FACULITY OF MECHANICAL AND INDUSTRIAL ENGINEERING

BAHIR DAR INSTITUTE OF TECHENOLOGY

BAHIR DAR UNIVERSITY, BAHIR DAR, ETHIOPIA

ENTREPRENEURSHIP FINAL PROJECT

Project title: Children and youth entertainment and shopping website.

Business founders
1. MESERET GASHAW ..BDU0501920UR
2. NAHOM DANIEL..........................BDU0502100UR
3. NAHOME GUMATABDU0502101UR
4. MICHAEL TADESE.BDU0501959UR
5. MICHAEL BALEW..BDU0501954UR

Advised by MR. TOMAS

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Table of Contents
1 Background of online marketing and entertainment sites in Ethiopia ............. 4
2 Description of the project ................................................................................ 5
2.1 Identification and exploration of business scenarios ................................. 6
2.2 Definitions of the project and alternative scenarios and models ............... 6
2.2.1 Technical process ............................................................................. 9
2.2.2 Time horizon .................................................................................... 9
2.3 Relationship to the surrounding geographical area ................................. 10
2.3.1 Social impact on local communities ................................................ 10
2.3.2 Economic impact ............................................................................ 10
2.3.3 Environmental impact on the surrounding area ............................. 10
3 Market feasibility ........................................................................................... 11
3.1 Enterprise description ............................................................................. 11
3.1.1 The size and scope of the industry ................................................. 11
3.1.2 Further direction of the companys estimation .............................. 11
3.1.3 The nature of the industry market ................................................. 11
3.1.4 The life-cycle of the company ......................................................... 12
3.2 Enterprise competitiveness ..................................................................... 12
3.2.1 Major competitors.......................................................................... 12
3.2.2 Barriers in the online shopping business market ............................ 13
3.3 Market potential...................................................................................... 14
3.4 Sales projection ....................................................................................... 15
4 Technical feasibility........................................................................................ 16
4.1 Facility needs ........................................................................................... 16
4.2 Suitability of the technology .................................................................... 17
4.3 Availability and sustainability of site ........................................................ 17
4.4 Raw materials .......................................................................................... 18

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 4.5 Other inputs (Human resource) ............................................................... 18
5 Financial feasibility ........................................................................................ 19
5.1 Estimate the total capital requirements .................................................. 19
5.2 Estimate equity and credit needs ............................................................ 20
6 Organizational/Managerial feasibility ............................................................ 22
6.1 Business structure ................................................................................... 22
6.1.1 Legal structure................................................................................ 22
6.1.2 Potential joint ventures .................................................................. 22
6.1.3 Available consultants and managers .............................................. 23
6.2 Business founders .................................................................................... 23
7 Study conclusion ............................................................................................ 24
7.1 Criteria Outline for decision making among alternatives ......................... 24

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 Feasibility study of Business venture on children and youth
entertainment and shopping site
1 Background of online marketing and entertainment sites in Ethiopia
Online marketing is well known and organized marketing system in developed
countries. But in Ethiopia it is only starting to bloom. Some of the online shopping
in Ethiopia are Kaymu, Jumia market, sheger.net, Sheba shopping. But these sites
are only focused on the adult portion of the community.
This business plan is for starting a children and youth shopping and entertainment
website. This kind of website is new in our country. Because of the limited
awareness of online marketing. But nowadays the culture of using the internet for
day to day activities is growing. like for example one can book his flight, do his
banking, also book cinema seat tickets online without leaving his bed as long as he
has internet access.
There are a lot of entertainment websites in Ethiopia. The most popular sites are
Ethiopian review, Ethiotube.net, diretube.com, addiszefen.com, addislive.com, and
addistunes.com.
But a site which combines online shopping and entertainment is new and never
seen before. This project is to make this happen in our country and save the time
and money of the youth and show available products and entertainments.
This business plan is new in its contents compared to other online shopping and
entertainment sites available in Ethiopia. We expect to gain large profit from all of
the services we are going to give that are shopping, entertainment and sports
betting.

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2 Description of the project
This project is to start online shopping and entertainment website.

