BUSINESS PLAN

FOR

ALFRED PLUMBING SOLUTIONS

P.O. BOX 990 – 30100,

ELDORET.

PRESENTER: KIPKEMEI ALFRED

INDEX NO. 5231020094

COURSE CODE: 2705

INSTITUTE: ALDAI TECHNICAL TRAINING INSTITUTE

CENTRE CODE: 523102

DEPARTMENT: BUILDING AND CIVIL ENGINEERING

SUPERVISOR: MADAM VIVIAN

PRESENTED TO: THE KENYA NATIONAL EXAMINATION COUNCIL (KNEC)

FOR THE AWARD OF DIPLOMA IN BUILDING
TECHNOLOGY

SERIES: NOVEMBER 2023.

DECLARATION

I hereby declare that this business plan is my original work presented to ALDAI TECHNICAL
TRAINING INSTITUTE.

STUDENT

NAME: ALFRED KIPKEMEI

SIGNATURE: ………………………..
DATE: …………………………

SUPERVISOR
NAME MADAM VIVIAN
SIGNATURE: …………………………….
DATE: …………………………….

i
ACKNOWLEDGEMENT
I acknowledge the efforts of my lecturer for guiding me in writing this business plan. I am also
grateful to my parents for their financial and moral support during the entire period.

ii
DEDICATION
I dedicate this Business Plan to my beloved parents, ATTI community (Lecturers and my fellow
students) as a whole and everyone else who I cannot note them down who assisted me morally,
and financially which led to the success of this business plan.

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Table of Contents
DECLARATION............................................................................................................................ i
ACKNOWLEDGEMENT............................................................................................................ ii
DEDICATION.............................................................................................................................. iii
CHAPTER ONE ........................................................................................................................... 1
1.0 BUSINESS DESCRIPTION ............................................................................................ 1
1.1 BUSINESS NAME .............................................................................................................. 1
1.2 BUSINESS LOCATION AND ADDRESS ................................................................... 1
1.3 FORM OF OWNERSHIP ............................................................................................... 1
1.4 TYPE OF THE BUSINESS.............................................................................................. 2
1.5 BUSINESS PRODUCTS AND SERVICES................................................................... 2
1.6 JUSTIFICATION OF OPPORTUNITY .......................................................................... 2
1.7 THE INDUSTRY ................................................................................................................ 3
1.8 GOALS OF THE BUSINESS........................................................................................ 3
1.8.1 Long term goals ........................................................................................................................ 3
1.8.2 Short term goals ....................................................................................................................... 3
1.9 ENTRY AND GROWTH STRATEGIES .................................................................... 3
CHAPTER TWO .......................................................................................................................... 4
2.0 MARKETING PLAN ......................................................................................................... 4
2.1 CUSTOMERS ..................................................................................................................... 4
2.1.1 Individual customers .............................................................................................................. 4
2.1.2 Institutional customers .......................................................................................................... 4
2.1.3 Government agencies ............................................................................................................. 4
2.2 MARKET SHARE .............................................................................................................. 4
2.3 COMPETITION ................................................................................................................. 5
2.4 METHODS OF PROMOTION AND ADVERTISING .............................................. 5
2.4.1 Advertising methods .............................................................................................................. 5
2.4.2 Promotional methods ............................................................................................................... 5
2.5 PRICING STRATEGY.................................................................................................. 5
2.6 SALES TACTICS .......................................................................................................... 6
2.7 DISTRIBUTION STRATEGY .......................................................................................... 6
CHAPTER THREE ...................................................................................................................... 7
3.0 ORGANIZATION AND MANAGEMENT PLAN ......................................................... 7
3.1 ORGANIZATIONAL STRUCTURE ............................................................................... 7

iv
 3.2 MANAGEMENT PERSONNEL ................................................................................... 7
3.2.1 Supervisor ................................................................................................................................. 7
3.2.2 Responsibilities ......................................................................................................................... 7
3.3 OTHER BUSINESS PERSONNEL .............................................................................. 7
3.3.1 Accountant ................................................................................................................................ 7
3.3.2 Drivers ...................................................................................................................................... 8
3.3.3 Security guard .......................................................................................................................... 8
3.3.4 Cleaner ...................................................................................................................................... 8
3.4 RECRUITMENT, TRAINING AND PROMOTION OF PERSONNEL ................. 8
3.4.1 Recruitment .............................................................................................................................. 9
3.4.1 Training .................................................................................................................................... 9
3.4.2 Promotion ................................................................................................................................. 9
3.5 REMUNERATION AND INCENTIVES ......................................................................... 9
3.5.1 Remuneration ......................................................................................................................... 10
3.5.2 Incentives ................................................................................................................................ 10
3.7 OTHER SUPPORT SERVICES ................................................................................... 10
CHAPTER FOUR ....................................................................................................................... 11
4.1 PRODUCTION FACILITIES AND CAPACITIES ...................................................... 11
4.3 REGULATIONS AFFECTING OPERATIONS ........................................................... 11
4.3.1 Health regulations .................................................................................................................. 11
4.3.2 Safety regulations ................................................................................................................... 11
4.3.3 Government regulations ........................................................................................................ 11
4.3.4 Other regulations ................................................................................................................... 12
CHAPTER FIVE ........................................................................................................................ 13
FINANCIAL PLAN ................................................................................................................ 13
5.0 INTRODUCTION............................................................................................................. 13
5.1 PRE-OPERATIONAL COST.......................................................................................... 13
5.2 BALANCE SHEET FOR MONETA PLUMBING SOLUTIONS FOR THE YEAR
ENDING 2023, 2024 AND 2025 ............................................................................................. 14
5.3 WORKING CAPITAL FOR THE YEAR 2023, 2024 AND 2025 ................................ 15
5.4 WORKING CAPITAL ..................................................................................................... 16
5.4.1 PRO - FORMA CASH FLOW STATEMENT FOR MONETA PLUMBING
SOLUTIONS FOR THE YEAR ENDING DECEMBER 2023 .......................................... 16
5.4.2 PRO - FORMA CASH FLOW STATEMENT FOR MONETA PLUMBING

