BUSINESS PLAN

TITTLE PAGE

BUSINESS NAME: JANY AUTO REPAIRS

P.O BOX 35 LUANDA VIHIGA

MOBILE, 0791223286

OWNER/PRESENT: JAVAN NYAPELA ESILABA

P.O BOX 35 LUANDA VIHIGA

MOBILE, 0791223286

DESCRIPTION:

JAR is a sole proprietorship owned by Mr. Javan Nyapela. The owners is to run profitable
business by ensuring high quality service and products are offered in order to meet demand and need of
customer efficiently.

Products of the business are to be marketed through advertising, promoting and networking, JAR is
working hard in order to win over her competitors by providing services at cheap price to increase
performance rate.

INVESTMENT: Required Ksh 800,000, ownership contribution is 30% (240,000)

CONFIDENTIALITY: A written statement of non-disclosure is required prior to viewing of this plan.

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DECLARATION
I JAVAN NYAPELA ESILABA declare that the information contained in this work is
absolutely and entirely my idea and has never been presented by anyone in whatsoever level to
any examination body whatsoever for the award of a certificate, diploma, degree or master’s
certificate.

CANDIDATES NAME: JAVAN NYAPELA ESIBALA SIGN…… DATE:………..

SUPERVISOR: SIGN………… DATE………...

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 DEDICATION
I dedicate this work to God who has given me good health and life, and for enabling me to come
up with this work. I extended it to my lovely family members, my dear beloved mum, and to my
uncle. May God bless you for the support that you all of you gave me.

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 ACKNOWLEDGEMENT
First I really thank almighty God who has given me life, strength, knowledge and wisdom on
how to go about this work.
My special gratitude also goes to the following people for helping me and guiding towards the
production of this work. I thank my dear beloved Mom who has been with me through all
difficulties and who really encouraged me to go on and by supporting me financially and
emotionally.
My thanks also go to my Uncle for his financial support towards the production of this work. I
also acknowledge my course mates especially John for giving me guidance on how to produce
the work when I was at the point of giving up.
I also appreciate my lecturer and supervisor Mr. Kimani for his guidance and his educational
support by giving me knowledge on how to come up with this business plan.
Finally my specials thanks goes to my friend Joseph who gave me support towards this work.
May God bless you abundantly for your great support towards the achievement of this work.

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 TABLE OF CONTENTS
CONTENTS PAGE NO.
DECLARATION………………………………….……………………………………………..i
DEDICATION…………………………………………………………………………………….ii
ACKNOWLEDGEMENT………………………………………………………………………..iii
TABLE OF CONTENT………………………………………..…………………………………iv
ABSTRACT………………………………………….………….……………………………….vi
DESCRIPTION………………………………………………………………………………….vii
INVESTMENT………………………………………………………………………………….viii
CONFIDENTIALITY……………………………………………………………………………ix
ASSUMPTIONS…………………………………………………………………………………x
EXECUTIVE SUMMARY……………………………………………………………………0.1
MARKETING PLAN…………………………………………………………………………..0.2
ORGANISATION AND MANAGEMENT PLAN……………………………………………0.3
PRODUCTION PLAN………………………………………………………………………….0.4
FINANCIAL PLANS…………………………………………………………………………..0.5

CHAPTER ONE
Business name………………………………..…………………………………………………….1

Business location and conducts……………..……………………………………….……………3

Form of business ownership……………………………………………...………….……………3
Type of business……………………….……….…………………………………………………4
Product and services…………………..………………………………………………………….4
Justification of opportunity……………….………………………………………….……………5
The industry……………………………….………………………………………………………5
Goals of business……………………….………………..……………………………………..…6
Entry and growth strategy…………………………………..…………………….………………6

CHAPTER TWO
Marketing objectives……………………………………….………………….…………………7
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Customers market……….………..…………………………………………….…………………7
Market share………………………………………………………………………………….……7
Competition……….………………………………………………………………………………7
Product development strategy………………………………………………………………..……8
Market penetration strategies……………………………...………………………………………8
Action plans……….…………………………………………...………………………………….9

CHAPTER THREE
Management objectives.....……………...………...………………..…………………………..15
Management team……………………………………………….………………………………15
Staffing ……………...………………………………………….………………………………15
People system……………………………………………………………….……………………15
Legal system….………………………………………………………………………………….16
Professional services ………....……………..…………………………………………………16
People action plan ………..…….………………………………………………………………16

CHAPTER FOUR
Operational objectives…………………………………………………………….……………23
Facilities and capabilities………………………………………………………….…………….23
Production strategies……………………………………………………………………………..24
Production process…….…………………………………………………………………………24
Regulation affecting operation…………………………………………………………………24
Operational action plan…………………………………………………………………………..24

CHAPTER FIVE
Financial objectives and assumptions…………………………….…………….……………26
Pre-operational expenses …..……………………………….……….……………......................27
Operational expenses …………………………………………..………………………………28
Proforma cash flow statement …………………………………………………………………28
Profit and loss income statement ...………………….…….…………………..……………….28

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Proforma balance sheet ……………………………..……………………….…..…………….29
Break even analysis……………………………………………………………………….…..29
Performance analysis…………………………………………………………………………..29
Desired financing …………………………………………………………………………..…..30
Proposed capitalization …………………………………………………………………………30
Action plan ………………………………………………………………………………………30

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ASSUMPTIONS

The owner is to meet all legal requirements before starting the business.

Qualified personnel are to be remitted and retained in the business.

Modern technology is employed in production process and record keeping.

The business provides high quality services to meet customers need.

The business is to purchase a land that provides space for expansion.

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EXECUTIVE SUMMARY

1.1 BUSINESS DESCRIPTION

JANY AUTO REPAIRS is the formal name of the business which is to be established at the start of
2022 as a sole proprietorship. JAR commences immediately in January and concentrates mostly on
sales of its services such as major serving and minor serving, repair or body repair of engines and
others. The business is located at Luanda Town in Vihiga County along Kisumu Busia road. JAR is
managed by the owner Mr. Javan Nyapela Esibala who has contributed 30% of the capital Ksh
240,000 and attained the remaining from bank loan Ksh 560,000.

