Duncan Business Plan

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Prepared by Duncan Otieno Ogendo – EABQ/03458P/2020 BCM

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THE TECHNICAL UNIVERSITY OF KENYA
BUSINESS PLAN
LATSE LOGISTICS LIMITED COMPANY
P.O. BOX 423 – 00200 NAIROBI, KENYA
Website: www.latseogilimited.com
PRESENTED BY: DUNCAN OTIENO OGENDO
REGISTRATION NUMBER: EABQ/03458P/2020
PRESENTED TO: THE TECHNICAL UNIVERSITY OF KENYA EXAMINATION

BOARD IN PARTIAL FULFILLMENT FOR THE AWARD OF
BACHELORS DEGREE OF BUILT ENVIRONMENT IN
CONSTRUCTION MANAGEMENT
DATE OF PRESENTATION: JUNE 19TH 2023
SUPERVISOR: MR. SAMUEL GICHINGA KIGURU
Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

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BUSINESS PLAN
DECLARATION
I hereby declare that this business plan has been prepared by me as a part of fulfillment for the award of
Bachelor of Built Environment in Construction Management Degree, at The Technical University of
Kenya. All information provided in this business plan is based on my research, knowledge, and
understanding of the subject matter.
I acknowledge that this business plan represents my own work and original ideas, unless otherwise
indicated, and is not copied or plagiarized from any other source. I have not submitted this business
plan, or a similar version of it, for any other academic assessment or evaluation.
I take full responsibility for the accuracy and completeness of the information presented in this business
plan. Any errors or omissions are unintentional and do not affect the overall integrity of the plan.
I understand that any attempt to misrepresent the work presented in this business plan, including
plagiarism or falsification of information, may result in disciplinary action as per the academic policies
and guidelines of The Technical University of Kenya
Name: DUNCAN OTIENO OGENDO

Reg. No: EABQ/03458P/2020
Signature ………………………………………………………………………...
Date ………………………………………………………………………………

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DEDICATION
I dedicate this work to my family, my wife, Gladys, and my two children, Risper and Oliver and also not
forgetting my close friend Brian who inspired me to continue writing this project.
I am truly grateful for the support, guidance, and encouragement provided by the above-mentioned.
Their invaluable contributions have helped shape the development and success of this business plan.
Their dedication, and belief in my abilities have inspired me to strive for excellence and overcome
challenges throughout this journey.
I would also like to express my sincere appreciation to the faculty members and mentors at The School
of Construction and Property Studies, led by the chairman of the department, Dr. Absalom Lamka for
the four-year period of our degree, they have inculcated in us the relevant information we need to set out
in the field ready for work. Their positive advice, assistance and critique during the projects facilitated
accomplishment of this report. They have imparted their knowledge and guidance, and have helped
refine our understanding of the subject matters. Their commitment to education and their willingness to
invest in their students' growth have been instrumental in the creation of this business plan.

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BUSINESS PLAN
ACKNOWLEDGEMENT
I hereby wish to acknowledge a few individuals who contributed to the compilation of this business plan
both financially and theoretically.
Firstly, my supervisor Mr. Samuel Gichinga Kiguru whose guidelines and supervision throughout the
process persistently enabled me to write effectively and efficiently. My close friends who helped
proofread my work and my parents who enabled me to print out this business plan.

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BUSINESS PLAN
EXECUTIVE SUMMARY
LATSE Logistics Limited Company will be a partnership form of business owned by two big time business
Men with adequate experience. It will be involved in providing transportation services that is importation and
exportation of goods, parcel deliveries and house and office relocation. The business will be located along
Mombasa road - Nairobi, Kenya. Its premises are at Duncan properties, LATSE enterprise building of two floors
with very spacious offices. The partners made a concrete observation and research and discovered an opportunity
to start the business based on several reasons them being that the logistic industry is wide and can employ citizens
of different levels of education, knowledge and skills: the advancement of opportunities in the logistics industry
are plentiful and also the partners look up to empower women by increasing their numbers in the logistic industry.
LATSE Logistics plans to enter the market by ensuring that it is legally registered and pay its taxes as many
clients observe the legality of a business. The company will also give out vouchers and rewards to its first fifty
clients in each month to get loyal clients. The targeted market are potential large scale business companies,
starting entrepreneurs, educational institutions, students and both working class and job seekers.
LATSE Logistics Limited Company has an advantage over its competitors as it is solely private with no
government control over it and it offers services for an affordable price. The company also does not choose
specific services to be offered no matter how complicated the need of transportation can be. Continuous
advertisement of the company will help set a firm ground of acquiring many potential and loyal clients. The
company’s major department include the finance department, sales and marketing department, procurement
department, human resource department and ICT department. The partners will be the CEOs and each department
will be headed by a manager. There would be a director who will be specifically in charge of the air and land
freights operations. Other personnel include secretaries, drivers, cleaners, security guards and kitchen staff. The
personnel will be employed having gone through a clear and fair interview, selection and training.
The company will use the financial plan to effectively and efficiently run the business. The financial plan will
help to know whether the business is making progress, profits and has a chance in staying in the logistic industry
for decades. The business will be run with high expectations of having to push through the demanding market and
competitive environment. Like any other business, the company is prone to risks in its growth process and it has
set out strategies to offset those risks. These risks include political instability, inflation, taste and preferences
changes from customers, variation in the level of demand, legal issues related to the business and economic
instability. LATSE Logistics Limited Company is a highly profitability entity and any viable financial
institution can help finance and make the business a reality. The financial gain is coupled up with the social
benefit achieved by the clients who ask for services from the company and get to experience high quality
transportation services in the logistic industry.

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TABLE OF CONTENTS
DECLARATION....................................................................................................................
DEDICATION........................................................................................................................
ACKNOWLEDGEMENT.....................................................................................................
EXECUTIVE SUMMARY....................................................................................................
CHAPTER ONE: BUSINESS DESCRIPTION..................................................................
1.0 Introduction......................................................................................................................
1.1 Name of the Business........................................................................................................
1.1.1 Mission...........................................................................................................................
1.1.2 Vision..............................................................................................................................
1.1.3 Business Location and Addresses................................................................................
1.2 Sponsor of the Business....................................................................................................
1.3 Nature of the Business....................................................................................................
1.4 Type of Business.............................................................................................................
Table 1.1 initial investment of LATSE Logistics Limited Company....................................
1.5 Products and Service......................................................................................................
1.6 Justification of the Business Opportunity....................................................................
1.7 Goals and Objectives of the Business...........................................................................
1.8 Entry Strategy................................................................................................................
1.9 Growth Strategy.............................................................................................................
CHAPTER 2: MARKETING PLAN..................................................................................
2.0 Introduction....................................................................................................................
2.1 Customers.......................................................................................................................
2.2Market Share...................................................................................................................
Table 2.1 the market shares initial stage upon entry..............................................................
Figure 2.1 Pie chart Representation of the initial market share.............................................
Table 2.2 the market share at growth stage............................................................................
Company name.......................................................................................................................
Figure 2.2 Pie chart representation of the market share at growth stage................................
2.3 Competition.............................................................................................................
........15
Table 2.3 competitors to LATSE Logistics Limited Company..............................................

