BUSINESS PLANNING

MODULE 8
 Why Is A Business Plan Important?
It gives entrepreneurs and small business owners, the ability to lay out their
goals and track their progress as their business begins to grow.

Business planning should be the first thing done when starting a new business

A business plan is made up of:

1. History & Background of the business
2. Marketing Plan
3. Production or Operations Plan
4. Management & Organizational Plan
5. Financial Plan
 Benefits of a Business Plan
• It helps you identify business critical priorities to focus on for the business.

• It helps to define your target market, target customers and how you will
promote and place your product to these customers.

• When you are looking for financing from a bank or self help group, a business
plan that answers questions about profitability and revenue is often required.

• It helps the business owner to design the growth of their business

BUSINESS PLAN
 1.0 HISTORY AND BACKGROUND OF THE
BUSINESS
Name of the owner of the business:
1.1The name of the business shall be: Fashionista Boutique
1.2I will operate this business Alone
1.3I will operate the business in Karuri Town near St. Martin de Porres
Church
1.4My business will involve the sale/ production/ processing of the
following items
i. Women’s tops
ii. Women’s trousers /stretch jeans
 1.5 My products are unique or different from those of my
competitors because of the following reasons:
i. Good quality
ii. Stylish and fashionable

1.6 My objectives for the business for the first year are:
ii. To get about 200 customers who are currently buying from
other business people
iii. To make a profit of Ksh 2500 every month /week /day
iv. Other: To ensure that I have repeat customers
 2.0 MARKETING PLAN
2.1Overall, I expect to sell my products or services to the following kind of
customers.
Ladies approximate number 500
2.2Each of them buys about 1 time per month /week /day
2.3I have estimated sales for the different products or services per month
/week /day to be as follows:
GOODS OR SERVICE QUANTITY SELLNG PRICE PER ITEM (KSH.) TOTAL
Womens Tops 30 400.00 12,000.00

Womens Jeans 20 1,000.00 20,000.00

Assorted clothes 50 250.00 12,500.00

TOTAL 44,500.00
 2.4I expect to reach the following level of sales per month for the first year

MONTH
SALES TOTAL
1 2 3 4 5 6 7 8 9 10 11 12
CASH
SALES 17,500 20,000 25,000 30,000 32,000 35,000 37,000 39,000 40,000 42,000 44,000 44,000 405,500
CREDIT
SALES - - - - - - - - 3,000 3,000 3,000 3,000 12,000
TOTAL
17,500 20,000 25,000 30,000 32,000 35,000 37,000 39,000 43,000 45,000 47,000 47,000 417,500

2.5My Major Competitors

Some of the important business people operating business similar to mine are:

COMPETITOR COMPETITOR’S STRENGTHS HOW WILL I COUNTER THEM

1 Blessed Boutique i. Location i. Offer latest fashion
ii. Bigger shop ii. High quality clothes
2 Mama Shiro i. Has been in business for a long time i. Good services
ii. Buys the clothes from Turkey ii. Affordable price
 3.0 PRODUCTION /OPERATIONS PLAN
• 3.1 Production/Operations Process
The major steps or stages in the production or operations of my business are as
outlined below:

STEPS/ STAGES CRITICAL OR IMPORTANT THINGS TO BE CAUTIOUS

ABOUT
1. Research • Target Market
• Supply of good quality goods
2. Financing Source • Business capital
• Business expenses
 • 3.2 Equipment, tools and other fixed assets required
The equipment, tools and other fixed assets required to operate the business are
listed below:
BUYING PRICE PER
EQUIPMENT QUANTITY SUPPLIER ITEM TOTAL

1 Mannequin Full Body 1 Le Mannequinnes (Jiji) 1,500.00 1,500.00

2 Mannequin Bottom 2 Le Mannequinnes (Jiji) 1,500.00 3,000.00

3 Mannequin Half Body 2 Le Mannequinnes (Jiji) 1,500.00 3,000.00

4 Clothes Hangers 100 Kenploy 32.00 3,200.00

5 Iron Box 1 Naivas 1,500.00 1,500.00

TOTAL 12,200.00
• 3.3 Critical Risks and Problems (Seasonal and other changes).
These are the changes that could take place and affect my business adversely.
Critical Risks/ Problem How they can affect my business
1. Shortage of supply of goods • Low income
• Fewer customers
2. Theft • Loss of business stock
• Closure of business

