ALPHA UNIVERSITY COLLEGE

PROGRAM:-PROJECT MANAGEMENT

Flash IT Solution

BUSINESS PLAN

Name:-Andinet Endayilalu ID MPM1/08/04/08

Submitted to: Fanta (PhD)

June, 2017
Addis Ababa

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Executive Summary

Flash IT solution is a start-up business formed as Partnerships; aim to provide Door To Door
Computer Maintenance, Office machinery maintenance & Computer Consulting service having
their own stocks for the sphere parts and Maintenance Toolkits. Flash IT solution plan to have great
customer service, keeping up-to-date with technology to remain as competitive and customer
friendly as possible.

Flash has the power of super speed. Flash IT Solution will respond immediately to their
customer request.

Flash will at first be a home office start-up, utilizing one studio room in the owner's home that is
Located in Stedium and serving customers by Travelling to their local area up to 20 KM from the
Stedium in all Directions.

The total investment expenditure requirement of the project including the working capital is
estimated at about Birr 100,000. Based on payback period the capital will be returned in 1 year and
also using the cash flow statement, the calculated internal rate of return (IRR) is 11%.The net
present value (NPV) at 15 %discounting rate is about Birr 1,040,878. The project is expected to
create employment opportunities for about 2 individuals of whom will be engaged in the direct
production process. However, the employment opportunities will more than the above mentioned if
we include the people who will involve and benefit in the market chain.

Starting off by serving a local market, the company seeks to expand into different geographical
areas by setting up new operations and by getting into strategic tie-ups with other companies that
can provide the necessary resources that can synergize the setup. After establishing a strong
foothold and a strong brand name in the market the company plans to offer total hardware vendors
for large organizations like banks.

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 1. Project Description

Introduction

Computer nowadays is a basic need for businesses or companies. It helps a lot in such a way that it
makes work more progressive and productive. It is an important thing that a company or small
business should have because it helps a lot in many ways such as organizing, storing and
manipulating data. Having computer programs may help a company grow bigger and be
competitive in the flow of the business world. It helps a lot because almost all the companies
nowadays uses computer literate and very competitive in many aspects. So, we are going to
introduced Flash IT Solution and our target market, all Computer Training centers, Internet service
Providers, individuals who use computers.

Background/Business Description
A business plan is a fundamental document used to detail plans for a start-up or restructure the
existing business. This document is used to describe Flash IT solution business plan goals and
strategies, as well as provide the existing business financing and marketing plans. The Business will
be opened in September 2017 E.C by Andinet Endayilalu and Nigatu Niguse. Prior to this; Mr.
Andinet Endayilalu has been graduated with Bsc. In Computer Science and will have a Masters
Degree in Project Management at the End of 2008 E.C. And Mr. Nigatu was graduated with
Marketing and will Be Graduated MBA at the end of 2009 E.C. Mr. Andinet is also certified in
office Machinery Maintenance (i.e. Photo copy Machinery, Fax Machines) and Computer. During
his career he has also worked in various capacities with several companies.

This business plan is prepared for Flash IT solution plc which is proposed to be located at Stadium
Area in the Kirkos sub city, Addis Ababa, Ethiopia. The project is in line with small scale Enterprise
policy and strategy of the Federal Democratic Republic of Ethiopia. The project is environmental
friendly and will provide job opportunity for the many Skilled Youth of the country by reducing
unemployment rate of the nation as the Business Growth and Expanded.
Initial competitive advantages include:
A well-Educated and Trained IT skilled Technician
An experienced marketing and Business Administration Expert.

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To achieve their plan with the intended project period is 1 year, they are seeking Birr 250,000 loan
and 550,000 their capital which they will use to
1. Buy sphere parts and Toolkits.
2. Promotion flyer Broachers and
3. Provide working capital. Pro forma financial statements are used with this plan to purchase
materials.

1.1 Business Case

Computer Hardware/software Maintenance and Consulting business is one of the most in demand
businesses today. Nowadays, internet cafes, Computer Training Centers, colleges and Universities,
organizational & Non Organizational offices, and even individuals perform their day to day activity
by using Computers and office Machineries. The company as well as individuals will invest a large
amount of money to acquire these Electronic Device and need to have long lasting service. Due to
misinformation and the lack of adequate knowledge on the electronic device many companies and
Individuals will expose to Loss of a huge amount of their capital by buying in appropriate
Equipment. In the same time these Electronic device will also fail due to many problems both
human made and disasters like power failure and others. Instead of investing a large amount of
capital to buy these Equipments again, replacing the failed device with the appropriate device by
the right Technical Person will lead them to reduce their additional expenses and maximizes their
capital.

Even though there are a number of computer Maintenance shops, they are not well organized and
their service is limited with their shop only. Flash IT Solution believe that; like any other services,
Computer Hardware/Software maintenance and consulting service will be managed by the Right,
well Trained and skilled Technical persons, Having interest in Making The Business is not sufficient
to be succeeds, Rather the Technical, The Marketing and the Administration skill (both soft and
hard skill) must be incorporated within the organizational structure. The Flash IT Solution was
founded on this base to provide a service for their customer by considering customer as a Lord, to
provide a service which is not limited to a shop only. The Flash IT Solution will also serve a
consultancy service for their customers when they need to buy computers and office machineries,

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Based on their Business Requirement and Proposal, to have a correct Electronic Device including
first time configuration/installations and Time based maintenance service(preventive and
Corrective Maintenance). These Approaches create a strong relationship between the Flash IT
Solutions and its customers.

