SILVER ALTANATIVE SEWER SYSTEM

NAME :OJIAMBO SILVANUS

ADM : CPL/220/2021

COURSE : CERTIFICATE IN PLUMBING

BUSINESS TITTLE : BUSINESS PLAN.

COURSE CODE :1305

INDEX NUMBER :021

PRESENTED TO : THE KENYA NATIONAL EXAMINATION COUNCIL

FOR PARTIAL FULFILLMENT FOR THE AWARD OF

CERTIFICATE IN PLUMBING

SUPERVICED BY :MR FILEXY OUMA

CENTRE :DR DANIEL WAKO MURENDE TVC

P.O BOX 149-50400

BUSIA

SERIES. :NOV SERIES

DECLARATION
I hereby declare that this business plan is out of my own efforts to the best of my level
bestcknowledge
Name: OJIAMBO SILVANUS

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Sign……………………

Date…………………..

Declaration by the supervisor

This project has been submitted for examination purpose with my approval as the institution
supervisor of the student
Name: mr.

Sign…………………..

Date…………………….

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 DEDICATION
I dedicate this work to my beloved parents, sisters, brothers, relative and friends for their
moral financial and spiritual support they have given me through this project writing

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 ACKNOWLEDGEMENT
I owe a lot of thanks to number of individual who helped, assisted and provided spiritual
support particularly my parent and siblings while carrying out this research which resulted to
this report I must express my great gratitude lecturer for his supervision and his support he
has given me through the writing of this project
I further wish to extend thanks to my friends and relative for their support during this study.

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Contents
DECLARATION.......................................................................................................................ii
DEDICATION..........................................................................................................................iii
ACKNOWLEDGEMENT........................................................................................................iv
CHAPTER ONE OF EXECUTIVE SUMMRY....................................................................1
1.0 EXECUTIVE SUMMRY.................................................................................................1
1.1 BUSINESS DESCRIPTION............................................................................................1
1.2MARKETING PLAN.......................................................................................................1
1.3 ORGANIZATION AND MANAGEMENT PLAN........................................................2
1.4 OPERATION AND PRODUCTION PLAN...................................................................3
The following are required for the smooth running of the business......................................3
1.5 FINANCIAL PLAN.........................................................................................................3
CHAPTER ONE .......................................................................................................................5
1.0.BUSINESS DESCRIPTION…………………………………5
1.1.THE NAME OF THE BUSINESS..................................................................................5
1.2. BUSINESS LOCATION AND ADDRESS....................................................................6
1.3. LEGAL FORM OF THE BUSINESS OWNERSHIP....................................................7
1.4. TYPE OF THE BUSINESS............................................................................................7
1.5. GOODS AND SERVICES.............................................................................................7
1.6 .JUSTIFICATION OF OPPORTUANITY......................................................................8
1.7. INDUSTRY....................................................................................................................8
1.8. GOLSE OF BUSINESS……………………………………………………………....9
1.9. ENTRIES AND GROUTH STRATEGY…………………………………………10

CHAPTER TWO……………………………………………………………………………10

2.1.MARKETING PLAN………………………………………………………………..11
2.2. MARKET SHARE………………………………………………………………….11
2.3. COMPETITION............................................................................................................12
2.4. ADVERTISEMENT.....................................................................................................13
2.5. SALES PROMOTION..................................................................................................13
2.6. PRICING STRATEGY.................................................................................................13
2.7. SALES TACTICS.........................................................................................................14
2.8. DISTRIBUTION STRATEGY.....................................................................................14

CHAPTER THREE...............................................................................................................15

3.0. ORGANIZATION AND PRODUCTION PLAN........................................................15

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 3.1. L1KEY PERSONNEL..................................................................................................16
3.2. SUPPORT STAFF........................................................................................................17
3.3. ORGANIZATIONAL CHARTS..................................................................................18
3.4.RECRUITMENT, TRAINING AND PROMOTION....................................................19
3.5. REMUNERATIONS AND INCENTIVES..................................................................19
3.6. LICENSE, PERMIT AND BY-LAWS.........................................................................20
3.7. SUPPORT SERVICES.................................................................................................21

CHAPTER FOUR..................................................................................................................23