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6
2.4 Advertising And Sales Promotion.................................................................................
2.4.1 Advertising...................................................................................................................
2.4.2 Sales Promotion...........................................................................................................
2.5 Pricing Strategy..............................................................................................................
Table 2.4 LATSE Logistics Limited respective prices for services offered..........................
2.6 Sales Tactics....................................................................................................................
2.7 Distribution Strategies...................................................................................................
CHAPTER 3: MANAGEMENT PLAN.............................................................................
3.0 Introduction....................................................................................................................
3.1 Business Manager and Qualifications..........................................................................
Figure 3.1 organizational structure for LATSE Logistics Limited Company........................
3.2 Key Personnel.................................................................................................................
3.2.1 Directors........................................................................................................................
3.2.2 Managers......................................................................................................................
3.3 Other Personnel..............................................................................................................
3.3.1 Junior Workers...........................................................................................................
3.3.2 Drivers..........................................................................................................................
3.3.3 Kitchen Staff................................................................................................................
3.3.4 Security Team..............................................................................................................
3.4 Recruitment, Training and Promotion.........................................................................
3.4.1 Recruitment.................................................................................................................
3.4.2 Training........................................................................................................................
3.4.3 Promotion.....................................................................................................................
3.5 Remuneration and Incentives.......................................................................................
3.5.1 Remuneration..............................................................................................................
Table 3.1 remuneration for LATSE Logistics Limited Company..........................................
3.5.2 Incentives.....................................................................................................................
3.6 Licenses, Permits and By-Laws.....................................................................................
3.6.1 Licenses........................................................................................................................
3.6.2 Permits.........................................................................................................................
3.6.3 By-Laws........................................................................................................................
3.7 Support Services.............................................................................................................

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CHAPTER 4: OPERATIONAL PLAN.............................................................................

4.0 Introduction....................................................................................................................
4.1 Operational Facilities and Capacity.............................................................................
Table 4.1 operational facilities and capacity..........................................................................
Figure 4.1 layout will be as per the blue print below.............................................................
Figure 4.2 administration office layouts is as below;.............................................................
4.2 Operational Strategies...................................................................................................
Table 4.2 cost of materials.....................................................................................................
Table 4.3 cost of labour..........................................................................................................
Table 4.4 overhead costs........................................................................................................
Table 4.5 total cost of operation.............................................................................................
4.3 Operational Process.......................................................................................................
Figure 4.3 flow chart for operational process of LATSE Logistics Limited Company
................................................................................................................................................
4.4 Regulations Affecting Operations..........................................................................
CHAPTER 5: FINANCIAL PLAN.....................................................................................
5.0 Introduction....................................................................................................................
5.1 Pre-Operational Costs....................................................................................................
Table 5.1 pre-operational costs of LATSE Logistics Company............................................
5.2 Working Capital.............................................................................................................
Table 5.2 the working capital for LATSE Logistics Limited Company................................
5.3 Projected Cash Flow Statement....................................................................................
Table 5.3 cash flow statement for LATSE Logistics Limited Company...............................
5.4 Proforma Income Statement.........................................................................................
Table 5.5 statement of comprehensive income for LATSE Logistics Limited
Company................................................................................................................................
5.5 Proforma Balance Sheet................................................................................................
Table 5.6 statement of financial position for LATSE Logistics Limited Company..............
5.6 Breakeven Analysis........................................................................................................
5.7 Desired Financing...........................................................................................................
Table 5.7 LATSE Logistics Limited Company desired finances...........................................

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BUSINESS PLAN
5.8 Proposed Capitalization.................................................................................................

Table 5.6 LATSE Logistics Limited Company proposed capitalization...............................
5.9 Expected Profitability Ration........................................................................................

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CHAPTER ONE
BUSINESS DESCRIPTION
1.0 Introduction
This chapter explains on the business name, vision, mission and sponsors of the business. It also discusses the
business location, address, the form of business ownership, the products and services offered to the market, the
goals and objectives of the business. This chapter explains on the entry strategy of the business to the market and
how it intends to grow.
1.1 Name of the Business
LATSE Logistics Limited is the name of the business. The name is the short form of land-air transportation
supply enterprise. The relevance of the tittle is that the business will be an incorporate technology company with
new and improved ways of transportation of materials and goods in conjunction with offering land and flight
services to satisfy customer’s expectations.
1.1.1 Mission
The business mission is to set up a standard transportation company that will be known for constantly providing a
high level of trustworthiness and easiness in transporting of goods and materials for our potential customers. We
are also looking to establish a transportation company that is top notch as well as very affordable.
1.1.2 Vision
The business vision in the logistics industry is to establish a transportation company that will be regarded as one
of the best not just in Kenya but around the world.
1.1.3 Business Location and Addresses
LATSE Logistics limited will be located along Mombasa road- Nairobi, Kenya. It is at the Duncan properties,
LATSE enterprise building of two floors with very spacious offices.
Postal address 423-00047 Nairobi, Kenya.
Our website: www.latselogilimited.com
Address: [email protected]
The location is appropriate as it is near both the country’s main ports, that is, the country’s international airport
and the new standard gauge railway station. The location is also advantageous as it enables the company to
transport goods via road for short distances. Moreover, it is approximately at the center of the logistics industry
most common area of operation hence enabling the company to interact with their competitors. The company is
able to easily operate its activities by sending out goods and services which saves on time and money as the
distance to be covered will be short to the airport and railway station. It will also be easy for road transportation as
they don’t have to pass through the main city, Nairobi, where the trucks could encounter traffic.
1.2 Sponsor of the Business
The business is jointly owned by Duncan Otieno, 42, and James Davidson, 38, two big time business men with
experience of over twelve years among them in the logistics industry; Both being hardworking over average
students in their academic years and moreover, one graduated with masters in procurement and supply chain
management and the other partner with an ongoing programme in masters in construction project management.
The owners both have gained important skills over the years that would help them in running of the company.

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BUSINESS PLAN
The skills include technical skills, human relation skills, conceptual skills, ability to make the right decisions and
time management skills.
1.3 Nature of the Business
LATSE Logistics founders are aware of how the logistic industry is competitive and hence have laid out
strategies of how to become a force to be reckoned with in the logistics industry. As a result, a devised policy has
been set that will favor the hardworking personnel in the company who are willing to learn in order to achieve the
company’s objectives. The company will be involved in providing transportation services to the public, that is,
national and international export and import services for both bulky and singly packed goods, finished goods and
unfinished goods from one geographical area to another as the major activity and house and office relocation and
door to door deliveries as the minor activity.
LATSE Logistics Limited plans on using the basic activities of logistics channel in supply chain management
that is from customer service to warehousing services. These basic activities include planning, sourcing, making,
delivering and returning the goods. The company intends on using its personnel effectively and efficiently in the
completion of its operations. It also will use the means of transportation available to them to enable the movement
of the goods and offer effective and efficient services. LATSE Logistics limited will use both direct and indirect
marketing for the company to market to gain the supposed loyal customers/clients.
1.4 Type of Business

LATSE Logistics Limited will be a partnership form of business. The partners plan to set up LATSE Logistics
with Ksh.50,000,000/= savings of previous years from a joint account at the KCB bank. There are other sources
of finance which will be used, them being a loan of Ksh.80,000,000/= from the KCB bank which will be paid at
an interest rate of 2.5% every month, family’s contribution of Ksh.500,000/= who will later expect support in the
form of bursaries and sponsorships for education and dividends of Ksh.5,000,000/= from the Stima Sacco
association that we enrolled in for the purposes of the business. 30% of the amount will basically be used to build
up a facility that will work as offices and warehouses as well as a parking space for approximately ten trucks and
fifteen motorcycles. 40% of the total capital is used to import vehicles and motorcycles from Japan to start off the
business. It is a big risk as the partners not so sure how the market will receive the company’s services but with
hard work, there is the expectation that the company will be on its feet in five years’ time. The table below shows
the capital to be used in starting the business;
Table 1.1 initial investment of LATSE Logistics Limited Company
Type of contribution to capital Amount in KSH.

