BUSINESS PLAN

ON

WHOLESELAR TRADE IN BEVERAGES

IFA GADA & FRIENDS BEVERAGES DISTRIBUTION.

For SINKE Bank
SHAGER BURAYU
NOV, 2024
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 Table of Contents
Executive Summary 1
1 Introduction: 2
2 Market Analysis for Adanech Guluma Boru: 4
3 SWOT Analysis and Evaluation: 5
4 Marketing and Sales Strategy 7
4.1 Sales Forecast 9
5 Organization, Management, Human Resource…………………………………………….10

4.1.1 List of Customers and Suppliers

4.2 Financing structure 12
4.3 Assumption 15
6. Loan Utilization & loan repayment……………………………………………………………16

5 Identified Income Sources to Cover Loan and Interest Payments: 17

6 Collateral Plan17
7 Risk Assessment: 18
8 Legal and Regulatory Compliance 19

9 Conclusion and Recommendation…………………………………………………………20

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 Executive Summary
Ifa Gada & frinds Beverages Distribution is a well-established and growing company in Ethiopia, operating in the
import and distribution sector. The company specializes in the importation of various consumer goods and has
successfully built a strong reputation for delivering high-quality products to customers across the country.
This proposal seeks a loan from Sinke Bank to support the expansion plans of Ifa Gada & frinds Beverages
Distribution. The loan amount requested is ETB 6.5 million, which would primarily be utilized for product range
and distribution network, as well as investing in marketing and promotional activities.
The expansion project aims to address the growing demand for diversified consumer goods in the market and
capitalize on the company's strong brand recognition. The additional funds will enable us to introduce new
product lines and diversify our offerings, giving us a competitive edge in the market. This expansion will also
create employment opportunities and contribute to the economic growth of the region.
With our strong track record of profitability and the continuously increasing demand for our products, we believe
that this expansion project holds great potential for success. We have conducted thorough market research and
identified key target segments to ensure the viability of the proposed expansion.

Moreover, we have a dedicated management team with a proven ability to execute business strategies and deliver
results. The funds from the loan will be managed efficiently and used in a cost-effective manner to ensure
maximum return on investment.

Ifa Gada & frinds Beverages Distribution has a solid foundation, robust financials, and a clear vision for growth.
We have a strong relationship with Sinke Bank and their support in the form of a loan will enable us to implement
our starting work plans effectively. We are confident that this expansion project will not only enhance the
company's performance but also contribute to the overall development of the economy.

In conclusion, we request Sinke Bank to consider our loan proposal and support us in our starting plans. The loan
funds will be utilized wisely to expand our product range, strengthen our distribution network, and invest in
marketing activities. With the bank's support, Ifa Gada & frinds Beverages Distribution will be able to capture a
larger share of the market and drive sustainable growth in the future.

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1 Introduction:
Ifa Gada & frinds Beverages Distribution is a dynamic and reputable company operating in Ethiopia's import and
distribution sector. With a diverse range of products, including fast-moving consumer goods, and many others, Ifa
Gada & frinds Beverages Distribution has established itself as a trusted partner for multinational firms,
manufacturers, logistics providers, and equipment manufacturers.

Over the past decade, Ifa Gada & frinds Beverages Distribution has successfully navigated the complexities of the
importation process and built strong relationships with suppliers, enabling us to offer the best delivery options
based on our clients' specific requirements. Our commitment to excellence and professionalism has earned us a
solid reputation in the industry.

In addition to our expertise in the import and distribution of various products, we have also ventured into the
construction sector, supplying high-tech equipment to meet the evolving needs of the industry. Our experience in
this sector further strengthens our ability to provide innovative solutions for diverse project requirements.

Ifa Gada & frinds Beverages Distribution extensive distribution network includes partnerships with reputable
vendors such as LIUK Trading and BGI Ethiopia. Through these partnerships, we have established a
comprehensive presence in the market, with 26 outlets in the west and 29 outlets in the south parts of Ethiopia.
This widespread coverage enables us to reach a large customer base and efficiently meet their demands.

