BUSINESS PLAN FOR HOTEL AND RESTRONT OF CHAFE DONSA

BUSINESS PLAN FOR HOTEL AND RESTRONT SERVICE

PROJECT

PROMOTER: HAYLU DHABI

LOCATION: OROMIA REGION _________WOREDA

KEBELE ___________

November, 2022
CHAFE DONSA
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

Business Proposal

Hotel Beach Resort & in chafe donsa

1.0 Executive Summary ------------------------------------------------------------------------------------- 3
1.1.objective----------------------------------------------------------------------------------------------------4
1.2 Mission-----------------------------------------------------------------------------------------------------4
2.0 Situation Analysis- ---------------------------------------------------------------------------------------4
2.1 Description of business----------------------------------------------------------------------------------5
2.2 Macro Environment -------------------------------------------------------------------------------------6
2.3 SWOT Analysis------------------------------------------------------------------------------------------ 6
2.3.1 Strengths ------------------------------------------------------------------------------------------------6
2.3.2 Weakness -----------------------------------------------------------------------------------------------6
2.3.3 Opportunities-------------------------------------------------------------------------------------------6
2.3.4 Threats--------------------------------------------------------------------------------------------------6
2.4 Competition Analysis-----------------------------------------------------------------------------------6
3.0 Target Market Analysis--------------------------------------------------------------------------------7
3.1 Market Demographics --------------------------------------------------------------------------------7
3.2 Market Needs ------------------------------------------------------------------------------------------8
3.3 Market Trends -----------------------------------------------------------------------------------------8
3.4 Market Growth ----------------------------------------------------------------------------------------9
4.0 Objectives ----------------------------------------------------------------------------------------------9
5.0 Marketing Mix Strategy ------------------------------------------------------------------------------9
5.1 Marketing----------------------------------------------------------------------------------------------10
6.0 Management Team ----------------------------------------------------------------------------------13
6.1 Organization Structure------------------------------------------------------------------------------14
6.2 Other Management Considerations --------------------------------------------------------------14
7.0 Financial, Budgets and Forecast ------------------------------------------------------------------15
7.1 Important Assumptions -----------------------------------------------------------------------------15
7.2 Sales Forecast----------------------------------------------------------------------------------------15
7.3 Projected Operating Expenses------------------------------------------------------------------16-23
7.4 Projected Financial Statements------------------------------------------------------------------19-24
7.5 Breakeven Analysis --------------------------------------------------------------------------------24
7.6 Proposed Business Ratios -------------------------------------------------------------------------25

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

Business plan of Hotel and Restaurant service project profile

PROJECT TITLE HOTEL SERVICE

The main objective of project is to provided has owner on hotel

of the __________ woreda in kebele as long years’ experience
and other business sectors will help to success in this hotel and
increasing individual income business

Duration of the project 3years

Time of commencement December 2022

Area of operation Oromia region state,east shoa zone Boset ,woreda within
Olenchity around ada`a,woreda,lume woreda,amara region state,
and national and nationality.

Beneficiaries Olenchity town and four woredas rounded

Advising and coordination East shawaZone and ____ woreda .investiment

role office ,agriculture office and other relevant office

Total project cost Promoters` contribution---30%=450,000

Bank finance---%70=1,050,000

Owner Ato ___________________

Phone. 09_________

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

1.0 Executive Summary

This business plan wills Shaw how to total investment of 1,500,000 could yield cumulative net profit in
excess of 600,000 over five year period, and average monthly sale average 72,000 while maintaining
adequate levels of liquidity The Business Hotels of the wholly owned and managed properties. The
Hayilu Dhabi hotel i & restaurant will be a partnership limited liability business company in which
the major owner will have unlimited liability. The hotel and restaurant t will provide the facilities to
run a (15-20 rooms) hotel, conference rooms, restaurant and Hayilu Hotel among other services
such as business center, laundry, and others. The hotel will be convenient located to have direct
access to the beach nearby the operation facilities in East shawa zone in Boset woreda Olenchity
town, . Differentiating the kind of service that will be offered, from that of the Strategy for woreda
are poverty reduction through higher economic growth, development of human resources and
physical infrastructure, and improvement in conservation of natural resources. In this context,
hotel strategy focuses on helping further improve access to long-term financing for woreda private
sector through support for private infrastructure, capital markets development, and export-
oriented industries and services
Economy growth projection but also with the forecast growth for the hotel industry in this
particular market place.
The hotel and restaurant will require an initial funding or investments of ETB 1.5 million in
order to cover the capital investment for land, building and equipment. The hotel will
target profitability since year one; although, net cash will remain a remarkable point of
concern until the initial funding is paid back to the investors. Gross margin is expected to
hit above 30% in year owned which could be considered in line with the bank..
Our marketing strategy will allow us to communicate the brand values, develop close
working relationships with our customers and suppliers and to identify the needs of our
guests in an effective manner. Continued differentiation and growth are two goals we have
set for ourselves. Growth will take place by targeting new areas of business within both
local and national communities.
Olenchity town is located at around 65 km Addis Ababa capital city of Ethiopia and from
adama 25 km the area located for this project is around 500m2 estimation cost is
1,500,000 EB.
1.1. Objective
To attract minimum of 20 regular customer per day and making job of opportunity in the first year
The main objective of this hotel is to provide individual economy development and services to the
appoint multe framers to come investment and making opportunity of job. of strategic and high
value hotel Olenchity town , with considerations for the needs of women, youth and the
environment. Specifically the project aimed at services on a basis for individual farmers and
increasing individual farmers’ income. Provide quality standard service to customers, to create job
opportunity for residents.
1.1 Mission and vision
The will be dedicated to provide its hotel and restaurant with the highest quality of service in a
luxury still modest environment. It will value the place in the community within it will operate and
will work to develop those relationships and to respect and protect the environment.