This business organization mainly has two sectors. The first one is SALE which sale
the product to the customer and the second one is the SERVICE sector which
provides the following services and delivery service.
The segments of the website include:
Shopping segment: includes selling toys, games, and clothes for children and
youth
Music and movies segment: provides free music and movies that are
entertaining for the children and youth.
Sport and entertainment news blog segment: shows sport news from the
country and abroad
Location provider segment: provides the locations of places for
entertainment. For example when one person is visiting new town he/she
can search for places to entertain in our website. It provides with locations
of cinemas, hotels, recreation places (game zones), parks, museums, and any
other places where people want to go when visiting new town.
Events segment: provides with the information of available events in the
country i.e. concerts, exhibitions, art gallery opening, etc.
sports betting segment: place for customers to bet on the outcome of a
sports events

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2.1 Identification and exploration of business scenarios
The entertainment and shopping business scenario does not exist in our country.
The available business scenarios are the different types of online shopping
scenarios. There are different kinds of online shopping experiences. Here are some
of the most common
Strictly online presence: the company is called online retailer. Many
companies have seen the benefits of having a solely online presence. The
costs associated with the brick and mortar store are virtually eliminated and
elements such as inventory are streamlined on a demand and supply basis.
Brick and mortar combination: also known as physical and virtual storefront.
For the customer, they have the benefits of both physical interaction with
the product and convenience of purchase. The internet creates the
awareness and spark in the interest and the physical storefront allows the
user the satisfaction of testing the product.
User to user: it is the idea of selling between consumers by connecting
buyers and sellers. This method is used in sites like EBay and craigslist.
From the above online shopping methods user to user method is not applicable for
our business plan since the products that will be sold are going to be new (not
used).
What we are going to use for this project is strictly online presence, but the brick
and mortar combination approach can be implemented as the company grow
stronger and can make its own products.
Most of the online shopping found in Ethiopia implement the strictly online
presence since physical and virtual storefront cost a lot more.

2.2 Definitions of the project and alternative scenarios and models

As described in the background the project is a children and youth entertainment
and shopping website which will provide the following products and services.
The types of products that will be sold in the shopping segment are the following
Toys
Games
Clothes

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Toys: the toys that will be sold on our website include
1. Action figures
2. Animals
3. Cars and radio controlled
4. Construction toys
5. Creative toys
6. Dolls
7. Educational toys
8. Electronic toys
9. Executive toys
10.Food-related toys
11.Model building
12.Physical activity and dexterity
13.Puzzle/assembly
14.Science and optical
15.Sound toys
16.Spinning toys
17.Wooden toys
Games: the type of games that will be sold are classified into three
Monopoly
Mouse Trap
Nintendo Entertainment System
Operation
Pong
Pretty Princess
Risk
Rock 'Em Sock 'Em Robots
Scrabble
Simon
Sorry!
Trivial Pursuit
Twister
Uno
Xbox

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Clothes: In this category there are any kind of clothing that are suited for the age
range of 5-25.
Sportswear (Men/Women, Ages 18 to 25; Boys/Girls, Ages 5 to 18)
Junior Clothing (Boys/Girls, Ages 10 to 18)
Children's Wear (boys/girls, Ages 5-10)
The services that our website provides include
Sports and entertainment news
Downloadable free music and movies
Location provider
Events info
Sports betting
Sports and entertainment news:
In this section local and global sport news will be posted daily. And also
entertainment topics will be blogged about.
Downloadable free music and movies:
This is where in this site a customer can download music and movies for free.
Location provider:
In this section customers can browse for location on the server.
Events info:
It provides with the information of available events in the country i.e. concerts,
exhibitions, art gallery opening, etc.
Sports betting:
How the sports betting works
For example: if there is a match between St. George and Ethiopian coffee

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 Person A thinks St. George will win and person B thinks Ethiopian coffee will win
the site connects the two customers and they place their bets (wager) using the
internet banking. The firm Takes 2-5% of the waged amount from the wining
customer.
2.2.1 Technical process
To start this business first we need to contact website Design Company. There are
some web design and hosting companies but the one we selected is EPION
Computer solutions PLC. Since they are the leading website design company in
Ethiopia providing website design and software development services at
affordable prices. This company will be the consultant and designer for our
website.
The technical process for the online shopping is that the customer browse the site
then place his order by choosing his/hers payment method, it might be with their
credit card or may be payment at delivery. The server process his/hers order and
check his/hers credentials. If it checks out we deliver to the customer.
2.2.2 Time horizon
To determine the time horizon first we need to know the requirements for the
project and the process. The steps to initiating this business site are the following
Contacting producers of the products that we are going to sell
Contacting web designing and hosting company
Find loans for the project
Buying equipment
The estimated time for the above steps is around six months after that the site
will be up and running.

