BUSINESS PLAN

CASTINE’S GAS SUPPLIERS

Gas Delivery

NAME : INYANGALA CASTINE MWALO

ADM. NUMBER : ELTOP/DSM/3667/J22
COURSE CODE : 2903
PAPER CODE : 107
INSTITUTION NAME : ELDORET TOURISM AND
PROFESSIONAL COLLEGE
SUPERVISOR : MR. DERRICK OCHIENG
SUBMITTED TO : KENYA NATIONAL EXAMINATION
COUNCIL FOR PERCIAL
FULFILMENT FOR THE AWARD OF
DIPLOMA IN SUPPLY CHAIN
MANAGEMENT
YEAR OF SUBMISSION : JULY 2022
DECLARATION
I hereby declare that this business plan is my original work and it has not been submitted to any
examination body or any other college. The business plan been submitted for examination with the
approval of the supervisor

Name : Inyangala Castine Mwalo

Signature:…………………………………………………………….

Date……………………………………………………………………..

Name of supervisor: Mr. Derrick Ochieng.

Signature …………………………………………………………………………

Date:……………………………………………………………………………………

i
DEDICATION
I would like to dedicate this plan to my beloved family for who have been very instrumental towards my
life and persuade my studies.

ii
ACKNOWLEDGEMENT
I sincerely thank my parents. Brothers and sisters for supporting me through my course and the financial
support they gave me. I also thank my supervisor for his tireless efforts all through writing my business
plan. Lastly, I pass my dearly thanks and regards to my loving friends for the support and care they gave
me throughout the entire plan project.

iii
Contents
DECLARATION..........................................................................................................................................i
DEDICATION............................................................................................................................................ii
ACKNOWLEDGEMENT..........................................................................................................................iii
EXECUTIVE SUMMARY........................................................................................................................vi
1.1 Business Description...................................................................................................................vi
1.2 Marketing Plan............................................................................................................................vi
1.3 Organization Plan........................................................................................................................vi
1.4 Operational Plan..........................................................................................................................vi
1.5 Financial Plan.............................................................................................................................vi
1.0 BUSINESS DESCRIPTION..................................................................................................................1
1.1 Business name...................................................................................................................................1
1.3 Form and type of business.................................................................................................................2
1.4 Products and services.........................................................................................................................2
1.5 Justification of opportunity................................................................................................................3
1.6 Industry..............................................................................................................................................3
1.7 Goals of business...............................................................................................................................3
1.8. Entry and growth strategy.................................................................................................................3
2.0 MARKERTING PLAN.........................................................................................................................5
2.1 potential customers............................................................................................................................5
2.2 MARKET SHARE............................................................................................................................5
2.3 Advertising and Promotion strategy..................................................................................................8
2.4 Pricing strategy..................................................................................................................................8
2.5 Sales tactics.......................................................................................................................................8
2.6 Distribution strategy..........................................................................................................................9
3.0 ORGANIZATIONAL PLAN..............................................................................................................10
3.1 Organizational structure...................................................................................................................10
3.2 Personal and qualifications..............................................................................................................10
3.3 Recruitment, Training and Promotions............................................................................................13
3.4 Remunerations and Incentives.........................................................................................................13

iv
 3.5 License, Permits, By-laws...............................................................................................................14
3.6 Business support services................................................................................................................14
CHAPTER FOUR.......................................................................................................................................1
4.0 Operational Plan..........................................................................................................................1
4.1 Product and service Design..........................................................................................................1
4.2 Production facilities.....................................................................................................................1
4.3 Production Strategy.....................................................................................................................1
4.4 Production process.......................................................................................................................2
4.4.1 Man power...........................................................................................................................2
4.4.2 Purchase of Gases................................................................................................................2
4.5 Regulations affecting operations..................................................................................................2
4.5.1 Safety Regulations...............................................................................................................2
4.5.2 Health law............................................................................................................................2
4.5.3 Environmental Regulations..................................................................................................2
CHAPTER FIVE...................................................................................................................................3
5.0 FINANCIAL PLAN/COST.............................................................................................................3
5.5 CASH FLOW STATEMENT FOR THE YEAR 2022................................................................5
5.5.1 PROJECTED CASH FLOW FOR THE YEAR 2023................................................................6
5.5.2 PROJECTED CASH FLOW FOR THE YEAR 2024................................................................7
5.4 PRO FORMA INCOME STATEMENT.......................................................................................8
5.6 BREAKEVEN POINT..................................................................................................................10

v
 EXECUTIVE SUMMARY

1.1 Business Description

Castine Gas Suppliers is a sole proprietorship form of a business that is to be managed by the owner and
is to be assisted by the family members. The business is to commence in March 2016. The business is to
be located at the heart of the busy town that is Kakamega which has only one gas supplier. Moreso the
business is to register under Castine, its address is to be Box 4003 Kakamega and the Telephone no. is to
be 0700286978.