4.0. OPERATION AND PRODUCTION PLAN................................................................23

4.1. OPERATION PLAN.....................................................................................................23
4.1.1 Geographical location of Business..............................................................................24
4.1.2 Work schedule.............................................................................................................25
4.1.3 Receiving and dispatching of goods services..............................................................25
4.2 PRODUCTION PLAN...................................................................................................25
4.3 REGULATIONS AFFECTING THE BUSINESS…….. ……………………………26

CHAPTER FIVE....................................................................................................................27

5.0 FINANCIAL PLAN.......................................................................................................27

5.1 PRE-OPERATIONAL COST........................................................................................27
5.2 WORKING CAPITAL...................................................................................................27
5.3 CASH FLOW PROJECTION........................................................................................28
Cash flow projection for the year 2023................................................................................29
Cash flow projection for the year 2024................................................................................30
5.4 MUNENE BOOKSHOP................................................................................................31
INTERKABES BOOKSHOP..............................................................................................32
5.5 PRO-FORMER BALANCE SHEET AT 31ST MAY........................................................32
INTERKABES BOOKSHOP..............................................................................................33
5.5 PRO-FORMER BALANCE SHEET AT 31ST DEC.2023.............................................33
INTERKABES BOOKSHOP..............................................................................................34
5.5 PRO-FORMER BALANCE SHEET AT 31ST DEC.2022.............................................34
5.6BREAK EVEN ANALYSIS...........................................................................................35
5.7 FINANCIAL RATIOS...................................................................................................38
5.8DESIRED FINANCING.................................................................................................39
5.9PROPOSED CAPITALIZATION..................................................................................40

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vii
 EXECUTIVE SUMMARY

1.0 BUSINESS DESCRIPTION

The name of the business shall be SILVER ALTANATIVE SEWER SYSTEM. The name is relevant to the business because it tell customers
brief information about the ,products and services that are available in our enterprise. It will be sewer pipes and fittings. It will be sole
proprietorship form of business. whose main objectives is to provide all plumbing services and provide sewer maintenance and repair of
plumbing devices. The business location is good for the business because the area is populated and people are came up with mordern buildings
which will enhance the growth of the business.
2.0 MARKETING PLAN
According to the market research carried out by the proprietor,it tells that most people are building mordern houses hence not having proper
drainage system. The terget market are colleges ,polytechnic and schools that will be in need of our services and materials for practical purposes
or in the maintenance and repair of their drainage system in the Organization
The business also targets big hotels located within the location of the business such as Itoya,Dreams, Lafiestar and many other ⁴ñ
It targets all the institutions such as Busia Referral hospital and Tanaka Hospital
Market share is eventually distributed among competitors as shown below:-
The following Advertisements measures shall be used on the target groups in the market
 Publicity:- This will be done through sign boards and brochures that are to be distributed among the customers that are targeted
 Advertising:-This will be done through mobile vans that will be used to broadcast and capture the attention of the targeted customers. Pricing
strategy will be done in accordance to the following guideline and polices
 Cost of Labor:- The proprietor has to set an average cost of labor that has no negative impact to the business. Government policies shall be
imposed to regulate the paying of taxes at the recommendable rate

3.0 ORGANIZATION AND MANAGEMENT PLAN

The proprietor shall be the general manager of the business who will organise the work.
The proprietor will recruit other qualified personnel such as the operation manager, Finance Manager, Secretary, Messenger, cleaner and security
person to help run the business.
They shall be recruited based on their academic qualifications or relevant skills in accordance to the business
Employees will be trained through seminars and workshops and grunting the study leave in order to motivate them and improve their skills in
their respective fields.
Promotion will be based on employee’s competence and academic qualification and he or she has acquired advanced learning
Support services will be provided by the following
 Banking services - Kenya Commercial Bank
 Insurance Services - Amaco Insurance Company
 Transport Services - Jetlink Traveling Company

4.0 OPERATION AND PRODUCTION PLAN

Different production facilities such as raw materials and other equipments such as furniture i.e. Shelves for materials arrangement.
Flexible and skilled Lourber in all the body required will be available and providing the new and modern structures’ to catch up the trending
styles of mordern buildings that are in the market
The business will carry out daily operation system from 8.00am to 5.00pm on weekdays and from 8.00am to 12.00Noon on weekends