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 1.2 Situation Analysis

The computer Hardware/Software Maintenance Business gained momentum alongside the

development of computer technology. Any computer system, whether a low-end home desktop or
an enterprise-scale server, may need repairs from time to time, opening up opportunities for small
business computer shops to serve as wide or narrow of a target market as they would like. This
Scenario will work also for office Machineries. The S.W.O.T. analysis involves the assessment of
the Strengths, Weaknesses, Opportunities and Threats of the Flash project:

Strengths: Why do customers buy our services?

Weakness: Why do people use our competitors; what can be improved?
Opportunities: Is the market expanding; are there new services?
Threats: Who are the potential competitors?

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Strengths
Computer technology becomes more ubiquitous with each passing year, increasing the size of the
market for computer Maintenance shops. Computer technology is still in a relatively early stage of
development, as well, meaning computers still fail on a regular enough bases to support the repair
industry. Recessionary conditions in the economy can shift consumers' focus away from buying
new computers and towards maximizing the life of their current machines, providing further
advantages to the industry.
Flash has their own stores for the Maintenance tools and sphere parts, so no shortage of sphere
parts at Flash.

Weaknesses
Computer Maintenance shops can find it difficult or virtually impossible to serve anything larger
than a local area and most of the Technical are located in particular area and are not well organized
to serve the countries customers. Automation is also nearly impossible in the computer repair
industry, keeping labor costs high by requiring each service to be performed by hand on a case-by-
case basis. Because of this, it can be difficult for computer Maintenance shops to achieve
economies of scale for operational costs.

Opportunities
Just as past advances provided opportunities to the computer & office Machinery Maintenance
Business, new advances in computer technology continue to provide new opportunities for savvy
small business entrepreneurs. The rise of tablet PCs, for example, creates the potential to serve new
markets, increasing the revenue repair shops can receive from existing clients.
Growing population of daily internet users, Training centers, Advertizing centers, schools, etc will
increase the number of computers. So these all Businesses will need for the services Flash offers.

Threats

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Computer technology continues to grow more sophisticated, and major players in the industry
continue to gain experience building more reliable machines. As the computer industry matures, it
is likely that computer technology will become much more reliable, failing less often and becoming
less susceptible to outside threats. The sheer size of the early computer-repair market may have
been a result of early-stage technology that failed more often than it worked.
Cloud computing creates opportunities for small businesses to secure long-term, high-volume repair
contracts with cloud service providers who view their service reliability as a major competitive
advantage.

1.3 Perform Feasibility Study

(Conduct a feasibility study to investigate and determine the likelihood of each solution in achieving the benefits
outlined in the business case including the reasonableness of the forecasted cost, the attainability of the solution, and the
acceptability of the associated risks).

Flash IT Solution services

General Computer Hardware Repairs and Maintenance services(All Brands)
Computer Installations
Computer Cloning/ Computer upgrading
Networking
Virus removal
Data recovery
Computer related advisory and consulting services
Other computer repair and installation related services

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1.4 Vision, Mission and Value Statements

Flash is about building a strong professional relationship with all our customers that are grounded
in honesty, fairness and integrity of service.

OBJECTIVES
The objectives of Flash IT Solution are:
1. Profit - To provide the best service available to the community at an affordable price.
2. Growth - To grow the business at a rate that is both challenging and manageable, leading the
market with innovation and adaptability.
3. Citizenship - To be an intellectual and social asset to the community and environment.
(Contribute 2% of pretax profits to charity).
To generate customer satisfaction so that at least more than 70% of our customer base is
repeat business.
Flash IT Solution mission is simple and straightforward:
Purpose Flash exists to provide fast, reliable technical assistance to local business/small
office/home office computer and Office Machinery users.
Vision To become the leading IT Solution in Addis Ababa with a commitment to meet or
even exceed customers' need and satisfaction.
Mission To deliver excellent quality services, operate in a responsible manner being up-to-
date with the upgrading Information technology, and provide fast, reliable technical
assistance and consistently satisfying customer experience.
Flash IT Solution is your computer paramedic..."

Service

Proposed IT Solution will provide Computer Hardware and Software Maintenance, Office
Machinery Maintenance, Computer consulting Service. However or the sake of innovation and
differentiation Flash will Provide a Door to Door Services.

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Keys to Success

Location of the project

Location of the project is of prime importance. If the project is set up in a location with high
competitors group, the amount of customers that comes to you will be less because your
competitors will be strong in financial. A project like this can really do well in places; where there
are limited competitors exist.

Unique Services

Majority of the Computer maintenance shops are operating on a similar kind of services. If the
proposed setup is opened with a strategy of differentiation, it can be more successful Door to Door
facility and Consulting Service, for value addition, free customer telephone line should also be
started in the upcoming years. In this feasibility free customer telephone line services are initiated
after two years of operations.

Quality of Service
The most important factor for the success of the project is the quality of service provided to the
customer that includes customers' need and satisfaction that is getting the job done right the first
time, offering 100% guarantee.

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 2. Project Overview and Planning
2.1 Key Stakeholders

Stakeholders definition
Stakeholders are entities that can affect or be affected by the organization's actions, objectives and
policies and directly or indirectly participate in the project. Flash IT Solution Business stakeholders
are both internal and external. Internal Stakeholders to the Flash IT Solution Business are those
Employees that serve the company to realize its Goals such as Managers, Employees, owners
(shareholders), suppliers and others that are employed in the Company. External stakeholders to the
Flash IT Solution Business are those who are benefited from the service, specifically customers,
creditors (Banks), government (and its agencies) and the community from which the business draws
its resources.

