CLICK INTERNET CAFE

(A business plan for the creation of Click internet cafe)

Prepared by:
Fthanegest G/medhn
Tahgas H/Michael
Alganesh Welu
Selemawit Akelom
Shushay Mekonen

(Founders and owner Manager of CLICK INTERNET CAFÉ)

Piazza, Gondar
Address: +251918225690
+251918049826
Email: clickint@yahoo.com

April 26,2018

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 Table of content

1. Executive Summary …………………………………….. 3

2. Business description …………………………………… 3
2.1 Products and Services …………………………….. 4
2.2 The company description …………………………. 4
2.2.1 Mission …………………………………..
2.2.2 Vision …………………………………..
2.3 Pricing ………………………………………………

3. The Market ………………………………………………….

3.1 Customers …………………………………………….
3.2 Market Size/Trends……………………………………
3.3 Competition……………………………………….....
3.4 Estimated sales
4. Development and production
4.1 Cost of production and Development
4.2 Labor requirements
4.3 Expenses and capital requirements
4.3.1 Operating expenses
4.3.2 Capital requirements
4.3.2 Cost of goods
5. Sales and Marketing
6. Management
6.1 Management description
6.2 Support and services
7. Financial Documents
7.1 Risks
7.2 Cash Flow Statement
7.3 Balance Sheet
8. APPENDIX

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 1. Executive Summary
Click internet cafe, unlike a typical cafe, will provide a unique form of communication
through the medium of the Internet. It is the answer to increasing demand.

The public wants:

 Access to the methods of communication and volumes of information now available on

the Internet, and
 Access at a cost they can afford and in such a way that they aren't socially, economically,
or politically isolated. Click internet cafe goal is to provide the community with a social,
educational, entertaining, atmosphere for worldwide communication.

This business plan is prepared to obtain financing in the amount of 150,000 birr. The
supplemental financing is required to begin work on site preparation and modifications,
equipment purchases, and to cover expenses in the first year of operations. Additional financing
has already been secured in the form of:

1) 70,326 in the form of long-term loans from government officials.

2) 50,384 of personal savings from owners of the company. And
3) 29,290 in the form of short-term loans.

The large initial capital investment will allow Click internet cafe to provide its customers
with a full featured Internet cafe. A unique, upscale, and innovative environment is required to
provide the customers with an atmosphere that will give rise to socialization. Successful
operation in year one will provide Click internet cafe with a customer base that will allow it to be
self sufficient in year two.

2. Business Description

Click internet cafe will provide its customers with full access to the Internet and common
computer software and hardware. Some of the Internet and computing services available from
click internet cafe are listed below:

2.1 Products and Services

 Customers can sign up for a Click internet cafe email account. This account will be
managed by Click internet cafe servers and accessible from computer systems outside the
Click internet cafe network.
 Access to Mozilla, Internet Explorer browser and other browsers.
 Full access to email, WWW, FTP, Usenet and other Internet applications such as Telnet.
 Printing, scanning and faxing.
 Installation of different operating systems like widows xp, window 7 and others.
 Installation of needed software’s like antivirus, game, application, café timer.
 Printer setup and configuration. [

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2.2 The company description

Click internet café soon to be located in Gondar city, piazza will offer the community easy
and affordable access to the Internet. Because a place is easily accessible to prospective
customers. Prospective customers are basically everybody. Click internet cafe will provide full
access to email, WWW, FTP, Usenet and other Internet applications such as Telnet.

2.2.1 Mission

As the popularity of the Internet continues to grow at an exponential rate, easy and affordable
access is quickly becoming a necessity of life. Click internet cafe provides communities with the
ability to access the Internet, and share Internet experiences in a comfortable environment.
People of all ages and backgrounds will come to enjoy the unique, upscale, educational, and
innovative environment that Click internet cafe provides.

