OL’LESSOS TECHNICAL TRAINING INSTITUTE

BUSINESS PLAN
BOOKS AND STATIONARY.
P.O BOX 367
NAIVASHA.

NAME OF BUSINESS: SYMO BOOKSHOP SERVICES.

P .O BOX 868, NAIVASHA.

CENTER NAME: OL`LESSOS TECHNICAL INSTITUTE.

PRISENTED BY : WARUNGU SIMON GICHEHA.

INDEX NO : 295410010140

PAPER NO : 307B

COURSE CODE :2908

PRESENTED TO; KENYA NATIONAL EXAMINATION COUNCILIN

PARTIAL FULLFILMENT FOR AWARD OF DIPLOMA IN SUPPLY

CHAIN MANAGEMENT

SUPERVISOR : MR AMOS RUTO

EXAMINATION SERIES: JULY 2018

i
DECLARATION
I declare that, this is my own original work; therefore, I am presenting this work to Kenya
National Examination Council as partial fulfillment of diploma in Supply chain
management

STUDENT NAME: Warungu Simon Gicheha

STUDENT SIGNATURE ………………….

THIS PROJECT WORK HAS BEEN SUBMITED FOR EXAMINATION WITH THE
APPROVAL OF THE SUPERVISOR

MR. AMOS RUTO

SIGNATURE.................................................................

ii
ACKNOWLEDGEMENT
I express my sincere gratitude to the teaching staff in the Business department through
my course study
Special thanks go to my supervisor for sacrificing a lot of his time to supervise my work
I am extremely great full for his patience and advice.
Lastly I thank my parents, teachers and my classmates for the moral support.

iii
DEDICATION
This project is dedicated to my dear parents and my brothers and sisters for their love and

encouragement which enabled me to go through my course successfully.

iv
Table of Contents

DECLARATION.................................................................................................................ii

ACKNOWLEDGEMENT..................................................................................................iii

DEDICATION.....................................................................................................................4

EXECUTIVE SUMMARY.................................................................................................1

1.1 BUSINESS DESCRIPTION.........................................................................................1

1.3 ORGANITATIONBAL MANAGEMENT...........................................................2

1.4 OPERATIONAL PLAN........................................................................................2
1.5FINANCIAL PLAN...............................................................................................2
1.6 POTENTIAL RISK...............................................................................................2
CHAPTER TWO.................................................................................................................3

2.0 BUSINESS DESCRIPTION................................................................................3

2.1BUSINESS NAME.................................................................................................3
2.2 BUSINES LOCATIION........................................................................................3
2.3 BUSINESS OWNERSHIP....................................................................................3
2.4 TYPE OF BUSINESS...........................................................................................3
2.5 PRODUCT / SERVICE.........................................................................................3
2.6 JUSTIFICATION..................................................................................................4
2.7 INDUSTRY...........................................................................................................4
2.8 BUSINESS GOALS..............................................................................................4
2.9 ENTRY AND GROWTH STRATEGY................................................................4
CHAPTER THREE.............................................................................................................5

3.0 MARKETING PLAN............................................................................................5

3.1 POTENTIAL CUSTOMERS................................................................................5
3.2 COMPETITION....................................................................................................6
3.3 MARKET SHARE................................................................................................6
3.4 PRICING STRATEGY.........................................................................................6
3.5 ADVERTISING AND PROMOTION STRATEGY............................................7
3.6 DISTRIBUTION STRATEGY.............................................................................8
CHAPTER FOUR...............................................................................................................9

4.0 ORGANISATION AND MANAGEMENT PLAN..............................................9

4.1 ORGANISATION STRUCTURE.........................................................................9
4.2 MANAGEMENT TEAM....................................................................................10
 4.3 OTHER PERSONNEL........................................................................................12
4.4 RECRUITMENT AND TRAINING...................................................................12
4.5 RENUMERATION / INCENTIVES...................................................................12
4.6 SUPPORT SERVICES........................................................................................13
4.7 LICENSE/ PERMITS..........................................................................................14
CHAPTER FIVE...............................................................................................................15