1.2 MARKETING PLAN

JAR serves various customers including institution campus, public servants, individual and domestic
customers. JAR holds a good share even though it takes a lot of competition from its present and
potential competitors such as West Bunyore auto repairs and other garages. JAR has come up with
strategies such as pricing strategies, sales policies, promotion and advertisement strategies, and
distribution strategies

1.3 ORGANISATION AND MANAGEMENT PLAN

JAR has to grow and expand successfully. Its owner has remitted and selected qualified employees
that are ready to work. Training is to the employees mostly at the end of the year or when need
arises. This is done to ensure employees are equipped with the necessary knowledge and skills.
Policy rules and regulations have been laid down in the form to guide employees on what they are
supposed to do and not to do. This helps employees to be cautions and committed. Punishment is
given to those who disobey the rules and regulations.

1.4 OPERATIONAL/ PRODUCTION PLAN

JAR deals with offering common services though they have a great and clear distinction from other
similar to them, to make that uniqueness of JAR services continuous, JANY, all use modern
technology and machines during service offering. The arrival and departure time of JANY workers
has been schedules and each employee has been assigned his/her duties.

1.5 FINANCIAL PLAN

The financial plans determine financial requirements of venture which add up to Ksh 800,000. JAR
has set up the financial objectives and assumptions concerning profits and loss which totals to Ksh
2,245,400 balance sheet Ksh 322,000 and cash flow of the business. Pro -operational, operational
and personal expenses have to be estimated in order to calculate the total investment before the
start of the business. Cash flow, profit and loss, balance sheet statement shall be done yearly to
determine the growth of the business. Fixed cost, variable cost and sales in each year would used to
calculate the break over point of the business. This business requires Ksh 800,000 with 30% of
owner’s contribution and the remaining will be obtained from friends, family members and
investors.

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 CHAPTER ONE

BUSINESS DICRIPTION

1.1 BUSINESS NAME

a) Identity

The business will be called JANY AUTO REPAIRS (JAR Forthwith). The acronym JANY came from the name
Javan Nyapela the owner’s name. The name JANY stands for Jovial Auto spare, National and youthful.
Auto repairs explain the main activity of the business.

JAR’s Logo provides clarity of the business. The letter ‘J’ simply is the first name of the business name.
The Logo is unique and original. It has spanner on it showing repairs.

The motto is quality repair with service and for the mission is to offer best and quality repair and
servicing. The connectivity of motto and mission enable me to come up with vision which settles on “To
be loading and best automobile repair in the area.

b) Opportunity choice

Researching the area I realized due to high population and investors in the area the number of
vehicles have increased. Due to that vehicle needs servicing since the owner has knowledge on
auto repair and entrepreneurial skill the area suited for the business.

1.2 BUSINESS LOCATION AND CONTACTS

a) Business location

i) Market area- Vihiga County

The County is located in western part of Kenya. It borders Nandi, Kisumu, Siaya and Kakamega Counties.
Vihiga County has an area of 530.9km2 and a population of about (47% males, female 53%) and age
distribution of 0-14 years (44.2%), 15-64 years (49.4%), 65 years (6.1). Has a good road network that
connects to Busia than Uganda. Hill of vision which attract tourist, financial service like commercial
banks and micro-finance institutions. The county has many education institution and health institution
too.

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 ii) Trade area- Luanda

JAR is located in Luanda market centre in Vihiga County. It has roads that connect to Kakamega County,
Siaya. This make it strategically situated. At Luanda JAR is to conduct its activities, the population density
49,346, and road. This contributes to continuity of the business and growth.

iii) Premises site

JAR is located in Luanda in Vihiga County. It is located at junction to Siaya and Busia road. The place is
strategically located since the road is linking Uganda. JAR seats on 1/2 an acre piece of land, payment of
deposit amounting to Ksh 32,000. Thereafter, a constant monthly rent of Ksh 32,000 per month. Rate is
both is both water and electricity which requires connectivity deposits and relevant agencies. KPLC Ksh
11,000 and Water Company. A monthly consumption is estimated Ksh 6,000and Ksh 4,000 respectively.
JAR premise has enough parking space to accommodate all client and vehicles to be repaired.

b) Contact
JAR communication mode of contact both internally and externally includes postal services,
mobile phones, telephone and internet emailing. The services require deposits and pre-
payment to the landline and internet connection go for Ksh 550 and 3000, post for Ksh 450.
JAR uses private post office box 41115-80100NTP Vihiga:
Mobile phone 0791223286
Email address [email protected]

1.3 FORM OF BUSINESS OWERSHIP

a) Ownership`

JAR will operate as sole proprietorship under the ownership of Javan Nyapela. The owner is to manage
and control the independently, motivating and strategizing his employees. The owner decided to run the
sole proprietorship business because it is cheap to raise capital and make decision on her own. A
registration fee of Ksh 1,000 is required plus meeting other government and local authority
requirements.

b) Sponsorship

The owner is a youthful diploma holder in automotive engineering that is committed to teamwork and
can work effectively without supervision. He is computer literate. Community can benefit through
guiding and counseling, also motivated speeches. Entrepreneurial and managerial skills gained gives the
owner ability standard to operate JAR.

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A total of Ksh 800,000 is required to cater for initial and operation of the business, 30% of it will be
directly from the owner and the rest 70% from bank loan.

1.4 TYPE OF BUSINESS

a) Type

JAR business will be of repairing vehicles and vehicle servicing. The services offered after repair for
customer’s vehicle will be unique. After repair vehicles will be wiped very well and cleaned. JAR
customers bring attention to customers who distribute to various places to reach many people through
marketing work done, and services offered by advertising and ensure that the standards and good
quality service are met.

b) Nature

JAR is a start up industry, new in the market area with already existing product but the uniqueness lies in
the highly the way service is offered and additional service to the vehicle. JAR operates 12hours in 6
days of the week. It will not operate on Sunday.