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2.3 Relationship to the surrounding geographical area
2.3.1 Social impact on local communities
The social impact of this site is that it improves the culture of online shopping in
our country. If this project becomes successful shopping experience will be
modernized and people we get what they need without leaving their seats at the
computer.
These days, for sport fans around the globe, emotional stress is not the only
negative impact of watching ones team lose a game. More and more Joe-sport
watcher joins the ranks of those who bet on different sports as sport has become
more than just a hobby. It will not take long before Ethiopian sport fans could join
this growing international scene. Our site will satisfy this need for the fans in our
country.
2.3.2 Economic impact
Now let us list some of the major impacts of our site with regard to economic
impact
Provides job opportunity
Facilitate product promotion
Give financial benefit for the country
Initiate other investors to participate in this kind of business
2.3.3 Environmental impact on the surrounding area
Our business plan is a type of business based on technical service and when we
come to environmental impact since there is no product production our institute
will only have a positive impact. As we know in Addis Ababa most of the time
similar activities are centered on the places therefore our institute will add some
value to the diversity of the surrounding area.

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3 Market feasibility
3.1 Enterprise description
3.1.1 The size and scope of the industry
The size of this business will be started in small and covers the Addis Ababa region
area only at first. The company will include head office, storage areas in few
places, and delivery motor cycles and one transportation vehicle for providing
information to the event and location provider segment of the website.
When to talk about the scope of this business idea it concentrate on promoting
local entertainment, give information about places for entertainment and sales
entertainment products for kids and youth and also have sport betting section.
3.1.2 Further direction of the companys estimation
This site is estimated to have a faster and larger server that will facilitate the
services that provide in a few years after the initial launch of the site. And also the
online shopping experience will be changed from strictly online presence to Brick
and mortar combination also known as physical and virtual storefront. This
transforms the company to higher level and it will start creating job opportunities
to a larger number of workers.
3.1.3 The nature of the industry market
Since the online business is always on continuous change and improvement, the
nature of this project going through rapid change and restructuring in time.
There must be day to day update on the sports and entertainment news. And also
update on the music and the movies uploaded. The location provider segment
depend on the speed of the sites server, for a better browsing experience the
servers must be up-to-date.
As the company grow stronger it might need restructuring the whole process, i.e.
the shopping mechanism, the website, the servers and number of employees.
And also the number of the branches will be increased.

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3.1.4 The life-cycle of the company
The life cycle of this business can classified by 3 stages
The first stage: is organizing the company i.e. search for producers that
want to sell their products online. And organizing the technical equipment
and the technicians for the server. And lastly gather the data for the
segments of the location provider and events.
The second stage: advertisement of the business using social networks,
newspapers and magazines
The third stage: where we launch the site and start working.

3.2 Enterprise competitiveness

3.2.1 Major competitors
Our website is one of a kind in our country since it have shopping and
entertainment segments combined. But the online shopping sites will be
competitors in selling the product. The following are some of the major
competitors

Jumia Market
Sheger.net
Sheba Shopping
Online Shopping Ethiopia
Ethiopian eBay
Delala.com
Ethiopian Store
Mesh Cart
Kaymu Online Shopping
Mereb.com.et
Yeroof
Gulit.com
Ezega.com
Yebeto.com

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From the above lists of sites the serious treats for our company are the following

1. Sheba shopping

2. Jumia market

3. Delala.com

4. Sheger.net

3.2.2 Barriers in the online shopping business market

When someone enter this kind of business they will have to face so many
challenges (barriers)
Those challenges are;
Access
Most people who do not buy online will know about the opportunity to buy
online, some will not have access to the internet or will have limited access to the

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internet, for example by using a friend's internet connection or accessing the
internet in a public place such as a Library or Internet Caf where there is a higher
risk of losing privacy and having details stolen. Some people do not see online
shopping as an option.
Internet Ability & Education
Some people will not consider shopping online an option due to lack of ability to
use the internet or at least a lack of confidence to shop online successfully, some
may have tried found it to steep a learning curve and given up.
Perception
Those who have not tried online shopping may have an inaccurate perception of
it; they perceived shopping online to be either difficult, unsafe, expensive or
unable to provide sufficient product information.
Reputation
Apart from using recommendations it can be difficult for consumers to tell which
websites are safe and which ones shouldn't be trusted. For this reason many
online shoppers will use well-known brands and brand loyalty sticking to a few
websites that they know are safe rather than shopping elsewhere.
The above barriers can be overcome by successful promotions and by providing
secured website.

3.3 Market potential

The potential market for our products is for the parents who wants the best for
their children. The product will be sold into a commodity and services that will be
provided are for free for the customers that intern will attract people to browse
the website. Large profit will be gained from advertisement.
There is an opportunity for the site to be branded if it can attract large number of
users. For that it must be very entertaining for the young people and the website
must have a good server.
The following table shows the potential customers and their percentage to the
total number of customers.