5.0 OPERATION PLAN...........................................................................................15

5.2 OPERATION STRATEGY.................................................................................16
5.3 DESIGN OF BUSINESS FLOOR.......................................................................16
5.4 OPERATIONAL PROCESS...............................................................................17
5.5 RELEVANT REGULATION.............................................................................17
CHAPTER SIX..................................................................................................................18

6.0 FINANCIAL PLAN............................................................................................18

OBJECTIVES............................................................................................................18
6.2 PRE-OPERATIONAL COST.............................................................................18
6.3 WORKING CAPITAL REQUIREMENTS.......................................................18
6.4PROFORMA INCOME STATEMENT...............................................................19
6.5 PROJECTED CASH FLOW...............................................................................20
6.5.1 PROJECTED CASH FLOW FOR THE YEAR 2019......................................20
6.5.2 PROJECTED CASH FOW FOR THE YEAR 2020........................................21
6.5.3 PROJECTED CASH FLOW FOR THE YEAR 2021......................................22
6.6 PROFORMA BALANCE SHEET......................................................................23
6.7 BREAK- EVEN ANALYSIS..............................................................................24
6.8DESIRED FINANCE..........................................................................................25
6.9 PROPOSED CAPITALISATION.......................................................................26
6.91 PROFITABILITY RATIOS..............................................................................26
6.92 POTENTIAL RISK...........................................................................................27
6.93 RISKS................................................................................................................27
EXECUTIVE SUMMARY
1.1 BUSINESS DESCRIPTION
The business SYMO BOOKSHOP SERVICES is named bearing the initials of the
ownership who is Warungu Simon Gicheha. The intended idea is to sale books and
stationary.
The business will be registered as
SYMO BOOK SHOP SERVICES.
P. O BOX 868
NAIVASHA
TEL 0728623192
The business will be located in a small up coming trading center adjacent to Naivasha 20
kilometers from Naivasha town. The ownership of the site is Mr. Ishmael to who the
business ventured would seek permission from him to put a business house or will rent
the already built house/premise.
The Symo will occupy some room space from one such kind
1.2 MARKETING
The business aims higher to meet the potential customers’ need, who will be outside of
Naivasha, students of secondary, primary schools, teachers, administration of Naivasha
and even local communities among others. The business is to compete with Naivasha
bookshop series the only existing one now.
The prices of the items to be sold shall be lower than the Naivasha center.
1.3 ORGANITATIONBAL MANAGEMENT.
Symo bookshop services will be organized by the owner who will be the manager in co-
ordination with other staff who will include supervisor, store clerk, cashiers sales,
watchman and the cleaner. Each of them will perform his or her own duties with high
expectation of good public relationship to serve customers. The manager shall take
charge all the running activities of the business.

1.4 OPERATIONAL PLAN

For the effective series with Symo Bookshop Services some machines and equipment
will be required for the operation to succeed and ensure standard services to the
customers this will include photocopiers, staplers, computers, calculators, fax machine
and book binder machines.

1.5FINANCIAL PLAN
The Symo bookshop Services will require a capital base amounting to KSHS 600,000 to
start. This shall be used to pay rent, purchase tools, equipment and machines to be used in
the business. Some will go to labor services, permits, advertisements, insurance and
maintenance. The fund shall come from personal savings and donations from friends and
loans from bank. After the end of the first year the business operation is expected to make
a profit of 40%.

1.6 POTENTIAL RISK

Because of changes taking place in the curriculum, orders made for supply may be many
in the stock that might not be sold within a specified period and will therefore occupy
space and read stock because they will not have market for the sale thus causing loss. The
business also been located in the place very near to universities, there can be fear of some
looting when students will be taken against lost of property.
 CHAPTER TWO
2.0 BUSINESS DESCRIPTION
The name of the business Symo Bookshop Services has been abbreviated from the
proprietor’s name and makes it simple to surmountable to the potential customers to
come and purchase items that is books and stationery.

2.1BUSINESS NAME
SYMO BOOKSHOP CENTER
P.O BOX 868
NAIVASHA
TEL. 0728623192

2.2 BUSINES LOCATIION

The business will be located in a small upcoming trading center near Naivasha that is;
20 kilometers from Naivasha town center. There will also be a sign post for easy access
to the premise.

