ADIKA'S ELECTRICALS AND ELECTRONIC PREMISE

P.O BOX 143

KISUMU
TEL: 0111382532
EMAIL: [email protected]

TITLE OF THE DOCUMENT : BUSINESS PLAN

PRESENTED BY : ADIKA JUSTUS

ADM NO. :TKNP/A/8249

INDEX NUMBER : 7411051348

DEPARTMENT: ELECTRICAL AND ELECTRONICS ENGINEERING

COURSE. : DIPLOMA IN ELECTRICAL AND ELECTRONICS ENGINEERING ( POWER OPTION)

PRESENTED TO : THE KENYA NATIONAL EXAMINATIONS COUNCIL IN PARTIAL FULFILMENT FOR

THE DIPLOMA IN ELECTRICAL AND ELECTRONICS ENGINEERING

CENTER NAME : THE KISUMU NATIONAL POLYTECHNIC

DATE OF PRESENTATION : JULY 2024

1
 DECLARATION
I, declare that this project is my own original work and has not been submitted by anybody else for award of Diploma in Electrical and
Electronics Engineering.

NAME : ADIKA JUSTUS

SIGNATURE : …………….......

DATE : ………………………..

This business plan has been submitted to an institution`s supervisor

NAME :

SIGNATURE : …………………

DATE : ……………………….
 DEDICATION

I dedicate this project to all my family, friend, teachers, classmates and advisors for every support financially, advisory, service that
they has made to me.

Thank you very much for every little support you have made to me as they have count much in my life and potential of making this
project.
I want to assure you that your effort has no gone in vain.
ACKNOWLEDGEMENT
The preparation of this project has been made successful due to mutual assistance, the support I obtained from my family, friends for
financial and moral support.
 EXECUTIVE SUMMARY

BUSINESS DISCRIPTION
The business activities undertaken , services, its operation, resources and growth ability, qualification of the owner, quality added by
the owner,, and what he does have been discussed in the chapter in details.

Name of the business is ADIKA'S ELECTRICAL AND ELECTRONICS SHOP

Business location, address, legal form of business ownership, advantages of sole proprietorship, type of business and level of
producing as small scale.
The business operation has been indicated as from Monday to Friday and working time as 12 hours,

MARKETING PLAN;
Under this the marketing plan content are viewed in detail on chapter 3 but here are summery; system of distribution, objective of the
marketing plan, identification of customers, and how the product or services would be.

Customer-definition, classification e.g. industrial, commercial, institutions and what customers need to be attached in this business,
how to maintain or improve production or services,

Market share-the proportion or part of market is served by the business as measured into % and a pie chart is drawn to indicate it,

How the business intend to increase market share e.g. by improving quality of products, vigorous sales promotion, through
advertisements and offering free gifts.

Competitors-definition, description in terms of characteristics of business assets, size, sales volume, product or services offered, mode
of operation considering their strength weakness analysis test.

Advertisement-means of informing and persuading for customer to by the products, how to carry it out e.g. by creating awareness of
the product, purpose of carrying it out e.g. by reaching new customers and retain old customers.

Sales promotion-attraction to offer by business to make customers to buy the product and to attract customer’s attention and to retain
them to brand

Pricing strategy-definition, how to fix the price, steps of determining the business price e.g. by considering the demand, cost offered
by competitors, geographical, production cost and services.
ORGANIZATIONAL & MANAGEMENT
Analysis the key personal and support staff in the business. Their qualification, experience, and responsibility play, roles in
achievement, objective based on the form of business started i.e. sole proprietorship.

Key personnel-definition, qualification of each, responsibility, financial payment/labor cost for each

Support staffs- Definition, who they are e.g. drivers, cooks, security, loaders & offloads, cleaners. Their labor payout is indicated of a
summarized table.

Organizational chart-summaries the position, qualification, labor cost per month and per year, rank of the support staffs.

Recruitment training & promotion - definition, recruitment, training process, process of recruitment of new employee, training
process ,conditions considered e.g. by area of skilled, allow employee to send application, selected the person to be trained, sponsor
to be trained.

Recruitment incentive-definition, it summarize on a chart the key personnel salary per year and the allowance given on top e.g.
allowance.

License & permits and by-laws.-there cost and renewability condition is advisor, help business discussed.

Support services-the professional-the professional service offered to business e.g. and function is to provide advice, help business

PRODUCTION FACILITY/CAPACITY
Machine tools & equipment. Definition, cost, number required, have been summarized on the table there repair and maintenance, the
business layout and other relevant equipment.