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

Haylu dhabi will continuously strive to create value for both owners and investors while honoring
the brand values and encouraging it staff to develop themselves in an environment of trust, loyalty,
caring, and team work\Our vision become best first choice local bay area and respect hotel and
restaurant-as measure by our customer by, Employers our shareholder and the community with
live in. the value include performance excellence ,we act like responsible owners, always seeking to
meet or exceed exceed expectation. Teamwork, we act as a team,commited to each other and bound
by trust and loyalty, and excellent and product and service that wall build and maintain customer
loyalty business location that will assure high hotel and restraint visibility and a high flow of
customers. Proven management ability to successful run a similar business.

2.0 Situation Analysis

2.1 Description of business: Low scale hotel & restaurant (15-20 rooms), convenient located to have
direct access to the operation facilities. It will offer a luxury but modest relaxing environment for not
only international tourist but also for the local people looking for a nice place to spend the weekends or
short vacations (e.g. summer school vacations, carnival, etc.) Also, it is expected that we will offer to our
customer excellent facilities to host special events as seminars, weddings, private parties, etc. Also, it will
include a SPA Package for those tourists looking for a place to relax and invest some money in theirs
body treatment (e.g. facials, massage therapy, and others.) Differentiating the type of business service
offered, from that of the competition, will assist not only in building the Hotel & Resort brand as
a whole, but will attract frequent business travelers, who requires a higher level of personal
service and recognition.

2.2 Macro environment (industry changes): Total hotel Revenues generated to the hotel industry
represented about 10% which was about The external, environmental issues that affect the Hotel are:

Political: a stable environment where little affects the ability of the hotel to generate revenue. From The
Wall Street Journal, Of Economic Freedom Report, Most sectors of economy are open to foreign
investment, although there are a few restrictions on "national interest" industries, retail trade, and some
services, and some professions require technical licenses. The International Monetary Fund reports that
residents and non-residents are permitted to hold foreign exchange accounts; there are no restrictions or
controls on payments, transactions, transfers, or repatriation of profits; and non-residents may purchase
real estate except within 92 kilometers of a national addis ababa capital city of oromia region state. In our
twon Olenchity work force for any business, and specialized and technical workers may comprise no
more than 5 percent of the total number of employees in any business .” was created to establish special
fiscal incentives for the construction, refurbishment and development of facilities having a minimum
investment of ETB 300,000 within the invetors. We are planning to consider the tax exoneration include
in this law as part of the business plan.

•Economic: Economic is expecting to improve this year to 1.5% as a result of the presidential election
process.
. Based on clarification in the methodology for calculating the income tax score, as well as the higher
level of government expenditure,by excessive bureaucracy in authorizing exploration, opposition by
indigenous groups, and slow implementation of a mining master plan." In addition, rigid labor laws

