TITLE: BUSINESS PLAN

INSTITUTION : THE KISII NATIONAL POLYTECHNIC

TITLE : KISII OFFICE FURNITURES, FITTING CENTER

PRESENTED BY : EZEKIEL BOGONKO OGAMBA

INDEX NUMBER : 703101/0852

COURSE : DIPLOMA IN CIVIL ENGINEERING

COURSE CODE : 2707

UNIT CODE : 305

SUPERVISOR : MADAM VIOLET

PRESENTED TO : THE KENYA NATIONAL EXAMINATIONS COUNCIL

IN PARTIAL FULFILLMENT FOR THE AWARD OF DIPLOMA IN
CIVIL ENGINEERING

EXAM SERIES: JULY 2024

 DECLARATION
I declare that this is my own copy, researched by and has never been presented by anybody to the
Kenya National Examinations Council.
NAME: EZEKIEL BOGONKO OGAMBA
SIGN:
DATE:

NAME:
SIGN:
DATE:

i
 DEDICATION
This project is dedicated to Almighty God for his protection, kindness, strength over my life
throughout the period and also to my father for his financial support and moral care towards me.
May Almighty God shield them from the peril of this world and bless their entire endeavor
Amen.

ii
 ACKNOWLEDGEMENT
The successful completion of this project work could not have been a reality without the encour-
agement of my friends like Faith among others. My immensely appreciation goes to my humble
and able supervisor Madam Violent for her kindness in supervising this business plan.
My warmest gratitude goes to my parents for their moral, spiritual and financial support through-
out my study in this institution.

iii
 EXECUTIVE SUMMARY

KISII OFFICE FURNITURE, FITTING CENTER will be sole proprietorship owned by

Ezekiel Ogamba , located at Egesa kisii-Kisumu road. The business will deal with general furni-
ture and fitting supply, domestic installations and repairs.
The owner settled on this name as it comes from where the business will be located and what it
will deal with . The owner chose the business location because it is a fast growing environment
which is a hub of many other areas and also because of the place being accessible as it is situated
along the highway.

The business will serve customers from the surroundings and neighbouring areas. The intended
business will face competition from local firms such as; wholesalers, retailers and local business.
The business hopes to set fair prices, use tactical sales strategies and use cheap but sufficient ad-
vertising methods of promotions and offer free transport services to customers who purchase in
bulk and come from around as an incentive. Posters, billboards and radio broadcast will be the
methods to introduce the business to people. And uses of networking by method of “tell a friend
to tell a friend.” Will also open a Facebook page to introduce the business to public. The busi-
ness has also identified some weakness that will take advantage on to counter their competitors.

The owner intends to employ qualified and competitive management team which inform and in-
spire the business to success.

Payment of workers will be done in time to motivate them. Permit, licences will be put in consid-
erations which will help the business to run without any disruption from authorities.

The business will have its organizational structure as follow+

iv
 TABLE OF CONTENTS
DECLARATION............................................................................................................................................i
DEDICATION...............................................................................................................................................ii
ACKNOWLEDGEMENT............................................................................................................................iii
EXECUTIVE SUMMARY..........................................................................................................................iv
CHAPTER ONE............................................................................................................................................1
1.0 BUSINESS DESCRIPTION................................................................................................................1
1.1 Owner’s details..............................................................................................................................1
1.2 Business Venture.................................................................................................................................1
1.2.1 Business location and address...........................................................................................................1
1.2.2 Ownership and registration...............................................................................................................2
Type of business........................................................................................................................................2
1.3 Product and services............................................................................................................................2
1.4 Justification of opportunities...............................................................................................................3
1.5 Industry................................................................................................................................................3
Industry size...........................................................................................................................................3
Industrial characteristics........................................................................................................................3
1.6 Goals of the business...........................................................................................................................3
Primary objective...................................................................................................................................4
Secondary objectives.............................................................................................................................4
Long term objectives..............................................................................................................................4
1.7 Entry and growth of the strategy..........................................................................................................4
1.8 Pre-start up strategy.........................................................................................................................4
Startup strategy......................................................................................................................................5
Maturity..................................................................................................................................................5
1.9 SWOT Analysis...................................................................................................................................5
CHAPTER TWO...........................................................................................................................................6
2.0 Marketing plan.....................................................................................................................................6
2.1 Potential Customers.............................................................................................................................6
2.2 Customers............................................................................................................................................7
Technical institution...............................................................................................................................7
Government departments.......................................................................................................................8
Factories.................................................................................................................................................8
Residents................................................................................................................................................8

