CLLASIC ELECTRONICS SHOP AND WHOLESALERS

CLASSIC ELECTRONICS SHOP AND WHOLESALERS

WANJALA ELISAHA WANONYI

P.O BOX 164-30200

KITALE

TRANZOIA COUNTY

PHONE NO. 0713901095

EMAIL: elyshahvinson@gmail.com

BUSINESS PLAN

PRESENTER : WANJALA ELISHA WANYONYI

INSTITUTION : THE ELDORET NATIONAL POLYTECHNIC

INDEX NO : 20407004

COURSE CODE : 2903/108

INSTITUTION : NATIONAL YOUTH SERVICE INSTITUTE OF BUSINESS

STUDIES

PRESENTED TO: THE NATIONAL EXAMINATION COUNCIL IN PARTIAL

FULFILMENT FOR THE AWARD OF CERTIFICATE IN CRAFT

INFORMATION AND TECHNOLOGY.

SERIES : NOVEMBER SERIES 2020

CLLASIC ELECTRONICS SHOP AND WHOLESALERS

DECLARATION

I hereby declare that this business plan is my own original work and has not been presented
anywhere else for examination purpose.

CANDIDATE NAME : MUTINDA R MUTUKU

SIGNATURE : ___________________________

DATE : ___________________________

This project has been submitted with my approval as appointed college supervisor.

NAME : ___________________________

SIGNATURE : ___________________________

DATE : __________________________
CLLASIC ELECTRONICS SHOP AND WHOLESALERS

ACKNOLEDGEMENT

My special tribute goes to the Director General National Youth Service, Madam matilda sales
for offering me a chance to be in National Youth Service and providing me with a conducive
learning environment, the Principal National Youth Service Institute of Business Studies, for
facilitating my learning process in the Institute. Special Acknowledgement goes to my supervisor
Mr. Richard who is my entrepreneur teacher for his tireless efforts they put in to make this
business plan a success.

MAY GOD BLESS YOU ALL!!!

CLLASIC ELECTRONICS SHOP AND WHOLESALERS

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DEDICATION

I wish to dedicate this project to my dear loving mother Mrs juliana mukii together with my
brothers, sisters and relatives at large for their financial and ideological support that they
accorded me.

MAY GOD BLESS YOU ALL!!!

CLLASIC ELECTRONICS SHOP AND WHOLESALERS

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TABLE OF CONTENTS
DECLARATION..............................................................................................................................i
ACKNOWLEDGEMENT...............................................................................................................ii
DEDICATION...............................................................................................................................iii
CHAPTER ONE............................................................................................................................1
1.0 EXECUTIVE SUMMARY.......................................................................................................1
1.1 BUSINESS DESCRIPTION.....................................................................................................1
1.2 MARKETING PLAN................................................................................................................1
1.3 ORGANISATION AND MANAGEMENT PLAN..................................................................1
1.4 OPERATION AND PRODUCTION PLAN.............................................................................2
1.5 FINANCIAL PLAN..................................................................................................................2
1.6 TARGET MARKET…………………………………………………………………………..2

1.7 COMPETITIVE ADVANTAGE……………………………………………………………...2

1.8 OPPORTUNITY AND ENTRTY…………………………………………………………….2

1.9 RISKS AND MEASURES……………………………………………………………………2

CHAPTER TWO...........................................................................................................................3
2.0 BUSINESS DESCRIPTION.....................................................................................................3
2.1 BUSINESS NAME....................................................................................................................3
2.2 THE PRODUCT AND SERVICE…………………………………………………………….3

2.3 BUSINESSS LOCATION AND ADDRESS............................................................................3

2.4 ENTRY PLAN...........................................................................................................................4
2.5 INDUSTRY...............................................................................................................................4
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2.6 GOALS OF THE BUSINESS...................................................................................................4
2.6.1 LONG TERM GOALS...........................................................................................................4
2.6.2 SHORT TERM GOALS.........................................................................................................4
2.7 JUSTIFICATION OF THE BUSINESS OPPORTUNITY.......................................................5
CHAPTER THREE.......................................................................................................................7
3.0 MARKETING PLAN................................................................................................................7
3.1 POTENTIAL CUSTOMERS....................................................................................................7
3.2 COMPETITION........................................................................................................................7
3.2.1 STRENGTHS.........................................................................................................................7
3.2.2 WEAKNESS...........................................................................................................................7
3.3 PRICING...................................................................................................................................7
3.4 SALES TACTICS.....................................................................................................................8
3.5 ADVERTISING AND PROMOTION………………………………………………………..8