Savings 50,000,000
Loan from KCB bank 80,000,000
Families’ contribution 500,000
Dividends 5,000,000
Total capital 135,500,000
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1.5 Products and Service

The founders of LATSE Logistics cannot deny that the main purpose of starting the company is to make profit.
However, the main purpose of starting the business is to make LATSE Logistics the top-quality transportation
service company that is readily available to the citizens of Kenya as well as potential clients from all over the
world and it being the best choice. LATSE Logistics Limited will help its clients in processing of documentation
involved in dispatching of goods from one place to another. The company intends to unburden the clients off the
stress of having to deal with the operations involved in the exporting and importing of goods and services, that is,
the company will only ask for the goods/products to be transported and the total affordable amount involved in
the operations and let us stress out in having to get the good/product to its destination. The company will also help
the residents from around the country to relocate. This is all about house relocation to office relocation to building
evacuations etc. What is unique about LATSE Logistics services is that it is readily available at any time of the
day and night, that is if the clients plan on moving even at night, they just contact the company. The company also
transport goods in a safe way in that the goods will arrive at its destination with no damages.
LATSE Logistics prioritizes the client’s needs in that it will deliver at the right time and at the right place unlike
other business logistics companies. The staff take care of the client’s goods as if it belongs to the company itself.
LATSE Logistics limited has the advantage over other companies in that it just doesn’t offer its services to the
big fish (business tycoons), but also offer its services to developing business people and the residents who want to
send parcels over short distances using the company’s motorcycles services for small parcels and goods and mini
pickups vehicles services for larger goods in short distances. For example, a person who sells clothes, shoes and
bags in Mlolongo can contact LATSE to deliver the clothes or shoes or bags ordered to a place like Muthaiga at
an affordable fee. Another example is a person who forgot to take an important document from his or her house
and can’t travel back to get it, he or she can contact LATSE to bring the document to them if they have someone
at their house. The company will deal in the exportation and importation of goods like electronics, spare parts,
furniture, metals and fragile goods like glass. LATSE Logistics Limited intends to help the business people have
an easy time in the transportation of the goods and services.
1.6 Justification of the Business Opportunity

The global economy tends to change enormously by expanding over the years and the logistic industry has
become more important. The economic environment may act positively or negatively but either way the founders
of the company have prepared LATSE Logistics for the coming hills ahead. LATSE Logistics founders saw an
opportunity based on different experiences and observations made. Some of the reasons that led the founders to
start the company are listed below;
i. Realization that outsourcing has provided new opportunities and new challenges in logistics thus the
ability to provide job opportunities to the unemployed logistic graduates in the country.
ii. Observation that logistics is a wide industry and thus can employ people of all education levels hence
trying to eradicate poverty by offering jobs to the unprivileged in the society.
iii. The advancement opportunities in the logistic industry are plentiful and moreover, the company will be
able to save on costs of having to hire new personnel by training the low-level employees and promote
them to be high level employees.
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iv. The possibility that starting a logistics company is rarely boring as there is a wide variety of work to be
done. The company will be dealing with materials and goods hence the sheer variety of work makes it
more interesting.
v. The partners look to employ more women in the company in the belief in woman power. This is because
many believe that logistics is a world that belongs to the men but the founders aspire for the women to
involve themselves at all levels of the logistic industry.
vi. Logistics is a stepping stone to the international business hence ability to expand the business wider and
gain more skills and easily get investors to invest in the business.
1.7 Goals and Objectives of the Business

The founders of LATSE Logistics have set goals and objectives to govern the company for it to succeed. With an
agreement that by the end of five years into the business, the company will have cleared the loans borrowed and
solely concentrate on making profits over 50% and investing 70% of the profit back to the business. The partners
intend to expand the business in 23% of the physical space of the offices and also build more warehouses to
accommodate more potential client’s goods. 20% will go to adding more vehicles and motorcycles yearly for easy
running of the business. The partners also intend to give atleast 10% back to the society and also motivate the
company’s employees to work much harder by giving rewards. The employees will also be required to adhere to
the ground rules that have been set so as to avoid cases of disagreement which brings the company down. LATSE
Logistics founders expect that in five years’ time, the company will be a force to be reckoned with in the logistic
industry.
1.8 Entry Strategy
A company should be legally registered to be able to operate any business and thus LATSE Logistics Limited
will abide by the law and get certified as a logistics company in Kenya. This will help the company avoid political
risks by paying off taxes. This will be an advantage as many clients look at the legality of the business at first
before proceeding to communication. LATSE Logistics plans to give free vouchers and rewards of big value to
its first 50 clients in each month to gain loyal customers. LATSE Logistics will also offer services at a lower
price than the other logistics company for clients with bulky goods. The partners also plan to fund a needy known
institute and also plan eventful occasions for the purpose of publicity.
1.9 Growth Strategy
LATSE plans on opening a branch in atleast every town in the country when it has grown. It also plans on
opening more branches around the world. More connection with business magnets and investors will be important
to the business growth. LATSE Logistics targets mainly the young enterprise entrepreneurs in the country and
internationally as they require all the help they need in the transportation of their goods. LATSE Logistics plans
on using the internet and social media to market itself. It also will use the media by advertising its services along
programs in the television and radio and also in magazines and business journals. Lastly, constant market survey
will be done to ensure room for improvement from the feedback obtained. LATSE Logistics founders also plan
to continuously give back to the society in any way that will add value to the company.
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CHAPTER TWO
MARKETING PLAN
2.0 Introduction
This chapter is meant to explain how the company will strategize its marketing methods on the potential
customers, how it plans to share the market with already existing companies/industries, be better than its
competitors, its strategy on the advertising and sales promotion, its pricing strategy, the sales tactics it plans to use
and the distribution strategy it will apply.
2.1 Customers
LATSE Logistics limited targeted potential customers are of two categories and they include;
i.) Business companies/enterprises
These are potential business customers who want to import and export goods from and to other countries. They
may need road transportation services from their headquarters to their branches in other towns. They may also
need warehousing and office relocation services. Most of these companies are located in Nairobi and its outskirts
and due to this, they can easily access LATSE logistics services that will be readily to them whenever they are
ready to start transportation. These companies can be large or small. The companies tend to ask for transportation
services for their goods every twice to thrice a month and its always in bulks. They are likely to pay for the
services offered to them by cheque. These companies may have different expectations on how they are to be
served.
ii.) Individual customers
These are people who are working class, job seekers, students and entrepreneurs. These customers will need
services like delivery services, relocation services, warehousing services and transportation of goods outside of
Nairobi. LATSE Logistics offers the named services and it will be able to deliver the services to them. These
customers are located in Nairobi and its neighboring towns. They tend to ask for these services whenever the need
arises that is it can be on the basis of every day or weekly or monthly or annually. They are likely to pay for the
services offered by cash, credit cards or use of cheques.
2.2 Market Share
The partners are aware of the stiff market and have prepared LATSE Logistics to have to share the market with
its competitors. As a startup, LATSE Logistics expects a few customers within the first three months but will
increase as time goes by. The expected market share is as shown below;
Table 2.1 the market shares initial stage upon entry

Company name (competitors) Market share
Ken freight (800/2000 x 100%) 40%
Bollore Logistics (600/2000 x 100%) 30%
Kenya Airways (500/2000 x 100%) 25%
LATSE Logistics Limited (100/2000 x 100%) 5%
Total number of customers 2000
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Figure 2.1 Pie chart Representation of the initial market share
MARKET SHARE
5.00%
25.00%
40.00%
30.00%
LATSE
KenfrieghtBollore logisticsKenya airwaysLATSE logistics
LATSE Logistics expects to have captured at least 25% of the market share after staying in the market for five
years by advertising the company directly and indirectly that is through applying the promotional strategies which
include pull strategy, push strategy and profile strategy. The expected market share is as shown below;
Table 2.2 the market share at growth stage
Company name Market share

Ken freight 29%
Bollore logistics 22%
Kenya airways 24%
LATSE Logistics 25%
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Figure 2.2 Pie chart representation of the market share at growth stage
MARKET SHARE
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25.00% 29.00%
BUSINESS PLAN
24.00%
22.00%
2.3 Competition
LATSE Logistics will experience stiff competition from big logistics companies which have been in the logistics
industry for longer periods. Some of these companies include Kenfrieght, Kenya airways and Bollore Logistics
Company. The table below shows their location, source, the size of market they command, strengths, weaknesses,
opportunities and the threats they have towards LATSE Logistics Company.
KenfreightBollore logisticsKenya airwaysLATSE Logistics
Table 2.3 competitors to LATSE Logistics Limited Company
Company Location Source Size of Market Strengths Weakness Opportunity Threat