v
 2.3 Market share and segments..................................................................................................................9
2.4 Competitors........................................................................................................................................10
Erista workshop...................................................................................................................................10
discount center.....................................................................................................................................10
Ebenershop...........................................................................................................................................10
Ouru super stores.................................................................................................................................10
Pricing strategy........................................................................................................................................10
2.5 PROMOTION AND COST ANALYSIS..........................................................................................11
2.6 DISTRIBUTION STRATEGY..........................................................................................................11
Sales tactics..............................................................................................................................................12
Forecast....................................................................................................................................................12
CHAPTER THREE.....................................................................................................................................13
3.0 Organization and management..........................................................................................................13
3.1 Management objectives.....................................................................................................................13
3.2 Personnel............................................................................................................................................13
3.2. Classifying the personnel..............................................................................................................14
CHAPTER FOUR........................................................................................................................................17
4.0 OPERATION AND PRODUCTION PLAN.....................................................................................17
4.1 FACILITIES AND EQUIPMENT....................................................................................................17
4.2 PRODUCTS AND SERVICES.........................................................................................................18
4.2.1 PRODUCT/ITEMS.....................................................................................................................18
4.2.2 SERVICES..................................................................................................................................18
4.3 FACILITY LAYOUT........................................................................................................................18
4.4 PRODUCTION AND OPERATIONAL STRATREGY...................................................................19
4.5 PRODUCTIONAL AND OPERATIONAL PROCESS...................................................................19
PRODUCTIONAL PROCESS............................................................................................................19
OPERATIONAL PROCESS...............................................................................................................19
4.6 OTHER SERVICES..........................................................................................................................19
4.7 REGULATION AFFECTING THE BUSINESS OPERATION................................................20
SAFETY REGULATION....................................................................................................................20
TRADE REGULATION.....................................................................................................................20
HEALTH REGULATORIES..............................................................................................................20
GOVERNMENT REGULATIONS.....................................................................................................20
ENVIRONMENTAL REGULATIONS..............................................................................................20

vi
CHAPTER FIVE.........................................................................................................................................21
5.0 FINANCIAL PLAN...........................................................................................................................21
5.1 PRE- OPERATIONAL COSTS........................................................................................................21
5.2 ESTIMATION OF WORKING CAPITAL.......................................................................................21
5.3 PROFOMA BALANCE SHEET.......................................................................................................22
5.2 WORKING CAPITAL......................................................................................................................23
5.3 PROJECTED CASHFLOW 2026.....................................................................................................25
5.4 PROJECTED CASH FLOW 2027....................................................................................................26
5.5 PROFOMA INCOME STATEMENT 2025......................................................................................27
5.5.1 PROFOMA INCOME STATEMENT 2026..................................................................................28
5.5 PROFOMA INCOME STATEMENT 2027......................................................................................29
5.6 CALCULATION OF BREAK EVEN...............................................................................................30

vii
 CHAPTER ONE
1.0 BUSINESS DESCRIPTION
The business enterprise will mainly be dealing with buying and selling of furnitures fitting com-
ponents to potential customers, individuals, institutions, hospitals and factories.

1.1 Owner’s details

Name – Ezekiel Bogonko Ogamba
Occupation – Engineer
Qualification – Diploma in Civil Engineering
Experience – 5 years
1.2 Business Venture
The proposed name will be (“KISI OFFICE FURNITURE FITTING CENTER ”). This name is

after the owner’s choice.

1.2.1 Business location and address

The business will be located within Kisii County Egesa Kisii-Kisumu Road, Kisii town Egesa

area, opposite Upper Hill Junction thus being close to institutions like Kisii National Polytechnic

and Kisii Campus where carpentry and building students will be going in case of practical en-

quiries. Therefore the business is promised to security because there’s security from the watch-

men around other shops.

The business address will be:

KISI OFFICE FURNITURE , FITTING CENTER

P.O BOX 70,

KISII.

TEL: 0758231715

EMAIL: [email protected]

1
1.2.2 Ownership and registration
KISII OFFICE FURNITURE FITTING CENTER will be a sole proprietorship type of busi-

ness because the owner is the manager thus ensuring job security, creation of employment for

personal satisfaction, intend to improve the living standard and the status of the economy.

The registration of the business will be done Kisii county Municipal Council enabling the

business to be illegal thus making to be known and free to sell, buy, order, display and dis-

tribute products.

Type of business
The KISII OFFICE FURNITURE, FITTING CENTER will be a small business that will be deal-

ing with buying, selling, ordering and distribution of products to potential customers, institutions,

hospitals and many more facilities around.

1.3 Product and services

The kisii home and office furniture, fitting center will encompass a wide range of offerings in-

cluding;

 Fitting design and installation for residential, commercial and industrial properties.

 Furniture distribution to meet specific client requirements.

 Furniture and fittings services

Among these services we will also be selling appliances like;

 Chairs
 Table
 Desk
Beds
 Boardroom tabe
 ceiling
 Nail
 Mdf

2
  Tiles 1

1.4 Justification of opportunities

Due to the high demand of furniture and fittings the business aims a focus with quality workman-
ship, satisfaction and innovative solutions, we strive to become trusted provide in supplying fur-
niture equipments and opportunities and contracts around the area.