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

reduce labor mobility and inhibit hiring. Corruption is a continuing problem; according to the U.S.
Department of State, "Panamanian laws regarding corruption are generally weak, and government
enforcement bodies such as the Comptroller General and the Attorney General have historically been
ineffective in pursuing and prosecuting those accused of corruption." Companies complain that corruption
in Panama is a "nuisance" obstacle to doing business.
•Social: the trend towards cost effective business travel leads hotel guests to seek more value for money,
which is where our added value differentiation strategy comes into play.
•Technological: the installation of 'on-line' room reservations system will require the integration of the
hotel IT system with hotel web sites (e.g. Expedia.com) to manage a central reservation system. This may
require a high level of investment.
. 2.3 SWOT Analysis
The following analysis highlights the internal strengths and weaknesses of our organization and the
opportunities and threats facing the hotel in our external environment. We must work to improve our
areas of weakness. Organizational strengths must be leveraged in order to capitalize on external
opportunities as they arise, and contingency plans formulated in order to deal with threats presented by
the environment.
2.3.1 Strengths
The Hotel's strengths can be identified as follows:
 Strategy: established differentiation strategy.
 Structure: flat, decentralized structure.
 Skills: diverse range of service skills within management and staff.
 Style: strong, participative culture.
 Staff: specialized and experienced staff well motivated and highly skilled. A well trained team
who are proud of their hotel and respect and promote the brand values.
 Shared Values: clear and well communicated.
 Brand Strength: brand values well represented engendering brand loyalty amongst existing and
new guests.
 Reputation: promote a strong reputation within the local market and corporate and travel trade
markets for reliability, exemplary service and quality.
2.3.2 Weaknesses
 The Hotel's weaknesses can be identified as:
 Capital Investment: require approval of credit lines from local banking to properly fund the
initial capital investment to build the facilities.
 Seasonal revenues: the flow of hotel cycle that occurs during spring-summer seasons versus
winter should be considered and manage.
 Staff: seasonal turnover requires ongoing training and orientation of new staff.
2.3.3 Opportunities
 The Hotel's opportunities can be seen as:
 Market: returning growth after a period of slump (2015 versus 2017)
 Competitors: no direct competition exists at present, in terms of the hotela and restaurant
Package and the convenient location chafe Donsa town (business property')
 Suppliers & Staff: Supplies (materials) and Staff (Personnel) required to run the facilities
could be obtained from the local market
 Guest Dependency: repeat corporate business based on personal service and quality, in a small
but luxurious environment.
2.3.4 Threats
 Threats to the Hotel have been identified as:
 Market Entry: potential for a competitive, global brand to enter the market with a similar
product.
 Substitutes: fully furnished and serviced business apartments offering lower daily rates.

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 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

 Economy: recovery from slight recession may take time.

2.4 Competition analysis
Although no direct competition exists, in terms of the _________ Package facilities, other 5(five)
hotels and serviced apartments do compete for the same corporate business sectors. Key
competitors have been identified as:
 mamu hotel/:hotel, good new hotel sale meat and alcohol drinking Hotel’s
rate.approximately .3.5%
 Qidis gebre hotel =have bedroom and good hotel sale meat and alcohol drinking best hotel 6%
 Diamond hotel good hotel sale meat and alcohol drinking, also have cafe of coffees and tae
Proximately10% take higher hotel older chefe
 fiqir hotel, bedroom and good hotel sale meat and alcohol drinking
 Othe hotel, hotel bedroom and good hotel sale meat and alcohol drinking35
Table 2.4: Growth and Share Analysis
Competition Price ($/unit) Growth Rate (%) Market Share (%)
Qidist gebrel hotel 110.00 6% 15%
Diamond hotel 90.00 4.5% 10%
Mamush hotel 90.00 3.5.0% 10.0%
Fiqir hotel 105.00 6.0% 15.0%
Hotel's (Project) 105.00 5% 15%
Other 120 8% 35%
Average 91.67 5.5% 16.7%
Total 550.00 33.0% 100.0%
Target Market Analysis:- The Hotel is a 15-20 luxury guest rooms and specializing in servicing and
corporate clients. It serves the business community, and visiting business travelers, in the city of
Olenchity and, Boset woreda.. Key to our business success is the level of customer loyalty and repeat
business we will receive on an annual basis. We will offer our guests the most up-to-date technical
business facilities, both inside the rooms and within the hotel's conference facilities. Also, we will offer
excellent facilities for relaxation and body treatments. Our guests feel that they can conduct their business
from within a less austere atmosphere than can be experienced in our competitive properties, where there
is less personal recognition. They will appreciate being called by name when they arrive, and having the
staff remembers their specific requirements, time and again. This is key in developing the relationship
beyond an initial stay and evidences our added value in relation to competitive properties in the vicinity.