1.2 Marketing Plan

The potential customers are to be individual, workers from various institutions bordering the town e.g.
Masinde Muliro University. The business venture intends to capture promotion and advertisement.

1.3 Organization Plan

The organization of the business is to be a line of organization. Its authority flows from top to the bottom
level. The hiragy is that the flow from the manager to the subordinate. He management is to be done by
the owner with the support of the family members and the business owner advisor. The business is to
offer an increasing salary of 15% in the second and third year to its employees.

1.4 Operational Plan

The business is to acquire most of its gases and equipment from Khetias Supermarket in Kakamega. The
production process is to be carried out in Castine’s and effective manner for the achievement of high
quality services which is to satisfy customers.

1.5 Financial Plan

The commencing capital of the business is to be Ksh. 500,000/=. The capital is to be utilized to met
consequential costs and other costs of running the business. By the end of the first year of trading period,
the business aims to attain a net profit of Ksh. 5,439,200/= which yield about 75% returns on owner’s
equity across investment of the cost incurred.

vi
 CHAPTER ONE

1.0 BUSINESS DESCRIPTION

1.1 Business name

The proposed business is to be castine gas supplies. The owner of the business is Inyangala
castine. The name is to be used because it is common name in the locals of that area. Also the
proposed name will be chosen because it is familiar, easy to pronounce and therefore catching
customer’s interests more easily. However the proposed business can attract more clients to the
business.

Gas Delivery

1.2 LOCATION AND ADDRESS

1.2.1 Business location

The proposed business will be located at Kakamega town opposite Khetias supermarket along
Kakamega Kisumu road. The area is highly efficient of the natural gas produced and delivered to
customers as useful energy.
Khetias supermarket
Khetia dropper store

Castine Gas supplies

County government Kakamega

1
1.2.2 BUSINES ADDRESS

The business address will be

Castine Gas supplies

PO BOX 4003,

KAKAMEGA.

TELEPHONE: 0700286978

EMAIL:[email protected]

1.3 Form and type of business

1.3.1 Form of business

The proposed business will be sole proprietorship because it will be owned and manage by one
person. More so it is the easiest type of business to form reason being is that does not need
approval of board or partner to make daily business decisions. The proposed business has no
legal distinction between the owner and the business entity, also have responsibility for
managing the business, receive all profits and responsible for all looses.

1.3.2 type of business

Castine gas supplies are to start up a gas business firm. the firm proposes to offer services of
high quality which comprises of product, services, construction and public utility industries of
edacity gas and water.

1.4 Products and services

The proposed business is to be a product services that offers sales services and installation of gas
grills gaslights logs and variety of outdoor fire features like fire pits. Also to tap our expertise
through our global network of services stations, our lines of fuel, lubricants bitun and natural gas.

2
1.5 Justification of opportunity
The proposed business was chosen with the aim of making profit and improve air quality and
limit emission of carbon dioxide in town. the location was chosen because the area has more
population to acquire the services produced. The business is easy to operate and manage because
does not need approval of partners to make business decisions. The owner will incur profits and
losses by itself.

1.6 Industry
The business is to be under supply chain management industry. This will involve where a gas
industry exists already the infrastructure usually based on the manufacture of gas technology
with the gas retailing managed by a single large wholesaler strong teamwork by catching clients
and vendors to know the new products in the market.

