Enockmosomi

1@gmai
l
.com

BUSI
NESSSTUDI
ES
FORM ONENOTES

(
enockmosomi
@gmai
l.
com)

ByMr
.Mosomi

FORMOREE-MATERIALS
What
sApp(
+254)0748842695

I
NTRODUCTI ONTOBUSI NESSSTUDI ES
Obj
ect
ives:Bytheendofthetopic,t
helearnershoul
dbeabl eto:
Explai
nthemeaningofBusi nessstudies
Explai
ntheimport
anceofBusi nessstudiesinsoci
ety.
Business:
Anyactiv
ityt
hatiscarri
edoutbyani ndi
vi
dualoran

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organi zationconcer ningpr ovisionofgoodsandser vi

ceswi thav i
ew
tomaki ngpr ofit.
Busi nessst udies: Ist hest udy /exami nat ionoft hebusi nessact ivit
ies
i
nsoci ety.Theseact i
vitiesar er elat edt ot hepr oduct i
onofgoods
andpr ov i
si onofser v i
ces.
-I
tcanal sobedef inedast hest udyofact i
viti
est hatarecar ri
ed
outi nandar oundpr oduct i
on, dist ribut ionandconsumpt ionof
goodsandser v i
ces.
iii
)Goods: Thesear ei t
emst hatar et angi bl e.i.e.theycanbet ouched
andf elt
.
Activ i
ty1: Thest udent st ol isti temsi nt hecl assr oom t hatcanbet ouched
andf elt
-Furnitur e,bui l
di ngs, books, v ehiclese. t.c
iv)Ser vices: Thesear eef for t
soract s/ act ionsoract i
vit
iest hatmay
besol dandar ei nt angibl e( cannotbet ouchednorf elt)
.
Activ i
ty2: Thest udent st ol isti temst hatmoneyi spai dtogetbutt hey
cannott ouch.
v)Pr oduct ion: Ref er st ot hecr eat ionofgoodsandser vi
cesor
i
ncr easi ngt heirusef ulnesst hroughact ivitiessuchast r
anspor tingt hem
towher et heyar er equi red.Peopl ewhoar ei nv ol vedi npr oductionof
goodsandser v i
cesar er efer redt oaspr oducer s.
Activ i
ty3: Usingt hel i
stsofgoodsandser v i
cesabov e,t
hest udent st o
namet hosei nv olv edint hei rpr oduct i
on.
v i
)Di str i
but i
on: Ref erst ot hemov ementofgoodsandser vi
cesf rom
producer st ot heuser s.Someact ivit
iest hatt akepl aceasgoodsand
servicesal lmov edi ncludet ranspor t
at i
on, stor age, i
nsur ance,
communi cation, adv erti
si ng. e.t.c
vii
)Consumpt i
on: Referst ot heactofusi ngt hegoodsorser vices
producedconsumpt i
oni st heul ti
mat egoal ofpr oduct i
on.Theper sons
whousesagoodoraser vicei sr eferredt oasaconsumer .
Activ i
ty4: Thest udent st ol istt heconsumer soft hegoodsandser vices
l
istedi nact ivit
y( 1)and( 2)abov e.
Busi nessst udi esasasubj ecti scomposedoft opicsdr awnf r
om v arious
disciplinessuchas:

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Commer ce
Accounti
ng
Economics
Offi
cepracti
ce
Entr
epreneurshi
p

Commer ce
Thisi st hest udyoft r
adeandai dst ot rade.Tr ader eferstot heexchange
ofgoodsandser vicesf orot hergoodsandser vicesormoney .
Aidst ot r
adear ehumanact i
viti
es( ser v ices)t hatassi sttradetotake
place.
Economi cs
Thisi st hest udyofhowhumanbei ngsst ri
vet osat isfytheirendless
want susi ngt heav ail
abl escar cer esour ces.
Account i
ng
Thisr ef erstoasy stemat i
cwayofr ecor dingbusi nessact i
viti
eswhi chall
usedf ordeci sionmaki ng.
Officepr actice
Thisr ef erstoal lactivit
iest hatar ecar riedouti nanof fi
cee. g.
communi cation, fi
ll
ing,cler i
cal wor k,r epr oduct ionofdocument se.t.c
Entrepr eneur ship
Thisi st hest udyofact ivi
tiesi nvolvedi nt hepr ocessofi dent i
fyi
nga
businessoppor t
uni t
yandacqui ringt henecessar yresour cest ostartand
runabusi ness.Theper sonwhocar riesoutt heseact i
vit
iesisreferedt o
asanent repr eneur .
Impor t
anceofBusi nessst udiesi nsoci ety
Busi nessst udi esismeantt opr epar el ear nerst of unct i
onasi nformed
consumer s,producer sandwor kersi nt hesoci ety.
Someoft hebenef itsofl ear ningbusi nessst udiesi nclude:
Assi stst helear ners/member soft hesoci et ytoacqui r
eknowl edge
andawar enessofbusi nesst ermi nol ogieswhi char enecessar ywhen
discussi ngbusi nessi ssuessuchaspr ofitandl oss.
Assi stst heindi vi
dual si nappr eci at ingt her oleofbusi nessin

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societ y/inpr ov i
sionofgoodsandser vi
ces.
Itenabl est hel ear nerst oacqui rebasi cknowl edge,skill
sand
atti
tudesnecessar yfort hedev elopmentofsel fandt henat i
onby
startingandoper atingbusi ness.
Equipst hemember sofsoci etywi thknowl edgeandski ll
snecessary
tost artandr unabusi nesscomf ortably.
Makest hemember sofsoci et yt oappr eci atet heneedf orgood
businessmanagementpr actices
Assist sindi vidual toacqui r
esel f-
disciplineandposi t
iveat t
it
ude
towar dswor k
Equipsi ndi vidual wi thabi lit
iest opromot eco- operati
oni nsociety
throught rade
Enabl est hei ndi vi
dual tounder standt her ol eofgov ernmenti n
businessact ivit
ies
Equipsi ndi vidual swi thabi l
itiest ounder standt heroleof
communi cat ionandi nformat iont echnol ogyi nmoder nbusi ness
management
Helpst hei ndiv i
dual st odev elopposi ti
veat ti
tudest owar dsthe
env i
ronment
Equipst hei ndi v
idual withknowl edgeandski ll
sr equi
redt oevaluat
e
businessper formance
Ithelpsi ndi vi
dual todev elopv ariousi ntellectual abil
i
tiessuchas
i
nqui ry,cr i
tical t
hinki ng, anal ysis, i
nterpret ation, r
ati
onal j
udgement ,
i
nnov ati
onandcr eat i
v it
y.
Itenabl esl ear nerst oacqui reski l
lsf orwi sebuy ingandsel l
ing.
Itcreatesaf i
r mf oundat ionf orf urthereducat ionandt raini
ngin
businessandot herr elatedf ields.
Itenabl esonet ounder standandappr eci atet hebasi ceconomi c
i
ssuest hataf fectt hesoci etysuchasi ncr easei npr i
cesofgoods
andser vices.
BUSINESSANDI TSENVIRONMENT
Bytheendofthetopi
c,t
helear
nershoul
dbeabl
eto:
Expl
aint
hemeaningandpurposeofabusi
ness

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1@gmai
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Ident ifyv ar iousbusi nessact iviti

es
Ident ifyv ar ioust ypesofbusi nessenv ir
onment s
Expl ainhowt hev ariousbusi nessenv ironment si nfluenceabusi ness.
Meani ngofabusi ness
Thisref erst oanyact ivitycar ri
edoutbyani ndiv i
dual orbyan
organi zationwi tht heai m ofmaki ngapr ofit.
Profi
ti swhatt hebusi nessear nsabov ewhati tspendsi npr ov i
di nggoods
andser vi
cest ot hepeopl ewhoneedt hem.
Thet er m busi nessal sor ef erstof irmsoror gani zationst hatpr ov ide
goodsandser v i
cest omakeapr of it.
Purposeofbusi ness( Reasonsf ort heexi stenceofbusi nesses)
Businessi si mpor tanti nanysoci et ybecausei tisnotpossi bl eforpeopl e
toprov i
det hemsel v eswi thal lwhatt heyneedwi thoutdi r
ectori ndirect
aidfrom ot her s.Someoft hemai nr easonswhybusi nessesexi star e:
Topr ov idegoodsandser v i
ces- Busi nessesexi stt osat isfyt heneeds
andwant sofbuy ersbypr ov idingt hem wi t hgoodsandser v ices.
Buy er si ncl udei ndi vidual consumer s, otherbusi nessesandt he
gov er nment .
Tocr eat eempl oy ment -
Busi nessespr ov idej oboppor tunitiest hrough
whi chmember sofsoci etycanear nmoney , whichcanbeusedt o
buygoodsandser v i
cesf ort hesat i
sfact i
onoft hei rneeds.
Toear npr of i
t-Pr ofitist hepr imar ygoal ofcar ryingoutbusi ness
oper at ions.I tisear nedbyt hepeopl ewhoputt heirr esour cesand
ef f
or tinbusi ness
Asanout l
etofnewi nnov at ion- Somebusi nessespr ov ideuni que
goodsandser v i
ceswhi chmaynotbeexi stingi nsoci et ye. g.plasti
c
fenci ngpol est hatar enowr epl acingwoodenpol es.
Tobeasownboss- Somepeopl er unbusi nessessoast obei nfull
cont rol oft heoper at i
onsandmakeal l thedeci si onsr egar di ngt he
busi nesswi thoutneedofr ef erencet opeopl e.
Tout ili
zeext rar esour ces-Somepeopl egoi ntobusi nesst omake
useofmoneyorpr oper tywhi chi snotbei ngputt opr ofitabl yuseat
agi vent ime.
Toof ferspeci alser v ices-Somebusi nessespr ov ideser v i
cest hat

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rai
sethel i
vi
ngst andardofpeoplee.g.gov er
nmentent erpri
sesthat
provi
depubl i
cutili
ti
essuchasheal t
hcar eandwat er.
Toutil
izesparetime-Somepeopl erunbusi nessesi nordertomake
useofext r
at i
meatt heirdi
sposalandint hepr ocessmakesome
extr
amoney .Alargenumberoff ormallyempl oyedpeoplehav e
smallbusinesswhi chtheyrunduri
ngt hei
rf r
eet imeinordertoearn
moremoney .
NB: Whateverpurposeabusi nessful
fi
ll
s,ithast oearnar easonabl
e
r
eturnont heinvestedmoneyt osurvi
ve.
TYPESOFBUSI NESSACTI VITI ES
Peoplecar ryoutdi fferentbusi nessact ivi
tiesi nor dert oearni ncome.
Businessact i
v i
tiesar eact ivit
ieswhi chi nvol vet hepr ovisionofgoods
orser viceswi thanai m ofear ni ngapr of i
t.
Activi
tiesdonewi thoutt hei ntent i
onofmaki ngpr ofi
tar ereferredtoas
non-busi nessact i
viti
es.Busi nessact i
v it
iesmaybegr oupedi ntothe
fol
lowi ngsev encat egor ies:
Extract i
on
Thisi
nv olv esobt aininggoodsf rom t heirnat ural set t
inge. g.mining,
far
ming, lumber ing, fi
shing, quar ry inge. t.
c
Processi ng- Thisinv ol vest heconv er sionofr awmat eri
alsintomor e
usef ul product swi t
houtcombi ningi twit hot hergoods.Exampl es
her ei ncludemi ll
ing/ gr i
ndi ngf lour,refiningoi l,tanningofski nsand
hides, conv ersionofi roni nt ost eele. t
.c
Manuf acturing-Thi si nvol vescombi ningdi fferentr awmat erial
sto
comeupwi thonef inal product .Suchact ivit
iesi ncludebr eadbaking,
maki ngat ablee. t.c
Const ruct i
on-Thi sinv olv esbui l
dingofst ruct uressuchas
bridges, ships, aeropl anes, houses, r
oads, railway se.t.
c
Distribut ionofgoods- Thi sr ef erstot heact iviti
esi nvolvedinmov ing
goodsf rom wher et heyar epr oducedt owher et heyar eneeded.
Peopl ewhocar r
youtdi stribut ionar ecal l
eddi stri
butors.Exampl es
ofdi st ri
butor sar ewhol esal er sandr etailers.
Trade- Act i
viti
esi nt hiscat egor yinvol vet hebuy ingandsel l
ingof

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goodswi thav i
ewofmaki ngapr ofi
t.Peopleinvolv
edi ntr
adeare
call
edt raders.
Provisionsofser vi
ces-Acti
vi
tiesinthiscategoryinvolvehumanacts
whichcoul dbement alorphy si
cal.Theseincludeactivi
ti
essuchas
hair
-cut ti
ng,hai
rstyli
ng,car-
washi ng,nursi
ng, t
eaching,dr
ivi
ng,and
entertaini
nge. t
.c.
NOTE: Student stogiveexampl esofact i
vit
iestheypaymoneyf or
whichar enotgoods.
BUSI NESSENVI RONMENTSANDTHEI REFFECTSONTHEBUSI NESS
Busi nessenv ironmentr efer stocondi t
ionsorf actorswhi chsur roundand
af f
ectbusi nessoper at i
ons.Thesef actor scoul dbewi thint hebusi ness
(internal env ironment )orf rom out sidet hebusi ness( ext ernal
env ironment ).
Thesef act orsaf fectt hedeci sions, str
at egies, processesandov erall
per formanceoft hebusi ness.
Act ivit
y: Di scusssomef act orst hathav east rongi nfl
uenceon
busi nesseswi thi nthei mmedi ateenv i
ronment .
Internal Busi nessEnv ironment
Thi scompr i
sesf actor st hatar ewi thint hebusi nessuni titself
.These
fact orscanbecont r olledf ullybyt hebusi ness.I nt er
nal env ir
onment al
condi t
ionscoul dbeei therst rengthorweaknesses.Thest rengthst endto
i
mpr ov et heper formanceoft hef irm whi leweaknessest endt oaffectthe
oper ationsoft hebusi nessnegat i
v ely.
Internal env ironmenti sal sor eferredt oas: mi cro-environment .Micr o
env ironment al fact or sincl ude:
Obj ect ivesoft hebusi ness
Theseat et arget sorgoal sthatar esetbyt heowner sormanager sofa
busi nesst obeachi ev ed.Theobj ecti
v eswi llinfluencet hef oll
owi ng;
Thest rategi esofabusi ness-Thi sisapl anofact ionwhi cha
busi nessi ntendst of oll
owsoast oachi ev eitsgoal s.
Ther esour cesr equi r
ed- Byst udy i
ngt heobj ecti
vesset ;abusi ness
candet er mi net her esour cesr equi redf ori t
sef fectiveoper ation.
Theser esour cesmaybephy sical,
financi al,humane. t.c

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Managementpol iciesandst yle

Themanagementr eferstot hepeopl ewhoar er esponsi bl
ef or
dir
ectingt heday -to-dayoper at i
onsofabusi ness.I ti sthemanagement
thatsetst heobj ectivesandpol i
ci
esofanor gani zat i
on.
Apol i
cyi sacour seofact i
onofact i
onf orachi evingsetobj ect i
ves,
whichi sadopt edbyabusi ness. (i
tistheest abl ishedwayofdoi ng
thi
ngsi nabusi ness.
Thepol i
ciesofabusi ness-Thepol i
ciesadopt edbyabusi nessmay
boostorhi nderi t
sgr owt handsur vivale. g.t hemanagementmay
decidet hatwor kerswi l
lnotbeal lowedt oj oint radeuni ons.Thi s
maymaket hewor kersfeel l
ockedoutoft hedeci sion-maki ng
process, resul tingint ension.Thi stensi onmayi nterferewi ththe
performanceoft heempl oy eesandr esul tini nefficiency.
Theact i
vitiesofabusi ness-Managementpol icieswi lldet ermine
theact ivi
tiesofabusi nessi .
e.thegoodsandser v i
cespr ov i
ded,
locationofbusi nesse. t.
c.
Managementst yle-Thisref erstohowmanager sconductt hedai l
y
oper ati
onsoft hebusi ness.Thi swi l
ldet ermi nehowwor ker srelate
witht heirmanager s.Thest yleadopt edbyt hemanagementwi l
l
infl
uencet hewor kersper formanceposi ti
v elyornegat i
vel ythus
affectingtheov erallperformanceoft hebusi ness.
Businessst ructure
Thisist hef ormal ar rangementofact ivi
tiesthatarecarriedoutatv ari
ous
l
ev elsoft heor gani zationsot hatobj ectivesofthebusi nesscanbe
achieved.
Dut i
esandr esponsi bil
iti
esofal l t
hewor kersaredefinedi nt hebusi
ness
structure.Theiri nterrelati
onshi psareal sodef i
ned.
Awel ll
aidoutbusi nessst ructureislikelytoleadt osuccessoft he
businesssi nce:
Eachoft heempl oyeesknowwhati sexpect edfrom t hem
Ther ewillbenoconf l
ictsorconf usionamongt hewor kers
Team wor ki senhanced
Ensur espr opercont rolwhi chist urnpromot esefficiency.

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Apoorbusi nessst ruct ureleadst obusi nessf ailure.

Busi nessResour ces
Aresour cer efer st oany thingt hatcanbeusedt oachi ev eanobj ect i
ve.
Theser esour cesi nclude;
Humanr esour ce-Humanr esour ce( per sonnel )r eferst othe
empl oy eeswor kingi nanor gani zat i
on.Empl oy eeswi l
lonlybeusef ul
iftheyhav et henecessar yknowl edgeandski llstosuccessf ullycarry
outt heassi gnedt asks.I ti st her ef
or enecessar yf ort he
managementt omat cht hecor rectpeopl ewi tht hecor r
ectjob
act i
v i
t i
es; t
hiswi l
lensur esuccessf ort hebusi ness.
Financi al resour ce-Moneyi sr equi redi nor dert ost artandoper atea
busi ness. Abusi nesswi thadequat ef i
nancest hatar epr oper ty
allocat edt ov ariousact iv iti
esandal somoni tor edi sl i
kelytodo
bet t
ert hant heonel acki ngsuchaspect s.
Phy si cal resour ces- Thesei ncl udet angibl ef aci l
iti
eswhi chbel ongt o
thebusi nesssuchasbui ldings, machi ner y, f
ur nitureandst ock.
Av ailabi l
ityofsuchf aci
litiesenabl est hebusi nesst ooper ate.
Technol ogy -Thi sr eferst oski llsandmet hodsusedi nproduct ion.
Useofmoder nt echnol ogyenhancespr oduct ionofgoodsand
ser vices.
5.) Resear chanddev elopment
Resear chanddev elopmenti sani mpor t
antf act orf ort hesuccessofa
business.Resear chgener at esnewi deas, skillsandbet t
ermet hodsof
doingt hi ngs.
Abusi nesshast odomar ketandconsumerr esear chr egul ar
lyt ofind
outhowt heconsumer sper ceiv ei tsgoodsandser v i
ces, andhowt hey
canimpr ov einor dert oout dot hei rcompet it
or s.
Resear chal soassi st sinthedev elopmentofnewanduni quegoods
andser vicest hatmayat tractnewconsumer sormai ntainthel oyaltyof
theexi stingones.
6.)Busi nesscul tur e
Thisisacombi nat i
onofempl oy eesexpect ations, beliefsandv alues
withi
nt hebusi ness.I tisnor mal lypassedonf rom onegener ationof
empl oy eest ot henext .Empl oy eesacqui renor msandcodeofconduct

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thatisaccept abletoal lfrom thegener almanagerdownt othe

sweeper .Abusi nesst hathasacul tureofi nvolv i
ngempl oy eesi n
decisi on-maki ngmayper for m betterthanonet hatdoesnoti nv olv eits
empl oy ees.
7.Owner s
Theowner soft hebusi nesspr ovi
def i
nances/ r
esour cest ost artand
runt hebusi ness.Theyal somakedeci sionsconcer ni ngoper ationsof
thebusi ness.
Appr opr iatedeci si
onsar elikelytol eadt owel lbeingoft hebusi ness
whi l
epoordeci sionsmayadv erselyaf fectthebusi ness.
External Busi nessEnv i
ronment
Thisenv i
ronmentconsi stsofal lthef actor swhi chaf fectt heoper at ions
ofthebusi nessf r
om t heout side.Someoft hesef actor sof ferbusi ness
oppor t
uni ti
eswhi l
eot her smaycr eat epr oblems( threat s) .
Businesshav elimitedornocont rolov erext ernalenv ironment alfact or s
andshoul dt hereforet rytodoadj usti nor dertocopewi ththem.
External env i
ronment alfactorsar eal sor eferr
edt oasmacr o-environment
i
.e.env i
ronmentt hatisi nlargescal e.
External businessenv ironmentcanf ur t
herbesub- di
videdi ntooper ating
envir
onmentandr emot eenv i
ronment ,dependi ngonwhet hert hef act or s
canbei nfl
uencedt osomeext entornot .Thoseenv i
ronment st hatcanbe
i
nfluencedar ereferredt oasoper atingenv i
ronmentwhi lethoset hat
cannotbei nf l
uencedar eknownasr emot eenv i
ronment .
ENTREPRENEURSHI P
Bytheendoft hetopic, t
hel earnershouldbeablet o:
Explai
nt hemeani ngofent r
epreneurshi
p
Discusst hei
mpor tanceofent repreneurshi
pt oaneconomy
Describechar acteri
sticsofanent repreneur
Generatebusi nessi deas
I
dent i
fyabusi nessoppor tunit
y
Evaluateabusi nessoppor tuni
ty
Explai
nt heneedf orabusi nessplan
Discussf act
or sthatinf l
uenceent r
epreneurshippr
acti
cesi
nKeny
a

10

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Discusst hecausesofbusi nesssuccess

Recogni zet heneedf oret hical pr act i
cesi nbusi ness
Meaningofent repr eneur shi p
Thisisthepr ocessofi dent if
yingbusi nessoppor tunitiesandgat hering
thenecessar yr esour cest ostar tandr unabusi ness.
Anent r
epr eneurwhoi dent i
fi
esbusi nessoppor t
uni ti
esandget st he
necessar yr esour cesi nor dertost artandr unabusi ness.The
entr
epreneurt her ef or ecr eatesnewbusi nessesort ransf ormt heexi sti
ng
onesint hef aceofr isksanduncer tai ntiesinor dert omakepr of its.
Anent r
epr eneuri st her efor eabusi nessowner ;hest ar t
sandor ganizes
thebusi ness( thef act or sofpr oduct ioni nappr opr iatecombi nat ion)
Importanceofent repr eneur shi pt oaneconomy
Cr eat i
onofempl oy ment -Thr oughent r
epr eneur shi p,jobsar ecr eated
whi chhel pi nabsor bingpeopl ewhowoul dot herwi sehav ebeen
jobl esse. g.peopl eempl oy edi nt hej uakal i sect or.
For mat ionofcapi tal-Profitear nedbyent repr eneur smaybeusedt o
expandt hebusi nessorev ent ost artotherbusi nesses.Wagesand
sal ariespai dt ot heempl oyeesi sasour ceofcapi t
al tot hem.
Rai singst andar dsofl i
ving- Ent repr eneur spaywagesandsal ariest o
thei rempl oy eeswhi chenabl et hem t oacqui r
egoodsandser vices
theyneedt ol ivecomf ortabl eliv es.Ent repr eneur sal sopr ov idea
wi dev ariet yofgoodsandser v i
cest oconsumer shencel eadi ngt o
impr ovedl ivingst andar ds.
Encour agest heuseofl ocal resour ces-Ent repr eneur shi pmakesi t
possi blet ouse/ expl oitlocal resour ces.Idler esour cessuchasscr ap
met al maybeusedt omakej i
kos.
Impr ov i
ngi nf rast ruct ure-Theexi stenceofbusi nessesi nt he
economymakest hegov er nmentest ablishori mpr ovei nfrast ructure
suchasr oads, communi cat ionf aci l
iti
esandwat er.Atot hert i
mes,
ent repr eneur smaycombi nef or cest oimpr ov einf rastruct urei ntheir
areaofoper at ion.
Sav i
ngsoni mpor ts-Local ent repr eneur sar eabl et opr oducegoods
andser v i
cest hatar easubst i
tut et oi mpor ts.Thi shel pst hecount ry
tor educet heamountofmoneyr equi r
edt opayf orsuchi mpor ts.