3.6 DISTRIBUTION STRATEGY………………………………………………………………..8

3.7 MARKET SHARE……………………………………………………………………………8

3.8 SWOT ANALYSIS TABLE…………………………………………………………………..9

CHAPTER FOUR.......................................................................................................................10
4.0 ORGANISATIONAL AND MANAGEMENT PLAN...........................................................10
4.1 BUSINESS MANAGER AND QUALIFICATIONS.............................................................11
4.2 REMUNERATION AND INCENTIVES...............................................................................14
4.2.1 SALARY AND ALLOWANCES SCHEDULE FOR EMPLOYEES.................................14
4.3 RECRUITMENT, TRAINING AND PROMOTION.............................................................15
CHAPTER FIVE.........................................................................................................................17
5.0 PRODUCTION/OPERATIONAL PLAN...............................................................................17
5.1 PRODUCTION FACILITIES AND CAPACITY...................................................................17
5.2 PRODUCTION STRATEGY..................................................................................................19
5.2.2 MONTHLY RAW MATERIAL REQUIREMENT.............................................................19
5.3 PRODUCTION PROCESS………………………………………………………………….19

5.3.1 GENERAL MANUFACTURING PROCEDURE………………………………………...20

5.3.2 DISCHARGE OF SERVICES…………………………………………………………….21

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5.4 GOVERNMENT REGULATIONS…………………………………………………………21

CHAPTER SIX............................................................................................................................23
6.0 FINANCIAL PLAN................................................................................................................23
6.1 PRE-OPERATIONAL COST.................................................................................................23
6.2 ESTIMATION OF WORKING CAPITAL.............................................................................23
6.3 PREPARATION OF CASHFLOW PROJECTION................................................................24
6.3.1 PROFORMA CASHFLOW STATEMENT FOR THE FIRST 12 MONTHS.....................24
6.3.2 PROFORMA CASHFLOW STATEMENT FOR THE FIRST THREE YEARS...............25
6.4 PREPARATION OF PROFORMA INCOME STATEMENT...............................................26
6.4.1 PROFORMA INCOME STATEMENT FOR THE FIRST 12 MONTHS..........................26
6.4.2 PROFORMA INCOME STATEMENT FOR THE FIRST THREE YEARS.....................27
6.5 PREPARATION OF PROFORMA BALANCE SHEET.......................................................28
6.5.1 NANCY JOHNSON DAIRY FARM PROFORMA BALANCE SHEET AS AT 1ST
JANUARY 2021............................................................................................................................28
6.5.2 PROFORMA BALANCE SHEET AS AT 31ST DECEMBER 2021...................................29
6.6 CALCULATION OF BREAK EVEN POINT........................................................................30
6.7 CALCULATION OF PROFITABILITY RATIOS.................................................................31
6.7.1 GROSS PROFIT PERCENTAGE........................................................................................31
6.7.2 RETURN ON EQUITY........................................................................................................31
6.8 DESIRED FINANCING.........................................................................................................32
6.9 PROPOSED CAPITALISATION...........................................................................................32
CLLASIC ELECTRONICS SHOP AND WHOLESALERS

CHAPTER ONE

1.0 EXECUTIVE SUMMERY

1.1 BUSINESS DESCPRITION

The name of the proposed business will be Classic Mini-Electronics shop. The business will be a
sole proprietorship and the business will be located near Tulin supermarket along line moja
road. Wanjala Elisha Wanyonyi will be the owner of the business. And also, the manager of the
shop. The business is set to open in 1st December 2022 after the owner completes his Diploma in
electrical and electronics engineering

The business falls under the agricultural industry and has the following goals and objectives.

i. To maximize profits and minimize losses in the business venture.

ii. To create employment.
iii. To train and educate the public at large on the importance of ad versing technology on
electronics equipment.

1.2 MARKETING PLAN

The proposed business is expected to capture a market share of at least 55% in Kitale and the
entire Tranzoia county .Its main potential customers will be churches entertainment halls like
CLLASIC ELECTRONICS SHOP AND WHOLESALERS
bars, institutions like schools, hotels and the general public. The pricing strategy will largely
depend on the supply and demand of electronics products, the business will also offer after sale
services to customers who purchase within the town.

1.3 ORGANIZATION AND MANAGEMENT PLAN

The business will employ 50 permanent employees who will have the necessary skills. The
owner of the business will be the managing director and head of the business and all other
employees under her. Every thing relating to promotion, job description, remuneration for each
permits required to run the business and other services will be outlined in this chapter.

1.4 PRODUCTION AND OPERATION PLAN

The start up capital will be Ksh.1,000000 the owner will raise Ksh.500,000 from her savings,
Ksh.250,000 from friends and relatives while the remaining Ksh.250,000 from a bank loan. The
capital is expected to purchase all the required equipments, their installation, all animals and the
animal feeds, payment of wages and other expenses attached to the business.

1.5 FINANCIAL PLAN

The start up capital from the owners savings will be Ksh.500,000, Ksh.200,000 from friends and
relatives and a bank loan of Ksh.100,,000

1.6 TARGET MARKET

The targeted customers are the institutions like schools, hotels and the public at large.