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Potential customers Percentage
Men (ages 18-25) 13%
Women (age 18-25) 12%
Boys (ages 5-17) 40%
Girls (ages 5-17) 35%

3.4 Sales projection

The sales projection for the shopping segment for the next three years is shown in
the following table.
Year1 Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Total Unit Total
# of item profit
items price
Toys 80 20 30 40 100 35 50 70 150 80 65 100 820 100 82,000

Game 60 40 30 50 60 70 60 20 60 20 45 60 575 150 86,250

cloth 50 70 90 40 80 60 40 30 90 70 50 80 750 350 262,500
Total profit 430,750

Year2 Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Total Unit Total
# of item price
items price
Toys 90 30 40 50 110 45 60 80 160 90 75 110 940 100 94,000
Game 70 50 40 60 70 80 70 30 70 30 55 70 695 150 104,250
cloth 60 80 100 50 90 70 50 30 90 70 50 80 820 350 287,000
Total profit 485,250

Year3 Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Total Unit Total
# of item price
items price
Toys 100 40 50 60 120 55 70 90 170 100 85 120 1060 100 106,000
Game 80 60 50 70 80 90 80 40 80 40 65 80 815 150 122,250
cloth 70 90 110 60 100 70 50 40 100 80 60 90 920 350 322,000
Total profit 550,250

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4 Technical feasibility
4.1 Facility needs
For the success of the company it needs a good infrastructure for implementing
its purpose which is online shopping and giving entertainment for its customers.
The facility will have one head office branch and two sub branch in different
sectors of Addis Ababa. The requirements of this sites are listed in the following
table
Branch name Rooms available in the site Rent for the offices/rooms
Legehar head office Management office 10,000
Shopping division office 7,000
Entertainment segment 7,000
office
Sports betting division 7,000
office
Server room 11,000
Reception office 5,000

Gerji sub branch One work office 4,000

Storage rooms 8,000

Arat kilo sub branch Work office 5,000
Storage rooms 9,000
Total cost of rent for 73,000 birr
month

The equipment needed for the facility are listed in the following table
Equipment quantity Total cost(birr)
Server 1 60,000
desktops 10 30,000
Delivery motor cycles 6 480,000
Transportation car 1 300,000
Total equipment cost 870,000

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4.2 Suitability of the technology
Online shopping is becoming popular in our country because of the increased
numbers of this service providers. But the available shopping sites do not include
entertainment segments. The technology of online shopping Is very sustainable
since it is only beginning in our country we expect this business to only grow
rapidly in the next five years or so.
Some of the limitations in this technology or service are the following
Trust issue from the customers about whether their order will be delivered
Internet network problems
Access to internet banking
The online sports betting is one of a kind. It never been done before, so there will
not be any competitors in this section. But it doesnt mean it will be 100%
successful. There are some limitations like
Online money exchange safety from hackers
Less awareness of the internet banking
Needs a very successful advertisement

4.3 Availability and sustainability of site

To be sustainably operating the company must have its own site where it have its
division offices i.e.
Promotion division
Sales management
Researchers division for event and location segments
Designers division
Storage area
But for starting the business we can rent site which located in Addis Ababa. Since
the capital city is suitable to find a large number of customers and easier for
promotion activities. And also it has easier access to qualified employees. The

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locations that are selected above are needed to deliver the products to the
customers as quick as possible.
The sites are available in the specified area which are Legehar, Gerji, and 4-kilo.
The storage rooms are located in this areas. For the sustainability of the company
the rented buildings (offices) are checked to be free from any urban development
issues and other problems that might force us to change location.

4.4 Raw materials

The raw materials in this type of business are the products from the producers
that we are going to sell them on our sites. This products are
Clothes
Toys
Games
Tickets etc

4.5 Other inputs (Human resource)

For success of the company we need to employee qualified worker whom will be
hired based on their creativeness, hardworking skills, and ambition.
The wage rate for the employees
Job title salary
Web designer 7,000
Promoter 4,000
Secretary 3,500
Security 1,500
Delivery guys(six in number) 3,000 each=18,000
Total salary 34,000

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 5 Financial feasibility
5.1 Estimate the total capital requirements
The total capital requirement includes the cost for the equipment, site rents,
salary and contingency cost.
Before starting the business we need to acquire the money to pay for the
employees and rent for at least 12 months.
Therefore salary cost for the next 12 months will be
34,000 * 12=408,000 birr
Rent cost for the next 12 months will be
73,000*12=876,000 birr
And the contingency capital needs include
Contingencies Estimated cost
Technology malfunction 150,000
Market access delay 100,000
Delivery problems 130,000
Total cost 380,000
Therefore the total capital requirement will be
Cost type Total cost
Equipment cost 870,000
Salary cost 408,000
Rent cost 876,000
Contingency cost 380,000
Total capital requirement 2,534,000

To start this company we need to raise 2,534,000 birr from founders and from
bank loan.

