,160 712,196 621,568 825,317.17

Current Borrowing 1,936,170 2,073,000 1,737,500 1,517,400

Other Current Liabilities 414,300 1,075,504 1,710,194 1,129,089.83

Subtotal Current 2,959,630 3,860,700 4,069,362 3,471,807
Liabilities

Long-term Liabilities 11,250,000 7,500,000 3,750,000 0

Total Liabilities 9,214,565.17 8,135,699.34 5,736,190.51 5,087,497.68

Paid-in Capital 7,400,000 7,400,000 7,400,000 7,400,000

Earnings 1,210,370 3,205,300 6,028,638 9,793,553
Total Capital 8,610,370 10,605,300 13,428,638 17,193,553
Total Liabilities and 22,820,000 22,820,000 22,820,000 22,820,000
Capital

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