Name They
Command
Kenfrieght ICD China, Almost 70%of the Government Expensive. Easy access to Limited
Embakasi Japan, freight handling support. Governme customers due to government
5km from German, market Experience of nt its connection support.
LATE Turkey, 37 years. with the Enough
USA. control. government.
Logistics capital.
Limited
Bollore Airport north Spain, Almost 60% of the Most respected Deals with Affordable road Good
logistics road 5km China, road transport sector road transport particular transportation of establishme
from Japan, business. businesses. goods. nt in the
LATE German, market.
logistics Korea
limited
Kenya Mombasa China, 90% of the air It’s the Expensive. Easy access to Limited
airways road Japan, transport sector provision of customers due to government
3km from German, ground handling it being the only support.
LATE Turkey, services to other airline in the Good
logistics Korea, airlines in country. establishme
limited USA, Kenya. nt in the
Cuba, Government market.
Egypt support.
and
more.
2.4 Advertising And Sales Promotion

The partners plan to market the company by applying the principles of marketing which are probe, product, price,
promotion and place. There is a plan to use both direct and indirect marketing to market the company.
2.4.1 Advertising
LATSE Logistics plan to influence people to know the company through use of bill boards, business magazines
and articles, TV and the internet. There will be advertising every once a month on the magazines and television,
every day in to the internet and once after every three months on billboards. The total advertising cost is expected
to amount to Ksh.400,000/= annually. In order to know if the company has reached the market well, market
surveys will be conducted to know what people think about LATSE Logistics Limited Company. The company
will also give out questionnaires for people to fill out.

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2.4.2 Sales Promotion

The partners plan to promote LATSE Logistics by giving out short term incentives to its regular clients by giving
out discounts depending on the weight of the goods to be transported, vouchers and calendars to all the clients that
visit the facility. The discounts will be given during the off-peak seasons so as to encourage them to transport
more goods during the season. Vouchers will be given during holiday celebrations and the calendars every first
month of the year.
2.5 Pricing Strategy
Since LATSE Logistics limited will be a new company, many will expect our services to be much better than our
competitors. Due to this, the company’s management team will consider some factors in the pricing of the
services offered so as to fulfill both the company’s purpose and the client’s expectations that is the company will
ensure that all entities involved end up in a win-win situation. These factors that LATSE Logistics intend to
consider include;
i. The cost we used to start the company.
ii. Our competitors price
iii. The company’s pricing objective
iv. The level of demand in the logistics market
v. The agency of need for our services
vi. The government policies
vii. The level of income of our target market.
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Table 2.4 LATSE Logistics Limited respective prices for services offered
Services Weight of Good Prices
Air transportation 1kg-99kg Ksh.100,000
Direct flight 100kg-999kg Ksh.300,00
Urgent transportation 1ton-100ton Ksh.500,000
101ton-1000ton Ksh.700,000
1001ton-infinite Varies with the amount of weight
Bollore logistics 10gram-999gram Varies with the amount of weight
1kg-999kg Ksh.50,000
100kg-999kg Ksh.100,000
1ton-100ton Ksh.300,000
101ton-1000ton Ksh.500,000
1001ton-infinite Varies with the amount of weight
House Relocation From Ksh.10,000
Office Relocation From Ksh.15,000
Parcel Delivery From as low as Ksh.100
Warehousing Services From Ksh.3,000
The pricing strategy used are;

i. Demand oriented pricing strategy

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ii. Cost pricing strategy

iii. Competitive pricing strategy
2.6 Sales Tactics
LATSE Logistics marketing team will enforce direct selling basics to new clients. As the company progresses, it
will use referrals and online selling of the services. The company will offer credit facilities and discounts to
frequent clients to motivate them. LATSE Logistics will ensure efficient and effective customer care to the
customers to satisfy their expectations. Any compliments and complains from the customers will be received well
and dealt with as soon as possible. LATSE Logistics will help give funds to needy children and persons with
disabilities in the outside institutions as a way of promoting public relations. It will also provide short- and long-
term jobs to the citizens of Kenya.
2.7 Distribution Strategies
LATSE Logistics limited plans to distribute its services by ensuring that what the client expects is fulfilled to the
latter. The company’s senior and junior personnel believe that communication with clients is the key to a
successful job. The company will deliver its services through the departments where the heads of these
departments will ensure that every task is taken into account and fulfilled. The company will perform both direct
and indirect distribution of the services to the clients. Direct distribution will be done through the procurement
and supply department. Indirect distribution will be done through external companies who would have joined
forces with the company through contracts for a short or long period of time. Problems such as excess demand
from the company’s services will be anticipated by the company from around the company’s area or other areas
from within or outside the country.
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CHAPTER THREE
MANAGEMENT PLAN
3.0 Introduction
A company that has to succeed needs to have a strong and well-planned management. A good management must
have qualified and efficient personnel and it begins from the chief executive(s) to the junior staffs. This chapter
will discuss all the personnel in the company that is their qualifications, requirements for them to be employed
and the required experiences. It will also discuss the process of training, promoting and remunerating the
employees. The licenses, permits, by-laws and support services will also be discussed in this chapter.
3.1 Business Manager and Qualifications
In chapter one, the business is identified as a partnership kind of business. Therefore, the partners will be the
superior managers of the company hence the chief executive officers (CEOs). The partners will use the skills set
acquired over the years to develop the company, that is, skills like the technical skills, human relation skills, time
management skills extra. The founders’ ability to make concrete and effective decisions will determine the rise
and stability of the company. Their role in the company will be to make the objectives and goals that LATSE
Logistics Limited key employees will be required to accomplish. The partners will act as the main
representatives to the public and would oversee through the coordination of activities to ensure that all the goals
that were set for the company are achieved.
The partners are qualified as the managers of the company for one holding a master’s degree in procurement and
supply chain management with leadership skills, time management skills, decision making and social skills, and
the other partner pursuing master’s degree in construction project management with facility management skills,

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project management skills, cost estimation and budget skills and quality control and assurance skills. The partners
are tactful and diplomatic, have high moral and professional behavior, firm, fare with a strong character,
disciplined and a fluent communicator. The partners have atleast five years of experience in the logistics industry.
The partner’s main duties will be planning, organizing, staffing, directing and controlling. As the owners of the
business, the partners will be entitled to all the profits and losses of the business will expect at least Ksh.80,000
each and every month.
The organization structure that will make LATSE Logistics limited function is shown in the diagram below;
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Figure 3.1 organizational structure for LATSE Logistics Limited Company
Chief Executive Officers

ral(Gener
Managers)
Director Air Freight Management and land

operations
Managers;
Managers; Accounting
Marketing and
sales Finance Purchasing
Managers; Human
Managers; Customs Managers; Traffic planning General ledgers
resource.
and Customs and (land and air) Administration.
Brokerage air brokerage land International
freight Exports freight. business
Imports Customer service development
trucking.
Warehousing
Other personnel Other personnel
Other personnel

Other personnel lOMoARcPSD|8507131
Other personnel
e.g., drivers
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ICT Department
3.2 Key Personnel

3.2.1 Directors
They will be in charge of directing the operating department and report back to the chief officers of the
departments.
Duties;
i. Determining and implementing policies and making decisions.
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ii. Binding company contracts with dealings of the company.
iii. Maintaining and keeping records.
iv. Calling meetings of departments.
v. Preparing and filling statutory documents with the company office or any other agency.
Qualifications;
i. Must be a master’s degree holder in his or her respective field.
ii. Must have 5 years’ experience working in the logistics field.
iii. Must be 28 years and above.
iv. Must be computer literate.
v. Must have a certificate of good conduct.
3.2.2 Managers
They will be in charge of their sub-departments and will be reporting back to the chief officers of their
department. Duties;
i. Agreeing and managing budgets.
ii. Planning menus.
iii. Recruiting, training and supervising the staff.
iv. Development of the department.
v. Planning staffing levels.
vi. Fostering a spirit of team work to the department employees.
vii. Solving disagreements between employees of his department.
Qualifications;
i. At least a bachelor’s degree in their respective field.
ii. At least 3 years’ experience in the logistics industry.
iii. Must be computer literate.
iv. Be a certified member of their respective fields.
v. Should be 25 years of age and above.