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5.2 Estimate equity and credit needs
Since online shopping is associated with online banking, our credit source will be
the bank, which is the Commercial bank of Ethiopia. Since it has the largest
number of customers in the country it is the best choice.
The entertainment segments of the site are for free, that is to attract website
viewers. This division of the company will benefit from the companies that are
going to promote on our site. This companies are hotels, cinemas, parks and other
entertainment places.
We have estimated that we need 2,534,000 birr to start the company. From this
money 50% will be from bank loan
Estimated credit=1,267,000 birr
And the other 50% will be raised from the founders, since there are five founders
they need to raise 253,400 birr each
Estimated equity=1,267,000 birr
The profit of the company from different segments of the company over three
years is estimated as follows
segment Year one Year two Year three
Online shopping 430,750 485,250 550,250
Entertainment 340,000 430,000 530,000
promotion profit
Sports betting 200,000 350,000 420,000
Total profit 970,750 1,265,250 1,500,250

The total profit that will be gained in three years is around 3,736,250 birr. The
break-even point will at the beginning of the second year after starting the
business. Since the total profit of year one and year two is
970,750+1,265,250= 2,236,000 birr
The profit of the company increases as the time passes and awareness of the
people increases. The break even analysis is given in the following graph

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 Cost
Profit

(2,534,000
birr)
Breakeven point
(No profit or loss)

Debit,
liabilit
y

0 1 2 3 year

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6 Organizational/Managerial feasibility
6.1 Business structure
6.1.1 Legal structure
The legal structure for the online shopping is provided from the government and
for the sports betting section we need to obtain permission from the national
lottery Administration.
The Administration is reorganized & strengthened by proclamation No 210/1981.
According to this proclamation National Lottery Administration has dual
objectives. The first objective is operating and administrating money lottery. The
other objective is regulating and controlling all activities that are related to lottery
games and gambling. The second objective includes the power of issuing permits
to other persons who carry out Tombolla and sport betting, suspend and cancel
the permits for sufficient reasons, and collect charges for the permits issued. It
has also a power to give permit or restrict the importation of game related items
and machines such as:-
Playing cards

Articles of billiards

Articles of Casino and Bingo

Video games

Other games (disk or coin operated).

After obtaining the permit we can implement the sport betting segment of the
website.
6.1.2 Potential joint ventures
The potential alliances for our company are listed below
National lottery association
Will be our partner for the sports betting section
Kids toys and games manufacturers

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Any company that wants to sell their product on our site will sign a contract with
our company then we will provide the service of selling the product and delivering
the product to the customer.
Entertainment providing companies
By entertainment providing companies we mean cinemas, concert organizers,
recreation parks. This companies can work with our organization. Our site will
promote this locations for our customers then we will charge the companies for
the promotion service.
Commercial bank of Ethiopia
The commercial bank of Ethiopia is the bank which will loan as the money to start
this company. And we will work with this bank for the customers to use their CBE
accounts to purchase the products.
6.1.3 Available consultants and managers
This project need a good web design and hosting consultant for it be successful in
the business. For the consulting there are some web design and hosting company
that will work with our website. As mentioned previously EPION computer
solution PLC is the designer for our site therefore this company will be the future
consultant for our business.

6.2 Business founders

The business founders are mechanical engineers graduated from Bahir Dar
University. Their names are listed below
Meseret Gashaw
Nahom Daniel
Michael Balew
Michael Tadese
Nahom Gumata
The business founders do not have the web designing skills, so the web site will
be designed by the designer. But the founders have creating skills which is the
most important ability for the company to stay competitive and be profitable.

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There is reward system for personnel who brought new technics and introduce
new technology to the company. The amount of reward will depend on the size of
the profit it will bring to the company.

7 Study conclusion
Finally we have seen that the business is very profitable and can be done in our
country with keeping in mind the barriers that will happen in the process.
Alternative business scenarios are opening virtual store fronts for the users to
browse through the products and also see with their own eyes instead of on the
computer screen.
The goals of our business is to promote online shopping in our country and
promoting safe and healthy entertainment. This goal will be accomplished by this
project.
The requirement for the project are not simple to obtain but they are not
impossible as they say no pain no gain by working hard enough the project can
be done.

7.1 Criteria Outline for decision making among alternatives

Is it the most effective alternative?
How much does it cost?
Is it appropriate for our country?
Is it possible to implement?
What are its benefits?
By using the above criteria we checked the available alternatives and we
concluded that the project is feasible and it is possible to proceed with creating it.

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