2.2.2 Vision
For the future the internet café may also offer workshops or lessons. These lessons may range
from simple familiarization with the computer to more difficult subjects. One-on-one tutorials by
the café staff may also be provided to clients who require the service.

Another service that an internet café will offer is photo editing. The customers might have a
picture that can be scanned or digitally edited, fixed up, or restored. While photo editing can be
done at home, it takes time to do the more difficult or complicated jobs, and people would rather
pay somebody to do the job properly rather that bungle it themselves. Video editing is also
another service that will be offered by the internet café, in much the same way as photo editing.

Click internet café will also offer to rent out equipment such as LCD projectors and video
editing tools to events like weddings or presentations.

As Click internet cafe grows, more communications systems will be added. The possibility of
additional units has been accounted for the current floor plan. As the demand for Internet
connectivity increases, along with the increase in competition, Click internet cafe will continue
to add new services to keep its customer base coming back for more.

Lastly, Pc assembling and maintenance will be available in our internet café.

2.3 Pricing

We will use a penetration pricing strategy to attract our primary target market. The method for
setting pricing is based on our capital flow and by considering customers interest but not much
considering lowest prices because lowest pricing is not good for most small business. We will try
to reduce prices of services and products to fit our competitors if it doesn’t have an effect in our
business flow of cash.

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 3. The Market

3.1 Customers:

Click internet cafe's customers can be divided into two groups. The first group is familiar
with the Internet and desires a progressive and inviting atmosphere. The second group is not
familiar with the Internet, yet, and is just waiting for the right opportunity to enter the online
community.

Click internet cafe's target market falls to anybody from the ages of 11 and above. In
addition to these two broad categories, Click internet cafe's target market can be divided into
more specific market segments. The majority of these individuals are students and business
peoples. See the Market Analysis chart and table below for more specifications.

Typical consumers within the market segments we are targeting are the following:-

 University students
 Office workers
 tourists and travelers
 school children, young kids and teenagers
 business men and women
 local residents without a home PC
 workers from near-by businesses on their lunch break
 And any other peoples working on different areas

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3.2 Market Size/Trends

The market size at piazza is very good since there are a large number of customers or users
who use internet services and other related technologies. In addition piazza is a center place in
Gondar many number of users are live and work in it. Many customers are willing to use internet
service and to pay fee for the corresponding time they use.

 Twelve birr per an hour was the most popular hourly Internet fee i.e. 0.20 cents per
minute.

3.3 Competition

Click internet cafe will follow a differentiation strategy to achieve a competitive advantage in
the market. By providing Internet service, it separates itself from all other internet cafes in
Gondar. In addition, it provides a comfortable environment with photo copy services, Faxing and
other soled materials; will distinguishing itself from other Internet providers in Gondar.

Click internet cafe will invest in high-speed computers to provide its customers with a fast and
efficient connection to the Internet. The computers will be reliable and fun to work with. Our
company will continue to upgrade and modify the systems to stay current with communications
technology. One of the main attractions associated with Internet cafes, is the state of the art
equipment available for use. So, we will offer a good service with consistent equipments to save
and obtain our targeted customers.

Click internet café may not be the first Internet cafe in piazza. It will differentiate itself from
the strictly-internet cafes in piazza by providing our customers with a good Internet and
computing services.

3.4 Estimated sales

This includes sales in units and birr for the next years, with the first year broken down by days.

Types of products and services Best case Worst case Most likely Per amount

Internet service 300 br. 200 br. 250 br. Per day
Photo copy 40 br. 32 br. 35 br. Per day
Printing 45 br. 36 br. 39 br. Per day
Faxing 72 br. 36 br. 54 br. Per day
Scanning 25 br. 15 br. 20 br. Per day
CD/DVD, Flash & memory 400 br. 299 br. 345 br. Per day
Installation of different OS’s 220 br. 165 br. 200 br. Per day
And other SW’s

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The location where our service is delivered to customers is at piazza in Gondar.

