MODERN MIXED FARM

DEVELOPMENT

PROJECT PROPOSAL

PROMOTER: - Mr. JEMAL ALIYE AHMED

Sepember, 2023
Dire dawa, Ethiopi

TABLE OF CONTENTS
 1. EXECUTIVE SUMMARY

In light of the current enabling policy environment formulated by FDRE for

private sector development both at national and regional level, create a
favorable condition for many foreign and domestic investors to invest their
capital in various sectors of the economy.

Thus, by realizing the current enabling investment climate in Ethiopia in

general and the investment opportunities in service sector in Dire Dawa
Administration in particular, the promoter of this project Mr. Jemal Aliye
Ahmed has planned to be engaged in establishment of Modern Mixed
Farm project.

The total investment capital of the project is estimated to be Birr

5,000,000 of which Birr 4,700,000 is allotted for fixed investment while
the remaining Birr 3,000,000 will be used as initial working capital.
Concerning to its financial source, Br. 1,500,000 i.e. (30%) will be
covered by the promoter and the remaining Br. 3,500,000 i.e. (70%) is
covered from bank loan.

The specific area proposed for the establishment of this project in Dire
Dawa administration specifically in Asaliso. The required land for this
project is 50Ha.

The project will accord employment opportunity for over 45 Ethiopian

nationals and will generate Birr 1,029,935 average annual income for

government revenue in the form of tax. The compatibility and harmony of

the project with both internal and external environments and its strong

organization and management plan make this project to be economically

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 viable, socially desirable financially liquid and technically feasible at large.

Hence we recommend this project to be implemented as soon as possible.

In General The promoter of this investment project to be forwarded this

proposal to the dire dawa administration to acquire the required Land for

this project.

2. INTRODUCTION

A good investment climate fosters productive private investment.

Investment is the engine for growth and poverty reduction. It creates
opportunities and jobs for people. It expands the variety of goods and
services available and reduces their cost to the benefit of consumers. It
supports a sustainable source of tax revenues to fund other important
social goals. Moreover, many features of a good investment climate
including efficient infrastructure, courts, and finance markets improve the
lives of people directly, whether they work or engage in entrepreneurial
activities or not. Improving the investment climate, the opportunities and
incentives for firms to invest productively, create jobs, and expand is the
key to sustainable progress in attacking poverty and improving living
standards (World Bank, 2005).

Despite the fact that, the significant role the private sector would play in
promoting national and regional development in the past few decades in
Ethiopia, the prevailed policy environment that has highly discouraged
the participation of private investors both foreign and domestic was made
the potential to be far from relaxation. This has resulted in hindering
national and regional socio-economic progress in almost all sectors of the

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economy revealing the existing low productive capacity of the economy
and significant socio economic losses in various dimensions.

Recognizing the extent to which the past policy environment has highly
impeded the development of the national economy and the necessity to
promote private sector participation in various of investment ventures
that are believed to be ,more rewarding and compatible with me current
national and regional development objects and priorities the new
investment policy in the country has open the wider opportunity for
private sector participation.

Based on this, at present the private sector has started to mobilize and
invest their knowledge and financial resources in various investment
activities, which they assumed to be beneficial for them and to the
country.

3. ANALYSIS OF PROJECT AREA

3.1 Back Ground

Geographically, Dire Dawa administration lies within 9 0 27' and 49 0N

latitude and and 41 0 38' and 21 0 19'E longitude. The city of Dire Dawa is
found at a distance of 501 kms far from Addis Ababa to the East and 306
kms far from Djibouti to south directions by road. The proximity to
Djibouti made Dire Dawa an outlet for export and inlet to import for the
eastern part of the country. Neighboring regions of Dire Dawa are the
Somali region in the North and West, and Oromyia region in the East and
South directions.

Dire Dawa City Administration is one of the two urban dominated

chartered administrations in Ethiopia. It has its own Charter established

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by Proclamation No. 416/2004. The city is divided into 9 Kebeles that are
the lowest administrative units. The Administration is executing and
implementing its municipal and state functions though its formally
established institutions. Therefore, it is facilitating, supporting and
enabling the investment and development initiative of the administration
through its institutions and related legal and organizational instruments.

Regarding the social situation and characteristics of the population, Dire

Dawa serves as a home for people from nearly all parts of the country.
According to the Population Census Report of 2007 prepared by CSA, the
population of the city consists of people from nearly all ethnic groups of
the country. Of these groups, the Oromo, Somali, Amhara and Southern
Nations and Nationalities, Peoples constitute the larger composition in
their population size.

The general demographic situation of Dire Dawa City shows that there is a
fast population increase both from natural and migration causes. The
prospect for the speeding-up of the momentum of the population growth
of the city in the future is also higher as the size of the young age
population at present dominates its population structure. The total
population of Dire Dawa Administration, as of July 2011, was projected to
be 377.000. From this, the population of the urban was projected to be
256,774, in the same year.

3.2 Infrastructure and Land Availability

The availability of well developed infrastructure and fair priced land are
among the conductive climate of investment opportunities in the city.
Telephone, road, power and waste disposal systems are major
infrastructural provision of the city. The city also has land resource which

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can be accessed for investment activities in the inner parts and expansion
zones of the city.