1.7 Goals of business

1.7.1short term goals

The goals which are to be achieved by business within one year of its operation industries,

i. to provide high quality services to the business clients

ii. to minimize profits
iii. to improve air quality
iv. to conserve our natural resources
v. expanding of market structures
1.7.2 Long term goals
These are goals achieved by the business within three or four years of its operation. They include
the following,
i. opening gas supply industry in other areas
ii. reducing production expenses
iii. expansion of premises to accommodate more energy
iv. the business focus on employing and recruiting more skilled labor in the next two
years of operation

1.8. Entry and growth strategy

1.8.1 Entry strategy

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Upon commencement the proposed business is bound to meet stiff competition to counter its
attack the business will offer quality energy services relatively at low prices than these of
competitors which will be prepared by competent expert since it will be nearly started. The
business will be advertised using different channels of media like radio, television, face book,
newspaper and posters which will be placed on strategic places all over kakamega town

1.8.2 Growth strategy

With time, castine gas supplies is to venture into services such as building a sales funnel which
helps to sale and grow quickly and easily. Moreover utilize a customer management system that
depends on your line of work. Continuous research is to be carried out to determine market
competitors and changing vendor’s behavior.

4
 CHAPTER TWO

2.0 MARKERTING PLAN

2.1 potential customers

The research conducted by the owner suggests the business customers will serve the following;
2.1.1 Institutions
The business intends to serve institutions around the town i.e. colleges and universities. The
institutions will offer the business services by buying the products produced
2.1.2 Travelers
The proprietor intends to serve travelers who might alight at kakamega town who came tour near
our town. The business customer will buy the products due to high expansion of fuels charcoal.
They might prefer to use business gases which are easily acquired. However cooks faster
compared to others.

2.2 MARKET SHARE

2.2.1 Market size
There is to be large numbers of customers who is to be come to business due to the fact that the
business offer high quality services to every vendor and trained good personnel. Also the
location of the business is to favor the good market hence attract more customers. The business
intends to share the market with other competitors who include nyangi’s gas supplies and Mary’s
gas supplies.

5
 Sales

10%

castine
nyangis
marys
30%

60%

2.2.2 Business competitors

Castine gas supplies are not only one at kakamega town but there are others which have been
established already in the town and they include;
Nyangis Gas supplies
Mary’s Gas supplies

2.2.3 Nyangis gas supplies

The business is located around Masinde Muliro University near Lukhambi road. The business
operates 24 hours have quality materials services and also high frequency supply of gases to
targeted destinations.
2.2.4 Mary’s Gas supplies
The business is located along Kisumu highway. The business offered affordable prices to
customers and clients. However it also has availability of power for the business running.

6
2.2.5 SWOT ANALYSIS

COMPETITO STRENGTH WEAKNESS OPPORTUNITY THREATS

R
NYANGIS GAS Have skilled Low level of Has his own Poor market
SUPPLIES personnel management business land handling
Offer high Very expensive Poor
quality services items management
Have frequent Located far
supplies of gas from market
MARYS GAS Qualified Unable to Has adequate Fluctuation in
SUPPLIES personnel accommodate capital to sustain prices
Large market large number of the business Loss of
share customers due Few competitors resources
Personal to its small size in the business
relationships Offer high area
with customers charge
No
diversification
Lack of
products and
services
differentiation
Poor customer Increasing sales
Castine Gas High integrity services and market share Increasing
supplies leadership in Slower to Has direct selling competition
production market than Good business Insecurity
innovation competitors location Increasing
Strong Low efficiency environment employee
employee and high waste Benefit costs
attitudes

7
 High efficient
Low cost
manufacturing

2.3 Advertising and Promotion strategy

The proposed business intends to use various methods of advertising and promotion strategy
which include the following;
2.3.1 Face book
The business intends to use face book for advertisement because has a great opportunity for
business to promote their products and services. Once they are engaged in your posts it is very
easy for you to communicate and deliver value adding content so that their interest in your
products increases over time and it will be more likely to take action on your ads and eventually
buy from you.
2.3.2 Billboards
The business intends to use billboards because they are effective for building brand awareness
and broadcasting business product or campaign to as many people as possible. Reason being
billboards tends to have the highest number of views and impressions when compared to other
marketing methods. it will contain writing such as;

WELCOME TO CASTINE GAS SUPPLIES JIBEBE YAKO LEO KWA BEI

NAFUU

2.4 Pricing strategy

The business will consider the following factor when setting up the prices;
Price based on the local plus the desired returns i.e. profits
Discounts will be given to the regular frequent customers in form of free email services

2.5 Sales tactics

The business will employ direct method to sell the products and services. These will imply and
enable the business to solve customers’ problems by using polite terms when you discuss with
them. The business will also generate a habit of following up with each customers and clients
when serving them thus building of loyalty and trust between customers and business.