To fuel our expansion and continue providing exceptional service to our clients, Ifa Gada & frinds Beverages
Distribution is seeking a loan from the esteemed Sinke Bank. We are confident that with the bank's support, we
can further enhance our operations, expand our product range, and strengthen our position as a leading player in
the import and distribution industry.

We are excited about the opportunity to partner with Sinke Bank and believe that our track record of success,
commitment to quality, and passion for meeting customer needs make us an ideal candidate for this loan.
Together, we can drive growth, create employment opportunities, and contribute to Ethiopia's economic
development.

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Objective

The objective of the 6.5 million starting business loan is to support Ifa Gada & frinds Beverages Distribution
ambitious business expansion plans and drive growth in the import and distribution sector. The loan will be
utilized to achieve the following key objectives:

1. starting of product range: With the loan, Ifa Gada & frinds Beverages Distribution will seek to diversify its
product range by adding new fast-moving consumer goods, raw materials, technical tools, household and
commercial equipment, and other innovative products. This expansion will enable us to cater to a wider customer
base and increase our revenue streams.

2. Increase distribution network: A portion of the loan will be allocated towards expanding our distribution
network, both within Ethiopia and in neighboring countries. By establishing new outlets and strategic
partnerships, we aim to enhance our market reach and improve our ability to serve customers efficiently.

3. Modernization of logistics and infrastructure: A significant portion of the loan will be invested in upgrading our
logistics and infrastructure capabilities. This includes enhancing our warehousing facilities, improving
transportation systems, and implementing state-of-the-art inventory management software. These improvements
will allow us to streamline operations, reduce costs, and enhance overall efficiency.

4. Strengthening partnerships: Ifa Gada & frinds Beverages Distribution will utilize the loan to establish stronger
partnerships with multinational firms, manufacturers, logistics providers, and equipment manufacturers. By
leveraging these relationships, we can negotiate favorable terms, access high-quality products, and provide
enhanced value to our customers.

5. Job creation and economic growth: The expansion plans enabled by the loan will generate significant
employment opportunities, both directly and indirectly. By expanding our operations and establishing new
distribution outlets, we will create employment opportunities for individuals across various sectors, thereby
contributing to local economic growth.

The expected outcomes of this starting work loan include increased market share, improved profitability,
enhanced customer satisfaction, and a stronger competitive position in the import and distribution sector. Ifa Gada
& frinds Beverages Distribution is confident in achieving these objectives and looks forward to the positive
impact our expansion will have on our company, employees, partners, and the overall economy.
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2 Market Analysis for Ifa Gada & frinds Beverages Distribution:
The target market for Ifa Gada & frinds Beverages Distribution consists of the import and distribution sector in
Ethiopia, specifically focusing on the west and south parts of the country. Here is a detailed analysis of this
market, including key numbers and trends:

1. Market Size:
- The import and distribution sector in Ethiopia has experienced significant growth in recent years, driven by
increased consumer purchasing power and growing demand for a wide range of products.
2. Growth Potential:
- The market shows immense growth potential due to factors such as population growth, urbanization, and rising
disposable incomes in Ethiopia.

- The GDP growth rate of Ethiopia has been averaging 7.6% over the last decade, indicating a vibrant and
expanding economy.

- The government's focus on industrialization and infrastructure development presents further opportunities for
market expansion.

3. Competition:

- The import and distribution sector in Ethiopia is highly competitive, with both local and international players
vying for market share.

- Key competitors include other import and distribution firms, regional wholesalers, and direct suppliers to
retailers.

- However, Ifa Gada & frinds Beverages Distribution has successfully established itself as a reputable player in
the market with a solid reputation, extensive distribution network, and partnerships with leading vendors such as
LIUK Trading and BGI Ethiopia.

4. Trends:

- There are several key trends shaping the import and distribution sector in Ethiopia:

- Increasing consumer preference for branded products and international brands.

- Growing demand for high-quality household and commercial equipment as urbanization and construction
projects continue to rise.
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 - Rising popularity of e-commerce and online purchasing, driving the need for efficient delivery options and
innovative logistics solutions.

- Shifting consumer preferences towards sustainable and eco-friendly products.

- Additionally, the COVID-19 pandemic has brought about new trends and challenges, such as increased
demand for certain consumer goods, changes in supply chain dynamics, and a shift towards digitalization.