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SOLUTIONS FOR THE YEAR ENDING DECEMBER 2024 .......................................... 18
CASH FLOW STATEMENT FOR MONETA PLUMBING SOLUTIONS FOR THE
YEAR ENDING DECEMBER 2025 ..................................................................................... 20
5.5 PRO - FORMA INCOME STATEMENT FOR MONETA PLUMBING
SOLUTIONS FOR YEARS 2023, 2024 AND 2025 ............................................................. 22
5.6 BREAK-EVEN POINT FOR MONETA PLUMBING SOLUTIONS FOR THE
YEAR 2023, 2024 AND 2025.................................................................................................. 23
5.6.1 FIXED COST ................................................................................................................. 23
5.6.3 BREAK EVEN ANALYSIS .......................................................................................... 24
5.7 DESIRED FINANCING FOR MONETA PLUMBING SOLUTIONS ....................... 24
5.8 PROPOSED CAPITALIZATION FOR UMOJA PLUMBING HARDWARE ......... 24

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EXECUTIVE SUMMARY

1.0 BUSINESS DESCRIPTION

ALFRED`S PLUMBING SOLUTIONS will be established to ensure that people of Simat

Eldoret get building materials and other products cheaply and easily. It will also aim at ensuring
that the business owner gets profits hence prosperity of the business. It will be located In Simat -
Eldoret. The business will start operating with an estimated capital of ksh. 2,000,000 of which
ksh. 700,000 will be from his savings, ksh.151, 000 as a loan from financial institutions and ksh.
200,000 from friends and relatives.

2.0 MARKETING PLAN

This chapter explains in detail the potential customers of the proposed business; its competitors
and the size of the market share. The entrepreneur will use promotional and advertising
techniques to its customers. Discounts offering products in credit and offering after sale services
will also be used to increase the volume of sales. Distributors and sale agents will also be used to
sale goods where they will be using bicycles, motor vehicle and motor bikes.

3.0 ORGANIZATION AND MANAGEMENT PLAN

The business will have a qualified team headed by the manager. He will manage the team
tactfully to ensure that the goals and objectives are achieved. Below the manager will be a
supervisor and then the subordinates

4.0 OPERATIONAL AND PRODUCTION PLAN

All the operations that will be involved in undertaking all the business activities are explained.
Facilities and equipment that are involved in the operations are also highlighted. Requirements
and all other expenses that will have to be met in the start of all the business operations are
clarified. Factors that affect all the operations either positively or negatively are explained in
detail.

vii
5.0 FINANCIAL PLAN

This shows the financial requirements of the proposed business venture. It displays all the pre-
operational costs to be incurred when starting the business. The statement in this chapter shows
the investments of the business and the profits realized and their ratios

viii
 CHAPTER ONE

1.0 BUSINESS DESCRIPTION

ALFRED`S PLUMBING SOLUTIONS will be in the trade industry and will be concerned
with ensuring that all consumption materials are readily available to the customers at the
lowest price and the highest quality. The proposed business will be operating under the sole
proprietorship where the owner of the business will be the manager and will be in charge of
all the operation in the business venture.
1.1 BUSINESS NAME

The business will operate under the name ALFRED`S PLUMBING SOLUTIONS. The
proprietor has chosen to operate under the name as it will have to convince the customers that
they are assured of any products of their choice.
1.2 BUSINESS LOCATION AND ADDRESS
The proposed business enterprise will be located in SIMAT - ELDORET. The business site
will be accessible because it is located along a very busy highway where it will also get its
products easily. The business location is also putting into account the customers and the
source of its products. It intends to operate under the following address:

MONETA PLUMBING SOLUTIONS,

P.O. BOX 990 – 30100,
ELDORET,
TEL: 0742437517
EMAIL: [email protected]