OPERATION AND PRODUCTION PLAN

Production/services design & development-definition, how to determine quality products e.g. by characteristics/properties, cost, how
to determine appropriate technology, cost effectiveness, flexibility in adoption efficiency etc.

Quality control- explanation of how the intended control quality of product or services & commonly applied measured.

Production/operation strategy and material requirement, types of material, sources, quality, unit cost and total amount had been
summarized on a table.

Labor requirement-the monthly labor requirement, ether direct or indirect, level of skills required from workers, calculation of total
cost of direct and indirect workers and their overall total cost.

Production cost-are summarized on a table for all expenses and an amount summation is indicated for total expenses, main feature of
offering proposed services.

A flow chart summery to highlight other external factors which are likely to affect the production process.

Regulation affection/ operation the government regulations, approvals which affects the product and services of production, cost of
regulation permits & licens.

FINANCIAL PLAN

Income-statement the business experience for a period of business operation whether at loss or profit. A business projected –income
statement for the year ending that
 TABLE OF CONTENTS

DECLARATION...........................................................................................................................1
DEDICATION...............................................................................................................................3
ACKNOWLEDGEMENT............................................................................................................5
1.0 EXECUTIVE SUMMARY...................................................Error! Bookmark not defined.
CHAPTER ONE..........................................................................Error! Bookmark not defined.
1.1 BUSINESS DISCRIPTION...................................................Error! Bookmark not defined.
1.2 MARKETING PLAN;...........................................................Error! Bookmark not defined.
1.3 ORGANIZATIONAL & MANAGEMENT........................Error! Bookmark not defined.
PRODUCTION FACILITY/CAPACITY.................................Error! Bookmark not defined.
1.4 OPERATION AND PRODUCTION PLAN.......................Error! Bookmark not defined.
1.5FINANCIAL PLAN................................................................Error! Bookmark not defined.
CHAPTER TWO.........................................................................................................................12
2.0: BUSINESS DISCRIPTION.................................................................................................12
2.1: THE SPONSOR;...................................................................Error! Bookmark not defined.
2.2: BUSINESS NAME...............................................................................................................13
2.3: BUSINESS LOCATION AND ADDRESS.........................................................................13
2.4: LEGAL FORM OF BUSINESS OWNERSHIP................................................................13
2.5: TYPE OF BUSSINESS........................................................................................................13
2.6: GOODS AND SERVICES...................................................................................................14
2.7: JUSTIFICATION OR OPPOTUNITY..............................................................................15
2.8: INDUSTRIES........................................................................................................................15
2.9: GOAL OF THE BUSINESS................................................................................................15
CHAPTER 3.................................................................................................................................17
3.0: MARKETING PLAN...........................................................................................................17
3.1: CUSTOMERS.......................................................................................................................17
3.2: MARKET SHARE...............................................................Error! Bookmark not defined.
3.3: COMPETITION...................................................................................................................19
3.4: ADVERTISEMENT.............................................................................................................20
3.5: SALES PROMOTION.........................................................................................................20
3.6: PRICING STRATEGY........................................................................................................21
3.7: SALES TACTICS.................................................................................................................22
3.8: DISTRIBUTION..................................................................................................................22
4.0 CHARTER 4..........................................................................................................................22
4.2: SURPORT STAFFS.............................................................................................................23
4.4: RECRUTEMENT TRAINING AND PROMOTION.......................................................24
4.5 REMUNERATION AND INCENTIVES...............................................................................25
4.6 LICENSE, PERMIT AND BYLAWS..................................................................................26
4.7 SURPORT SERVICES.........................................................................................................27
CHAPTER 5.................................................................................................................................29
5.0 PRODUCTION AND ORGANIZATION PLAN...............................................................29
5.1 PRODUCTION FACILITY/CAPACITY...........................................................................29
5.1.1 MACHINE, TOOLS AND EQUIPMENTS.....................................................................29
5.1.2 REPAIR AND MAINTANANCE....................................................................................30
 5.1.3 LAYOUT OF BUSINESS PREMISE..............................................................................31
5.2 PRODUCT/SERVICES DESIGNED & DEVELOPMENT..............................................31
5.3.1 MATERIAL REQUIREMENTS..................................................................................32
5.3.2 LABOUR REQUIRED...................................................................................................32
5.4 PRODUCTION PROCESS;.................................................................................................33
CHAPTER 6: FINANCIAL PLAN............................................................................................34
6.0 FINANCIAL PLAN...............................................................................................................34
6.1 PRE-OPARATION COST ESTIMATION.........................................................................34
6.2 WORKING CAPITAL ESTIMATION...............................................................................35
6.3PROFORMA CASH FLOW STATEMENTS.................Error! Bookmark not defined.
6.4 PROFORMA INCOME STATEMENTS............................................................................36
6.5 PROFORMA BALANCE SHEET.......................................................................................38
6.6 BREAK EVEN POINT.........................................................................................................40
APPENDIX....................................................................................Error! Bookmark not defined.