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vi. Better than average written and spoken communicator.

vii. Excellent organizational management skills.
viii.Evidence of ability to practice a high level of confidentiality.
3.3 Other Personnel
These are the junior workers in the company, drivers, cleaners, kitchen staff and security team.
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3.3.1 Junior Workers

They are under the managers and may include deputy managers, secretaries, personal assistants, and workers in
general. They must be holders of a diploma in their respective fields and have basic computer skills. They must be
certified members of their respective field e.g.; an accountant must have a certificate in CPA level 1-4 and the
procurements must have either a CPS-K or an APS-K certificate. They must have at least 6 months experience
working in the logistics industry. They must be very fluent communicators of English and Swahili languages.
They must also be above the age of 22 years.
Duties and responsibilities;
i. Doing the work allocated to them in time, effectively and efficiently.
ii. Ensuring that every client has been served and with high professionalism.
iii. Ensuring that all inventory has been dealt with and as per the clients’ expectations.
3.3.2 Drivers
They will be responsible for transporting the goods to their final destination whether by truck or motorcycle. They
must have a valid driving license with the experience of 2 years in driving. They must be fluent communicators of
English and Swahili languages. They must be holders of a diploma in high school education.
3.3.3 Kitchen Staff
They will be responsible in cooking and serving the other employees in the company. They must be holders of at
least a certificate in hospitality and with the experience of 1 year working in the hospitality industry. They must
be fluent communicators and have good human relations skills.
3.3.4 Security Team
They will be responsible of protecting and ensuring physical safety of the employees. LATSE Logistics will make
a contract with the BOB Morgan security which is one of the best security companies in Kenya to provide that
service.
3.4 Recruitment, Training and Promotion
3.4.1 Recruitment
The human resource manager of LATSE Logistics will be responsible for recruiting new employees of the
company. The process of job analysis will be crucial when coming up with the job descriptions and specifications
which will be specific to the job. Incentives and attractive job salaries will be attached to the job description and
specification. In order to ensure that the business recruits the best employees the following procedure will be used
during the recruiting process;
i. Analysis of the vacancy.
ii. Identify the possible source for possible candidates.
iii. Conduct extensive advertising for the job description and requirements.
iv. Sourcing applicants from institutions will be an alternative.
v. Internal promotion or transfers from branches will be considered.
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Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020

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The selection process will be as follows;

i. Receiving the applications from the applicants.
ii. Assessment of the applications and shortlisting.
iii. Conducting interviews of the shortlisted applicants.
iv. Selecting the best candidates for the jobs.
v. Orientation of the candidate(s) chosen for the job.
3.4.2 Training
Training in LATSE Logistics will involve;
i. The newly employed employees will undergo mandatory orientation to learn more about the organization.
This will help them get a more understanding of how the daily operations of the company are done. The
other older employees will help them in their duties for the first two weeks and then they will have a one -
week evaluation of their performance. During the orientation they will also be introduced to the
employees, the company in general, learn on the organizational structure and the objectives and goals of
the company.
ii. The employees will also be trained after every two years while still working so as to ensure they are up to
date with the changes in the logistics industry.
iii. When there occurs a transfer of an employee, he/she will undergo through orientation and introduction of
the new branch that they on to.
iv. When an employee has been promoted, they will also be trained of their new duties and responsibilities.
v. LATE Logistics limited will also conduct benchmarking activities where the employees can visit other
bigger companies so that they can learn more and improve on their performance.
vi. LATE Logistics will offer short courses like leadership skills, risk management and stress management
for free to the employees to help them level up their skills.
3.4.3 Promotion
LATSE Logistics will promote its personnel with the criteria based on the level of education, self-development,
best performance of work, contribution of achieving the company’s objectives and the years of service to the
company. The methods of promotion include;
i. A raise in salary
ii. A new personal office
iii. Allowances
iv. Gifts for having a good performance appraisal.
3.5 Remuneration and Incentives
3.5.1 Remuneration
The table below represents how LATSE Logistics plans to pay its employees;
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Table 3.1 remuneration for LATSE Logistics Limited Company

Serial no. Job title Basic salary Allowances Monthly salary Annual salary
001 Chief officers of 90,000 30,000 120,000 1,440,000
departments
002 Directors of 80,000 25,000 105,000 1,260,000
departments
003 Managers 70,000 20,000 90,000 1,080,000
004 Deputy managers 50,000 15,000 65,000 780,000
005 Procurement officers 40,000 8,000 48,000 576,000
006 Marketers 40,000 8,000 48,000 576,000
007 Accountants 40,000 8,000 48,000 576,000
008 Information technologists 40,000 8,000 48,000 576,000
009 Secretaries 25,000 6,000 31,000 372,000
010 Personal assistants 25,000 6,000 31,000 372,000
011 Drivers 20,000 4,000 24,000 288,000
012 Cleaners 18,000 2,000 20,000 240,000
013 Kitchen staff 20,000 4,000 24,000 288,000
Total costs 558,000 144,000 702,000 8,424,000
3.5.2 Incentives
LATSE Logistics intends to give its employees additional benefits as a form of motivation. The incentives can be
financial or non-financial. The financial are sponsored trips to the place of their choice, bonuses, premium pays,
commissions and a plan where employees also enjoy the profits that the company has made. The non-financial are
staff career path, conducive working environment, social events, annual leaves and free lunches.
3.6 Licenses, Permits and By-Laws
3.6.1 Licenses
The company will register as per the law of the country to acquire incorporate certificates, the company seal and a
tax pin certificate. It will also need to register with the national logistics council. For this to happen, the partners
will have to hire a certified lawyer who will deal with the certifications. The process is expected to take a
maximum of two months with the total costs of Ksh.50,000. The company will also need to get a fire license
which they would be renewing yearly for Ksh.10,000. It will also need to have a business trading license which is
issues by the registrar of firms in the ministry of trade and industry for ksh.20,000.
3.6.2 Permits
The company needs to have the city council approval for it to run and it will be paying Ksh.20,000 yearly to
maintain good relations. It will also need to visit Huduma Centre to acquire the NSSF and NHIF numbers and it
will be paying monthly for ksh.20,000. The company will also need to get a permit from NTSA to ensure that all
vehicles used are in good condition for Ksh.5,000. It will also need NEMA’s approval for being an organization
that is environmentally friendly for Ksh.5,000.

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3.6.3 By-Laws
For the company to run efficiently and effectively it needs to abide to the rules and regulation of the country.
These by-laws examples include;
i. Insurance cover
ii. Health cover
iii. Labor laws
iv. Income tax
3.7 Support Services
LATSE Logistics will depend on outside sources which are experienced and more knowledgeable on their fields
for their services. This outside source may include;
i. Legal services - the company will ask for the services from Justin and Anne law firm who will be
required to handle all the legal matters that the company will come into contact every now and then.
ii. Insurance services - the company will insure itself with the ICEA Lion Insurance Group for every
insurance that the law needs of them. It will be paying Ksh.20,000 monthly.
iii. Banking services - the company will be banking its money to the KCB bank for all its transactions but
for the sake of the clients it can also receive banked money from other banks like Co-operative bank,
Equity bank, Family bank and Stanbic bank.
iv. Technical services - the company will ask for technical services from mechanical companies near them.
v. Security services - the company will source its security staff from the BOB Morgan security services on
contracts which are to be renewed each year.