• 3.4a To ensure that these changes do not adversely affect my business or to reduce
the possible effects, I will do the following:
i. Buy stock in advance
ii. Shared security with neighbouring shops

• 3.4b Legal Requirements (both government and local council)

Some of the laws require that business like mine do or not do the following
i. Business name Registration
ii. Council license
• 3.5 Monthly costs for buying materials for producing or providing the
service

BUYING PRICE
MATERIALS PER ITEM QUANTITY SUPPLIER TOTAL

1 Uhuru bags 10.00 10 Hawker 100.00

2 Ladies Clothes - a bale 17,000.00 1 Gikomba 17,000.00

3 Soap 100.00 1 Market/ Shop 100.00

4 Water- 20L 5.00 4 Car Wash 20.00

TOTAL 17,220.00
 4.0 MANAGEMENT & ORGANIZATIONAL PLAN
I will put effort to have good management for my business. In the following
sections, I have indicated some of the important things that I have considered
seriously and will put in place
• 4.1 Employees who will be required, their responsibilities and their skills.
EMPLOYEE REPONSIBILITY NUMBER MONTHLY SALARY TOTAL
Sales, Purchases & shop
Business Owner management 1 5,000.00 5,000.00

• 4.2 Looking for employees (where applicable)

I will use the following methods to get employees

• 4.3 Motivating employees ( where applicable)

I will use the following methods to motivate my employees:
 5.0 FINANCIAL PLAN
• 5.1a Buying fixed assets (refer to section 3.2) = Ksh. 12,200

• 5.1b Pre-operational costs (These are the costs which will be incurred
before starting the business)
ITEM COSTS
Rent & Deposit 8,000.00
Licenses 6,000.00
Mirror 800.00
Cash & Receipt book 300.00
Chair 1,000.00
TOTAL 16,100.00
• 5.1c Costs of running the business for at least 1 month. I have determined
that the total costs of running my business for 1 month will be as follows:

EXPENSES TOTAL
Purchase of goods and services for production or service
provision (See section 3.5) 17,200.00
Own Salary (Section 4.1) 5,000.00
Salary for employees (Section 4.1) -
Motivating employees (Section 4.1) -
Security 1,000.00
Transport 1,000.00
Rent - for business premise 4,000.00
Electricity/ Fuel/ Firewood 500.00
Business Promotion
Savings 2,000.00
Loan Repayment (where applicable) 5,000.00
TOTAL 35,700.00
• 5.2 Total money required to start the business
As per the costs, I have identified from 5.1, the total money required to start
the business is:
SECTION TOTAL
5.1a 12,200.00
5.1b 16,100.00
5.1c 35,700.00
TOTAL 64,000.00

• 5.3 I will get money from the following sources:

SOURCE TOTAL
From my savings 20,000.00
From my spouse/parent 50,000.00
Loan from Sacco/ Self Help -
TOTAL 70,000.00
 • 5.4 Projected Cash Flow “In” and “Out” flows (Income & Expenditure)
IN CASH RECEIPTS MONTH 1 MONTH 2 MONTH 3 MONTH 4 MONTH 5 MONTH 6
1Balance from last month - 32,500.00 16,800.00 6,100.00 400.00 14,900.00
2From my own pocket 20,000.00
3Loan from parents/ spouse 50,000.00
4Cash Sales 17,500.00 20,000.00 25,000.00 30,000.00 32,000.00 35,000.00
5Collection from debtors - - - - - -
TOTAL 87,500.00 52,500.00 41,800.00 36,100.00 32,400.00 49,900.00

OUT EXPENDITURE MONTH 1 MONTH 2 MONTH 3 MONTH 4 MONTH 5 MONTH 6

1Purchase of Fixed Assets 12,200.00
2Purchase of Pre-operational costs 16,100.00
3Purchase of goods for sale 17,200.00 17,200.00 17,200.00 17,200.00 17,200.00
4Own Salary 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
5Security 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00
6Transport 1,000.00 1,000.00 1,000.00 1,000.00 1,000.00
7Rent - for business premise 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00
8Electricity/ Fuel/ Firewood 500.00 500.00 500.00 500.00 500.00 500.00
9Savings 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
10Loan Repayment (where applicable) 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
TOTAL 55,000.00 35,700.00 35,700.00 35,700.00 17,500.00 35,700.00

PROFIT/LOSS 32,500.00 16,800.00 6,100.00 400.00 14,900.00 14,200.00