CHAPTER ONE.

1.0: BUSINESS DISCRIPTION

The business deals with supply of electrical and electronics equipment’s
1.1: BUSINESS NAME
The name of the proposed business will be ADIKA'S ELECTRICAL AND ELECTRONIC SHOP which will deal with electrical and
electronics appliances.

1.2: BUSINESS LOCATION AND ADDRESS

The business will be located at Nyamasaria Market along Kisumu- Nairobi road opposite Black Pearl Resort.

THE communication purpose is mention as;

BOX number 143 Kisumu

Tel No: 0111382532

E-mail: [email protected]

1.3: LEGAL FORM OF BUSINESS OWNERSHIP

The business will be a form of a sole proprietorship and the business in itself meant to minimize the unlimited human wants in
satisfaction of their needs.

The name of the business suggest that Adika Justus being the owner and the risk taker in either aspect of profit and loss incurred in
the business

The owner contributes capital and labor it takes for efficient business progress

1.4:TYPE OF BUSSINESS
The business activity will be in retailing nature where goods are directly sold to consumer.

The reasons for this type of business is of the following advantages;

 It will bring good within easy access of consumers.

  It will sell goods in small quantities as required by consumers.
 It will offer after sale services.
 It will offer variety of goods to the producers.
 It will help wholesalers and producers in doing market research.
 It will offer credit facilities to trustworthy consumers.

1.5: GOODS AND SERVICES

The business will be offering sales of electrical and electronics equipment’s of high qualities that will satisfy consumers demand.

ITEMS SIZES AND SPECIFICATIONS

Sockets Industrial sockets

Domestic sockets

Conduits Flexible conduits

Metallic conduits

Pvc conduits

Switch boxes Double/single boxes

Cables Coast Cables Limited

From 1.5 mm to 10.0 mm

Electronic components Resistors

Capacitos
Inductos
Switches Single/double pole one way

Single/double pole two way

Float switch

Push button

Limit switch

1.6 JUSTIFICATION OR OPPOTUNITY

The reason for carrying this business are;

COMPLEXITY-To develop better system-thinking capacity of products in a way that minimize unnecessary complexity.

TECHNOLOGY-To develop a long-term technology strategy while remaining flexible enough to takShort-term goals;

Empe advantage of unforeseen technology development

GLOBOLIZATION-Trying to understand the international market and culture through best information gathering and analyzing what
it means.

1.7: INDUSTRY

The business will be classified under electrical and electronic industry . This will be one of the most considered industry in the
country, this is because almost all commercial and industrial process depends on its availability, it will alsobe usedin home for lighting
and many other functions.
1.8: GOAL OF THE BUSINESS

The business will be meant to ensure availability of products to the user at every point and any time of need to maximize profit that
can well save the employees and maintain the production equipment.

Short term goals

Employment-business ensures that good number of individuals one employ to improve and maintain their living standards

Services; the business ensures right time of delivering goods and even right quality goods delivered.

Long term goals

The business tend to build another location to expand the business mark.

The business outweigh competitors by introducing new techniques in the production.

The business tend to employ many employee thus enable it create job opportunity.

1.9: ENTRY AND GROWTH STRATEGY.

The business will acquire licence from local government to start a business. The business will also use different strategies of entering
to the market so as to create awareness to the consumers which include;

1. Offering credit and services to the potential consumers.

2. Business will offer discount and gifts to the consumers who buy in bulk.
 3. Selling of high quality product so as to keep consumers.
Growth Strategy.
The business will use high level of advertisement thus creating awareness of the business hence increasing the number of
consumers and sales which will lead to getting more profit.

CHAPTER 2

2.0: MARKETING PLAN

Marketing is the process of identifying customers along with their needs. The main activities involve selling of various electrical
products and accessories and also provide maintenance services to consumers.

The consumers are served with quality goods and well advanced services and each is hoped to have desirable satisfactory.

2.1: CUSTOMERS

There will be a good number of customers who live in Kisumu county and neighbouring counties of not less than 30000 and 70% of
these are youths while the rest are the ageing. Interestingly the youths are the ones who participate in or do electrical engineering and
this being a good population the youth will the potential customer for ADIKA'S ELECTRICAL AND ELECTRONIC SHOP.The
target will be individuals. The business will be offering after sales services thus more customers which in turn will increase its
production.