- Ifa Gada & frinds Beverages Distribution acknowledges these trends and is committed to adapting its strategies
to stay ahead in the market and meet the evolving needs of its customers.

In conclusion, the import and distribution sector in Ethiopia presents a large and growing market for Ifa Gada &
frinds Beverages Distribution With a strong track record, partnerships with key vendors, and an understanding of
market trends, Abron Trading Plc is well-positioned to capitalize on the immense opportunities and achieve
further success in the industry.

3 SWOT Analysis and Evaluation:

A - Strengths:

1. Skill and Profession: Ifa Gada & frinds Beverages Distribution has professionals with extensive
experience and wide exposure in door-to-door distribution of FMCG (Fast-Moving Consumer Goods).
This expertise ensures efficiency and effectiveness in delivering products to customers.

2. Strong business relationship: Ifa Gada & frinds Beverages Distribution focuses on building long-term
business partnerships with clients. This strength helps in establishing trust, understanding customer
requirements, and creating loyalty among clients.

3. Interpersonal relationship: Ifa Gada & frinds Beverages Distribution prioritizes interpersonal
relationships with clients. This strength facilitates better communication, understanding of customer needs,
and personalized services.

4. Reliability: Ifa Gada & frinds Beverages Distribution is known for its reliability in delivering products
and services. This strength enhances customer satisfaction, trust, and loyalty.

5. Assured quality: Ifa Gada & frinds Beverages Distribution maintains a high standard of quality in its
services and products. This strength helps in meeting customer expectations and retaining clients.

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 6. Target-oriented services: Ifa Gada & frinds Beverages Distribution aligns its services with customer
targets. This strength ensures the delivery of desired outcomes and enhances customer satisfaction.

W - Weaknesses:

1. Limited resources: Ifa Gada & frinds Beverages Distribution may face challenges due to limited
resources. This weakness could potentially affect scalability and the ability to cater to a larger customer
base.

2. Dependence on technology: Ifa Gada & frinds Beverages Distribution heavily relies on technology, such
as GPS and sales tracking systems. This weakness could lead to disruptions in operations if there are
technical issues or system failures.

3. Lack of diversification: Ifa Gada & frinds Beverages Distribution focus on door-to-door distribution of
FMCG may limit opportunities for expansion into different sectors or markets. This weakness may restrict
potential growth and revenue streams.

O - Opportunities:

1. Growing FMCG market: The FMCG market is expanding globally. Ifa Gada & frinds Beverages
Distribution can leverage this opportunity to capture a larger market share and increase revenue.

2. Demand for efficient distribution: With increasing competition and customer expectations, there is a
demand for efficient distribution services. Ifa Gada & frinds Beverages Distribution can capitalize on this
opportunity by providing superior and reliable door-to-door distribution.

3. Collaborations with FMCG companies: Ifa Gada & frinds Beverages Distribution can explore
partnerships or collaborations with FMCG companies to strengthen its presence in the market. This
opportunity can lead to new business opportunities and increased brand value.

T - Threats:

1. Intense competition: The door-to-door distribution sector is highly competitive, with numerous
companies offering similar services. Ifa Gada & frinds Beverages Distribution may face threats from
existing competitors and new entrants.

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 2. Technological advancements: The advancement of technology can potentially disrupt the traditional
door-to-door distribution model. Ifa Gada & frinds Beverages Distribution needs to stay up dated and
adapt to new technologies to remain competitive.

3. Changing consumer preferences: Consumer preferences and buying behavior may change over time. Ifa
Gada & frinds Beverages Distribution needs to continuously monitor and adapt its offerings to meet
evolving customer needs.

4. Economic uncertainties: Economic factors, such as recessions or inflation, can impact consumer
spending and demand for FMCG. Ifa Gada & frinds Beverages Distribution needs to be prepared for
potential economic downturns and minimize associated risks.

In conclusion, Ifa Gada & frinds Beverages Distribution has several strengths, such as its skilled professionals,
strong business relationships, and utilization of technology. However, it also faces weaknesses, such as limited
resources and dependence on technology. By capitalizing on opportunities like the growing FMCG market and
efficient distribution demand, and effectively addressing threats such as intense competition and changing
consumer preferences, Ifa Gada & frinds Beverages Distribution can enhance its competitive position and achieve
sustainable growth.