11

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Reduci ngf or ei gndomi nanceoft heeconomy -Par ticipat i

onofl ocal
entrepr eneur si nv ari
ousbusi nessact ivi
t i
eshel psi nr educi ng
invest ment sbyf or ei
gner sint hepar ti
cularar ea.
Promot ionoft echnol ogy /promot ionofi nnov ation, r
esear chand
dev elopment -
Ent repr eneur sar ecr eat i
veandt heycomeupwi thnew
andbet terway sofaccompl ishi ngt asks.Mostoft hei nv entionsand
innov ationsi noursoci et yhav ebeendev elopedbyent repr eneur s.
Promot ionofent repr eneur i
al cul tur e/helpsi nt hecr eat i
onofr ol e
model s-Successf ulent repr eneur s/ entrepr eneur i
al ventur es
encour ageot hermember sofsoci et ytoi niti
at et hei rownbusi nesses
andhenceactasr olemodel si nt hebusi nesswor l
d.
Itcont ribut est ogov er nmentr ev enue- Taxesandf eespai dby
entrepr eneur ial vent ur esconst it
ut epar tofgov ernmentr evenue/
incomet hathel psi ttof aci l
itat ei tsoper at i
ons.
Itpromot eseconomi cgr owt h- Ent repreneur spr oducegoodsand
serv i
ces.Thi si ncr easest hev ol umeofgoodsandser v i
cesi nt he
economyl eadi ngt oexpansi onoft heeconomy .
Itmaypr omot esel f-
act ualizat ionandest eem- Byi nitiatingbusi ne-
ssesi nwhi cht heyar et heirownbosses, ent repr eneur spr idei s
boost edandt hismaypr omot et heov eral lproduct i
vityoft he
economy .
Characteristicsofanent r
epr eneur
Agoodent repr eneurshoul dhav et hef ol l
owi ngchar act eristics:
Desiretoachi ev e-Anent repr eneuri saper sonwhowi shest oexcel and
hast hedr ivet osucceedwhi l
ecompet ingwi thot her s.He/ sheal way s
tri
est oaccompl ishsomet hi ngnew.
Abili
tytosol vepr obl ems- Anent r epr eneuri sexpect edt ost ruggl ewi t
h
determinat i
ont ogetsol ut i
onsev enunderdi ffi
cul tsi tuat i
onsot hatt he
businesscansucceed.
Riskt aker -Ent repr eneur st akev i
abl ebusi nessv ent ur esev enwhent hey
arenotsur eoft her eturns.Theyassesssi tuat ionsandt akecal cul at
ed
ri
sks.
Ini
ti
at i
ve–Anent repr eneurshoul dbeaggr essi v
ei ni mpl ement ingi deas
wellaheadofot herbusi nessessot hathe/ shecanbeaheadoft hem.

12

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Timeconsci ousness- Anent repr eneurshoul dbeabl et ouset i

mewi sel y
andav oidwast i
ngi t.Awi seandqui cklyi mpl ement eddeci sionmay
meansuccessi nbusi nesswher east imel ostmaymeanf ail
ure.
Cr eat ivityandi nnov ation- Anent repr eneurshoul dbeabl et ogener ate
newi deasaswel last hinkoft hebestway sofput ti
ngt hem i nto
pr act i
ce.
Independenceandsel fconf i
dence- Ent r
epr eneur sar et heirownbosses
andshoul dbel ieveint heirabi li
tyt odot hingsandsucceed.
Per sistenceandpat i
ence- Anent repr eneurshoul dnotgi veupwhen
chal lengesar i
se.Somet imes, he/ shet akest i
meandmakear epeat ed
act i
onoradopt sadi f f
erentcour seofact i
oni nor dert oov ercome
suchchal l
engessoast oreacht het arget
Deci siv e-Ent repr eneur shav est rongpr obl em, solvi
nganddeci sion
maki ngski lls.Thebusi nessenv ironmenti ssucht hatdeci sionhast o
bemadequi ckl ytor espondt oanysi t
uat iont hatmayar i
se.
Per suasi ve-Conv incingpeopl et obel ievei nt heirideasandbuyt heir
pr oduct skeepsent repreneur si nbusi ness
Goal -
or iented- Ent repreneur sar eachi everswhowor kt owar dssetgoal s.
Theycont inual lymoni torpr ogr esst odet er minewhet hert heyar e
achi ev ingt hegoal st heyhav esetandwher eimpr ov ement sneedt obe
made.
Seeki nf ormat ion- Entr
epr eneur susev ari
ousmet hodst ogett her elev ant
i
nf or mat i
ont hati snecessar yf ort hesuccessoft hebusi ness.
Concer nf orhi ghqual itypr oduct s- Anent repreneurshoul dst r
ivet o
copeorbeatt heexi stingst andar dsofqual ity.Thiswi llenable
him/ hersucceedi nacompet iti
vemar ket .
Commi tmentt owor k-Anent repr eneurpl acespr i
or i
tyonget t
ingt asks
accompl i
shed.Toachi ev et hishe/ shemaymakeext raor dinary
per sonal sacr i
ficee. g.wor ki ngunt ilveryl ate.
Concer nf orcust omersat isf act i
on- Anent repreneurshoul densur e
thatcust omer sar esat i
sfiedsoast ocont i
nuebei ng/ r
emai nloy alto
thebusi ness.
Desi ret of eedback- Anent repr eneurshoul dbei nterest edi nknowi ng
howt hebusi nessi sper f
or mi ng.

13

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Generati
ngBusi nessIdeas
Foranentrepreneur, t
hefirstst epinst ar
ti
ngabusinessbeginswit
han
i
dea(businessidea) .
Busi
nessi deasareal laboutt hought sonpossibl
ebusinessesan
ent
repreneurcanst artorimpr ove.Iti
ndicatesamongotherthi
ngs;
Thepr oductstopr oduce/ sell
Whot hebusinesswi l
l sell t
o( market)
Wher ethebusi nesswi llbel ocated
Howt hewillberun( management )
Whyt hebusi nessisneeded( object
ives)

Sour cesofBusi nessI deas

Newspaper s-Local newspaper sl iket heDai lyNat ion,EastAf r
icane. t.
c
especi all
yint hebusi nessandadv ert i
singsect ionshav eal otof
informat i
onaboutcommer cial oppor t
unitiesaswel lasper sonal
ser vices.
Showsandexhi biti
on- Vi si
tingshowsandexhi biti
onsor gani zedby
manuf act uresanddi stribut orsandaski ngquest ionsf r
om t hesal es
per sons.Ent repreneur scanal sogetbusi nessi deasf rom pr oduct s
displ ayedi nsuchshows.
i
ii.Magazi nesandj our nal s-Readi ngmagazi nesandj ournalswi th
busi nessi nformat ionmayequi panent repreneurwi thnewbusi nessi deas.
i
v .Hobbi es–Thesear eact i
vitiespur suedf orpl easurebutt heycanal so
ser veasasour ceofbusi nessi dease. g.phot ography .
v.Vocat i
onal trainingandexper ience- Abusi nessi deamaybedev eloped
from one’ sownar eaoft r ainingorexper iencee. g.at eachermayuse
i
deasf rom hi s/hert rainingt ost artapr ivateschool .
vi.Sur v
ey sandmar ketr esear ch- Thi si nvolvesconduct i
ngani nvestigation
togat heri nformat ionf rom consumer sonwhatpr oduct stheyr equire.
vii
.Recy cli
ng/ usingwast epr oduct s-Somewast eproduct scoul dbe
conv ertedi ntousef ulproduct se. g.scr apmet al f
ormaki ngj i
kos, oldty r
es
formaki ngsandal se. t.c
vii
i.Li steningt owhatpeopl esay -
Byl isteningkeenl ytowhatpeopl esay ,

14

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onecani dentifyunsat isfiedneedse. g.compl aintsaboutgoodsand

ser vicesi nt hemar ket.Thesecompl ai ntsmayf orm abasi sofabusi ness
i
deaf oranent repr eneur .
i
x.I dent i
fy i
ngamar ketgap( niche) -
Anent repr eneurmayt ryto
i
dent ify/spott heneedsofconsumer swhi char enotbei ngmetbyt he
exist i
nggoodsandser vi
ces.
x.Br ai nst orming- Anent repr eneurcanengageot herpeopl eina
discussi ononhowbestt odev elopbusi nesses.
xi.List ingat tri
but esofapr oduct -Byl istingt heat tributesofapr oductt hat
i
sal readyexi stingi nt hemar ket, onecanf indnewusef ort hepr oduct .
xii
.Copy ing/impr ovinganexi stingbusi ness- Thisinv olvesi dentifyi
ngt he
weaknessesofabusi nessandt ryi
ngt ocomeupwi t
hsol uti
ons.
Busi nessOppor tuni ty
Agoodbusi nesspl ani snotnecessar il
yabusi nessoppor tunity
.A
busi nessi deabecomesabusi nessoppor t
uni tyifitisv i
abl ei.e.itcanbe
dev elopedi ntoasuccessf ul/prof it
abl ebusi nessent erprise
Abusi nessoppor tuni t
yisaf av our ablechancet hatanent repreneur
accept sf orinv est ment .Itexi stswher et her eisagapt obef il
ledi nthe
needsoft hemar ket.Exampl esofsuchgapsi ncl
ude:
Inav ai labili
tyofpr oduct s- Thisi swher egoodsandser vicesneededbyt he
consumer sar enotav ai l
ableatal l int hemar ket.
Poorqual i
typroduct s-
Abusi nessoppor tuni tyexistsi foneof fersbet ter
qual itygoodsandser v i
cest hant hoseoft heexi sti
ngbusi nesses.
Insuf ficientquant i
ti
es- Thisi swher et hegoodssuppl iedar enotenought o
meett hedemand/ needoft heconsumer s.
Unaf f ordabl epr ices- Abusi nessoppor tuni tyexi stswher eonewoul d
char geaf f
or dabl epr i
ces.
Poorser vices-Abusi nessoppor t
unityexi stswher ecust omer sar enot
ser vedwel l
.
Ev aluat ingabusi nessoppor tuni ty
Thi smeansassessi ngwhet hert hei dent ifiedoppor tunityi sviableornot .
Thi shel psinar riv i
ngatt hebestdeci sionconcer ningt hebusi nessideat o
i
mpl ement
Ev aluat ionshoul dbedonecar ef ull
y,sy stemat i
callyandwi t
houtemot i
ons.

15

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Evaluat ioni snecessar yev enwher et her ei sonl yonebusi nessi dea.This
willhelpi nav oidingst ar ti
ngabusi nesst hatcannotsucceed.
Factor st oconsi derwhenev aluat ingabusi nessoppor t
uni t
y
Thef ollowi ngar et hef act orst oconsi derwhenev aluat i
ngabusi ness
oppor tuni ty.
Per sonal consi der ation- Thesear et heabi li
tiesandexpect ationsof
anent repr eneur .Theyi ncl udet hef ollowi ng;
Obj ect ives-Theent r
epr eneurshoul dev aluat et hebusi nessi deat o
findoutwhet heri tisi nl inewi thhi s/ herobj ect ives.
Ski ll
s-Wher eabusi nessr equi rescer tainspeci ali
zedski l
lsandt hose
ski ll
sar el ackingt hei deamaybedr opped.
Commi tment s- Wher ethebusi nessi sl ikel ytoi nt erferewi t
ht he
ent repr eneur sot hercommi tment si tmayf ail
.
Inter est-Itisnecessar yt ocheckwhet hert hei ntendedbusi nesswi ll
i
nt erestt heent repr eneurornot .I ftheent repr eneurwi llnotenj oy
runni ngt hebusi ness, t
hei deashoul dbedr opped.
Busi nessconsi der at i
on- Thesear eext ernal f
act or sthatar el i
kelyto
af fectt heoper at ionsoft hebusi nessandt heyi ncl ude;
Av ailabi l
ityofmar ketf ort hepr oduct -Anent repr eneurshoul dassess
theav ai l
abilit
yofcust omer sbef or est artingabusi ness.Cust omers
exi stwher et her ei sagap/ nichi nt hemar ket .
Technol ogy -Thebusi nessshoul dbeev aluat edi nt ermsofwhet her
ther eisanappr opr i
at et echnol ogyt hatcanbeusedi npr oduct i
on.
Fact or st obel ookedi nt oi nclude;
-Appr opriatenessoft het echnol ogy
-Thecostoft het echnol ogy
-Thepossi bilityoft hebusi nesssuf f er
ingi ncaset hetechnol ogy
becomesout dat ed/ obsol ete.
Availabi li
tyofr awmat er i
alsandot herr esour ces- Ther awmat er i
alsand
resour cesr equi redshoul dbewi thint her eachandaf fordabl etothe
ent repr eneur .
Gov er nmentpol icy-Anent r
epr eneurshoul dconsi dert her equirement sof
thegov ernmentbef orest artingabusi nesse. g.t hegov ernmentmay
requi recer t
ainbusi nessest obel ocat edi ncer tainar easonl y.

16

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Amountofcapi t alrequired- Thecapi t

al requiredt orunandmai ntainthe
busi nessshoul dbeconsi deredi.et hesour ceofcapital
.
Profi
tabil
ityoft hebusi ness- Withinacer t
aindurat i
onoftime.
Thebr eak-evenper i
od-Howl ongt hebusi nesscant aketosuppor ti
tsel
f.
Possibil
it
yofexpansi oni .e.thepot ential f
orgrowt hofthebusiness.
I
mpactoft hebusi nessoper at i
onsont heenv ir
onment s;some
busi nessesl eadt oenv ironment al degradationandshouldbe
locat edinappr opri
at epl aces/effectoncommuni tyand
env i
ronment al health.
Security
-Av ai
labili
tyofsecur i
tyshouldbeconsi dered.
Levelofcompet i
ti
on- Thiswi l
lhelpdet ermi newhet herthebusinesswi l
l
sur vi
v eornot .
Theriskst hatthebusi nesswi llface.
BUSI
NESSPLAN
Thi
sisawr it
tendocumentt hathi ghlight
st heobj ecti
vesoft hebusi ness
andstepst obef ollowedi nor dert oachievet heseobj ecti
ves.I tindi
cates
wheret hebusi nessi s,wher ei twant stomov eto, howandwhen.
Cont
ent sofagoodbusi nesspl an
Nameoft hebusi ness
Thepr oductt obesol dorpr oduced
Per sonnel tomanaget hebusi ness
Amountoff inanceandot herr esourcesr equired
Themar kettobeser ved( customer s)
Ty pesofempl oyeesr equi red
Pr ojecti
on( l
ev elofachi evementi nfutur eint ermsofpr of i
t)
Summar yoft heplan.
Needf ort hebusinesspl an
Abusi nesspl anisnecessar ytoanent r epreneurf orthef ollowi
ng
reasons:
Av oidingmi stakes-int hepr ocessofdr awi ngapl an;mi stakest hat
woul dtakepl aceint hebusi nessar eident i
fiedandcor rect edinthe
plan.Thi shel psinav oidi ngt heoccur renceofsuchmi stakesi nthe
busi ness.

17

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Ident ifyingst rengt handweaknesses- Abusi nesspl anhel psi n

i
dent if
y ingst rengt hsorweaknessesandwher eweaknessesar e
det ected, r
emedi al act ionsmaybet akenear l
yenough.
Requi rementbyf i
nanci ers-Financi al i
nstituti
onssuchasbanksmay
requi reabusi nesspl anbef or etheycanacceptt of i
nancet he
activ it
iesoft hebusi ness.
Allocat ionofr esour ces- Ithelpst odet ermi nether esour cesr equir
ed
andpl anonhowandwher etouset hem.Thi sensur est hat
resour cesar enei therunder util
izednorusedf ort hewr ongpur pose.
Faci lit
at esbusi nessev aluation-Abusi nesspl anhel psan
entr epr eneurt oassesst hepr ogressoft hebusi nessandany
dev iation( di fference)f rom thei nt endedpl ancanbecor rect edi n
goodt i
me.
Ithel psanent repr eneurout li
necompet i
ti
on- I
thel pst he
entr epr eneurt obef ullyawar eoft hemar ketsheorhepl anst o
oper atei n,under st andi mpor tantt rendsandknowwhoher / his
compet itorsar eandt hei rstrengt hsandweaknesses.Thi s
i
nf or mat i
onai dst heent repreneurt odev el oppr oduct st hatar e
bet tert hant hoseoft hecompet i
tors.
Amot ivat i
ngf act or-Abusi nesspl ani scommuni catedt oall
empl oy eesi nt hebusi ness.Thi smakest hem awar eoft hedi recti
on
tobet akenbyt hebusi ness.Thi smot i
vatest hem t owor ktowar ds
thatdi r ection.
Adapt abi li
ty-Nor mal ly, notal levent soccuraspr edi ctedi nt he
busi nesspl an.Howev er,awel ldrawnbusi nesspl anshoul dgi ve
room t oaccommodat eanychangest hatmi ghtoccuri nt hef uture.
Tool forcont rol-Planni ngi nv olvesset tingofst andar dsagai nst
whi chper f
or mancescanbeassessed.I ncaseofdev iation
cor rect i
v emeasur escanbet aken.
Factor st hati nfluenceent repr eneur shippr actices
Therear emanycondi tionsorf actorswhi chmayencour ageordi scourage
entr
epr eneur ship.Someoft hesef actorsar e:
Gov ernmentpol icy -Somegov ernmentpol ici
esar ef av our ablet othe
oper ati
onsoft hebusi nessandt husencour agepeopl etogoi nto

18

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busi nesswhi leot herpol iciesmaybeunf avour ableandwi ll

discour agepeopl ef r
om goi ngi nt obusi ness.E. g.highert axesar e
unf av our abl ehencedi scour agi ng.
Infrast ruct ur e-i
nfrast ruct ur ei ncludest ranspor tandcommuni cation
net wor ks, wat er,secur i
tye. t.c.Av ailabi l
it
yofgoodi nfrastr uctur ein
anar eat endst oencour agepeopl et osetupbusi nesseswhi l
epoor
i
nf rast ruct uret endst odi scour aget hem
Lev elsofeducat i
onandski lls-Rel ev antandappr opr i
ateknowl edge
andski ll
sar enecessar yi ft hebusi nesshast osucceed.Thesear e
acqui r edt hrougheducat ion, trainingorexper i
ence.
Av ailabi l
ityofmar ket s-Adequat emar ketsencour agesexi st i
ng
ent repr eneur st ocont i
nuepr oduci ngandal soencour age/ attract
newonest ov entur ei nt obusi ness.
Av ailabi l
ityofr esour ces- Appr opr iater esourcesar enecessar yf or
star ti
ngandsmoot hr unni ngofabusi ness.Theser esour cesi nclude
phy sical , human, capi tal andt echnol ogy .
Cul tural andsoci al belief sandat titudes- Thesear enor ms, v alues
andbel iefsofagi vencommuni ty .Cul turehel psdet ermi net heki nd
ofgoodsandser v icest hatpeopl econsume.t hi
si nturn, di ctatest he
typeofbusi nessest obeest ablishedi nsuchcommuni ties. e.g
Musl i
msdonott akepor kt her efor ebusi nessessel l
ingpor kwi llnot
dowel l i
nsuchcommuni ties.
Compet iti
on- Busi nesseswi ll dowel liftheyar eabl et ocompl et e
favour abl y.Ot her swi llav oi dcompet iti
onbyest ablishingbusi nesses
wher et her ei snocompet i
tion.
Pol i
tical stabi li
ty-
pol it
ical stabi litygi vesconduci veat mospher ef or
busi nessest ost ar tandt hr i
v eont heot herhands, wher et her ei sno
political inst abili
ty ,busi nessesmaynotdowel landent r
epr eneur s
maycl osedownbusi nessesornewonesmaynotcomeup.
Nat ur al fact ors-nat ur alf act or ssuchasr ai
nf all
,temper at ur es,
ear thquakes, pest s, droughte. t.c.mayi nfl
uencet het ypeof
busi nessest hatar ecar riedouti nanar ea,especi all
yagr icul tur al
busi nesses.
Presenceofr ol
emodel si nt hesoci et y-Thepr esenceofsuccessf ul

19

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ent repr eneur sact sasanencour agementt oaspi ri

ngent repr eneurs.
CausesofBusi nesssuccess
Abusinessi sconsi der edasbei ngsuccessf ulifitmakesconsi stentprofi
t
andexper iencespr ogr essi vegr owt hi nt hescal eofi tsoper ati
ons.
Someoft hef act orst hatl eadt ot hesuccessofbusi nessmayi nclude:
Ri
ghtchoi ceofbusi ness- Agoodbusi nessoppor tuni tyneedst obe
ev aluat edont hebasi sofabi l
ityt ocapt uremanycust omer s, make
reasonabl epr ofitf ort heowner (s)andpr ov ideanoppor tuni tyfor
gr owt h.Maki ngt her ightchoi ceofabusi nessorpr oductul timately
cont ribut est ot hesuccessofabusi ness.
Propermanager i
al ski l
ls-Anent r
epr eneurshoul dbeabl et ocar ryout
managementr olesef fect ively.Agoodmanagerwi llcar ryoutr ol
es
suchas;
Hi r
ingst aff-Thepr ocessofacqui ringnewempl oyeest ot akeup
newposi tionsort or eplaceempl oy eeswhohav elef tthebusi ness.
Assi gni ngdut i
es- Allocat ingempl oy eesdut iesaccor di ngt ot heir
qual ificat i
ons.
Super v ising- Ensur ingt hatempl oy eescar r
youtt askst hatar e
assi gnedt ot hem
Training- Enabl ingempl oy eest oacqui reknowl edgeandski ll
s
necessar yt oper form dut iesassi gnedt ot hem.
Mot i
v at i
ng- gi v
ingempl oy eesi nducementt oper f
ormt heirdut i
es.
Properl ocat i
on/ availabi l
ityofcust omer s-Thebusi nessshoul dbe
situat edi napl aceconv enientf ori tsoper ationse. g.wher e
cust omer sar eeasi l
yav ail
abl e.
Adequat ef inance/ capi tal-Moneyi sneededt oacqui reot herr esour ces
thatar er equi redbyt hebusi ness.Abusi nesst hathasadequat e
capi tal isl i
kelyt odowel lasi tisabl et ofinanceal l i
tsoper at i
ons.
Lackofcompet iti
on- Mostbusi nessesar eputoutofoper ati
onbyst i
ff
compet ition.Ther efore, abusi nessoper at i
ngi nanar eawher ethere
i
sl ittleornocompet i
t i
oni sl ikelyt osucceed.
Commi tmentt obusi ness
Properf inanci al management -
Pr opermanagementoff inancesi s
necessar yfort hesuccessoft hebusi ness.I tensur est hatmoneyi s

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av ailabl eandi susedf ort hei nt endedpur pose.