2:2 MARKET SHARE

This is a segment or a portion of overall market available which the business intend to capture out of 30000 total population targeted
within the sector of business in this area JOSCA qelectrical and electronics will have and always the highest above the total population
of the other firms with the key player and the gap that is existing as prescribed below :

FIRM SALES PER MONTH

JOSCA electrical 10000
ADIKA'S electrical and electronics shop 13000
DENNIS electrical enterprise 7000

Market shares are therefore found in percentage as shown

JOSCA - (10000/30000) *100%

=33.3%

ADIKA'S - (13000/30000)*100%

=43.3%

DENNIS -(7000/30000)*100%

=23.3%
2.3: COMPETITION
The key competitors or the data on the key competion.

Take product of primary product or services –the business wil compete for consumers with other companies on these prroducts;Meter
box, panel, Electrical switches, Different types of lamps,lamp holders, Different types of electrical cables, Different types of sockets,
Different types of conduits,phaser tester and screw driver.

Find campanies that sell these products or offers this services.The business will search for more than one major search engine while
pretending to be a consumer.

Identifying the business competitor stratagy and weakness by identifying the kind of product or services that they offer.

Do word -of-mouth market research;Ask consumers in the area as well as customer who they buy from or which services they use.

Do a simple survay;it is important to survey not only the customers but the competitors too.

STRENGTH WEAKNESS ANALYSIS TEST CHART

NAME OF FIRM STRENGTH WEAKNESS

JOSCA electrical Had stayed long in business Dosnt provide after services
High distribution chanel Poor location
Payment in cash Limited working hours

ADIKA'S electrical High population location Has taken short in business

High technical use Limited working hours
Allow cash and credit
purchase
 Offer maintanance services
DENNIS electrical Good working staffs Low staff payment hence
they do not last
Poor advertisement method
Limited working hours

2.4: ADVERTISEMENT
This is a mass communication of informing and persuading the buyers to buy products with a view of a maximizing a company’s
profit.

The purpose of this advertisement is to inform on to consumers about new product and also to reach new consumers to use products
offered by this premise.

2.5: SALES PROMOTION

This is the dissemination of information through a wide variety of activities other than personal selling advertising and publicity which
stimulate consumers purchasing and dealer’s effectiveness.

The method of advertisement used in this business premise is as follows;

DIRECT MAILLING-mailing and desired customers collect address from customers by noting address on their checks asking to fill out
information cards.

POSTERS AND BULLETING BOARDS-very relevant to place where customers will actually notice them .the best bet is to place the
posters on bulletin boards and other places which the customers frequently refresh the poster that will appear new to customers.
AFTER SALE SERVICES-E.g. transport; consumers that takes larger scale products are offered to transport till their consumption
place from the business place without paying anything.

OFFERING DISCOUNTS-Due to purchasing goods in bulk, this gives good/fair pricing without suffering any loss when the products
bulkiness is broken thus discount is offered to consumers.

GIVING OF FREE GIFTS-Consumers are offered with other free gifts like soft drinks as they come to purchase, caps and aprons.

2.6: PRICING STRATEGY

It is a monitory value of the product or service, fixing a price is a step that determine success of a business price is set to generate
adequate profit.

Price fixation depends on;

DEMAND-This is the way consumers are willing and able to buy provided products and frequent consumption.When the demand is
high, the price of a product is high while if the demand is lo then the price too will be low.

COST OF PURCHASING PRODUCT OR SERVICER-By considering the purchasing/acquiring cost and add services, transportation
cost, storage cost one can easily come up with a favorable price that favor both the producer and consumers.

PRICE OFFERED BY COMPETITORS- Act as Rome while in Rome as the say goes.one can set the price slightly lower or slightly
higher or can maintain same price as the competitors pricing.

GEOGRAPHICAL PRICING-Pricing is based on where the consumers are coming from. This is by considering the class and living
standard of your expected consumers.

2.7: SALES TACTICS

The sales tactics the business will apply to boost the sales volume include;
Use of upsells efficiency;

Ones consumers buy from the firm and are in a buying moods, it’s easier to close on additional or related sale. Many people who run
online business give 100% commission to the antedates on their products.

Clever pricing is the key;

The products should worth what the customers are willing to pay for it.

Run a customer reward program;

There is no need to be a fortune 500 companies to run a reward program instead make it a simple program where people can get
discounts for being a customer and satisfying certain simple criteria.

Advertising or strategic display of the product;

Customers do not like to be deceived or being sold to ideal advertise only the benefits products/solutions can give and never hype
anything.