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 2.2 Project Benefits
(Describe the expected results and high level benefits of the project financial and non-financial benefits.
Describe the high level benefits including hard, measurable benefits (i.e., increased sales) and soft,
immeasurable benefits (i.e., increased customer loyalty).

While Flash IT Solution Business Become Operational, it will reduce the demand
of

2.3 Project Planning

(Describe here the specific stakeholders and the sector that your project will ultimately impact. Describe the project
scope, and develop the project plan)

2.4 Project Justification

Market Analysis
Flash IT Solution will provide computer support in both a consulting and technical capacity to
small business owners as well as home PC users. Personal market research by the owner indicates
an attractive market niche for our services; of which Flash will take full advantage. The very nature
of the computing industry, with its amazing rate of technological development, creates a constant
need for businesses skilled in updating and advising customers on computer-related issues.
From the Observation we did, we have seen rapid growth in demand for these services in the last
few years. Customers are seeking skilled help with everything from installation of software and
hardware components, repairing office machineries. small-business owners need reliable and quick

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help with all their computer needs, since every hour down may mean an hour or more of lost
revenue, especially for any business with a website or those doing e-commerce.

4.1 Market Segmentation

The existing computer service market is so extensive that categorizing it is rather difficult. We have
broken our potential market down into two groups, based on their needs: home PC users and small
business clients.

1. Home PC User

Such home users generally own a computer to do email, play games, write letters, scan and print
photos, and occasionally to do book keeping or taxes. Home PC users with more sophisticated
applications generally have enough technical know-how, from technical experience at work, to do
their own repairs and upgrades. Their hardware needs will include the computer itself, monitors,
keyboards, mouse, printer, and scanner.

2. Small Business Users

Small business users will provide the majority of our business revenue. The small business market
will be defined as customers with 2 or more computers or a network which they use for business
purposes. Their business use may include minor usage, such as internet cafes, Training Centers,
keeping the books, designing graphics or ad campaigns, and writing copy for press releases. The
more intensive their computer usage for business, the more critical it is to them that their
technology work well and reliably, and that quality repairs and support are available in a crisis.
Their hardware needs will include the same items as home users, plus servers, backup systems, data
storage, and wireless networking.

4.2 Target Market Segment Strategy

Although there are more potential customers among home PC users, we expect the majority of our
revenue to come from small business clients, since their need for our services is more urgent, and
they are willing to invest in technology as part of their business plan. The majority of our marketing
efforts will thus be focused on small business owners. These customers typically don't have a full-

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time IT person, but have full-time IT needs. Home PCs are often used by multiple people, and serve
multiple purposes. Our home PC users need help with managing their settings to integrate the
different needs of all household members as much as they need technical assistance.

Both the software and hardware side of the computer industry continue to turn out new and revised
computer components at alarming rates. For Flash this means job security well into the future.

4.3 Service Business Analysis

The computer & office Machineries maintenance and repair industry is fragmented, with a few
large, national players and hundreds of small, local stores. While most computers are actually
repaired in-store, near the customer, parts for the repair come from major manufacturers and
distributors; delays in receiving necessary parts can significantly slow down the repair process.
Flash IT Solution will break these Large chains problem by keeping vast amounts of inventory in
stock at all times, while local stores offer customers the trade-off of personal interaction and trust
that may make up for some delay.

Flash has established a relationship with a local distributor to do rapid special-ordering; although
this capability is more expensive than normal channels, it will enable us to quickly establish a
reputation as efficient and responsive to customer needs, particularly for our small business users.
We will leverage this customer loyalty into great word of mouth marketing and steady growth.

4.3.1 Competition and Buying Patterns

Customers choose computer repair and assistance services based on reputation, previous
experience, and price. They may choose to return to a mediocre provider with whom they're
familiar, rather than try out a new unknown company about whom they've heard nothing.
Establishing our brand identity and a great reputation in the first few months is critical to our
success. Once we have broken in to the local market, our great service will turn new clients into
permanent clients.

Our services charge will be very reasonable for the high quality service we offer. The satisfaction
our consumers find will keep them coming back.

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Strategy and Implementation Summary

Our Strategy and Implementation turn on three points:

1. A value proposition of timely and practical solutions, at a reasonable rate, coupled with a
100% guarantee.
2. Exploiting our competitors weaknesses: a competitive edge based on quick, effective, and
sympathetic customer service, which meets the customer where his needs are, rather than
trying to fit him into an existing box.
3. Quickly establishing a brand identity and developing a great reputation among local
customers to generate word of mouth advertising.

5.1 Competitive Edge

Quick response: Flash will provide same day, fast and reliable service.
On-site and pick-up/drop-off services: This will minimize the time and effort a customer
needs to put into dealing with his computer problem.
Surprisingly, our small size is an advantage: customers will recognize me (and future
employees), and will know they will get the same great service every time they call.

5.2 Marketing Strategy

Our marketing strategy will aggressively exploit our competitors' weaknesses. During the start-up
phase, we will run large promotion in flayers, Broachers, asking, "Are you fed up with poor
customer service for your computer and Office machinery needs?" These advertising will focus on
our advantages, including on-site service, competitive rates, and quick response and turn-around
times and including Consultancy services. They will announce our opening date, and include a
coupon for free diagnostic service for the first 10 customers.

We will continue periodic advertisements, including several promotions (discounts, free diagnosis,
etc.).

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5.3 Sales Strategy

Our marketing strategy will generate customer inquiries. We will close the deals by offering an
outstanding service and a very reasonable price. Happy customers generate repeat business. While
the Business grows more we will offer toll free number which is operational From 8:00 A.M to 10
AM hours a day, seven days a week.