Managementoff inancesi ncl udes:
Acqui si ti
onoff inances- Thi sinv olvesr aisingoft her equi r
edamount sof
money .Thi scanbedonet hroughav ariet
yofway ssuchasl oans
from f i
nanci al institutionsandowner ’
scont r
ibut ions.
Managi ngcash- Thi sensur est hatt heav ailablemoneyi sonlyusedf or
theact ivi
tiest hatar ebenef icial tot hewel lbeingoft hebusi ness.
Properr ecor dkeepi ng- Thisi nv ol veshav ingar ecor doff inancesr aised
andhowt heyar eused.
Pr operdebtmanagement -Car eshoul dbet akent oensur et hat
credi ti sonl yext endedt ocr edi twor t
hycust omer s( creditwor thy
cust omer sar et hosewhosechancesofpay i
ngar ehi gh).Debt
col l
ect ionshoul dal sobecar eful l
ypl annedt oensur et hattheyar e
col l
ect edwhendue.
Goodpubl icr el
at ions- Thi si nvol vescr eatingandi mpr ov ingagood
relat ionshi pbet weent hebusi nessandot herpeopl e.Goodr elat i
ons
ar enecessar yf orat tract i
ngandr etent ionofcust omer s.
Beingcr eat iveandi nnov ative- Thi si nv olvesf i
ndingnewusesofapr oduct
,
newchannel sofcommuni cat ionandnewway sofdoi ngt hings.Thi s
enabl est heent repreneurt obeaheadofot her s.
Propermar ketr esear ch- Thebusi nessenv i
ronmentusual l
ychangesata
highr ate.Thi smakesi tnecessar yf oranent repr eneurt ost udy
his/ hercust omer ’
spr efer ences, tast es, spendi ngpat t
erns, i
ncome
l
ev els, compet i
tions, andbehav i
orandsubst itutepr oduct s.
Good/ pr opert imemanagement -Ti memanagementi st heabi li
tyt ocarry
outpl annedact ivi
tieswi thint heal locat edper iod.
Properski l
lsandat tit
udesofempl oyees- Empl oy i
ngqual if
iedst aff
resul tsinwor kbei ngdonei napr ofessi onal manner .Thi senhances
theper for manceoft hebusi ness.
Properpr icingofgoodsandser vices- Pr icingshoul dbedone
appr opr iately .Ifthepr icesf ort hepr oduct sar et oohi gh, t
he
busi nesswi l
l losecust omer s.Ver yl owpr i
cesmayat tract
cust omer sbutki llthebusi ness.I tist hereforei mpor t
antt ocr eatea
bal ancebet weenpr icet ochar geandt hepr ofitmar gint oreal ize.

21

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ETHI CALI SSUESI NBUSI NESS

Ethics- ref erst oasetofv alues, pr inci plesandr ulesofaccept abl e
behav iorwhi chi nf luencehowi ndi vidual s, groupsofpeopl eandt he
societyi ngener al behav e.
Businesset hics- refer st oaccept abl ebehav iort hatshoul dbedi splay edby
businesspeopl e.Busi nesset hicshel psbusi nessesi ndeci dingwhat
acti
onsar er ightorwr ongdependi ngonci rcumst ances.
Ethical i
ssues- ar et hemor alconcer nst hatar isei nthecour seofcar ryi
ng
outbusi ness.
Needf orEt hical issuesi nBusi ness
Theneedf oret hical issuesi nbusi nessi ncludest hef ol l
owi ng;
Ensur esnodi scr imi nat i
oni nbusi ness- Busi nesset hicsensur est her eis
nodi scr iminat ioni nar eassuchasr ecr uitment( hiring),pr omot ion,
training, r
emuner ationandassi gnmentofdut i
es.Thesepr ocesses
shoul dbeobj ect iveandbasedonmer it,qual if
ication, exper ienceand
abi l
ity.
-I
tensur est hatev erybodyi sgiv enanequal oppor tuni ty(hasequal
chance)andi snotdi scr imi natedagai nstbecauseoft heirsex ,religion,
ethnicity, soci al backgr ounde. t.c.
Ensur espr otect ionoft heenv i
ronment /Hel psi nav oidi ngenv ironment al
pol l
ut ion-Busi nesset hicspr ohi bit sbusi nessuni tsf rom car ryingout
act i
v i
tiest hatmaycausepol lutionanddegr adationoft heenv ironment .
Env ironment al degr adat ionmaybecausedbyhumanact ivitiessuchas
loggi ngandunpl annedcul ti
vat i
on.Pol lutionmaybecausedby
act i
v i
tiessuchas:
Dampi ngef fluent sf r
om pr oduct ionuni tsi ntowat ermassest hereby
causi ngwat erpol l
ut i
on.Wat erpol lutioni sdi sastroust ohumanheal t
h
andal sot oaquat icani mal s.
Emi tt
ingcar bondi oxi deandot hergasesi nt otheat mospher ecausi ng
airpol l
ut i
on
Dampi ngofwast emat erialont hel andsur facecausi ngsol idwast e
pol l
ut ionThi scr eat est erriblesi test owat chandal sobr eedi ngpl aces
fordanger ousi nsect ssuchasf lies.

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Ensur esf airpl ayi ncompet it

ion- Ethicsensur est hatbusi nessesdonot
engagei nunf airpr act iceswhi lecompet i
ngwi thother s.These
pr acticesmayi nclude:
Dest roy ingacompet i
tor ’spr oductorpr omot ional toolssuchas
bi
llboar ds
Buy inganddest roy i
ngcompet itor’spr oduct sbef oret heyreacht he
mar ket
Gi vingf alsei nfor mat ionaboutacompet i
tor’sproduct
Hel psi nav oidingenv i
ronment al degr adat i
on- Ethicsensur est hatthe
phy sical env ironmenti snotdegr adedt hroughbusi nessact iviti
es.
Suchact ivit
iesmayi nclude:
Def or estationt hroughl oggi ng
Unpl annedcul tiv ation
Hel psi nav oidingenv i
ronment al pollution-Env ir
onment alpollution
maybecausedbyact iviti
essuchas:
Releasi ngcar bondi oxi deandot hergasesi ntot heat mospher ether eby
causi ngai rpol lution
Channel ingef fluent sf rom f act or i
est owat ermassest herebycausi ng
wat erpol lution.Suchpol lutioncanbehar mf ul tohumanheal thand
aquat icani mal s.
Disposi ngofwast emat er ialsuchaspaperandscr apmet alont hel and
sur facet herebycausi ngsol idwast epol lution.
Produci ngt ool oudnoi sewhi chmi ghtbehar mf ul t
ohumanbei ngs
hear i
ngs
Emi tti
ngt oost rongl ightt hatmaybehar mf ul t
oourey esight
Ensur esr ightsofempl oy eesar euphel d-Ethicsensur est hattheempl oy
er
doesnotv i
olatet her ight sofempl oy eesespeci all
yasl aidouti nt heir
t ermsandcondi tionsofempl oyment .Suchr ight sincludepay mentof
duesi nt ime.
El
imi nat esuseofunf airmeansofachi evingbusi nessobj ecti
ves-Ethics
ensur est hatt hebusi nessoper ationsar ecar riedouti napr ofessional
waye. g.i tisunet hi cal togi v eorr ecei v eabr i
bei nor dert owina
busi nesscont ract .Si mi larly,itisnotet hicaltohoar dgoodsawai ting
t heirpr icest ogoup.

23

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Av
oidsconsumerexpl oitat
ion-
Ethi
csensurest
hatconsumersarenot
exploit
edbyt hebusiness.Consumersmaybeexploitedt
hrough
practi
cessuchas:
Ov er
chargingt hem
Falseadver t
isement
Selli
ngpoorqual i
tygoodsandser v
ices
Selli
ngwr ongquant it
ies
Selli
nghar mful commodi ti
es

THEOFFI
CE
Def inet het erm anof f
ice
Anof fi
cei sabui l
di ng,room orapl acesetasi def oradmi ni
str
ati
ve,
communi cationorcl erical wor kofanor ganizati
on.
Out li
net hef uncti
onsofanof f
ice
Recei vi
ngofi nformat i
oni nv ari
ousf ormssuchascal ls,per
sonalvisi
tsor
document ssuchasl et ters
Recor dingandsor ti
ngofi nformat ionr ecei
ved.
Stor ingofi nf ormat i
onf orf uturer eference
Dist ri
but ionofi nformat ionwi t
hinandout sidetheor ganizat
iontothe
var ioussect i
ons, depar tment sorper sonnel f
ornecessar yacti
on
Repr oduct i
onormaki ngofcopi esofdocumentbyuseofv ari
ous
met hods, suchasphot ocopy ing,dupl i
cati
ngandcar boncopy i
ng
Prot ect i
ngorsaf eguar dingt heor gani zati
on’sproperty
Stat et hev ariousr eprogr aphict echni questhatcanbecar ri
edoutinan
of fice
Car boncopy ing
Stenci lduplicati
on
Phot ocopy ing
Spi r
itdupl i
cat i
ng
Inkdupl icating
Yourschool wouldwi sht ousephot ocopyingasamet hodofmaking
copi esofexams.St atet headv antagesanddi sadvantagesofusing
thismet hod
Adv ant agesofphot ocopy ing

24

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Itisaf astmet hodofr epr ogr aphy

Itisasi mpl emet hodandr equi relit
tlet raini
ngoft heuser s
Onewi llobt aint heexactcopi esoft heor igi
nal document
Themet hodi snotexpensi vei fthecopi est obemadear ef ew
Itisenv ironment al f
riendl y
Di
sadv antagesofphot ocopy ing
Thecopi est hatar emadef adei nthecauseoft ime
Phot ocopy i
ngcanbecost lyift hecopi esbei ngmadear emany
Theempl oy eesmaymi suset hemet hodduet oitsconv enience
Phot ocopy i
ngmachi ner equi resel ectricitywhi chmaybeexpensi ve
Fewcol our si nadocumentmaybeobt ainedbyuseoft hismethod
St atethet y
pesofof ficel ay out
Encl osedof ficelay out
Openof ficel ay out
Landscapeof ficel ayout
Suggestr easonswhyanor gani zat i
onshoul dusel andscapeof fi
ce
lay out
Itcreatesar elaxedat mospher ef ort hewor kers
Itismor eat t
ract iveandbeaut i
ful
Thei mageoft heor gani zation/ fi
rmi senhanced
Itpromot esgoodwor kingr el ati
onsandco- operationamongt he
wor kers
Equi pmentandof ficef aci li
tiesmaybeshar edamongt heempl oyees
Thef l
ower sorpl ant susedbr eakt hemonot onyofopenspaces
St ateway sinwhi chl andscapeof fi
cel ay outcanbecr eat ed
Bypl aci ngpl ant s/flower si nanof fice
Byhav ingpai ntingsofani mal sorpl ant sont hewal l
Bypl aci ngf ishaquar iumsi nanof fi
ce
Thr oughshapi ngofof f
icef ur nitureinf orm ofani mal s, bi
rdsand
concr eteshapes
Cr eati
ngmi niatur ephy sical feat uressuchaswat er fal
lsand
mount ainsi nt heof fice
St atewhyy ouwi lladv iceanof f i
cemanagert ouseanopenof fi
ce
lay outinst eadofanencl osedof ficelay out

25

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Inanopenof fi
cel ayouti tiseasi ert osuper visewor kerst haninan
encl osedof fice
Anopenof ficedi scouragesabsent eeism whi chmaybecommoni n
anencl osedof fice
Itischeapert omai ntainanopenof fi
cet hananencl osedof f
ice
Equi pment ,faci li
tiesandmachi nescanbeshar edi nanopenof f
ice
whi chmaynotbepossi bleinanencl osedof fice
Floorspacei ssav edinanopenof ficet hani nanencl osedof f
ice
Ther ei senhancedat t
ract i
onandf ramewor ki nopenof fi
ce
Itischeapert ol ightanopenof fi
cet hananencl osedof fi
ce
Itiseasyt ol ocat eempl oyeesi nanopenof fice
St
at etheadv ant agesofencl osedof f
icel ay out
Itisi dealforwor kthati sconf ident i
al innat ure
Itismor esecur et hananopenof fi
cel ay out
Theof ficei sideal wher ehi ghl evel ofconcent rati
oni srequir
ed
Itispr estigiousf ortheoccupantofsuchanof f
iceast heyare
recogni zed
Thewor keri snotdi sr
upt edbynoi seormov ementofot her
empl oyees
Hi
ghlightt hedi sadv ant agesofanopenof ficel ayout
Ther ei sal otofnoi seanddi sr uptionf r om ot herempl oyees
Cont agiousdi seasesmayspr eadeasi lyamongt heempl oyees
Thet opr ankedwor kersmayf eel bel it
tledbei ngpl acedamongot her
wor ker s
Itisnotv eryconduci v
ef orwor kt hati sconf ident ialorsecr eti
vein
natur e
Proper t
ywi t
hi nt heof ficei snotv erysaf e
Duet ousebymanypeopl etheof ficemaynotbev erytidy
Outl
i
net hef actor st hathav et obet akeni ntoconsi derat i
onwhen
decidi ngonat y peofof ficel ayoutt ouse
Thecostofconst r
uctionandmai ntenance
Thenumberofst afftobeaccommodat edint heof f
ice
Thecl imat i
ccondi ti
onoft hear ea
Gov er nmentdi rect i
veifany

26

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Thenat ur eofwor ktobecar riedouti nt hatparticularof f

ice
Thenat ur eandr ankofst afftobeaccommodat edi nt hatpar ti
cular
off i
ce
Thef l
oorspaceav ai
lablef ort heof fi
ce
Theneedt omai ntainagoodwor kflowamongt hewor kers
Statet hedi sadv antagesofanencl osedof ficelayout
Itcanencour ageabsent eeism
Itisnoteasyt osuper vi
set heempl oyees
Itisexpensi vetoconst ructandmai ntain
Faci li
ti
esandof fi
ceequi pmentcannotbeshar edamongt hewor kers
Wor kerscanmi suseof ficeequi pmentsuchast het elephone
Theof ficelayoutt akesupmor espace
Al otoft i
mei swast edwhenmov ingf rom oneof f
icet oanot her
Itmaypr omot eindi v
idual ism assomeempl oyeesar eisolatedfrom
other s
Enumer atet hef actorsy ouwi lladv i
ceMr .Mwaj umat oconsi derwhen
buy ingof ficemachi nesf orhi scompany
Theef fectoft hemachi neont hewor ker s
Thecostoft hemachi neorequi pment
Thesui tabili
tyoft hemachi nef orthet askt hatisint endedf or
Theav ai l
abil
ityofaf tersal esser v
icespr ovi
debyt hesel l
er
Pr esenceofof f
icest affwi tht heski l
lsr equir
edt ooper atethe
machi ne
Onehast oconsi derspaceorr oom t okeept hemachi neor
equi pment
Thel i
kelihoodoft hemachi nebei ngout datedabsol ut eoroutofdat e
Onehast oconsi derwhet hert hatmachi necanadoptt ofuture
changes
Statet hebestt ypeofmachi neonewoul duset oper formt hefoll
owi ng
t
asks:
Funct ions Typeofmachi ne
(a) Tocr eatepost age Fr ankingmachi ne
i
mpr essi onson

27

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env elopes
(
b) Tof ol ddocument s Composi t
emachine
putt hem i nenvelope
andseal them
(
c) Todest roysensitiv
e Papershr edder
butunwant ed
document s
(
d) Tost orelarge Comput er
volumesofdat a
(
e) Tor un300copi esof Pr i
nti
ngmachi ne
anexam f or
student sinaschool
(
f) Tomakeexam Photocopier
copi esofacer t
ain
originaldocument
(
g) Tot rim paper sto Guil
l
otinemachine
ther equiredsizes

Hi
ghl
ightthedi sadv antagesofusi ngofficemachi ne
Theycanbev er ycostly
/ expensiv
et obuyandoper ate
Theyoccupyspacewhi chcanbeusedf orothertasks
Machi nesmayr eplacelabourcausi ngunempl oyment
Somemayr equireelectrici
tywhichmaybeexpensi ve
Anybr eakdownoft hemachi nemaydel aywor k
Themachi nemaybecomeobsol ete(outofdat e)
Theyar esubj ectt owearandt ear(
depr eciat
ion)
Somemayr equirespecial i
zedortrainedper sonneltooper
ate
St
atethet hr
eecat egoriesofof fi
cestaff
Manager ialstaf f
Juniorstaf f
Subor di
nat est aff

28

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Out
li
net headv ant agesofusi ngof ficemachi nes
Machi nesar elaboursav i
ngandcanbecostef fectiveint hel ongrun
Theout putofmachi nesi sofgoodqual ity
Theycanbeusedt omi nimi zef r
audort hef t
Machi nescanbev eryf astsav ingont i
me
Theycanpr oduceuni form wor k
Machi nescanbev eryaccur at
eascompar edt ohumanl abour
Somemachi nescanbeadapt edt omul tipletasksuchasacomput er
Hi
ghlightther olepl ay edbyagoodf il
ingsy stem i nanor ganizat i
on
Fil
ingpr ovidessecur ity/saf etyofdocument s
I
tf acil
i
tateseasyr etri
ev al oraccessofdocument s
Goodf il
ingenhancesor der l
inessandt i
dinessofanof fi
ce
I
tguar anteesconf i
dent ialityofi nformat i
onsi nceitcannotgett othe
wronghands
Goodf il
ingpr omot esgoodcommuni cation
Fil
ingguar ant eest hatdocument sarepr ot ectedf r
om damage
Goodf il
ingguar anteesgoodf ut urereferencei ncaset hei nformation
i
sr equired
Out l
inethev ariouscat egor i
esofof fi
ceequi pmentgi v i
ngexampl es
i
neachcase
Cat egor y Exampl e
(a) Typi ngof f i
cemachi ne (i
)Typewr it
er
(i
i
)Di ctating
machi ne
(b) Mai li
ngof ficemachi ne ( i
)Franki ngmachi ne
(i
i
)Composi te
machi ne
(i
i
i)Foldingmachi ne
(c) Communi cationof fice (i
)Telephone
machi ne (i
i
)Tel ex
(i
i
i)Cel lphone
(d) Dupl icating/ r
eprogr aphi c ( i
)Phot ocopi er

29

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machi
ne (
ii
)Dupl
icator
(
ii
i)
Pri
ntingmachi
ne

Distingui shbet weencent rali

zedanddecent rali
zedf ili
ngsy stem
Incent ralizedsy st em onedepar tmenti sgi vent her esponsibili
tyof
keepi ngandmanagi ngal lthef i
lesi nt hewhol eor ganizat i
on.This
depar tmenti sr ef erredt oasar egi st r
y.Decent rali
sedf il
ing
Statet hechar act eristicsofagoodof f
icewor kerwi thoffice
eti
quet te
Cour tesyi .edeal ingwi thpeopl epol i
tely
Punct ual i
ty -
keepi ngt i
meatal l ti
mes
Honest y-telli
ngt het rut h
Co-oper at ionwi thot herempl oy ees
Tact ical orbei ngdi plomat i
cwhendeal ingwi thother s
Goodj udgementandcomi ngupwi tht hebestdeci sion
Neat nessandor der li
nessi ntermsofwor kar r
angement
Dedi cat ionorl oy altyt owar dst heor gani zat i
on
Highl ightper sonal attributest hatBakar i shoul dhav easanof f
ice
wor ker
Heshoul dbepr esent able
Heshoul dmai nt ainhi ghst andar dofmor ali
ty
Heshoul dhav eagoodsi tti
ngpost ure
Heshoul dmai nt ainhi ghst andar dsofhy giene
Heshoul dbeneatandaccur at eint heor ganizationofhi swor k
Heshoul dmai nt aingoodheal thandphy sicalfi
tnesst hroughhav i
ng
properdi etandexer cising
Definet her olespl ay edbyt hef ollowi ngof fi
cewor ker s
(a)Depar tment almanager
Mai nt ainingt hebooksofaccount s
He/ shemaypr epar et hebudgetf orhi s/herdepar t
ment
Submi tt
ingr epor tst ot heseni ormanageraboutper formanceoft he
depar tment
Moni toringandsuper visingwor kersi nt hedepar t
ment
Assi gni ngr olesanddut i
est oempl oy eesi nthedepar t
ment

30

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( b)Per sonal secr etar y

Recei v ingandf i
li
ngi nformat ion
Booki ngappoi ntment sf ort heboss
Taki ngandwr iti
ngmi nut esdur i
ngmeet ings
He/ shecanmai ntainsmal lamountofmoneyf ormaki ngsmal lor
pett ypur chasesi nt heof fi
ce
He/ sher ecei vesandmakescal lsf
orhi sseni ors
Highl ightt rendsi nof ficemanagement
Useofmoder ncomput ersenhancesef fici
ency
Int
r oduct ionofcust omercar edesksorof fi
cest oaddr ess
cust omer sconcer ns
Mov ementt owar dopenandl andscapeof fi
cepl ant oenhancemor e
i
nter act ionamongt hewor ker s
Out sour cingf orsomet askt hatcanbedonebyot herfir
msi nstead
ofempl oy ingwor ker st odot hesamee. g.hav i
ngext ernal cleaners
orsecur ity
Useoft hecel lphonef orcommuni cati
on
E-Commer cei sar ecentt rendi nbusiness.Out linetheadv antagesof
usingt hi smet hodi ncar ryingoutbusi nessact i
v it
ies.
Adv ant ages
Onecanhav eawi dev arietyofgoodsandser vicesf rom allov erthe
wor ld
Itreducest hecostoft rav elli
ngt othemar ketori nsear chofpr oduct
Iti
sf astasdeal scanbemadewi t
hinashor tper i
odoft i
me
Asel l
ercanadv ertisegoodst omanyconsumer sov erawi dear ea
Paperwor kandt hemanydocumentusedonot hert radear e
remov edorr educedassel li
ngandbuy i
ngi son- li
ne
Alotofi nf ormat i
onaboutt hemar ketcanbeaccessedont he
i
nter net

HOMETRADE
TOPICOBJECTIVES:
Bytheendoft
hetopi
c,t
helear
ner
sshoul
dbeabl
e
to:
Expl
aint
hemeaningandi
mport
anceoft
rade.

31

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Classi fyt rade

Expl aint hef ormsofhomet rade
Discusst het ypesandf unct i
onsofr etailers
Discusst het ypesandf unct i
onsofwhol esal ers
Descr i
bet hedocument susedi nhomet radeandt heci rcumst ances
underwhi cht heyal lused
Expl aint hemeansofpay mentusedi nhomet radeandt he
circumst ancesunderwhi cht heyar eused
Expl aint het ermsofpay mentusedi nhomet radeand
circumst ancesi nwhi cht heyar eused.
MEANI NGOFTRADE
Thisist hebuy ingandsel li
ngofgoodsandser viceswi ththeai m of
makingapr ofit.
I
mpor tanceoft rade:
Tradepl aysav i
t alrolei nanyeconomy .Thev ariousr olespl ayedbyt rade
i
nt heeconomyi nclude:
Hel pspeopl etoacqui rewhatt heycannotpr oduce
Av ailsav ar iet
yofgoodsandser vi
cest her ebyi mpr ovingt hepeopl es
l
ivingst andar ds
Cr eatesanout letf orgoodst herebyenabl ingt hepr oducer sto
disposeoft hei rsur pluspr oduce
Cr eatesempl oy mentoppor t
unities
Encour agesspeci alizati
onanddi visionofl abour
Promot espeace, social r
el ati
onsandunder st andi
ngt hepar ties
i
nv ol
v edsi ncet heydependononeanot her
Prov idesr ev enuet ot hebusi nessandt hegov ernmenti nf or
m of
taxesandf eeschar gedont hev arioust radingact ivit
ies
Ensur esst eadysuppl yofgoodsandser v i
ces
Expl oitationofl ocal resour cesast rader scr eategoodsandser vi
ces
usi ngl ocal lyav ailabler esour ces
Encour ageseconomi cgr owt handdev el opment
ClassificationofTr ade
Ont hebasi sofgeogr aphi cal l
ocat i
onoft hepor ti
oninv olved,These
are:

32

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Homet rade- Alsocal ledi nternal ,l

ocal ordomest i
ct rade.
-Itref erst ot hebuy ingandsel li
ngofgoodsandser v i
ceswi thint he
boundar i
esofagi v encount ry.
-Itisf ur therdi videdi ntor et ail t
radeandwhol esalet rade.
Int er nat ional t rade( for eignt rade)
-Thi si st radet hati scar ri
edoutbey ondtheboundar iesofacount r
y
-Thi si st radecar ri
edoutbet weeni ndivi
dual sorgov ernmentofdi fferent
count riese. g.t radebet weenaci tizenofKeny aandaci t
izenofTanzani a,
ort radebet weent hegov er nmentofKeny aandt hegov ernmentof
Sout her nSudan
-Internat ional t
r adecar ri
edoutbet weent wocount riesisr ef erredt oas
bilater al tradeandi nt ernat ional tradecar r
iedoutamongmanycount r
ies
(mor et hant wocount ries)i sr eferr edtoasmul t
il
at eraltrade.
Internat ional tradei scl assi fiedi ntot hefollowi ng;
Expor tTr ade- Whi chi st hesal eofgoodsandser vi
cesbyacount r
yto
anot hercount ryori ndi vidualsi nonecount r
yt oanot hercount ryor
indi v idual si nonecount rytoi ndi v
idualsi nanot hercount ry.
Impor tTr ade- Whi chi st hebuy i
ngofgoodsandser vicesbyone
count ryf rom anot hercount ryorbyi ndiv idualsi nonecount ryf r
om
indi v idual si nanot hercount r
y .
For msofHomeTr ade
Ret ail Tr ade
-Ret ailtr adei nv olv est hebuy ingofgoodsandsel l
ingt hem t ot hef inal
consumer .Ar et ail
eri st het raderwhobuy sgoodswi thav iewofsel l
ing
them t ot hef inal consumer .
Cl assi fi
cat ionofRet ai lTr ader s
Ret ailer sar ecl assi f i
ed/ cat egor i
zedaccor dingt ot heamountofcapi tal
theyneedt ost ar tandoper atet hei rbusinessesandt heirsal esv olume.
Thusr et ailer scanbecl assi fiedas;
Smal l scal er et ailers
Lar gescal er et ailers
Smal l-scal eRet ailbusi nesses/ smal lscal eRet ai l
ers
Thesear er et ailer swhosecapi talr equir
ementi slowandt hei rsales
vol umeal sol ow.Theyf ormt hemaj ori
tyofr etailt
rader sandal l
f oundi n

33

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allpartsoft hecount ry.