4 Marketing and Sales Strategy

1. Target Market Analysis:
Conduct thorough market research to identify the target audience for Ifa Gada & frinds Beverages Distribution
products. Analyze demographics, preferences, and purchasing behavior to create customer profiles.

2. Unique Selling Proposition:

Clearly define Ifa Gada & frinds Beverages Distribution unique selling proposition (USP) that sets it apart from
competitors. Highlight the key features, benefits, or values that make Ifa Gada & frinds Beverages Distribution
products superior.

3. Branding and Positioning:

Develop a strong brand identity and positioning strategy that resonates with the target market. Design a
compelling brand image, logo, and tagline that communicate Ifa Gada & frinds Beverages Distribution value
proposition effectively.

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4. Marketing Campaigns:

Create integrated marketing campaigns across various channels to maximize reach and engagement. Examples
of marketing tactics include:

a) Digital Marketing: Leverage social media, search engine optimization (SEO), pay-per-click (PPC)
advertising, email marketing, and content marketing to boost brand awareness and drive traffic to Ifa Gada &
frinds Beverages Distribution website.

b) Traditional Advertising: Utilize print media, radio, television, and outdoor advertisements to reach a wider
audience.

c) Influencer Marketing: Collaborate with influencers and industry experts to endorse Adanech products and
increase brand credibility.

d) Event Sponsorships: Sponsor relevant trade shows, conferences, or community events to raise brand
visibility.

5. Sales Techniques:

Train the sales team to effectively communicate value, handle objections, and close deals. Implement the
following sales techniques:

a) Relationship Building: Foster strong relationships with customers using personalized interactions, follow-ups,
and exceptional customer service.

b) Consultative Selling: Understand the customer's needs and provide tailored solutions that align with their
requirements.

c) Up selling and Cross-selling: Identify opportunities to up sell or cross-sell products based on customer
preferences and purchase history.

6. Customer Acquisition:

Implement strategies to attract new customers to Ifa Gada & frinds Beverages Distribution:

a) Referral Program: Encourage existing customers to refer their contacts by offering incentives or discounts.

b) Lead Generation: Utilize lead generation techniques such as gated content, newsletters, and webinars to
capture potential customer information.
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 c) Strategic Partnerships: Collaborate with complementary businesses or industry influencers to expand the
customer base.

7. Customer Retention:

Focus on retaining existing customers and fostering long-term relationships:

a) Loyalty Program: Implement a rewards program that incentivizes repeat purchases and offers exclusive perks
to loyal customers.

b) Personalized Communication: Regularly engage with customers through personalized emails, newsletters, or
SMS marketing to nurture the relationship.

c) Customer Feedback & Support: Set up a mechanism for gathering customer feedback and promptly
addressing any concerns or issues.

8. Performance Tracking and Analysis:

Continuously monitor and analyze marketing and sales data to assess the effectiveness of different strategies.
Make data-driven decisions and optimize campaigns accordingly.

4.1 Sales Forecast

Ifa Gada & frinds Beverages Distribution is forecasting strong sales growth over the next fiscal year. The
following forecast is based on a combination of historical sales data, market research, and industry trends.

Assumptions:

1. Market Demand: The forecast assumes that there will be a stable and growing demand for beverages in the
market. The company has conducted extensive market research and analyzed consumer trends to anticipate future
demand patterns.

2. Brand Partnerships: Ifa Gada & frinds Beverages Distribution has established solid and mutually beneficial
partnerships with renowned beverage brands like BGI. The forecast assumes that these partnerships will continue
to generate consistent sales and contribute to the company's growth.

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3. Product Mix: The sales forecast considers the current product portfolio and assumes that there will be a steady
demand for the existing product range. The forecast also factors in the introduction of new beverages based on
market demand and emerging trends.

4. Promotion and Marketing: Ifa Gada & frinds Beverages Distribution plans to increase its marketing efforts to
create brand awareness and drive sales. The forecast assumes that these promotional activities will effectively
attract new customers and stimulate repeat purchases.