3. The Project Framework

Observation is one ways of identifying the existing problem that lead to the Business idea.
Once after selecting the Business idea from different Alternatives, The project Activities are
listed down and the WBS framework of project will be designed as described bellow

Project activities

Survey
1. Data collection
Identifying the
Location where majority of the competitors are located
The service they provide
The Cost
Customer feedback
Operation(the way they perform their Business)
Risks and setting priority
Opportunities
2. Data analysis
Analyzing (summarizing) data collected in above steps.
Identifying location with less Number of Competitors and High
Number of customers.
Identifying office Rent with Less/medium cost
Identifying the Mostly required sphere parts and where they will
purchased.
Mitigating the identified Risk(Negative) by using
Impact/Probability Matrix

a. Avoidance

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 b. Transfer
c. Mitigation: Either reduces the likelihood that a risk
occurs, or minimizes the negative consequences if it
does occur.
Other relevant data

3. Cost Analysis(these include all costs i.e material cost, labor coast, promotion cost,
office rent cost, and all direct/indirect cost spend for the FLSH IT Solution Business
Project other cost)
Use NPV IIR, payback period, Based on the fact(Result) obtained in Data
Analyzing steps, Flash IT Solution Business will Analysis the its startup cost and
setup its Market strategy that lead the Business to the Next step.

4. Deciding source of finance

If its Loan again analyzing the cost and method of repayment, interest if any,
5. Market Analysis
6. Setting Market strategy
1. Selection of Business Area(Location)
Selection of Office rent
Negation and agreement
Hiring of lob our
Purchase of paints
Inner and outer decor

2. Procurement
Purchase of furniture/ Cabins
Purchases of computers sphere parts
Purchases of Office machinery sphere parts
Purchases of Maintenance Tool kits
Setting and arranging
Purchases of Software

3. Flash IT Solution services promotion

Making Flayers
Making Broachers

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4. Hiring Employees
Hiring of employees
Negotiation with employees
Contract and agreement

5. Cost analysis:

Cost occurs on following operations:

Paying rent for place.
Training of employees.
Cost of fulfilling the legal requirement.
Purchase of office equipments.
Advertising cost.

Project Milestones

Our milestones, listed in the table below, outline the major events that will promote, as well as
insure the success of Flash IT Solution and keep it a going concern well into the future. We will
measure our success in meeting these milestones every month, and adjust the plan to keep up with
our objectives. Name recognition, in particular, is very important to breaking into this market - we
will conduct a survey by calling 3 randomly selected small businesses from the Addis Ababa on the
specified dates.

Based on the above result the WBS framework for Flash IT Solution will be presented in the
following tables.

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 Milestones
Milestone Start Date End Date Budget(ETB) Responsible
Data collection 11-JUN-17 16-JUN-17 (500) Andinet & Nigatu
Data analysis 18-JUN-17 21-JUN-17 0 Andinet & Nigatu
Cost Analysis 22-JUN-17 27-JUN-17 0 Andinet & Nigatu
Deciding source of finance 28-JUN-17 29-JUN-17 0 Andinet & Nigatu
Selection of Business Area(Location) 31-JUN-17 3-AUG-17 0 Andinet & Nigatu
Negation and agreement 4-AUG-17 12-AUG-17 0 Andinet & Nigatu
Processing legal Requirement 14-AUG-17 17-AUG17 (1000) Andinet & Nigatu
Purchase of paints 18-AUG-17 18-AUG-17 (600) Nigatu
Inner and outer decor 19-AUG-17 20-AUG-17 (400) Painters
Procurement of Materials for operating 21-AUG-17 25-AUG-17 (5000) Andinet
Purchase of furniture/ Cabins 21-AUG-17 25-AUG-17 (4,000) Nigatu
Purchases of computers sphere parts 28-AUG-17 2-SEP-17 (15,000) Andinet
Purchases of Office machinery sphere parts 28-AUG-17 2-SEP-17 (7,000) Andinet
Purchases of Maintenance Tool kits 28-AUG-17 2-SEP-17 (4,000) Andinet
Flash IT Solution services promotion 28-JUN-17 29-JUN-17 (1,000) Nigatu
Get Loan Approved 4-AUG-17 12-AUG-17 200,000 Andinet & Nigatu
Open Business 4-SEP-17 1000 Andinet & Nigatu
Totals 160500

4. Project Requirement Definition

(Identify types and quantities of the labor along with skill and knowledge sets, the equipment and materials
required to deliver your project goals and objectives including technical requirements. Also define the location/site
and technology requirements of your project).

Project requirements are conditions or tasks that must be completed to ensure the success or
completion of the project. They provide a clear picture of the work that needs to be done. They're
meant to align the project's resources with the objectives of the organization.

Qualifications:

Candidate must possess at least a Bachelor's/College Degree, Computer Science/Information

Technology or equivalent.

Candidates must not be older than 35 years old.

Computer literate and can perform basic computer trouble shooting.

Hardworking, honest and willing to work with less supervision.

Applicants must be willing to work in out of office.