1.7 COMPETITIVE ADVANTAGE

The proposed business will do deliveries to the various customers who are near and do offer sale
services. The owner of the business has also done a course on general agriculture.
CLLASIC ELECTRONICS SHOP AND WHOLESALERS
1.8 OPPORTUNITY AND ENTRY

The proposed business is intended to do well in the market since it has no competition thus there
are only other two farms in the whole county

1.9 RISKS AND MEASURES

The business is likely to encounter risks such as:

 Competitions
 Climate changes
 Low sales
 Diseases

CHAPTER TWO

2.0 BUSINESS DESCRIPTION

The proposed business will be NEYMAR CATTLE FARM. The business will be located along
Sultan hamud . The business will be a sole proprietorship type of business and managed by the
owner Mutinda R Mutuku as the Manager. The owner is 23 years. The owner has undertaken a
certificate in general agriculture and currently pursuing a Craft certificate in information and
technology in craft engineering training school. The owner has no experience because she is still
in college and intends to open up the business at the completion of her course.

2.1 BUSINESS VENTURE

The name of the proposed business is NEYMAR BEEF CATTLE FARM. The first name is
‘NEYMAR' The business is located along MOMBASA ROAD AT SULTAN HAUD TOWN.
The major activity of the business is to produce Beef products. Its principal customers are the
public at large. The business will be registered with relevant authorities. The business intends to
CLLASIC ELECTRONICS SHOP AND WHOLESALERS
start with a capital of Ksh.1,000000 whereby Ksh,500 000 comes from the owners savings,
Ksh.250,000 from friends and relatives whereby the remaining Ksh.250,000 from a bank loan.

2.2 THE PRODUCT OR SERVICE

The business intends to produce beef products such as canned meet , fresh meat also sell some
of the animals. The products will fetch a lot of profits.

2.3 BUSINESS LOCATION AND ADDRESS

The postal address of the business will be:

P.O BOX 97-100

Sultan -hamud

PHONE NUMBER: 0798908780

EMAIL:mutukuric@gamil.com

2.4 ENTRY PLAN

The business being centrally placed is expected to enter the market and acquire customers easily.
This will be achieved through providing affordable prices which are relatively lower than our
competitors. The business will also offer after sales services for who will buy in bulk. It will also
offer out door services to those customers who don’t access our center.

This will be a great advantage over our competitors because they don’t offer such services. To
ensure growth of the firm, profit earned will be used in the expansion and replacement of
equipment.

2.5 INDUSTRY
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The proposed business falls under the agricultural industry. Its major objective in the market is to
produce quality beef products for the inhabitants and sell quality products.

The business will apply modern technology for its operations. The business will employ 50
workers who will help in production of our products. Its introduction to the region and presence
of high demand is a sign of high profit fixtures in return.

GOALS OF THE BUSINESS

2.6.1 LONG TERM GOALS

 Generate income to the owner through profits.

 To advocate for importance of keeping livestock.
 To create as many job opportunities as possible.

2.6.2 SHORT TERM GOALS

 Aim at producing high quality dairy products using modern methods of production.
 Maximize profits and minimize losses for the business venture.

2.7 JUSTIFICATION OF THE BUSINESS OPPORTUNITY

The business having few competitors and being centrally placed in the area it will attract many
customers. The competitors lack the modern technology for producing these products and that
means that the business will attract a lot of customers hence promote the growth of the business.
CLLASIC ELECTRONICS SHOP AND WHOLESALERS

FROM NAIROBI
CLLASIC ELECTRONICS SHOP AND WHOLESALERS

Salama town

Mulu mutisya maize farm

Sultan hamud town (buy mall supermarket)

CHAPTER THREE

3.0 MARKETING PLAN 6

3.1 POTENTIAL CUSTOMERS

Neymar beef cattle farm intends to sell its products to the general public at large, its target
customers will be institutions like schools, hotels and restraints. The targeted population is
around 1000000 people. The number of customers expected to buy products are about 700000
people per day.
CLLASIC ELECTRONICS SHOP AND WHOLESALERS
3.2 COMPETITION

The proposed business is expected to face competition to face competition from other two farms.
The existing farms mwakio and kamba beef farm. The strengths and weakness are analyzed
below.

3.2.1 STRENGHTS

 Experienced
 Well known in the area.

3.2.2 WEAKNESSES

 Low quality products

 No after sale services

3.3 PRICING

The demand and supply of products in the market will aid in the pricing of the products and
services. The pricing strategy will largely also depend on the competitors price, the business will
make its price slightly lower to that of our competitors. The management will make sure the
price of the raw materials is favorable

3.4 SALES TACTICS

The business will do direct selling, it will provide out door and mobile services. The workers will
do deliveries to customers who are near the farm. The business will recruit sales team go to
various parts of the country sell. The business will organize for prize giving day to reward its
best clients. Good communication and good public relation will attract more clients.

3.5 ADVERTSING ND PROMOTION

CLLASIC ELECTRONICS SHOP AND WHOLESALERS
So as to enforce and to spread the information about the business to promote services delivery
the managing Director decided to make it known by the use of the word of mouth by use agents,
friends and relatives will move around the region to inform the public. Business cards containing
address, contact, location and services will be distributed to the public in towns, churches and
schools. Posters with our pictures of our unit systems will be pinned in the public meeting zones.