A) Land availability and management: According to the DDA

structural plan (FUPI 2004) appropriate sizes of land has been allotted for
service activities. The study depicts that efforts have been done to
reserve sufficient areas in both the existing built-up and the expansion
areas that will lead to the provision of balanced service at all levels of the
city. Accordingly, the total area allocated for service is about 311ha.
Considerable size of this land has been allotted for commercial services
like rea estate development. The lease period for commercial activities
has been set as 70 years. The arrangement of the lease payment is based
on advance payment of lease 20%.

B) Physical Infrastructure and Facility

Road: Dire Dawa Administration has about a total road length of 346.24
km with different hierarchy and types and extended to different parts of
the city. From this 249.9 km is gravel, 56.94 km coble stone and 39.40 km
asphalt road of different standards. Other than this, the city is connected
to surrounding regions, other parts of the country and neighboring
countries with gravel and asphalt roads. Therefore, the area is internally
and externally accessible and has proper links.

Telephone: According to Dire Dawa Administration Statistical Abstract,

dire Dawa, (2011), the current users of telephone service exceeds
113000. The GSM prepaid and post paid users are 110539 while the fixed
telephone users are about 12300. Dial up internet users are 393. Both
private and business users have the larger number of the constituents.
The existing service providing capacity is also higher to accommodate
diversified Telecom users. Therefore, Telecom service is accessible to
fulfill the project requirement to the standard.

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Electricity: The major source of Dire Dawa city electricity supply is the
connected lines of the national grid system. According to According to
Dire Dawa Administration Statistical Abstract (2011), there are 25066
private, 259 industrial, 338 government and 3613 commercial customers
of electric from Dire Dawa substation. Based on the 200m2 transformer
coverage assumption, the total coverage of electricity in the built up area
of the city is estimated 53.3 %. The inner part of the city has more access
than the expansion areas. As this project will be established in the vicinity
of city, power access will be better, from connected line.

3.3 SERVICE FACILITIES

The major services required by the project includes, transport, training,

financial, and market aspects. The city is highly benefiting from road, rail
way and airline transport services. Both freight and passenger transport
services rendered to different parts of the country and to the neighboring
counties.

There is TVT School administered by the government. Besides, there is

one big public university. Different private colleges and training center
are found in the area. Therefore, necessary man power capacity building
supports can be availed at the spot. Regarding the financial institutions
there are 20 banks and insurances found in the city. Therefore, loan and
risk transfer supports can be found within the project area.

LABOR FORCE POTENTIAL

Labor is an important element of the project requirements. The

unemployment situation of Dire Dawa city is higher compared to the
situation of the major towns of the country and the overall country total.

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 Currently the unemployment rate of Dire Dawa City is estimated at 22.9
%. This includes educated unemployed too. Therefore, the job seeker has
significant number. On the other hand there are numerous public and
private training centers engaged in offering different short and medium
term technical trainings.

4. BACK GROUND OF THE PROMOTER

Mr. Jamal Aliye Ahmed is a dynamic business man engaged in various

business lines. He has very good entrepreneur skills and long year of

experience in generating, managing and running various business lines.

The promoter is planning to engage in investment activities that benefit

the nation and the city, Dire Dawa. The promoter in its part believes that

to participate in Modern Mixed Farm in Dire Dawa city and hence there

is strong self-interest by the promoter in fostering prosperity in this

country in general and in dire dawa Administration in particular.

5. PROJECT RATIONALE AND OBJECTIVES

5.1 PROJECT RATIONALE

Conducive socio-economic development policy and stable political

environment are vital for a country to attract private investors. The very

fact that Dire Dawa Administration is well endowed with easily available

ground water and have land suitable for the feed for animal fattening,

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horticulture and dairy farm. Furthermore the presence of demanding

market for finished (fattened) animals and dairy farm in the Middle East

countries and accessibility to different part of the country as well as

neighboring country for export are among the attractive factors of

investment in sitty zone Administration.

This urban population was not accompanied by the required respecting

development in the socio-economy in infrastructures of the city. All these

contributed to the prevailing problems of extreme urban poverty and other

social evils such as poor access of the majority of the people to

employment opportunities and other social amenities.

Currently, the federal democratic republic of Ethiopia paves the way for

easy access to any private investor to make is investment in any social

and economic development sector with no capital restriction by perusing

free market policy. Changes and adjustments made on various supporting

policy and regulations undoubtedly enhance the revival and smooth

implementation of development projects. Recognize these facts

necessitated this project idea and be given prior attention.

5.2 PROJECT OBJECTIVES

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The general objective of this project is to establish mixed farm in Dire
Dawa Administration to generate profit, and creating job opportunity to the
society those who are living within the Administration.

 Creating job opportunity to the society

 Generate optimum profit to the owner

 To utilize the opportunity of the city in commercial farm.