1.3 FORM OF OWNERSHIP

ALFRED PLUMBING SOLUTIONS will be a sole proprietorship kind of business where I
will be the manager of the business and all other personnel will be under my supervision. The
liability of the business will be unlimited. The following are features which will justify that
the business is a sole proprietorship; the business owner will be the organizer. I will manage
all the activities of the business and I will have unlimited liability. This means that in case of
any debts my personal property will be sold to pay for the debts, I will enjoy all the profits

1
realized and suffer the losses incurred in the business and few legal formalities will be
required as only a license will be required to start its operation.
1.4 TYPE OF THE BUSINESS

ALFRED PLUMBING SOLUTIONS will operate as a trade type of business where it will
provide all the building and construction materials to its customers. The business will
purchase its products from manufacturers where it will then make them available to the
customers at convenient size hence no production process will take place. It will only deal
with finished goods which will satisfy the customer needs directly.
1.5 BUSINESS PRODUCTS AND SERVICES

The business will offer products such as nails, timber, ply woods, doors, window frames,
Cement, Iron Sheets, Locks, Drills among other materials.

1.6 JUSTIFICATION OF OPPORTUNITY

The business will achieve its success in the future due to certain factors. These factors will
favor the business positively thereby contributing to the success. The factors include
1.6.1 Infrastructure.
The business will be easily accessible due to its location near a very busy Eldoret – Simat
highway. This will enable its customers and suppliers have an easy access to the business.
1.6.2 Nearness to suppliers.
Most of the suppliers of the products are located within the area and this will help to have
adequate stock to suit the choices of the customers.
1.6.3 Presence of space for expansion.
As the business grows there will be an adequate area to expand the business as it has a very
large field which can meet these needs. The business is located whereby it will be creating
employment opportunities to people, utilizing the local resources, provision of goods and
services and cleaning the environment.

2
1.7 THE INDUSTRY
ALFRED`S PLUMBING SOLUTIONS falls under trade type of industry as it buys its
products from manufacturers and re-sales them to its customers at convenient Prices. The
business will be very large and both manpower (labor intensive) and modem technology like
computers in its operation will be used. At the start, the business will employ a total of 4
employees, and which is expected to increase as the business grows to even 20 in the nearest
future. The business requires a starting capital of one million (ksh 1,000,000) to start its
operation and have the potential to compete with other firms to meet its goals
1.8 GOALS OF THE BUSINESS
The business enterprise has both long term and short-term goals to meet in future as it grows.
The manager will manage his team tactfully to ensure that these goals are met to continue
with its operation.
1.8.1 Long term goals
In the long run, the business will accomplish some goals which will contribute to its growth
and hence success. Some of the long-term goals it will meet are, increase the labor force as
the business expands to ensure there is maximum accomplishment of tasks in the shortest
time possible. Increase the employees' wages and salaries and assisting the society in some
activities like cleaning the environment and increase the number of vehicles to transport its
products to the market.
1.8.2 Short term goals
In the short run, the business will meet the following goals to cope up with other firms in the
industry. Offer quality goods to its customers to increase customer confidence and trust. The
management will work very hard to ensure that it realizes its profits as it continues with its
operation.
1.9 ENTRY AND GROWTH STRATEGIES
The business will attract its customers by offering and gain acceptance in the market through
advertisement mostly through the vernacular radio stations. Billboards will also be used to
enlighten customers who will be using the highway. Social media will be another method of
informing its customers about the products. The business will attract its customers by offering
to them goods of high quality, offering more affordable prices, discounts, offering goods in
credit and offering after sale services such as transportation of goods.

3
 CHAPTER TWO
2.0 MARKETING PLAN
This will describe how the business intends to sell its products to offer services. It also
identifies the customers, competitors and outlines the pricing, selling and promotion and
distribution strategies. The business will use different methods of marketing its products. The
methods may include advertising, sales promotion, road shows and exhibitions.
2.1 CUSTOMERS
The business will be dealing with different types of customers with different levels of
income, occupations, beliefs, and age groups. Its customers will be classified as follows;
individual customers, institutional customers and government agencies.
2.1.1 Individual customers
These are customers who will buy products in small quantities and mostly for building their
own houses. These customers will include house builders who intend to build houses for
their own use. They will buy and transport their products through their own means. This
category of customers will contribute to about forty percent of the total number of customers.
They will come to the business enterprise personally and buy their goods.
2.1.2 Institutional customers
These customers will purchase products in large quantities and may include people building
estates, schools, and churches. They will buy products in bulky hence able to get discounts
for their purchases. These customers may be given after sale services like transportation of
their purchases to their localities. These customers will contribute to a percentage of thirty of
the total customers.
2.1.3 Government agencies
Government agencies that are involved in providing some materials like water to the public
will buy Water Tanks and steel metals for schools and government offices. These customers
will contribute to a percentage of thirty of the total customers.
2.2 MARKET SHARE
The proposed business venture will take a very large portion of the market share in the area
because most people in the area travel for a long distance to get the goods. When the business
starts it will serve an approximate area of Ten square kilometers of the total population area.
All the people in Simat town and its environs who are intending to build their plots will also
be served by the proposed business venture.