1.5 Industry
The KISI OFFICE FURNITURE, FITTING CENTER falls within the construction industry and
it will be one of the biggest industries within Kisii County and Nyanza region at large in supply-
ing large amount of goods and services to the local people. Some of the modern technologies
will be used to improve the business.

Industry size
The KISII OFFICE FURNITURE, FITTING CENTER will be just a medium industry since the
businesses located around the town are small businesses which have not excelled technologi-
cally. The business will be developing later in supplying good quality products and services to
residents, institutions, factories and hospitals.

Industrial characteristics
The manager must consider a lot of characteristics of employees towards running the business.
The employees must be skilled and equipped with electrical knowledge in more so modern tech-
nology since there’s town development. Since labour is intensive with salary and wages as a re-
ward, this will enable the workers to improve their living standards.

1.6 Goals of the business

As an entrepreneur, the owner of the business aim to maximize profit, focus in the future, that is
open and operates similar projects to other parts of the country. The goals of the business are;
1 Offering employment opportunities to improve the owners standards of living
2 Enjoy all the profits of the business.
3 Expanding the business in the future to other parts of the county and the region.
4 Gaining more experiences which will help the owner to improve the business.

3
Primary objective
The immediate objective to the business is to ensure that goods and services are bought and sold
as expected.

Secondary objectives
The secondary objective of the owner to the business will be ensuring the expansion of the busi-
ness, employing more employees, ordering more stock from the market into the business.

Long term objectives

The managers of the business will the market leader, who will supply products, equiments and
appliances in the whole county. Due to high demand in the market around, other enterprises will
be opened to satisfy other people also.

1.7 Entry and growth of the strategy

Pricing-the business will be selling products of high quality compared to other supplier and at re-
duced prices to attract more customers to buy its products.

Distribution-the business will be offering fire resources like distribution of products that will be
in bulk from the business center to maintain its customers.

Advertisement- the business will advertise its existence through media, signboards and posters
which will be displayed all over the town. Personal promotion will also be done as a way of ad-
vertisement.

1.8 Pre-start up strategy

The owner will decide where to locate the business. An agreement between the owner and the
landlord on how to pay bills. This will be done after the building of the business is done ready to
resume the business.

4
Startup strategy
When the business will be ready, the owner will advertise its products. Major products of the
business and pricing of the products will be done together with the discounts offered. Free offers
will be offered during distribution process.

Maturity
When the business has matured, no loses will be encountered since the business will not be able
to collapse. Royal customers will be established and they will be given discount and other ser-
vices like credit facilities. Sub-branches will be opened in places where potential customers and
with high demand for the products will have been established. Employees motivation will be
made through parties and increasement of their salaries and more employees will be employed.
Reliable suppliers will be established and at times they will be invited during committees and
seminars, after this other means of advertising would have been done for the continuing adver-
tisement.

1.9 SWOT Analysis

Strength Weakness Objectives Threats

Employing expe- Competition from Producing quality prod- Shifts in market require-
rienced person- nearby business. ucts to attract customers ments.
nel who will pro- in achieving company
duce high quality goals.
products.

5
 CHAPTER TWO.
2.0 Marketing plan
Marketing is the buying, selling, distribution and advertisement of products in order to make the
products known to the customers and the business.
Entrepreneurs will market their products to make customers aware of the existing products.

2.1 Potential Customers

Kisii National Polytechnic
Kisii School
Kisii University
KMTC
Kisii Central Police
Marketing Objective
Entrepreneurs can market their products in order to:
1. Have more customers
2. Give information to the existing products
3. Ensure customers get the quality of products

i) Sales turnover
The business will have the sales of Kshs 500,000 or the first year, Kshs 800,000 for the second
year as the business aims at 1,000,000
Much

ii) Return of capital invested

This means what will be percentage return on capital invested/employed.
The business will spent Kshs 1,500,000, and the capital to be invested in the money spent is
500,000
Return on the capital employed
500,000 x 100
1,500,000 = 33.33%

6
 iii) Market share
The KISII OFFICE FURNITURE, FITTING CENTER will target on customers or market. For
the 1st year the market share will be 10% and 15% for the 2nd year 20% for the 3rd year

% in shares

year 1
year 2
year 3
year 4

2.2 Customers
The KISII OFFICE FURNITURE, FITTING CENTER will serve both individual and higher
learning institutions in the area, the targeted group will be 15,000 people which is the population
of the area. This is expected to increase as the business grows. Large population will be the stu-
dents from the around institution pursuing building and carpentry related courses.
The business will be opened at 7.00a.m to 8.00p.m except during weekends. The business tends
to use all the possible means to maintain its customers and attract more. This will be done
through offer sales services, credit facilities among other services.