6. PROJECT TECHNICAL STUDY

6.1. The project Description

6.1 Dairy farm &livestock fattening

The proposed project is aimed at collecting sheep, cattle, and camel from
neighboring regions to the center and feed well balanced ration till they
attain the favorable body condition and complete the required quarantine
period. Including the 21 days for quarantine inspection and the time
required for collection, the animals are expected to stay75-90 days of
body conditioning (finishing) period on each cycle.
The project has a plan of exporting 14,600 sheep, and 6,500 cattle on the
first year and increases the volume of each every year to attain the export
of 21,500 sheep and 14,600 cattle on the tenth year. And also this dairy

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and fattening farms project is purely a private one intended to give service
to those consuming these products in Households, hotels, restaurants,
tearooms, bars, and other private and public organization.
There is a clear indication the consumption of milk by urban population is
growing from time to time. Based on understanding the establishment of
dairy farm is planned. There is also an increasing demand for milk and
fattening animals in the urban center, restaurants, for meat. The total land
area required for the implementation of this project estimated around 20
hectare. This land will be gained through leased policy of the
administration.
6.2 Horticulture farm
6.2.1 Production management
Crop rotation: - Better results could be achieved by rotating a given
crop between two or three farm plots. It is recommended that the
same or closely related crops should not be planted on the same
ground. This will not only deplete the soil, but also favor the build-up
of diseases and insects on that particular crop. Crop rotation is
equally important for fruit crops. As a general recommendation the
land should be cropped with a vegetable rotation following a fruit
crop for minimum period of 3 years before any fruit crop is replanted.
Irrigation water application method selected: - Without irrigation
application vegetable production would be impossible for the area
like Dire Dawa Administration especially during the months of
October to March where the dry spell reach the temperature. Even
during the rainy seasons of April to September, dry periods of two to
three weeks are common where the soil moisture drops below field
capacity which calls for supplementary irrigation while it is vice versa
for the deep rooted crops. Heavy irrigation will be applied once a
week for deep rooted crops while two to four times light irrigation per
weeks is recommended for shallow rooted crops. Furrow and basin

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 irrigation are the two common methods of irrigation water application
to the fields. Basin irrigation is more practical and applied to fruit
trees such as papaya, Banana, and Orange. Smaller size basin will be
applied which facilitate efficient utilization of the available water as
per sandy loam nature of the project area soil. This will help to
minimize deep percolation losses in reducing operational cost and
increases irrigation efficiency.
Weeding: - The principal purpose of cultivation is control of emergence
and overwhelming weeds. These weeds are harmful which complete
with the crops for water, and nutrients. The result of this competition
is fully reflected on the productivity of the crop, its quality and
appearance to win market demand. In addition, weeds often carry or
harbor diseases and insects. So early and timely shallow cultivation
to control weeds is considered to be one of the important cultural
practices, Applying cultural practices at most is preferred to minimize
environmental counter effect of chemical application protection
methods.
Disease and insect control: - There are many diseases and insects that
attack fruits. Some of these diseases and insects are specific only to
one crop type while others may attack several crops. Therefore
control measures would be practiced to keep on the effects of
disease and insects. Some of the control practices include crop
rotation, destruction of infested plants and residues, use of resistant
varieties and spraying and dusting with fungicides and insecticides.
Planting System: - Direct sowing and transplanting from nursery will be
the two major planting systems that would be applied based on the
requirements of each horticultural crop.
a. Direct Seedling: from the already selected vegetable crops carrot and
tomato will be grown to maturity from the seeds planted in the field.
The depth of seedling varies according to soil type, size of the seed and

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 moisture status of the soil. Thinning of seedlings is an important
operation in the direct seedling method of establishing stands.
b. Trans-Planting: transplants are raised in the nursery with the two
common methods, i.e. bare root on seedbed and in plastic tubes of
different size as per the soil nutrient condition and the plant
physiological characteristics. Where bare root seedlings produce the
first two leaves vigorous once are identified at a spacing of 15-20 cm
with application of thinning practice. Plastic tube seedlings will be
applied for crops that are difficult to transplant bare root such as seeds
of high value ex. “Solo” papaya.
c. Harvest and post harvest practices: these are fully considered in
this project study to minimize the problem poor quality product and
short life storage of the crop. To ensure the product meets market
requirements in general and export in particular this practice should be
part and parcel of the farm management irrigation production with
handling within the farm and during transportation. Mechanical
damage, physical and physiological changes frequently pre-dispose the
products to attack. Hence, poor quality product will imply failure to
meet the requirements and loss reliability from the customers and
finally will be put out of the market. The following are factors
considered to improve product handling of the farm.

 Pre-harvest factors (planting material i.e. the seed type and

varieties, climatic factors, cultural practices, chemical application
and weeding )
 Harvesting and field handling. For most horticultural crops, once it is
harvested it begins the process of decay. Hence, consideration is
given to the maturity stage, harvesting method and tools, skills,
transport and storage facility of the farm.
 Packing & transportation to its destination

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  Temperature management of the particular crops as per their
physiological requirements in addition to market.
 Based on the above necessary requirements the farm had the
facilities of refrigerated room, skilled man power to follow the pre
and post harvest standards and refrigerated transportation to the
destination market of the perishable crops.

Horticulture cost

Project Years
N Description 1 2 3 4 5 6 7 8 9 10
o
Purchase of
1 vegetable seeds 260 290 320 320 370 370 370 370 370 370
Purchase of
2 fruit seeds 300 300 340 370 370 370 370 370 370 370
Purchase of
3 chemicals/fungi 240 240 240 280 280 320 320 320 320 320
cide ,
insecticide

4 Miscellaneous 950 950 950 950 950 140 140 140 140 140
0 0 0 0 0
175 178 185 192 197 246 246 246 246 246
Total 0 0 0 0 0 0 0 0 0 0

6.3. Project location and land requirement

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The specific area proposed for the establishment of this project is in Dire
Dawa where there is suitable land for this project. The promoter of this
investment project to be forwarded to the dire dawa Investment office to
acquire required License for this project.

