**Funding Request Breakdown & Strategic Justification**
Boaz Trading PLC seeks **27,500,000 ETB** in funding through a balanced equity/debt mix (60% equity, 40% debt) to launch its culturally rooted T-shirt brand. Below is a detailed allocation and rationale for each expense category:
---
### **1. Cannes Activation: 6,875,000 ETB (25%)**
**Purpose**: Establish global brand equity and secure premium pricing power.
**Breakdown**:
- **Pop-Up Store Construction**: 2,500,000 ETB (modular design, VR experience).
- **Celebrity Partnerships**: 1,875,000 ETB (gifting T-shirts to Ethiopian filmmakers/actors).
- **Logistics & Shipping**: 1,250,000 ETB (carbon-neutral airfreight via Ethiopian Airlines).
- **Media Campaigns**: 1,250,000 ETB (Vogue Africa features, social media ads targeting diaspora).
**ROI Driver**: Expected to generate **200M ETB** in global media value and **6,600,000 ETB** in Year 1 revenue.
---
### **2. Local Production: 11,000,000 ETB (40%)**
**Purpose**: Build scalable, cost-efficient manufacturing rooted in Ethiopian materials.
**Breakdown**:
- **Organic Cotton Procurement**: 4,400,000 ETB (1,000+ tons from Arba Minch cooperatives).
- **Hawassa Industrial Park Setup**: 3,300,000 ETB (leasing machinery, training 50 workers).
- **Sustainable Dyeing Facility**: 2,200,000 ETB (natural dye extraction infrastructure).
- **Inventory Buffer**: 1,100,000 ETB (3-month raw material stockpile).
**ROI Driver**: Reduces production costs by **25%** through vertical integration.
---
### **3. Store Setup (Addis): 5,500,000 ETB (20%)**
**Purpose**: Create immersive retail experiences to drive foot traffic.
**Breakdown**:
- **Bole Flagship Store**: 3,850,000 ETB (200 sqm rent, artisan-crafted interiors).
- **Pop-Up Kiosks**: 1,100,000 ETB (Meskel Festival, Unity Park installations).
- **Tech Integration**: 550,000 ETB (AR fitting rooms, TeleBirr payment systems).
**ROI Driver**: Projected **1,200+ daily visitors**, translating to 30,000 ETB/day in sales.
---
### **4. Marketing: 3,000,000 ETB (11%)**
**Purpose**: Dominate local brand awareness and digital engagement.
**Breakdown**:
- **Influencer Campaigns**: 1,200,000 ETB (macro/micro-influencers on TikTok/Instagram).
- **Social Media Ads**: 900,000 ETB (Amharic-language Google/Facebook ads).
- **Event Sponsorships**: 600,000 ETB (Sheger Marathon, Addis Fashion Week).
- **UGC Contests**: 300,000 ETB (“Design Your Heritage” crowdsourcing).
**ROI Driver**: Target **50% brand awareness** in Addis Ababa within 6 months.
---
### **5. Contingency: 1,125,000 ETB (4%)**
**Purpose**: Mitigate risks of currency fluctuations, supply delays, or political disruptions.
**Allocation**:
- **Forex Hedging**: 562,500 ETB (cover 50% of USD/EUR exposure).
- **Emergency Inventory**: 337,500 ETB (backup fabric for 1 month).
- **Legal Reserves**: 225,000 ETB (tariff lobbying, compliance).
---
### **Funding Mix & Repayment Plan**
- **Equity (16,500,000 ETB)**: Offer 30% ownership stake to investors, with dividends starting Year 3.
- **Debt (11,000,000 ETB)**: 5-year loan at 12% interest via Commercial Bank of Ethiopia, secured against inventory.
---
### **Risk Mitigation**
- **Cannes Underperformance**: Pre-sell 40% of collection via diaspora crowdfunding (platform: **ArifPay**).
- **Production Delays**: Dual-source cotton from Arba Minch and Sidama regions.
- **Debt Servicing**: Use 50% of net profit for repayments, prioritizing debt over dividends until Year 3.
---
### **Alignment with Financial Projections**
- **Revenue**: Achievable with 3,000 Cannes units (vs. 1,500 projected) and 74,250 Everyday units.
- **ROI**: 18% target hinges on **4,950,000 ETB net profit**, requiring revised sales targets (see Financial Projections).
---
This funding plan balances bold global ambitions with grounded local execution, ensuring Boaz Trading PLC becomes Ethiopia’s first globally recognized apparel brand while delivering investor returns.