2.8: DISTRIBUTION
A distribution channel is a chain of business or intermediaries through which a good or service passes until it reaches the final
consumer. The channel are broken into direct and indirect forms with a direct channel allowing the consumers to buy the good from a
manufacture and an indirect channel allowing the consumer to buy the goods from a wholesaler or retailer.

CHARTER THREE
3.0 ORGANIZATIONAL AND MANAGEMENT PLAN .

3.1 MANAGEMENT OBJECTIVES .

QUALIFICATIONS
POSITION DUTIES

MANAGER Will be consulting Should be fluent in

employees and English and Kiswahili.
together make
Should have a five year
decisions.
experience.
Business negotiator.

Should have a Diploma

Motivating other
in Electrical and
employees through Electronic Engineering.
salary increment.

CASHIER Performing Should be diplomatic.

momentary Dedicated and
transactions such as meticulous high level
giving and receiving of accuracy.
balance. Bilingual; fluent in
Maintain clean neat Swahili, English.
and correct stock. Computer skilled in
 Balance all MS word, excel and
transactions running out book.
assigned. High skilled in
Answer telephone and providing prompt and
perform light friendly customer
housekeeping. services.

3.2: RECRUTEMENT TRAINING AND PROMOTIONS.

3.2.1:RECRUITMENT;

The purpose of employing staff or worker ‘finding and hiring the best qualified candidate from within or outside of an organization for
a job opening in a timely and cost effective manner .

3.2.2:TRAINING;

It is important to add or acquire additional skills in every field an individual undertakes, to do this the following have to be put into
practice;

ORGANIZATIONAL ANALYSIS-

The analysis of an organization strategies, goals and objectives.

What is the overall training to accomplish? The important question being answered by this analysis are; who decided that training
should be conducted, why a trading program is seen.
PERSONAL ANALYSIS;

This is the analysis dealing with potential participants and instructors involved in the process.

The important questions being answered being by this analysis; who will receive the training and their level of existing knowledge.

WORK /TASK ANALYSIS;

This is the analysis of the job and the requirement for performing the work that seek to specify the main duties and skill level required
and this help ensure that the training which is developed will include relevant links to the content of the job.

CONTENT ANALYSIS;

Analysis of documents, laws, procedures used on the job and ensure the quotation about what knowledge or information is used on
this job.

3.3:REMUNERATION AND INCENTIVES

Remuneration is the award given to a worker to appreciate his/her effort extended in carrying out his dealer where incentives is
something that motivates an individual to perform an action.

HOW TO DETERMINE WAGES /SALARY FOR THE START;

Consider-Nature of the work assigned.

The income generation by the business.

The government minimum wage guidance provided.

Economic circumstances provided.

By considering the above aspects, the table below shows the salary bills for this enterprise;

I Position Number Wage/salary Wage/salary Summation

per month per year(ksh) for total
(ksh) number per
year (ksh)
manager 1 35000 420000 420000
Office 1 28000 336000 336000
assistance
Cashier 2 20000 240000 480000
Market 3 15000 180000 530000
officer
Security 2 8000 96000 192000
guards

3.4:LICENSE, PERMIT AND BY LAWS.

These are the legal requirements that are required by the law of government for a business to operates, it is required to have;
A DOING BUSINESS AS CERTIFICATE, (DBA)

Sole proprietors and general partnership operating their business under a factitious or assumed name must apply for a DBA certificate
with the county in which the business is physically located contact the local county courthouse.

DBA application fee is 7500 and generally a one term occurrence license.

A DBA does not protect or reserve a business name inquire about a DBA application if a business is incorporated, but operating under
another business name.

3.5:SURPORT SERVICES.
The following are some of the support services for this business required;

Trade officer

Government agency services

Banking and financial services

Postal and couriers

Transport services

Management training

Legal services

Insurance services
Security services.

This support services are acquired from different companies as follows in the table below;

SERVICE COMPANY BOX NO. TEL. NO. E-MAIL

TRADE Salome 236-4100 03291784 salm@gmail.

transports com
GOVERNMENT AGENCY Kenya 48774 1411230 [email protected]
agency mego

TRANSPORT SERVICES FARGO 234-4100 32874 Fargo.co.ke

MANAGEMENT
SERVICES
LEGAL SERVICES KEBS 053-4103 +15230 Kebs.co.ke
INSURANCE SERVICES KRA 214 - +23456 KRA.gmail.c
40100 om
SECURITY SERVICES KK 234-4100 +877644 kk.gmail.com
CHAPTER FOUR

4.0:PRODUCTION AND OPERATIONAL PLAN

Production is the process of workers combining various material, manpower, knowledge, skills, tools and equipment, machineries and
interested in an action so as to come up with a suitable product for consumers.