8
2.6 Distribution strategy
The proposed business intends to use various channels utilized to services the customers thus
helping the products to reach various destinations and targeted groups includes from the produce
the goods will be sold internationally to wholesalers. During the distribution it may arise a
problem or a challenge of language barrier while distributing. The easiest way of overcoming
this to use of natural and official’s language this is English and Kiswahili over the problem.

9
 CHAPTER THREE

3.0 ORGANIZATIONAL PLAN

3.1 Organizational structure

Here each worker receives orders from the person who is above the hierarchy

manager

supervisor

accounts
clerk

driver cleaner security

3.2 Personal and qualifications
Castine Gas supplies intends to employ the following business personnel

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3.2.1 Manager

The proposed business will be managed by the manager employed by the business owners and
the business performance is to be evaluated by an auditor hired on an annual basis.

The manager will have the following qualifications;

Qualifications

 Higher diploma in human resource management

 Must have at least 5 years experience
 Must be of age 35-40
 Must be a computer literate

Duties and responsibilities

 Responsible for obtaining the necessary supplies of gas to meet company needs
 Responsible for proper transportation and storage of gas supplies
 Maintaining cooperate working relationship with other employees
 Ensuring services offered to customers are adequate
3.2.2 Supervisor
Qualifications
 Higher diploma in human resource management
 Must have at least 3 years of experience
 Must be of age 30-35
 Must be a computer literate

Roles and Responsibilities

o Promote teamwork among employees
o Meets the store revenue and performance targets
o Directs and manages the financial performance of the store
o Decision making and choosing among alternatives
3.2.3 Accounts clerk

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Qualifications
 Diploma in supply chain management
 Must be at least 3 years in the same filed
 Must be of age30-32years
 Must be flexible
Responsibilities
 Provide support for the accounting, finance and sales departments
 Receives and verify invoices from the supplies
 Advertising management on financial matters
 Preparation of salaries and wages of workers
3.2.4 Other personnel’s
3.2.4.1 Driver
Qualification
o Must be installed enough to handle any situation in road
o Must of age 26-30years of university employee
o Must have a driving license
Roles
 Demonstrate safe driving
 Responsible for transporting packages
 Transporting clients
3.2.4.2 Security
Qualifications
 Must be a form four graduate
 Must be of age 20-25years
 Must be hardworking
 Must have good language
Roles
 Guarding the firm
 Taking the records of vendors and visitors who visit and leave the firm
 Monitor proper entrance
 Secure all exits doors and windows

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3.2.4.3 Cleaner
Qualifications
 Must be a form four graduate
 Must be of age 20-25 years
 Must be hardworking
 Must be smart
Responsibilities
 Supplying cleaning materials to designated facility area
 Keep track of cleaning schedule
 Cleaning the business firm

3.3 Recruitment, Training and Promotions

3.3.1 Recruitment
The proposed business will advertise vacant positions in the local newspaper and only candidates
with qualifications are considered for the interviews and short listing.
3.3.2 Training
The business is to train the employees by conducting seminars to update them on new knowledge
by making them to improve on their skills
3.3.3 Promotion
The proposed business is to promote the employees on merits performance. workers are to
advance from one rank to another. Promotion is also advanced through personal merits of the
work clean records and normal business operations.

3.4 Remunerations and Incentives

3.4.1 Remunerations
Workers are to be paid in the middle of the month with advance. This will enable to enjoy their
job and reducing problem of workers learning the work.

Employees(personnel) Monthly payment Yearly payment

Manager 20000 240000
Supervisor 12000 144000
Accounts clerk 10000 120000
Driver 8000 96000
Cleaner 6000 72000

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Security 6000 72000
TOTAL 62000 740000

3.4.2 Incentives
Employees used to be awarded with a affair remuneration depending on the qualifications stated
s per job title. The remunerations is to be done or subjected to increment when the business
makes profit.