5.0 FINANCIAL PLAN

Money will be needed for purchase of furniture equipment and licenses, payment of salaries and rent and other expenses such as
Furniture fittings, Equipments,Office,chairs and shelves,Receipt books and record ,License and permits and rent payments
There for the proprietor intends to start the business with Kshs. 124,300.00 cash at hand is Kshs.85, 000.00 for the start of the business

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 CHAPTER ONE

1.1. Business description

The sergested will be silver alternative sewer system the sergested name tell partly of the service that will be provided by the organisation. I ma
a qualified plumber who have under take the course at Dr Daniel Wako Murende TVC for two years and went for attachment for three months
were I gained my experience in sewer and water treatment process for the three months I was on attachment as a cidified and skilled personnel I
will be able to deliver to my customers as they will want
1.2. BUSINESS LOCATION AND ADDRESS
The business is located within WesternProvince, in Busia County, a long Busia Kisumu road in Matayos constuency The business will operate
under the following addres.
Silver alternative sewer system
P.O.BOX 253-6065
Busia
TEL:0705606516
Email:[email protected]

The business will begin its operations on December 2026. The proprietor has chosen this location because of the following reasons.
Advantages of the location to the business
Water is readily available. This is important for cleaning business premises and basic use by the employees during the hours of work.
The areas is both safe for the customers and the business properties because the area has a police station ,this will make customers feel very
much safe especially in evening hrs.
The area has good transport and communication network that make the business easily accessible by customers and supply of necessary
materials and equipment’s required form the smooth running of the business surrounding area has colleges, offices and estates with people who
could need immediate assistance in the type of books and stationery that would be required during studies, school and colleges that school and
colleges that will need immediate assistance includes, Mbale Polytechnic.
The area also has reliable power supply and this will allow the business to run up to late hours as source of lighting are available

1.3. LEGAL FORM OF THE BUSINESS OWNERSHIP

The Sewer system workshop will be a sole proprietorship type of business. The owner will be the Manager in order to oversee the smooth
running of the business. The proprietor will enjoy the following benefits individually.
i. The process of decision making within the business will be fast and effective.
ii. Security and top secrets will be maintained
iii. Freedom of control of others and the proprietor will be to apply his own skills, knowledge and abilities in running the business. This
will enable the owner to make mature decisions
iv. Profit maximization. The owner will be able to enjoy all the profits of the business since there is no mortgage.
The business has the following benefits to the society.
Advantages of the business to the society
a) Creation of employment – Individual within the society will be able to seek employment from the business premise
b) Improving the economic status of the county. This will be achieved through taxes that are collected from the business
Disadvantages of the business
There will be little room for the expansion of the business since the ownership is individualist.
In case of death, or sickness of the owners, the business will seize from improvement and hence poor management

2.4. TYPE OF THE BUSINESS

STIMA electrical will be a startup retail shop where the proprietors will have direct contact with his customers hence narrowing the gap
between wholesales and customers. The business will be a service oriented one which will offer high quality, reliable and affordable service to
its customers
Purchasing goods and equipment at a large variety and maintenance of goods will be provided at appropriat shares that favors majority of
customers

1.5. GOODS AND SERVICES.

Services to be rendered to customers will include providing all installation and domestic plumbing devices .Goods offered will be of high
quality and thus the latest ones of new technology that provides immediate and responds to the users demands. Goods such as copper pipes,

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PPR pipes, PVC pipes, and all other installation materials such as union socket outlets, and pumps. We shall also provide repair and maintenance
of waste water line and plumbing.
To improve employee’s interpersonal relations with the customers and make customers feel satisfied with the service offered to them. The
proprietor has an educational scheme for the employees after give period of time. Goods to be offered to customers will be of high quality as the
business will not be providing the materials and goods from the legal manufacturer.