It is the act of creating output of a good or service which has value and contribute to the utility of individuals.

Operation plan-this is a detailed plan used to provide a clear picture of how a team, section or department will contribute to the
achievement of the organization strategic goals.

4.1: PRODUCTION FACILITY/CAPACITY

This are assets or tangible properties that are used in a business to ensure highest yield possible.

4.1.1 MACHINE, TOOLS AND EQUIPMENTS

They are as shown below and their cost, number, quality
 Item No. Required Cost (ksh)

Voltmeter 3 @ 2500 7,500

Millimeter 2 @ 2000 4,000

Ohmmeter 3 @ 2500 7,000

Set of screw driver 2 pcs @ 7000 14,000

Set of pliars 1 pcs 4500 4500

TOTAL 37,000

4.1.2 REPAIR AND MAINTANANCE

This is to ensure that machines or tools are up to date on its official /purpose function to enable maximum output expected by the
business.

Purpose of maintenance include;

To maintain output production

 Minimize time wastage

To ensure continuous supply to consumers

4.1.3 LAYOUT OF BUSINESS PREMISE

This is a dependent firm and pays for the provision by other firms, some services it depends on include rent, security, postal, financial
assistance etc.

The business is entitled to a monthly rent of Kshs.10,500.

4.2 PRODUCT/SERVICES DESIGNED & DEVELOPMENT

This is the foundation of a product life-cycle and the execution plan for further- development

4.2.1 PRODUCT DESIGN AND DEVELOPMENT;

Production design is to create a new product to be sold by business to its customers.

Problem definition and customers need identification through extensive market studies, observing similar product in use and
discussion with manufacturers and potential purchasers.

Product detail design-during the phase, it develop analytic drawing for each part of the product cost and ease of maintenance.

Product requirement and organizational requirement based on several criteria and technical constraints.

4.2.2 SERVICE DESIGNED AND DEVELOPMENT;

The business enterprise will endeavor to employ the best employee who have got the technical knowledge and will be adoptive to the
new changes in the technology and therefore will provide best service required by the clients.
Supply of products will be made on time to avoid delay this is the way the business maximize it profits. To ensure efficient and
effective utilization of resources it will be switched off.

The monthly labor of the business will consist of both direct and indirect staff director workers will be providing the service directly to
customer.

4.3 MATERIAL REQUIREMENTS.

Raw material inventory is the total cost of all component parts currently in stock that have not yet been used in work in process or
finished goods production.

Description Quantity Unit per price Total

Lamp holders 1000 50 50,000
Lamps 200 150 30,000
Meter Box 20 2000 40,000
Switch 400 150 60,000
Cables 4.0mm² 2 10,000 20,000
Cable 1.5mm² 10 2500 25,000
Cable 2.5mm² 10 3200 32,000
TOTAL 257,000

4.3.1LABOUR REQUIRED
The business enterprises will endeavor to employ the best employees who have got the technical knowledge and who are adaptive to
the new changes in the technology and therefore will be able to provide the best services to our clients successfully.

The remuneration package are as follows;

POSITION QUALIFICATION NUMBER WADGE TOTAL COST *NUMBER

PER MONTH HOUR
Management Diplomatic 1 145.833 35000
Office assistance Diplomatic 1 116.67 28000
Cashier Diplomatic 2 83.33 @ 40000
Marketing Diplomatic 3 62.5 @ 45000
Officer
Security Certificate 2 33.3 @ 16000
Total 164000

4.3.2:INDIRECT EXPENCES.

They are also known as overhead costs/expenses.

The table below shows the project monthly cost of operation labor and other overheads.

DESCRIPTION MONTHLY AMOUNT YEARLY AMOUNT

Water 600 7200
Insurance 5000
Transport 1000 12000
Advertisement 1500 18000
Electrical bills 1000 12000
TOTAL 4100 54200

4.4 PRODUCTION PROCESS;

These are the concerned with transforming a range of input into those output that are required by the market.

Activities/stage involved in the product or services to be offered screening idea.

The purpose of idea screening is to eliminate those ideas that do not appear to have high potential and avoid the cost incurred at
subsequent stages.

CHAPTER FIVE

5.0:FINANCIAL PLAN
This is the comprehensive evolution of an individual current pay and future financial state by using current knowing variable s to
predict future income assets values and withdrawal plans.

OVERVIEW OF FINAL PLAN

This is the process that determines how you can best meet your business goals through proper management of the financial affairs.