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CHAPTER FOUR
OPERATIONAL PLAN
4.0 Introduction
This chapter will be discussing LATSE’s Logistic limited operational facilities, the operation strategies it will
use, its operation process and all the regulations that may affect its operations for good efficiency.
4.1 Operational Facilities and Capacity
LATSE Logistics will require special machines and equipment for the smooth completion of the business
activities. These machines may include weighing machines, ladder trucks, trollies, vehicles (trucks, mini trucks,
pickups and motor cycles) etc. The equipment required are office tools and the furniture to be used in the offices.
All the machines, equipment’s, tools and other facilities are described in the table below;
Table 4.1 operational facilities and capacity
Facilities Details
Machine/ tools/ equipment No Capacity Cost per Total Supplier/source
required unit costs
Container reach stackers 1 1kg-1000kg 42,000 42,000 WIILLIAM MACHINERY
Container lift trucks 1 1kg-1000kg 45,000 45,000 WILLIAM MACHINERY
Forklifts; 4 1kg-1000kg 30,000 120,000 WILLIAM MACHINERY
Pneumatic tire
forklifts Narrow aisle
forklifts Electric
forklifts
Side loaders forklifts
Pallet jacks stackers 1 1kg-1000kg 32,000 32,000 WILLIAM MACHINERY
Forklifts trucks 1 1kg-1000kg 120,000 120,000 WILLIAM MACHINERY
Trucks 3 8000kg-15000kg 2,000,000 6,000,000 Jason general motors
Mini trucks 3 100kg-700kg 1,000,000 3,000,000 Jason general motors
Pickups 3 100kg-500kg 800,000 2,400,000 Jason general motors
Motorcycles 15 1kg-100kg 200,000 3,000,000 Jason general motors
Total 4,269,000 14,759,000
Counter freight detectors 1 - 100,000 100,000 WILLIAM MACHINERY
Tool boxes and 10 - 300,000 3,000,000 WILLIAM MACHINERY
parts storage
Storage unit racks 15 - 200,000 3,000,000 WILLIAM MACHINERY
Bar storage racks 15 - 200,000 3,000,000 WILLIAM MACHINERY
Photocopier 2 2-4,000 AA 54,000 108,000 LG electronics shop
sheets
Printers 5 - 10,000 50,000 LG electronics shop
Computers 5 - 35,000 175,000 LG electronics shop
Solar panels 2 80kw/h 25,000 50,000 Bofapin solar panels
Total 924,000 6,933,000
Total 5,193,000 21,692,000

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Furniture and fittings 30 - 5,000 150,000 Grace furniture

example office tables,
chairs, visitors’
coaches,
Stationeries e.g., pens, 50 - 1,000 50,000 Blue stationeries
logbooks, diaries
Total 6,000 200,000
The company’s premises will be approximately be a 1acre land. LATSE Logistics limited premises layout will
be organized in such a way that its operations will flow smoothly that is from the point a client enters our
premises to the point where he/she leaves.
The company premises will be divided into 4 sections which include;
i. Administration wing - this where all the clients will be welcomed to the company and be offered
LATSE Logistics limited services. It will be also the section where all the blue tie staff will be located
and be working from. All the company’s paper work will be handled from here.
ii. Warehousing wing - this is the place all the client’s goods will be stored either for storage purposes or
before they are dispatched to their final destination. A small section of the warehouse will act as a storage
room for the company.
iii. Loading and offloading containers wing - this is the section where all the goods to be transported will
be loaded to or offloaded from the trucks that they are to be or were transported with.
iv. Parking space and arena - this is a section where all the vehicles that enter LATSE Logistics premises
will be parked excluding the trucks which have their section. A small part of the space will act as an arena
where the kitchen and café will be located. It will be the place where the staff and visitors can have a
peaceful quite time for themselves during breaks (applies to the staff).
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Figure 4.1 layout will be as per the blue print below

Gate
Kitchen
S
e Cafe
c
u
ri
t
y
Warehouse E
Administration
Warehouse
G
Warehouse F
Wareh ouse Wareh ouse

D C
Warehouse A
Loading and offloading area Security
Warehouse B

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Figure 4.2 administration office layouts is as below;
Entrance and exit
ICT Security
Department Department
Reception
Private
Entrance
Other personnel open office
Sales and Visitors

marketing meeting room
department
CEO
Secretary’s’ office and
PA’S
Finance Accounting
Secretaries Office and department office
PA’S General Meeting room
CEO
Directors’ office Human resource Procurement

Board meeting room Managers’ offices
department department
4.2 Operational Strategies

The main aim of operations for LATSE Logistics will be to maximize customer’s satisfaction and minimize
operational costs. The company will follow the following strategies to ensure that its operations flow smoothly in
that there would be efficient supervision, minimized costs, maximized outputs, good performance and high
probability. These strategies include;
4.2.1 Employing qualified and talented personnel.
4.2.2 Use of modern machines and equipment which are less costly and give out more output.
4.2.3 Ensuring frequent reports from all the departments to improve on arising issues and get better on some.
4.2.4 Ensuring continuous employee motivation increase outputs.
4.2.5 Training employees when the need occurs.
The companies work will be supervised by the CEOs through the directors and managers. The directors and
managers will have to ensure that the costs are minimized through ordering reducing supply expenses, lowering
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financial expenditures, modernizing the company’s marketing efforts, harnessing virtual technology, use of
efficient time strategies and making most of the company’s space to stack containers where there is free space in
case the warehouses are full. Wastage of resources will be reduced through keeping paper recycling bins in
offices, buying essential utilities in bulks, reusing binders and folders and printing papers in a smarter way. The
employees will be informed of optimizing operations in the company through having to complete their work by
the deadline given, reducing idleness, avoid chit chats during office work, encouraging team work and making
sure that there is good relations between the superiors and their subordinates in that the inferior employees can
approach their superiors for any issues affecting them whether positive or negative and at the same time
respecting them. The employees will also be taught during orientation of ways of utilizing resources allocated to
them e.g., avoiding to use more papers than necessary for writing and moving machines when they are not
working.
The costs involved in the operations of LATSE Logistics are shown in the diagram below;
Table 4.2 cost of materials
I.) Cost of materials per month
Item Amount (KSH.)

Operational costs of transport 5,000,000
Maintenance costs; inventories 1,500,000
Warehouses
Administration costs; handling costs 2,000,000
Communication costs
Development costs 1,000,000
Storage costs 2,000,000
Distribution costs 1,000,000
Fixed and variable costs 1,000,000
Total costs 12,500,000
Assumptions;
4.2.5.1 The costs will be varying over the years.
4.2.5.2 The logistics market will be changing in favor of the company’s operating costs
4.2.5.3 The fixed and variable costs have the same equal figures for example, from the table above each of the
costs have ksh.500,000.
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Table 4.3 cost of labour

II.) Cost of labour per month
Personnel Salary/month
Chief Officers 120,000
Directors 105,000
Managers 90,000
Deputy managers 65,000
Procurement officers 48,000
Marketers 48,000
Accountants 48,000
Information technologists 48,000
Secretaries 31,000
Personal assistants 31,000
Drivers 24,000
Cleaners 20,000
Kitchen staff 24,000
Total salary 702,000
Assumptions;
4.2.5.3.1 The governments wage bill will remain unchanged which is Ksh.12,000.
4.2.5.3.2 He employees will be satisfied with the company’s pay over the years.
Table 4.4 overhead costs
III.) Overhead costs
Item Amount (KSH.)
Electricity 300,000
Water 200,000
Fuel 1,000,000
Telephone and internet 400,000
Insurance 20,000
Stationery 50,000
NHIF and NSSF 20,000
0ther expenses 50,000
Assumptions;
4.2.5.3.2.1 The other expenses facing the company will not exceed Ksh.20,000.
4.2.5.3.2.2 Fuel, electricity and water expenses will remain unchanged overtime.
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Table 4.5 total cost of operation