Technical institution
The business will expect technical schools or institution to buy:
1. Mdf 7. Desk
2. Triwood 8. Woodscrews
3. Tape measure
4. Timbers
5. Beds
6. Chairs
Examples of those institutions are;
1. Kisii university

7
 2. The kisii national polytechnic
3. Kisii school
4. Kereri girls secondary school

Government departments
Government departments will be expected to buy;
Tiles
1. Office tables
2. Celling board
3. Tables
4. Chairs
Examples of these government institutions include;
1. Kisii central police station
2. Nyanchwa police station
3. Kisii county government offices
4. Kisii referral hospital

Factories
These are large industries which uses heavy and large machines in production services. These
factories are expected to buy;
1. Cement
2. Tiles
3. Board room table
4. Office chairs
5. Table
These factories are:
1. Kisii banana processing plant (BOCA)
2. Kisii avofresh

Residents
Because of the town developments, both domestic and industrial wiring will be done and the in-
dividual electricians are expected to buy;
1. Tack nails
2. Wood screws

8
 3. Pliers
4. Tiles
5. Chairs
6. Tables
7. Ceiling boards
8. Table
All of these customers will create easiness in the distribution of products since the business
needs to order new stock in the market for customer satisfaction.

Amount

Government department
Institutions
Factories
Residents

2.3 Market share and segments

The KISII OFFICE FURNITURE, FITTING CENTER will be operating its business for profits
even though there’s stiff competition from other businesses around. The business will cater for
all classes of customers who will be from learning institutions, individual and companies. The
business is going to make a capital of about 70% of the customers in the area, since it is situated
at a strategic point, meaning that the customers will be accessing services without problem com-
pared to other businesses. Having qualified personnel will contribute a lot of market share.

9
2.4 Competitors
After a market survey was done by KISII HOME AND OFFICE FURNITURE, FITTING CEN-
TER it has been proved that the key competitors of the business include; Erista workshop, dis-
count Centre, Ebenezah workshop, Ouru super stores.
KISII OFFICE FURNITURE, FITTING CENTER decided to cub their strength and overcome
their weakness in order to succeed and run the business.

Erista workshop
This is a sole business man who is 2km from KISII HOME AND OFFICE FURNITURE,
FITTING CENTER Dealing with fittings only. The business will be facing challenges since
the owner is not educated

discount center
The business is located next to Mwembe movie shop. The business has limited number of
customers because their sells are at high prices hence customers are always complaining.

Ebenershop
The business has many customers but the where the building is situated, the road to Kisii
town will be expanded to a high way and this will bring down the business giving KISII
HOME FURNITURE, FITTING CENTER a chance to fetch all the customers.

Ouru super stores

The business is located 1km from Ebenezer workshop but its sales are at poor quality. This is at
latest market research. This in turn makes the business less competing to others.
Pricing strategy
KISII OFFICE FURNITURE, FITTING CENTER will price its product and services according
to;
Cost of production- the business shall price its products according to the buying price of
the materials and equipment from the manufacturer and it will include the transport to the
area at operation. For example if the buying price of an item is ksh.500, the business will
price it at kshs.650. This will be derived at less charging 30% at the buying price. That is
30%/100 x 500=650
Demand-if there will be a high demand for the product in the market the business shall
price the products at 45% of the following prices

10
 45/100 x500
225+500=725
Supply-supplying of the products will be quick to customers; the business shall reduce
the price by selling at 20% at the buying price so as to finish the stock quickly in order to
introduce new stock. For example if buying price is ksh.500, then it will be 20/100
x500=100+500=600
Competition- if the competition from other business is high, KISII OFFICE FURNI-
TURE, FITTING CENTER shall do a market survey on pricing of other business and it
will change at 170 below their average selling price. For example if the average sales of
others are below 600 on a product the business will sell at 594
1/100 x600=6
Then 600-6=594

2.5 PROMOTION AND COST ANALYSIS

The business will be promoted in different ways;
Effective advertisement will be done through magazines, newspapers signboard, radios
and television.
Posters will be mounted at strategic points such as round about, cross-road and, other
parts. The posters will indicate the products, services and the address at the business.
The business will hold seminars which will help in awareness of the business since it will
be public addressing.
Entertainment will be used during advertisement to capture the interest of the people
passing by in the process that will get what is being advertised.
Signboards shall be placed at various points showing the name of the business, distance
and the address.

2.6 DISTRIBUTION STRATEGY

KISII OFFICE FURNITURE, FITTING CENTER will use the following distribution strategy.
Packaging of products will be done as required, then transporting them by means of road trans-
port to customers destination.
Delivering of product to customers will be done as fast as possible to delay.

11
 If it seems that there are a lot of customers from a certain place who walk at a distance,
outlet or a branch will be opened at the particular place to reduce walking distance. The
channel of will be;

Supplier Retailer customer

Wholesaler Retailer Customer

Sales tactics
Customers will be attracted to the business by having well trained personnel who will
handle customers well. Personal contacts will help to strengthen the relationship at the
customer to the business. Customers care desk will be available for handling problems
and complaints which cards and magazines will be available at the counter where every
customer will access it.

Forecast
For a period of time the business will be expected to be;
Expanding the business which started with thus making it operate in a big building.
Diversifying the business by opening branches of the same business around the county
Having two pickups vehicle which can be used in transporting furniture and products fit-
ting to customers.