3.6 DISTRIBUTION STRATEGY

The business operational services will be rendered to its customers accordingly. Raw materials
bought will be transported by firm’s vehicles. The same means will be used to offer out door
services and mobile services to our customers.

3.7 MARKET SHARE

The business is expected to sell to the locals and also the people outside the Katangi Market.
Since it has competitors it is expected share the market with the others.

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CLLASIC ELECTRONICS SHOP AND WHOLESALERS
3.8 SWOT ANAYSIS.

NEYMAR beef cattle farm will produce goods of high quality and of good quantity thus it will
attract many customers. This is because the business will apply modern technology which other
competitors does not have. The business will open early in the morning making it reliable other
than the other businesses .

CHAPTER FOUR

4.0 ORGANIZATIONAL AND MANAGEMENT PLAN

The business will require 50 workers. The flow of work runs from top to bottom but the
manager will make sure that the personnel work as a team.

MANAGER

ASSISTANT MANAGER

ACCOUNTANT CLEANERS

SALESMAN CASUAL LABOURERS

WATCHMAN DRIVER
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4.1 BUSINESS MANAGER AND QUALIFICATIONS

The business is under the management of Mr Mutinda R Mutuku

THE MANAGER MINIMUM REQUIREMENTS

i. Have an ‘O’ level certificate

ii. Be tactful and diplomat
iii. Computer literate
iv. Honest and ethical in her dealings
v. Good communication skills

DUTIES AND RESPONSIBILITIES

i. Controlling and directing the firm’s activities.

ii. Computing salaries for the staff
iii. Discipline of the staff, promotion and welfare
iv. Allocating duties for the staff
v. Represent the business in legal matters
vi. Personnel number and duties
vii. Organizing training program for the staff.

ASSISTANT MANAGER

i. He will be answerable to the manager.

PERSONAL REQUIREMENTS

i. Must be honest
ii. Ready to work at late hours
CLLASIC ELECTRONICS SHOP AND WHOLESALERS
iii. Be hard working

REQUIREMENTS

i. Aged between 25-40

ii. At least 2 years experience
iii. A ‘O’ level certificate
iv. Fluent both English and Kiswahili
v. Computer literate
vi. Holder of office administration and management certificate.

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DUTIES AND RESPONSIBILITIES

i. Assist the manager in undertaking his duties.

ii. Assigning duties to other employees.
iii. Ordering of raw materials
iv. Checking prices of new purchased products.

ACCOUNTANT

PERSONAL REQUIREMENTS

i. Honest
ii. Hard working
iii. Trustworthy

REQUIREMENTS

i. A 2 years experience
ii. An ‘O’ level certificate
iii. An holder of A.T.C final level certificate
iv. Aged 23-32 years
v. A computer literate

DUTIES AND RESPONSIBILITIES

CLLASIC ELECTRONICS SHOP AND WHOLESALERS
i. Planning for the centre growth
ii. Budgeting annual expenditure, with assistance from the manager.
iii. Preparation of monthly payroll of employees.
iv. In –charge of monthly on the transaction carried out in the firm.

CASUAL LABOURERS

REQUIREMENTS

i. An ‘O’ level certificate (minimum grade D+)

ii. Fluent in English and Kiswahili.
iii. Aged between 23 years and above.

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DUTIES AND RESPONSIBILITIES

i. Arranging and packing goods

ii. Cleaning the firm premises.
iii. Security of the firm.

DRIVER

i. KCSE mean grade of D+

ii. Posses driving license class E
iii. Certificate of good conduct
iv. Age of 24 years and above

RESPONSIBILITIES

i. To ensure van is in good condition

ii. Transport purchased goods to customers premises
iii. Transport new stocks to the business premise.

WATCHMAN
CLLASIC ELECTRONICS SHOP AND WHOLESALERS
QUALIFICATIONS

i. Have certificate of good conduct.

ii. Trained and has experience of at least 3 years from a recognized institution.

RESPONSIBILITIES

i. Make sure that the premise is free from idlers.

ii. Guards the premises day and night.

SALES MEN

QUALIFICATIONS

i. Certificate in Sales and marketing

ii. Social and can talk in both Kiswahili and English.
iii. Kenyan citizen.

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RESPONSIBILITIES

i. Sell the products to the customers.

CLEANER

ii. An ‘O’ level certificate ( minimum grade D plain)

iii. Aged between 23 years and above.

DUTIES

i. Cleaning the firm premises.