Smal lscal ebusi nessesar eeasytostar
tandi nmostcasestheyare
operatedasone- man’ sbusiness.
Asmal lscal etraderserv estheneedsofpeopleintheimmediate
neighbour hoodanddeal mainl
yinfastmovinggoodssuchasf oodst
uff
s,
detergent s,kerosenee. t.c
Categor i
esandTy pesofsmal lscal
e
Thesear et womai ncategoriesofsmall
-scaletr
adersasshownbelow;
Smal l scaleTr aderswithoutshops
-I
ti
nerantTr ader s(Hawker sandpeddlers)
-Roadsidesel l
ers
-Openai rmar ketTr aders

Smal lscal eret ailer swithshops

-Singleshops -Ti edshops -Ki osks - Mobileshops
-Mar ketst all
s -Cant eens -Mai lorderst ores
Smal lscal eRet ailerswi thoutshops
Iti
ner antTr ader s
Thesear eretailerswhomov ef r
om placet oplaceselli
ngt heirgoods
eit
heronf oot ,bybi cy clesormot orcycles
-Theymov ef rom t ownt ot own, doortodoorandf r
om v i
l
laget ovil
lage
selli
ngt hei rgoods.Thei rgoodsmayi ncludecl ot
hes,utensilsand
foodst uffs.Cust omer scanbuygoodswi thouthav i
ngt otraveltolookf or
them
-Exampl esofi tinerantt rader sar ehawker sandpeddl ers(Hawker smov e
aroundonbi cy cles, handcar tsormot orcycleswhi l
epeddlerswal karound)
-Thei t
iner antt rader sr equi real i
cencef rom t helocalauthoriti
esinor der
tosel ltheirgoods.
Char acter i
sticsofi tiner antTr aders
Ar ef oundmai nlyi ndensel ypopulat edar eas
Mov ef r
om pl acet opl acei nsearchofcust omer s
Theyar ev eryper suasi ve
Thei rpr i
cesar enotcont roll
ed.

34

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Advant agesofi t
inerantTr ader s
Theyr equi r
el i
ttl
ecapi tal tost ar t
Theyar econv enientbecauset heybr inggoodscl osert ot hepeopl e
Thebusi nessisf lexiblei nt hatt heycanmov ef rom pl acet oplace.
Theycanal sochangef rom l ineofbusi nesst oanot her
Fewl egal formal it
iesar er equir ed
Theyusual l
ydonotsuf ferbaddebt sbecauset heysel li
ncash.
Di sadv antagesofi tinerantTr ader s
Thet radersgett i
redbecauseofmov ingf rom onepl acet oanot her
whi lecar ryi
nggoods.
Thebusi nessisaf fectedbybadweat hercondi tions
Thet raderssal eal imitedr angeofgoods
Itisdi ffi
culttot ranspor tgoodsf rom onepl acet oanot her .
Donotof f
erguar ant ee, incasei temsar et obef ounddef ective
Theyar econst ant l
yi nconf li
ctwi tht hel ocalgov er nment .
Roadsi desel l
er s
Thesear etraderswhosel ltheirgoodsatpl aceswher eot herpeopl epass
byandatbusypl acessuchasal ongbusyr oads, busst ages, road
j
unct ionsandent rancest opubl icbui ldings.
Theypl acet heirgoodsont rays, car dboar ds, empt ysacksandmai l
s
Theysel lit
emssuchasf r
uits, utensi ls, sweet s,clothingandsome
hardwar e.
Open- airmar ketTr ader s
Openai rmar ketsar epl acessetasi debyt hegov ernmentt hrought he
l
ocal author i
tieswher epeopl emeett obuyandsel lgoods.Tr ader sselli
ng
si
mi larcommodi ti
esar eal l
ocat edaspeci al area.Suchmar ket sar eopen
onpar t
icularday soft heweek.
Thev arietyofgoodssol dher ei swi deandi ncludeagr icultural produce,
cl
othi ng, househol di t
ems, animal s, foodst uf fsandev enf urniture.
Thet rader smov ef rom onemar kett oanot herdependi ngont hev ari
ous
mar ketday s.
Advant agesofsmal l-
scal er etailerswi t
houtshops
Theyr equi r
easmal lamountofcapi tal tostartandoper atet hei
r
busi nesses.

35

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Theyar econv eni entsi ncet heyt akegoodst ot hecustomer swit

hin
theirreach.
Theyi ncurl owcost sofdoi ngbusi ness
Mostoft heirgoodsar el ow- pri
cedandhencemor eaffordableto
cust omer s.
Thebusi nessi sf lexible.I tiseasyt ochangef r
om onebusi nessto
anot her
Theyr equi refewl egal r
equi rement s
Thef i
nanci al r
isksi nvolv edi nthesebusi nessesar emi ni
mal
Theydonotsuf ferbaddebt ssincet heysel l oncashbases
Theyi nteractatper sonal lev elwi t
ht hecust omer sandcanconv ince
them t obuyt hei rgoods.
Di
sadv antagesofsmal l-
scal er et ail
erswi t
houtshops
Itistiringf ortrader st omov ef r
om pl acet opl aceespeciallyift
he
goodsar eheav yandt hedi stancecov eredar elong
Thet r
ader sfacest iffcompet i
ti
onf r
om ot hert r
aderswi t
hmor e
resour ces
Theyof f
eral imi tedv ari
et yofgoods
Theyar eaf fectedbyunf av orableweat hercondi ti
on
Lackofper manentoper at i
ngpr emi sesdeni est hem achancet o
dev elopper manentcust omer s
Theyf aceal otofcer tai
nt y ,especi all
yi nt ermsofast eadyf l
owof
i
ncome
Theysomet imessel ldef ect iveorl owqual i
tygoodsbecause
cust omer sex pectt opayl ittlemoneyf orthem.
Smal lscaleRet ai
ler
swi thshops
Thesear esmal lscaleret
ailerswit
hpermanentlocati
onst ooperatef r
om.
Theyinclude;
Kiosks
Thesear esmal lshopsorst ruct
uresfoundmostlyi
nr esident
ialareas,
busystreets,hi
ghl ypopulatedareasorinsi
debuil
dingwher epeopl epass
byorwor k
Theydeal i
nf ast-mov i
ngitemsandgr oceri
essuchas; sodas,cakes,

36

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sweet s, cigar et tes, andnewspaper se. t.c.someki osksal sosel lf

ood
Mar ketst alls
Thesear eper manentst andsf oundi nmar ketpl aces, especi all
ythose
oper atedbyt hev ariousl ocal aut hor i
ties
Theyar eofdi ffer entdesi gnsdependi ngont hegoodst heysel lor
servicest heyof f er.
Theyar er ent edorl easedbyi ndi vidual sfrom local aut horiti
es
Theydeal inf astmov i
nghousehol dgoodst houghsomemayspeci ali
ze
i
not herpr oduct ssuchascl othi ngandshoes.
Exampl esar est al l
satMut hur wamar ket s,Kariokor,andmostmuni cipal
mar kets.
Adv antagesofki osksandmar ketst alls
Theyar esmal l,henceeasyt ost artandoper ate
Theyar econv eni ent lylocat edcl oset ot heircust omer s
Theyr equi rel ittlecapi tal tost art
Theyt endt ohav eal oyal gr oupofcust omer ssincet heyhav e
per manentpr emi ses
Theyi ncurr elat i
v elyl owr unni ngcost s
Theygi v eper sonal attent iont othei rcustomer s
Theyar ef l
exi blesi ncet heownercanchangef r
om onebusi nesst o
anot hereasi ly.
Disadv ant agesofki osksandmar ketst alls
Theypr ovideal imi tedr angeofpr oduct s
Theyusual lydonothav eadequat ehighercapi t
al forexpansi on
Theychar ger el ativel yhi gherpr icest hant her etailer
swi t
houtshops
Theyf acest if
fcompet i
tionf rom mor eest abl i
shedr etail
businesses
Theysomet imessuf ferf rom baddebt s
Duet ot hei rsi ze, theydonotenj oyeconomi esofscal e
Formar ketst allst hehour sf oroper ati
onar econt rolledbyt hel ocal
aut hor ityconcer ned
Singl eshops( uni tshops)
-Si
ngl eshopsar emost l
yl ocat edi nt het radingormar ketcent resinr ural
areasori nt her esi dent i
al areasofhi ght owns
-Theyar eoper atedf rom f ixedpr emi ses

37

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-Theyar eusual l
yr unbyoneper sonwhomaygetassi stancef r
om
him/herf ami l
yorempl oyattendance
-Somedeal inonel i
neofcommodi tysuchashouses, cl
othi ng,gr
ocer ies
orelect ronics
Advant agesofsi ngl eshops
Mi nimal capi tal isr equired
Runni ngcost sar eusual lylowast heownermayuset heservicesof
fami lymember s
Theymayof fercr edi
tfaci l
itiest osomecust omer s
Theyar eeasyt ost artbecauseonl yal icencei srequir ed
Theyusual lyhav eal oy algr oupofcust omer s
Flex i
bi l
ity .Theownercanchangehi sorherl ineofbusi nessatwi l
l
Theyar eeasyt ost artsincet heownerdoesnothav et omeetany
manuf act ur esr equi r
ement s
Pr oduct spr i
cesar efi
xedbyt heshopowner s
Theownerhast hef r
eedom ofcr eativityandi ndependence
Theyar econv eni entsincet heyensur egoodsar ewi t
hi neasyr each
oft hei rcust omer s.
Disadv ant agesofsi ngl eshops
Expansi oni sdi fficultduet ol i
mi tedf unds
Theyf acest i
ffcompet iti
onf rom l argebusi nesses
Theabsenceoft heownermayr esul tincl osureandl ossofbusi ness
Maysuf ferbaddebt s
Pr ovidel imi tedv ar i
etyofgoods
Theoper ationsoft hebusi nessar eaf fectedbyt heowner ’s
commi t ment .
Tiedshops
Thesear eshopst hatmai nlysel lthepr oduct sofonepar ti
cul ar
manuf actur eorar eownedbyaspeci ficsuppl ierofcer t
aingoods.The
shopsar eownedorcont r
olledbyt hemanuf acturer,andar ethustiedt o
themanuf act ur e.
Themanuf act ur e/suppl i
erdesi gnst heor gani zationoft heshopandi ts
appear ancee. g.pai nt inghencet heyl ookal i
ke.Thesuppl ycl osel
y
superv isest heshops.

38

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Exampl esoft i
deshopsi nclude; Batashopswhi chsel lshoesmadeby
BataCompany , pet r
ol stationl ikeNat ional, Kobi l
,andt ot ale.t
.c
Advant agesofTi edshops
Av ai
labi l
ityofgoodsi sassur edatal lt i
mes
Thesuppl iercar riesoutpr omot i
onf ort hegoods
Themanuf act urer/suppl iercaneasi lygi vecr edittot heshops
Cust omer scanr eturnorchangef aultygoodsatanyoft heshops
Theshopsar eeasi l
yi dent ifi
ableduet ot heirsi mil
ar i
ty
Trader sar ef i
nancedbyt hemanuf actur e
Theygetl oy alcust omer swhokeepbuy ingt heirbr andedpr oducts
Adv ertisementexpensesar emetbyt hemanuf actur e
Theygett echni cal adv icef rom themanuf acture
Someoper at efrom per manentpr emi sesownedbyt hemanuf acture.
Disadv antagesofTi edshops
Decisi onmaki ngi sslowbecauset hemanuf act ur
ermustbe
consul ted
Thev arietyofgoodsi sl i
mi t
ed
Theshopscannotsel lgoodsf r
om anyot hermanuf acturesevenif
customer sr equi r
et hem
Pricesar ef i
xedbyt hemanuf act
ur eandsomet imespr ofi
tmar gi
ns
maybel ow
Theyi nhi bitt her etail
erscr eativi
tyandi nnov ations
Ther ei sal ikelihoodofdi sagr eement sbet weent hemanuf acture
andt het i
edshopowner s.
Diff
erences/ Dist i
nct ionbet weenat i
edshopandsi ngleshop
Singleshop Tiedshop
-Owneri sf reet ost ock -Deal ershipcanbewi t
hdrawni f
what ev erhe/ shewi shes oper ator sstockcompet i
ng
product s
-Ownedbyi ndi vi
dual oragr oup - Theowneri snor mallythe
ofpeopl e manuf act urer
-Sell
spr oduct sfrom di ffer ent - Sellspr oduct sfr om asingle
manuf act urer s manuf act urer

39

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not
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-Designofshopaccor dingt o -Shopsusual lyhav et hesame

owner swi sh desi gn
-Pricesofgoodsdet ermi nedby - Pricesofgoodssetbyt he
shopownerordi fferent manuf act urer
manuf actur es
-Oper atorsnott rainedby -Oper at orsar eusual lyt r
ained
manuf actur ers bymanuf act urer
Cant eens: Thesear er etailshopsf oundi ni nst i
tutionssuchas
school s,col leges, hospi talsandar mybar racks.
-Theyst ockav arietyofconsumabl egoodssuchassodas, bread, t
ea,
grocer i
esandot hert hingsusedbyt hepeopl eint hatinst itution.
-Theyar er unbyt hei nst i
tutionsmanagementorbyi ndi vidual sonr et
ail
business
-Mostoft hem oper atewi thoutal i
censeast heyar econsi der edt obepar t
ofthei nstituti
on.Thei rhour sofoper ationar esomet imesr egul atedby
theinst i
tution
Adv antagesofcant eens
-Somedonotpayanyr ent,thust heyi ncurl owov erheadcost s
-Theyof tenr equi relowcapi taltostar t
-Someof f
ercr edi tfacili
tiest otheircust omer s
-Theyar esi tuatedati deal locat i
onwhi chisconv enientf ort hei r
customer s
-Theyar eassur edofamar ketast heycat erf orpeopl einpar ticular
i
nst i
tution.
Disadv antagesofcant eens
-Themar keti slimi t
edt opeopl einapar ti
cul ari nst i
tution
-Theydonotopent hr oughout /theyopenf orl imi tedhour se. g.after
classesi nschool s
-Theycl osedownwhent het argetedcust omer sar enotav ai l
ablee. g.
duringschool holiday s.
-Theymaysuf ferf r
om baddebt s
-Theyar edi ffi
cul ttoexpandduet oinsuf f
icientf unds
Aut omat icv endi ngmachi nes;Thesear ecoi norcar doper ated

40

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ehi
ghschool
not
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gui
debooks,
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machi nesusedt osel lcommodi ti

esl i
kedr inks,stamps, andsnacks
e.t.
c.Exampl esar ecof f
eeshops, ATM’ se.t.c
Feat ures
-Theydi spensegoodsorser vicesonceacoi noracar di si nsertedand
i
nst ruct i
onskey edi n.
-Theyoper atewi thoutanat tendant
-Theyar eusual l
ypl acedatst rategicpl acessuchasbusyst r
eet s,off
ice
buildings, shoppi ngcent resandhospi tals.
Adv ant agesofv endi ngmachi nes
Commodi tiescanbeboughtany t
imebecausenoat tendanti s
required
Theysav et heownert hecostofempl oy i
ngashopat tendant
Theycanbeputst rat egicallyt oboostsal ese. gati nst i
tuti
ons
Theyar efastandaccur at e
Theyar enotaf f
ect edbyweat herchanges
Theypr ovidegoodsandser vicesoncashbasi spr otect i
ngt heowner
from t hebur denofbaddebt s.
Disadv antagesofv endi ngmachi nes
Theypr ovideal imi tedr angeofpr oduct s
Break- downsorst ock- out smaydi scouragecust omer s
Mai ntenancecost sar ehi ghduet or egularser vi
cing, repairsand
somet imesv andal ism
Theownermayi ncurl ossest hroughf r
audanduseofi nappr opri
ate
coinsandcar dsbyconsumer s.
Cust omer sar ef orcedt ocar rycoi nsandcar dsinor dert oobt ai
n
goodsorser vices
Theirusei sl imitedt ocust omer swhoar ef amili
arwi thhowt he
machi newor ks
Theyar emai nlyf oundi nur banar eas, t
her ebylocki ngoutt hepeople
i
nr ural areas.
Mobi leshops
Mobi l
eshops, l
ikei tinerantt rader smov ef r
om t ownt ot ownorv i
l
lageto
vil
lagesel li
ngt hei rgoods.
-Theyhav ev ehiclest hatt heyhav econv ertedint oashopf rom whi ch

41

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ghschool
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gui
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customer scanbuyt heirgoods

-Theyv isitdi f
ferentt ownsatr egul arintervals.
Advant agesofsmal lscaleRet ailer
s
Easyt or aisecapi t
al t
ost art
Ret ailersar einclosecont actwi ththeconsumer sandmaygi v
e
credi ttocr editwor t
hycust omer s.
Areabl et ousef r
eeorcheapl abourf rom familymember s
Ther isksinv ol
v edinthei rbusi nessesar esmal l
Thebusi nessi ssimplet ost artandmanage
Fewl egal formal i
ti
esr equi redt ost ar
tandr unthebusi ness
Thet radercaneasi lychangef rom onef or
m ofbusi nesst oanother
i
.e.t hebusi nessisf l
exi bl
e
Disadvant agesofsmal l
-scal eret ai
lers
Trader shav elimitedaccesst ol oanfaci l
it
ies
Theymaynotaf fordtohi respeci ali
stsort echnicalstaff
Maysuf ferbaddebt si ftheygi vecr edittocust omerswi thoutproper
assessment
Donotenj oyeconomi esofscal e
Hav eal owt ur
nov erbecauseoft heli
ttlecapitalinv
est ed
LARGESCALERETAI LERS
Lar
ge-scaleretail
ershav ethef oll
owi ngfeatures/characteri
sti
cs;
Requirelargeamount sofcapi taltostartandmai nt
ain
Theyoper atefrom l argerf i
xedpr emises
Theyoper atemai nlyinur banar eas
Theyhav eal argel abourf orce
Buygoodsi nlargequant iti
esfrom whol esalersordirectl
yfrom
producersandar et hereforeallowedl arget r
adeandquant i
ty
discountsandot herf avourablecr edi
tfacili
ti
es
Requiretheser vicesofspeci al
istssuchassal espersonsand
accountants
Mayoccupyonel argepr emiseorsev er
al premisesinthesamet own
orindiff
erentt owns
Theyhav elargest ocksandl ar
gesal esv olumes

42

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TYPESOFLARGESCALERETAI LERS
Super market s: Asuper mar keti sal arge-scal esel f-
selection/sel
f-
servicest or et hatdeal smai nlywi thhousehol dgoodssuchas
utensi l
s, f
oodst uf fsandcl ot hes.Ithast hef ollowingf eatures;
Featuresofsuper mar ket s
Requi resl argecapi tal tost ar t
Theyst ockawi dev arietyofgoods
Of f
er sselfser vicef acili
ti
es
Goodshav epr icet agsorbarcodes
Pricesofgoodsar ef ixed
Nocr editfaci li
tiesar eof fer ed
Sellatcompar at ivelylowpr ices
Goodsar esy stemat i
callyar rangedf oreasysel ecti
on
Shopper sar epr ov idedwi thbasket sort roll
ey sf orconv enience
Ther ei smi nimal i
nt eractionbet weenbuy erandsel l
er
Ther ear eempl oy eeswhopackgoodsf orcust omer satt hepay
point s.
Advant agesofsuper mar kets
Pricesmayber el ativelylowbecauset heybuyt heirgoodsi nbul
k
andar egi vendi scount s
Sav est imeascust omer sar eabl et ogetmostgoodst heyr equi
re
underoner oof
Self-ser v
icesav est hecust omer st ime
Fewat tendant sar eempl oy edt her ebyr educi ngt hemont hlywage
bill
Impul sebuy i
ngl eadst omor esales, hencehi ghpr ofi
ts
Baddebt sar eav oidedbecauset her earenocr editsales.
Thepr icet agsongoodshel pcust omer st omoni t
ortheirspending.
Disadv antagesofsuper mar kets
Donotof fercr edi tf acili
ti
est ocust omer s
Donotdel ivergoodst ot hecust omer ’
spr emi ses
Aref oundmai nlyi nur banar eas
Mayi ncurl ossesduet opi lferageofgoods
Impul sebuy i
ngmayl eadt hecust omer st obuy i
nggoodst heymay

43

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notneed.
Theyar eexpensi vet ostartandoper ateduet ot helar geamountof
capi t
al requi red
Pricesar ef i
xedandbar gainingi snotaccept ed, whichdi scourages
somecust omer s
Mi nimal per sonal i
nteractionl i
mitschancesf ormaki ngmor esales
Hy per mar ket s
Ahyper mar keti sal argeshoppi ngcompl ex/centrecompr i
singav ari
ety
ofbusinessesmanagedbydi ff
erentpeopl eallhousedi nonebui l
ding
Examples; v
il
lagemar ket ,sari
tcent re,Tuskey s-
Kisumu, Nakumat tmega
ci
ty-
Kisumue. t.
c
Feat
ures/ Char act eri
st i
csofHy per markets
Areser vedwi thgoodaccessr oads
Theyhav eampl epar ki
ngspace
Manybusi nessesi nonebui lding
Locat edi nt heout skirt
soft own
Off erav ar i
et yofgoodsandser vices
Occupyal ar gespace.
AdvantagesofHy per mar kets
Off erampl eandsecur epar kingspacet ocust omer s
Cust omer scandoal lt
heirshoppi ngi nonebui lding
Theyar eusual lyopenf orlonghour s
Theymaypr ovidecr editfacil
iti
esbyaccept ingcr editcards
Ther eisl esst r
afficcongest i
onashy permar ket sar el ocat
edaway
fr
om ur bancent r
es
Prov ideawi dev arietyofgoodsandser vi
cest ocust omer sunder
oner oof.
Theyhav ef airpricest hatarecust omerf ri
endl y.
Di
sadvantagesofHy permarket
s
Areonlyconvenientt
ocustomer
swhohav ecar sbecauset
heyar
e
si
tuatedawayfrom cit
ycentr
es
Theyserveli
mitednumberofpeopleduet
ot hei
rlocat
ion
Theyrequi
relargeamountofcapi
talt
oestabli
sh