12
 CHAPTER THREE.
3.0 Organization and management
This is a system which brings business parts, which are independent to one body thus achieving
the goals set. The importance of organization and management are planning, organizing, coordi-
nating, directing and staffing.

Organizational structure

Supervisor Accountant

Secretary Senior electrician Sales manager

Sales men

3.1
Customer care Other personnel

Management objectives
 To ensure the business attains its goals
 To ensure customers are served well
 To ensure the business is running well and well established
 To ensure easy distribution of products and services to the required destination

3.2 Personnel
The personnel are the employees who work in the business as authorized by the manager.
Importance: they make work easier easing the distribution of goods and services, they are in-
volved in decision making hence understanding rules and regulations of the business.

13
3.2. Classifying the personnel
TITLE QUALIFICATION Duties and Responsibili- Incentive Salary
ties
Supervisor -The supervisor must be 2yrs -Assist the manager in Able to ac- 20,000
and above.. administration of the cess loan.
-Must be computer literate business by advising the
with at least two yeas of ex- other employees on how
perience in similar field. to work in the business.
-Must have supervising skills -Assist the manager in
and good in communication. decision making.
-Motivate workers in or-
der to achieve the desired
goals and objectives of
the business.
Accoun- -Must be at least 25 years -Keeping all financial -Award of 25,000
tant and above. records of the business 5,000 every
-Must have 3 grades in CPA assist. - month as a
certificate from a recognized Assist the manager in loan.
college and be a computer banking services and also
literate. prepare the pay roll for
workers.

Secretary -Must be 22 years and above. -Typing, filling and re- -Able to re- 15,000
-Have at least a secretarial ceiving visitors and give ceive train-
certificate from a recognized general assistance to the ing pro-
institution and good in com- senior officials. grams.
munication.

Sales Man- -Be 25years and above. -Responsible in making Promotion 18,000
ager -Must have attained a purchases and sales.
diploma in business and sup- -He/she will be keeping
plies management. records of orders from
customer and give rele-
vant information.

14
 Customer -Be 25 years and above. -Responsible in making -Promotion 18,000
Care disk -Must have attained a purchases and sales.
diploma in business and sup- He/she will be keeping
plies management. records of orders from
customers and give rele-
vant information

Customer -Be at least 24 years 24 -Handling problems and Receiving 10,000

Care Desk years. questions which cus- training
-Should know how to com- tomers will encounter
municate with the customers about the business.
and have a good relations -Collect information
with them. from customers and
reach it to the manager.

Watchman -Have at least KCSE certifi- -Protecting the business Training ev- 9,000
cate and must be physically properties and ensure ery month.
strong and mentally upright. customers safety.

Shop atten- -Must be attained a mean -Attending customers -Training 10,000

dants grade of C minus and must and make sales to them. every
have a good relationship with -Helping in packing month.
customers. goods.

Total
107,000/=

Other Personnel
15
NO Position Nature Qualification Responsibility No. Salary
wages
1 Account Permanent 3 grade in CPA Keeping financial 1 20,000
records.

2. Sales man- Permanent Diploma in busi- Making purchases 1 18,000

ager ness suppliers and sales

3. Supervisor. Permanent Have supervising Monitor on daily 1 15,000

skills. working.

4. Secretary. Permanent Have a diploma in Typing, printing, fill- 1 12,000

secretarial studies. ing materials, for ref-
erence.

5. Customer Temporary Able to communi- Solving complains 1 10,000

care. cate well and problems

6. Watchman Permanent Have a KCSE Able to protect prop- 2 8,000

Certificate erly

7. Advisor Temporary Able to advise KCSE Certificate 1 5,000

TOTAL 88,000

CHAPTER FOUR.
4.0 OPERATION AND PRODUCTION PLAN
In order for the business transaction to be effective, the business should be planned very
well to yield good output.

16
 During operational period, all possible means of improving production should be taken
into account.
The quality and quantity should be focused into satisfactory of customers.

4.1 FACILITIES AND EQUIPMENT

These are the requirement in the business premises which will be used for the quality pro-
duction to satisfy customers
Example soldering wires, testers, screwdrivers, both flat and star and millimeters, builds,
transistors and thyristors.