4.2 REMUNERATION AND INCENTIVES

CLLASIC ELECTRONICS SHOP AND WHOLESALERS
4.2.1 SALARY AND ALLOWACES SCHEDULE FOR EMPLOYEES

POST NUMBER PER INDIVIDUAL TOTAL

MANAGER 1 10,000 10,000
ASSISTANT 1 7,500 7,500
MANAGER
ACCOUNTANT 1 6,500 6,500
CASUAL LABOURERS 4 4,500 18000
DRIVER 6 5,000 30000
SALESMEN 10 3,000 30000
WATCHMEN 10 3,500 35000
CLEANER 17 1,500 25500
TOTAL 50 162500

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4.3 RECRUITMENT, TRAINING AND PROMOTION

RECRUITMENT

The business will source its workers from the external sources. Through advertising to radio,
news papers, friends and employment agencies. The qualified will be oriented to the job and
shown how to do the job.

TRAINING

The employees shall have internal training on how to run the business and efficiently to achieve
goals and objectives. The manager and the supervisor would be required to attend a management
training seminar annually. The cashier will also be required to progress with his education, to
enable him have enough skills to handle the expansively growing enterprise.
CLLASIC ELECTRONICS SHOP AND WHOLESALERS
PROMOTION

All employees’ promotion will depend on performance. This is to promote their morale and
work.

REMUNERATION AND INCENTIVES

The business will offer its personal salaries and allowances to their level of education,
experience and job title. The manager will conduct employee’s performance appraisal to monitor
their strength, weaknesses where promotion and training deserves.

SUPPORTIVE SERVICES

In order to run efficiently and smoothly the business will require supportive services which will
include;

(i) Banking services

This will help save and keep the business funds safe. It will also lend loans to the firms in need.
Kenya Commercial Bank will provide this services.

(ii) Postal services

The firm will need postage services for documents and brochures and also receiving
correspondence from clients and other interested persons. This will be acquired from Makueni
post office

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(iii) Insurance services

As the business is subjected to risks there is need to insure in case of loss in the course of the
activities. These services will be acquired from mkulima insurance company

(iv) Telephone services

CLLASIC ELECTRONICS SHOP AND WHOLESALERS
Due to recent development in the mobile industry, the business will operate with service provider
like the Safaricom Holding Company and Airtel Kenya to be in contact with our clients.

Legal services

The business will employ honourable maamzo as the lawyer of the business to represent it in the
court of law in legal matters.

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CHAPTER FIVE

5.0 OPERATIONAL AND PRODUCTION PLAN

The operation of the business is scheduled to commence on 1st may 2020. The equipment and
machines will be purchased and installed before the commence of the business to avoid
inconveniences.
CLLASIC ELECTRONICS SHOP AND WHOLESALERS
The operation and production plan is developed to ensure smooth running of the business
enterprise for the production of quality and quantity products. This will help in steady supply of
products.

5.1 PRODUCTION FACILITIES AND CAPACITY

The business will operate from a big spacious room containing partitions of different production
plants. The animal docks will be located right behind the store. There will also be the grazing
areas. It will also have packing lots where finished goods will be packed. At the back yard we
shall have a store for storing the animal feeds and also for storing raw materials.

The following table will be required and their costs.

ITEM QUANTITY KSH. PER ITEM TOTAL

Calculator 10 1,000 10000
Ledger 5 200 1000
Computer 6 12,000 72000
Fridge 20 15,000 300000
Weigh machine 4 5,200 20800
Shelves 5 150 750
First aid kit 3 600 1800
Broom 11 10 110
Knives 20 300 6000
Chairs 6 200 1200
Working uniform 50 135,000 670000
Animal feeds 100 4,010 401000
Total 1078310

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ENTERPRISE LAYOUT

PACKING ZONE WASHROOMS THE ANIMAL FARM

GENTS LADIES
CLLASIC ELECTRONICS SHOP AND WHOLESALERS

MANAGER
MAIN GATE SECRETARY MANAGER
SECURITY

SALES MEN
CLEANERS

The business is on a 50 acre land.

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5.2 PRODUCTION STRATEGY

CLLASIC ELECTRONICS SHOP AND WHOLESALERS
In order for the intended business to make desired profits, the workers will need to employ skills
and technology for them to bring up good quality services and steady supply of dairy products.
Compared to their immediate competitors locally. Others enterprises in competition will have
hard time to challenge the proposed business because of the good quality and production of fresh
products and of good quantity which it intend to sell.

The farm will ensure rearing of newest breeds of animals for production of quality meat which
will be able to be processed to produce quality products. The business will use modern tools and
equipment. Neatness and cleanliness will be part of the strategy and routine to improve the
business. The farm dairy will be opened early in the morning and will operate for the whole day.

5.2.2 MONTHLY RAW MATERIAL REQUIREMENT

The enterprise will have to incur some cost on buying of raw materials and equipment to enhance
the production of quality dairy products.