5.1 PRE-OPERATION COST ESTIMATION

These are the expenditures made in advance but income has not been reported on the balance sheet

ITEM PERTICULARS AMOUNT (KSH)

1 Feasibility study/business plan 2,500
2 Business registration 300
3 Permit/trade license 500
4 Initial advertisement 2000
5 Recruitment of staffs 3000
6 Miscellaneous 3000
Total 11300

5.2 WORKING CAPITAL ESTIMATION FOR 2023.

Particulars JAN FEB MAR APRL MAY JUNE JULY AUG SEP OCT NOV DEC

BEGINNING CASH 100,000 172,950 40,050 -71,050 22,850 259,850 360,350 354,600 355,600 380,000 409,000 328,100

CASH FLOW IN ;

CASH SALE 70,000 80,000 90,000 210,000 340,000 254,000 200,500 189,000 210,000 200,000 150,000 178,000

DEBTORS _
COLLECTION - 5,000 15,000 78,000 65,000 - 25,000 30,000 35,000 - 45,000

LOAN 300,000 - - 150,000 - -- - - - - - -

TOTAL CASH 470,000 252,950 135,050 303,950 440,850 578,850 560,850 568,600 595,900 615,000 559,000 551,100
AVAILABLE
CASH OUT FLOW ;

RENT 8000 8,000 8,000 8,000 8000 8500 8500 8500 9,000 9,000 9,000 9,000

SALARY/WAGES 100,000 120,000 120,000 115,000 110,000 115,000 110,000 115,000 117,000 118,000 118,000 118,500

REPAIR AND 1500 1000 800 12,000 10,000 10,050 8,000 8,500 9,000 9,500 9,000 9,500
MAINTANANCE

TELEPHONE BILL 800 600 500 550 500 550 400 500 550 600 500 500
LOAN INTREST 8,000 10,000 5,000 5,000 5,000 5,500 6,000 6,500 6,500 7,000 7,500 7,000

ADVERTISEMENT 15000 - - - - 15,000 - - - - - -

WATER BILL 750 600 500 550 550 550 550 600 650 700 700 750

INSURANCE 12,000 - - - - - - - - - - -

STATIONARIES 15,000 15,000 14,000 14,000 13,000 13,500 13,500 13,500 13,700 14,000 14,000 13,000
 POSTAL 500 800 500 500 500 550 550 600 650 700 700 700

INTERNET 10,000 8,000 7,000 75,000 7,000 7800 7,800 8,000 8,500 9000 9,000 9,000
CHARGES
LABOR 50,000 48,000 49,000 49,500 49,000 49,500 50,000 50,000 50,000 51,000 50,500 50,000

ELECTRICITY 1000 900 800 1000 1,000 1000 950 1,000 1000 1200 12,00 1,200

LICENCE 2,500 - - - - - - - - - - -

TOTAL CASH 297,050 212,900 206,100 281,100 181,000 218,500 206,250 212,700 215,900 206,000 230,900 218,450

NET CASH FLOW 172,950 40,050 -71,050 22,850 259,850 360,350 354,600 355,900 380,000 409,000 328,100 332,650

This is the difference between current assets and current liabilities.

PARTICULARS AMOUNT (KSH)

Cash at bank 500,000
Cash at hand 200,000
Stock 80,000
Debtors 100,000
Stationaries 700,000
Electricity 8,000
TOTAL 1,588,000

5.3 ADIKA'S ELECTRICAL AND ELECTRONIC SHOP CASH FLOW 31st Dec 2024
5.4 PROFORMA INCOME STATEMENTS.
Proforma income statement is a planned and prepared in advance to a transaction to project the future status of the company.

Gross profit = sales income + credit sales.

Expenses are all cost that are incurred in daily running of the business.

Net profit = gross profit – expenses

ADIKA'S ELECTRICAL AND ELECTRONICS SHOP PROFORMA INCOME STATEMENT FOR END OF YEAR

PARTICULARS YEAR (2025) YEAR(2026) YEAR(2027)

Sale 1,380,000 1,656,000 1,987,200
Less; cost of sales 500,000 600,000 720,000

Gross margin 880,000 1,656,000

Less; operational
expenses
Rent 108,000 118,000 720,000
Loan interest 70,000 90,000 100,000
Advertisement 30,000 20,000 22,000
Telephone bill 8,000 10,000 6,000
Labor 150,000 200,000 500,000
License 12,000 8,000 10,000

Labor payment 17,800 10,000 12,000

Water bills 8,900 5,000 7,000
Stationary 100,000 120,000 150,000
Internet charges 9,500 7,000 8,000
Postal 7,600 6,000 5,000
Insurance 12,000 10,000 8,000
Electricity 12,200 8,000 10,000
Repair & maintenance 10,400 5,000 7,000
Total operation 546,900 417,000 765,000
expenses
Net profit before 333,100 639,000 1,495,00
20% Taxation

NET profit after 266,400 511,200 401,600

20% Taxation

5.5 PROFORMA BALANCE SHEET

A proforma balance sheet summarizes the projected future status company after a planned transaction based on the current financial
statement.