Table 3.0: Target Market Forecast

Potential Customers Growth 2015 2016 2017 CAGR

(%)

Farmaer kebele 33 10% 100000 110000 111000 3.0%

Around _______waroda 2.0% 122,127 128,233 134,645 5.0%

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 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

Kebele__________ 12.0% 11,648 12,463 13,336 7.0%

Local city 30% 10,000 10,200 10,404 2.0%

Total 3.9% 330,741 343,472 356,737 3.9%

Potential Customers Growth 2015 2016 2017 CAGR

(%)

3.1 Market Demographics

Market Geographic: Olenchity City is the capital of the city of Boset woreda, with a population of
20,000 Located in the in the Boset woreda has borders Adema woreda west , the also Arsi Zone
Marti nourth woreda, Amhara region Minjara Shankora south woreda and Fantale woreda east .
Five water reoserce river in the, and mojo xiqa,mojo guda,kasam,balbala and baballii in the Cost
Rica in the west. topography varies from mountains towards the herar,tulu fara to small hills can
includes.

Market Demographics Total population is estimated around 70 seventy hunderd and it has a
density of 30 persons per square kilometer. Nearly 90% of the people live in the urban areas. The
country’s capital community is made up predominantly of households having two to four children,
either at home or away from home, with at least one parent/guardian having attended college.
Market Psychographics Olenchity have not tourist. The Boset woreda have production acgriculte
more productivity wheat and teff .Enterprises have been prospering for generations. There is also a
strong sense of community and a high level of awareness as regards to caring for the environment

Market Behaviors:-Businesses in the area choose to support one another wherever possible, be
remaining loyal to long standing relationships with customers and suppliers.

Credit cards are accepted in most hotels, restaurants and department stores. Most stores open from
9 a.m. to 6 p.m., Monday through Saturday. Some of them open on Sunday. Special Sales are
frequent throughout the year.
3.2 Market Needs Hotel will offer value and benefits to our clients, over and above the standard of
our facilities and affordable rates. We seek to provide our guests with an exemplary personal
service, and level of recognition that they have come to rely upon. We will provide our guest with a

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 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

luxurious, relaxing environment within which to conduct their business or vacations and that our
hotel customers would not be able to find at other more impersonal competitor hotel Our guests
need to know that they can develop a relationship with the hotel that will ensure efficiency, value
for their money and reliability in supplying them with the support they need, when they need it. We
will operate with a very strong sense of community, and we want to stay an integral part of that
community.

3.3 Market Trends:-Market trends can be categorized as follows: Corporate Travel Policies, Local
Business Trends, and Economic Cut Backs.

 Corporate Travel Policies: As a result of various security issues, as regards traveling in both
domestic and international markets, there has been a significant drop in corporate guests visiting
the city. Although the level of corporate room business appears to be increasing again, it has had
a significant affect on last year's result and consequent projections for the future.

 Local Business Trends: There has been a period of low activity in the area of conferencing and
business catering with local companies electing to conduct meetings and seminars on their own
premises in order to cost cut. This is changing however as group bookings, incoming visitors and
day use of conference facilities is on the increase.

 Economic Cut Backs: The city has not cancelled any major trade events over the last two years.
Exhibitions held at the halls had attendance figures much lower than expected. All booked events
for the upcoming 12 month period however; including the Miss Universe Pageant Show and other
Fashion Exhibitions have pre-booked attendance figures online with expectations and in some
cases in excess of projections.

3.4 Market Growth

The growth rate of the target markets has been increasing the past three years with the only exception of
year 2016 in which some contraction in the market was experienced mainly due to the global economy
and the secondary effects of 9/11. Current trends indicate a return to projected growth figures within the
next 10 to 15 months. Once reestablished, growth is anticipated to continue at a steady pace online with
the expansions in the Boset woreda hotels activities, the annual program of travel trade events taking
place and the launch of a new complex facility built in the Olenchity Area this year.
The number of customers and coming to our city (potential customers) has grown at an average of 5.0%
during 2013-2015. In 2016, the number asphalt rood can finished of customers increased about the 20%.

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

4.0 Objectives:-Our marketing strategy's objective is to communicate the unique set of products and
services that we will offer to our hotel’s guests. We attempt to direct the focus of our customers to the
issues of quality and value for the money as opposed to simply the bottom line costs associated with their
staying time in the hotel. Our marketing strategy will allow us to communicate our brand values, develop
close working relationships with our creditors, customers and suppliers and to manage the needs of our
guests in an effective manner. Continued differentiation and growth are two goals we have set for
ourselves. Growth will take place by targeting new areas of business within both local and Ethiopian
communities.

4.1 Marketing Objectives

 To share our strategic objectives with potential creditors in order to properly fund the initial
capital investment to build the facilities.

 To communicate how loyalty amongst our guests will be developed by providing a positive hotel
experience to them.

 To establish the hotel starts up revenues, profit and growth target goals within the given time and
budget action plan.