No Facil- Description Purpose Supplier Owner- Price Total

ity ship cost
Equip
ment
1 Spirit standard Measuring ver- Mwembe Owned 500 500
level tical and hori-
zontal length
2 CCU 4 way with Control the ENEN Owned 2000 4000
circuit power
breaker
3 Steep Standard Drawing in ca- Wema Owned 500 1500
tape ble
4 Com- Permanent Keeping the Wema Hired 2000 80000
puter record of the 0
producer and
names of em-
ployees
5 Meter Standard To show the Juakali Owned 500 2500
box amount of
power consume
6 P.V.C Standard Correct to pass ENO Owned 1000 6000
Cable through them
7 Switc Standard To control in- Mwembe owned 500 3500
hes stallation

TOTAL 98,000

4.2 PRODUCTS AND SERVICES

4.2.1 PRODUCT/ITEMS
NO ITEM QUALITY UNIT PRICE TOTALS¹¹ by
in¹¹1qqqqqqq1q

17
 1
1 Heater 3 2,000 6,000
2 Speaker 3 4,000 12,000
3 Electrical meter 20 2,000 40,000
4 Circuit breakers 20 1,000 20,000
5 Power inverters 10 4,000 40,000
6 Conducts 100 120 12,000
7 Switches 100 70 7,000
8 Solars 10 7,000 70,000
9 Transformers 5 10,000 50,000
10 Others - - 55,000
To- 912,000
tal
4.2.2 SERVICES
4.3 FACILITY LAYOUT
Customer care entrance
Manager Customer care room Reception

Secretary
Store Sales Man-
Accountant ager

Display Room
Supervisor

Back entrance for

General store
Items

4.4 PRODUCTION AND OPERATIONAL STRATREGY

Since electricity is the major concern in the dealing of the business, a qualified electrician will be
employed to deal with relevant problems.

18
Machines and equipments should be arranged in order to avoid accidents. For proper production
of goods and services, machines should be arranged systematically example; cutting machine,
welding machine and so on.
Products must be packed on specified standards and then displayed.

4.5 PRODUCTIONAL AND OPERATIONAL PROCESS

PRODUCTIONAL PROCESS
The production steps which would be involved in producing the proposed product are as follows;
The manager will make a requisition of the product which will be ordered, he will determine the
potential suppliers.
The products will be stocked and then displayed ready for sale. Some goods will have negotiable
prices and others will be fixed
The business production process is likely to be affected by the factors.
Power failure which will be substituted by a standby generator.
Power weather condition which will affect transportation hardships which will also affect pro-
duction process by making delays.

OPERATIONAL PROCESS
As from the customer arrival time, they will make their orders, they will be served, they will pay,
they will be made aware of new products and services, if any, and they will go.
This operational process is shown in the block diagram below.
Customer arrival Order Payment any other service

4.6 OTHER SERVICES

A detailed table of all the expenses incurred by the business is given below.

NO DESCRIPTION MONTHLY(KSHS) YEARLY(KSHS)

1 Transport 30,000 360,000
2 Insurance 2,500 30,000
3 Electricity 9,000 108,000
4 Water 500 6,000
5 Rent - -
6 Stationaries 70,000 70,000
7 Advertisements 5,000 60,000
8 Telephone 1,000 12,000
9 Salary/wages 70,000 840,000
10 Miscellaneous 10,000 120,000
Total 198,000 1,606,000

4.7 REGULATION AFFECTING THE BUSINESS OPERATION

19
SAFETY REGULATION

The BIDII ELECTRICAL CONTRACTING SERVICES will ensure a high degree of safety to
its workers by enhancing first aid. The business will enhance a fire extinguisher which will be
positioned in an open place where it can be seen and accessed easily by all workers in case of ac-
cidents and outbreak of fire.

TRADE REGULATION

The business will maintain security by accompanying every sale with a receipt which will help in
case of any problem of recording book keeping.

HEALTH REGULATORIES

The business will ensure sanity within the shop by ensuring high degree of cleanliness.

GOVERNMENT REGULATIONS

It’s the manager’s duty to ensure that the business is legally operating with trading license from
the council; payment of taxes will be done in time thus ensuring fair competition to others. Fair
prices of goods will be charged and it will be involved with fair trade practices. The business will
ensure accurate advertisements will be done to create real picture of the business.

ENVIRONMENTAL REGULATIONS

This regulation will ensure that the wastes from the business are well disposed to avoid dirtiness
of the business.

20
 CHAPTER FIVE.
5.0 FINANCIAL PLAN.
The purpose of the financial plan is to determine the amount of profit or loss realized by the busi-
ness, its financial plan is determined.

5.1 PRE- OPERATIONAL COSTS

DESCRIPTION AMOUNT(KSHS)
Machinery
1. Computer system 50,000
2. Multimeters 1,400
3. Bending machines 10,000
4. Others 20,000
81,400

FURNITURE
1. Cabinet 15,000
2. Tables 9,000
3. Chairs 6,000
30,000
OTHER COSTS
1. Electricity installation 60,000
2. Water installation 5,000
3. Transport 10,000
4. Advertisement and promotion 50,000
5. Insurance 2,500
6. License and permits 6,000
7. Salary and wages 70,000
8. Telephone 3,000
9. Miscellenous costs 10,000
216,500
TOTALS =81,400 + 30,000 + 216,500

KSHS 327,900
5.2 ESTIMATION OF WORKING CAPITAL
Working capital = Current Assets – Current Liabilities

WC = CA – CL
Current Assets Amount Current Liabilities Amount
1. Stock 912,000 Creditors 30,000
2. Debtors 40,000 Short term loan 100,000
3. Cash at hand 212,000
1,164,000 130,000

21
WC = CA – CL
1,164,000 – 130,000
= kshs. 1, 034,000
5.3 PROFOMA BALANCE SHEET
This is the amount needed by the entrepreneur in the running of the business.