2.3 BUSINESS OWNERSHIP

It is a sole proprietorship business therefore the entire management will be taken care of
by the proprietor, then the supervisor to store clerk and cashier sales and watchman to be
taking charge of insecurity matters and cleaner for the cleanliness of the premise.

2.4 TYPE OF BUSINESS

The Symo bookshop services will start as a small scale business enterprise owing to the
high need which makes people travel all the way to Naivasha town 20 kilometers to
acquire the bookshop materials which Naivasha bookshop does not posses.

2.5 PRODUCT / SERVICE

The Symo bookshop services will set the text books, exercise books, magazines journals,
stationary and related items, bags, umbrellas.
2.6 JUSTIFICATION
The main aim of this kind o9f business opportunity is justifiable by the fact that its
location is accessible to both Naivasha and the local community i.e high and low income
groups. There is high population from Naivasha and its environs that goes to buy
bookshop materials, books and stationary from Naivasha town.

2.7 INDUSTRY
Symo bookshop services will operate under the trade services with the aims of making
profit and giving profit and giving good services to the customers.

2.8 BUSINESS GOALS

For the start of the business, the short term goals will be to bring the services closer to
the people at competitive prices slightly lower than the one charged by the Naivasha
bookshop which has been the only in the region. The Symo bookshop is going to be
cheaper.
The long term goal will be to create a needing culture, whereby its projected to build a
library and possibly enlarge the business to have a publishing unit with all the powerful
machines acquired.

2.9 ENTRY AND GROWTH STRATEGY

The Symo bookshop services will open daily from 7.00 am – 8.00 pm on Mondays –
Saturday and from 1.00 pm-8.00pm on Sundays. Punctuality and preservation of time
will be highly observed for the sake of customer’s needs and satisfaction.
CHAPTER THREE
3.0 MARKETING PLAN
The objectives for the marketing the Symo bookshop services shall be;
(i) To put sign posts directing to business premises
ii) To write and pin posters on the items to be sold everywhere in the targeted strategic
places

3.1 POTENTIAL CUSTOMERS

The potential customers shall comprise of students of Naivasha, teachers of Naivasha,
students of high schools, pupils of primary schools, administrators, local communities
and individual travelers among others.

INSTITUTION TARGET PERCENTAGE

TEACHERS 30%
HIGH SCHOOL STUDENTS 70%
PRIMARY SCHOOL STUDENTS 85%
ADMINISTRATORS 35%
LOCAL COMMUNITIES 40%
INDIVIDUAL TRAVELERS 20%
OTHERS 10%
TOTAL 41.4%(MARKET SHARE)
3.2 COMPETITION
The Symo bookshop is going to have a stiff competition with the Naivasha bookshop
services located at the students centre on the ground of strength and weakness.
STRENGTH
Naivasha bookshop is more established and has more products which are easily supplied
for the services to the customer, and Symo bookshop will be yet to be established.
WEAKNESS
- Naivasha charges high prices on the books
- It does not open during weekends
- The opening hours one restricted to between 8.00 am to 5.00 pm from Monday to
Friday only
- It takes some days to a week to remain closed during stock taking periods
Symo bookshop services will capitalize on that by lowering the charges, opening time
will be different from there’s that is from 7.00 am to 8.00 pm Monday- Saturdays and
1.00 pm to 8.00 –pm on Sundays and by this the customers shall be accorded
maximum assistance.

3.3 MARKET SHARE

The business intends to have a bigger market share within a short time possible
because of the low price charges and the operational time which is many as compared
to only a competitor business around which charges high and often services in les
hours therefore in return more profit is expected.

3.4 PRICING STRATEGY

This will be based on the customer oriented pricing for more attraction and the
psychological pricing whereby it will be ascertain percentage given to customers as
discounts depending on the items bought on large numbers.
3.5 ADVERTISING AND PROMOTION STRATEGY
Symo bookshop ser vices will have an initial plan to increase awareness to the customers
by placing posters in all strategic places i.e. students center, all shopping centers around.
It will consider organizing book exhibition workshop in order to promote the goods sold
in the event. There will be some gifts given for any purchase made on the materials. The
gifts can be in form of materials or discounts in prices of up to 40%.
The business also intends to advertise the services it provides throughout the country by
means of media, radio, television, and newspapers and produce a calendar in the name of
the business on which the cost of charges will be sent.