5. Distribution Network: The Company’s distribution network has been expanding steadily, reaching more
retailers and businesses across different geographic regions. The sales forecast assumes continued growth in the
distribution network, resulting in increased sales opportunities.

6. Competitive Landscape: The sales forecast accounts for the competition within the beverage distribution
industry. Ifa Gada & frinds Beverages Distribution has analyzed the market share of key competitors and
anticipates capturing a larger market share through superior service, product quality, and strong relationships with
customers.

7. Customer Relations: Ifa Gada & frinds Beverages Distribution places a strong emphasis on building and
maintaining excellent customer relationships. The forecast assumes a high customer retention rate and expansion
of the customer base through referrals and positive word-of-mouth.

Using these assumptions, Ifa Gada & frinds Beverages Distribution has projected a sales growth rate of 10% for
the next fiscal year. It is important to note that these projections are subject to market conditions, unforeseen
events, and changes in customer preferences. Ifa Gada & frinds Beverages Distribution will continually monitor
and adjust its sales strategies to maximize growth potential and achieve its sales forecast.

Organization, Management, Human Resource Requirement and Availability

1.1.1. Business Form

Ifa Gada & frinds Beverages Distribution is established in the form of sole proprietorship by an Entrepreneur, and
will be headed by a professional Manager. The structure of the organization is designed as follows.

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 1.1.2. Organizational Structure

The organizational structure Ifa Gada & frinds Beverages Distribution

1.2. Human Resource Requirement of the Business

Multi business trading like Ifa Gada & frinds Beverages Distribution is a labor intensive industry; therefore, a
total of 14 employees will be hired including the current employees to handle the overall operation.

The average yearly increment of the salary for the employees is assumed at 10% for the next 5 years by considering
changes in the external and internal environment. In line with the requirements of the private organization’s social security
organization, the pension scheme will be installed and the contribution from the organization is considered to be 11% of
the salary and businesses to increase in proportion to the annual salary increment. Other employee benefits and
unforeseeable costs are considered in the 10% contingency. Other employee benefits are also assumed at 2% of the total
salary expenses. Accordingly, the following table shows the existing and future workers’ requirement with qualifications
and the first year’s monthly and annual salary levels and associated costs.

N N Monthly Gross Annual Gross

Position Qualifications
o O Salary/Employee salary
BA & above in Business
1 General Manager Management, or related 1 15000 180000
fields; Experienced
BA in Accounting or related 12500 150000
2 Marketing Manager 1
field
Diploma in Purchasing, 36000 432000
3 Sales 6
Marketing & related Above
4 Secretary & Cashier Diploma (10+4) in the field 1 5394 64728
5 Accountant BA in Accounting or related 1 6000 72000
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 field
6 Diploma in 5000 60000
Store man 1
7 purchasing/marketing
8 6000 72000
Guards 6th complete 2
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Sub-total 15 85.894.00 1,030,728.00

Total Human Resource Cost - Salary Expense 15 85,894.00 1,030,728.00

4.1.1 List of Customers and Suppliers

Ifa Gada & frinds Beverages Distribution has Many Potential Customers which is sub-Agent, Retailer and
Potential Whole Sellers and also there are many Partners who have Business link with our company that are
strategically alliances throughout the Year. Currently there are almost above one Hundred Customers Mainly
Retailers. As we above mentioned above the our Potential Suppliers is BGI Ethiopia PLC and LIUK Trading who
Have a Lion Share on Beverage Industry Of the Company.

4.2 Financing structure

The project asset is estimated to be new loan requested is an term loan of birr 6,500,000 (its revolving and
purchase of input to be released each year and paid at the end of each year) and the total equity is birr 975,000.00
. The detail is summarized in the table below

4.3 Investment

Description Total
4.3 Assumption
Computer and its Equipment 104,533
1, Distribution Office Furniture 49,026 Capacity
Vehicles 1,908,026.00
St.Georg Beer Bottle21,110.00 505,624.56
Creates Per Month
Draft Beer Sinqe Malt14,018.00 654,246
Creates Per Month
Castel Beer Castel Brewery 31,706.00 726,000
Creates Per Month
Draft and
Sinq Malt St. George Bottles. 4,179.00 2,026,421
Creates Per Month
Working Capital 526,124
Total 6,500,000
3Note: - The Detail is Summarized on the Table which Expressed Three Years Profit and Loss Statement.
Projected Income Statement