The specific area proposed for the establishment of this project in Dire
Dawa administration specifically in Asaliso. The required land for this
project is 50Ha.

7. PROJECT ORGANIZATION AND MANAGEMENT

7.1 The basis of organization and MGT

Organization is a managerial process of planning, coordination and control

of company on and off site activities, resources, process and output
effectively and efficiently. Organization is among the most important tolls
which enable all stakeholders to have shared understanding of company
objectives, act independently and yet collectively to achieve common
goals. Without appropriate and sound organization and management. It is
not possible to benefit from available resources and satisfy the demand for
the output of the business. Inability to benefit from optimal utilization of

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resources and satisfy the needs and requirements of customers would
definitely lead to failure planned business objectives. The argument which
states that there is no bad business but bad management clearly defines
the roles and significances of organization and management. Under
normal condition every manager needs his or her company to be
profitable, competitive and maintain leadership position. To successfully
achieve the above ambitions of managers, attainment of management
efficiency and effectiveness is a must. To this effect existence of sound
organization and management capacity has found out to be an important
tool.
Analysis if fundamental aspects of optimal organization and organizational
capacity assessment tools and procedures reveal that; existence of clearly
identified and defined company vision, Missions, Values, Short nad long
term objectives including the following are among major indicators of
sound organization and management.
 Existence of shared understanding among company stakeholders
 Existence of compatibility of company missions with company
organizational structure
 Existence of fully staffed and operational organizational structure
 Existence of clearly identified and defined lines of authority,
responsibility, lines of communications and guide lines.
 Existence of clearly identified and defined administrative and
working systems procedures and guide lines
 Existence of leadership, management and supervisory skills,
experience and capabilities.
 Existence of adequate and desirable professional, technical and
other support staff etc.
Business processes are central to the functioning of an organization. Yet,
they have been neglected for a long time in managerial studies mainly due
to the fact that departments in companies are structured in a functional or

Page 16
product oriented way. Many companies, under business process
improvement are breaking away from this type of organizations and intend
to establish process based organizations in order to cope with the
increasing complexity and dynamics of the economic environment.
To distinguish process based organizations from other types of
organizations it is essential to start with the definition of business process.
Davenport (1993, p.5) defines a business process as <<... a structured,
measured set of activities designed to produce a specific output for a
particular customer of market>>. Hammer and champy (1993, p.35)
defines. <<... a business process as a collection of activities that takes
one or more kinds of input and creates an output that is of value to the
customer>>.

Functionally organized companies have considerable problems taking a

customer’s perspective, because process that produce value for the
customer. E.g fulfilling funds transfer order cut across several
departments. However, the latter only report to higher level managers, so
that a customer perspective can be realized only at that level. Frontline
managers will be reluctant to take the same perspective since they are not
accountable for the outcomes of other departments taking part in the
same process.

Companies organized along product lines also have problems taking

customers perspective as well. A product structure leads to poor
coordination across product lines which are a major drawback when
divisions serve the same customers. Information systems in different units
are likely to be incompatible with each other, resulting in a fragmented
approach of customers, which in turn leaves lost of possibilities untouched
to create value from them. Because most product divisions are functionally

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structured the same shortcomings o functionally organized companies are
applicable on the business level of product-based companies.

7.2. Workflow process organization & MGT

Based on the above basic principles and procedures the A.S.K International
P.L.C Business Centre real estate development project workflow process
has planned to be organized and managed.
A Operations Core Process
The parking and garage, the shopping, offices and hall rental day to day
operations shall be carried out by operations/ customer core process. The
operations core process shall have retail customer group, corporate
customer group, engineering and technology group and treasury group.
B. Development Core Process
The development core process shall be entrusted in creating fertile
ground, designing and developing systems and strategies which would
help the company to expand business development horizons, markets,
customers etc. Accordingly, this core process shall have the following
business groups
Research and development group
Business development group
Market new and development group
Systems and strategies design and development
C Support and Control Core Process
The support and control core process shall be responsible to provide
necessary inputs, facilities enabler and related support to the operations
and development core process and ensures the validity of their
performance against pre-planned budget and use of resources, etc at
large. Accordingly, the support core process shall have the following major
business groups.

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 Human resources and personnel mgt group
Finance and accounts mgt group
Materials, property and logistics mgt group
Supervision and control business group

7.3. Project admin levels

The entire project activities, resources, process and output shall be

planned, coordinated, implemented managed and controlled through three
management and administrative levels.
A The Owners/Promoters
The general meeting of the project promoters shall be the top
management and ultimate decision making organ. The major duties and
responsibilities of this administrative level shall be,
- To provide strategic plan and leadership support to the project
general management
- To appoint the general manager and supervisory level managers
- To determine and approve the wages, salary and benefits of the
general manager and supervisory level managers
- To approve the plans and budget proposals of the general
management office
- To review and comment on the performances and achievement
results of the project.