ADVERTISING
THROUGH MEDIA NO. OF TIMES AMOUNT CHARGED

RADIO 2 10,000
NEWSPAPER 3 15,000
CALENDERS 2 20,000
TOTAL 7 45,000
3.6 DISTRIBUTION STRATEGY
There will be plan to visit the neighboring schools and talk to them to sell the idea
and if willing, request them to make orders through the proprietor, so that the
business can supply them with all the materials at once during the beginning of the
year. The means to use fir distribution purposes will be on hire as a source of income,
there will be some percentage charged on the customers due to the services provided
and this will promote the business a lot.

DISTRIBUTION PLAN

SYMO BOOKSHOP SEVICES

PRIMARY OTHERS
SCHOOL
SECONDARY
SCHOOL
CHAPTER FOUR
4.0 ORGANISATION AND MANAGEMENT PLAN
Symo bookshop services being a sole proprietor ship business, the owner will take charge
of overall management and it’s expected to employ reasonable hardworking personnel in
their duties. The responsibility and hard work will enhance efficiency in the operation of
the business; the good public relationship will be displayed right from the top person to
the lower rank persons.

4.1 ORGANISATION STRUCTURE

PROPRIETOR / MANAGER

SUPERVISOR

CASHIER
STORE
WATCHMAN

CLEANER
4.2 MANAGEMENT TEAM
The management team will be composed of a supervisor, a store clerk, a cashier, a
watchman, and cleaner. The overall will be the proprietor or manager to ensure that all
duties are run promptly and the arrangement of items to be in a good orderly manner.
The supervisor will take charge mostly when the proprietor is away. There will be a store
clerk to make sure that the store items are up to date and there should be no shortages.
The cashier will handle cash on daily basis before handing it over to the manager.
The watchman will position himself next to the cashier at the door to be checking receipts
and certificates and also the items bought. He will also ensure proper security of the
place.
The cleaner will be taking charge of the cleanliness of the rooms including dusting of
shelves and books. All the employees will be required to have a minimum o0f
qualification of form four level of education.
EMPLOYEES RESPONSIBILITIES AND QUALIFICATION.

POSITION QUALIFICATION RESPONSIBILITIES /

JOB DESCRIPTION
1 SUPERVISOR Form four certificate with grade C and -general supervision of staff and
above premise
Must have 1 year of experience in - ensure workers perform duties
related field. -opening and closing the business
Ensure there is enough stock in store
2 STORE CLERK -must have A.C.N.C stage II and above -keep records of store buildings
-form four certificate with grade D plus -arrange stocks for easy
and above identification
3 CASHIER -must have form four certificate with -to take charge of finances on sales
grade C minus and above -hand over cash collection onto the
Must have accounts knowledge. manager before closure
4 WATCHMAN -must have a primary certificate and - take charge of security within
above and outside the premises
Must have good conduct from known - check receipts of items
security firm before being taken out

5 CLEANER Must have a primary certificate and - take charge of cleanliness of

above the room including dusting of
shelves
4.3 OTHER PERSONNEL
When many goods will be supplied to the proprietor in either a lorry or the work load is
heavy, there will be need to employ people temporarily or hire them to conduct the duties
and pay them immediately depending on the business agreement at that time. Their duties
will be mainly to offload items and carry them into the store.

4.4 RECRUITMENT AND TRAINING

The Symo bookshop services will come up with a policy on employment of staff and it
will be based on good qualification and performance. The position will be advertised to
suitable applicants and fore the best success of getting the right person, the need will be
consult experts in the ideal fields i.e accounts for stores and cashier to conduct the
interviews. All application will be accompanied with the detailed documents required.
TRAINING
There will be a training policy for the employees who will be based on workshop and
seminars and induction courses will be offered because technology changes everyday in
our lives. This will be a mode to improve the status in terms of getting promotions i.e a
cleaner will be moved to store clerk.