44

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Theycaneasi lyexpl oitt heircust omer ssincet hei rpr i

cesar enot
cont rolled
Requi relargeamountofspacewhi char enotav ailableincent r
al
busi nessdi st ri
ct( CBD)
Theyspendal otofsecur i
tytosaf eguar dpr oper ties
Chai nst ores( Mul ti
pleshops) ; Arel ar gescal ebusi nesseswi th
separ atebr ancheswhi char emanagedandor gani zedcent rally.The
branchmanager sar eaccount abl et ot heheadof fice.Exampl es;
Af r
icanRet ail Tr ader s( ART) , Whi t eRosedr ycl eaner s,Nakumat t
,
Tusky s,Uchumi e.t.c
Character i
stics/ feat ur esofchai nst or es
Ar emanagedcent rallyf rom aheadof f
ice
Pr i
cesar est andar df oral lt
hei rpr oduct sinal l theirbr anches
All branchesdeal i
nt hesamet ypeofpr oduct s
Salesar edecent ralizedi .e.thev ar iousshopssi tuat edi ndifferent
placesactassel lingpoi ntsorbr anches
Pur chasesofst ockar ecent ral i
zedi .
e.buyst ockbuyst ockinbul k
cent rallyanddi st ri
but edt othedi fferentbr anches
Goodscanbet ransf erredf rom oneshopt oanot herwher etheneed
fort hem i shi gher
Theshopsoper ateunderonenameandar esimi l
ari nappear ance
andi nteriorl ay out
Advantagesofchai nst ores/ mul tipleshops
Theyenj oyl arget r
adedi scount ssi ncet heybuyt hei rgoodsi nbul k
cent rallyandi spassedt oconsumer si nf orm ofl owpr ices
Commoncost ssuchast hoseofadv ertisingar eshar ed
Goodst hatdonothav eahi ghdemandi nonebr anchcanbe
transf erredt oanot herwher et hei rdemandi shi gh
Theyar eeasi l
yi dent if
iedbyt heircol ouranddesi gn
Theyhav elowoper at i
onal cost sbecauseoft hecent r
alizedbuy i
ng,
stor age, adv er tisingandaccount ing
Theyser veal ar genumberofcust omer sbecauset heyar espr eadin
manyt ownsandci ti
es
Thesi mi lari
t yoft heshopsi nappear anceandser vicesser vesasan

45

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adv er t
isingt ool
Riskssuchasl ossesar espr eadamongmanyshops
Itispossi blet opayf orgoodsi nonebr anchandpi ckt hem upi n
anot her .
Disadv ant agesofchai nst or es/mul t
ipleshops
Lar geamountofcapi talisrequiredt ostartandmai ntaint he
busi ness
Theycat ermai nlyfort heur banar easast heyar esi t
uat edi nt hose
places
Or gani zational problemsmayoccurduet ot hei
rlargesi ze
Nocr edi tfacili
tiesar eof f
eredexceptt hoseoper at
ingexcl usi velyon
hirepur chaseschemes
Responset omar ketchangesi ssl owduet ot heslowdeci sion
maki ng
Deci sionmaki ngi sslowast heheadof ficemustbeconsul t
ed
Lackofper sonal touchwi t
hcust omer s
Absenceofper sonal touchbet weenempl oy erandempl oy eemay
reducei ncent ivesf orhar dwor kamongst aff
Peopl et endt oshyawayf r
om buy i
ngsimi larproduct ssuchas
clothesandt hismayr educesal es.
Depar tment alstores
Thisisagr oupofsi ngl eshopsoper atingunderoner oofwi tha
centralizedmanagement
Eachshop/ depar tmentspeci ali
zesinapar t
icularl i
neofpr oduct sandi s
headedbyi tsowndepar tmentmanager .
Charact erist i
csofdepar tment alstores
Eachdepar tmenthasi tsownmanager
Eachdepar tmentsel l
sonl yonel i
neofpr oduct s
All depar t
ment almanager sareanswer ablet oagener al manger
Theyof ferawi dev arietyofgoodsatr elati
v elylowpr i
ces
Theysel lgoodsst ri
ct l
yoncashbasi s
Theyar eusual lyint owncent res
Goodsar enott r
ansf erabl efr
om onedepar tmentt oanot heraseach
hasi tsownv arietyofgoods.

46

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Adv ant agesofdepar tment al stor es

Cust omer scanbuy /accessawi dev arietyofgoodsatf airpr i
ces
underoner oof .
Theycanaf f ordtohi r
et rainedqual ifiedexper iencedst affwho
pr ov idequal ityser vices
Theybuygoodsi nl arget radedi scount s.Thi senabl est hem t osell at
lowpr ices.
Eachdepar tmenti sabl et omakei ndependentandqui ckdeci sions
thataf fecti tsoper ations.
Thei ndependenceofdepar tment sensur est hattheweaknessof
onedepar tmentdoesnotaf fecteachot her .
Sav ingscanbemadeonsomeact iv i
tiessuchaspr oductpr omot i
on
bycent ralizingt hem.
Disadv ant agesofDepar tment al stores
Al argeamountofcapi tal i
sr equiredt ost artandmai ntaint hest ores
Theyr equi real argenumberofcust omer st ooper atepr ofitably
Itisdi fficul tt ogiveper sonal attentiont ocust omer s
Theycat ermai nlyfort heur bancommuni tiesinwhi cht heyar e
locat ed
Theyst rictlysel ltheirgoodsoncashbasi s
Oper at ional cost sar ehi ghduet ot hewi dev arietyofser vices
of fer ed
Thei rlar gesi zecoul dencour aget hef tandpi lf
erageofgoods
Thei ndependenceofdepar tment scanmakecent ral contr ol dif
fi
cult.
Mai l orderst ores
Thisi sat y peofr etailbusi nesswher ebusi nessi scar r
iedoutt hr ought he
postof fice, tel ephoneoremai l
-Orderingoft hegoodsi sdonet hrought hepostof f
icetel ephoneoremai l
anddel iver ingofgoodsi sdonebypostorcour ier
-Therei snoper sonal cont actbet weent hesel l
erandt hebuy erandbuy er s
getinf or mat i
onf r om adv er tisement s.
-Goodsar edi spat chedont hebasi sofcashwi thor der( CWD)orcashon
deli
v ery( COD) .
Char act erist i
cs/ featuresofMai l or derst ores

47

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-Theysel l thegoodst hrought hepostof f

ice
-Theyoper ateoncashwi thor der( CWO)orcashondel i
ver y(COD)t erms
-Heav yadv erti
sementar ei nv olved
-Customer sdonotv isitthesel l
ingpr emi ses.
-Therei snoper sonal cont actbet weent hebuy erort hesel ler
-All
t r
ansact i
onsar edonet hr ought hepostof f
ice
-Theydeal withgoodst hatar el essbul ky,hav ehi ghv alue, andar edur abl
e
andnott oof r
agile
-Mayhav el argewar ehouses
Adv antagesofMai lorderst or es
Theyr eachcust omer swhoar ef arforawayf rom t heshoppi ng
cent res
Donotr equiret heser vicesofsal esper sonnel orshopat tendant s
forski ll
edl aboursi ncesel lingi sr outine
Tot al control ofdi stri
but ioni spossi ble
Pay ment sismadewi t
hor derordel iverysot herei sl i
ttlechanceof
baddebt s
Elimi natest hel ossassoci at edwi thshopspace, t
hussav ingonr ent
Suppl yofgoodsi sbasedonor dert husat raderr equi resli
ttl
e
wor kingcapi tal
Themet hodel i
mi nat est ripst ocongest edst or esandl engthywai ts
queues
Donotr equirelar gest oragespacef orgoods.
Disadv ant agesofMai l orderst ores
Adv er ti
singandpost agecost smayi ncr easest hepr iceofgoods
Ther ei slackofper sonal cont actbet weent hesel lerandt hebuy er
Ther ei slimitedv ari
et yofgoodsonof f
er
Cust omer sdonothav et heoppor tunityofi nspect i
nggoodsbef ore
buy ing
Ther ear enocr edi tfaci l
ities
Themet hodi sonl ysui tabl ef ort hosewhocanr eadandwr it
e
Shoul dtherebeapr obl em wi tht hepostof f
ice.e. gindust rialacti
on
li
kest ri
kes, thebusi nessmaybeaf f
ect ed
Difficulttooper atei npl aceswher epostof f
iceser vicesar epooror

48

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unav ailable
Chancesofbei ngdef raudedar ehi gh.
FUNCTI ONSOFRETAI LERS
Thesecanbedi scussedasser v i
cesr ender edt oconsumer s,whol esaler
s
andproducer s
Servi
cesRender edt oconsumer s
Of f
er scr editf acil
iti
es: Ret ail
ersar eincl osecont actwi ththe
consumer sandsomemaygi vethem cr editfaciliti
es
After -sal esser vi
ces: Ret ai l
erswhosel ltechni cal goodse. g.cars,
elect roni cse. t.cmayof feraf t
ersal eser vicest oconsumer se.g.
tr
anspor t,
inst all
ationr epai re.t
.c
Prov isi onofv ar i
etyofgoods: Ret ail
ersst ockawi devar i
etyofgoods
fr
om di fferentwhol esal er sandmanuf acturesenabl i
ngt he
consumer st ohav eawi dechoi ce.
Adv isi ngconsumer s: Ret ailersmayof feradv icet oconsumer son
choi ceanduseofpr oduct s
Av ailingneededgoods: Ret ail
ersmakegoodsav ail
ablet o
consumer satt her ightt imeandpl ace
Breaki ngbul k: Retailerssel lgoodst oconsumer sinconv enient
quant ities
Accumul atingbul k
Stabi lizingpr ices: Byensur i
ngt hatgoodsar econt i
nuousl yav ai
l
able
toconsumer s
Servi
cesRender edt owhol esal er s
Ret ailer sst oregoodsandr eli
evet hewhol esal erst hebur denof
stor i
nggoodsandt hest oragecost s
Theyr elievet hewhol esal ersthebur denoft ranspor t
ation
Ret ailer sadv icewhol esal ersonmar kett r
ends( onconsumer s
demand) andgi vev aluabl ei nformat ion
Theyhel pindi stributionofgoodst otheconsumer s
Theyhel pinbr eakingbul konbehal foft hewhol esaler
Theyf inancewhol esal erst ocont i
nuewi tht heiroper ationst hrough
pay ingf ort hegoods
Theyr elievet hewhol esal erofsomer iskst hatar i
sef r
om t he

49

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stor ageofgoodssuchast heft,fireandacci dents.

ServicesRender edt opr oducer s
Thr oughwhol esal ersr etail
er spr ov i
dev eryv i
tal i
nformat iont o
manuf act uresaboutmar ketdemand
Theyadv ert i
segoodsonbehal fofpr oducer s
Theysel landmar ketgoodst oconsumer s.Thisr eli
ev esthe
manuf act urest het askandr i
skofr et ail
ing
Theyst or egoodsonbehal foft hepr oducer s
Theybr eakbul konbehal fofpr oducer st oconsumer s
Theyf inancepr oducer sbybuy ingandpay i
ngcash
WHOLESALETRADE
Whol esal ingi nv olv essel l
i
nggoodsi nl argequant i
tiest otrader sf orresal
e.
Awhol esal eri sat r
aderwhobuy sgoodsi nbul kf r
om
producer s/manuf acturesf orresal et or etailersatapr ofit
.
-Therear ewhol esal erswhocar ryoutr etaili
ngbutt hatdonotmaket hem
retai
lers.
Classificat ionofwhol esal ers/Ty pesofwhol esal ers
Whol esal er smaybecl assi fi
eddependi ngonanumberoff actors.These
factorsi ncl ude;
Accor di ngt ot her angeofgoodst heyhandl e
Accor di ngt ot hegeogr aphi cal areai nwhi cht heyoper ate
Accor di ngt ot hei rmet hodofoper ati
on.
Accor di ngt ot her angeofgoodst heyhandl e
Undert hi scl assi ficat i
on, whol esal ersmaybeanyoft hef ollowing;
Gener al mer chandi sewhol esal ers
Gener al l
inewhol esaler s
Speci alizedwhol esal ers
Gener al mer chandi sewhol esalers
Thewor dmer chandi semeansgoods.
-Thegener al mer chandi sewhol esaler sst ockandsel l
awi dev arietyof
goodse. g.har dwar e,clothes, cosmet i
csandf oodst uff
s.Ther etai l
ers
whobuyf rom t hesewhol esal ersar et husabl et ogetawi dev arietyof
goodsf orr esal e.
-Theyar eal socal ledgener alwhol esaler sorf ull
-l
inewhol esalers

50

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b)Gener al l
inewhol esal er s
-Thesear ewhol esal er swhodeal inawi dev arietyofgoodswi t hinthe
samel i
nee. g.t ext books, dupl icatingpaper sandot hert y
pesofst ati
onary.
c)Speci ali
zedwhol esal er s
-Thesear ewhol esal er swhodeal inapar t
iculargoodf rom agi v enlinee.g.
i
nt hel i
neofgr ains, theymayspeci alizei nmai zeonl y .
i
i)Accor dingt ot hegeogr aphi cal areai nwhi cht heyoper ate.
Undert hiscat egor ywhol esal er smaybe;
Nat i
onwi dewhol esal ers
Regional whol esal ers.
Nat i
onwi dewhol esal ers:
Thesear ewhol esal er swhosuppl ygoodst ot radersi nallpar t
soft he
count ry
.
-Theyest abl i
shwar ehousesordepot si ndi ff
er entar easf rom Keny a
National Tradi ngCor por at i
on( KNTC)
b) Regi onal Whol esal ers
Thesear ewhol esal er swhosuppl ygoodst ocer tainpar tsoft hecount r
y
only.Theymaycov eracount y, District,divisione. t.
c
i
ii)Accor dingt ot heirmet hodofoper at i
on
Undert hiscl assi fication, whol esal erscanbe:
Cashandcar rywhol esaler s
Mobi lewhol esal ers
Rackj obber s
Cashandcar rywhol esaler s: Thesewhol esalerssel lgoodsoncash
andsel f
-ser v i
cebasi slikesuper mar kets
-Theynei therof fert ranspor tnorcr editfaci l
iti
est ot heircust omer s.
Mobi lewhol esal ers/ Trackdi st r
ibut ors:Thesear ewhol esal erswho
usev ehi clest omov ef rom pl acet oplacesuppl yinggoodst o
retail
erse. g.sodadi str
ibut ors,br eaddi st ri
butor s,beerdi stri
but or
s
e.t.
c.
Rackj obber s
Thesewhol esal ersspeci ali
zei nsel l
i
ngcer tain/ parti
cul arproduct st o
otherspeci alizedwhol esal ers.Theybuygoodsf r
om pr oducersorf rom
othercount ri
esf orr esel li
ng.

51

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E.g.somewhol esal er sbuyhor ti

cultural product sf rom pr oducersandsel l
tootherwhol esal ersi nur banar eas
-Rackj obber susual l
yst ockt hei rgoodsi nshel vesorr acksf r
om whi ch
customer ssel ectt hegoodst obuy .Cust omer smaybeal lowedt opayf or
thegoodsaf tert heyhav esol dt hem.
d)Dr opshi pper s
Thesear ewhol esal er swhomakeor der sf orgoodsf rom
manuf actur es/ producer sbutdonott aket hem f r
om t hepr oducer s
premi ses.Theyt henl ookf ort hebuy ersf ort hegoodsandsuppl ythe
goodsdi rect lyf rom t hepr oducer s
Alter
nat ecl assi ficat ionofwhol esaler s
Anal ternat ivecl assi ficat i
onofwhol esal ersisgi venbel ow:
Thosewhobuygoodsst or ethem i nwar ehousesandsel l
them t o
trader swi thouthav i
ngaddedany thingt ot hem.
Whol esal erswhoactaswhol esal er’sagent sorbr okers.Thesear e
mi ddl emenwhoar epai dacommi ssionf ortheirwor ke. g.
commi ssi onagent s
Thosewhoaf terbuy i
ngt hegoodsandst ori
ngt hem pr epar ethem
forsal e.Theybr eakbul k, pack, brand, sor t,gradeandbl endt he
goods
Theset ermsar eexpl ai nedasbel ow:
Br eaki ngbul k-Reduci ngacommodi tyint osmal l
erquant i
ti
esf orthe
conv eni enceoft hebuy ere. g.buy ingsugarf rom t heproduceri n
sacksandsel lingi tinpacket s.
Packi ng- Put tinggoodsi npacket sandboxesr eadyf orsale.
Br andi ng- Gi vingapr oductanamebywhi chitwi llbesold
Sor ti
ng- Sel ect inggoodst odesi redsi zes, weight ,colourandqual i
ties
Gr ading- Put tinggoodsi ngr oupsofsi mi l
arqual iti
est omakei t
easi ert opr icet hem
Blendi ng- Itinv olv esmi xingdi fferentgr adesofapr oducttoachi eve
qual iti
esl iket ast eandcol our .
Funct
ionsofawholesal
er
Thesecanbediscussedasser
vicesr
ender
edt
opr
oducer
s,r
etai
l
ersand

52

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toconsumer s.
Serv
icesofwhol esaler st ot hepr oducer s
Theyreliev et hepr oducer sthepr oblem ofdi stri
but ionbybuy ing
goodsf rom t hem andsel l
ingt or etailers
Theyreliev et hepr oducer sofsomer iskst heywoul dexper i
encee. g.
damage, thef t,fall i
ndemande. t.c
Savethepr oducer sf rom t hepr oblem ofst oragebybuy i
nggoods
andkeepi ngi nt hei rwar ehouses
Theypr epar egoodsf orsal eonbehal foft hepr oducer s
Theygetf eedbackf rom consumer sonbehal fofpr oducer s
Theypr omot epr oduct st hroughadv er t
ising, displ ays, t
radef air
sand
exhi
bit
ions
Theyfinancepr oducer sbybuy inggoodsf rom t hem andpay ingi n
cash.
Serv
icesofwhol esaler st ot heRet ailers
Theystockawi dev arietyofgoodsi nl argequant iti
esr eli
evingt he
ret
ail
erf rom buy i
ngf rom di f
ferentpr oducer s
Theyav ail goodsatpl acesconv enientt or et ail
ers
Theybr eakbul kf ort hebenef itofr etail
ers
Theyof fert ranspor tf aciliti
est or etailers
Theyof feradv isor yser vicest or etailersr egar dingmar kettr
ends
Theyof fercr edi tf acili
tiest or etailers
Theyengagei npr oductpr omot iononbehal fofr etailer
s
Theysor t,bl end, packandbr andgoodssav i
ngr etailersfrom hav i
ng
todoit.
Serv
icesofwhol esaler st oconsumer s
Theyensur east eadysuppl yofgoodst or etai l
ershenceconsumer s
arenotf acedwi thshor tages
Theyensur east abl esuppl yofgoodshencet her ewi llbestabi l
it
yin
marketpr ices
Theyenabl econsumer st oenjoyawi dev ariet yofgoods
Theybr eakt hebul kofgoodst husenabl i
ngt heconsumert hrough
theret
ai l
ert ogett hegoodsi nconv enientquant iti
es
Theypr epar egoodsf orsal ee. g.br anding, blendi ngandpackagi ng

53

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Passinf
ormati
ontoconsumersthr
oughretai
ler
saboutt
hegoods
e.
g.newproducts,
newpricesandt
heiruse.
DOCUMENTSUSEDI NHOMETRADE
Abusi nessdocumenti sawr i
ttenr ecor dwhi chgi vesev idencet oast age
i
nt het r
ansf erofgoodsorpr ov isionofser vicesf r
om onepar t
yori tis
writt
enr ecor dwhi chgi vesev idencet hatt raderorabusi nesst ransacti
on
hast akenpl ace.
Abusi nesst ransact i
oni sadeal bet weent woormor epeopl einvolvi
ng
exchangeofgoodsandser vi
cesi nt ermsofmoney .
Businesst ransact i
onmayt akepl aceoncashbasi s;inwhi chcasegoods
arepai dforbef oreorondel iver yorashor twhi leafterdel i
very
Businesst ransact i
onmayal sot akepl aceoncr editbasi s;whichmeans
paymenti smadeaf teraspeci fiedper iodf rom t hedat eofdel i
v eryofthe
goodsort hepr ov i
sionoft heser vices
Therear ev ariousbusi nessdocument st hatar eusedi nv ari
ousst agesof
businesst r ansact i
onsasdi scussedbel ow;
Document susedatt hei nqui rystage
Thisist hef irststagei nt ransact i
on.Ani nqui r
yi sar equestbya
prospect i
v ebuy erfori nf
or mat i
ononav ail
abl egoodsandser v
ices.Itis
aimedatest abl i
shingt hef ollowi ng;
Whet hert hegoodsorser vi
cesr equi redar eav ail
abl eforsale
Thequal i
tyornat ureoft hepr oduct sav ailable
Thepr icesatwhi cht hegoodsorser v i
cesar ebei ngsol d
Thet er msofsal einr espectt opay mentanddel iv
er yofgoodsor
services
Someoft hedocument susedatt hisst agei ncl ude;
Letterofi nquiry;
Thisisal et terwr it
tenbyapot ent ialbuy ert ot hesel l
ertof indoutt he
goodsandser v i
cesof feredbyt hesel ler.
Aletterofi nqui rycanbegener alorspeci f
ic.Aspeci fi
clet t
erofi nquir
y
seeksf ori nfor mationaboutapar ticularpr oduct .
Replyt oani nqui r
y
Thesel lermayr eplyt othel etterofi nqui rybysendi nganyoft hef oll
owing

54

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document s;
-Pricel ist- Acat alogue -Quot at ion -
At ender
i
)Apr icel ist
Thisi sal i
stofi temssol dbyt het radert oget herwi tht heirprices.The
i
nf or mat ioncont ainedi napr icel i
sti susual lybriefandnoti l
lustratedand
mayi ncl ude;
-Nameandaddr essoft hesel ler - Listoft hegoodsandser vices
-Ther ecommendeduni tpr icesoft hepr oduct s - Anydi scountsof fered
Pricel istshowt hepr i
cesoft hecommodi t
iesatt hatt i
me.
Acat alogue; Acat aloguei sabasketwhi chbr iefl
ydescr i
best he
goodsasel lerstocks.
Iti
snor mal lysentbyt hesel lert othebuy erwhent hebuy ersendsa
gener al l
et terofinqui ry.Itusual l
ycar ri
esi l
lustrationsont hegoods
stocked, andcoul dbei nt hef or m ofat tr
activeandcol orf
ul pictures
Thecont entofacat aloguei ncl udest hef ollowing;
Nameandaddr essoft hesel ler
Det ai l
soft hepr oduct st obesol d; i
nfor m ofpi cturesand
il
lust rat i
ons
Thepr icesoft hepr oduct s
Af ter-salesser v i
cesof f
er edbyt hesel ler
Packagi ngandpost ingexpensest obei ncur red
Del iver yservicest obeused
Ter msofsal e
-Cat aloguescar rymor einf or mat i
ont hant hepr icel i
standt heyar emor e
expensi vet opr i
nt.
Quot at i
on;Thi sisadocumentsentbyasel l
ert oabuy erinr esponse
toaspeci fi
cl etterofi nqui ry.Itspeci f
iest hecondi ti
onsandt erms
underwhi cht hesel l
eri swi ll
ingt osuppl yt hespeci f
iedgoodsand
ser vicest ot hebuy er.
Thecont entofaquot ationi ncl udest hef ol
lowi ng;
-Nameandaddr essofsel ler - Nameandaddr essoft hebuy er
-Descr i
pt ionofgoodst obesuppl ied -Pricesoft hecommodi ti
es
-Termsofsal ei.
e.di scount s, timeofsuppl y,delivery
-Tot al oft hegoodst obesuppl i
ed