5.0 Marketing Mix Strategy

The Hotel will be positioned as a hotel, strategically located and offering a high level of personal
service. Our focus is on offering our guests added value and differentiating ourselves in our levels of
personal service. We provide a quality hotel experience where guests are valued, respected and
their business is truly appreciated. In this section, we will review some important elements of our
marketing mix strategy to accomplish our goals.

5.1 Marketing Mix

5.1.1 Product: The Hotel will provide the customer- guests with an alternative to the impersonal,
large room15-20 properties in the city. Strategically located, our property will enable our guests to
be at the heart of the business community and yet in an environment of calm and professionalism
Olenchity sector facilities. We seek to differentiate our product and services in the following areas:
 Personal recognition of our frequent travelers.
 Luxurious rooms that offer a sense of doing business from 'home.'
 Staff that have a strong customer-service ethic.
 Business and relaxing facilities to pamper customer’s loyalty.
5.1.2 Place: product and service information will be sold to the guest via personal selling, direct
marketing, advertising and the Internet. Delivery channels include travel agents and international
reservations systems.
5.1.3 Price: pricing strategy will be consistent with the differentiation objective, to provide added value
for a reasonable rate as opposed to discounting and devaluing our products and services. Room rates
quoted are net of tax and service, are per night, per room with continental breakfast included:

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 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

SPA and others facilities (e.g. restaurant & bar) will be managed by out-sourcing the service. The hotel
will provide the facilities and establish the service policy and strategy to ensure that the out-sourcing
contractors will provide be aligned with the hotel marketing plan. Revenues generated from the SPA and
other facilities have been considered as part of the hotel total estimated revenues.
5.1.4 Promotion: primary focus will remain on mass communication via print ads in trade publications
and on the Internet. Direct mail campaigns to existing and prospective clients will increase as a cost
effective means of targeted campaigning. Personal selling in the local market will remain an important
element of the mix in order to build long-term relationships within the local community and generate the
initial high levels of corporate activity requires to fund the target growth.
Public relations activities will play an important role in the marketing mix, presenting the hotel as a
supportive member of the community and participating in significant local events (e.g. National Tourism
Association Campaigns, American and National Chamber of Commerce Activities, Environmental
Protection Agency Sponsorship Programs, Panama Canal Commission – Land Development Authority Council
Meetings, etc.).
5.2 Estimated Tactical Budget :-our annual marketing budget is 100,000 sale estimated to achieve gross renevu of
200000 of for the 1st year of operation. Our marketing expenses will be approximately 8.3% of the gross revenue
5.2.1 Sales Forecast
This is based on the number of pre-contracted corporate rooms, and an anticipated return to business levels projected
(conference room activities, SPA package, restaurant and other room services). Revenues for subsequent years will
be based on an average growth rate of 4%
.
Sales Forecast FY #1 FY #2 FY #3

Corporate Single 94,050 97,812 101,724

Corporate Double 217,500 226,200 235,248

Corporate Deluxe 181,500 188,760 196,310

Corporate Suite 30,810 32,042 33,324

• The Main Boardroom 42,900 44,616 46,401

• The Conference Hall 45,500 47,320 49,213

The Ballroom 118750 123500 128440

All hotel facilities 172874 179789 186981

Restaurant and bar 310725 323154 330680

Total sale 1,214,609 1,263,193 1,308,321

Table 5.2.2 Marketing Expense Budget

Marketing expense are projects to be approximately 5% average overall annual revenue.

The marketing expense are projected to be approximately Monthly Expenses FY #1 FY #2 FY #3

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Print Advertising 10,800 11,448 12,364

Internet Advertising 24,000 25,440 27,475

Public Relations 9,600 10,176 10,990

Direct Advertising 20,400 21,624 23,354

Total Expenses 64,800 68,688 74,183

Our annual marketing budget is 100,000. Sales are estimated to achieve gross revenues of , Our marketing
expense is structured to reflect the hotel strategy differentiation. Quarterly travel trade publications and
interim monthly press ads will communicate our message to key corporate clients in one of our most
significant target markets. Monthly Internet advertising expenses include banner ads, and strategic links
with car rental, airline and destination management companies' websites to drive business to the hotel.
Direct mail activity will support to build our targeted customer database, not only in terms of improving
the quality of the data but also on increasing the size of the database with prospective customer
information. Public relations expenses cover PR events, participation at local functions and sponsorship
funds. Overall, the percentage of total revenue required to support the marketing expense could be
considered a moderate amount. We are expecting to adjust the percentage of marketing expense to sales
to reflect an increase to the level of 8-10% for subsequent years.