4.5 RENUMERATION / INCENTIVES

Remuneration of staffs will depend on the experience and qualification of the position
being held by an individual basing it on good performance and being obedient. The
reviews will be considered after every two years.
INCENTIVES
The management will consider the welfare of the staff in a better manner by organizing
for them lunches on daily basis and some gifts shall be given to them at the end of every
year. They will be provided with dust coats and provision of medical cover treatment thus
making them work in conducive environment.
SALARIES / WAGES
EMPLOYEE NO. OF BASIC SALARY TOTAL
EMPLOYEES PER MONTH REMUNARATION
PER MONTH
SUPERVISOR 1 10,000 10,000
STORE CLERK 1 8,000 8,000
CASHIER 1 8,000 8,000
WATCHMAN 2 12,000 12,000
CLEANER 1 5,000 5,000
TOTAL 6 43,000 43,000

4.6 SUPPORT SERVICES

The Symo bookshop will have support services such as insurance, banking and hotel
services.
INSURANCE
The business is to be insured by the insurance company Naivasha town branch P.O BOX.
4679 NAIVASHA TOWN; in co-operative bank house and its location is 15 kilometers
from the business. The covers will be against dangers like fires and losses.
BANKING
The business will have an account with the national bank of Kenya, Naivasha- Naivasha
town branch in which to deposit the cash sales and apply for loans to support for
promotion of the business.
HOTEL SERVICES
The proprietor will make an arrangement with the valley hotel P.O BOX 10 Naivasha
which is about 50 meters from the business. This will be to help promote and provide the
employees with meals.
4.7 LICENSE/ PERMITS
As the law of the land states, all the business in operation must have licenses from the
local government authority of which some fee is charged. The business will acquire the
license from Naivasha county council. The licenses are going to be both the trade and
health licenses and the required fee is ksh. 3,000 per year which is renewable at the end
of every year.

PERMIT
The business will get such certificate from local authority and it will state that the
business is allowed to operate under which type of business. This will be acquired from
District officer’s office at a fee of ksh. 500.

BY-LAWS
These are based on health and safety regulations, hence working environment should be
favorable to both workers and the community around. These include:
- public health act| (cap 242)
- trading license act (cap 497)
- Registration business act (cap 499) registration as a sole proprietor.
CHAPTER FIVE
5.0 OPERATION PLAN
The business will require a reasonable capital to finance the tools and equipment in order
to ensure maximum profits. A variety of machines such as copiers, staplers guillotine,
book binder, computer and calculator among many others will be required for the
standard service to customers.
5.1 CAPACITY UTILISATION
Equipments / Methods of supplier Amount (ksh)
premise acquisition
Building Rent ______ 10,000

Purchase K.I.E Jomo

Kenyatta 150,000
Text books Foundation

Purchase K.I.E Jomo

Kenyatta 5,000
Foundation
Longman kenya

purchase macmillan 20,000

TOTAL 185,000
5.2 OPERATION STRATEGY
Capital is the major operational resource requirement to operate the business. It is
necessary for the purchase of equipments and paying salaries for the business
maintenance.
The source of capital is as follows
PARTICULAR AMOUNT IN KSH.
PERSONAL SAVINGS 300,000
BANK LOAN 400,000
GIFTS 50,000
TOTAL 750,000
5.3 DESIGN OF BUSINESS FLOOR

PHOTOCOPYING
MACHINE

STORE

MANAGERS
OFFICE

CASHIER

BOOK
SHELVES

BOOKS
DISPLAY

5.4 OPERATIONAL PROCESS

It will include ordering, acquisition, and selection, marketing storage, operational costing
and labour.
Received books are arranged in the shelves.

a) ORDERING; this is where the goods required by potential customers are ordered,
the list is written and sent to the supplies in advance to organize the type of goods to
supply
b) ACQUISITION; it is the process of acquiring the gods ordered by placing L.P.O
to the supplier and the manager records the number of goods ordered
c) SELECTION; here the goods are checked to know the damaged ones and to
ascertain whether they are the right goods.
d) MARKETING this is to create a market for a customer by making known the type
of goods which are available and affordable at reasonable prices through
announcements using microphone and music for attraction.
e) STORAGE the books are going to be stored in a display manner to attract
customers.
f) OPERATIONAL COSTING. There will be an immediate need to purchase
photocopy machines at a cost of 40,000 shillings
g) LABOR COSTING. Since the Symo Bookshop Services is mainly to offer some
technical services, there will be need to employ skilled personnel and to retain them.
Their pay will be on monthly basis.
Any other benefit will be accorded basing on a good performance.