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Tools and Equipments for repair and maintenance services

Technical requirements

Technical requirements
No Name of tools Specification Quantity
1. Screwdriver sets 53 in1 Multi-Bit Repair Tools KitSet, Atlantis India 2

2. Soldering iron with 60W Soldering Iron 230VAC 2

soldering stand
3. Multi-meter (digital) Auto Ranging Digital Multi-meter,MATRIV 2

4. De-soldering braid De-soldering Wire Roll in Handy Dispenser, 1.5m 2

5. Solder Rosin Core Solder 2

6. Combination pliers 6 TAPARIA 4

7. Cutting pliers 6 TAPARIA 4

8. Long nose pliers 6 TAPARIA 4

9. Neon tester 6 TAPARIA 4

10. Tweezers 6 TAPARIA 4

11. Blower iron 1

12. Wire stripping pliers Taparia WS 06(Econ) 2

13. Combination pliers Taparia - 1621-6 2

14. Screw Driver Sets with Taparia 831 2

Neon tester
15. Punching Tool Punch Down tool for RJ45,Cat5e, Cat6 5

16. Crimping Tool Ratchet Type 5

17. Screw Driver Sets with Taparia 831 2

Neon tester
18. LAN Tester Cat-5e RJ45 Network Ethernet 2
LAN Internet Connectivity Wire Line Tester Tool
19. Anti-Static Wrist Band Static control and 360-degree protection 2
(F8E093)

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Computer Sphere Parts

RAM With different 1Gb, 2Gb,4Gb

Hard Disk With different size 80 GB to 400Gb
DVD Drive Required only for Installation
Keyboard
Mouse Microsoft mouse or compatible pointing device

Location

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 5. Organization Structure

There are various forms of organizations such as single proprietorship, partnership (general or
limited), and cooperative organization (consumer, producers, marketing, or financing). Out of this
the most suitable form of organization for the Flash IT Solution can be Partnership.

Andinet.E, Nigatu Niguse

Owners

Administration manager Marketing manager Operation manager Financial manager

Andinet Nigatu Andinet Nigatu

Management Summary

Flash IT Solution is a Partnership business Organization will be owned and managed by Mr.
Andinet Endayilalu and Mr. Nigatu Niguse. Prior to this; Mr. Andinet Endayilalu has been
graduated with Bsc. In Computer Science and will have a Masters Degree in Project Management at
the End of 2008 E.C. And Mr. Nigatu has been graduated with Marketing. Mr. Andinet is also
certified in office Machinery Maintenance (i.e. Photo copy Machinery, Fax Machines) and
Computer. During his career he has also worked in various capacities with several companies and
these makes him a qualified IT expert having the Project management skill. Mr.Nigatu, during his
career at commercial Bank of Ethiopia he has been worked in marketing and promotion department
and this experience makes him to understand the Promotion and Marketing strategy. In addition to
this Mr.Nigatu will have his master Degree in Business Administration at the end of 2009 E.C.

For the first three months, Andinet will be in charge of all aspects of the IT services including
providing both the consulting and maintenance services and Nigatu will be in charge with the

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Promotion and managing others Activities. In the third month, when another technician and
customer service is hired, Andinet will shift some of his energy from directly responding to
customer maintenance needs, to Consulting and managing others to does this work effectively.
Andinet will maintain direct control over inventory ordering. The Customer Office will handle all
customers call and record their problem in short then will transfer to the concerned staff members
based on the issue. Currently Flash IT solution will handle all customer requests by using fixed line
phone and the customer will be charged when they call for the service request but when the
Business grows, Flash IT will subscribe free Line from the telecom and makes avail the Number
for all customers.
The first week of each technicians employment will be dedicated to helping them understand
computer maintenance guidelines: the customer needs help, and we're here to help them; the
customer is frustrated, upset, or confused - but that doesn't make the customer a problem; the
customer needs reassurance as well as solutions. Within this framework, the technician can solve
the customer's problem the best way they see fit.

JOB DESCRIPTION
Owners/Managers
(Mr. Andinet.E and Mr. Nigatu Niguse )
Maintains staff by recruiting, selecting, orienting, and training employees; maintaining a
safe, secure, and legal work environment; developing personal growth opportunities.
Accomplishes staff results by communicating job expectations; planning, monitoring, and
appraising job results; coaching, counseling, and disciplining employees; developing,
coordinating, and enforcing systems, policies, procedures, and productivity standards.
Establishes strategic goals by gathering pertinent business, financial, service, and
operations information; identifying and evaluating trends and options; choosing a course of
action; defining objectives; evaluating outcomes.
Accomplishes financial objectives by forecasting requirements; preparing an annual
budget; scheduling expenditures; analyzing variances; initiating corrective actions.
Maintains quality service by enforcing quality and customer service standards; analyzing
and resolving quality and customer service problems; identifying trends; recommending
system improvements.

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 Maintains professional and technical knowledge by attending educational workshops;
reviewing professional publications; establishing personal networks; benchmarking state-
of-the-art practices; participating in professional societies.
Contributes to team effort by accomplishing related results as needed.

Recommended Benefits
Compensation is payment to an employee in return for their contribution to the organization, that is,
for doing their job.

Estimated Annual Cost for Salaries

Description Monthly Salary(ETB) Annual Salary(ETB)

Administration & Operational manager 800.00 9,600.00

Marketing and Financial manager 600.00 7,200.00
Total Salaries 16,800.00

6. Financial Plan
(Determine the amount of money needed with your project including investment costs (building and civil works),
pre operating costs, and running costs/working capital, and maintenance and support fees in order to determine the
overall project cost).

The following sections lay out the details of our financial plan for the Flash IT Solution Business
for the coming 1 year.

Start-up Summary

Total start-up expenses include initial expenses for Flash IT Solution, setting up the business, and
doing our pre-opening advertising and Running Costs/working capitals. Exact allocations are shown
in the table.