3.5 License, Permits, By-laws

3.5.1 Licenses
Before the business commence it is to obtain a trading license from kakamega county
government

3.5.2 Permits
The proposed business is to acquire a permit to show that the firm is legally carried out its
business. The permit is to be obtained in county council of kakamega town and is to incur the
expertise of renewal of the permit which will amount to 4500 Kenyan shillings
3.5.3 By-laws
The business is to comply to the following by-laws stipulated by the ministry of local
government for it is to be operate without interference;
Public market so that they cause any modern gas might be availed in the market
General nurseries by-laws

3.6 Business support services

The business is to open an account with central bank of Kenya branch in Eldoret town. The bank
is to provide banking facilities such as saving money and acquisition of loans. The account
number of the business is;
CENTRAL BANK OF KENYA,
PO BOX 4687,
ELDORET
ACCOUNT NO: 173-189-739

14
The post box is to be opened to facilitate the business with contact address that is to be allowed
for easy receiving of letters. However the business is long for any other services provided by the
post office that is beneficial to the firm which will cost kshs 50000

15
 CHAPTER FOUR

4.0 Operational Plan

4.1 Product and service Design

The proposed business intends to offer quality services of its products at the time they are needed.
The owner designed its products to clients by offering the services directly to them. This helps the
business to create more space for the expansion by offering the services at a lower price of 5000/=

4.2 Production facilities

The proposed business intends to use the following machines and equipments for a successful
operations of the business.

Equipment Quantity and Cost of quantity Source

capacity
Pumps 250 20,000 Nairobi Gas Suppliers
Hose fittings 100 35,000 Turskys Supermarket
Valves 50 28,000 Khetias Supermarket
Gas and Meters 120 16,000 Kakamega Shop
Separators and Filters 130 12,000 Eldoret Suppliers
Pipe Fitting and 100 40,000 Mumias Suppliers
Flanges
Totals 151,000

4.3 Production Strategy

In order for the firm to carry out its operations effectively, the following materials will be needed
to be supplied to the business from various destinations and reach the targeted areas ar a relatively
cheaper price.

Items Cost SOURCE

Electricity 16,000 Kakamega town
Banners 40,000 Khetias supermarket
Grills 35,200 Nairobi hardware
Rent 5,000 Kakamega gas suppliers
Wages and Salaries 15,000 Kakamega town
Total 111,200

4.4 Production process

As a result of technology economic scenario Gastine Gas suppliers wishes to deliver quality
services to the client to attract customers and market the business items of customers enrolment.
The following are some of the ways to ensure the serve production process.

4.4.1 Man power

The owner of the business and the manager are to be source of the right manpower to work in the
business. This is to facilitate easy production of data. The manpower is to be champion behind the
desired quality services to be enjoyed by the customers.

4.4.2 Purchase of Gases

The proposed business aims to offer quality services to its clients. The gas are to be purchased to
enhance efficiency ant time saving from the clientele are using the products. Gases work towards
the production of data at minimum time and are to be used cost effective both to the owner and the
user.

4.5 Regulations affecting operations

The business intends to use the following regulations.

4.5.1 Safety Regulations

The business is to ensure the gas suppliers is to protect the business in case of an accident in the
business premises.

4.5.2 Health law

The business is to operate in an area that is free from hazards that may affect the workers. The
business area must be dust free to prevent the workers from contracting airborne diseases.

4.5.3 Environmental Regulations

The owner of the business is to locate the business in an area that is free from pollution i.e. air.
water and land pollution. This is to ensure that the workers health is good and well taken care of.

2
 CHAPTER FIVE
5.0 FINANCIAL PLAN/COST
It is a tool that shows the business income and expenditure.

IMPORTANCE

(i) Financial planning is vital for the success of a business

(ii) Enhances profile which is responsible for the growth and survival of the
business.

5.1 PRE-OPERATIONAL COST

These are expense that the business will incur before it starts operation.

Items Cost

Equipments 54,000

Raw material 9,100

Project research 2,500

Licenses and permits 1,000

Electricity 2,500

Telephone 1,000

Advising 500

Water bills 400

Repair 1,500

transport 2,000

Total 75,000

3
5.2 WORKING CAPITAL

Item Year 1 Year II

Purchases 430,200 418,400

Cash in bank 702,500 779,00

Cash at hand 200,500 400,500

Debtors 109,00 186,500

Total current assets 1,442,200 1,784,400

Creditors 52,800 55,000

Bank loans 60,000 60,000

Taxes 7 revenues 20,000 30,000

Total current liabilities 132,800 145,000

Working capital 1,309,400 1,639,400

Working capital = current Assets – Current Liabilities

Year 1 = 1,442,200 – 132,800 = 1,309,400

Year 2 = 1,784,400 – 145,000 = 1,639,400

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 5.5 CASH FLOW STATEMENT FOR THE YEAR 2022
ITEM JAN FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC TOTAL