Project
Description

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Sales Revenue
84,221,312
Cost good sold 99,496,312

Gross profit 15,275,000

Operating expense

Salary & Benefit Expense 1,030,736.5

Utility Expense 101,656
Rent Expense 990,989
Insurance Expense 6,921.6
Car rental Expense 4,351,803.17
Printing & Stationary Expense 4,473.50
Repair & Maintenance Expense 139,910.14
Vehicle’s Inspection & License Expense 38,943.78
Bottle Expense 150,000.00

Bank Charge Expense 6,200.00

Interest Expense 2,855,072.65

Depreciation Expense 17,954.3

Legal Fee Expense 5,000.00
Travel & Paradigm Expense 50,668.64
Computer Supplies Expense 16,522.09
Promotional Expense 56,922.88
Loading & Unloading Expense 77,669.00
Cleaning & Sanitation Material 22,404.00
Total operating expense 9,923,847.25

Profit Before Income tax 15,275,000

Provision for profit tax 1,488,577.09

Profit After tax 3,862,575.75

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 19. Projected Cash Flow Statement
Description Project

Cash Inflows
Owner's Equity 975,000.00
Bank Loan 6,500,000.00
Net Profit 3,862,575.75
Depreciation
Total Cash Inflows 11,337,575.75
Cash Outflows
Cost of goods sold 1,451152.75
Operational expenditure 6,023,847.25
Total Cash Outflows 7,475,000.00

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 Table 1. Profit and Loss Statement of Ifa Gada & frinds Beverages Distribution
4. Loan Utilization & loan repayment

Pym. Principal Interest Total Ending

Disbursement
No. Repayment Payment Repayment Balance

6,500,000.00

1 - 224,003.63 243,750.00 467,753.63 6,275,996.37

2 232,403.77 235,349.86 467,753.63 6,043,592.6

3 241,118.91 226,634.72 467,753.63 5,802,473.69

4 250,160.87 217,592.76 467,753.63 5,552,312.82

5 259,541.9 208,211.73 467,753.63 5,292,770.92

6 269,274.72 198,478.91 467,753.63 5,023,496.19

7 279,372.5 188,381.14 467,753.63 4,744,123.67

8 289,849.00 177,904.64 467,753.63 4,454,270.57

9 300,718.33 167,035.3 467,753.63 4,153,556.34

10 311,995.27 155,758.86 467,753.63 3,841,561.07

11 323,695.09 144,058.64 467,753.63 3,517,865.98

12 335,833.66 131,919.97 467,753.63 3,182,032.32

13 348,427.42 119,826.21 467,753.63 2,833,604.90

14 361,493.45 106,260.13 467,753.63 2,472,111.45

15 375,049.45 92,704.18 467,753.63 2,097.062.00

16 389,113.81 78,639.18 467,753.63 1,707,948.19

17 403,705.58 64,048.06 467,753.63 1,304,242.61

18 418,844.53 48,909.10 467,753.63 885,398.08

19 434,551.2 33,202.43 467,753.63 450,864.87

20 433,940.12 16,906.76 450,846.87 0

- Utilize 6.5 million of the loan to expand the existing inventory and cater to increased customer
demand.

Identified Income Sources to Cover Loan and Interest Payments:

1. Operating Cash Flows:

- Utilize a portion of the company's operating cash flows generated from sales and business
operations to cover the loan installments and interest payments. These cash flows will be
allocated based on the proposed repayment schedule mentioned above.

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2. Cost Reduction Initiatives:

- Implement cost reduction measures, such as optimizing supply chain management,

renegotiating vendor contracts, and streamlining internal processes, to enhance profitability and
generate additional funds for debt repayment.

3. Increase in Sales and Revenue:

- Develop and execute sales growth strategies to increase Ifa Gada & frinds Beverages
Distribution market share and capture a larger customer base. This could include expanding
product lines, entering new markets, or launching targeted marketing campaigns to drive sales
and boost revenue. The increased revenue will contribute to covering the loan and interest
payments.