The bulk of our start-up requirements are asset needs: we need diagnostic and repair equipment,
some of them will be contributed to the business by the Mr. Andinet from his own materials. We are

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treating this equipment as assets because we expect it to last at least three years, and to have some
resale value when we are through with it; we will buy additional expensed equipment. We also need
start-up inventory which includes RAM, spare hard drives, cables, and cases. Although we will
keep expenses to a minimum for the first three months, before we move, we will also need cash at
start-up, to see us through the next several months with a positive cash balance.

We plan to fund our total start-up requirements direct owner investment (including the contributed
assets), and a three-year loan from the Bank. Both of the Owners are an Employee of Bank and
each of them has the loan benefit of 8 months of their gross salary). We should be able to easily
repay this loan within three years, even with much lower sales revenue than projected. (See the
Cash Flow table for projected repayment.)

Start-up Expenses in (ETB)

Legal 650
Start-up Assets in (ETB)
Maintenance Tool kits 1,500
Cash Required 28,000
External CD drive 2,000 Start-up Inventory 1,200
Different softwares 1,000 Other Current Assets 10,000
Computer sphere parts 6,000 Long-term Assets 0

Office Machinery sphere parts 6,000 Total Assets 39,200

Networking Equipments 4,000 Total Requirements 42,225

Advertisement 1,200
Salaries 16,800
Office rent
Total Start-up Expenses 36,800

Assets in (ETB)
Start-up Funding in (ETB)
Non-cash Assets from Start-up 11,200
Start-up Expenses to Fund 3,025
Cash Requirements from Start-up 28,000
Start-up Assets to Fund 39,200 Additional Cash Raised 0
Cash Balance on Starting Date 28,000
Total Funding Required 42,225
Total Assets 39,200

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 Liabilities and Capital in (ETB)
Liabilities
Current Borrowing 200,000
Long-term Liabilities 0
Accounts Payable (Outstanding Bills) 0
Other Current Liabilities (interest-free) 0
Total Liabilities 200,000
Capital
Planned Investment
Owner 50,000
Investor 0
Additional Investment Requirement 0
Total Planned Investment 50,000
Loss at Start-up (Start-up Expenses) (36,800)
Total Capital 13,200
Total Capital and Liabilities 213,200
Total Funding 250,000

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 6.1 Project Cost
(Determine the composition of the initial investment outlay/cost including equipment and material costs,
working capital requirement, and pre-operating interest (if any)

Start-up Expenses Details in (ETB)

Legal=650
Maintenance Tool kits=1,500
External CD drive=2,000
Different softwares=1,000
Computer sphere parts=6,000
Office Machinery sphere parts=6,000
Networking Toolkits=4,000
Advertisement=1,200

Total Start-up Expenses=36,800

Start-up Assets
Cash Required=28,000
Start-up Inventory=1,200
Other Current Assets=10,000
Long-term Assets=0
Total Assets=39,200
Total Requirements=42,225

6.2 Estimates of Sales, Production, and Profitability

(Make financial forecasts - estimates of capacity utilization rate, revenue, operating and administrative costs,
projected profit and loss statement, cash flow statement, including depreciation and amortization schedule).

Sales Forecast

The sales strategy is a prediction of controllable growth for the first year. Flash IT Solution will
focus on quality and attention to detail to avoid some potential pitfalls encountered by many new
businesses. The predicted growth is moderate in the home PC market and in the small business
arena. However, with aggressive advertising this will increase. Our aggressive flayers, Broachers
advertising will increase our residential and small business customer base as. Within a few months
we will have the need for additional employees to handle the work load. At that time, we will move
into a rent office.

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The sales forecast is conservative, which gives us a chance to measure our experience and adjust the
plan accordingly. We will service all of Areas of Addis Ababa City with the distance range of less
than 15 KM. We expect that the majority of our jobs will be performed in the immediate town area.

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Computer maintenance 164 230 350
Office machinery maintenance 130 175 250
Consultancy service 120 150 200
Total Unit Sales 414 555 700
Unit Prices (in ETB) Year 1 Year 2 Year 3
Computer maintenance 280 300 300
Office machinery maintenance 400 500 600
Consultancy service 50 75 100
Sales (in ETB)
Computer maintenance 45,920 69,000 105,000
Office machinery maintenance 52,000 87,500 150,000
Consultancy service 6000 11,250 70,000
Total Sales 103,920 167,750 325,000
Direct Unit Costs Year 1 Year 2 Year 3

Computer maintenance 84 90 90
Office machinery maintenance 105 126 126
Consultancy service 4 5 7
Direct Cost of Sales
Computer maintenance 13,776 20,700 31,500
Office machinery maintenance 13,650 22,050 31,500
Consultancy service 480 750 1,400
Subtotal Direct Cost of Sales 27,906 43,500 64,400

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 Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Home PC Unit 166 200 225
Small Business Unit 264 300 350
Promo 235 0 0
Maintenance Contracts 32 60 85
Total Unit Sales 697 560 660
Unit Prices Year 1 Year 2 Year 3
Home PC Unit $280.00 $300.00 $300.00
Small Business Unit $500.00 $600.00 $600.00
Promo $50.00 $0.00 $0.00
Maintenance Contracts $400.00 $600.00 $600.00
Sales
Home PC Unit $46,480 $60,000 $67,500
Small Business Unit $132,000 $180,000 $210,000
Promo $11,750 $0 $0
Maintenance Contracts $12,800 $36,000 $51,000
Total Sales $203,030 $276,000 $328,500
Direct Unit Costs Year 1 Year 2 Year 3
Home PC Unit $84.00 $90.00 $90.00
Small Business Unit $105.00 $126.00 $126.00
Promo $4.00 $0.00 $0.00
Maintenance Contracts $0.00 $0.00 $0.00
Direct Cost of Sales
Home PC Unit $13,944 $18,000 $20,250
Small Business Unit $27,720 $37,800 $44,100
Promo $940 $0 $0
Maintenance Contracts $0 $0 $0
Subtotal Direct Cost of Sales $42,604 $55,800 $64,350

Projected Profit and Loss

The table below shows our projected profit and loss. There are two lines for direct cost of sales - the
second line shows projected inventory costs of fulfilling our maintenance contracts. The
marketing/promotion line shows our planned advertising program expenses. Although these are
aggressive, we must spend heavily in the first year in order to establish the brand recognition that
will help us break in to the local market.