1.5 PRODUCT AND SERVICES

a) Overall products

The business reinstated in the market shall be involving in repair of vehicle and vehicle servicing.

b) Engine repair

Repair of engine will be always done or replacement of engine if need but when the damage is small it
will be repaired.

c) Brake

Brake requirement will be done also replacement of linings and pad. Brake adjustment will also be the
service offered

d) Wiring

Wiring problem and connection will be done, fixing lamps and other wiring problems to be done.

e) Servicing

Serving of the vehicle will be done that is, changing oil, adjusting brakes, replacing oil filters.

f) Others

Others will include cleaning of vehicles that is, wiping windscreens. That will be enjoyed by customers.

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1.6 JUSTIFICATION OF OPPORTUNITY

a) Business swot

i) Internally analysis

I being the manager of the business decision making will be easily since the manager has acquired some
entrepreneurial skills. Weakness will come where labor is to be applied; since number of employees is
few.

ii) External analysis

Due to the increasing number of vehicles in the area, the business and travelers will result to wide range
customers. Luanda market being strategically located, it is developing fast due to transport network.

b) Viability of opportunity

Vihiga County is strategically located on main road; the place is suitable for trade this makes the
business to succeed. JAR dealing with mechanic, Luanda which has road that connects to Kakamega,
Busia and Siaya. Infrastructure in the area is good making the place busy. Banks, financial institutions
and social ammonites such as school, hospital and churches are easily accessible. Many security
personnel in the area have enhanced security. Availability of water, electricity and telecommunication
improvement are good signs that there is pro-business. Commodities and equipment to use are
available, this is because Kisumu and Kakamega town are near. JAR is to operate 12 hours from Monday
TO Saturday. Skilled labor amongst the employer and employees has enhanced the viability of the
business opportunity through good management of financial accounts leading to smooth running of the
activity in the operation areas, good customer relation has increased market share hence viability.

1.7 THE INDUSTRY

a) Identity and size of main industry.

The proposed business will engage it’s self in repair and servicing of the vehicles. The proposed business
will fall under Moto vehicle industry. The business will be a medium size business since it targets both
low and high class customer in community and the surrounding.

b) Characteristics

A JAR key characteristic is capital required. It means that capital is to be acquired from different sources
like loans from financial institution and personal saving. This is to enhance growth of the business. The
industry is intensively and brings a wave of excitement to customers through unique services offered to
them.

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 c) Trends and future prospects of the industry

It repairs and services the vehicle by use of modern means and good enough. JAR is manageable and
profitable to a range of between 30% and 50%. The industry is looking forward to the best services given
and lives confident that the business is well equipped for growth and expansion.

d) Own business positioning

In one year’s time JAR is expected to have grown and reached a 15% of the industry. By all effort the
owner and the employees, JAR is expected to grow faster due to its location and resource

1.8 GOALS OF THE BUSINESS

a) Vision

JAR vision is to be leading and be the best automobile repair in the area.

b) Objectives

i) Short term objectives

 To achieve profit of 60% in a year
 To operate business that can be able to offer service to five customers at a time
 To start with five qualified employees who will assist in work

ii) Long term objectives

 To expand and work under large scale business
 To increase number of employees
 To increase profit to 80% in the following year
 To use new technology to diagnosise vehicle

1.9 ENTRY AND GROWTH STRATEGY

a) Entry strategy
 Offer quality service to customers
 To keep better and proper books of the account.
 Introducing new machines of diagnosis of vehicle problems
 Open branches of the garage other places

b) Growth strategy
 To offer training to students
 To develop good partnership with other firms stakeholders
 To introduce new technology inform of proving productivity

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  To study and carry out a market to determine to determine the level of consumption.

CHAPTER TWO

MARKETING OBJECTIVES

2.1 MARKETING OBJECTIVES

 Capture a market share of 2% in year 1 and increase to 5% in year 2.

 Capture 25% of unit customer within the market area
 To repair vehicles that will total Ksh 4,200,000 in a year
 To spend sales obtain from minor repair on promotion and marketing in years that is about
the sales obtained from serving the vehicles

2.2 CUSTOMERS MARKET (TARGET MARKET)

a) Overall

The largest markets for JAR are companies and other domestic customers. Its potential market
opportunity is to serve more customers. This will be achieved by repairing 10 vehicles per day. JAR
customers include those who are of high class, middle class and low levels in Maseno, Vihiga, Majengo
stretching to Siaya among other areas. JAR manages to meet 70% of all product categories provided by
competitors.

c) Institutions

Institutions vehicles will also be repaired by JAR, where JAR focuses on them since it is entry strategy to
ensure strong visibility internally and externally. Availability of more vehicles and most getting defaults
make the demand high.

d) Retailers

This category includes large company and mini company and firms which spread around main trade
area. They are keen on vehicle serving and replacement of spare parts, replacement of new parts on
vehicles. These customers need quality product and good services admitting continuity in the business.

e) Individual

This group of customers include, people with personal cars, teachers cars. JAR will be offering services to
any customer in need of the service.

f) Hospital

They include district, private hospitals, dispensaries and carnies whose supplies originates from Luanda
town. Due to vehicles damages and need of service the services will be offered by JAR.

g) others

These include NGO’S, churches, one time customers who have vehicles which need emergency repair.

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 2.3 MARKET SHARE (DEMAND ANALYSIS)

a) Overall potential demand

Moto industry has made tremendous growth all over Vihiga County due to improved roads and
micro use in vehicles in the area JAR current share is 25% compared to its competitors, overall
suppliers shares 30% highest, main customers making 14% highest and major customer making 48%
the highest.

h) Current supply of products by customers

JAR competes with other Auto repair industries in the county and has managed a 38% share market with
other attaining the remaining 58%. JAR intends to grow bigger and attain a market share of more than
50% in the next two years. Currently the market the market share for all Auto repairs is 70 in total with
JAR having 25.

i) Current supply of products to customers

The current share of main products to all suppliers stands 65 with public servants 32% business people
10%, other customers 12% institution 32% and others 9%. Highest demand is the servicing of the
vehicles.

j) Own business apportionment and per major customers

JAR manages to repair 300 vehicles per month which 40% is of the company, 6% business people 4%
people with personal cars, 200 institution, 15% others servicing in production take 40% repair of brakes
20%, engine 15% replacement of spares 32%.