55

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Quot at ionsar enor mal lyinf orm ofl etters, butmanyl arge-scale
busi nesseshav epr e-pri
ntedquot at i
onsf ormswhi cht heyr eadil
ysendt o
thepot ent ial cust omer s.
A Tender
Thi sisadocumentofof fert osellsentbyasel lert oabuy erinresponse
toanadv ertisedr equest
Tender scont aint hef oll
owi ng;
-Dat ewhent het enderadv ertisementwasmade - Modeofpay ment
-Dat eofmaki ngdocument -Discount sgi ven
-Nameandaddr essofpr ospect iv
esel lercal ledt het ender er
-Thepr icesatwhi cht hegoodscanbepr ov ided
-Per i
odofdel ivery -Modeofdel ivery
-Tender sar edel iveredi nseal edenv elopeswhi char eopenedbyt hebuy er
onaspeci fieddat e
Thewi nningt enderi susual lyawar dedont heoft helowestquot edprice
althought hebuy erisnotobl i
gedt oacceptt hisespeci all
yi fquali
tyi
s
l
ikelyt obel ow
Tender sar enotbi ndingunl essaccept edbyt hebuy er .
Document susedatt heor derst age
Afterr ecei v i
ngr epl i
est oinqui ryinf orm ofpr icelist,catalogueor
Quot at ion, apr ospect ivebuy erwillstudyt het ermsandcondi ti
onsstated
i
nt hem, andt henmaydeci det obuypr oduct sornot .
AnOr der
I
fapr ospect ivebuy erdeci dest opur chaseani tem( s),heorshet hen
placesanor der
Anor deri sadocumentsentbyapot ent i
al buy ert oasel lerrequesti
ngt o
bepr ov i
dedwi thspeci fi
edpr oduct sunderspeci fi
edt ermsandcondi ti
ons
-Anor deri ssuedf orgoodsi scal l
edal ocal pur chaseor der( LPO)
Anor deri ssuedf orser vi
cesi scall
edal ocal serv i
ceor der( LSO)
Way sofmaki nganor der
Fill
inganor derf orm.Thi sisapr e-print eddocumentt hatisusedf or
maki ngor der s
Wr iti
nganor derl ett
er
Sendi ngane- mai l,f
axi ngorsendi ngashor ttextmessage

56

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Givingav er bal order.Ver bal or dershav et hedisadvant agei nthat

theycanbemi sunder stoodandt her ewoul dbenor ecor dofi tems
ordered
-Wher ewr ittenor der sar emade, thepot ent i
al buy erkeepsacopyoft he
orderf orusei nv erif
y ingthegoodsor der edwhent heyar edel iv
er ed.
-Awr itt
enor dermaycont ainthef ol lowi ng;
Nameandaddr essoft hebuy er
Nameandaddr essoft hesel ler
Thenumberoft heor der
Quant i
tiesor der edandt ot al amountt obepai d
Descr iptionoft hegoodsor der ed
Priceperi tem
Speci al i
nst ructionsonsuchmat tersaspackagi nganddel iver y
Acknowl edgementnot e
Onr eceivingt heor der ,t
hesel lersendst hebuy eranacknowl edgement
note
Anacknowl edgementnot ei sadocumentsentbyt hesel l
ert ot he
prospect ivebuy ertoi nform hi m/ hert hatt heor derhasbeenr ecei vedand
i
tisbei ngact edupon.
Aftersendi ngt heacknowl edgementnot e, t
hesel l
erhast odeci de
whet hertoext endcr edittot hebuy erornot .Att hi
sst age,thesel l
erhas
thefol l
owi ngopt ions;
Ifthesel leri sconv incedt hatt hebuy eriscr editwor t
hy ,
arrangement sar emadet odel ivert heor deredgoodsorser vicest o
thebuy er .
Ifthesel leri snotsur eofcr edi twor thinessoft hebuy er,acr edit
statusi nqui rycanbei ssuedt ot hebuy er’sbanker sort oot her
suppl ierswhodeal witht hebuy ertoascer tai
nt hecredi twor thiness.
Ifthebuy eri snotcr edi twor thyt henapol itenoteorapr of orma
invoicecanbesentt ohi m/ her
Apr oformai nv oice
Thisisadocumentsentbyt hesel lert ot hebuy errequestingt hebuy erto
makepay mentf orgoodsorser vicesbef or etheyar edeli
v ered.I t
i
ndicat est hatt hesel lerisnotwi ll
ingt ogr antt hebuy ercredi t

57

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Funct i
onsofapr ofor mai nvoice
Apol i
tewayofaski ngf orpay mentbef or et hegoodsar edel i
vered
Sentwhent hesel lerdoesnotwantt ogi v ecredit
Usedbyi mpor terst ogetcust omer scl ear ancebef oregoodsar e
delivered
Issuedt oanagentwhosel lsgoodsonbehal foft hesel ler
Showwhatt hebuy erwoul dhav et opayi ftheor deri sappr oved
Canbeusedt oser v easaquot ation
Circumst ancesunderwhi chapr o-formai nvoi cemaybeused
Ifthesel l
erdoesnotwantt ogi vecr edit
Ifthesel l
erwant st osell goodst hroughanagent
Ifthesel l
erwant st ogetcl ear ancef ori mpor tedgoods
Ifthesel l
erwant si ttofunct i
onasaquot at i
on
Ifthesel l
erwant st oinfor mt hebuy erwhathe/ shepayi ftheor deri
s
appr ov ede. t.c
Document susedatt heDel i
ver yst age
Afterthesel lerhasaccept edt heor dersentanacknowl edgementnot e
andwher enecessar yt hepr o-for mai nvoice, thesel l
ert henpr eparest he
goodsf ordel iveryt ot hebuy er.Thi scanbedonei nt hef ol
lowi ngway s;
Thesel lercanaskt hebuy ert ocol l
ectt hegoods
Thesel lercandel iverthegoodst ot hebuy erusinghi s/herown
meansoft ranspor t
Thegoodscanbedel iv
er edt othebuy ert hroughpubl i
ct ranspor t
Theser vi
ces( s)canber ender edt othebuy eratt hesel lersort he
buy er’spr emi sesoratanyconv enientpl ace.
Themai ndocument st hatar eusedatt hisst agear e;
Packi ngnot e; Bef or edeliver ygoodsar epackedf ordispat ch.Thisis
adocumentpr epar edbyt hesel l
ershowi ngt hegoods
cont ained/ packedi nev erycont ainer ,boxorcar tonbei ngdel ivered
tot hebuy er
-Acopyoft hepacki ngnot eispackedwi t
ht hegoodst omake/ helpt he
buy erhav easpotcheck.
Thecont ent sofapacki ngnot ei nclude;
-Descr i
ptionofgoodspacked

58

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-Quanti
t i
esofgoodspacked
-Themeansofdel iver y
NOTE: Apacki ngnotdoesnotcont ainpr i
cesofgoods.Thi sensur est hat
thosepeopl ei nvolv edi nchecki ngandt ranspor tinggoodsdonotknow
thevalueofgoods.Thi sisdoneasapr ecaut i
onagai nstt hef t
.
Adv icenot e; Thi si sadocumentsentbyt hesel l
ertot hebuy ert o
informt hebuy ert hatt heor der edgoodshav ebeendi spat ched.Itis
usual lysentt hr ought hef astestmeanspossi ble.
-I
tcontainst hef ollowi ng;
-Themeansofdel iver y -Adescr iptionoft hegoods
-Thequant itydispat ched -Dat e
-Nameandaddr essofbuy erandsel l
er
Functi
onsofanadv icenot e
Informi ngt hebuy ert hatt hegoodsar eont hewaysot hatincaseof
anydel ayindel iver y,thebuy ercanmakei nqui r
ies
Aler t
ingt hebuy ersot hatnecessar yarrangement scanbemadef or
pay ment swhent hegoodsar rive
Canser veasanacknowl edgementnot e,wher eonei snotsent /
Del i
v erynot e;Thi si sadocumentsentbyt hesel l
ert ot hebuy ert o
accompanyt hegoodsbei ngdel ivered.
-Adeli
v erynot eisal way smadei nt ripli
cat e(3), onecopyr emai nswi tht he
sell
erandt wosentt ot hebuy er .
-Whent hegoodsr eacht hebuy er, he/ sheconf i
rmst hatt hegoodsar et he
onesor der edf orandt hatt heyar ei nther ightcondi ti
onbycompar ingt he
deli
verynot e, t
heor derandt hegoods.I fthebuy eri ssat i
sf i
edwi t
ht he
goods, he/ shesi gnst het wocopi es, retainst heor iginalandsendt he
copybackt ot hesel l
er .Thi sser vesasev i
dencet hatt hegoodshav ebeen
recei
vedi nt herightcondi tionandi nt her ightquant i
ties.
-Somebusi nesseskeepdel iverybooksi nwhi cht hebuy ersi gnst o
i
ndicatet hatgoodshav ebeenr ecei vedi ngoodcondi ti
on.Adel i
verybook
i
susedbyt hesel leri fhe/ shedel iv ersgoodsbyhi msel f/her selfasan
alt
ernativet oadel i
v erynot e
Thecont entofadel i
v er ynot ei ncl udest hef oll
owi ng;
Nameandaddr essoft hesel ler

59

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Nameandaddr essoft hebuy er

Dat eofdel i
ver y
Deliv erynot enumber
Descr i
pt i
onoft hegoodsdel ivered
Quant iti
esoft hegoodsdel iv
er ed
Spacef ort hebuy ertosi gnandcommentont hecondi t
ionofthe
goodsr ecei ved.
Consi gnmentnot e
Thisi sadocumentpr epar edbyat ranspor t
ert oshowt hathe/shehas
beenhi r
edt odel i
verspeci fi
edgoodst oapar t
icularbuyer.Thisdocument
i
susedwhengoodsar edel i
veredtot hebuy erbypubl i
cmeansof
transpor te. g.byt r
ains.
-Thesel leri stheconsi gnor ,
thebuy eristheconsi gneeandt hegoodst he
consi gnment
-Thet ranspor t
ingcompanypr eparest heconsi gnmentnot eandgi vesthe
sellertocompl et eandsi gn.Thesel lerthenr eturnsthenot etothe
transpor ter( carrier)whot akesi tt
oget herwi ththegoodst othebuy er
.
-Onr eceiv i
ngt hegoods, thebuy ersignst heconsi gnmentnot eas
ev i
dencet hatt hegoodswer eactuallytr
anspor ted.
Thecont entofaconsi gnmentnot eincludest hef ol
lowing;
Det ailsoft hegoodst ot hetr
anspor ted
Nameaddr essofsel ler(consignor)
Nameandaddr essofbuy er(consignee)
Ter msofcar ri
ageandcondi ti
onsoft ranspor ti
ngt hegoods
Thet ranspor tat
ioncost
Handl ingi nformat i
on
Dest inat i
onofgoods
GoodsRecei vednote;
Thisisadocumentsentbyt hebuyertothe
sel
lertoinform hi
m/herthatgoodssenthavebeenrecei
ved.It
usuall
ypreparedindupli
cate,t
heori
ginali
ssenttothesell
erandthe
copyretainedbythebuyer.
Thecontentsoft hegoodsrecei
vednoteincl
ude;
Dateofthedocument

60

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Nameandaddr essoft hebuy er

Nameandaddr essoft hesel l
er
Cor respondi ngpur chaseor der
Det ailsofgoodsr ecei ved
Dat et hegoodswer er ecei ved.
Ret urnedgoodsnot e/ Damagedgoodsnot e;Ifgoodsaredamaged
ont heway ,thebuy ermayr eturnt hem t otheseller
.Thebuy ermay
alsor eturngoodsf orot herr easonse. g.
Wr ongt y
peofgoods
Excessgoods
Wr ongqual i
tygoods
-Whent hegoodsar er etur ned, thebuy eri nfor
mst heselleroft
her et
urn
bysendi ngagoodsr et urnednot e.
-Agoodsr et urnednot ei sadocumentsentbyabuy ertoasell
ertoinfor
m
him/hert hatcer taingoodsar ebei ngr etur nedtotheseller
.
-Wher et hegoodsar er etur nedbecauseofdamage, thenotemaybe
refer
redt oast hedamagedgoodsnot e.
Thecont ent soft hegoodsr eturnednot ei nclude;
Det ailsofgoodst hathav ebeenr etur nedtotheseller
Dat egoodsar eret ur ned
Thenumberof( GRN)
Or dernumber
Del i
v erynumber
Nameandaddr essofbot hbuy erandsel l
er
-Whent hesel lerreceivest henot et oget herwi t
hthegoods, heissuesa
credi
tnot e
Document susedatt hei nvoicingst age
Thisst agei nvol vesthesel lerr equest i
ngordemandi ngf orpay
mentf rom
thebuy erf orthegoodsorser vicesdel iver ed.

Someofthedocumentsusedatthisst
ageincl
ude:
I
nvoi
ce
Thi
sisadocumentsenttothebuyerbythesel
l
ertodemandf
orpay
ment

61

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forgoodsdel iver edorser v i

cesr ender ed.
Therear et wot y pesofi nvoicesnamel y:
Cashi nvoice- Thi si ssentwhenpay menti sexpect edimmedi atel
y
afterdel iver yt husact ingasacashsal er eceipt
Acr edi tinv oice- Thi sissentwhenabuy erisal lowedt opayatal ater
date.
Funct i
onsofani nv oi ce
Itshowst hedet ai l
sofgoodssol di .
e.quant i
tydelivered,unitpri
ce,
totalv alueoft hegoodsandt ermsandcondi ti
onsofsal e.
Iti
sar equestt ot hebuy ert omakepay ment
Itserv esasanev idencet hatthebuy erowest heselleracer t
ain
amountofmoney
Iti
susedasasour cedocumenti nrecor dingt hetransactioninthe
bookofaccount s.
Thecont ent sofani nv oicei ncl udet hef oll
owi ng:
Invoicenumber
Nameandaddr essoft hesel l
er
Nameandaddr essoft hebuy er
Dat edocumenti spr epar ed
Det ai
lsofgoodsr epai r
ed
Unitpr icesofgoodsdel ivered
Tot alv al
ueofgoods
Discount sof fered
EandO. Epr intedatt hebot tom
Thel ett
er sEandO. E( Er r
or sandOmi ssionsExcept ed)meanst heseller
reservest her ightt ocor rectanyer rorsandomi ssionsmadei nt heinvoi
ce.
-Onrecei vingt hei nv oi ce, thebuy erv erifi
esthecont ent
susi ngthelocal
purchaseor derandt hedel i
ver ynot e.Iftheinv oicei sinorder,thebuy er
makesar r
angement st opayt heamountst ated.
Businesseswhi chof ferser vicesi ssueadocumentcal ledabill,which
servest hepur poseofani nv oi ce.

Di
ff
erencesBet
weent
hei
nvoi
ceandpr
o-f
ormai
nvoi
ce

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Thei
nvoi
ce Thepr
o-f
ormai
nvoi
ce
Iti
sissuedaftergoods Iti
sissuedbeforegoods
andser v
iceshavebeen andser v
iceshavebeen
deli
vered del
ivered
Itshowst het
otalval
ueof 2)Showsthet ot
alval
ueof
thegoodsorser vi
ceson goodsandser vi
cestobe
credi
t bought
I
tisusedtodemand 3)I
tisusedtodemandfor
paymentforpr
oduct
ssol
d paymentinadvancef
or
oncredi
t product
stobebought
Usedasabasisformaki
ng 4)Usedasabasisforpr
epari
ng
paymentforpr
oduct
s paymentforpr
oductsnotyet
al
readybought bought
Ser vesasanot i
ceof 5)Ser v
esasaQuot ati
onf or
pay mentf orproducts pr oductst obebought .
boughtoncr edit
Cr
editnot e
Thisisadocumentsentbyt hesel lertothebuy er(creditbuyer)t
ocorrect
anov er
char ge.Iti
susedt oinformt hebuy erthatt
heamountpay abl
eby
hi
m/ herhasbeenr educed
Anov erchargeisanexcessamountchar gedbey ondt her i
ghtpri
ce.
Causesofov erchargemayi nclude;
Arithmet i
calerror
slikewr ongaddi ti
on
Priceov ercharges
Inclusionofwr ongorunor deredi temsi ntheinvoice
Failuretodeductt heallowabledi scounts
Ret urnofgoods( damagedgoods)
Failuretonot ethereturnbyt hebuy erofpacki ngcasesor
cont ai
nersusedt odel i
vergoodst ohim/ her

63

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Useofwr ongpr icel i

st.
-Thepur poseoft hecr editnotei stor educet hetotal i
nvoiceamountby
theamountoft heov er charge.
-Acr editnot ei susual lypr i
ntedi nredt odi stingui
shi tfrom other
document s.
-Cont entsofacr editnot einclude;
Nameandaddr essoft hesel l
erandt hebuy er
Cr editnot enumber
Dat edocumenti spr epared
Descr i
pt i
onandv alueofgoodsr eturnedbybuy er(incaset hatwas
done)
Tot al over charge
Reasonswhyasel l
erwoul dsendacr edi tnot etoabuy er/cir
cumst ances
underwhi chacr editnot eissentt oabuy er .
-Whent her eisanov er chargei nani nvoice
-Whent heor i
gi nalinv oicehadi ndicatedi temst hatwer enotsuppl i
ed
-Whent hebuy erretur nsempt ycases/ cratest hathadbeenchar gedinthe
i
nv oice.
-Whent hebuy erretur nssomegoodst ot hesel l
er
-I
fthebuy erwasent itledt oadi scountwhi chwasnotgi venort akencar e
ofint hei nv oice.
Debi tnot e
Thisi sadocumentsentbyt hesel l
ert ot hebuy ertocor rectan
under char geont heor iginal i
nvoice.I tisusedt oinformt hebuy erthatthe
amountpay abl ebyhi m hasbeeni ncreased.
-Adebi tnot eact sasanaddi ti
onal inv oice.
-Anunder char geariseswhenamountchar gedonpr oductsislesst han
theirrightpr ice.
Causesofunder char gei nclude:
Pr i
ceunder char gesoni t
ems
Ar i
thmet icer r
or s/ mistakeni ncal cul at i
on
Omi ssionofi t
emsi nt heinv oice
Ret ent i
onofcr atesandcont ainer st hatwer enoti nvolvedbyt he
buy er

64

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Deductionsofmor ediscountthanwhatwasgi ve/intended

Ci
rcumstancesunderwhi chadebi tnot ewi l
lbesentt ot hebuy er
Whent hereisanunder char
geint hei nv oice
I
fthebuy erhadbeengi venadi scountt hatwasnotduet ohim
I
fsomei t
emshadbeenomi t
tedi ntheor i
ginali
nv oice
I
fthebuy erdecidestoretai
nsomeempt ycont ainersorcr ates
Di
ffer
encesBet weenadebi tnoteandacr editnot e
DEBITNOTE CREDI TNOTE
I
ssuedt ocorrectan Issuedt ocorrectan
underchargeont he ov erchar geont hei nv
oiv e.
i
nvoice.
Writ
tenonbl ueorblack. 2) Usual lywr i
tteninr ed
I
ssuedwhencont
ainer
s 3)Issuedwhencont
ainer
shav
e
hav
enotbeenret
urned beenr et
urned.

Document susedatt hepay mentst age

Thisisthef i
nal stageofacr editbusinesstransaction.I
ttakesplaceaf
ter
theinvoicehasbeenr eceivedandascer t
ainedtobecor rectorwhere
necessar y
,correct i
onsmade.
Thedocument susedatt hepay mentst ageinclude;
Receipt
Thisisadocumenti ssuedt ot hebuy erbythesel l
eraspr ooft
hat
paymenthasbeenmade.
-Paymentcanbedonei ncash, cheque,otherformsofmoneyori nkind
-Thereceiptalsoser vesasasour cedocumentf ormakingentriesin
booksofaccount s.
Contentsoft her eceiptinclude;
Dateofpay ment
Nameoft heper sonmaki ngpay ment
Nameofper son/insti
tuti
onr eceivi
ngpay ment
Amountpai dinwor dsandf igur
es

65

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Meansofpay ment
Recei ptnumber
Si gnat ureofper soni ssui ngt her eceipt.
-Thei ssuanceofar ecei ptbyt hesel l
ert othebuy eraf t
err eceiving
pay mentmar kst heendoft hecr edittransact ionbet weent hesel lerand
thebuy er( wher epay menthasbeendonei nf ul l)
-Arecei ptser vest hesamepur poseast hecashsal eslip
i
i) StatementofAccount
Thisi sadocumentpr eparedbyt hesel l
erandsentt othebuy er, givinga
summar yofal lthedeal ings/ transact i
onsbet weent hem dur i
nga
particul arper i
odoft i
me, usual lyamont h.Ithast hef ol
lowi ngdet ail
s;
Dat ewheni twaspr epar ed
Nameandaddr essoft hesel ler
Nameandaddr essoft hebuy er
Accountnumber
Dat ecol umn- wher et hedat eofeacht ransact ionisr ecor ded
Par ticular s(Det ai l
s)column- wher et heexpl anationofeach
t ransact ioni sshown
Moneycol umn
-Debi tcol umn- increasesi nt heamount spay abl eduet ocr editsal esor
underchar gecor rection.
-Credi tcol umn- Decr easei nt heamount spay abl eduet oov er
char ges
correct edorpay ment sr ecor ded.
-Balancecol umn- Amountowi ngaf tereacht ransact i
on( Balance
outst andi ng)
Anydi scount sal lowedt ot hebuy er
Dat ewhent hebuy erisex pect edt ocleart hebal ance
Ter msofcr edi te. t.
c.
-Thest at ementofaccountenabl est hebuy ert oascer t
aint hecor rectness
ofthet ransact i
onswhi chhav et akenpl acewi t hthesel l
erov ert hest at
ed
period.
iii
)IOU
AnI OU( Iowey ou)i sadocumentwr it
tenbyt hebuy erandsentt ot he
sell
ert oacknowl edgeadebt .