4. Profit Reinvestment:

- Allocate a portion of the company's profits towards repaying the loan, while ensuring a
balance in reinvesting funds for business growth and expansion. This approach will help generate
additional profits in the long term, contributing to the repayment process.

5. Cash Reserves: Utilize existing cash reserves or set aside a contingency fund specifically for
loan repayments. This ensures a dedicated source of funds to cover any unforeseen
circumstances or temporary cash flow fluctuations without defaulting on the loan.

It is essential to regularly monitor and evaluate the financial performance of Ifa Gada & frinds
Beverages Distribution, track progress towards repayment goals, and makes any necessary
adjustments to the plan as circumstances change. Communication and coordination with lenders
should be maintained to ensure transparency and adherence to agreed-upon terms.

5 Identified Income Sources to Cover Loan and Interest Payments:

1. Operating Cash Flows:

- Utilize a portion of the company's operating cash flows generated from sales and business
operations to cover the loan installments and interest payments. These cash flows will be
allocated based on the proposed repayment schedule mentioned above.

2. Cost Reduction Initiatives:

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 - Implement cost reduction measures, such as optimizing supply chain management,
renegotiating vendor contracts, and streamlining internal processes, to enhance profitability and
generate additional funds for debt repayment.

3. Increase in Sales and Revenue:

- Develop and execute sales growth strategies to increase Ifa Gada & frinds Beverages
Distribution market share and capture a larger customer base. This could include expanding
product lines, entering new markets, or launching targeted marketing campaigns to drive sales
and boost revenue. The increased revenue will contribute to covering the loan and interest
payments.

4. Profit Reinvestment:

- Allocate a portion of the company's profits towards repaying the loan, while ensuring a
balance in reinvesting funds for business growth and expansion. This approach will help generate
additional profits in the long term, contributing to the repayment process.

5. Cash Reserves:

- Utilize existing cash reserves or set aside a contingency fund specifically for loan
repayments. This ensures a dedicated source of funds to cover any unforeseen circumstances or
temporary cash flow fluctuations without defaulting on the loan.

It is essential to regularly monitor and evaluate the financial performance of Ifa Gada & frinds
Beverages Distribution, track progress towards repayment goals, and makes any necessary
adjustments to the plan as circumstances change. Communication and coordination with lenders
should be maintained to ensure transparency and adherence to agreed-upon terms.

6 Collateral Plan
To secure the loan for Ifa Gada & frinds Beverages Distribution, the company can offer various
not assets or additional security as collateral. Below are potential assets that can be considered:

1. Buildings:

Ifa Gada & frinds Beverages Distribution can offer Collateral Ane Dima woreda administration.

Risk Assessment:

1. Market Risks:
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 a. Increased Competition: With the expansion, Collateral may face intensified competition in
the market. Mitigation: Conduct a thorough market analysis to identify competitors, their
strategies, and differentiation points. Develop a robust marketing and sales strategy to
differentiate the company's products and maintain a competitive edge.

b. Market Saturation: Expansion may lead to saturation in the target market, reducing potential
growth opportunities. Mitigation: Diversify into new geographic regions or identify new
customer segments to mitigate the risk of market saturation. Continuously monitor market trends
and adapt the product offerings accordingly.

2. Financial Risks:

a. Insufficient Capital: Expanding operations may require a significant capital investment.

Mitigation: Conduct a comprehensive financial analysis to determine the required capital and
explore financing options like loans, partnerships, or equity investments. Maintain accurate
financial records and practice efficient financial management to optimize cash flow.

b. Foreign Exchange Risk: If expanding internationally, fluctuations in foreign exchange rates

may impact profitability. Mitigation: Hedge foreign exchange risk through financial instruments
like currency futures or options. Maintain a balanced international presence or establish local
manufacturing units to reduce exposure to exchange rate fluctuations.