4. Development and production

4.1 Cost of production and Development

This section will explain a design and development budget. This budget includes the cost o
the design of expense to take into a production. The cost of production for start up business will
require different labor and materials. In our business development we need the following
expenses.

Start-up Expense Details:

 10 computers = 70,000 br.

 Two printers = 2,100 br.
 One scanner = 700 br.
 Different Software’s = 1020 br.
 Photo copy machine=35,000 br.
 other fixtures and remodeling:
o Six stools = 1,600 br.
o Ten computer desks with chairs = 5,400 br.
o Stationery goods = 2500 br.
o One telephone = 500 br.
o CD/DVD, flash and memory= 10,000 br.
o Decoration expense = 1200 br.
o Promotion = 1000 br.
o Rent expense=3000 br.
o Insurance = 6575 br.
o Utility expense=200 br.

Total start-up costs=140,795 br.

4.2 Labor requirements

Click internet café will need labor to start up and run the business. Address how many people
are required and what skills we need to possess.

For the process of installing and configuring the network we need technicians who have a
skill in network configuration and installation for the startup process of a business. The cost for
this task will require 20,000 br. Also we need employee who has graduated in secretarial science
skill to work with a photo copy machine. The cost for this will be estimated around 900 br. per a
month. Other activities will be covered by owners of the company. Since we are found in the
process of starting the business no more employees will included.

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4.3 Expenses and capital requirements

4.3.1 Operating expenses:

Rent Expense: we have a budget for rent expense which is estimated about 3000 br. per month
for start up business.

Marketing Expense: Click internet cafe will allocate 1000 br. for promotional expenses over the
first year. These birr will be used for advertising in local newspapers in order to build consumer
awareness.

Insurance Expense: Click internet cafe has allocated 6575 br. for insurance for the first year. As
revenue increases in the second and third year of business, Click internet cafe intends to invest
more money for additional insurance coverage.

Depreciation: In depreciating our capital equipment, Click internet cafe uses the Modified
Accelerated Cost Recovery Method. We depreciated our computers over a five-year time period
and our fixtures over seven years.

Taxes: Click internet cafe is an LLC, it is not taxed. However, there is a 15% payroll burden.

4.3.2 Capital requirements:

The amount of money we will need to obtain the equipment and resources used to start up
and continue operations of the business will be estimated around 202,152 br.

4.3.3 Cost of goods:

Types of products and services Best case Per amount

Internet service 0.20 cents Per minute

Photo copy 0.60 cents Per page
Printing 1.50 cents Per page
Faxing 18 br. Per page
Scanning 2.50 br. Per page
CD/DVD, Flash & memory 4.50 br., 24 br. Per storage size
Installation of different OS’s Depends on -------------
And other SW’s OS’s type

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 5. Sales and Marketing

In this section we will use different tactics and strategies to get customers to buy our
products and to use services offered by our company.

1. Sales strategy: to get customers for our business we will try to make our services to have
high quality and harmonic rather than amount. For instance, take a care for a photo copy
machine to print clearly, configure the broad band internet which has high quality with
fast speed, and give a service for a customer’s ethically with good personal behavior.
2. Advertizing and promotion: we have stated different general promotional plans for our
business, but since our company is found in start-up process we may not use different
Medias because of high payment for media stations.

Coupon: Click internet cafe will implement a pull strategy in order to build consumer
awareness and demand. Initially, our company has budgeted 1,000 br. for promotional efforts
which will include advertising with coupons for a free hour of Internet time in local publications
and in-house promotions such as offering customers free Internet time if they pay for an
introduction to the Internet workshop taught by Click internet cafe's computer technician.

The reason behind using coupons is that it requires low cost as we stated in the promotion
budget. And it can be addressed to any customers easily.

Word of mouse: it is also another promotion strategy for our customers to purchase and use
services/products offered by our company.

Click internet cafe realizes that in the future, when competition enters the market, additional
revenues must be allocated for promotion in order to maintain market share.