66

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-
Itdoesnotspeci
fydatewhensettl
ementwil
lbemade.
-
Itact
sasev i
dencethatadebtexi
sts.
Summaryofdocument susedinhomet r
ade
Documentsentbybuyer Documentsentbysel
l
er
-
Let
terofi
nqui
ry -
Pri
cel
i
st
-
Order -
Cat
alogue
-
Goodsr
ecei
vednot
e -
Quot
ati
on
-
Goodsr
etur
nednot
e -
Tender
-
IOU -
Acknowl
edgement
-
Adv
icenot
e
-
Packagi
ngnot
e
-
Del
i
ver
ynot
e
-
Consi
gnmentnot
e
-
Inv
oice
-
Prof
ormai
nvoi
ce
-
Credi
tnot
e
-
Debi
tnot
e
-
Recei
pt
-
Stat
ementofaccount
MEANSOFPAYMENTS
Thesear
ethemethodsorway sthebuyermayusetoset
tl
edebt
sari
sing
fr
om abusi
nesst
ransact
ion.Thesearevar
iousmeansofpay
mentst
hat

67

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canbeused.Thesemeansofpay ment scanbeputi ntothef ol

lowing
groups;
Cash
Meansofpay mentpr ov idedbyt hepostof f
ice
Meansofpay ment spr ov idedbyt hecommer cialbanks
Meansofpay ment swhi char isef rom pr i
vatear r
angement sbet ween
sellersandbuy er s
Othermeansofpay ment .
Cash
Thisr eferstot heuseofnot esandcoi nstomakepay ment s.Currency
notesandcoi nsar ei ssuedbyt hecent ralBankofKeny aandar etherefor
e
l
egal tender
-Legal t
endermeansev eryonei sobl i
gedbyl awt oacceptt hem asa
meansofpay menti .e.noonecanr efuset oacceptt hem ast heyar e
backedbyt hel aw. Not esandcoi nsar eav ail
ablei ndiff
erent
denomi nati
onsasf ollows;
Coins; 5cent s, 50cent s,sh. 1, sh.5,sh. 10andsh. 40
Not es;sh.10. sh.20,sh. 50,sh. 100, sh. 200, sh.500andsh. 1000.
-Coinsar esui tablef orset tlingsmal l debt sandar eacceptableasl egal
tenderupt oacer tai nmaxi mum e. g.50cent scoi nsthemaxi mum i ssh20
andsh. 1t hemaxi mum i sksh. 100.
Adv antagesofcashasameansofpay ment :
Itistheonl ymeansofpay mentwhi chi sal egal t
ender
Conv eni entf orset tl
ementofsmal ldebts
Conv eni enttopeopl ewi thorwi thoutbankaccount s
Cashi sr eadilyusabl e
Disadv antagesofcashasameansofpay ment
Notconv enientt ocar ryar ound
Cashcanbel ostorst oleneasi l
yasi tisreadi l
yusable
Pay menti sdi fficultt opr oveunl essar eceiptisissued
Circumst ancesunderwhi chcashpay menti sappr opriate
Wher et heamount si nv olvedar esmal l
Wher et hepay ee( r
ecei v er)doesnotacceptot hermeansofpay ment
Wher ecashi st heonl ymeansav ai l
able

68

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Wher ethepay eer equi rescash( money )ur gently

Wher ether ei sneedt oav oi dex pensesassoci atedwithot hermeans
ofpay ment s
Meansofpay ment spr ov idedbyt hebanks
Commer cialbanksar ef inanci al instituti
onst hatacceptdeposi t st oand
withdrawal sf rom t hem.
Theyal sol endmoneyt ocust omer s.Exampl esofcommer cialbanks
i
nclude: Commer cial bankofKeny a, National bankofKeny a,Bar cl
ays
bank, andCo- oper at i
v ebanke. t.c
-Therear ev ariousmeansofpay ment spr ovidedbyt hecommer cialbanks.
Theyar e:
Cheques
Bankdr af t
s/ banker scheques
Credi ttr
ansf ers
Standi ngor ders
Trav ell
erscheques
Telegr aphi ctransf ers
Debi tcar ds
Electronicf undTr ansf er(E.F. T)
Cheques
Thisisawr i
ttenor derbyanaccounthol derwi ththebank( drawer )tothe
bank( drawee)t opayondemandaspeci fiedamountofmoneyt othe
namedper son( pay ee)ort hebear er
Parti
est oacheque
Drawer -
Thi si st heper sonori nstit
utionwhowr i
tesandi ssuest he
cheque. Hei susual l
yacur rentaccounthol derwi t
hthebank
Pay ee-Theper sonori nst itutiont obepai d
Drawee- Thebank( wher et hedr awerhasanaccount )
Detailsonacheque; theyincl ude:
Datewheni tisi ssued
Nameoft hedr awer
Thenameoft hepay ee, excepti nbear ercheques
Thenameoft hedr awee( bank) andbr anchf r
om wher eitisi ssued
Amountt obepai dinf i
gur esandi nwor ds

69

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Theaccountnumberoft hedr awer

Thesignatur
eoft hedrawer
Thechequenumberandbankcode
Theappropriat
erevenuest amps
Typesofcheques
Opencheques
Crossedcheques
Bearercheques
Ordercheques
Opencheques
Thisisachequet hatcanbepr esentedf
orpay
mentov
ert
hecount
er.You
presentitandcashi spaidt
oy ou.

Crossedcheques
Thisisachequet hatbearst wopar al
lellinesont heface.Thismeanst he
chequecannotbecashedov erthecount er.Thechequei sdeposi t
edi nan
account( payee’saccount )
Thepay eet henwi thdrawst hemoneyf rom his/ heraccount
Acr ossedchequecanbeopenedbyt hedr awersi gningtwiceoni t
sf ace.
-Acrossingcanbegener al orspeci al
-Generalcrossing-general crossingsonl ycont ainsthet wopar al
lell
ines.
Thisimpl i
esthatt hechequewi llbepai dt hroughanybanki nwhichitis
deposited.
-Specialcrossi
ngs- Hasot heri nstructionsi ncl
udedi nthecrossingi.
e;
Notnegot i
abl e-
Meanst hechequecanbet ransferr
edbyt hepay eeto
athirdparty,buthet hirdcannott r
ansf erthecheque( onl
yt he
ori
ginalpayeecant r
ansf erthecheque)
Accountpay eeonl y-
Meanst hechequeshoul dbedeposi tedint he
accountoft hepay ee.
Nottransferable-Meanst herei snonegot iationort r
ansferofthe
cheque
Bearercheques- Thischequedoesnothav ethenameoft hepay ee
writ
tenoni t.Theper sonpr esent i
ngi ttot hebanki stheonewhoi s

70

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pai d.
Or dercheque- Thechequebear st henameoft hepay ee.Thebank
pay sthispar ti
cularpay eet heamountst atedint hechequeaf ter
properi dent ifi
cation
Dishonour i
ngacheque
Achequei sdi shonor edi fthebankr ef usest opayandr eturnst hecheque
tothedr awer .
-
Achequecanbedi shonor edduet ot hef ollowi ngreasons:
Insuf f
icientf undsi ntheaccount
Ifthesi gnat ureont hechequedi ffersf rom t hedr awer sspeci men
signat ureint hebank.
Ifthechequei sstal ci.e.pr esent edf orpay mentaf tersixmont hs
from thedat eofi ssue.
Ifthechequei spostdat ed-meani ngt hechequei spr esent edf or
pay mentear l
ierthant hedat eont hecheque
Iftheamounti nfigur esi sdi fferentf rom t heamounti nwor ds
Iftherear ealterationsont hechequewhi char enotcount er signed
byt hedr awer
Ifthechequei stor n,dirtyordef aul dmaki ngitill
egible
Iftheaccounthol der (drawer )i sdeadandt hebanki sawar eoft he
fact
Ifthedr aweri nstruct st hebanknott opayt hepar t
icularcheque
Ifthechequecont ainser r
or swhi chneedt obecor rected
Ifthedr awerbecomesbankr uptori nsane
Ifthedr awerhascl osedhi s/ heraccount .
Advantagesofusi ngcheques
Theyar emor esecur ethannot esandcoi nsbecausei ftheyar el
ost
orst olen, theycanbet racedt ot heper sonwhocashedt hem.
Theyar econv enientt ocar ryandcanbeusedt opayl argesum of
moneywhi chwoul dbeot her wisei nconv enienttopayusi ngcash
Theycanbet ransfer r
edt oat hir
dpar tyt omakepay ment /cheques
arenegot iable
Pay mentcanbemadebychequewi thoutt heneedt ot r
av el t
omake
pay ment

71

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Theypr ov i
dear ecor dofpay mentbecauseoft hecount er f
aits.The
count erf ai
tsact saspr ooft hatpay menthasbeenmade.
Underspeci al circumst ances, theycanbecashedordi scount ed
beforemat urity.
Disadv antagesofusi ngcheques
Chequescanbedi shonor ed
Requi rest hepay eet ogot ot hebankandi nsomecasest ohav ean
account
Thedr awerpay ssomechar gese. g.char gesf orthechequebook
Canonl ybei ssuedbyanaccounthol der/ t
hedr awermusthav ean
account
Theyar enotr eadi l
yaccept ablebyev erybody
Theydonotpr ov ideimmedi atecash.
Circumst ancesunderwhi chachequei sappr opr i
ateasameansof
pay ment
Wher et heamountofmoneyi nv ol
vedisl arge
Wher et hepol icyoft hebusi nessdemandsso
Wher eachequei st heonl ymeansav ail
abl e
Wher et herei sneedt oav oidot herri
sksassoci atedwithot her
meansofpay ment s
Bankdr af t
s/ Banker ’
scheques
-Thisisachequedr awnonabanki .e.achequedr awnbyonebankt o
anotherr equest i
ngt hel atterbankt opayanamedper sonori nstitutiona
specifiedsum ofmoneyandchar gei tt
othedr awingbank
-I
tcanal sobedr awnbyabankont herequestofacust omer .The
customerf il
lsi nanappl icati
onf orm obt ai
nedf rom abankandhandsi t
overtot hebankt oget herwi tht hemoneyshewant stot r
ansf eranda
commi ssionf ortheser vi
ce.
-Thebankt henpr epar est hechequeandgi v
esi tt otheapplicantwhocan
thensendi tt othepay ee
-Abankdr af thast hedr awingbank’ sguaranteef orpay ment.I tis
thereforemor ereadi lyaccept ablet hanper sonal cheques.
-I
tissui t
abl ewhenur gencyi sdesi redi nthepay mentasi ti
smor er eadil
y
accept able.

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Cr edi tt ransf er
Thi si sameansofpay mentpr ov idedbycommer cialbankst ot hei r
cur rentaccount shol der swhowantt opaymanypeopl eusi ngone
cheque/ att hesamet i
me
-Onechequei sdr awnandi susual l
yaccompani edbyal istoft hepeopl e
tobepai d, theamountt obepai dt oeachper sonandt headdr essesof
thebankbr ancheswher et hepay menti st obemade.
-Thebankt henensur est hatacr edittransferi saf f
ectedt ot hev arious
bankbr anchesandeachpay eei spai d
-Acr edi ttransf eri susual lyusedbyempl oy erst opaysal ariest ot heir
staf fmember s.
d) St andi ngor der
Thi si sani nst ruct iont oabankbyanaccounthol dert opayanamed
per sonoranor gani zat ionaf ixedamountofmoneyatr egul arint erval s
ov eraspeci fiedper iodoft imeorunt i
lstopped
-I
ti sav eryusef ul meansofpay mentf orbusi nesspeopl easi tenabl es
them t or egul ar lypayt heirr ecur rentbi ll
se. g.wat er,i
nsur ance, el ectricit
y,
l
oanpay ment , hirepur chasepay mente. t
.c
e)Tr av eler’scheques
Thi si sachequedr awnbyonebankt oanot herr equest ingt hel at tert o
payaspeci fiedsum ofmoneyt oanamedbear er,whousual l
ywoul dhav e
boughtt hatchequef rom i ssui ngbank.Thechequehol derpay st hev al
ue
oft hechequepl ust hechar gesf ortheser vi
cest otheissui ngbank.
-Trav eller schequesar eusual lyissuedi nf i
xeddenomi nat ionsandar e
ver yconv eni entf ort rav el pur poses, hencet heirname.Theyenabl ea
per sont ot rav el wi thouthav ingt ocar ryal otofcash.Thechequesar e
alsor eadi l
yaccept abl easameansofpay ment .
f) Tel egr aphi cTr ansf er s
Thi si samet hod/ meansoft r ansf erri
ngmoneyof fer
edbycommer cial
bankst oany bodywhowant st osendmoneyt oanot her
Thesenderi sr equi redt of illanappl icationf orm andpr ov idet hef ollowing
i
nf or mat ionamongot her s:
-His/ hername -
Theamountofmoneyt ober emi tted
-Nameoft hepay ee -
Thebankwher ethemoneywoul dbepai d

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Theappl icanti schar gedacommi ssionandt elegr aphf ee.Thepay ing

banksendsat elegr am t ot hepay eewhohast oi dent ifyhi mself/her sel
f
befor et hepay menti smade
Themet hodi sf astandsaf e.
Debi tcar ds
Thesear epl ast i
ccar dsi ssuedbyf i
nanci alinstitutionse. g.bankst hat
enabl esaper sont opur chasegoodsandser vi
cesf rom anybusi nesst hat
accept st hem.
Debi tcar dsar eusedt omakepay ment sfrom moneyhel dinones
account sandar et her efor eanal ternativet ocashpay ment s.Exampl es
areATM car ds.
El ect ronicFundTr ansf er(E.F. T)
EFTi samet hodoft ransf er r
ingmoneyf rom oneaccountt oanot her
wher ecomput er sareused.Thesenderi sr equiredt of i
llanel ectroni c
fundt ransf erf or m pr ov i
dedbyt hebankwhi chi nstr uctst hebankt o
transf ermoneyf rom hi s/ heraccountt oanamedaccount .
Informat ioni st hensentt ot hepay ee’sbankel ect roni call
yandt he
amounti nt heaccounti si ncreasedaccor di
ngly.Themet hodi sv eryf ast.
Meansofpay ment spr ovidedbyt hepostof fice
Thepostof f
icepr ovidesmeansofpay ment sthatcanbeusedt ot ransfer
moneyf r
om oneper sont oanot her
Themeansofpay ment spr ovidedbyt hepostof f i
cet of acili
tate
pay ment si ncludes,
Moneyor der s
Post apay
Post alor der s
Post agest amps
Pr emi um bonds
Moneyor der s
Amoneyor derf acili
tat est het ransf erofmoneyf r
om oneper sont o
anothert hrought hepostof fi
ce( and/ orbank)
Amoneyor deri susual lyf oraspeci f
iedsum ofmoneyusual lypur chased
wi t
hcashf rom t hepostof fice
Aper sonwi shi ngt osendmoneyusi ngt hismet hodv isitsapostof f
ice

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andcompl et esanappl icat i

onf orm.Someoft hedet ailscont ained/given
i
nt hef ormi nclude:
Theamountofmoneyt ober emi tted
Nameoft hepay ee
Thenameoft hepostof fi
cewher et hemoneyor derwi ll
becashed
Nameandaddr essoft hesender
Whet hert hemoneyor deri st obeor dinaryorsentbyt el
egraph
Whet hert hesenderwi shest obei nf ormedi fthemoneyhasbeen
paid
Whet hert hemoneyi st obepai dt hr oughabankaccountoratt he
postof ficecount er.
Theappl icat i
onf orm, moneyt ober emi ttedandcommi ssi onf orthe
serviceishandedt ot hepostof ficecl ear kwhopr eparest hemoneyor der
andgi vesi ttothesenderwhomayposti torsendi ttot hepay ee.
-Telegraphicmoneyor der s,thepostof ficesendsat elegram t ot hepay ee
i
nfor minghi m/ hert ogot ot hepostof fi
ceandcl aimt hemoney .
-Beforepay menti smade, t
hepay eemust ;
Identifyhimsel f/her selfbypr oduci nganI Dcar d
Identifytheper sonwhosentt hemoney .
-Thesenderoft hemoneyi sl eftwi thacount erf
oilwhi chser v
esas
evidencet hatmoneywassentandi tcanbeusedt or eclaimt hemoneyi f
i
tdi dnotr eacht hepay ee
-Moneyor dermaybeopenorcr ossed.Acr ossedmoneyor derbearst wo
parallell
inesdr awndi agonal lyoni tsf aceandmustbedeposi tedinthe
bankaccountoft hepay ee.I tcannotbecashedov erthecount eratthe
postof fi
ce.
-Anopenmoneyor dercanbepr esent edf orpaymentatt hepostof fi
ce
count er.
Circumst ancesunderwhi chmoneyor deri sappropr i
at e
Wher ei tistheonl ymeansav ailable
Wher eot hermeansar enotaccept abl e
Wher et herei sneedt oav oidi nconv eniencesorr isksassoci ated
withot hermeans
Post apay

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Thisi sanEl ect roni cFundTr ansfer( EFT)ser viceof feredbyt hepost al
corpor ationofKeny a, f
orsendi ngandr ecei v
ingmoneyi nst antl
yf rom
variousdest inat ionsbot hl ocall
yandi nternat i
onal l
y.
-Theper sonsendi ngmoneyf i
ll
si naf or m cal l
ed‘ sendf orm’ givingt he
foll
owi ngdet ails;
Name, addr essandt elephonenumberofsender
Name, addr essandt elephonenumberofr eceiver
Payci ty,townandl ocat ionoft her eceiver
Signat ur eoft hesender
Amountt obesent
-Thesenderhandsov ert hef orm, theamountofmoneyt obesentandt he
commi ssi ont ot hepostof fi
cecl erkf orpr ocessi ng
-Thet ransf erisdonev iat heinternett hr oughamachi net hatgivesa
twel v
e-di gitnumberf ort het r
ansact i
oncal l
edt he‘ Tr ansact i
oncont rol
number ’(TCN) .
Thesendert henconv ey sthisnumber ,amountsentand
payl ocat iont ot her ecipientandi nstruct i
onst ot her ecipienttov isitthe
namedpostof ficef orpay ment .Thi smessagei susual l
yconv ey ed
throught hequi ckestmeanspossi blesuchasat el
ephonecal l
-Thesenderi sgi v enacopyoft hepr ocessed‘ sendf orm’ aspr ooft hat
moneyhasbeensent .Thepostof fi
cer etainst heor iginal f
orrecor d
purposes.
-Whent her ecei v erv i
sitst hepostof fi
ce, he/shewi llfi
lla‘receiverf orm’
givingt hef ollowi ngdet ails;
Thet r ansact ionnumber (
i.
e.t het wel ve-di
gitnumber )
Theexpect edamount
Thename, addr essandt elephonenumberoft hesender
Theci tyt ownorl ocat ionoft hesender
Signat ur eoft her ecei ver
Ther ecei v ert heni dent ifi
eshi msel forher selfbypr oduci nganI Dcar dor
passpor tbef orer ecei vingt hemoney .
-Ther ecipi ent /pay eei st hengi v
ent hemoney ,acopyoft her eceivef orm
aspr oofofhav i
ngr eceivedt hemoney .Thepay ingpostof fi
cer etainsa
copyaspr oofofpay ment .
Adv antagesofusi ngPost apayasameansofpay ment

76

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Accessibil
it
y-Postapayout lets( postoffices)arelocated
countrywidetoel i
minat emov ementov erlongdistancestoget
money
Easeofuse- Sendingorr eceivingmoneyi seasyasoneonl yneedsto
fi
llaform whichi sprocessedi mmedi ately
Speed-thetransferofmoneyi sinst ant(fast)
Securit
y-Confidenti
ali
tyint het ransmi ssionofmoneyi sprov
idedand
moneyi sonlypai dtot heper soni ntended
Convenience-Post apayser v i
cesar eof feredforlonghoursduring
thedayandpayl ocationsar econv enientlylocat
ed
Affor
dabilit
y-Postapayser vicesar erelativel
yaffordabl
easlarge
amount scanbesentatr easonabl ecost s.

Post al orders
-Post al or der saresol dbyt hepostof fi
cef ort hepurposeofr emi t
ting
money
-Theyar eav ail
ableinf i
xeddenomi nat i
onsofsh. 5,10. 20,40,60,80,100and
200
-Onbuy i
ngapost alor der,thesenderpay sf orbotht hef acev alueoft he
postal orderandacommi ssi
onchar gedf ort heserv i
ce
-Post al or der sjustlikemoneyor dersar eissuedwi thcount erfoil
st hatthe
senderwi l
l keepasev idenceofr emittancei ncaset heper sont owhom
he/sher emi tsthemoneydoesnotr ecei veit .
Thesenderwr it
est henameoft hepay eeont hepost alorderasasaf ety
measur e.
Pay mentt ot hebear ercanbemadei nanypostof ficewi t
hpost alorder
facil
ities
Post al or der smayal sobecr ossedoropen( seecrossedandor di
nar y
moneyor der s)
Circumst ancesunderwhi chpost alorder sar eappropr iate
Wher et heamount sinvol
vedar esmal l
Wher eitist heonl ymeansav ail
abl e
Wher et hereisneedt oav oi
dinconv eniencesandr i
sksassoci ated

77

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withtheothermeansofpay ment .
Di
fferencesbetweenpostalorder
sandmoneyor der
s
Postalorder
s Moneyor der
s
Itcanbecashedatany Canonl ybecashedata
postoffice specif
icpostoffi
ce
Areinfixeddenominat
ions b) Var
iesaccordingtotheneeds
oftheremitt
er
Doesnotr equir
eany c)Requir
est hefi
l
li
ngofan
appli
cati
onf ormtomakea appl i
cati
onf orminmaki ng
remitt
ance remitt
ance
Canbecashedbyt he d)Canonl ybecashedbyt he
bearer payee
Valuecanbei ncreasedby e) Valuecannotbei ncr
easedby
aff
ixi
ngrev enuestamps affi
xi
ngr evenuestamps
Postagestamps
Postagest ampsmaybeusedt opaysmal lamountsofmoney .The
persont owhom t hestampsar esentcanthenuset hem forsendingmai
l
and/ortopaysomeoneel se.

Pr emium Bonds
Premi um bondsar eissuedbyt hepostof ficeindenominati
onsofsh.10
andsh. 20.Theymat ureafteragi v
enper i
od, aft
erwhichonecancash
them.
-Bearer scanal soenterintodrawssoast owi nmoney .
-Premi um bondscanbeusedt oset tl
edebt s,buti
tisnotasafemet hod
becauset heycanbecashedbyany bodyi.e.bythebearer.
Circumst ancesunderwhi chpost agestampsandpr emium bondsare
used
Wher et heamount sinvolvedar esmal l
Wher et heyaretheonl ymeansav ai
lable.
Meansandpay mentswhi charisefrom privat
earrangementsbetween

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thesellersandt hebuy er s
Therear ev ariousbusi nessdocument st hator i
ginatefrom pr i
v ate
agreement sbet weenbuy ersandsel lers.Thebuy eracknowl edgest he
creditandaccept st opayatspeci fiedf ut uredat esbysi gningsome
document s.Thesedocument si ncl ude;
IOwey ou( I
OU)
Bil
lofexchange
Promi ssor ynot e.
Bil
lofExchange
Thisisuncondi tional order, i
nwr iting, addr essedbyoneper sont o
another ,
r equi ri
ngt heper sont owhom i tisaddr essedbyoneper sonto
another ,
r equi ri
ngt heper sont owhom i tisaddr essedt opayondemand,
oratast at edf utur edat e,t
hesum ofmoneyont hebilltothedr awer,ora
namedper sonort oabear er .
Order -isacommandnotar equest
Uncondi tional -Withoutcondi tioni .
e.nouseofsuchwor dsas‘ i
f’or
‘
whom’
Thebi llmustbei nwr iti
ng
Amountofmoneymustbecl ear lyst at ed
Payeemustbenamed.He/ shecanbet hedr awerorsomeoneel se
orthebear er
Dateofpay mentmustbest atedorcanbedet erminede. g.‘Two
st
mont hsf rom t hedat eoft oday ’orThr eeday safter31 Januar y
2012’
-Abillofexchangei sprepar edbyacr editort oadebt orwhenacr edit
or
want stobeassur edofpay mentbyadebt oronagi venf ut
ur edat eor
whenaskedt odosobyt hecr edit or
-I
fthebuy er /debt orsignst hebill “accept ed”t henhe/ shecannotdeny
responsibi lit
yf ort hedebtsi ncehe/ shehasacknowl edgedr esponsi bili
ty
forthedat e.
Procedur ef orpr epar i
ngabi llofexchange
Abi l
lofexchangei swr itt
enbyaper son( credi t
or)tohi sdebt ort oseek
assurancet hatthedebt orwoul dpayt hedebt .
Step1. Thecr edit orprepar est hedr af tandsendst othedebt or.