This table also shows our projected expense increases as we hire more employees and move into a
larger rented space. Before the move, the owner will absorb expenses related to utilities. In years

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two and three, we have budgeted for additional expensed equipment to expand our diagnostic and
repair capabilities to keep up with orders.

We are seeking a modest net profit in the first year. As our reputation grows, we will see higher revenues and net profit
over the next three years.

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales 103,920 167,750 325,000
Direct Cost of Sales 27,906 43,500 64,400
Total Cost of Sales 76,014 124,250 260,600
Gross Margin 27,906 43,500 64,400
Gross Margin % 78.28% 78.22% 78.55%
Expenses
Payroll $69,000 $110,000 $115,000
Marketing/Promotion $28,000 $6,000 $12,000
Depreciation $0 $0 $0
Lease $10,000 $12,000 $12,000
Expensed Equipment $0 $10,000 $12,000
Insurance $3,150 $1,200 $1,200
Website $2,080 $480 $480
Answering Service $200 $2,400 $2,400
Mileage $2,660 $5,400 $5,400
Vehicles $13,200 $15,000 $17,000
Cell Phones $1,260 $1,260 $1,260
Utilities $5,000 $6,000 $7,000
Internet $1,200 $1,200 $1,200
Moving Expenses $2,000 $0 $0
Total Operating Expenses $137,750 $170,940 $186,940
Profit Before Interest and Taxes $21,188 $44,940 $71,090
EBITDA $21,188 $44,940 $71,090
Interest Expense $1,097 $6,570 $2,139
Taxes Incurred $6,027 $11,511 $20,685
Net Profit $14,064 $26,859 $48,266
Net Profit/Sales 6.93% 9.73% 14.69%

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Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $203,030 $276,000 $328,500
Direct Cost of Sales $42,604 $55,800 $64,350
Costs of Fulfilling Maintenance Contracts $1,488 $4,320 $6,120
Total Cost of Sales $44,092 $60,120 $70,470
Gross Margin $158,938 $215,880 $258,030
Gross Margin % 78.28% 78.22% 78.55%
Expenses
Payroll $69,000 $110,000 $115,000
Marketing/Promotion $28,000 $6,000 $12,000
Depreciation $0 $0 $0
Lease $10,000 $12,000 $12,000
Expensed Equipment $0 $10,000 $12,000
Insurance $3,150 $1,200 $1,200
Website $2,080 $480 $480
Answering Service $200 $2,400 $2,400
Mileage $2,660 $5,400 $5,400
Vehicles $13,200 $15,000 $17,000
Cell Phones $1,260 $1,260 $1,260
Utilities $5,000 $6,000 $7,000
Internet $1,200 $1,200 $1,200
Moving Expenses $2,000 $0 $0
Total Operating Expenses $137,750 $170,940 $186,940
Profit Before Interest and Taxes $21,188 $44,940 $71,090
EBITDA $21,188 $44,940 $71,090
Interest Expense $1,097 $6,570 $2,139
Taxes Incurred $6,027 $11,511 $20,685
Net Profit $14,064 $26,859 $48,266
Net Profit/Sales 6.93% 9.73% 14.69%

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Projected Cash Flow

The Cash Flow chart, below, shows our projected cash position for the first year; the table
following it shows highlights for the first three years. With the requested start-up funding, we will
maintain a positive cash balance throughout, and repay the loan within three years.

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $203,030 $276,000 $328,500
Subtotal Cash from Operations $203,030 $276,000 $328,500
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $203,030 $276,000 $328,500
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $69,000 $110,000 $115,000
Bill Payments $110,873 $141,877 $164,115
Subtotal Spent on Operations $179,873 $251,877 $279,115
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $6,564 $6,550 $6,111
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $186,437 $258,427 $285,226
Net Cash Flow $16,593 $17,573 $43,274
Cash Balance $44,593 $62,165 $105,440

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 6.3 Sources of Finance
(Describe sources of funding for your project - the financial requirement/structure by source of finance).

Start-up Funding

To get Flash IT Solution started the owners is providing assets and we are also seeking a short-term
loan that repaid within three years. Our conservative sales forecasts, based on industry research
within the local area, project large sales in year one, gradually increasing through year three. To
reach these goals, we will use an aggressive advertising campaign to exploit our competitors'
weaknesses. With good cost control, we will see a modest, yet comfortable, net profit the first year,
even after moving into a leased space and hiring additional technicians.

7. Financial Analysis
(Describe what the return on investment would be for your project. Depending on the criteria used within your
project, your financial analysis may use ROI, IRR, NPV, Payback period and including sensitivity analysis).

The financial analysis of the Flash IT Solution project is based on the data presented in the previous
section and the following assumptions:-

Source of finance 200,000 ETB loan and 50,000 ETB is owner investment

A. TOTAL INITIAL INVESTMENT COST

The total investment cost of the project including working capital is estimated at Birr 250,000 ETB.