ASSETS KSH LIABILITIES KSH

Fixed assets Long term liabilities

Land 50,000 Creditors 10,000

Building 20,000 Others 5,000

Equipment 10,000 Short term liabilities

Others 5,000 Bank loans 50,000

Total 85,000 Totals 65,000

Current assets Current liabilities

Cash at hand 100,000 Account payable 10,000

Bank 70,000 Tax payable 20,000

Inventory 10,000 Others 5,000

Others 5,000

Total 185,000 Total 35,000

5.2 WORKING CAPITAL

CURRENT ASSETS KSH CURRENT LIABIL- KSH

22
 ITIES

Cash at hand 100,000 Creditors 10,000

Cash at bank 70,000 Bank overdraft 50,000

Debtors 50,000 Accounts 150,000

Stock 20,000

Working capital 210,000

23
WORKING CAPITAL = CURRENT ASSETS CURRENT LIABILITIES

DETAILS
313,000 237,00 280,00 270,50 263,50 241,50 225,50 228,50 240,50 250,50 209,50 2,760,00
-
0 0 0 0 0 0 0 0 0 0 0
sales 130,000 135,00 150,00 160,00 165,00 180,00 170,00 200,00 185,00 190,00 300,00 1,965,00
0 0 0 0 0 0 0 0 0 0 0
stock 323,500 307,50 300,50 295,00 293,50 275,50 261,50 265,50 278,50 290,50 165,50 3,057,00
avail- 0 0 0 0 0 0 0 0 0 0 0
able
pur- 10,000 10,000 20,000 25,000 30,000 15,000 50,000 40,000 50,000 50,000 55,000 355,000
chases
net 55,500 67,900 88,000 92,000 113,00 103,00 102,00 135,00 132,00 142,00 132,50 1,162,90
profit 0 0 0 0 0 0 0 0
ex- 48,500 40,500 32,000 36,000 19,000 32,000 42,000 12,500 20,000 18,000 2,500 303,000
penses
ending 297,500 280,50 275,50 263,50 260,50 241,50 225,50 228,00 240,00 209,50 240,00 2,762,00
stock 0 0 0 0 0 0 0 0 0 0 0
gross 104,000 108,40 120,00 128,00 132,00 136,00 144,00 148,00 152,00 200,00 240,00 1,612,40
profit 0 0 0 0 0 0 0 0 0 0 0
cost of 20,000 27,000 30,100 32,000 33,000 34,000 36,000 37,000 38,000 40,000 500,00 827,100
goods 0

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5.3 PROJECTED CASHFLOW
DE- JAN FEB MAR APR MAY JUN JULY AUG SEP OCT NOV DEC TOTAL
TAILS
opening 0 0 0 0 0 0 0 0 0 0 500 0 500
stock
sales 0 0 0 0 0 0 0 0 0 0 0 0 0
transport 7,000 7,000 9,000 10,000 6,000 5,000 9,000 9,500 7,000 10,000 10,000 9,500 99000
adverts 2,000 5,000 6,000 9,000 22000
posters 1,500 3,000 4,000 6,000 14500
salaries 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 480000
legal en- 5,000 5000
try
purchases 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 36000
total out- 58,000 58,000 58,000 58,000 58,000 58,000 58,000 58,000 58,000 58,000 58,000 52,000 690000
flow
ending 201,50 211,00 219,50 194,00 214,50 212,50 234,00 108,00 266,00 213,00 3,695,00 557500
stock 0 0 0 0 0 0 0 0 0 0 0

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 5.4 PROJECTED CASH FLOW
PARTICULAR JAN FEB MAR APR MAY JUN JULY AUG SEP OCT NOV DEC 0
opening stock 272,900 272,900 272,900 272,900 272,900 272,900 272,900 272,900 272,900 272,900 272,900 272,900 3274800
sales 10,000 20,000 40,000 30,000 60,000 58,000 49,000 28,000 10,000 80,000 70,000 60,000 515000
total in- 160,000 100,000 120,000 130,000 180,000 170,000 110,000 130,000 190,000 140,000 160,000 100,000 1690000
flow16000
transport 4,000 4,000 1,000 2,000 3,000 4,000 3,000 4,000 1,500 2,000 1,400 10,000 39900
advertisement 1,500 3,000 2,500 2,000 9000
posters 2,500 4,000 3,000 5,000 14500
salaries 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 480000
legal entry 7,000 7000
purchases 0 0 0 0 0 500 0 0 0 0 0 300 800
total outflow 60,500 60500 121000