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2.3 COMPETITION
ALFRED`S PLUMBING SOLUTIONS will have the following competitors
- Bahati hardware
- Simat hardware
- Modern hardware
2.4 METHODS OF PROMOTION AND ADVERTISING

The proposed business enterprise will enlighten its customers about its products through
different methods like advertising through radios, TV, newspapers, billboards and through
different promotional methods like free samples, shows and exhibitions and trade fairs. These
will help it to capture and attract more customers in the business.
2.4.1 Advertising methods
AFRED`S PLUMBING SOLUTIONS will use different advertising techniques to familiarize
and enlighten the public about the Business. The business products will be advertised through
social media and more so Facebook.

2.4.2 Promotional methods

ALFRED`S PLUMBING SOLUTIONS will promote the business through different
promotional methods which will make customers aware of it and create confidence in them.
Road shows will be used as a means of promoting the product where the management will
organize for visits in different centers along the highway and enlighten them about their
products. Moreover, the business will arrange for trade fairs and exhibitions where it will
enlighten their customers on the usage and installation of some of its products that need
technical knowhow.
2.5 PRICING STRATEGY
The management will price its products after a detailed analysis of the same products offered
by competitors to ensure that they cope up with what the competitors are charging and then
charge fairer prices that their competitors so as to capture many customers. Some of pricing
techniques will include distribution of price lists to their customers and any other person
willing to buy their products so as to help them in making decisions whether to buy or not.
Offering discounts to customers who buy goods in bulky to motivate them to buy in large
quantities. This will in turn help the business to have high sales volume, hence getting high

5
profits. Offering well in credits terms to trustworthy customers to enable those who do not
have available cash acquire the goods and pay later and offering after sales services like
transportation to those who buy in bulky as well as offering experts in the installation of sinks
and toilets.
2.6 SALES TACTICS
The sole proprietor will adapt different sale tactics to reach out to customers. These sale
techniques which will determine the sale volume of the business. The techniques which will
be used include personal selling where the products will be sold directly to its customers in
the business enterprise. This will give the customer a sense of belonging thereby motivating
them. Sales agents and distributors will also be used to take products in the marketplaces.
They will be given a commission which will be calculated based on volume of sales. This
will motivate them to make more sales.

Recruitment and selection of sales force to get those who have the desired qualities to
convince customers. After they are selected, proper training is needed to develop them, and
desired salary assigned to them to ensure they are retained for a long period
2.7 DISTRIBUTION STRATEGY
The business enterprise will also use its employees to distribute the products to its customers.
Moto cycles, Lorries and pickups will be used to ensure that the products reach the market at
a convenient time without any delay. In distributing its products, the business will encounter
the problems of insufficient transport facilities and sales agents. The proprietor will encounter
these problems by hiring more pickups and motorcycles and recruiting more sales
representatives as the business grows.

6
 CHAPTER THREE
3.0 ORGANIZATION AND MANAGEMENT PLAN
Proper organization and management of the business will play a key role in the success of the
business. The organization and management of the business through different organizational
structure will enable the staff to identify the duties and responsibilities assigned to everyone.
This will also help them to identify different communication channels to present their
grievances and help them to know different lines of authority.
3.1 ORGANIZATIONAL STRUCTURE
The business enterprise will design its organizational structure from the top management to
the subordinates. Lines of authority will flow from the highest level where those in the higher
level will delegate duties and have control over those in the lower levels in the organizational
chart.
3.2 MANAGEMENT PERSONNEL
In the proposed business the management personnel will comprise of the manager and the
supervisor. I will be the business manager. They will have the qualities and responsibilities as
outlined below.
3.2.1 Supervisor
Should have a diploma in business administration from a recognized institution; should have
served as an administrator for a period of at least three years in a busy firm. Should be
between 25-30 years.
3.2.2 Responsibilities
He/she will be delegating duties to the subordinate and ensure that they are accomplished.
He/she will ensure all business operations run smoothly, he/she will be communicating the
employees' affairs to the manager and his/her salary will be fourteen thousand per month.
3.3 OTHER BUSINESS PERSONNEL

Other staff members in the business will be security guard, Salespeople, Cleaner and
Distributors. The following table outlines their qualifications, responsibilities, and their
salaries.
3.3.1 Accountant

Qualifications

Should be a holder of CPA II, must have worked in a Hardware for at least two years.

7
Duties

Must ensure all receipts are properly kept and maintain in the proper manner all the books of
account.

Monthly salary will be ksh. 15,000

3.3.2 Drivers
Qualifications
Should have a valid and clean driving license and a mean grade of D+ in 'O' level
Duties
Responsible for collecting purchased goods and transporting goods to the customers. Monthly
salary will be ksh. 12,700
3.3.3 Security guard
Should have a D plain in 'O' level and possess good communication skills and a certificate of
Good Conduct.
Responsibilities
He will be responsible for safeguard the assets of the business.
Monthly salary will be ksh.8, 400
3.3.4 Cleaner
Should have a grade D in 'O' level and possess good communication skills.
Responsibilities
Will be responsible for maintaining cleanliness in the business premises.