5.3 Proposed Action Plan and Timeline All figures will be monitored on an ongoing basis in relation to
projections versus actual figures, and the ongoing plan will be altered or manipulated as necessary in
order to react to and, wherever possible, anticipated external changes to the environment. Annual
Marketing Plan results will be evaluated as part of the agenda of the Sales Meeting programmed at the
end of the year where the structure of the plan for the upcoming year will also be established.

Actions Year 1

J F M A M J J A S O N D

Contract media space

Ad agency liaison on print ad material

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

Evaluate business results ongoing quarterly

Direct mail lists to purchase/prepare

Ad agency liaison on direct mail material

Dispatch/monitor campaign results

Public relations functions to schedule

Establish list of sponsorship events/companies

Evaluate sponsorship requests

Annual Sales Meeting – Evaluation

The marketing director will lead the hotel public relations and marketing team of all advertising and public
relation related activities he/she will work closely with the member of team, especially the sale and finance
directors to implement and monitory the effectiveness of the marketing plan and evaluate the quarter results

Actions Budget Responsible department

Contract media space 15000 Marketing

Ad agency liaison on direct mail material 10000 marketing

Evaluate business results ongoing quarterly marketing

0

Direct mail lists to purchase/prepare 6000 Marketing

Ad agency liaison on direct mail material 7000 Marketing

Dispatch/monitor campaign results 3000

Public relations functions to schedule 0 Public relation

Establish list of sponsorship events/companies/hotels Public relation
0

Evaluate sponsorship requests Public relation

6000

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7000 Public relation

Annual Sales Meeting – Evaluation

42000 Finance
Total

6.0 Management Team

6.1 Organization Structure: The founder of the company will manage the hotel’s growth and organization
jointly with the management team. All staff, sales and marketing personnel will report to the management team
as per the organization chart in the following chart.
THE hotel ________ RT & restaurant

Proposed Organization Chart

Hayilu Dhabi presendent and

genera manejer

Human
resource

Darecte of Director of business

Dircter opirater
finance1

Maintenance and nformation sale marketin

house keeping system maneger maneger
maneger

6.2 Other Management Considerations

The Palms Resort & SPA will adopt a cross –functional team work approach to manage not only the day to day
hotel activities but also current and new product-service package developments. Having representatives from
various departments clearly has its advantages; but most important, effective teams must have the nurture and
support of the management team.

No President & Total

General Manager

Director of Operations 1

Director of Finance 1

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Director of Business 1

Maintenance & Housekeeping 1

Manager 1

Total 6

7.0 Financial, Budgets and Forecast

The financial plan for driving and funding the growth of The _______ & Restaurant is presented in detail in the
following sections. Initial capitalization (after founder’s seed) is about 1050,000 million. This capitalization is intended to
be provided by the local bank sector and the private investors.
7.1 Important Assumptions
The financial assumptions upon which this plan is based are outlined as follows:
Table 7.1 : General Assumptions 2018
General Assumptions 2015 2016 2017

Short-term Interest Rate(%) 3.0% 3.0% 3.0%

3Long-term Interest Rate (%) 5.0% 5.0% 5.0%

0.0% 0.0%
Tax Rate (%) 0.0%

Revenues Growth (%) 0% 4%

Sales on credit(%) 75% 75% 75%

Marketing Expenses (as of Revenues(%) 5%

The incentives and benefits are:
(a) Exoneration for 25 year period of import duties, contributions, levies, and impositions of any kind on imports of
materials, equipment, furniture, accessories, vessels, and motor vehicles able to accommodate at least 8 passengers.
(b) Exoneration of real estate taxes of a 25-year period.
© Exoneration of any kind of tax or levies on the capital of the enterprise.
(d) Exoneration of income taxes on interest earned on loans made to investors involved in public lodging
accommodations.
(e) Special 10% depreciation rate for all real state assets excluding

7.2 Sales Forecast

Sales Forecast Estimate Estimated Estimated Average Average

d 2015 2016 2017 Share (%)

Corporate Single 94,050 97,812 101,724 7.7% 101880

Corporate Double 217,500 226,200 235,248 17.9% 235610

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Corporate Deluxe 181,500 188,760 196,310 14.9% 196612

Corporate Suite 30,810 32,042 33,324 2.5% 33109

The Main Boardroom 42,900 44,616 46,401 3.5% 46472

•The Conference Hall 45,500 47,320 49,213 3.7% 47344

The Ballroom 118750 123500 128440 9.8% 123563

All hotel facilities 172874 179789 186981 14.2% 179881

Restaurant and bar 310725 323154 330680 25.6% 321528

Total sale 1,214,609 1,263,193 1,308,321 100% 1262041

0% 4.% 4% %11

7.3 Projected Operating Expenses

THE HAYILU DABI & RESTAURANT ANNUAL EXPENSE DETAIL

Operating expenses Frist 2015 2016 2017

Sale and marketing

Salaries 75,000 80,250 84263

Benefits 97500 104325 109541

Telephone 1200 1236 1298

Supplies 2400 2472 2596

Travel 6000 6180 6489

Print Advertising 10800 11440 12364

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Internet Advertising 24000 25440 27475