5.5 RELEVANT REGULATION.

In the Symo Bookshop, the staff will be expected to be punctual at all times. They
must be in uniform that is dust coats. There will be no smoking and drinking inside
and the unwell will be taken to hospital. Any case of absenteeism among the workers
must be reported to the supervisor.
CHAPTER SIX
6.0 FINANCIAL PLAN

OBJECTIVES
The business will target to capture large number of customers who frequently go for
shopping in Naivasha town. The group will aim to create good will with suppliers so that
materials will be available for full time.

6.2 PRE-OPERATIONAL COST

REQUIREMENTS AMOUNTS
1 RENT 1000 X 12 12,000
2 REGISTRATION COST 1,000
3 PERMIT AND LICENSE 3,400
4 TRANSPORT 10,000
5 ADVERTISMENT 1,600
TOTAL 145,000

6.3 WORKING CAPITAL REQUIREMENTS

CURRENT ASSETS CURRENT LIABILITIES

Cash = 155,000/= Creditors = 50,000

Bank = 100,000/= Working capital = 205,000

Stock = 225,000/=

WORKING CAPITAL = CURRENT ASSETS - CURRENT LIABILITIES

= 255,000- 50,000 = 205, 000

6.4PROFORMA INCOME STATEMENT

SALES 2019 2020

300,000 450,000
LESS CLOSING COST
OF SALES
OPENING STOCK --------- 155,000
PURCHASES 255,000 50,000
100,000 10,000
LESS CLOSTING STOCK 50,000 95,000

105,000 95,000
195,000 355,000

LESS EXPENSES 1ST YEAR 2ND YEAR

PRE-OPERATIONAL 50,000 50,000
COST
BANK OVERDRAFT 60,000 60,000
ELECTRICITY 6,000 6,000
WAGES 43,000 43,000
OTHER EXPENSES 6,000 6,000
165,000 305,000
NET PROFIT 30,000 50,000
 6.5 PROJECTED CASH FLOW
6.5.1 PROJECTED CASH FLOW FOR THE YEAR 2019
PARTICULARS JAN FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
Cash Balance 1400000 2051000 2887000 4029000 5021000 5664000 6346000 7028000 7501000 8183000 8852000 9730000 68692000

Cash inflow

Cash sales 1200000 1300000 1300000 1200000 1200000 1300000 1300000 1200000 1300000 1400000 1200000 1200000 15200000

Data collection 400000 450000 450000 700000 350000 300000 300000 200000 300000 200000 600000 300000 4750000

Loans 300000 350000 306000 200000 400000 400000 300000 200000 3000000 2450000

Total cash inflow 1900000 2100000 2056000 19000000 1750000 2000000 2000000 1700000 1800000 1900000 1800000 1500000 22400000

Total cash available 3300000 4157000 4943000 5929000 6771000 7664000 8346000 8728000 9301000 100083000 10652000 11230000 91092000

Cash outflow

Rent 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 600000

Salaries 148000 148000 150000 150000 148000 148000 148000 150000 150000 1520000 1520000 1520000 1796000

Raw materials 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 7512000

Transport bill 50000 50000 60000 60000 50000 50000 50000 60000 60000 60000 70000 70000 690000

telephone bill 10000 10000 12000 11000 11000 12000 12000 12000 11000 10000 11000 11000 132000

Repairs &maint 20000 20000

Stationery 5000 5000 6000 5000 6000 6000 6000 5000 6000 6000 6000 6000 67000

Loan repayment 320000 370000 420000 210000 420000 420000 320000 210000 320000 2890000