2.4 COMPETION

a) Competitors

Although there are many people running the same business in Luanda town some of them produce
substitutes. The major competitor is West Bunyore auto repair and other small garage around. JAR
has one branch with 10 workers. While other garage has more branches with a lot of employees.
Competing on one market JAR has tent to increase its products and services offered there by
increasing profitability. JAR profit is increasing due to difference with competitors prices. JAR opens
from Monday to Friday for 12 hours and weekends for 24 hours.

k) Own business analysis

i) Market swot analysis

JAR offer high quality products and gives discount and its price are negotiable to the regular and trusted
customers. JAR has ensured good relationship with customers. JAR use common media for
advertisement such as radio, television and posters for promotion. JAR premise is located in area with
high population, secured and easily accessible. JAR produces product basing on the customer
availability.

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 ii) External analysis

JAR offer high quality product which are highly demanded by customers. The population growth is an
opportunity that JAR faces as they are venturing in similar business. The fluctuation of prices of products
due to technologies changes and vehicle increase.

iii) Positioning of JAR

JAR grows at high rate with increasing profit. JAR intends to grow by other sub branches in the first two
years. JAR provides high quality products with affordable prices making it easy to customers, also
offering parking for customer.

iv) Advertisement

JAR has designed various promotion items which are used in advertising the business. Such items which
are used include signboards, business cards, calendars, caps, T-shirts and among other things. This is to
cost approximately Ksh 15,000 and is expected to use Ksh 1000 monthly to advertise itself. This
promotes the image of the business and attention of customers, the awareness of the business and the
products sold hence increasing customers hence the growth of the business.

l) Place / Distribution
i) Location area

The area has good infrastructure which make it easily accessible. There is securing because it is situated
near police station and also the place has more police posts. The neighboring area security guards from
recognized security firm also maintain security in the area. The area is busy and has conducive
environment for business.

ii) Distribution channels

There is good insfrastructure in area. The owner of the vehicles will be obtaining their vehicle
themselves in the workshops. Those who need vehicle to be driven to where they are, also will be sorted
as they wish.

m) People (Sales tactics)

i) Sales team/ force

The sales team is well trained and relates well with JAR customers. JAR has currently 25 workers who are
permanently employed. JAR plans to be recruiting new staff every year with continuation of the old
ones. The management will continue evaluating workers performance.

ii) Selling methods

JAR uses advertisement methods like billboards, business cards, caps and T-shirts to market its product
to customers which will cost Ksh 500. Delivery to customer when they request vehicle are driven to
requested places.

iii) Sales projection

Sales for casting are more challenging for new business. JAR is guided by a market research, knowledge
of potential and existing customers as well as influence of competitors is invaluable when fore casting

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projection of the sales is not about breakeven but JAR focuses on what it did last or targets which relies
on an accurate assessment of the market compete with other auto repairs. JAR increases its total
purchase units within the first year to increase current market share.

2.5 PRODUCT DEVELOPMENT STRATEGY

JAR aims at improving the living standards of Luanda town residents and most parts of Vihiga
County. It supplies high quality products and are healthy. All workers of JAR keep hygiene work hard
to benefit of the JAR. Employees of JAR are taken to further training after every three month to keep
them update on new repair methods. This has created awareness of new techniques of repair. JAR
advertises itself even beyond Vihiga County and offer high quality services.

2.6 MARKET PENATRATION STRATEGIES

a) Pricing strategy

JAR prices are affordable to all customers. Prices have been divided upon depending on completion
prices and the standard price in the market. Price depends on which past to be reported or replaced.
Discount to regular and trusted customers. Customer who regularly repair or come to JAR for services
are offered some free services.

b) Promotion/ advertisement strategy

I. Promotion

JAR has formulated different forms of promotions to their customers by giving some free services.

2.7 ACTION PLANS

Item Action /Activity What to do and when Deadline

Pricing  Different prices By marketing Ongoing activity
 Category of the manager within 18
product months
 Regular
customer to be
offered
discount
 The price
should be
affordable to
all customers
Promotion  Pricing the By the owner within 2
product months
 Offering free
services to
regular
customers

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  Offering free
calendars to
customers
Product  Ensuring Production manager End of August 2020
product is by 1 year
maintained
 Cleaning the
products for
customers
 Offering
parking place
for customers
and security of
products

PRICE  Enlarging By the owner By the end of 2 years

business
premises
 Offering nice
parking area
for product

CHAPTER THREE

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ORGANISATION AND MANAGEMENT

3.1 SMANAGEMENT OBJECTIVES

Initially do it two management in year 1and increase in year 11 .Hire 2 screening machine in year 1
and increase to 4 in year 11.

Pay staff based on the current rate and provide on yearly incensement of 5% annually rate

3.2 MANAGEMENT TEAM

(a)Team

Management team comprises of the manager and assistant manager .Manager specialized in at
least a bachelor degree in business management and have the required skill in business, including
entrepreneurial skills and managerial skills. The manager is required to have ability to manage and
develop employees and ensure quality service and value for money. Assistant manager should have
principles and should assist running and managing business .Democratic leadership style should be
employed so that all employees participate in making decisions. Manager and assistant manager
lays down rules and regulations for running the business smoothly. Employees are notified to the
changes taking place to reduce resistance in job places. Manager has outcome in the business scope
that in case .He is incapacitated and is no longer able to run the business ,it should be taken over by
next of kin.

(b) Organization structure

The type of organization structure is fruits organization. The owner is the overall manage, assistant
manager is accountable to the manager. Accountant and production supervisor are below assistant
manager. Sales people, driver and cleaners are below the accountant while the store man, security
guards are below the production officer.

(c) Roles and responsibility

Responsibilities are divided according to position, qualification and experience. The subordinates are
motivated by giving them promotions to senior levels .Increments of salary and also taking them to
tour. Good working conditions are provided and this will lead to increase in individuals and team
spirit and workers will be ready to cooperate with others and work together as team. Recruitment
will be done after two year and will be done by manager. In order to maintain team spirit JAR will
provide its worker with all requirements at place of work and ensure good management and

20
 listening to employees complains and decisions. Top management will have the power to hire and
fire employees.