Public Relations 9600 10176 10990

Direct Advertising 20400 21624 23354

Professional services 1800 1854 1947

Miscellaneous expenses 3000 3090 3245

Public Relationships 25000 27500 30250

Total Sales and Marketing 276,700 295,587 313812

General and Administrative

100,000 107,000
Salaries 112,350
130,000
Benefit 139,100 146,055

Rent 3,000 3,300 3,630

6,000
Insurance 6,000 6,000

Utilities 12,000 13,200 14,520

1,200
Telephone 1,320 1,452

Supplies 900 990 1,089

Travel 2,400 2,640 2,904

Professional services 2,400 2,472 2,596

Depreciation 12,000 13,200 14,520

Miscellaneous expenses 2,400 2,472 2,596

Total General & Administrative 272300 291,694 307,711

549,00
Total Operating expenses 587,289 621,522

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

Total Sales and Marketing 276,700 295,595 313,810

Operating Expenses 2015 2016 2017

Inc/ Dec (%) vs previous year 0.0% 6.8% 6.2

) Total General & Administrative 272300 291694 307711

Inc/ Dec (%) vs previous year 0.0 7.1 5.5

Total Operating Expenses 549000 587289 621522

Inc/ Dec (%) vs previous year 0.0 7.0 5.0

(%versus total revenues 45.2% 46.5% 47.3%

7.4 Projected Financial Statements

THE Haylu dabi & restaurant Statement of Projected Result of Operations For
each of the three years ending December 31, 2018.

Gross Sales 2015 20016 2017

Corporate Rooms 523,860 544,814 566,607

Conference Rooms 207,150 215,436 224,053

Other Facilities 483,599 502,943 523,060

Total Sales 1,214,609 1,263,193 1,313,721

Cost of Sales 309,419 306,325 300,198

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

Gross margin 905,190 956,868 1,013,523

As (%) of Gross sales 75% 76% 77%

Operating expenses

Sales & Marketing 276,700 295,595 313,810

General and Administrative 272,300 291,694 307,711

7.4 Projected Financial Statements

THE Haylu Dhabi & restaurant Statement of Projected Result of Operations For
each of the three years ending December 31, 2018.

Gross Sales 2015 20016 2017

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

Corporate Rooms 523,860 544,814 566,607

Conference Rooms 207,150 215,436 224,053

Other Facilities 483,599 502,943 523,060

Total Sales 1,214,609 1,263,193 1,313,721

Cost of Sales 309,419 306,325 300,198

Gross margin 905,190 956,868 1,013,523

As (%) of Gross sales 75% 76% 77%

Operating expenses

Sales & Marketing 276,700 295,595 313,810

General and Administrative 272,300 291,694 307,711

Total Operating expenses 549,000 587,289 621,522

Income from operations 356,190 369,579 392,001

Earnings before interes and taxe ETB 356,190 369,579 392,001

Interest expense (income)

Interest expense (Short-term 3%) 3600 4500 3000

Interest expense (Long-term )10% 5000 7500 10000

Interest income (exoneration )0% 0 0 0

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

Net Interest expense (income) 8600 12000 13000

Net income before taxes 347590 357579 379001

Taxes (exoneration)

Federal Taxes(0%) 0 0 0

State Taxes (0%) 0 0 0

Total Taxes 0 0 0

Net Income after interest and taxes 347,590 357,579 379,001

As (%) of Gross sales 29% 28% 29

THE Hayilu dabi hotel& restaurant

Projected Balance Sheet
For each of the five years ending December 31, 2018.
ASSETS 2015 2016 2017

Current assets

Cash and cash equivalants 24292 25264 26274

inventories 12146 12632 13137

Marketable securities 0 0 0

Accounts receivable 25,304 26,317 27,369

Other current assets 6,073 6,316 6,569

Total Current Assets 67,816 70,528 73,349

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

Property, plant and equipment

Land and building 1,000,000 1,000,000 1,000,000

Purchase software 10,000 10,000 10,000

Computer equipment 25,000 30,000 35,000

Room furniture and appliances 200,000 200,000 200,000

Office Furniture and equipment 100,000 100,000 100,000

Conference Room Furniture and 100,000 100,000 100,000

equipment

SPA Furniture and equipment 75,000 75,000 75,000

Restaurant Furniture and equipment 250,000 250,000 250,000

Other 50,000 75,000 100,000

Total Property, plant, and equipment 1,810,000 1,840,000 1,870,000

Less Accumulated depreciation 181,000 276,000 374,000

Net Property, plant and equipment 1,629,000 1,564,000 1,496,000

Total assets 1,696,816 1,634,528 1,569,349

LIABILITIES

Current liabilities:

Notes and loans payable 100,000 150,000 200,000

Account payable 120,000 150,000 100,000

Accrued income taxes - - -

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

Other accruals 54,226 4,359 10,179

Total current liabilities 274,226 304,359 310,179

Cash flows Cash flows from Cash flows from

from operating operating activities
operating activities
activities

Net Income 347,590 357,579 379,001

Reconciliation of net income to cash from 0 0 0

operations

Depreciation and amortization 12,000 13,200 14,520

Gain and losses on sales of assets 0 0 0

Changes in operating assets

and
liabilities
Accounts receivable 25,304 1,012 26,357

Accounts payable 120,000 30,000 70,000

Total changes in operating assets

94,696 28,988 43,643
and
liabilities
Net Cash provided (used) by operations 454,285 399,767 437,164

Cash flows from operating activities

Purchases) Sales of
1,810,000 30,000 1,900,000

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

investments
Purchases of property, plant, and
equipment
Total Cash from investing activities 1,810,000 30,000 1,900,000

Cash flows from financing activities

Issuance (retirement) of stock:

1500000 - -
Change in additional paid-in capital
preferred
Change in preferred stock - - -

Change in common stock - - -

Total issuance (retirement) of stock 1500,000 - -

Total cash from financing activities 1,500,000 - -

Net Increase (decrease) in cash

and 144,285 369,767 1,462,836
Equivalents
Cash and equivalents, beginning 0 144,285 $ 514,053

Cash and equivalents, ending 144,285 514,053 948,783

7.5 Breakeven Analysis

Break even, based upon fixed initial market overheads, will be obtained prior to the end of the 1st year of operation.
Cost control and continuous improvement in the operation and implementation of the market strategy will increase
profitability which will increase

Assumptions :
Average monthly revenue 101,217
Average monthly Variable 25,785
cost
Estimated Monthly Fixed 45,750
Cost:

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

Total Cost (Fixed + 71,535

Variable) =
Monthly sales Break 71,535
Even =
7.6 Proposed Business Ratios
7.6.1 Profitability Ratios:
Gross Margin and Net Profit Margin indicate that the hotel will generate profit from year #1. Percentages of gross
and net margin (related to gross revenue) are in line with the local industry. Return on assets (ROI) and Return on
Equity (ROE) indicate that significant earnings will be generated from the investments in assets and a result an
efficient usage of the owners’ equity is expected.
7.6.2 Activity Ratios:
AR and AP Turnover suggest a good management of the balance sheet plus the Inventory Turnover that also
indicates an excellent rotation of the inventory. Collection days (only 8) represent a business risk in the balance
sheet since most of the credit card service providers will require more than 30 days to pay back. Potential increase in
the AR could generate some pressure in the cash flow.k

7.6.3 Debt and Liquidity Ratios Debt and Liquidity Ratios are very low. It is an indication of the required initial
capital funding required from the owners’ equity A negative working capital represents an area of concern. The
large amounts in the total current liabilities versus the total current assets suggest that the hotel will be under
pressure to cover its debts during the first years of operation. This situation should become under control by
significantly reducing the amount of the debt after the 5th year of operation

Profitability Ratios 2015 2016 2017

Gross Margin 75% 76% 77%

Net Profit Margin 29% 28% 29%

Return on Assets 20% 21% 24%

Return on Equity 24% 26% 29%

Activity
48.0 48.9 48.9
Ratios
AR Turnover
Collection Days 8 8 8

Inventory Turnover 25.5 24.7 23.3

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

Accts. Payable Turnover 10.1 9.4 10.5

Total Asset Turnover 0.67 0.69 0.71

Debt
0.16 0.19 0.20
Ratios
Debt Ratio
Debt / Equity Ratio 0.19 0.23 0.25

Liquidity Ratios

Current Ratio 0.25 0.23 0.24

Net Working Capital (206,410) (233,831) (236,830)

Acid Test 0.18 0.17 0.17

Additional Ratios

0.16 0.18 0.19

Assets to Sales

Current Debt / Total Assets 1.40 1.32 1.22

Asset Turnover 0.72 0.76 0.82

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Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

27
Name of the Owner________________________
 BUSINESS PLAN FOR HOTEL AND RESTRONT OF __________

28
Name of the Owner________________________