6. Management

Management structure and duties in our company includes the owners involved in start-up
process of our business.

6.1 Management description

Since we all are graduated in computer science department almost we were found in the
same standard knowledge about computer, internet, and any other related technologies. But
to make our management structure clear for customers we will participate into different
activities in our business.

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 Management Structure

1. Cherie Gismie -------------------- Manager

2. Bogale Anjet -------------------- Network Administrator
3. Girma Sisay -------------------- Technician
4. Haile Selassie Araya -------------- OS’s and SW installer
5. Arega Shiferaw ------------------ Technician
6. Helen Gugsa ---------------------- Cashier

6.2 Support and services

Click internet cafe will obtain computer support and needed Internet access Services from
Mini Computers which is located in Gondar. It will provide the Internet connections, network
consulting, hardware and software support required to run the network and business.

7. Financial Documents
7.1 Risks

Developing a business has its own risks. We all are ready to take and resist
responsibilities for negative and positive risks that will happen throughout our
business development.

The risks related to click internet cafe are:

 Will there be a demand for the services offered by Click internet cafe in Gondar?
 Will the popularity of the Internet continue to grow, or is the Internet craze?
 Will individuals be willing to pay for the service Click internet cafe offers?
 Will the cost of accessing the Internet from home drop so significantly that there will not
be a market for Internet Cafes such as Click internet cafe?

Cost over runs: we have budget for this kind of risk to solve or address it and take different
types of actions.

Problem with suppliers: buy large amount of materials or products which are needed for our
company before shortage of product are occurred.

Competitive price cutting: For this type of risk we will try to find and buy products/materials
with low cost by giving a time to understand the current market environment. And we will
offer our services and products with high quality than the previous once.

Technological Developments: as technologies grow up, advanced products may be

manufactured. So, our company will use them in parallel.

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 Environmental problems: we will try to place our business area comfortable for all
customers and configure the network installation in ground areas.

Opportunities

1. Growing population of daily Internet users. The importance of the Internet almost equals
that of the telephone. As the population of daily Internet users increases, so will the need
for the services click internet cafe offers.
2. Social bonds fostered by the new Internet communities. The Internet is bringing people
from across the world together unlike any other communication medium. Click internet
cafe will capitalize on this social trend by providing a place for smaller and local Internet
communities to meet in person. Click internet cafe will grow some of these communities
on its own by establishing chat areas and community programs. These programs will be
designed to build customer loyalty.

7.2 Cash Flow Statement

Since Cash flow is the process of estimating initial capital requirement. So, the following
statements will show the projected cash flow for our business.

1) 70,326 br. in the form of long-term loans from government officials.

2) 50,384 br. of personal savings from owners of the company. And
3) 29,290 br. in the form of short-term loans.

Accounts Payable: click internet café acquired a 70,326 br. loan from a bank at a 10% interest
rate. The loan will be paid back at 1953.50/month over the next three years. The 29,290 br. short
term loan will be paid back at a rate of 8%.

7.3 Balance Sheet

This Balance sheet indicates the ventures assets, liabilities and owners equity.
Our projected balance sheet is presented in the table below.

Assets Year 1 Year 2 Year 3

Current assets cash 150,450 176,989 201,432
Other current assets 0 0 0
Total assets 150,450 176,989 201,432
Liabilities Year 1 Year 2 Year 3
Long-term liabilities 70,326 35,233 15,748
Short-term liabilities 29,290 10,212 0
Total liabilities 99,616 45,445 15,748

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 APPENDIX

Month 1 Month 2 Month Month Month Month Month Month Month Month Month Month
3 4 5 6 7 8 9 10 11 12
Unit prices