1.6 .JUSTIFICATION OF OPPORTUANITY

The proprietor has obtained a certificate in plumbing maintenances and repair of water line and strongly believe that the practice theoretical
skills acquired will enable the proprietor's management of the business since the area is densely populated and is situated along Uganda-Kenya
Road. Large population and presence of Colleges, and hospitals will provide a ready market in order to meet their demands.
The good infrastructure and adequate security will be a great boost to the business. The conducive environment and atmosphere for employees
and customers shall be provide due to the favorable climate

1.7. INDUSTRY
The Sewer falls under stationery industry which has faster growth to change the drainage system and diserning new drainage system as it
provides the fields of coduesive of study making studding more computable and higher hygiene within the nearby area
CHARACTERISTICS
It’s dynamic in nature. This is because technology keeps in changing frequently and organizations are being more it has estimated that computer
maintenance shops are scarce and therefore the business is acting to cater for providing the computer repair and maintenance in order to change
the community rapidly.
Its international industry because it speeds county wide due to provision of demanded books which will be available at the business.
It’s also communicational in nature because the business will be serving people from different ethnic background and therefore must be able to
communicate in several languages for the prosperity of the business.

1.8. GOALS OF THE BUSINESS

Short term goals
a) Buying additional equipment’s e.g. more staff, building for holding shelves by the beginning of second year in order to cater for the
growth of the business
b) Purchase of more chairs and other accessories as more people will be able to access our services this will retain customers.
c) Creating a branch of business in the different location by the end of the third financial year

Long term goals

The proprietor intends to do the following in order to achieve the long term goods
a) Satisfaction of the customer’s needs
Necessary equipment’s and personnel have been put in place to cater for the needs of customers
b) Advertisements of the service offered
Proprietor will market the business to make the customers aware of the services offered and its location
c) Making Profit
At the end of trading period, the proprietor expects to get profit from the business name
d) Offering credit facilities
To attract and retain customers the proprietor should intend to offer credit to customers in order to make them loyal and reliable to the
brands

1.9 ENTRY AND GROWTH STRATEGY

Entry strategy
The business will have defined entry strategy as the demands of goods that will be offered in the business premise is of high quality and
thereafter are of high demand and this factor will lead to rapid growth of the business.
Growth strategy
Due to improved level of technology in the field of marketing the proprietor has brought in computers that will be used to improve the
marketing strategy as the computers are always fast as compared to manual man power.
Advertisement has be made all over the area to show the customers that goods that are offered in the business of high demand and this will
improve the growth of the business rapidly.
The proprietor has deployed competent staff that will aid quick operation and delivery of goods and services to the customers and this will
highly improve the growth of the business.

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Financial resources and sales profits will be used to improve the business growth so as to bring quick delivery of goods and services to the
customers.
After entering into the market, the business will be expected to sustain itself in order to cope up with market standards and compete with
similar businesses that are already in the market.

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 CHAPTER TWO
2.0 MARKETING PLAN
2.1 CUSTOMERS
A customer is anybody who is in need of goods and services and is willing and able to pay for them. The business will target types and
categories of customers in the market. The targeted customers will include, Individuals, Institutions and organizations
Individuals
This group includes customers that are the residents within the nearby estates and the surrounding area all will be able to goods and services as
the workshop is going to make sure that all customers are acted for.they are all required to be satisfied and have equal opportunity in my
business
Institutions
This includes all the customers from the schools, hospitals and hotel be able to get all the types of goods they will need from the business.
Customers will include Busia Polytechnic,St Mathias boys high school and other school within the scrounging
Organizations
The business will target all the organizations such as Busia Referral hospital and Tanaka Hospital also because it’s a growing town there will be
same hotel build in modern way hence will also need my services of discerned sewer line and of goods quality

2.2 MARKET SHARE

The business shall be expected to commend 41% market share as forecasted services to be offered shall serve large population with few
competitions
A cording to the recent market, analysis conducted shows that sales expected in the area is 110,000.00 this shall be shared with other business
Business Sales Market Share
Silver sewer system 50,000 41%
Wafula’s exoster 40,000 33%
Wabwire’s manhole 20,000 25%
diserner

In the second financial year the market is expected to increase 56% having average sales of 4,000.00 shillings daily. This is because the services
offered will be highly located at the centre of large institutional and the schools.