Monthly salary will be ksh.8, 400

3.4 RECRUITMENT, TRAINING AND PROMOTION OF PERSONNEL
The business venture will ensure that it gets well qualified personnel who will work tactfully
to achieve the business goals. The personnel will be obtained by recruiting the personnel and
training them to develop their skills. The employees will be trained while doing the job in the
workplace.

8
3.4.1 Recruitment
The business manager will advertise all vacancies by placing posters outside the premises
specifying the qualifications, responsibilities for each vacancy. The manager will personally
conduct the recruitment exercise. After advertising the manager will wait for the application
from the interested candidates and interview in relation to the specified qualification. After
recruitment the candidate with the desired qualities will be selected and given their respective
jobs.
3.4.1 Training
All the selected workers in the business will be given proper training in their areas of
specialization and in other areas to allow them to undertake multiple tasks in future. Those
promoted to other levels will also be trained to help them perform their future jobs without
difficulties. The manager will use on the job training to train his personnel so as they can be
able to perform their duties while learning
3.4.2 Promotion
This is the upward movement of an employee in the organizational hierarchy to another job
commanding greater authority higher status and better working conditions. Hardworking
personnel will be promoted to higher level jobs in the business venture. This will act as a
motivating factor to other staff members to work hard hence making the business to achieve
its goals. Promotion will be done by the manager after appraising the employees and
determining their performances. Those who have performed well will be promoted to higher
levels.
3.5 REMUNERATION AND INCENTIVES
The business manager will ensure that the employees are remunerated according to their
qualification and other incentives like allowances and leave given to them. The incentives
should be supplemented with favorable working environment to give the employees a sense
of belonging.

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3.5.1 Remuneration
The table below shows salaries for workers in Kenya shillings.
Position Basic allowance Allowance Gross salary
Manager 24,000 4,000 28,000
Supervisor 15,000 2,000 17,000
Accountant 10,000 1,000 11,000
Driver 9,000 700 9,700
Sales agent 8,000 500 8,500
Security officer 8,000 400 8,400
Cleaner 8,000 400 8,400
Total 87,000 10,400 97,400

3.5.2 Incentives
This refers to what is given to the personnel in each business enterprise in addition to their
pay to make them feel more comfortable and gain a sense of belonging. The proposed
business venture intends to provide overtime pay, sick leave with full pay, maternity and
paternity leave with full pay and organizing retreats for their staff and their families during
holidays. The incentive will be given to each employee regardless of his position and status.
The management will also organize for retirement benefit to the aged employees.
3.7 OTHER SUPPORT SERVICES
These are services which the business needs from either individual, organization or
institutions which will help the business in undertaking its operation.
ALFRED`SPLUMBING SOLUTIONS will enjoy the services provided by the Kenya
commercial bank, Eldoret branch for deposits and withdrawals of cash and in the payment of
employee salaries. Their debtors will also deposit their cheques in the bank where they will
be collected.

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 CHAPTER FOUR
4.1 PRODUCTION FACILITIES AND CAPACITIES
For the operation to flow smoothly, the business will require facilities and equipment that
will ease the duties and tasks to be undertaken in the business. These facilities will be
purchased and the other leased or hired for a specified period. The facilities and equipment
will include.

Equipment Units Supplier Cost

Pickup 1 General Motors 900,000
Bicycles 2 Raja bicycle mart 3,000
Computer 1 Mbukonyx computer dealers 10,000
Wheelbarrow 1 Kithito stores 1,500
Chairs 10 Kenchairs limited 3,000
Shelves 4 Kamirithu hardware stores 2,000
Total 19 919,500

4.3 REGULATIONS AFFECTING OPERATIONS

These are factors that will affect the business operations and will have a great impact on the
success or failure of the business. The regulations will help to curb any accident and
misunderstanding that may occur in future. The regulations will be there to ensure that the
employees are comfortable and feel secure when undertaking any operations as their health
and safety is safeguarded. These regulations will include the following.
4.3.1 Health regulations
Health regulations which will ensure that the employees’ wellbeing is ensured and any
employee who may contract a disease while undertaking his duty will be compensated.
4.3.2 Safety regulations
A safety regulation which will ensure that the employees operate in a safe environment which
is free from accidents and protective clothing is provided to them to ensure their safety.
4.3.3 Government regulations
Government regulations which will ensure that the business is registered and obtains a
trading license specifying the type of the business to operate before getting the permission to
commence its operation.