B. General management office

The project day to day activities shall be planned, coordinated and
controlled by the general manager. General manager shall be reporting to
the general meeting/president of the promoters. General manager shall be

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 responsible to monitor, control support and facilitate the individual and
team efforts of all core process staff
C Supervisory MGT level
There shall be three supervisory management level operations, marketing
and business development, support and control core process heads/team
leaders. The supervisory level managers shall be reporting to the general
manager
Each supervisory level manager shall be responsible to plan, coordinate
and control the activities, resources; process and output of his/her
respective core process in an efficient, effective and economical manner.

7.4. Project Organization Structure

Promoters

G.M

SEC

Operations Support Development

Managers Manager Manager

Retail Corporate HRD Finance Business MKT

DVT DVT

Engineering Treasury Materials Control System R&D

DVT

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Page 21
 8. PROJECT COST ESTIMATES

The total investment capital of the project is estimated to be Birr 5,000,000 of

which Birr 4,700,000 is allotted for fixed investment while the remaining Birr
3,000,000 will be used as initial working capital. Concerning to its financial
source, Br. 1,500,000 i.e. (30%) will be covered by the promoter and the
remaining Br. 3,500,000 i.e. (70%) is covered from bank loan.

8.1 Fixed cost

Office furniture and equipment

The estimated cost of office furniture and equipment required by the proposed
project office is nearly birr 665,000. The detail of that are required for office
furniture described as follows.

No Description Unit Qty Unit cost Total

cost
1 Chairs No 10 10,500 105,000
2 Office table No 10 11,850 118,500
3 File cabinet No 5 20,500 102,500
4 Computer with printer No 10 30,000 300,000
5 Stapler No 10 250 2,500
6 Puncher No 10 150 1,500
7 Refrigerators No 1 25,000 25,000
8 Others No Estimated 10,000 10,000
Total cost 665,00
0

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Machinery and Equipment

The total cost of machinery and equipment is estimated at Birr 4,000,000. Detailed
list of machinery and equipment is given below.
List of Machinery and Equipment requirement
No Description Unit Qty Unit Total cost
cost
1. Truck (130 quintal No 250,000
capacity) 500,000
2. Medical equipment’s No 1,861,0
00 722,000
3. Electric power No 1,756,0
generator 00 1,048,000
4. Submersible motor No 785,000 570,000
5. Feed mixer No 1,780,0
00 1,560,000
6. Milling machine No 950,000 1,040,000
Total cost 4,000,000

Infrastructure and Installation costs

The cost of infrastructure very essential for all sectors that involves providing more
services without interrupting their work and it is also very essential for the
development projects. Because, without this facilities no one construct or
implement their projects. That is why the government and the city administration
give more emphasis for the social sectors. To make the project runs at its optimum
the basic infrastructure as electric power supply, telephone services water line, etc
have to in place with an estimated cost of installation birr 210,950

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Installation cost
N Description Total cost
o
1 Electric installation 133,200
2 Telephone line installation 25,000
3 Fax line installation 8000
4 Internet line installation 9,250
Water line installation 35,500
Total cost 210,950

8.2 Operational cost

The plant will create job opportunities for 45 persons. The detailed manpower
requirement and the estimated annual labour cost including fringe benefits is
mentioned in the table below. The total cost of manpower including fringe benefit
is estimated at Birr 459,360.
Sr. Description Req. No. Monthly Annual
No Salary Salary
. (Birr) (Birr)
1 General Manager 1 5000 60,000
2 Secretary 1 1200 14,400
3 Quality Controller 1 2500 30,000
4 Personnel 1 1800 21,600
5 Accountant 1 2000 24,000
6 Sales man 1 1500 18,000
7 Production Supervisor 1 3000 36,000
8 Machine Operator and 3 2500 30,000
technician
9 Production Clerk 1 1400 16,800
10 Store Keeper 1 1,000 12,000
11 Purchaser 1 1600 19,200

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 12 Guard 2 900 10,800
13 Daily labourer 20 10400 124,800
Total 45 34,800 417,600
Employees’ Benefit 3,480 41,760
(10% of Salary)
Grand Total 38,280 459,360

Training Requirement

The quality controller, production supervisor, technician operators should be

given on-the-job training for a duration of two weeks by experts of the supplier
of the machinery and equipment. The estimated training cost is Birr 300,000.
Utilities
The major utility required by the plant is electricity,water and telephone. Annual
electric consumption of the plant, at 100 per cent capacity utilization rate is
estimated at 60,000 kWh and the estimated cost, at the rate of Birr 3.25 per kWh,
will amount to Birr 195,000. And also Potable water will be required for personal
use and quality control laboratory. Annual water requirement is estimated to be
10,000 m3. Annual cost of water, at the rate of Birr 3.00 per m 3, amounts to
Birr 30,000 and the annual utilization of telephone 8000 at rate of 1.25. The total
annual cost of utilities is estimated at Birr 10,000.