Consultancy 15000 15000 150000

Miscellaneous 5000 5000 6000 6000 5000 6000 6000 5000 6000 6000 6000 7000 70000

Total cash outflow 1249000 1264000 1344500 908000 1107000 1381000 1318000 1227000 1118000 1231000 9229000 922000 13492000

Net cash out flow 2051000 2887000 4029000 5021000 5664000 6346000 7028000 7501000 8183000 8852000 9730000 10308000 77600000
 6.5.2 PROJECTED CASH FOW FOR THE YEAR 2020
PARTICULARS JAN FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
Cash Balance 1400000 2051000 2887000 4029000 5021000 5664000 6346000 7028000 7501000 8183000 8852000 9730000 68692000
Cash inflow
Cash sales 1200000 1300000 1300000 1200000 1200000 1300000 1300000 1200000 1300000 1400000 1200000 1200000 15200000
Data collection 400000 450000 450000 700000 350000 300000 300000 200000 300000 200000 600000 300000 4750000
Loans 300000 350000 306000 200000 400000 400000 300000 200000 3000000 2450000
Total cash inflow 1900000 2100000 2056000 19000000 1750000 2000000 2000000 1700000 1800000 1900000 1800000 1500000 22400000
Total cash 3300000 4157000 4943000 5929000 6771000 7664000 8346000 8728000 9301000 100083000 10652000 11230000 91092000
available
Cash outflow
Rent 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 600000
Salaries 148000 148000 150000 150000 148000 148000 148000 150000 150000 1520000 1520000 1520000 1796000
Raw materials 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 7512000
Transport bill 50000 50000 60000 60000 50000 50000 50000 60000 60000 60000 70000 70000 690000
telephone bill 10000 10000 12000 11000 11000 12000 12000 12000 11000 10000 11000 11000 132000
Repairs &maint 20000 20000
Stationery 5000 5000 6000 5000 6000 6000 6000 5000 6000 6000 6000 6000 67000
Loan repayment 320000 370000 420000 210000 420000 420000 320000 210000 320000 2890000
Consultancy 15000 15000 150000
Miscellaneous 5000 5000 6000 6000 5000 6000 6000 5000 6000 6000 6000 7000 70000
Total cash 1249000 1264000 1344500 908000 1107000 1381000 1318000 1227000 1118000 1231000 9229000 922000 13492000
outflow
Net cash out flow 2051000 2887000 4029000 5021000 5664000 6346000 7028000 7501000 8183000 8852000 9730000 10308000 77600000
 6.5.3 PROJECTED CASH FLOW FOR THE YEAR 2021
PARTICULARS JAN FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
Cash Balance 1400000 2051000 2887000 4029000 5021000 5664000 6346000 7028000 7501000 8183000 8852000 9730000 68692000
Cash inflow
Cash sales 1200000 1300000 1300000 1200000 1200000 1300000 1300000 1200000 1300000 1400000 1200000 1200000 15200000
Data collection 400000 450000 450000 700000 350000 300000 300000 200000 300000 200000 600000 300000 4750000
Loans 300000 350000 306000 200000 400000 400000 300000 200000 3000000 2450000
Total cash inflow 1900000 2100000 2056000 19000000 1750000 2000000 2000000 1700000 1800000 1900000 1800000 1500000 22400000
Total cash 3300000 4157000 4943000 5929000 6771000 7664000 8346000 8728000 9301000 100083000 10652000 11230000 91092000
available
Cash outflow
Rent 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 600000
Salaries 148000 148000 150000 150000 148000 148000 148000 150000 150000 1520000 1520000 1520000 1796000
Raw materials 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 7512000
Transport bill 50000 50000 60000 60000 50000 50000 50000 60000 60000 60000 70000 70000 690000
telephone bill 10000 10000 12000 11000 11000 12000 12000 12000 11000 10000 11000 11000 132000
Repairs &maint 20000 20000
Stationery 5000 5000 6000 5000 6000 6000 6000 5000 6000 6000 6000 6000 67000
Loan repayment 320000 370000 420000 210000 420000 420000 320000 210000 320000 2890000
Consultancy 15000 15000 150000
Miscellaneous 5000 5000 6000 6000 5000 6000 6000 5000 6000 6000 6000 7000 70000
Total cash 1249000 1264000 1344500 908000 1107000 1381000 1318000 1227000 1118000 1231000 9229000 922000 13492000
outflow
Net cash out flow 2051000 2887000 4029000 5021000 5664000 6346000 7028000 7501000 8183000 8852000 9730000 10308000 77600000
6.6 PROFORMA BALANCE SHEET
OPENING BALANCE SHEET AS AT 1ST JANUARY 2019
LIABILITIES ksh. ASSETS ksh.
capital Fixed assets
Owner equity 40,000 Machines and tools 50,000
Others 50,000 Current assets
Bank loan 300,000
Each 700,000
TOTAL 750,000 750,000