CASH FLOW

BALANCE BROUGHT 116,800 639,999 1,280,000 1,945,8000 2,642,000 3,341,000 4,043,700 4,791,300 5,668,800 6,862,00 7,160,200 37,890,300
FORWARD

DEBTORS 100,000

SALES 160000 749900 766800 826400 843500 908600 973700 1031300 1064900 112300 118300 1140200 9,750,00

TOTAL CASH 900000 47,650,300

CASH OUTFLOW 900,000

ELECTRICITY 185000 185000 185000 185000 185000 185000 185000 185000 185000 185000 185000 185000 54,000

RENT 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 120,000

ADVERTISEMENT 20,000 20,000 40,000

TELEPHONE 1250 1250 1250 1250 125-0 1250 1250 1250 1250 1250 1250 1250 9,300

SALARIES 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 660,000

INSURANCE 10,000

WATER 10000 10000 10000 1500 2000 10000 1500 1500 10000 10000 10000 10000 132,000

OTHERS 5000 500-0 5000 5000 5000 500 5000 500 5000 50005 5000 500 163,000

TOTAL CASH 415 415 415 415 415 415 415 415 415 415 415 415 1,188,300

BALANCE BROUGHT 116,800 639,999 1,280,000 1,945,8000 2,642,000 3,341,000 4,043,700 4,791,300 5,668,800 6,862,00 7,160,200
FORWARD

5.5.1 PROJECTED CASH FLOW FOR THE YEAR 2023

ITEM JAN FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC TOTAL

5
CASH FLOW

BALANCE BROUGHT 116,800 639,999 1,280,000 1,945,8000 2,642,000 3,341,000 4,043,700 4,791,300 5,668,800 6,862,00 7,160,200 152,965,000
FORWARD

DEBTORS 100,000

SALES 160000 749900 766800 826400 843500 908600 973700 1031300 1064900 112300 118300 1140200 9,750,00

TOTAL CASH 8,958300 8,958300 8,958300 8,958300 8,958300 8,958300 8,958300 8,958300 8,958300 8,958300 8,958300 8,958300 165,015,500

CASH OUTFLOW

ELECTRICITY 185000 185000 185000 185000 185000 185000 185000 185000 185000 185000 185000 185000 54,000

RENT 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 120,000

ADVERTISEMENT 20,000 20,000 40,000

TELEPHONE 1250 1250 1250 1250 125-0 1250 1250 1250 1250 1250 1250 1250 9,300

SALARIES 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 56,000 56,000 56,000 56,000 667,000

INSURANCE 10,000

WATER 10000 10000 10000 1500 2000 10000 1500 1500 10000 10000 10000 10000 15,000

OTHERS 5000 500-0 5000 5000 5000 500 5000 500 5000 50005 5000 500 275,000

TOTAL CASH 144,900 101,900 102,400 100,200 122,800 102,600 98,200 128,500 98,300 103,400 182,900 102,900 1,236,300

BALANCE BROUGHT 116,800 639,999 1,280,000 1,945,8000 2,642,000 3,341,000 4,043,700 4,791,300 5,668,800 17,773200 18,670,300
FORWARD

5.5.2 PROJECTED CASH FLOW FOR THE YEAR 2024

ITEM JAN FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC TOTAL

CASH FLOW

BALANCE 18,670,300 116,800 639,999 1,280,000 1,945,8000 2,642,000 3,341,000 4,043,700 4,791,300 5,668,800 6,862,00 7,160,200 264,074,050
BROUGHT
FORWARD

6
DEBTORS 150,000 150,000 100,000 400,000

SALES 160000 749900 766800 826400 843500 908600 973700 1031300 1064900 112300 118300 1140200 9,750,00

TOTAL CASH 8,958300 8,95830 8,958300 8,958300 8,958300 8,958300 8,958300 8,958300 8,958300 8,958300 8,958300 8,958300 165,015,500
0

CASH OUTFLOW

ELECTRICITY 185000 185000 185000 185000 185000 185000 185000 185000 185000 185000 185000 185000 54,000

RENT 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 120,000

ADVERTISEMENT 20,000 20,000 40,000

TELEPHONE 1250 1250 1250 1250 125-0 1250 1250 1250 1250 1250 1250 1250 9,300

SALARIES 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 56,000 56,000 56,000 56,000 667,000