3.3 STAFFING

(a) Personal requirements

JAR will start with one member on top .Management accompanied by 8 employees in the first year.
Hence as the business grows top management will have two members and 12 employees in the
second year. The employees will have at least a certificate for qualification in their respective
disciplines for order and smooth management.

(b) Rules and regulations

JAR will have asset of rules and regulations that will be followed and adhered to by everyone with
no exception. This will include;

 Absenteeism without permission will not be allowed

 Employees will clock in the arrival and departure time
 High levels of discipline will be maintained
 All the employees have responsibility of taking care and maintaining all the equipments
 Littering in the compound will not be allowed
 Safety will have to be observed hence safety attires will have to be worn.

3.4 PEOPLE SYSTEM

a) Recruitment and selection

i) Recruitment

JAR will source for employees by employing different form of requirement. Those members of the public
answer an advertisement on a job vacancy will be received by the employment agency and will be
processed by them. JAR will also have scouts that go looking for the most talented people in the industry
and offering them jobs. The company will also consider employee referrals and they will be processed by
management in the case of a vacancy. JAR will post a job description through its advertising venues
together with the job specifications. Those interested will have to fill in a job application form before
having a one on one interview with the recruiter.

ii) Selection processing

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  The process will have a few steps that will require to be rolled to ensure that the best candidate
is selected.
 First they will be reading out from application and those that meets the qualification moves on.
 There will be information gathering that is through questionnaires that the applicant will fill and
one on one interview.
 The successful candidates will go through scruting of the abilities and work ethics
 The successful candidates will receive and offer a notification the expected reporting date and
time.
 They will be represented with an employee agreement that will be inclusive of a detailed
statement of the working conditions for them to sign.
 On reporting they will undergo orientation and be introduced of the new employee into the JAR
society.
Finally they will have to sign a compliance form on the employment laws, health and safety
regulations.

b) Training and development

Workers are trained for effective and efficient running the business as well as keeping them appraised
on the trends in the industry.

JAR will conduct training of employees at least twice a year for both managerial and non-managerial
staff. In each year before the training take place a survey will be conducted for the management to
know where to focus on training and then set aside a budget for the same. The induction form of
training will be adopted by JAR for both the managerial and non-managerial staff. Hence JAR will keep
records on all training sessions for easy follow up.

c) Retaining and motivation

JAR will endeavor to see that all its employees are treated well with the respect they deserve and hence
the management will ensure that they will be in a good working condition. Conducive for everyone and
good relationship between the management and the employees. Survey of the levels of job satisfaction
will be carried out on a quarterly basis. Management will also keep an open mind on the employees
entrust. Employees will be promoted in the basis of their performance, work ethic and promotion of
team building. Management will promote without being biased for motivational purpose, bonuses will

22
be offered inform of appreciation to the employees and recognition will be shown to the hardworking
employees and they will be rewarded. Management will also institute a formula for financial support for
the employees in order to empower them. A retirement package will also be afforded for the employees
in order for preparation for retirement.

d) Appraisal / performance evaluation

JAR will adopt a personal recording keeping for all the employees that is every employee will be
required to write a detailed monthly report on the work done. Through this the management will have
information on the quantity and quality of the work done. This report will also reflect on the individuals’
initiative dependability and attendance job acknowledgement and cooperativeness. Management will
adopt both the result oriented method and a two way decision method for conductivity the appraisals.
The appraisals will also reflects on the achievement both individual and group areas to improve the
overall performance training need and career expectations.

e) Rewards/ Remuneration

JAR will set rates of pay in accordance with the market rates for both salaries and commissions. In
addition as a motivation to the employees, the management will also -----employee benefits that will be
given as a reward. Loyalty benefits will be avoided after every two years to the employees, management
productivity, experience, qualification and responsibility accepted.

f) Communication and team building

JAR will have clear channel of communication that will create a good working relationship between the
management and the members of staff. Information flow will be smooth in both directions that is top
from bottom and vice versa. There will be a weekly staff meeting the last working day to promote more
interaction between management and staffs. There will be monthly managerial meetings. The
management will put in place guidance and cancelling sessions that will composing for all employees to
attend at least once a month to deal with either JAR related issues, personal problems or retirement or
termination issues. In the spirit management will implement on how employee can forward their
problems and management to deal with complains.

23
3.5 Legal system/Aspects

JAR will be dedicated to the adherence of the law. Its policy will be to pay all legal fees required and
dead with arising issues with after the company will ensure it meets all the legal requirements. It is
expected before it commences its operation, all requirements in labors, public, health and safety,
financial, regulations and insurance average. Management will ensure that all legal licenses are
renewed in time in the yearly fashion. The legal fee will always be available because the
management will ensure to always set aside the amount from other operational funds. JAR will be in
the front line in compliance with the government and county government law and by laws.

3.6 external /professional services

JAR will set a policy on external existence comprising on rules of engagement and calling upon the
assistance only when extremely necessary. Only professional assistance will be sought externally
and only from qualified firms to give such assistance. All other kind of problems will be solved
internally or by bench marking to well develop companies in the industry. The management will
have a budget set aside for professional assistance on yearly budget. The assistance will be inform of
advisory and extensions service and consultancy.