CLOSING BALANCE SHEET AS AT 31ST DEC 2020

LIABILITIES KSH ASSETS Ksh.

Capital equity 400,000 Fixed assets
Bank loan 300,000 Machines and tools 50,000
Others 50,000
Add net profit 3,954,800 Current assets
Current liabilities. Cash 4,714,200
Provision tax 9,400 Debtors 50,000
creditors 100,000

TOTAL 4,814,200 4,814,200

6.7 BREAK- EVEN ANALYSIS

VARIABLE COST
 50,000
PURCHASES
40,000
TRANSPORT
TOTAL 90,000
FIXED COST
SALARIES 516,000
LICENSE 3,400
INSURANCE 24,000
BANK INTEREST 60,000

TOTAL 603,400

9,438,400 – 90, 000 = 9, 348 400

CONTRIBUTION SALES RATIO = 155,000 X 100% = 51.7%

300

6.8DESIRED FINANCE

PRE- OPERATIONAL COST 145,000

FIXED ASSETS 50,000
WORKING CAPITAL 205,000
TOTAL 400,000
6.9 PROPOSED CAPITALISATION

CAPITAL 300,000
BANK LOAN 400,000
DONATION 50, 000
TOTAL 750,000

6.91 PROFITABILITY RATIOS

(I) GROSS PROFIT RATIO = GROSS PROFIT

TOTAL SALES

1ST YEAR = 330,000 = 1.1

300,000
(II) RETURN ON EQUITY = NET PROFIT TAX
OWNERS EQUITY

195,000
155,000

RETURN ON INVESTMENT = NET PROFIT BEFORE TAX= INTEREST

TOTAL INVESTMENT

= 355,000 + 50,000 = 19.96

205,000

6.92 POTENTIAL RISK

6.93 RISKS
This sub topic describes the critical potential risks that are likely to affect the business
and possible solutions to overcome them. The following are the anticipated risks
a) Government regulations.
Government laws and policies keep on changing now and then. some of the changes can
affect the business negatively like for the case of learning changes in curriculum will
create congestion for books that will not be on the market use.
Therefore they will be dead stock so the business will run at a loss.
b) Location risks
 The area where the business is located is very near to the school. It might happen that
one time when students go on rampage, the business premises can be looted and damages
caused by students can cause e a great loss.
c) Fire break out
The business might have fire break out because of electricity, this can be short circuit or
a customer may drop a cigarette on litter and may cause a fire
d) Competition.
Since the business will compete with the other established one s that is Naivasha
bookshop services, it will mean that the price of the materials in Symo bookshop will go
down for the sake of getting customers.
SOLUTIONS
a) The competitors;
The government will make aggressive advertisement through community functions and
friends, media, i.e. radio, TV and newspapers.
b) The Symo bookshop services will reinforce the building by installing burglar proof
doors and windows.
c) Fire break outs. The business will put up fire extinguishers and smoke detectors and
also will train employees on how to use and handle this.
The electric wire installation will be done properly.

6.93 RISKS ANALYSIS TABLE

LOCATION OF THE BUSINESS
 NAIVASHA – NAIROBI HIGHWAY

TO

KEROCHE NAIVASHA TOWN

INDUSTRY
SYMO
BOOKSHOP NAIVASHA
BOYS HIGH
SCHOOL

MARKET