ITEM QUANTITY COST TOTAL

HAY 100 PIECES 5000 500000
CONCENTRATES 2100 1,000 2100000
BOOSTER ----------- 500 500
DEWORMERS ----------- 100 600
VACCINES ----------- 200 200

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CLLASIC ELECTRONICS SHOP AND WHOLESALERS

5.3.2 DISCHARGE OF SERVICES

Since the enterprise will have a shop to sell our products, the discharge of the services will be
very quite elaborate when the customers enters the premises, first he/she will conduct the
customer care desk of the reception. He/she will then go to our shop which will be stocked with
our dairy products. After a customer is served at the counter by our shop attendant, our services
are prompt. If a customer purchases in bulky he/she will be offered after sale services such as
transportation and also will be given a discount on the goods bought.

SUPPLY

This will be done by the sales men. They will distribute our products to different parts. The
products will be packed in our tins and transported to be sold to the shops and also the nearby
hotels.

5.4 GOVERNMENT REGULATIONS

For the sake of the legal formalities of the proposed business, the business will be supposed to
obtain two licenses from the local authorities and the other from the Agricultural Board of
Kenya. The local trade license will be obtained from the Municipal Council of Makueni through
Hon. Kivutha kimbwana at Ksh 10,000. Agricultural board of head Dr. Mwaura officer in charge
of Agricultural section at Sultan hamud town at Ksh 25, 000 totaling to ksh.42000

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PUBLIC HEALTH AND ENVIRONMENT ACT

The proposed business will be registered and abide by the government regulations of ensuring
that the environment is protected from pollution. The business is supposed to ensure cleanliness
in the whole process of production and packing of the goods and ensure there are no hazards to
human health.
CLLASIC ELECTRONICS SHOP AND WHOLESALERS

LABOUR ACTS

The employees will be registered with the National society security fund. This will provide
survival benefit, withdrawal benefit and old age benefits under NSSF Act.

REGISTRATION ACT AND WAGES AND EMPLOYMENT

The proposed business will register with works mans compensation for the employees liability.
This will be incasing of health while undertaking his duties. During market days the salesmen are
required to pay for marketing place at Ksh. 100 every market day.

The business will have trade mark which will be ‘N.J.K.M’ which the agricultural board will
recognize. Workers will have rights to claim for any unpaid wages and employment Act.

TAXATION

The owner will provide the Kenya Revenue Authority will all the relevant information for
taxation at a provision of 10%

TRAFFIC ACT

The driver shall be required to have legal driving licenses. This will help to reduce rate
inefficiency hence it increases the out put.

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CHAPTER SIX

6.0 FINANCIAL PLAN

CLLASIC ELECTRONICS SHOP AND WHOLESALERS
The intended business open in 1st may 2020

6.1 PRE OPERATIONAL COST

ITEM AMOUNT IN KSH

Beef cattle 120,0000
RAW MATERIALS 20,000
FURNITURE 1000
EQUIPMENT 4000
RENT DEPOSIT 15,000
ADVERTISEMENT 1000
STATIONERY 1,000
LICENSES 300
TOTAL

6.2 ESTIMATION OF WORKING CAPITAL

Estimation of working capital is the remaining amount of capital after meeting the pre-
operational cost.

WORKING CAPITAL = CAPITAL –PRE-OPERATIONAL COST

= 1000000 -

= Ksh.283,000

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CLLASIC ELECTRONICS SHOP AND WHOLESALERS

PARTICULARS JAN FEB MAR APRL MAY JUNE JULY AUG SEP OCT NOV DEC T
CASH INFLOW 283,00 288,50 301,80 316,00 334,50 352,50 369,50 389,80 412,45 435,15 457,00 502,20 4
OPENING CASH 0 0 0 0 0 0 0 0 0 0 0 2 2
SALES 127,00 130,00 130,00 132,00 132,00 133,00 134,00 138,00 137,00 137,00 140,00 140,00 1
0 0 0 0 0 0 0 0 0 0 0 0 0
TOTAL CASH 410,00 418,50 431,80 448,00 466,50 485,50 503,50 527,80 549,45 572,15 597,00 642,20 6
INFLOW 0 0 0 0 0 0 0 0 0 0 0 0 0
CASH OUT FLOW 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 1
RENT 0 0 0 0 0 0 0 0 0 0 0 0
ELECTRICITY 1,100 1,000 1,200 1,100 1,000 1,000 1,100 1,200 1,000 1,000 1,000 1,000 1
TRANSPORT 3,000 2,900 2,800 2,700 3,000 3,000 2,700 2,600 2,800 2,700 2,900 3,000 3
INSURANCE 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4
WATER 400 400 400 400 400 400 400 450 400 450 400 450 4
LICENSE 500 --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- 5
ADVERTISEMEN 2,500 --------- --------- --------- --------- --------- --------- 2,500 --------- --------- --------- --------- 5
T
REPAIR AAND 3,000 2,900 2,800 2,700 2,000 2,000 2,000 2,000 2,500 2,500 2,000 2,000 2
MANTEINANCE
TELEPHONE 2,500 2,000 2,100 2,100 2,100 2,100 2,000 2,100 2,100 2,000 2,000 2,100 2
LOAN 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 -------- --------- 2
REPAYMENT
SALARIES 54,500 54,500 54,500 54,500 54,500 54,500 54,500 54,500 54,500 54,500 54,500 54,500 6
PURCHASES 20,000 19,000 18,000 16,000 17,000 19,000 17,000 16,000 17,000 18,000 18,000 18,000 2
TOTAL CASH 121,50 116,70 115,80 113,50 114,00 116,00 113,70 115,35 114,30 115,15 94,800 95,050 1
OUT FLOW 0 0 0 0 0 0 0 0 0 0 0
NET CASH FLOW 288,50 301,80 316,00 334,50 352,50 369,50 389,80 412,45 435,15 457,00 502,20 547,15 4
0 0 0 0 0 0 0 0 0 0 0 0 0
6.3 PREPARATION OF CASH FLOW PROJECTION