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Step2. Thedr aftandaf t

eraccept ingt hecondi tionsl aidt her ei
n, he/ she
signsoni tandwr it
et hewor ds“ accept ed” .He/ shet hensendsi tbackt o
thecr editor.Att hispoi ntt hedr aftbecomesabi l
lofexchange.
Step3. Thecr editorr ecei v est hebi l
l andmay :
Keepi tunt i
l mat urit
ywhenhewoul dpr esenti tt ot he
debt or(accept ed)f orpay ment
Discounti twi thabank.Thi si spr esent ingt oabankoranyf inancial
instit
ut i
onandr ecei vingcashagai nsti tbef oret hemat uri
tydat e.
Onei showev erchar ged( discount ingchar ge)f ort heser vi
ce
Negot i
at eit-Usingi tt opaysomeoneel seapar tf rom t hepay ee.
Partiest oabi l
lofExchange
Drawer -Thisi st heper sonwhogi v est hedebt ort hewr itt
enor derto
payt hev alueoft hebi ll ofexchange( thecr editor )
Drawee- Thi sist heper sont owhom t heor dert opayi sgi ven
(Debt or).Heorsheaccept st hebi l
l.
Pay ee-Thi sist heper sont owhom t hepay menti st obemade.The
pay eemaybet hedr awer ,or
Essent i
alsofabi llofExchange
Itmustbesi gnedbyt hedr awer (creditor )
Itmustbeaccept edbyt hedr awee( debt or)
Itmustbeaccept eduncondi tional ly
Itmustbearappr opr i
at er ev enuest amps
NOTE: Abi llofexchangebecomesameansofpay mentwheni tis
present ed( discount ed)t ot hebanksornegot i
ated.
Adv antagesofusi ngaBi l
l ofexchange
Thehol dermaypassr ight sont hebi ll t
oanot herper son
Dat eofpay menti sdet er mi ned
Accept ancebyt hedebt ormakesi tlegal l
ybi nding
Thepay eemayr ecei vemoneybef oreduedat esbydi scount ing
Disadv antagesofusi ngaBi ll ofExchange
Itmaybedi shonour edonmat urity
Cashmaynotber eadi lyav ailableasbanksmayber eluctantt ocash
bill
sf rom debt or sofdoubt ful fi
nanci albackgr ounds
Itisanexpensi vef or m ofcr edi tast hecr edi t
ormayl osepar toft he

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facev alueofbi lli

nf or m ofdi scount
Circumst ancesunderwhi chaBi l
lofexchangei sappr opr iate.
-Whent hecr editorwant st obeassur edt hatthepay mentwoul dbedone
-Wher et hecr editorwant smoneywhi l
et hedebt ori snotabl et oraiseit
befor et heendoft hecr edi tper iod
-Wher et hecr editorwant st ouset hedebtt opayanot herdebt .
Pr omi ssor ynot e;Thi si sadocumenti nwhi chadebt orpr omi sedto
payacr edi toraspeci fiedsum ofmoneyataspeci f
iedt ime/ date.
Feat ur esofapr omi ssor ynot e
Ther ear et wopar t i
esi .
e.thedr awer (debt or)andt hepay ee(credit
or)
Ther ei sapr omi set opay
Itiswr i
ttenbyt hedebt ortot hecr edi tor
Itdoesnotr equi reaccept ancesi ncei tissignedbyt heper son
commi ttingt opayt hemoney
Thewr iter/makeri sliableont henot eashe/ shei st hedebt or.
-Afterdr awi ngandsi gni ngt hepr omi ssor ynot e, thedebt or( bor r
ower )
sendsi tt ot hesel ler.(Lender )
-Thesel ler/lendermaykeepi tunt i
l mat urityandt henpr esenti tfor
pay mentormaydi scounti twi tht hebanksbef oremat urity.
Simi l
ar itiesbet weenaBi l
l ofExchangeandapr omi ssor ynot e:
Bot hactasev i
denceoft heacknowl edgementofadebt
Bot hmaybedi scount edorendor sedbef oremat ur i
ty
Bot har enegot iablei .e.canbet ransf erredf rom oneper sont o
anot her
Bot har el egal lybi nding
Bot hal lowf oradequat etimewi thinwhi cht oor gani zef orthe
pay mentoft hev al ueoft hebi l
lornot e.
Differencesbet weenapr omi ssor ynot eandabi ll ofexchange:
Pr omi ssor ynot e BillofExchange
-Dr awnandsi gnedbyt he - Drawnandsi gnedby
debt or thecr editor
-I
tdoesnotneedt obe -I
tmustbeaccept edby
accept ed thedebt orf orittobe

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vali
d
-Thedr
aweranddr
awee -Thedraweristhe
areoneper
son credi
torandthedrawee
i
st hedebtor
TheI OU
-I
OUi sanabbr eviationof‘ Iowey ou’
-I
tisawr it
tenacknowl edgementbyabuy erofadebtar isi
ngf rom the
purchaseofgoodsandser vicesoncr edit
.Itiswr ittenandsi gnedbyt he
buyerandsentt ot hesel l
er
-I
fthesel leraccept sit,thent hebuy ercanr ecei vegoodsandser vi
ceson
credit.
Thought heIOUdoesnotusual lyindicatethespeci ficdat eofpay ment,
thebuy eracknowl edgest hedebtandaccept sr esponsi bil
it
yt opayata
suit
abl efutur edat e
NOTE: TheuseofI OUi srest ri
ctedt ocommer cial transact i
onsi nvolvi
ng
parti
eswhohav edeal twitheachot herf oral ongt i
me; hencet heyknow
eachot herwel l
.
Othermeansofpay ment
Creditcar ds
Mobi lemoneyt r
ansf erser vi
cese. g.M- pesa.
Creditcar ds(pl asti
cmoney )
-Thesear epl asticcar dst hatenabl eaper sont opur chasegoodsor
servicesoncr editf rom anybusi nesswi l
li
ngt oacceptt hecar d
-Theyar ebot hameansofpay mentandat erm ofpay ment
Mobi lemoneyt r
ansf erser vi
cese. g.M- pesa
-Thisisameansofmoneyt ransferser vi
cespr ov idedbymobi lephone
servicepr oviderst ot heircust omer s( subscriber s)
-I
tcanonl ybeusedt otransf ermoneybet weenpeopl esubscr ibedt ot
he
samemobi lephonenet wor ke. g.from onesaf ar icom subscr iberto
anothersaf ar i
com subscr i
ber ,Airt
el t
oAi rt
el e.t.c
-Thesendermustr egisterfort hemoneyt ransf erser viceandi sissued
withaPI N( per sonal i
dent i
ficationnumber )
-Whenmoneyi ssent ,botht hesenderandt her ecei verwi l
lreceivea

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messageconf i
rmingt hetransf
er.
-Apersoncansendmoneyany ti
meany wher
esol ongashe/ shehas
valuei
nhi s/herm- pesa,pesapapaccount.
-Eachmobi l
eser viceprovi
derhasar angeofval
uet hatcanbetransf
err
ed
usingthi
smet hod.
-Asmal l
transactionfeeischargesforthetr
ansferi.
e.forsendi
ngand
withdr
awing

Benefi
tsofmobi lemoneyt r ansf erser vices
Conf i
dent iali
ty-Thesecr etPI Npr otect sthev al
ueint hecust omer ’
s
account
Easeofuse- Theser vicei seasyt ouseast heagent sassistst ocarry
outtransact i
on
Speed- Moneyt ransf eri sani nst antser vi
ceconv eyedt other eceiv
er
viatheshor tmessageser vice( SMS)
Conv enience- Theser v i
cei sconv eni enttobot hthesenderandt he
receiver,ast heyonl yneedt ogot ot henear estagent (
moneycanbe
sent/deposi t
edorr ecei v edany wher e)
Accessi bil
ity-Theagent se. g.m- pesaagent sarelocatedi nmost
partsoft ownsandal soi nr ur al areas.Moneycanhencebesentand
receivedany wher eandany t i
me.
Affordabi l
ity-
Theser v icechar gesar ever yl
owf orregistereduser s
andv eryaf f
ordabl ef ornonr egi stereduser s
Secur i
ty-Relativelysecur ewhent hesenderusest hecor rectphone
numberoft her eceiv er.
TERMSOFPAYMENTS
Thesearet hev ar i
ousagr eement s/ condi tionsagr eeduponbet ween
sel
ler
sandbuy ersr egardi nghowdebt sar i
singf r
om theirtransactions
shoul
dbeset tled.Thesecondi ti
onsi nclude;
-Howpay menti sexpect ed
-Whenpay menti sexpect ed
-Whatisincludedi nthequot edpr icee. t.
c.
Termsofpay ment sar ebr oadl ycat egor izedi ntotwo;

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Cashpay ment s
Def er
redpay ment s( credi tpay ment s)
-Thiscl assifi
cat iondependsonwhet hert heagr eementi stopayf orthe
product si mmedi atel yoratal at erdat e.
CashTer msofpay ment s
Casht ermsofpay mentappl ywhenabuy eri sr equiredt opayf orgoods
orser vicesi mmedi at elybef or eoraf terdel i
very .Theyi ncludet he
foll
owi ng:
Spotcash- Thi si swher epay menti sdoneatt hepoi ntofpur chase.
-Mai nl yusedi nr et ailbusi nesseswher ecust omer sar er equiredt opay
ast heygett hegoodsorr ecei v etheser v i
ce.
b) CashonDel i
v er y( C.O. D)
-Thisiswher et hebuy erpay sf ort hegoods( orser vices)assoonast hey
aredel iveredt ohi sorherpr emi ses.
c) Cashwi thor der( C. W. O)
-Thisiswher et hebuy eri sr equi r edt opayf ort hegoodswhenmaki ngthe
orderf ort hegoodsort heser vi
ces.
Circumst ancesunderwhi chC. O. DandC. W. Oar eappr opriate
Whent hebuy eri snewt ot hesel ler
Wher et hebuy er’scr edi twor thi
nessi si ndoubt
Wher et hesel leri soper at ingmai lor derst ores( C.W. Oonl y)
Wher eC. W.OorC. O. Di st hepol icyoft hebusi ness
Ift hecostofcol lect ingdebt sisconsi deredhi ghbyt hesel ler
Whenasel l
eri st omakegoodsbasedonuni quespeci f
ication
pr ov i
dedbyapar ticul arbuy er(C. W. Oonl y )
Wher et hesel lerwant st oav oidty i
ngupbusi nesscapi talindebt s.
d)Pr omptcash; Thi si swher epay mentshoul dbemadewi thinaf ewday s
(normal l
ysev enday s)af terdel iv ery.
-Promptcashper iodal lowst hem t oexami net hegoodsandcheckt he
i
nv oicet ocer t i
fyitscor rect i
ons
i
i) Def erredpay ment s
Thismeanst hatgoodsorser vi
cear enotpai df orinf ul l
ondel i
ver y.They
areinst eadpai di nf ut urei nal umpsum ori nsev eral instalment s.
Theper iodwi thinwhi chabuy eri ssupposedt opayt hesel lerisref err
ed

84

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toascr editper i
odandi sexpr essedi nt ermsofday s.
-Termsofpay ment si ncr editt ransact i
onsar eusual l
yagreeduponbyt he
sellerandt hebuy erdependi ngon;
Capi tal base/ f
inanci al stabi l
ityoft hesel ler
Thenat ureoft hegoodssuppl i
ed
Ther elat i
onshi pbet weent hebuy erandt hesel l
er
Thecr edi twor thinessoft hebuy er
-I
ndet er mini ngt hecr edi twor thinessofabuy er,thesellerwill
consi der ;
a)Char act er-Thebehav i
oroft hebuy erint ermsofhonest y,which
determi nest hepr obabi lityoft hebuy erhonor inghi s/ herdebtobl i
gat i
ons
b)Capaci ty-Thebuy er ’
sabi lityt opayasi ndicat edbypastbusi ness
performancer ecor dsort hepr ofitabili
tyandt hev alueofhis/herasset s.
c)Capi tal-Thef inanci al posi tionoft hebuy ersbusi nessorhowmucht he
buy er’
sbusi nessi swor th.
d)Col lateral-Thesear et hepr oper ti
esofv aluepl edgedbyt hebuy eras
secur i
tyf ort hecr edi t
e)Condi ti
on- Theef fectoft heexi stingeconomi ccondi ti
onsont he
buy er’
sabi lityt opayhi s/ herdebt s.
For msofDef erredpay ment s( credi tpay ment s)
Opent radecr edi t
/ opencr edit
-Undert hesef orms, goodsandser vicesar esol dt othebuy erwhoi s
expect edt opayf ort hem ataf uturedat eorwi thinagi venperiod
-Thebuy ermayal sober equi r
edt opayf orgoodsorser vi
ceson
i
nst all
ment s.
-Discount smaybeal l
owedt oencour aget hebuy ertopayont ime.
-Theowner shi poft hegoodspassest othebuy erimmedi atel
yaf ter
enteringt hecont ract .Thesel lershoul dhowev erensur ethebuy erwi ll
pay
by:
Ascer tainingt hecr edi twor thinessoft hebuy er
Aski ngt hebuy ert oguar ant eepay mentbysi gningsomedocument s
e.g.bi llofexchange
Aski ngt hebuy ert ohav esomeoneel set oguar anteethepay ment
Aski ngt hebuy ert opl edge( mor tgage)someofhi s/herproper tyas
secur ity

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Fact or stoconsi derwhengi vi

ngcr edi t
Cr editwor thinessoft hebuy er
Repay mentper iod
Amountofgoodst hecust omerwant s
Av ail
abilityofadequat estock
Honest yi .e.r eliabili
tyofthecust omer
Frequencyatwhi cht hecust omerbuy sf r
om thesel ler
Sel l
er’sint ent iont oat tr
actandr etaincust omer s
NOTE: Noi nt er esti susual l
ychar gedonopent radecr edi
t.
Exampl esofopent radecr edit
Simpl ecr edi t(promptcash/ personal credit)
-I
saf or m ofcr edi text endedt oat raderoracust omerf orav eryshort
ti
me, usual lynotmor ethanaweek
-I
tisacommonf or m ofcr editbet weenr etailersandt heircustomer s.
-I
tisal sor eferr edt oaspr omptcashbecausepay menti smadewi t
hina
shor tt i
me.
i
i)Mont hlycr edi t
-Af orm ofcr edi text endedwhenasel leral lowst hebuy ertopay /
settl
e
his/herdebtaf teronemont h
-Thebuy ercancont i
nuet akinggoodsf rom t hesellerupt otheendoft he
mont h.
-I
tisaf orm ofcr editusual lyall
owedbyr etai l
erstosal ari
edwor kersfor
goodssuchasf oodi temsandnewspaper s
i
ii)BudgetAccount s
-Areusual lyoper atedbyl argescal er etailerst oappr ov edcust omers
-Ther etail
erkeepsanaccountoft hecust omeri nhi s/herbooks
-Tooper atebudgetaccount s;
Adeposi ti sr equi r
ed
Regul arpay ment saret obemade
Ther eisamaxi mum amountofcr edi ttobeal l
owed
Thecust omermaybechar gedf oranyspeci al serv i
cesgivenbyt he
sel l
ercal led“ aftersal eserv i
ces”
i
v )Tradecr edi t
-Thisi scr editgi venbyat radert oanot hert raderwhengoodsar ebought

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forsel li
ng
-Pay ment sfort hegoodsi smadeaf terselli
ngt hegoodsorwi t
hinan
agr eedper i
odoft ime
v)Cr editcar df aci li
ties
-Plasticmoney( credi tcar ds)enabl est hehol dert oobt ai
ngoodsand
serv i
cesoncr edi tf orm speci ficsuppl iers(peopl ewi ll
ingt oacceptt he
cards)
-Theyal soenabl et hehol der st oobt ainmoneyf rom speci fi
cbanksand
otherspeci fiedf inanci alinst itutions
-Theyar eav ail
abl et oadul t sofappr ov edcredi twor thiness
-Somecr editcar dscanonl ybeusedl ocall
ywhi leot herslikev i
sacar ds
canbeusedbot hl ocallyandi nternationall
y.
-Whenacust omermakesapur chaseusi ngt hecar d,thesel l
er
elect r
oni callyv er i
f i
est hev alidityoft hecar dandwhet herthecr edi
t-card
holder /cust omerhassuf f i
ci entcr edittocov ert hepur chase.Ifalli
swel l,
thecr edi tcar dcust omersi gnsaspeci fi
cfor mt hathav ebeenf i
ll
edbyt he
trader .Suchf or msar eusual lypr ovidedbyt hecar dcompanyt othet rader.
Thet raderandt hecar dhol derr etainacopyeachandt heot hercopies
aresentei t
hert ot hecr edi tcar dcompanyort ot het rader ’
sbank.
-Ther ear et her efor e3par tiest oacr edi tcard;
Thecompanyt hatissuest hecar ds
Thecar dhol der
Thet r
ader
-Atr egul arinter val s,thecr editcar dcompanysendsast atementof
accountt oeachcar dholdershowi ngt heout standi ngbal anceatt hatt i
me.
Theout st andi ngbal anceshoul dnotbegr eatert hant heal lowedcr edit
l
imi t.
-Exampl esofcompani est hati ssuecr editcar dsi nclude; Barcl
ay scard,
Amer icanExpr ess, Accesscar dsandVi sacar ds.
Adv
ant agesofcredi
tcard
Theyar esaf
ertocarr
yaroundt
hancash
Conv eni
entt
ocarryaround
Enablesthehol
dertogetgoodsandser
vicesf
rom speci
fi
edsel
l
ers

87

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wit houtpay ingi mmedi atel y

Somear eaccept abl ebot hl ocal lyandi nternational l
y
Enabl est hehol dert ogetmoneyf rom speci fi
edbanks
Incr easescr editr atingofani ndi v i
dual
Disadv ant agesofcr editcar ds
Toacqui rethecr edi tcar d, theappl icantisr equiredt ohav ean
est ablishedcr editr ecor d
Thehol deri schar gedhi ghi nt erestr atebyt hecar dcompany
Itispr onet oabuset hroughf raud
Inter esti schar gedi fther ei sdel ayi npay ment
Canonl ybeusedbyt hosewhoar e18y earsandabov e
Hol dermaybet empt edt oov er spend
Thei rusei slimi tedt oonl yspeci ficar eas(urbanar eas)
Facesst i
ffcompet i
tionf rom ot hermeansofpay mentsuchas
cheques, moneyor der sandpost alor ders.
Onl yf ewbusi nessesacceptt hecar ds
Longpr ocedur esar ei nv olvedi nget tingthecar ds
Thecar dscanonl ybeaf fect edbypeopl ewi t
hhi ghi ncome.
Hirepur chase
ToHi re: Meanst ousesomeoneel se’ spr oper tyforapay ment
Hirepur chase: I
samet hodofhi ringpr oper t
ywi thanopt iontobuy .
-Thet erm ofpay mentf orahi repur chasear e;
Thebuy erpay sani nitialdeposi t(downpay ment )
Ther emai ni
ngamount (bal ancedi spai dinequal mont hl
yinstal
lment
spr eadov eranagr eedper iodoft ime
Thei nst allment spai di ncludei nter estwhi chusual lymakest he
ov erall pr i
cepai dr elat i
velyhi ghert hanwoul dbet hecasei fthe
goodswer eobt ainedoncasht er ms.
-Goodssol donhi gherpur chasear edur abl eandexpensi vesuchas;
vehicles, fur niture,elect roni cse. t.c
-Thebuy ercanonl ypossest hecommodi tybutnotowni t
.Ther
efore’
the
buyercannotsel lthegoodst oanot herper sonbef oreal l i
nstal
lmentsare
paid
-Owner shi poft hegoodsr emai nswi ththesel l
er.Thegoodsar e‘onhire’

88

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tot hebuy er .
-Aftercompl etingthepay ment( afterthel asti nst all
menthasbeenmade) ,
acer ti
ficat eisi ssuedt ot hebuy eraspr oofoft ransf erofowner ship
-I
ncaset hebuy erfailst omakepay ment /def aul tsinpay ment ;thesel l
er
canr epossesst hegoods.Howev erifthebuy erhaspai dt wot hirdsoft he
total/hi repur chasepr iceatt het i
meofdef aulting, thesel l
erhasnol egal
rightt or epossesst hegoods.
-Thesel l
ercanonl yr ecov ert her emai ningamountofmoneyt hr ougha
cour tact ion
-Thesel l
ermustdi spl aybot ht hecashpr iceandt hehi re-pur chasepr i
ce
ont hei temst oenabl et hebuy erstodeci deunderwhatt ermst heywant
tobuyt hegoods.
-Awr ittenagr eementhast obeent eredi ntobybot ht hesel lerandt he
buy er.Theagr eementsaf e- guardst hei nter valsofal l ofthem
-Exampl esofhi repur chasebusi nessesoper at i
ngi nKeny aincl ude; Afr
ica
Ret ailTr ader s( ART) , Kukopesha, SingerandAmedo.
-Forsal ariedpeopl e, thehi repur chasehasi ntroducedasy stem wher et he
i
nst allment sar ededuct eddi rectl
yf r
om t hebuy er’ssal aryev erymont h.
Thisi scal ledt hecheck- offsy stem.I nt hissy stem, nodeposi t
s/ down
pay ment sar er equired.Thebuy er’sempl oy ert akesupt hedut yof
remi ttingt hedeposi tst ot hesel leronamont hlybasi s.
Adv ant agesofHi repur chase
Tot hebuy er
Thebuy eracqui respossessi onanduseofgoodsi mmedi atelyaft
er
ent er i
ngi ntot hecont ract
Inst allment st obepai dar epr e-determi ned, sot hebuy erknowsand
isabl etobudgetf orthi samount
Onecanacqui reexpensi vegoods/ itemswhi char edifficul ttogeton
casht erms
Pay menti sspr eadov eral ongdur ationoft i
memaki ngi t
conv enient /suitst hebuy er’sincome
Rai sesst andar dsofl ivingdespi t
el i
mi tedr esour ces
Tot hesel ler
Thegoodsbel ongst ot hesel l
erunt ilthel asti nstall
menti spai d

89

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He/ shecanr epossesst hegoodsi ncaset hebuy erdef aultsi n

payment s
Thesel lerisabl et omakemor epr ofitduet ohi gherpr i
cesi nt he
l
ongr un
Thesal esv olumei ncreaseduet ogreat erabi litybycust omer st o
pay/ mor ebuy ersar eattractedt ohi r
epur chaset ermsl eadi ngt o
mor esal es
Nor ef undi spay abletoabuy erf orgoodsr epossessedf rom hi m/ her
Duet ot hecheck- offsystem, chancesofnon- pay mentar e
mini mi zed.
Disadvant agesofHi repurchase
Tot hebuy er
Thehi repur chasepr i
cei shi ghert hant hecashpr i
ce.
Thegoodsbel ongt othesel lerunt i
lthel asti nst all
menti smade
Becauseoft heeasypay mentt erms, thebuy ermaybet empt edt o
over spendwhi chmi ghtleadt of i
nanci al probl ems
Thev ar i
etyofgoodssol donhi repur chaset er msi sl i
mi tedt ot hose
goodst hatar edur able
I
fthebuy erdef aul t
sinpay ment ,theal readypai donesar et reat edas
hi
rechar gesandar enotr efunded.
Goodsmayber epossessedi fthebuy erdef aul tsinpay ment
Tot hesel ler
Goodsr epossessedcanonl ybesol dassecondhand
Ther ei sal otofdocument ationandf ilingofi nformat i
on/ recor ds
Thecostofoper ati
ngt hebusi nessi susual lyv eryhigh
Ther i
sksofl ossonhi repur chasesal esar enor mallyhighassome
buyer smaydef aultinpay ment
Highamountofcapi t
al i
sneededt ofinanceahi repur chase
business
Alotofmoneyi sspentonr epai rofdamagedgoods
Alotofcapi talist i
edandhel di nstockanddebt s.
I
nst allmentBuy ing/creditsale( deferredpay ment )
-I
nthisf or m ofcr edi tsell
ing,thebuy erisnotr equi redt opayadown
payment .Pay mentf ort hegoodsi smadei nequal install
ment sspr ead

90

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overaper iodoft ime.Thesei nstal

lmentscoveri
nterestandrelat
edcosts
ofsell
ing.
Otherfeatur esofinstallmentbuy i
ng
Theowner shipandpossessi onofgoodspassesont othebuy er
immedi atelythefirstinstal
lmentispaid
Oncet hegoodshav ebeensol d,t
heycannotber epossessedbyt he
sellerev enifthebuy erdef ault
sinpayment.
Incaset hebuy erdef ault
si npayment,t
hesellercanobtain
compensat i
ont hroughcour tacti
on.
Ther ei sawr it
tenagr eementbet weenthebuy erandthe
seller(credit
or)
Thebuy ermaydi sposeoft hegoodsbeforepay i
ngforthem full
y
Canbeusedf ornon- durablegoods.

91

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