IV.) Total costs of operation per month
Item Amount (KSH.)
Cost of materials 12,500,000
Cost of labour 702,000
Overhead costs 2,040,000
4.3 Operational Process
LATSE Logistics will have to use the business logistics management procedure to ensure that its services satisfy
our client’s expectations. These procedures include;
Facility inspection
This can be done by the CEO every once in a month which help in checking for anything and everything that can
get into the employees’ way and prevent them from doing their tasks when they next clock on.
Customer first meeting
Once the sales and marketing team brings on board a potential client, the company’s directors will meet with the
client and know what services they require from the company then immediately evaluate whether the company is
capable of offering the services to them. The negotiations for the costs of the services offered will be done in
collaboration the company’s managers. The client will be required to pay 50% of the agreed cost first to the
account’s office whether in cash, credit card or cheques.
Service delivery
At this stage, the services offered by the company will be divided into various inventory management parts which
include;
4.3.1 Exporting - the company will transport the stock from its first location and bring it to its premises for
inspection and evaluation it with the client’s permission. The goods will be stocked in the warehouses to
wait for immediate transportation to its destination. During the time that the good is in the warehouse, the
company’s procurement department will take care of all the paper work needed for exporting purposes
before they are dispatched to ensure all the legal requirements are followed.
4.3.2 Importing- the company will get in touch with the company or shop that the client wants to buy from and
then it makes a purchase. The company will ensure that the goods to be transported are taken care of and
arrive in their premises undamaged. They will inspect the goods and store it while they get in touch again
with the client to inform them of the good arrival.
4.3.3 Land transportation- the company will ensure that the goods to be transported by land are wrapped,
labelled well, packed and put in the right trucks for transportation. The drivers will have to ensure that the
goods arrive safely and on time. As for the parcels delivery personnel they will have to ensure that the
parcels arrive to the right client at the right place and time. For the movers they have to ensure that the
furniture and other goods are handled well and moved to the right location then arrange them for them.
4.3.4 Warehouses services- the company will offer storage services for the clients who are unable or do not have
storage space for their stocks and this will be at a cost separate from the transportation cost. The clients will
be required to sign an agreement form to proof that they agreed to the terms and conditions of the
company’s storage of stock in the warehouses. The clients are allowed to pick their stock with different
strategies of picking which include order picking, line picking, cluster picking, batch picking, zone picking,
label-based picking, and paper-based picking.
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Final payment
The client will have to make the final payment on delivery of the goods if they are first time clients but if the
client is a long-term customer, they will receive an invoice to inform them of the delivery of the goods. If they
will have any complaints, they will be required to leave the notes at the reception desk or send an email to the
company email address.
Figure 4.3 flow chart for operational process of LATSE Logistics Limited Company
marketing clients 1st

Facility inspection meeting price negotition
process
evaluation of the service delivery;

clients service to exportation,importation, land transportation,
be offered warehousing.
final payment client leaves
4.4 Regulations Affecting Operations

There are regulations set by the government and the logistics council as well that will affect our operations. These
regulations are internal and external. They include;
Internal regulations;
4.4.1 EOBR Regulations - this is the electronic on-board recorders which tracks the time that the truck drivers
are on the road. LATSE Logistics will ensure it fulfills this rule by putting the gadgets in its vehicles.
4.4.2 Worker classification-this law protects employees from being utilized as a contingent workforce rather
than workers with a traditional employment relationship. LATSE Logistics will give its employees the
freedom of speech whenever they feel like they are oppressed.
External regulations;
i. Crashworthiness standards - these are standards, similar to automobiles that help protect truck drivers
involved in accidents. LATSE Logistics will place the necessary gadgets in lace and also ensure the
vehicles are fully put with safety equipment’s so as to avoid the accidents from happening.
ii. Stability control standards - this is a technology mandate controlling stability on heavy-duty tractors to
preventing rollovers of trucks and trailers. LATSE Logistics will ensure that the trucks are not
overloaded.
iii. Economic regulation of carriers - this is the government oversight of rates and entry into an industry.
LATSE Logistics will be paying all the rates required by the government.
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iv. Pricing practices -this is set by government transportation council to protect the consumers and large
payoffs in efficiency. LATSE Logistics will ensure that it sell its services at a price that do not
discriminate the consumers.
v. Health laws - this law benefits the employees in that the company is forced to comply to the affordable
care act which includes groundbreaking employer health care ‘pay or play’ where the employee is
required to pay for medical insurance for the employees. LATSE Logistics will cover its employees’
health insurance.
vi. Taxation laws - this law affects the company as the taxes of Kenya vary each year that they are not
constant. The company will ensure that it pays its taxes to the government to avoid poor relations with the
government.
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CHAPTER FIVE
FINANCIAL PLAN
5.0 Introduction
This chapter describes the financial plan within the initial stage of the business operation. It includes the pre-
operational costs, working capital and projected cash flow statement for one-year, pro-forma income statement,
proforma balance sheet and calculation of the break-even point are all included here. Desired financing, proposed
capitalizations and the expected profitability ratios are shown here.
The financial plan will be used as follows;
i. The partners will use the financial information to get a clear report on the outcome of the business
operations in monetary form.
ii. The expected shareholders will use the financial information to assess the risk and return of their
investment in the company and take investment decisions based on their analysis.
iii. The prospective investors need financial statements to assess the viability of investing in LATSE
Logistics Limited Company.
iv. The employees of LATSE logistics will use the financial statements for assessing the company’s
profitability and the consequences on future remunerations and job security.
v. LATSE Logistics external general public may be interested in the effects of the company on the
economy, environment and the local community.
vi. The government will require LATSE Logistics Limited financial statements to determine the correctness
of tax declaration in the tax returns. The government also keeps tracks of economic progress through the
analysis of financial statements of businesses from different sectors of the economy.
5.1 Pre-Operational Costs
The table below shows the in detail the resources that the company will mobilize to set its objectives;
Table 5.1 pre-operational costs of LATSE Logistics Company
Activity/ Item Amount KSH.
Licenses and permits 110,000
Equipment’s and installation costs; Electricity. 1,466,000
Water.
Forklifts.
Stackers.
Business registration 20,000
Starting inventory; Furniture and fittings. 200,000
Stationery.
Cost of land and buildings 40,650,000
Telephone and Internet cost 400,000
Vehicle 14,400,000
Insurance 20,000
Machines 6,933,000
Raw materials 9,000,000
Other costs 5,000,000
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5.2 Working Capital

Table 5.2 the working capital for LATSE Logistics Limited Company
Current assets
Debtors 1,000,000
Cash at bank 86,866,000
Cash in hand 10,000,000
Stock 9,000,000
Total current assets 10,886,600
Less current liabilities
Creditors 2,000,000
Bank overdrafts 8,000,000
Total current liabilities 10,000,000
Working capital 886,600
Assumptions;
i. The company expects to have creditors and debtors in the first year who will determine the healthiness
operations of the company.
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5.3 Projected Cash Flow Statement