ADIKA'S ELECTICAL AND ELECTRONICS SHOP.

 A PROFORMA BALANCE SHEET AS AT 31st (2024)

PARTICULARS YEAR (2025) YEAR(2026) YEAR (2027)

CURRENT ASSETS
Cash at bank 2,000,000 160,000 100,000
Cash at hand 160,000 80,000
Stocks 220,000 1,200,000 100,000
Prepayments 15,000 80,000
150,000
50,000
TOTAL 2,400,000 2.000,000 288,000

FIXED CURRENTS
Machine & 200,000 180,000 120,000
equipment
Furniture & fittings 70,000 40,000 20,000
Motor vehicle 250,000 200,000 160,000
TOTAL FIXED 520,000 420,000 300,000
ASSETS
TOTAL FXD & 2,920,000 2,420,000 588,000
CRNT
CURRENT
LIABILITIES
Creditors 150,000 100,00 80,000
Accrued taxes 100,000 60,000
40,000
TOTAL CURRENT 250,000 160,000 120,000
LIABILITIES
TERM LIABILITIES
Loans 170,000 120,000 100,000
Capital 1,561,800 1,000,000 1,800,000
TOTAL TERM 1,731,800 1,120,000 1,900,000
LIABILITIES
TOTAL 1,981,800 1,280,000 1,920,000
LIABILITIES
The owner equity is calculated by;

Subtracting total liabilities from total assets

That is for year one, (2,400,000 – 1,981,800)

=418,200

For year two, (1,120,000 – 160,000)

=960,000

For year three, (1,900,000 - 120,000)

=1,780.,000
5.6: BREAK EVEN POINT

The break-even point is the sales volume at which a business earns exactly no money.

ADIKA'S ELECTRICAL AND ELECTRONICS SHOP

BREAK EVEN POINT FROM YEAR ONE TO YEAR THREE

PARTICULARS YEAR ONE YEAR TWO YEAR THREE

FIXED COST
Management salary 2,000,000 180,000 160,000
License 25,000 20,000 18,000
Rent 108,000 100,000 80,000
Salaries 2,000,000 180,000 100,000
Electricity 12,200 10,000 8,000
TOTALS 4,145,200 490,000 366,000
VARIABLE COST
Labor 840,000 800,000 780,000
Advertisement 30,000 25,000 20,000
Transport 20,000 18,000 15,000
Stationaries 2,000,000 1,800,000 160,000
Insurance 12,000 10,000 8,000
water bills 8,900 8,000 6,000
Electric bills 12,200 10,200 8,200
Postage 7,600 7,000 6,000
TOTAL SALES 2,930,700 2,678,200 1,005,1000
PRODUCTION 7,075,900 2,727,200 1,371,100
COST
BEP = 10,008,184.82 49,321.977 4999,276.3221
FC/1-(CM/SALES)

APPENDIX I

RISK AND MITIGATION

Economic Downturn: A potential risk is an economic downturn leading to decreased consumer spending on electronics and
electrical products.

Mitigation. Diversify product offerings to cater to budget-conscious consumers. Implement cost-saving measures and maintain
strong relationships with suppliers to negotiate better prices.

Competition. Intense competition from established brands and local competitors could pose a challenge.

Mitigation. Focus on differentiation through superior customer service, product quality, and competitive pricing. Invest in marketing
strategies to build brand awareness and customer loyalty.
Supply Chain Disruption. Disruptions in the supply chain due to factors like natural disasters, geopolitical issues, or pandemics
could impact product availability.

Mitigation. Maintain multiple suppliers to reduce dependency on a single source. Establish clear communication channels with
suppliers for early identification of potential disruptions and have contingency plans in place.

Technological Advancements. Rapid technological advancements leading to product obsolescence could result in inventory losses.

Mitigation. Regularly monitor industry trends and consumer preferences to anticipate changes. Invest in training for employees to
stay updated on the latest technologies and products, and adopt a flexible inventory management system to minimize obsolete stock.

APPENDIX II

Kuratko, Donald H and Richard M. Hodgetts, R (2014).Entrepreneurship: A Contemporary Approach.

Graham, F & Stetan Z (2014). Guide to Business Planning. Profile Publishers. Economist Edition

Manu George and Thiongo John (2014). Entrepreneurship Education in Vocation and Technical Training. UNDP/ILO
Geneva, Turin and Nairobi Kenya.