Internet 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.25
service cents cents cents cents cents cents cents cents cents cents cents cents
Photo copy 0.60 0.60 0.60 0.60 0.60 0.60 0.60 0.60 0.60 0.60 0.60 0.60
cents cents cents cents cents cents cents cents cents cents cents cents
Printing 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 2.00 2.00 2.00
cents cents cents cents cents cents cents cents cents cents cents cents
Faxing 18 br. 18 br. 18 br. 18 br. 18 br. 18 br. 18 br. 18 br. 18 br. 18 br. 18 br. 20 br.
Scanning 2.50 br. 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
br. br. br. br. br. br. br. br. br. br. br.
CD/DVD, 4.50 br., 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.50
Flash & 24 br. br., 24 br., br., br., br., br., br., br., br., 24 br., 24 br.,
memory br. 24 br. 24 br. 24 br. 24 br. 24 br. 24 br. 24 br. br. br. 24 br.
Installation of Depends D. on D. D. D. D. D. D. D. D. D. D.
different OS’s on OS’s OS’s OS’s OS’s OS’s OS’s OS’s OS’s OS’s OS’s OS’s OS’s
& other SW’s type type type type type type type type type type type type
Total Unit 51.30 51.30 51.30 51.30 51.30 51.30 51.30 51.30 51.30 51.80 51.80 53.85
prices
Month 1 Month 2 Month Month Month Month Month Month Month Month Month Month
3 4 5 6 7 8 9 10 11 12
Unit sales
Internet 9000 br. 10080 10203 12045 13342 15023 15102 15131 15202 15502 15704 15895
service br. br. br. br. br. br. br. br. br. br. br.
Photo copy 1200 br. 1213 1312 1523 1563 1623 1649 1697 1723 1765 1798 1823
br. br. br. br. br. br. br. br. br. br. br.
Printing 1350 br. 1376 1393 1423 1474 1502 1540 1578 1598 1623 1702 1787
br. br. br. Br. br. br. br. br. br. br. br.
Faxing 2160 br. 2212 2344 2399 3045 4056 4299 4334 4423 5123 5288 6103
br. br. br. br. br. br. br. br. br. br. br.
Scanning 750 br. 889 br. 923 965 1031 1200 1392 1493 1512 1723 1823 1923
br. br. br. br. br. br. br. br. br. br.
CD/DVD, 12000 12876 13233 13764 14233 14525 14987 15033 15900 16255 16922 17493
Flash & br. br. br. br. br. br. br. br. br. br. br. br.
memory
Installation of 6600 br. 7200 7923 8923 9234 10234 10989 11123 13122 14923 15878 16222
different OS’s br. br. br. br. br. br. br. br. br. br. br.
& other SW’s
Total Unit 33060 35774 37331 41042 43914 48163 49958 50389 40358 56914 59115 61246
sales br. br. br. br. br. br. br. br. br. br. br. br.

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Expenses

Stationery 2500 2500 2500 2500 2500 2500 2500 2500 2500 3000 3000 3000
goods br. br. br. br. br. br. br. br. br. br. br. br.
CD/DVD, 10,00 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 13,000 15,00 15,000
flash and 0 br. br. br. br. br. br. br. br. br. br. 0 br. br.
memory
Decoration 1200 ------- -----. ------ ------ 1400 ------ ------ ------- -------- ------- 1700
expense br.
Promotion 1000 ------- 1000 ------ 1000 ------ 1000 ------- 1000 -------- 1000
br. br. br. br. br. br.
Rent 3000 3000 3000 3000 3000 3000 3500 3500 3500 3500 3500 3500
expense br. br. br. br. br. br. br. br. br. br. br. br.
Insurance 6575 6575 6575 6575 6575 6575 6575 6575 6575 6575 6575 6575
br. br. br. br. br. br. br. br. br. br. br. br.
Utility 200 303 234 323 311 344 312 345 356 434 422 545 br.
expense br. br. br. br. br. br. br. br. br. br. br.
Total 2447 22378 23309 22398 23386 23819 23887 22920 23931 26509 29497 30320
Operating 5 br. br. br. br. br. br. br. br. br. br. br. br.
expenses

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