11
4.3.4 Other regulations
Other regulations may include obtaining an insurance license cover for the business to ensure
that any hazard which might occur in future does not make the business incur a loss

12
 CHAPTER FIVE
FINANCIAL PLAN
5.0 INTRODUCTION
This determines the financial requirements of the proposed business venture. The main aim of
the business will be to have a perpetual growth and make profits. This will give guidelines
when looking for financial assistance from other friends or any other financial institution.
5.1 PRE-OPERATIONAL COST
Before the proposed business enterprise starts its operation, advance preparation will be
considered in the acquisition of the facilities that will be necessary for the business to start
its operations. All costs that will be incurred when putting the business into operation are
highlighted in the following table.
Particulars Cost (ksh.)
License 7,160
Insurance 20,000
Transport 4000
Postage 1000
Telephone 3000
Electricity bill 2500
Water bill 1500
Rent 10,000
Advertisement 10,000
TOTAL 58,960

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5.2 BALANCE SHEET FOR MONETA PLUMBING SOLUTIONS FOR THE YEAR
ENDING 2023, 2024 AND 2025
Particulars 2023 2024 2025
Assets
Fixed assets
Machinery 55,000 45,000 40,000
Equipment 50,000 40,000 40,000
Buildings 45,000 35,000 30,000
Furniture and 34,000 30,000 30,000
Fittings
Total fixed assets 184,000 150,000 140,000
Current assets
Cash at hand 12,000 15,500 17,000
Cash at bank 500,000 650,000 700,000
Debtors 8,020 5,500 22,960
Stock 20,000 22,000 26,000
Total current assets 540,020 707,750 765,960
Total assets 724,020 857,750 905,960
Liabilities
Short term
Liabilities 5,000 3,200 2,600
Creditors
Total short term
Liabilities 5,000 3,200 [ 2,600
Long term
Liabilities 150,000 50,000 40,000
Bank loan •
Equity (net worth) 569,020 804,550 863,360
Total long term
Liabilities 724,020 857,750 905,960

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5.3 WORKING CAPITAL FOR THE YEAR 2023, 2024 AND 2025
Current assets 2023 2024 2025
Cash at bank 500,000 650,000 700,000
Cash at hand 12,000 15,500 17,000
Debtors 4,000 5,500 7,000
Stock 20,000 22,000 26,000
Total current assets 536,000 693,000 750,000
Current liabilities
Creditors 5,000 3,200 2,600
Loan 150,000 50,000 40,000
Total current 155,000 53,200 2,600
Liabilities
WC=CA-CL 381,000 639,800 707,400

Working capital for the year 2022

Working capital = current assets — current liabilities
= ksh.536,000-155,000
= ksh.381, 000 Working capital for the year 2022 Working capital =
current assets - current liabilities
=ksh.693, 000- 53,200

15
5.4 WORKING CAPITAL
5.4.1 PRO - FORMA CASH FLOW STATEMENT FOR MONETA PLUMBING SOLUTIONS FOR THE YEAR ENDING
DECEMBER 2023

Particulars Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Cash inflow Ksh. Ksh. Ksh. Ksh. Ksh. Ksh. Ksh. Ksh. Ksh Ksh. Ksh. Ksh. Ksh.
.
Balance b/f 7,409,3 7,646.1 7,861,9 7,977.3 8,322,8 8,619.2 9,004,6 9,419,6 9,846.2 10.361, 10,917, 11,561. 108.947.
80 80 70 20 70 10 35 65 45 465 100 790 830
Sales 550,00 620,00 620.00 750.00 750,00 790,00 820,00 830,00 870.00 960,000 1,000,0 1,200,0 9,760,00
0 0 0 0 0 0 0 0 0 00 00 0
Debtors 1,000 1,500 1,500 2.000 3.000 1,800 1.600 2,700 1.500 2,000 950 700 20.250
Total cash 7,960,3 8,267,6 8,483,4 8,729,3 9,075,8 9,411,0 9,826,2 10,252, 10,717, 41,323, 11,918, 12,762, 118,728,
inflow 80 80 70 20 70 10 35 365 745 465 050 490 080
Cash
outflow - -
Purchases 200.00 300,00 400,00 300,00 350.00 300,00 300.00 300.00 250,00 300,000 250,000 300.000 3,550.00
0 0 0 0 0 0 0 0 0 0
Transport 600 550 600 700 800 900 750 750 780 800 900 1,000 ' 9,130

16
Salaries 97,400 97,400 97,400 97.400 97.400 97.400 97,400 97,400 97,400 97,400 97,400 97,400 1,168,80
0
Postage 400 420 350 370 480 450 500 520 390 375 200 400 4,855
Electricity 500 600 590 700 720 500 400 490 670 480 450 500 6,600
Insurance 3,000 - - - - - - - - - - - 3,000
Water 200 240 210 190 160 175 210 250 200 190 210 210 2,445
Licenses 5,000 - - - - - - - - - - - 5.000
Advertisem 1.500 1,450 1.650 1.570 1,700 1,800 2.000 1,900 1.800 2,100 2,000 2,200 21,670
ent
Rent 3,500 3,000 3.400 3,700 3,800 3.800 3,900 3.900 4,000 4.000 4,000 4.000 45,000
Miscellaneo 1,700 1,750 1.600 1,500 1,200 1,000 1,100 600 700 750 850 800 13.550
us
Telephone 400 300 350 320 400 350 310 310 340 270 250 290 3,890
Total 314,20 405,71 506,15 406,45 456,66 406.37 406,57 406^2 356,28 406,365 356,260 406,800 4.833,94
outflow 0 0 0 0 0 5 0 0 0 0
Net cash 7,646,1 7,861,9 7,977,3 8,322,8 8,619,2 9,004,6 9,419.6 9,846,2 10,361. 10,917, 11,561, 12,355, 113,894,
80 70 20 70 10 35 65 45 465 100 790 690 140