Table 5.3 cash flow statement for LATSE Logistics Limited Company
Item Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Total s
Cash inflow (000) (000) (000) (000) (000) (000) (000) (000) (000) (000) (000) (000) (000)
Opening cash 33,608 113646 115374 115222 114980 115090 114390 114520 114680 115140 115570 115870 -
Cash Sales 16060 17000 17020 17050 17500 17200 17550 17800 17900 17990 18000 18500 209570
Bank loan 80000 - - - - - - - - - - - 80000
Total cash 129668 130646 132394 132272 132480 132290 131940 132320 132580 133130 133570 134370 1587615
inflow
Cash outflows
Raw materials 12500 12500 12500 12500 12500 12500 12500 12500 12500 12500 12500 12500 150000
Salaries 702 702 702 702 800 800 800 1000 1000 1000 1000 1500 10708
Advertisement 400 - - - - - - - - - - - 400
Insurance 20 20 20 20 20 20 20 20 20 20 20 20 240
Electricity 300 300 300 300 300 300 300 300 300 300 300 300 3600
Water 200 200 200 200 200 200 200 200 200 200 200 200 2400
Licenses and 350 - - - - - - - - - - - 350
other legal
requirements
Office expenses 50 50 50 60 60 60 80 80 80 80 100 100 850
Telephone and 400 400 400 400 400 400 400 400 400 400 400 400 4800
internet
charges
Fuel 1000 1000 900 900 1000 1500 1000 1000 800 900 1000 950 11950
Loan - - 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 20000
repayment
Other expenses 100 100 100 110 110 120 120 140 140 160 180 200 1580
Total cash 16022 15272 17172 17292 17390 17900 17420 17640 17440 17560 17700 18170 206978
outflows
Closing Net 113646 115374 115222 114980 115090 114390 114520 114680 115140 115570 115870 116200 -
cash
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Assumptions;
i. The cash sales of the business is expected to increase by increase in number of clients who need the
company’s services.
ii. The company’s expenses are expected to vary as some may increase or decrease while others will remain
constant.
iii. The raw material amount will vary annually not monthly hence the constant value throughout the
months.
5.4 Proforma Income Statement
Table 5.5 statement of comprehensive income for LATSE Logistics Limited Company
LATSE LOGISTICS STATEMENT OF COMPREHENSIVE INCOME
Description KSH. KSH.
Sales 209,570,000
Net sales 209,570,000
Opening stock 33,608,000
Purchases 21,892,000
Closing stock (116,200,000)
Cost of goods sold (-60,700,000)
Gross profit 270,270,000
Less expenses
Electricity 3,600,000
Water 2,400,000
Fuel 11,950,000
Telephone and internet 4,800,000
Insurance 240,000
Licenses and other legal matters 350,000
Salaries 10,708,000
Advertisement 400,000
Raw materials 150,000,000
Loan repayment 20,000,000
Office expenses 850,000
Other expenses 1,580,000
Total expenses (206,878,000)
Net profit before tax 63,392,000
Provision tax of 16% (10,142,720)
Net profit after tax 53,249,280
FOR THE PERIOD ENDED 31ST DECEMBER 2032
Assumptions;
i. Other expenses entail all the expenses that may arise during the operating of the business.
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5.5 Proforma Balance Sheet

Table 5.6 statement of financial position for LATSE Logistics Limited Company
LATSE LOGISTICS
STATEMENT OF FINANCIAL POSITION
AS AT 31ST DECEMBER 2032
Fixed assets KSH. KSH. KSH.
Land and buildings 40,650,000
Machines 6,933,000
Vehicles 14,400,000
Furniture and fittings 2,000,000
Total fixed assets 63,983,000
Current assets
Stock 9,000,000
Debtors 1,000,000
Cash at bank 86,866,000
Cash in hand 10,000,000
Total current assets 10,886,600
Less current liabilities
Creditors 2,000,000
Bank overdraft 8,000,000
Total current liabilities (10,000,000)
64,869,600
Financed by.
Owners Capitals 55,500,000
Net profit 53,249,280
Drawings (68,435,180)
-15,130,400
Long term liabilities
Loan 80,000,000
64,869,600
Assumptions;
i. The drawings indicated will be extracted from the business in form of money and deposited in a private
account for emergencies reasons. For each year the company expects the figure to vary.
ii. The owners’ capital is a total of the partner’s savings, family contributions and dividends.
5.6 Breakeven Analysis
Sales = 209,570,000
Variable costs = (raw materials + salaries + office expenses +fuel + other expenses Variable)
Costs = 12,500,000 + 10,708,000 + 850,000 + 11,950,000 + 1,580,000
Variable costs = 37,588,000
Total contribution margin = (sales - total variable costs)
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Total contribution margin = (209,570,000 – 37,588,000) = Kshs.171,982,000

Contribution margin % = contribution margin x 100
Sales
= 171,982,000 x 100
209,570,000
= 82.06%
Total fixed costs operating costs = 78,199,000
Break-even level (in shillings) = fixed costs
Contribution margin %
= 78,199,000
82.06%
= Kshs.95,294,906.17
5.7 Desired Financing
Table 5.7 LATSE Logistics Limited Company desired finances
Item Amount (KSH.)
Pre-operational costs 78,199,000
Fixed assets (machines, land and buildings, 63,983,000
vehicles, furniture and fittings)
Miscellaneous 500,000
Total desired 143,568,600
5.8 Proposed Capitalization
Table 5.6 LATSE Logistics Limited Company proposed capitalization
Contribution Amount (KSH.)
Savings 50,000,000
Loans from KCB bank 80,000,000
Family contributions 500,000
Dividends 5,000,000
Total investment 135,500,000
5.9 Expected Profitability Ration
a) Gross profit percentage = gross profit x 100
Total sales
Gross profit percentage = 270,270,000 x 100
209,570,000
Gross profit percentage = 129%
b) Return on equity = net profit after tax x 100
Total investment
= 53,249,280 x 100
135,500,000
= 39.3%
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REFERENCES
 Business module guide by lecturer Mr. Samuel Gichinga Kiguru
 "Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers"
By Alexander Osterwalder and Yves Pigneur
 "The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically
Successful Businesses" By Eric Ries
 "The Startup Owner's Manual: The Step-By-Step Guide for Building a Great Company" By
Steve Blank and Bob Dorf
 "The Art of the Start 2.0: The Time-Tested, Battle-Hardened Guide for Anyone Starting
Anything" by Guy Kawasaki
 "Business Plan: How to Write a Business Plan - Business Plan Template and Examples
Included!" By Alex Genadinik
 "The One-Page Business Plan for the Creative Entrepreneur" By Jim Horan
 "Business Planning for Entrepreneurs: A Comprehensive Guide to Business Plan Writing,

Financing, and Growth" By David H. Bangs Jr.
 "The Business Plan Workbook: A Practical Guide to New Venture Creation and Development"
By Colin Barrow, Paul Barrow, and Robert Brown
 "The Definitive Business Plan: The Fast Track to Intelligent Business Planning for Executives
and Entrepreneurs" By Richard Stutely
 "The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It" By
Michael E. Gerber
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Prepared by Duncan Otieno Ogendo – EABQ/03458P/2020 BCM

THE TECHNICAL UNIVERSITY OF KENYA

LATSE LOGISTICS LIMITED COMPANY

P.O. BOX 423 – 00200 NAIROBI, KENYA

PRESENTED BY: DUNCAN OTIENO OGENDO

REGISTRATION NUMBER: EABQ/03458P/2020

PRESENTED TO: THE TECHNICAL UNIVERSITY OF KENYA EXAMINATION

DATE OF PRESENTATION: JUNE 19TH 2023

SUPERVISOR: MR. SAMUEL GICHINGA KIGURU

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

Name: DUNCAN OTIENO OGENDO

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

CHAPTER 4: OPERATIONAL PLAN.............................................................................

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

5.8 Proposed Capitalization.................................................................................................

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

1.4 Type of Business

Table 1.1 initial investment of LATSE Logistics Limited Company

Type of contribution to capital Amount in KSH.

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

1.5 Products and Service

1.6 Justification of the Business Opportunity

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

1.7 Goals and Objectives of the Business

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

Table 2.1 the market shares initial stage upon entry

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

Figure 2.1 Pie chart Representation of the initial market share

KenfrieghtBollore logisticsKenya airwaysLATSE logistics

Table 2.2 the market share at growth stage

Company name Market share

Company Location Source Size of Market Strengths Weakness Opportunity Threat

2.4 Advertising And Sales Promotion

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

2.4.2 Sales Promotion

The pricing strategy used are;

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

ii. Cost pricing strategy

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

Figure 3.1 organizational structure for LATSE Logistics Limited Company

Chief Executive Officers

Director Air Freight Management and land

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

3.2 Key Personnel

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

vi. Better than average written and spoken communicator.

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020 BCM

3.3.1 Junior Workers

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020

The selection process will be as follows;

Prepared by Duncan Otieno Ogendo - EABQ/03458P/2020

Table 3.1 remuneration for LATSE Logistics Limited Company