B. PRODUCTION COST
The annual production cost at full operation capacity is estimated at Birr 25.16 million (see Table
7.2). The material and utility cost accounts for 95.30 per cent, while repair and maintenance take
0.45 per cent of the production cost. 117-14

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Table 7.2ANNUAL PRODUCTION COST AT FULL CAPACITY ('000 BIRR)
Items Cost %
Raw Material and Inputs 27400.6 96.317
Utilities 42.361 0.149
Maintenance and repair 125.6 0.442
Labour direct 180.9 0.636
Factory overheads 72.24 0.254
Administration Costs 152.48 0.536
Total Operating Costs 27974.2 98.333
Depreciation 474.15 1.667
Total Production Cost 28448.331 100

C. FINANCIAL EVALUATION

1. Profitability

According to the projected income statement, the project will start generating profit in the first year
of operation. Important ratios such as profit to total sales, net profit to equity (Return on equity) and
net profit plus interest on total investment (return on total investment) show an increasing trend
during the life-time of the project.
The income statement and the other indicators of profitability show that the project is viable.

2. Break-even Analysis
The break-even point of the project including cost of finance when it starts to operate at full
capacity (year 3) is estimated by using income statement projection.
BE = Fixed Cost/Sales Variable Cost= 22 %

3. Pay Back Period

The investment cost and income statement projection are used to project the pay-back period. The
projects initial investment will be fully recovered within 5 years.

4. Internal Rate of Return and Net Present Value

Based on the cash flow statement, the calculated IRR of the project is 26 % and the net present
value at 8.5% discount rate is Birr 8.45 million.

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 8. Benefits and Impact Analysis
(Present in detail the benefits and impacts of your project).

1. Socio-economic Analysis

1.1 Profit Generation

Financially, the investment is viable and earns an average yearly profit of Birr 346,960 and
cumulative profit of Birr 1,040,878 during the 3 year. Therefore, the project stimulates powder
production industry sub-sector and service sector development policy and strategy of the country.

1.2 Tax Revenue

The project will provide an average yearly tax of about Birr 186,824 to the country (excluding
VAT). This is an additional source for the government that will contribute for the efforts
undergoing to improve the social and economic development endeavors in the country.

1.3 Employment Generation

Even-if the project is small scale; it is expected to create employment opportunity of about 13
citizens. The number of the employment citizens will be more than the above mentioned figure if
the individuals who join the market chain. Therefore, the project contributes significant
employment opportunities in the country.

9. Implementation and Monitoring Plan

(Develop implementation action plan for your project including key activities, the milestones,
deliverables/expected results, and success measures or the key performance indicators (KPIs) that will be used to
measure the success of your project. This includes the way the project is organized and managed to deliver the
desired result).

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 10.Procurement Plan
(Identifying products/services to sources from external suppliers/vendors along the time dimension)

11.Quality Plan
(Provide quality targets, assurances and control measures)

12.Risk Management Plan

(Highlight potential risks and actions taken to mitigate them - plan for managing risks and changes within the project
system including what need to be monitored and controlled on an ongoing basis towards the successful delivery of your
project).

13.Marketing Plan
(Describe in detail everything that will need to be done to market your project product and the training program
that will be needed to help beneficiaries on how to use the output of your project).

The Market
The very nature of the computing industry, with its extraordinary rate of technological
development, creates a constant need for businesses skilled in updating and advising customers on
computer-related issues. In town, the majority of potential customers are dissatisfied with existing
options, creating an attractive niche for an innovative start-up. Small business PC users will provide
the majority of our business revenue. Business Week expects the computing industry to grow at a
rate of 12% and the processor speeds to continue to expand for years to come, providing a rich
resource for sales.

PC Repair has decided to focus mainly on the small business market, as these customers
typically don't have a full-time IT person, but have full-time IT needs. PC Repair will offer an
affordable, on-demand service for these customers. We can also offer maintenance agreements that

36
generate additional monthly income. For our residential customers, we will offer a very affordable
and helpful service with a very flexible schedule to meet their needs. Our target market will focus
on Ramsford-on-Bitstream and the surrounding areas. Market research indicates there is an
abundance of business for a small company such as PC Repair.

14.Manpower Recruitment and Training Plan

(Identify staffing/manpower requirements for the respective units or functions and plan for the recruitment as
well as training areas - including objective, target group, content, cost, duration, resource person, venue, etc)

We will ensure that we hire people that are qualified, hardworking, creative, customer centric and are
ready to work to help us build a prosperous business that will benefit all the stake holders (the owners,
workforce, and customers). As a matter of fact, profit sharing Arrangement will be made available to all
our senior management staff and it will be based on their performance for a period of five years or more
as agreed by the board of trustees of the company. In view of the above, we have decided to hire
qualified and competent hands to occupy the following positions

Chief Executive Officer

Head, Technical Services
Human Resources and Admin Manager
Sales and Marketing Executive
Accountant
Computer Repair and Maintenance Engineers and Technicians (10)

Client Service Executive

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15.Communication Plan
(Describe the information needed to inform the stakeholders including the plan you use to reach out to the
stakeholders concerning your project).

16.Acceptance Plan
(List the criteria or the performance baseline to be met to gain customer acceptance for your project)

17.Appendices
(Place any information or diagrams that will not fit in the sections above and then reference them back to the
section it refers to. This includes projects on revenue, operating and administrative costs, projected profit and
loss statement, cash flow statement, including depreciation and amortization schedule).

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