3.7 PEOPLE ACTION PLAN

Item/area Activities/ strategies Who/period Deadline
Role and  Ensure the firm Manage within the The first year
responsibility has the competent 1st year
personnel
 Delegation of rules
responsibilities to
all employees
Recruitment and  Ensuring the Management Ongoing process
selection skilled people are team
employed in the
firm
 Screening the best
application
suitable for job
 Orientation and
introduction of
new employees

24
  Create new post
for advertisement
Training and  Provide regular Human resource
development training to manager
improve
employees skills
 Conduct training
on first aid and fire
fighting
mechanism
Retaining  Ensuring Manager On a quarterly
motivation employees are basis
well treated and
complains
resolved
 Ensuring good and
conducive working
condition
 Ensuring a good
working
relationship in the
work place
 Ensuring job
satisfaction
among the
employees
 Ensuring good
motivation on the
employees
Appraisals  Ensure proper Management On a monthly
individual record team basis
keeping practices
 Ensuring the
availability of the
appraisal forms
 Ensuring the
appraisals are
done

25
Reward and  Set payments Management
recognition rates for salaries team
and commission
 Set rates for
benefits and profit
sharing
 Issuing employees
benefits
 Issuing loyalty
benefits
 Setting rates for
overtime
productivity,
experience
qualifications and
responsibilities
accepted
Communication  Setting Management On monthly basis
and team building communication team
protocols
 Ensuring smooth
communication
 Setting forums for
interaction and
communication
 Setting team
building activities
 Ensuring there are
forums for
consulting and
problem solving
 Ensuring of guiding
and counseling
sessions
Legal and  Ensuring
possession aspect adherence to
the law
 Ensuring

26
 payment of
all loyal fees
 Ensuring that
all royal
requirement
s are met
 Ensuring the
renewal of all
legal licenses
 Ensuring the
complicities
of laws by-
laws
 Ensuring the
availability of
legal fee

CHAPTER FOUR

4.1 OPERATIONAL OBJECTIVES

 Production will be considered and based on current technologies from the beginning
 Utilize services produced by staffs and members
 Utilize the initial expenses of the firm

4.2 Facilities and capabilities

a) Capital purchases and assets

The business will have to acquire some machine and to enable its production and operation to
run successfully and in the long run achieve the set objectives.

The business equipment will include jacks for lifting vehicles while repairing it. Diagnostic
spanner which is modern tool to diagnose vehicles problem. JAR will obtain these machines to
ensure products are in good condition.

b) Store /plant layout

JAR is to be in one big space which will have one office divided into section. The office
will keep records and the ongoing progress of the firm. The office will have room of
manager, supervisor and accountant. The area will have place where finished vehicles
will be parked and also washrooms.

27
 c) Capacity limitations

JAR due to large space repairs of vehicle will be done frequently since there is space to
accommodate the vehicles. Work will be supervised and this will enable to know what lacks.
The records also will be kept for work done to enable to know what lacks so that to be
purchased.

4.3 OPERATION/ PRODUCTION STRATEGIES

a) Labor/ planning

JAR requires some labor forces. JAR will use unskilled laborers who are willing to learn to
provide some labor and they will be paid per day. Tea break, lunch time and weekends are
taken as overtime. Supervisors will always ensure customers vehicles are in good condition.
They will be inspecting the vehicles after repair.

b) Control process

To standardize performance there is going to be a total production expected per month which
will determine the performance of JAR. All quality control are checked and tested to ensure
quality work output processing of product is to be maintained to ensure the workers are
producing the best. Repair work is to be done at best.

c) Purchasing and stock control

i) Purchasing

Purchasing of the enterprises requirements is done by accountant and supervisor with

approval of the manager. JAR management team has effective method of purchasing by
raising a requisition through the supervisor and the accountant who make sure that the
stocks are of the right quality and delivered at the right time.

II. Stock control

JAR uses the inventory as the method of stock where it involves recording of stock balances
after receipt issues of materials so that the balances of stock at anytime can be attained
immediately. The store keeper is to be maintaining good records of the stock in the business.

d) Costing

28
The materials, labor and overhead costs are decided upon depending on the consumption of
the materials. The materials got the got the biggest share of 70% since they are the main aim of
the business survival labor is apportioned to 20% and overhead such as electricity and water is
apportioned to 10% of the total costs. Repair cost depends with the part to repair with range
from Ksh 6,000 to Ksh 30,000. Replacement of part will be affordable costing from Ksh 2000 to
Ksh 10,000 depending with which part is to be replaced.

e) Production design and development

Due to more vehicle increase and need to repair and replace parts, JAR intends to develop its
advertisement materials and update the promotion items to keep it on tract of the evolving
market and generation thus machinery used to be implemented by purchasing the modern
technology to put more emphasis and encourage efficiency on product production and improve
the quality and way to handle customers needs and preferences.

4.4 OPERATIONAL/ PRODUCTION PROCESS

a) Procedure/ methods

i) Overall production /operations

JAR main product and services are body work repair spray painting, main and major servicing,
repairing automotive engines and transmission and general automotive repair. Each service is
carried following different steps and prospective. The procedure has various steps which are
inspection preparing of job cards, the worker picks up the vehicles for maintenance and finally
road test after which cleaning is done and the vehicle is collected.

Phase 1: Booking

 The owner of the vehicle arrives at the workshop.

 The security personnel picks the details of the owner and his/her vehicle
 Hand over the customer to the secretary

Phase 2: Inspection

 The secretary inspect the vehicle damage

 Calls the workshop manager to have a road test to confirm the problem

29
  What is to be bought, required and replaced is noted down

Phase 3: Preparing a job card

 Lots of things to be used for the specific vehicle are restored

 List of tools to be used is also noted down
 Respective parts are issued
 The job is assigned to the skilled personnel to work on it.

Phase 4: Operational/ production

 Preparing vehicle for it to be worked on

 Collection of the expected tools and parts to replace from the store
 Changing, replacing and removing broken/ worn out parts
 Test for efficiency rectification of the identified problem
 Complete job card

Phase 5: Cleaning and collecting

 The vehicle is cleaned

 Its then parked in the parking slots waiting to be cleared up and picked by the owner

ii) Major services

a) Major and minor servicing

 The vehicle is run for a few minutes so as all the oil is collected in the sump
 Engine is switch off and vehicle raised on stands
 Servicing begins by changing engine oil by new oil
 The plugs are checked, brakes both pads lightings are checked
 After confirming everything is good, the vehicle is taken to test and cleaned later,
parked awaiting cleaning up. By replacing engines and transmission.
 In this case the vehicle is raised on the stands by a jerk
 The parts that are broken down are removed
 If it’s beyond repair a new one is ordered and replaced, if not its repaired and returned
back
 The vehicle is tested to correct functioning
b) Spray painting and body work repair
 The part that is dented is first cleaned to remove the destroyed paint coatings
 After its clean primer is applied
 Sand the primer till the area becomes smooth
 A base coat is sprayed and allowed to dry
 The final coat is applied and allowed to dry

30
  The final shining coat is then later sprayed and allowed to dry.

c) General automotive repairs

 The vehicles is checked and taken for a test
 The problem is noted down on the job card
 Respective tools and parts are picked up
 Job is done and a vehicle awaits pick up and being cleared.