6.3.1 PROFORMA CASH FLOW PROJECTION FOR THE FIRST 12 MONTHS.

CLLASIC ELECTRONICS SHOP AND WHOLESALERS

24
CLLASIC ELECTRONICS SHOP AND WHOLESALERS
PARTICULARS 2021 2022 2023
CASH IN FLOW
OPENING CASH 4,442,402 4,706,550 5,253,450
CASH SALES 1,610,000 1,700,000 1,800,000
TOTAL CASH 6,052,400 6,406,550 7,053,450
INFLOW
CASH FLOW
RENT 120,000 120,000 120,000
ELECTRICITY 12,700 12,800 12,600
TRANSPORT 34,100 34,200 34,200
INSURANCE 48,000 48,000 48,000
WATER 4,950 5,000 5,000
LICENSE 500 500 500
ADVERTISEMENT 5,000 5,000 5,000
REPAIR AND 28,400 28,400 28,400
MANTAINANCE
TELEPHONE 25,200 25,200 25,200
LOAN 200,000 ---------- --------------
REPAYMENT
SALARIES 654,000 654,000 654,000
PURCHASES 213,000 220,000 225,000
TOTAL CASH OUT 1,345,850 1,153,100 1,155,900
FLOW
NET CASH 4,706,550 5,253,450 5,897,550

6.3.2 PROFORMA CASH FLOW PROJECTION FOR THE FIRST THREE YEARS
CLLASIC ELECTRONICS SHOP AND WHOLESALERS

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CLLASIC ELECTRONICS SHOP AND WHOLESALERS

PARTICULARS JAN FEB MARC APRL MAY JUNE JULY AUG SEP OCT NOV DEC T
CASH INFLOW
SALES 127,000 130,000 130,000 132,000 132,000 133,000 134,000 138,000 137,000 137,000 140,000 140,000 1
PURCHASES 20,000 19,000 18,000 16,000 17,000 19,000 17,000 16,000 17,000 18,000 18,000 18,000 2
GROSS PROFIT 107,000 111,000 112,000 116,000 115,000 114,000 117,000 122,000 120,000 119,000 122,000 122,000 1
EXPENSES
RENT 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 1
ELECTRICITY 1,100 1,000 1,200 1,100 1,000 1,000 1,100 1,200 1,000 1,000 1,000 1,000 1
TRANSPORT 3,000 2,900 2,800 2,700 3,000 3,000 2,700 2,600 2,800 2,700 2,900 3,000 3
INSURANCE 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4
WATER 400 400 400 400 400 400 400 450 400 450 400 450 4
LICENSE 500 ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- 5
ADVERTISEMENT 2,500 ------- ------- ------- ------- ------- ------- 2,500 ------- ------- ------- ------- 5
REPAIR AND 3,000 2,900 2,800 2,700 2,000 2,000 2,000 2,000 2,500 2,500 2,000 2,000 2
MANTAINANCE
LOAN 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 2
REPAYMENT
TELEPHONE 2,500 2,000 2,100 2,100 2,100 2,100 2,000 2,100 2,100 2,000 2,000 21,000 2
SALARIES 54,500 54,500 54,500 54,500 54,500 54,500 54,500 54,500 54,500 54,500 54,500 54,500 6
TOTAL 101,500 97,700 97,800 97,500 97,000 97,000 96,700 99,350 97,300 97,150 76,800 77,050 1
EXPENSES
NET PROFIT 5,500 13,300 14,200 18,500 18,000 17,000 20,300 22,650 22,700 21,850 45,200 44,950 2
BEFORE TAX
PROVISION FOR 880 2,128 2,272 2,960 2,880 2,720 3,248 3,624 3,632 3,496 7,232 7,192 4
TAX 16%
NET PROFIT 4,620 11,172 11,928 15,540 15,120 14,280 17,052 19,026 19,068 18,354 37,968 37,758 2
AFTER TAX
6.4 PREPARATION OF PROFORMA INCOME STATEMENT