No Description Required Qty utilized Unit cost Cost per

unit per year year
Electric power Kw 60,000 3.25 195,000
Water M3 10,000 3.00 30,000
Telephone period 8000 1.25 10,000
Total cost 235,000

Other operational expenses

Description Annual

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 expenses

Worker uniform 1,500

Stationary materials 750

Cleaning items 990

Cleaning materials 880

Repair and maintenance (3% of fixed asset) 133,194

Total cost 137,314

Project Cost Summary

No Description Cost in Birr

1 Fixed Investment Cost 4,700,000

 construction ,civil works and 4,000,000

machineries
 land lease cost 1,4890

 Installation 232,286

 Office furniture and Equipment 705,053

 Other fixed assets 120,000

2 Operational cost 3,462,789

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  Employee salary &wages 131,400

 Utilities expenses 215,310.50

 Training requirement cost 94,300

 Other operational cost 94,240

 Raw material cost 4,927,538

3 Working capital 10% 300,000

4 Project total cost 5,000,000

9. BEGINNING BALANCE SHEET

1. Asset

Current Asset ----------------------------------------- 300,000

Fixed Asset -------------------------------------------- 4,700,000

Total Asset ---------------------------------------------------------5,000,000

2. Liability

Current Liability-------------------------------------------------
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 Long term liability --------------------------------------------3,700,000

3. Capital

Owner’s Equity ---------------------------------------------- 1,500,000

Total capital -------------------------------------------------------- 5,000,000

10. PROJECT REVENUE ESTIMATES

Estimated Revenue/ Annual service given by the project

No Description Unit Averag Project Year
e unit 1 2 3
180,0 252,00 403,20
00 0 0
136,0 190,40 266,56
00 0 0

Estimate of Annual revenue in the project year

No Description Uni Avera Project Year
t ge 1 2 3
unit
14,400,0 20,160, 32,256,0
00 000 00

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 10,880,0 15,232, 21,324,8
00 000 00

Total Revenue 25,280,0 35,392, 53,580,

00 000 800

11. Profit and Loss Statement of the Project

No Description Project Year

1 2 3
Total Revenue 25,280,0 35,392,00 53,580,80
00 0 0
Sales tax 505600 707840 1071616
Net Revenue 24,774,40
0 34,684,160 52,509,184
Less: Operational Expenses
 land lease 74,400 74,400 74,400
 Employee salary and 459,360
wages 505,296 81,840
 Training payment 300,000 330,000 555,826
 Utilities expenses 235,000 258,500 363,000
 Cost of Raw material 2,001,880 2,202,068 284,350
 Others 137,314 151,045 2,422,275
 Depreciation 3,002,125 3,002,125 3,002,125
Total Expenses 6,210,079 6,523,434 6,783,816
Gross profit 18,564,32
1 28,160,726 45,725,368
Income tax 35% 6497512.3 16003878.
5 9856254.1 8
Net Profit 12,066,80
9 18,304,472 29,721,489

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 12. Depreciation
No Description Original Method Expect Annual
value ed life depreciati
on
Building & 9,850,00 Straight line 30
construction 0 years
328333
38,860,0 Straight line 15
00 years 2590666
Office furniture’s 665,000 Straight line 8 years 83125
Total
depreciation 3,002,125

13. ENVIRONMENTAL AND SOCIAL ASPECT OF THE PROJECT

The proposed project has no environmental impact rather this type of investment
project could help to mitigate the environment in general and climate of the
project area in particular. Thus, this is an environmental friendly project that will
contribute much for the improvement of the environmental through using modern
technology. The project location is also ideal for the disposal and treatment of
wastes and the promoter is prepared to be a minimum polluter and environmental
friend through providing incentive to local people to grow seedling and manage
accordingly. On the other hand the positive social impact of the project on the
society is significant. The project creates employment opportunities for 45
peoples.
14. PROJECT IMPLEMENTATION STRATEGY
14.1 Project Formulation and Establishment
A. exchange of views and creating shared understanding

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The project proposal and strategic planning management document shall be
distributed to all potential stakeholders such as concerned members of the family,
government institutions and to selected financer with a view of creating satisfactory
exchange of views and promote shared understanding in advance.
B. Determination of establishment phase target activities
During the project formulation and establishment phase, the following major tasks
are required to be successfully accomplished.
Registration, licensing and acquisitions of operations commencement authorization
Acquisitions of construction permits
Preparation of every legally required document
Appointment of strong and capable implementation team
C. Promotion and Fund Raising
To prepare promotional strategic planning mgt guidelines
To prepare promotional ideas, materials, logistics and facilities
To conduct promotional tasks and build strong constituency of support
To evaluate the process of promotion and progress
To prepare fund raising strategic planning guideline
To assess and identify major project donors
To assess and identify the interests, rules, regulations and conditions of targeted and
prioritized financers
To prepare all necessary requirements of financers and apply for fund
To undertake follow ups and secure fund
D. Organizational Builds up
Establishing and organizing project office
Preparing project working and administrative systems and procedural guidelines
Commissioning construction
Purchase of all on and off site durable and consumer goods
Staff recruitment, orientation and employment
To conduct pre operational trial runs, checking the validity of all activities

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 14.2 Budgeting Implementation strategy
A. Budgeting concept Definition
The realization of any strategic decision needs proper identification and
understanding of project objectives, and necessary activities. Moreover,
determination of time phase out process and resources to the completion of each
task which calls for budget making process and existence of effective strategic
budgeting is a key implementation strategy for the success of project objectives. In
consideration to the significance of sound budgeting system and procedures, it has
been selected and proposed as one of the best implementation strategy.
There is no doubt that the internal and external activities, resources, process and
output of any organization should be managed effectively and efficiently. To attain
short and long term objectives of the project the management must chart the entire
tasks in advance in a comprehensive and coordinated manner. A budget is a
comprehensive and coordinated plan expressed in financial term for the operation
and resources of a project for some specific period in the futures. A budget is the
plan of project’s expectation in clear & formal terms to avoid confusion and to
facilitate their attainability. Thus the roles and significances of budgeting are;
 To state the project’s expectation in clear and formal terms, to avoid confusion and to
facilitate their attainability
 To communicate expectation to all concerned
 To provide a detailed plan of action for reducing uncertain and proper direction of
institutional group and individual efforts
 To provide a means of measuring and controlling performance
 To coordinate all institutional, group and individual efforts towards the success of
project objectives.