3. Operational Risks:

a. Supply Chain Disruptions: Expansion may strain the existing supply chain, leading to delays
or disruptions in the delivery of raw materials or finished goods. Mitigation: Identify alternative
suppliers and establish contingency plans to ensure continuity of operations. Build strong
relationships with suppliers and implement robust inventory management systems.

b. Operational Inefficiencies: Rapid expansion may result in operational inefficiencies, leading

to increased costs and reduced productivity. Mitigation: Conduct regular operational assessments
to identify bottlenecks and streamline processes. Invest in technology and automation to improve
efficiency and reduce manual errors.

4. Regulatory Risks:

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 a. Compliance and Legal Issues: Expanding into new markets may expose Ifa Gada & frinds
Beverages Distribution to unfamiliar regulatory frameworks and legal complexities. Mitigation:
Conduct thorough research on local regulations and seek legal counsel to ensure compliance.
Establish strong internal control systems that align with local laws and regulations.

b. Intellectual Property Infringement: Entering new markets may expose the company's
intellectual property to infringement risks. Mitigation: Register trademarks and patents in
relevant jurisdictions to protect intellectual property rights. Monitor the market for any potential
infringements and take legal action if necessary.

Regularly review and update the risk assessment document as the business expansion progresses
and new risks emerge. Implement robust risk management protocols to mitigate potential risks
while maximizing the opportunities presented by the expansion plans.

7 Legal and Regulatory Compliance

Ifa Gada & frinds Beverages Distribution is committed to complying with all relevant laws,
regulations, licenses, and permits enforced by the Ethiopian government. The company ensures
adherence to the following legal and regulatory requirements:

1. Business Registration:

Ifa Gada & frinds Beverages Distribution has completed the necessary business registration
process as per the Ethiopian Companies Law. The company is incorporated and holds a valid
Certificate of Incorporation, along with an up-to-date commercial registration certificate.

2. Tax Compliance:

Ifa Gada & frinds Beverages Distribution complies with all tax-related obligations under the
Ethiopian Revenue and Customs Authority. The company registers for and pays taxes, including
corporate income tax and VAT, as per the tax laws. Regular tax filings and payments are made
within the prescribed timelines.

3. Employment Laws:

Ifa Gada & frinds Beverages Distribution adheres to Ethiopian labor laws concerning
employment contracts, working hours, wages, social security contributions, and occupational
health and safety. The company ensures fair and equal treatment of employees, adhering to
minimum wage requirements and providing safe working conditions.
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4. Environmental Regulations:

Ifa Gada & frinds Beverages Distribution is committed to environmental responsibility and
sustainability. The company complies with relevant Ethiopian environmental regulations,
including waste management, pollution control, and conservation measures. Environmental
impact assessments are conducted for new projects or expansions, ensuring compliance with
local regulations.

5. Intellectual Property Protection:

Ifa Gada & frinds Beverages Distribution respects intellectual property rights and complies with
Ethiopian laws related to trademarks, copyrights, and patents. The company takes necessary
measures to protect its proprietary information, products, and brand, including filing applications
for trademarks or patents when applicable.

6. Licensing and Permits:

Ifa Gada & frinds Beverages Distribution obtains all necessary licenses and permits required for
its operations. This includes licenses for manufacturing, import/export permits, and any industry-
specific permits or certifications mandated by Ethiopian authorities. The company ensures timely
renewal and compliance with the terms and conditions of these licenses and permits.

7. Consumer Protection:

Ifa Gada & frinds Beverages Distribution pays utmost attention to consumer rights and follows
Ethiopian consumer protection laws. The company provides accurate product information,
honors warranties, and handles customer complaints in a timely and fair manner. Ifa Gada &
frinds Beverages Distribution prioritizes customer satisfaction and aims to exceed consumer
expectations.

To ensure ongoing compliance, Ifa Gada & frinds Beverages Distribution maintains a dedicated
legal team or outsources legal services to stay updated with the evolving legal and regulatory
landscape in Ethiopia. The company conducts regular internal audits to assess compliance,
address any identified shortcomings, and implement corrective measures promptly. Ifa Gada &
frinds Beverages Distribution committed to a strong culture of compliance and ethical business
practices.

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 Conclusion and Recommendation

As clearly shown in the business plan report, the business is found to be feasible socio-
economically, financially and ecologically. Thus, the business deserves to get giving priority in
offering the requested loan financing for the further expansion of the business.

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