=ksh.639, 800 Working capital for the year 2020 Working capital = current assets - current liabilities
= ksh.750, 000-42,600
= ksh.707, 400
17
5.4.2 PRO - FORMA CASH FLOW STATEMENT FOR MONETA PLUMBING SOLUTIONS FOR THE YEAR ENDING
DECEMBER 2024

Particulars Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Cash inflow Ksh. Ksh. Ksh. Ksh. Ksh. Ksh. Ksh. Ksh. Ksh Ksh. Ksh. Ksh. Ksh.
.
Balance b/f 7,409,3 7,646.1 7,861,9 7,977.3 8,322,8 8,619.2 9,004,6 9,419,6 9,846.2 10.361, 10,917, 11,561. 108.947.
80 80 70 20 70 10 35 65 45 465 100 790 830
Sales 550,00 620,00 620.00 750.00 750,00 790,00 820,00 830,00 870.00 960,000 1,000,0 1,200,0 9,760,00
0 0 0 0 0 0 0 0 0 00 00 0
Debtors 1,000 1,500 1,500 2.000 3.000 1,800 1.600 2,700 1.500 2,000 950 700 20.250
Total cash 7,960,3 8,267,6 8,483,4 8,729,3 9,075,8 9,411,0 9,826,2 10,252, 10,717, 41,323, 11,918, 12,762, 118,728,
inflow 80 80 70 20 70 10 35 365 745 465 050 490 080
Cash
outflow - -
Purchases 200.00 300,00 400,00 300,00 350.00 300,00 300.00 300.00 250,00 300,000 250,000 300.000 3,550.00
0 0 0 0 0 0 0 0 0 0
Transport 600 550 600 700 800 900 750 750 780 800 900 1,000 ' 9,130
Salaries 97,400 97,400 97,400 97.400 97.400 97.400 97,400 97,400 97,400 97,400 97,400 97,400 1,168,80
18
 0
Postage 400 420 350 370 480 450 500 520 390 375 200 400 4,855
Electricity 500 600 590 700 720 500 400 490 670 480 450 500 6,600
Insurance 3,000 - - - - - - - - - - - 3,000
Water 200 240 210 190 160 175 210 250 200 190 210 210 2,445
Licenses 5,000 - - - - - - - - - - - 5.000
Advertisem 1.500 1,450 1.650 1.570 1,700 1,800 2.000 1,900 1.800 2,100 2,000 2,200 21,670
ent
Rent 3,500 3,000 3.400 3,700 3,800 3.800 3,900 3.900 4,000 4.000 4,000 4.000 45,000
Miscellaneo 1,700 1,750 1.600 1,500 1,200 1,000 1,100 600 700 750 850 800 13.550
us
Telephone 400 300 350 320 400 350 310 310 340 270 250 290 3,890
Total 314,20 405,71 506,15 406,45 456,66 406.37 406,57 406^2 356,28 406,365 356,260 406,800 4.833,94
outflow 0 0 0 0 0 5 0 0 0 0
Net cash 7,646,1 7,861,9 7,977,3 8,322,8 8,619,2 9,004,6 9,419.6 9,846,2 10,361. 10,917, 11,561, 12,355, 113,894,
80 70 20 70 10 35 65 45 465 100 790 690 140

19
CASH FLOW STATEMENT FOR MONETA PLUMBING SOLUTIONS FOR THE YEAR ENDING DECEMBER 2025

Particulars Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Cash inflow Ksh. Ksh. Ksh. Ksh. Ksh. Ksh. Ksh. Ksh. Ksh. Ksh. Ksh. Ksh. Ksh.
Balance b/f 12,355, 12,708, 13,079 13,471, 13,882, 14,263, 14,814, 15,465, 16,177, 16,938, 17,800, 18,712, 179,670,
690 150 ,685 215 630 600 480 920 490 790 490 310 450
Sales 600,00 620,00 620,00 630,00 640,00 790,00 890,00 940,00 1,000,0 1,100,0 1,150.0 1.120,0 10,100,0
0 0 0 0 0 0 0 0 00 00 00 00 00
Debtors 1,500 1,570 1,600 1,540 1.400 1,700 2.000 2.400 2,000 2,300 2,400 2,550 22,960
Total cash 12,957, 13,329, 13,701 14.102, 14,524, 15,055, 15,706, 16,408, 17,179, 18,041, 18,952, 19,834, 189,793,
inflow 190 720 ,285 755 030 300 480 320 490 090 890 860 410
Cash
outflow
Purchases 120,00 130,00 110,00 100,00 140,00 120,00 120.00 110,00 120,00 120,000 120,000 120,000 1,430,00
0 0 0 0 0 0 0 0 0 0
Transport 700 600 500 520 550 500 600 620 510 620 490 650 6,860
Postages 300 200 250 240 270 270 285 300 340 400 440 420 3,715
Salaries 114,00 114,00 114,00 114.00 114,00 114,00 114.00 114,00 114,00 114,000 114.000 114,000 1,368,00
0 0 0 0 0 0 0 0 0 0