6.4.1 PROFORMA INCOME STATEMENT FOR THE FIRST 12 MOTHS

CLLASIC ELECTRONICS SHOP AND WHOLESALERS

26
CLLASIC ELECTRONICS SHOP AND WHOLESALERS

PARTICULARS 2021 2022 2023

SALES 1,610,000 1,660,000 1,700,000
PURCHASES 213,000 210,000 212,000
GROSS PROFIT 1,397,000 1,450,000 1,488,000
EXPENSES
RENT 120,000 120,000 120,000
ELECTRICITY 12,700 12,600 12,700
TRANSPORT 34,100 34,000 34,000
INSURANCE 48,000 47,000 47,000
WATER 4,950 5,000 4,950
LICENSE 500 500 500
ADVERTISEMENT 5,000 5,000 5,000
REPAIR AND 28,400 28,300 28,300
MANTAINANCE
TELEPHONE 25,200 25,000 25,100
LOAN 200,000 ----------------- ----------------
REPAYMENT
SALARIES 654,000 654,000 654,000
TOTAL EXPENSES 1,132,850 931,400 931,550
NET PROFIT 264,150 518,600 556,450
BEFORE TAX
PROVISION FOR 42,264 82,976 89,032
TAX 16%
NET PROFIT 221,886 435,624 467,418
AFTER TAX
6.4.2 PROFORMA INCOME STATEMENT FOR THE FIRST 3 YEARS
CLLASIC ELECTRONICS SHOP AND WHOLESALERS
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6.5 PREPARATION OF PROFORMA BALANCE SHEET

6.5.1 NEYMAR BEEF CATTLE DAIRY FARM PROFORMA BALANCE SHEET AS

AT 1ST JANUARY 2021.

FIXED ASSETS KSH LONG TERM LIABILITIES KSH

Machine and equipment 500,000 Owners (savings) 5000,000

Friends and relatives contributions 250,000

Bank loan 250,000

CURRENT ASSETS

Opening cash 500,000

___________ __________

500,000 1,000,000
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6.5.2 PROFORMA BALANCE SHEET AS AT THE END OF THE 1ST YEAR

NEYMAR BEEF CATTLE FARM PROFORMA BALANCE SHEET AT 31ST

DECEMBER 2012.

NON- CURRENTS ASSETS KSH LONG TERM LIABILITIES KSH

Machine and equipment 217,000 Owners savings 200,000

Friends and relatives 100,000

Bank loan 200,000

CURRENT ASSETS Net profit 221,886

Stock 300,000

Debtors 5,000

Cash at hand 202,306

__________ ___________

724,386 724,386
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6.6 CALCULATION OF BREAK EVEN POINT

ITEM AMOUNT KSH

FIXED VARIABLE COST
SALARIES 6350,300
INSURANCE 48,000
RENT LICENSE 120000
ADVERTISEMENT 500
LOAN REPAYMENT 5,000
TOTAL VARIABLE FIXED COST 200,00
TOTAL FIXED VARIABLE COST 1,027,500
VARIABLE COSTS
TELEPHONE 5,200
WATER 4,950
ELECTRICITY 10,000
MANTAINANCE 28,400
TRANSPORT 34,100
PURCHASES 21,000
TOTAL VARIABLE COSTS 318,350

TOTAL CONTRIBUTION MARGIN =TOTAL SALES –TOTAL VARIABLE COST

= 1,610,000 – 100550

= Ksh.1509450

PERCENTAGE CONTRIBUTION MARGIN = TOTAL CONTRIBUTION MARGIN x 100

TOTAL SALES
CLLASIC ELECTRONICS SHOP AND WHOLESALERS
= 1509450 x100

1,610,000

= 93.75%

30

BREAK EVEN = TOTAL FIXED COST x 100

PERCENTAGE CONTRIBUTION MARGIN

= 1,027,500 x 100

93.75%%

= Ksh.1, 280,693.008

BREAK EVEN = Ksh.1,280,693.008

6.7 CALCULATION OF PROFITABILITY RATIO

6.7.1 GROSS PROFIT PERCENTAGE

GROSS PERCENTAGE = GROSS PROFIT x 100

SALES

= 107,000 x 100

127,000

= 84.25%
CLLASIC ELECTRONICS SHOP AND WHOLESALERS
6.7.2 RETURN ON EQUITY

RETURN ON EQUITY = NET PROFIT x 100

INITIAL CAPITAL

= 22.886 x 100

500,000

= 44.38

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6.7.3 RETURN ON SALES

RETURN ON SALES = NET PROFIT x 100

SALES

= 221,886 x 100

1,610,000

= 13.78%

6.8 DESIRED FINANCING

DESIRED FINANCING = PRE-OPERATIONAL COST + WORKING CAPITAL

= 217,000 +283,000

= Ksh.500, 000

DESIRED FINANCING = KSH.500, 000

CLLASIC ELECTRONICS SHOP AND WHOLESALERS
6.9 PROPOSED CAPITALIZATION

LOAN = KSH.200, 000

FRIENDS AND RELATIVES = KSH.100, 000

OWNERS CAPITAL = KSH.200, 000

TOTAL = KSH.500, 000

PROPOSED CAPITALIZATION = KSH.500, 000

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