4.5 REGULATION AFFECTING OPERATION

All workers whether staff casuities are expected report at the work station early enough us
from 8:00am till 10:30am where a 30 minute break is offered. Work is resumed from 11:00am
to 1.00pm where one hour lunch break is taken till 2.00pm, extents till 5:00pm in the evening.
Overtime is a crossed part which will always be checked into always. Before beginning a job one
is expected to have put on the required personal projective equipment in accordance to the
expected Job.

4.6 OPERATION ACTION PLAN

Area Activity/strategies Who/period Deadline

Facilities and Evaluating and Procurement office 24/1/2020
capacity analyzing purchased 5th ,1,2022 23/2/2020
and determining Productive manager
diminishing level 15th,02,2022
Design layout Analyzing layout and Production manager 15/2/2020
making decision plant 3/1/2020
flow and machine
installation
Operation and Setting performance Management team 4/2/2020
strategy standards
Production Analyzing flow chart General manager 20/1/2020
regulation of services, health
certificate and trade
mark business
certificate acquiring

31
CHAPTER FIVE

FINANCIAL PLAN5.1 FINANCIAL OBJECTIVES AND ASSUMPTIONS

a) Objectives

 Raise Ksh 240,000 through personal savings and investors

 Have Ksh 300,000 networking and visioning to Ksh 320,000in year 2
 Raise Ksh 400,000 cash inflow raising it to 500,000
 Make 26.5% DOT on sales in year 1 and 38% in year 2

b) Assumptions

I. Cash flow
 Capital purchase for the fixed parts are purchased before start of business
 Purchases of materials are done monthly
 Miscellaneous is calculated based on 5% total expenditure
 Renewal of utilities takes effect at the end of the year.

II. Profit and loss

 Costs by sales equivalent to purchase for month in use
 Expenditure per item corresponds to spread on cash flow
 Salaries and wages remain constant throughout the year
 Depreciation of fixed assets remains constant every year

32
 III. sheet
 Taxation in sales is done on the first and second year
 Assets and liabilities should balance at the end of every year.
 Loan payment are done as from the first year

5.2 PRE-OPERATIONAL EXPENSES

ITEM DESCRIPTION AMOUNT

Capital purchases 38,000
Installation 45,000
Maintenance 25,000
Deposits 30,000
Advertisements and promotion 28,000
Transport 10,000
Legal fees 15,000
Professional fees 30,000
Purchase production 40,000
Office 31,000
Miscellaneous 30,000

TOTAL 322,000

5.3 OPERATIONAL EXPENSES

i) Operations

Items description Monthly Allowance Total amount

Maintenance 1000 1 1000
Rent 18000 1 18000
Electricity 3000 2 6000

33
 Water 3000 2 6000
Postage 1400 1 1400
Telephone 1600 3 4800
Legal fee 500 1 500
Promotion and 1200 1 12000
advertisement
Remuneration 55000 1 55000
Professionals fee 1600 1 1600
Transport 10,000 1 10000
Loan premium 10,000 1 10000
Interest on loan 14000 1 14000
Drawings 25000 2 50000
Miscellaneous 5% 31000 1 31000

Total 184,100(B1) 221300(B2)

s

iii) Personal expenses

ITEM DESCRIPRION AMOUNT ALLOWANCE TOTAL

Housing 16000 1 18000
Food 10000 1 10000
Clothing 5000 1 5000
Medicine 3000 1 3000
Rent 10,000 1 10000
Entertainment 3000 1 3000
Miscellaneous 2000 1 2000

Total 51,000(C2) 51, 000(C1)

Investment =A+B1+C1

Minimum =32, 2000 +184,100 +5, 1000 =557, 1000

Maximum = A+B2+C2

322000 + 221300 +51000 =594,300

5.4 PROFORMA CASH FLOW STATEMENT

34
ITEMS 2022 (Ksh) 2023 (Ksh)
Beginning cash balance 2,734 000
Cash sales 3,456,000 3,950 000
Loan 270,000
Owner equity 250 000

Total cash flow 3,976,000 6,684,000

ITEMS 2022( Ksh) 2023(Ksh)

Expenditure
Capital purchase 200,000
Rent 241,000 230,000
Electricity 55,000 50,000
Water 55,000 50,000
Postage 22,300 18,000
Telephone 18,000 12,000
Legal fee 30,000 18,000
Promotion/advertisement 250,100 150,000
Maintenance/renovation 28,000 8,000
Remuneration 850,000 568,000
Professional fee 36,200 6,000
Purchases 500,000 35,000
Inventory 65,000 25,000
Transport 55,000 45,000
Loan premium 195,000 40,000
Interest on loans 27,000 11,000
Drawings 81,000 81,000
Miscellaneous 192,050 86,050

TOTAL EXPENSES 2,900,650 1,433,050

Ending cash/ not supply
Deposit 1,131,450 5,228,950

5.5 PROFIT AND LOSS INCOME STATEMENT

ITEMS 2022 (Ksh) 2023 (Ksh)

Cash sales 3346000 38 50000
Lost cost of sales 220000 250000
Gross profit 3126000 360000
Expenditure

35
 Rent 125000 125000
Electricity 40000 43000
Water 44000 16000
Postage 7700 8,000
Telephone 12000 11,000
Legal fee 18700 18,200
Promotion/ Advertisement 23000 19,000
Maintenance 17200 8,000
Premantation 240000 200,000
Professional and fee 11000 5,000
Office surface 15000 9,000
Transport 8000 6,000
Interest on loan 76000 4,300
Depreciation 103000 19,000
Miscellaneous 140000 1,210,00