INSURANCE 25,000 25,000

WATER 10000 10000 10000 1500 2000 10000 1500 1500 10000 10000 10000 10000 16,500

OTHERS 5000 500-0 5000 5000 5000 500 5000 500 5000 50005 5000 500 315,000

TOTAL CASH 144,900 101,900 102,400 100,200 122,800 102,600 98,200 128,500 98,300 103,400 182,900 102,900 1,389,950

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5.4 PRO FORMA INCOME STATEMENT
Profit & Loss Account for the year ending 31st December 2022, 2023 and 2024

Item 2022 2023 2024

Sales 2,095,500 2,489,400 2,096,800

Less costs of sales 430,200 418,400 484,500

Gross Profit (g) 1,665,300 2,071,000 2,581,300

Expenses

Repair and maintenance 4,750 5,050 5,50

Salaries and wages 960,000 960,000 960,000

Water bills 33,500 36,000 36,000

Electricity 9,600 9,280 8,050

Taxes 31,200 24,350 29,700

Stationary 20,000 15,000 35,000

Telephone 2,510 3,120 4,350

Insurance 5,550 5,650 6,800

Advertisement 24,000 24,000 24,000

Transport 2,200 1,800 1,800

License 12,950 12,150 10,800

2,500 2,500 2,500

Total expenses 1,108,760 1,098,900 1,124,550

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5.5 BALANCE SHEET

This is what the business Owns

Assets = Liabilities + Capital

Balance sheet as at 31st December 2022

ITEM AMOUNT ITEM AMOUNT

Fixed Assets 492,540 Capital

Premises 54,000 Net profit after tax 569,540

Equipment 300,000

Total Long term liabilities

Current Assets Bank loan 60,000

Stock 40,500

Cash in hand 10,500 Current liabilities

Cash at bank 60,000 Creditors 13,000

Debtors 5,000 Taxes 20,000

Totals 116,000

TOTALS 662,540 662,540

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5.6 BREAKEVEN POINT
It is used to analyze the effects on profit of different costs, volumes and prices. It shows the level
of sales required to support overheads of the business. The breakeven point is that point which
the business will cover all of its costs but not make y any profit

ITEM YEAR 1 YEAR 2 YEAR 3

Salaries 960,000 960,000 960,000

Purchases 430,200 418,400 484,500

Electricity bills 31,200 24,350 29,700

Water bills 9,600 9,280 8,050

Rent 33,500 36,000 36,000

Total 1,464,500 1,448,030 1,518,250

Variable costs

ITEM YEAR 1 YEAR 2 YEAR 3

Loan repayment 60,000 60,000 60,000

Advertisement 2,200 1,800 1,800

Repairs 4,750 5,050 5,550

Transport 12,950 12,150 10,800

stationary 2,510 3,120 4,350

Total 82,410 82,120 82,500

5.6.1 Contribution per margin

Sales = 2,095,500

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Fixed Cost = 1,464,500

Variable costs = 82,410

= Total sales – Variable expense

2,095,500 – 82,410

= 2,013,090

5.6.2 Contribution margin percentage

Contribution margin = T.S. –V.C X 100%

T.S

= 2,095,500 – 82,400 X 100%

2,095,500 = 96.07%

5.6.3 BREAKEVEN LEVEL FOR 2018

B.E.L = E.C X 100%

COTNRIBUTION

Breakeven point (B.E.P) for 2018

5.7 PROFITABILITY RATIOS

1ST YEAR 2022 2ND YEAR 2023

GP Sal GP –Sales – material cert

GP –Sales – material cert 2985438- 1950600

2985438 -97800 1,034838

2007438 Gp%

Gp% 20077438 x 100

20077438 x 100 2985438

2985438 =34.66%

=69.24% Net profit = GP – Expenses

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Net profit = GP – Expenses 1034838 - 548100

2007438 – 95306 = 486738

1060132 486738 x 100

1050132 x 100 2985438

2985438 =16.30%

=35.10%

5.7.1

1ST YEAR 2022 2ND YEAR 2023

Net profit operator/Total investment

Net profit operator/Total investment 486738 x 100

1050132 x 100 2,000,000

2,000,000 = 24.33%

= 52.50%

5.8 Desired financing

Item Cost

Pre-operational cost 363910

Working capital 60,000

Fixed assets 26110

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