20
Electricity 600 540 520 540 540 590 550 660 640 600 620 670 7,070
Insurance 3,500 0 0 0 0 0 0 0 0 0 0 0 3,500
Water Bills 200 210 190 185 170 180 175 200 220 200 230 210 2,370
Advertisem 1,000 800 900 850 1,000 1,200 1.000 1.200 1,200 1,000 900 1,200 12,250
ent
Licenses 5,000 - - - - - - - - 5,000

Rent 2,500 2,500 2,500 2,500 2,650 2,650 2,650 2,650 2,700 2,700 2,700 2,700 31,400
Telephone 250 200 210 190 250 230 200 210 190 180 250 300 2,660
Miscellaneo
us 990 985 1,000 1,100 1,000 1,200 1,100 990 900 900 950 1,100 12,215
Total 249,04 250,03 230,07 220,12 260,43 240,82 240,56 230,83 240,70 2,885,04
outflow 0 5 0 5 0 0 0 0 0 240,600 240,580 241,250 0
Net cash 12.708, 13,079, 13,471 13,882, 14,263, 14,814, 15,465, 16,177, 16,938, 17,800, 18.712, 19,593, 186,908,
150 685 ,215 630 600 480 920 490 790 490 310 610 370

21
5.5 PRO - FORMA INCOME STATEMENT FOR MONETA PLUMBING SOLUTIONS
FOR YEARS 2023, 2024 AND 2025
Particulars 2023 2024 2025

Sales 9,485,000 9,760,000 10,100,000

Less purchases 1,820,000 3,550,000 1,430,000

Gross profit 7,665,000 6,210,000 8,670,000

Expenses

Transport 7,680 9,130 6,860

Postage 3,305 4,855 3,715

Wages and salaries 1,168,800 1,168,000 1,368,000

Electricity 3,515 6,600 7,070

Insurance 2,000 3,000 3,500

Water 2,320 2,445 2,370

Advertisement 19,950 21,670 12,250

License 3,500 5,000 5,000

Rent 27,900 45,000 31,400

Telephone 3,640 3,890 2,660

Miscellaneous " 11,230 13,550 12,215

Total expenses 1,253,840 1,283,140 1,455,040

Net profit before tax 6,411,160 4,926,860 7,214,960

Tax provision 25% 1,602,790 1,231,715 1,803,740

Net profit after tax 4,803,370 3,695,145 5,411,220

22
5.6 BREAK-EVEN POINT FOR MONETA PLUMBING SOLUTIONS FOR THE YEAR
2023, 2024 AND 2025
5.6.1 FIXED COST

2023 2024 2025

ksh. ksh. ksh.
Rent 27,900 45,000 31,400
Insurance 2,000 3,000 3,500
License 3,500 5,000 5,000
Salaries 1,168,800 1,168,800 1,368,000
Total fixed costs 1,202,200 1,221,800 1,407,900

5.6.2 Variable Cost

2023 2024 2025

ksh. ksh. ksh.

Purchases 1,820,000 3„550,000 1,430,000

Electricity 3,515 6,600 11,000

Water 2,320 2,445 2,370

Postage 3,305 4,855 7,070

Telephone 3,640 3,890 2,660

Transport 7,680 9,130 6,860

Advertisement 19,950 21,670 12,250

Miscellaneous 11,230 13,550 12,215

Total variable costs 1,871,640 1,581,180 1,484,425

23
5.6.3 BREAK EVEN ANALYSIS
Particular 2023 2024 2025

BEP = F.C. 1,202,200 1,221,800 1,407,900

1 - V.C. 1 - 1,871,640 1 - 1,581,180 1 - 1,484,425

Sales 9,485,000 9,760,000 10,100,000

1,202,200 1,221,800 1,407,900

0.8027 0.8780 0.8530

Ksh.1,497,695.30 Ksh.1,391,571.75 Ksh.1,650,527.55

5.7 DESIRED FINANCING FOR MONETA PLUMBING SOLUTIONS

Items Amounts (ksh.)
Pre-operational cost 9,800
Working capital 381,000
TOTAL 390,800
5.8 PROPOSED CAPITALIZATION FOR UMOJA PLUMBING HARDWARE
Contributions Kshs.
Ownership savings 600,000
Bank loan 150,000
Family, relatives, friends 250,000
Total 1,000,000

24