Thus, it is inconsideration to the above roles and significance of budgets and

budgeting that we select it as the best implementation strategy.
B kinds/types of budgets & budget setting process
Although, there are various kinds/types of budget items, to simplify it, the types of
major budgets have been categorized in to four.

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Sales budget
Operations budget
Financial budget
Capital budget
Statement of Smart objectives and goals is probably the starting point and pace
maker for all other types of budgets. The sources of sound project objectives/goals
are again the internal and external environments. Analysis of the patterns of project
internal and external environments, pinpointing project opportunities and challenges
with a focus on the demand for the project services, existence of external
opportunities and internal capabilities, it is pertinent to define project objectives and
goals in clear and formal terms at the outset.
The objectives and goals of any project emanate the operations, financial and capital
budget needs. The project corporate level objectives and goals, operations and
capital budgets are required to be further apportioned for all core process which
together form corporate budget.
The process of setting sound budget is a complex and complicated process, because
of the involvement of various factors in it. However, budget setting process starts
with the determination of limiting factors at the outset. The most important project
limiting factors are,
The demand for the project services
The economic life of the project
Existence of factor and non factor inputs
External opportunities supporting the project ideas and internal capabilities to
establish, operate, manage and control etc are some among others. Based on the
above limiting factors, the first step of budget setting process starts with definitions
and establishment of project basic objectives and goals
Second step: at this stage, it is necessary to identify and describe all on and off site
activities necessary to successful achievement of stated objectives and goals,
determination of logical sequence of activity execution process, time phase out to
complete each task in clear and unambiguous terms. Third step: at this stage, it is

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 very important to assess identify and define the resource needs of all activities,
measure, quantify and state in clear and formal terms.
Fourth step
Group all activities according to their similarities
Establish major budget centers
Allocate the resources required to major and sub budget centers
Prepare objectives/goals, operations, financial and capital budgets at corporate, core
process and sub process and assign centre of responsibilities
B. ESSENTIALS OF BUDGET MGT
To make the objectives and purposes of budgets productive and positive impact
generating we propose the following budget administration. It should be well
recognized that corporate and functional levels budgets are prepared by line
executives while the organization and implementation of budgeting is a staff
function. Joint efforts of all line execution and a staff function in the preparation,
administration organization and implementation of budgeting should be done in a
coordinated manner. To this effect there should exist the following systems of budget
administration.
The budget committee consists of all members of the management committee which
bring together all activities of different project functional unites.
The primary function, of the budget committee is to decide on the general policies of
the project and directs all project functional unites to prepare their respective
budgets.
Budget director/officer

The budget officer shall have the following tasks;

 To draw a detailed time table for the preparation of budgets.
 To calculate and consolidate individual budgets into the project master budget.
 To design and develop necessary budgeting systems and procedures.
 To design and develop budgeting formats.
 To generate accumulate and transfer budgeting parameters information data and
indicrs.

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 To undertake satisfactory exchanges among all project concerned stakeholders on
budgets and budgeting
 To educate all concerned on budget and budgeting
 To undertake monitoring evaluation and control activities
 To prepare periodic or extra ordinary budgeting reports
 To disseminate the feedbacks of budgetary monitoring and evaluation to all concerned
stakeholders
 To suggest sound and workable recommendations for immediate corrective measures
Budget manual

The budget manual is a written set of instruction which serves as a rule book and
reference for the implementation of a budget.

Budget management principles

o Existence of top management support
o Specific measurable achievable realistic and time bound goals.
o Existence of clearly defined assign ment of authority and responsibility
o Creation of canters of responsibility
o Existence of appropriate accounting system
o Budget education and effective communication
o Flexibility

14.3 PERFORMANCE MGT AND CONTROL

A. monitoring, Evaluation and control strategy

The success/ failure of any planned objectives should be known with certain degree
of accuracy. To this effect all activities, resources process and output should be
monitored evaluated and controlled timely and regularly. To undertake monitoring,
evaluation and controlling activities timely and regularly there should exist.
Clearly identified and defined description of planned objectives, outcomes output and
inputs.