Total cost 880,600 651200

Profit before taxation 2,245,400 2948800

5.6 PERFORMA BALANCE SHEET

PRE-START YEAR 1 YEAR 2

ASSETS 2022 2023

36
 a) Fixed asset 250,000 250,000 229,000
capital
Purchases loss (21000) (21000)
depreciation
Subtotal 250,000 229,000 208,000

b) Current asset
31,200 63,200 63,200
stocks

210,000 210,000 210,000

Inventory pre-
payment
Cash in hand 320,800 420,000 550,000

Less taxation (25,365)

Debtor 20,000

Subtotal 562,000 687,835 1,031,200

TOTAL ASSETS 812000 916,835 1,031,200

LIABILITIES
Loan 560,000 250,000 250,000
Less payments (15,000) (24,000)
560,000 225,000 226,000
Creditor 128,225 250,530
(i)Subtotal 560,000 354,225 467,530

CAPITAL
Owners equity 240,000 250,000 300,000
Less drawing 200,000 200,000

37
(ii)subtotals 240,000 50,000 100,000
Profit before taxation 500,900 500,950
Less taxation (25,365) (25365)
Add profit ploughed
back
(iii)Subtotal 475,583 475,585

TOTAL L+C(i+ii+iii) 800,000 879,840 1,043,115

5.7 BREAK EVEN ANALYSIS

Based on Ksh 3,346,000 sales receipt for year 1

ITEM DESCRIPTION F.C V.C TOTAL

Cost of sales - 550000 550000
Rent 160,000 - -
Electricity - 42000 42000
Water - 18000 18000
Postage 17000 7000 24000
Telephone 11000 13000 24000
Legal fees 170,000 - 17000
Promotion and 80,000 7500 87500
advertising
Maintenance 7000 - 7000
Remuneration 800000 24000 82400
Professional fees 7700 - 7700
Inventory(office 62,000 20,000 82000
supplies)
Transport - 200,000 230,000

38
 Interest on Loans 76000 - 76000
Depreciation 108,000 - 108,000
Miscellaneous 150,000 330,000 480,000
TOTAL 1495700 1241500 2577200

B.E.P = F.C F.C= fixed cost

1-V.C/S V.C= variable cost

S= sales for year 1

1495700 = 1495700
1-1241500/273150 0.546

= 2,739,377.289
5.8 PERFOMANCE ANALYSIS

Details Estimates Ratios Interpretation and actions

Working capital 7.0% 12.78 Current assets over more
(W.C) than current liabilities. This
indicates that JAR is
instability stage.
Quick ratio 7.19% 11.42% By competing the quick
(Q.R) ratio of the years, the
business is supposed to be
in a position to pay back all
the short form debts.
Asset turnover 2.19% 1.32 The continuous sales of
(A.T) more than 1% above that
JAR is able to make
continuous sales but the
business assets are limited
and needs to be increased

39
 Gross profit 16.14 16.2% This indicates that the
(G.P) expenses of JAR are high.
This implies that
management policies are
to be previewed to cost of
production
40.31% 41.08% There is persistence in
Net profiting increment which shows
sales (N.P.S) reduced cost of operation.
To boost the profit, the
product prices are to be
moved upwards every
financial year.
Return on owner 4.6% 4.28% The retain of owners
enquiry (ROE) enquiry is more than the
initial investment. This
indicates profitability.
Return investment 21.2% 24.3% Rise in the amount
invested indicates
efficiency in JAR’s
operations as it utilizes its
assets to generate more
profits.
Margin investment 54.24% 55.245 Rapid increased on the
planned sales, indicates the
reliability in the project
sales.

5.9 DESIRED FINANCING

JAR would be financed by the owner by 30% and the remaining 70% from loans and
investments. The owner choose the sources since they are variable people and they can be
continually accessed. In addition, investors were chosen since there is an upcoming town and
investors. They will try to grow the business up in the area.
5.10 PROPOSED CAPITALIZATION
This is the source of find in the expected sources of income of the business.

Item Amount
Pre-operational cost 200,150
Operational cost 100,200
Personal 30,100
Total increments 356,900

40
Owners’ equity (friend and family) 500,000
Investors 800,000

5.11 ACTION PLAN

AREA ACTION WHO/PERIOD DEADLINE

Over planning Set appropriate Accountant 7th Dec 2022
financial for business
growth and reward
develop an overall
financing plan and
harmonize the entire
business
Cash flow budget  Preparation of Owner 14th Dec 2022
operating
 Payment of all
obligations for
the business
when due
 Budget for pre-
preparation
and personnel
expense
Preparation for  Establish profit Manager and 2nd Dec 2022
profit goals accountant
 Determine
plan volume
sales
 Determine
expenses for
planned sales
 Comes up with
possible
affirmative
improve
profits
Control of operation  Decides Accountant 18th Dec 2022
procedure of
financial
control
 Set efficiency

41
 level target
enterprises
performed
standards and
communicate
to workers
 Prepare
repairs on
financing
position of
business
Desired financing  Evaluate Manager 25th Dec 2022
business
financial
strategies
 Select
financing
institution and
negotiation on
landing
 Allocate
finance
according to
plan

5.11 ACTION PLAN

AREA ACTION WHO/PERIOD DEADLINE

Over planning Set appropriate Accountant 7th Dec 2022
financial for business
growth and reward
develop an overall
financing plan and
harmonize the entire
business
Cash flow budget  Preparation of owner 14th Dec 2022
operating
 Payment of all
obligations for
the business
when due
 Budget for pre-
preparation

42
 and personnel
expense
Preparation for  Establish profit Manager and 2nd Dec 2022
profit goals accountant
 Determine
plan volume
sales
 Determine
expenses for
planned sales
 Comes up with
possible
affirmative
improve
profits
Control of operation  Decides Accountant 18th Dec 2022
procedure of
financial
control
 Set efficiency
level target
enterprises
performed
standards and
communicate
to workers
 Prepare
repairs on
financing
position of
business
Desired financing  Evaluate Manager 25th Dec 2022
business
financial
strategies
 Select
financing
institution and
negotiation on
landing
 Allocate
finance
according to

43
plan

44