5.5 PROFOMA INCOME STATEMENT 2025

details Jan Feb Mar Apr may June July Aug Sep Oct Nov Dec

26
opening 313,000 237,000 280,500 270,500 263,500 241,500 225,500 228,500 240,500 250,500 209,500 3,082,000
stock
sales 130,000 135,000 150,000 160,000 165,000 170,000 180,000 185,000 190,000 200,000 300,000 2,258,500

stock 323,500 307,500 300,500 295,500 293,500 275,500 261,500 265,500 278,500 290,500 165,500 3,347,000
available
purchases 10,000 10,000 20,000 25,000 30,000 15,000 50,000 40,000 50,000 50,000 55,000 355,000

net profit 55,500 67,900 88,000 92,000 113,000 103,000 102,000 135,000 132,000 142,000 132,000 145,000

expenses 48,500 40,500 32,000 36,000 19,000 32,000 42,000 12,500 20,000 18,000 2,500 322,000

ending 297,500 280,500 270,500 263,500 260,500 241,500 225,500 228,000 240,000 209,500 240,000 1,772,400
stock
gross profit 104,000 108,400 120,000 128,000 132,000 136,000 144,000 148,000 152,000 200,000 240,000 2,993,000

20,000 27,000 30,100 32,000 33,000 34,000 36,900 37,000 38,000 40,000 500,000 931,000

5.5.1 PROFOMA INCOME STATEMENT 2026

details Jan Feb Mar Apr may June July Aug Sep Oct Nov Dec

opening 313,000 237,000 280,500 270,500 263,500 241,500 225,500 228,500 240,500 250,500 209,500 3,082,000
stock
sales 130,000 135,000 150,000 160,000 165,000 170,000 180,000 185,000 190,000 200,000 300,000 2,258,500

27
stock 323,500 307,500 300,500 295,500 293,500 275,500 261,500 265,500 278,500 290,500 165,500 3,347,000
available
purchases 10,000 10,000 20,000 25,000 30,000 15,000 50,000 40,000 50,000 50,000 55,000 355,000

net profit 55,500 67,900 88,000 92,000 113,000 103,000 102,000 135,000 132,000 142,000 132,000 145,000

expenses 48,500 40,500 32,000 36,000 19,000 32,000 42,000 12,500 20,000 18,000 2,500 322,000

ending 297,500 280,500 270,500 263,500 260,500 241,500 225,500 228,000 240,000 209,500 240,000 1,772,400
stock
gross profit 104,000 108,400 120,000 128,000 132,000 136,000 144,000 148,000 152,000 200,000 240,000 2,993,000

20,000 27,000 30,100 32,000 33,000 34,000 36,900 37,000 38,000 40,000 500,000 931,000

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 5.5.2 PROFOMA INCOME STATEMENT 2027
details Jan Feb Mar Apr may June July Aug Sep Oct Nov Dec

opening 313,000 237,000 280,500 270,500 263,500 241,500 225,500 228,500 240,500 250,500 209,500 3,082,000
stock
sales 130,000 135,000 150,000 160,000 165,000 170,000 180,000 185,000 190,000 200,000 300,000 2,258,500

stock 323,500 307,500 300,500 295,500 293,500 275,500 261,500 265,500 278,500 290,500 165,500 3,347,000
available
purchases 10,000 10,000 20,000 25,000 30,000 15,000 50,000 40,000 50,000 50,000 55,000 355,000

net profit 55,500 67,900 88,000 92,000 113,000 103,000 102,000 135,000 132,000 142,000 132,000 145,000

expenses 48,500 40,500 32,000 36,000 19,000 32,000 42,000 12,500 20,000 18,000 2,500 322,000

ending 297,500 280,500 270,500 263,500 260,500 241,500 225,500 228,000 240,000 209,500 240,000 1,772,400
stock
gross profit 104,000 108,400 120,000 128,000 132,000 136,000 144,000 148,000 152,000 200,000 240,000 2,993,000

27,000 30,100 32,000 33,000 34,000 36,900 37,000 38,000 40,000 500,000 931,000

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5.6 CALCULATION OF BREAK EVEN
The breakeven analysis is calculated in various steps as follows
Compiling all expenses
Salaries 480,000
Insurance 10,000
Advertisement 22,000
Transport 99,000
Cost of goods 931,000
Depreciation 20,000

Separating business expenses into fixed and variables

Salaries 480,000
Insurance 10,000
Total 490,000

Variables
Advertisement 22,000
Transport 99,000
Depreciation 20,000
Cost of goods 931,100
Total 1,072,100

Dividing variables by the total sales and multiplying by 100%

1,072,100
× 100 %
2,215,500

= 48%
Subtracting
100% - 48% = 52%
Dividing fixed expenses by the above % to get the breakeven analysis.
490,000
= 942.3
52

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Breakeven analysis = 942.3
Calculation of profitability ratio
Return on sales = total net profit: total sales
1,450,400: 790,000
1: 8
Return on assets = total net profit: total sales
1,450,400: 1,818,000
= 1: 8
Proposed financing
Proposed financing is the amount of capital the business requires for its operation cost
Displaying unit 60,000
Furniture 200,000
Total 260,000

31