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 Existence of, sound, and appropriate, indicators, which show, the success/ failure, of
the planned objective outcome, output and inputs used.
Appropriate source and means of verifying that the planned, objective outcome,
output and inputs were in accordance with/ deviated from the planned
Clearly stated important assumption with/without which the planned objective
would/would not be successful.
The role and significance of monitoring evaluation and control are briefly described
as follows.
 Monitoring

Monitoring is a continuous and process oriented information gathering, and data

mining on what has happened, who did it, when, how much, for whom etc. aimed at
measuring the magnitude, time quality and impact of the initiative. Monitoring helps
to compare the input human, material financial etc output product/service result and
the outcome (achievement against the planned tasks. Effective monitoring must be
completely integrated into all tasks. Existence of sound monitoring system, enable
organization to make appropriate and timely decision making and ensures
transparency and accountability.
 Evaluation

Evaluation is the process of analyzing information and data gathered during

monitoring process. The evaluation system helps to think critically and search into
ways of achieving desirable results. It is a periodic process of reviewing monitoring
data and drawing sound conclusion from it. Good evaluation system enables
organization to analyze the pre and post patterns of existing and future plans and
search into ways of achieving desirable results.
 Control

Control is a managerial process of detecting errors of principles system, procedures

etc aimed at avoiding resource miss allocating unemployment, fraud, wastage and all
other misfortunes which hinder the success of planned objectives. Control enables
organization to continue their production of goods/ products without jeopardizing

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 internal and external resources for better future. Thus, an integrated monitoring and
evaluation system in a single whole enables organizations optimally benefit from
available resources through satisfaction of existing and potential customers in their
best interests.
The monitoring evaluation and control system should be designed to serve both the
strategic and operational phases. The monitoring evaluation and control system
designed for both strategic and operational phases are described as follows.
This is a continuous and systematic monitoring evaluation and control of the validity
of basic assumption under which it operates. Thus, a regular and continuous
proactive check against the validity of planned strategy aimed at changing or
improving the condition of vital assumption.
Performance management and control is a managerial process of designing and
developing sound indicators parameters means and sources of verifications
necessary to measure activities resources, process and output of individuals, groups
and institutions against the targeted standards and come up with logical results
which would help to make sound decisions. Although there are numerous areas
whose performance are needed to be well managed and control, the most important
areas and performance management indicators used in laundry and dry cleaning
business are briefly identified and described as under.
Operational control strategy is designed to guide monitor and evaluate the progress
of all planned activities against their respective planned objectives as in meeting
targets representing the planning horizon. Accordingly, all planned activities shall
have the following basic system to be used as a monitoring evaluation and control
mechanisms.
Components of narrative description
 Objectives
 Outcome
 Output
 Input
Indicators that show

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  Objectives have been achieved
 Planned outcome has been attained
 Desired output has been obtained
 Input are properly allocated and employed in all terms

Source and means of verification

Relevant means and source of verification shall be clearly identified and employed
accordingly;
 Strategic planning documents
 Audit report
 Field visit and on site survey
 Past data etc shall be used

14.4 CHANGE MANAGEMENT IMPLEMENTATION STRATEGY

In connection with the application of the project strategic plan, certain changes are
inevitable and these changes may take place in a continuous/discontinuous process.
The fact that all types of changes must result in supportive, adverse or neutral
effects, necessitate management needs to identify and understand the types and
impacts of each planned changes, to be able to benefit from change offers and deal
with the challenges of changes.
In general, transformational, transactional, transitional and Incremental changes in
the project workflow process organizational culture and behavior are expected to
occur both at strategic and operational dimension of this proposal. The impact of all
of these changes should be managed in favor of the project at large
The following major implementation strategies are proposed to manage these
changes.
Work flow process

This is a targeted economy of scale process intervention, aimed at attaining cost

minimization, profit maximization, efficient service delivery and customer

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 satisfaction. To do this it is pertinent to understand the dynamics of project realities
in the changing world. To change the workflow process to desirable small scale the
following implementation strategy are proposed.
 To undertake a detailed task analysis and determine the condition, process and time
phase out for each task.
 To determine the resource requirements availability quality magnitude and cost
 Determination of technology and system requirements
 Determination of skill, profession and experience requirement
 To design and develop strategic fit and incorporating human resources into system
integration
 Acquisition of top management support.
Organizational culture change implementation strategy

Change in organizational culture refers to change in project belief, values, strategy,

purpose and expectations. Conductive conditions to cultural changes proposed are
 To create appropriate environment for team work, process focus, action oriented and
low level decision making
 Outstanding and effective trial of many alternative tools and techniques and
selecting the most appropriate
 Building the skills and competence of management and staff
 Setting standards to measure performance
 Analysis and initiating corrective measures
Behavioral change implementation strategy

Organizational behavior refers to employee individual and collective behaviors. The

most challenging task is to manage employees’ behavior towards the success of
desired changes.
The following strategies are proposed for project organizational behavioral change
implementation and management
 Involving employees in planning and decision making process
 Promotion of rewarding and incentive system

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 Promotion of employee career and skill development operational plan
 Avoiding under/over employment
 Promotion of transparent, accountable and non discriminatory data based decision
making practices
 Provision of clearly defined job description, evaluation, lines of authority and
responsibilities as well as lines of communication and information flows.
 Provision of management and leadership support and guidelines.

Staff motivation strategy

Experiences has demonstrated that the most difficult and resistance to

organizational transformation and improvement process is the behavior of employee,
unless employees are properly managed motivated and participated in the process
the efforts of achieving planned objectives would carry meaningless. Moreover, the
fact that there are various knowledge skill, experience dedication commitment sense
of ownership belongingness moral ethics honesty, reliability etc. among employees
there exist differences in their effort contributing and performance results. Employers
contributing extra efforts and time require recognition need reward and
development. Because recognition, reward and development.

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