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2.3 COMPETITION
The business will have its competitors such as the moontime, buchima workshops. Details of the competitors are shown as follows
Business name Assets Sales volume Monthly Share P.a
Wafula’s 140,000 30,000 30% 360,000
exoster
Wabwire’s 125,000 60,000 26% 400,000
manhole
diserne
Silver sewer 200,000 150,000 44% 620,000
system
Total 465,000 240,000

Competitors’ strength and weakness

Wafula’s exoster
It located 1.5km from Busia town next to Korinda prisons
Strengths
It has ventured into the market for at least 6 years providing similar goods therefore has long time experience and has established.
For being in the market for long period of time, the owner is in position of giving credit to customers.
Weaknesses
Due to large number of customers it has, it has been unable to have good customer relationship.
Lack of skilled customer related personnel’s who can talk to the customers.
It has less opening days in a week

Wabwire’s manhole diserner

Its located 1km from Busia town next to Halisi millers
Strengths
It has ventured into the market for a remarkable period of time providing similar goods and services to the customers.
It has established good relationship and is in a position of giving credit to customers.
Weaknesses
Due to large numbers of customers its getting, it has been unable to have good customer relation.
Lack of all goods needed by the customers has been a setback to the business. Due to all the strengths and the weaknesses of the competitors
shown, will enable wor kshop to have the following advantages.
The business will employ and provide goods of high quality that will cater for the unserved part of the customer’s needs.
It will employ skilled workers that will be able to good customer’s relationship that will influence the customers to the business.
The business will be opening early and will be able to open during weekends to serve the wondering customers.

2.4 ADVERTISEMENT
The following advertisements shall be used on targeted customers.
Publicity-this will be done through the use of sign boards and making of brochures to be distributed to targeted customers. Brochures will have
the content of what the business offers to the customers.
Information will be printed on posters and placed at vantage places such as markets, bus parks in order to influence and persuade large number
of customers to the business.
Advertising-this will be done through mobile vans that will be used to broadcast and capture the attention of customers about the products and
services offered by the business.

2.5 SALES PROMOTION

Sales promotion shall be done by giving discounts to customers in accordance to the volume of goods that are purchased for the business
premise.
This will be done by providing 3% of total goods that are purchased. This will enable the influential of customers to the business.

2.6 PRICING STRATEGY

The price of goods will differ from the type to another in accordance to the quality of the goods.

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Proprietor will consider the following guidelines and policies when determining the price of goods offered to the customers
a) cost of labor-the proprietor has to set an average cost of labor that will not have negative impact on services offered
b) Government policy- government has set aside policies which ensure that the taxes are paid for and goods prices are not high beyond the
consumer demands.
c) Prices charged by the competitor-proprietor will make sure that all cost of goods offered to be affordable than its competitors. Discounts
shall be rewarded to the customers in accordance to the volume of goods bought.

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2.7 SALES TACTICS
The business will offer direct services to the customers. This will make sure the services easily available to the customer’s needs.
Posters will show some of the advertisements that will persuade the customers
Discounts will be offered to customers who obtain goods worth 50%.

2.8 DISTRIBUTION STRATEGY

The business will start as a small business offering direct services to customers. It will bridge the gap between suppliers and customers.
Distribution process will commence as shown:
Producers’ suppliers’ customers
Acquisition of requirements and materials will be made from various suppliers.
Obtaining goods locally has remarkable benefits to the business such that goods will be brought in large quantities and therefore the business
will be able to acquire cash discounts. Secondly credit services could be offered to the business after establishment.
Problems associated to the obtaining of goods locally are as follows: - delayed delivery, at times the goods take long time to be delivered into the
business.
Inadequacy of stock, proprietor might fight that materials are out stock.

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 CHAPTER THREE

3.0 ORGANIZATION AND PRODUCTION PLAN

Management plan
The the silver alternative sewer system will comprise the following management staff: - General manager, operation manager and finance
manager.
General Manager
The proprietor will be the general manager of the business since the business is sole proprietorship form. He has acquired enough skills in social
relation and management that will enable him properly manage the business since the business is developing dynamically , this has push the
general manager to acquire diploma in Information Technology that will enable him to get in touch of with the modern form of communication.
The general manager will be needed to carry out the following issues:
a) Recruiting other employees to the business.
b) Coordinate with the business employees to ensure that the main objective of the business is achieved.
c) Remunerating business employees.
d) Approving the purchase and any order of materials that are to be used in business development.
Operation manager
There will be only one operation manager in the business and will have the following qualifications:
 Must have diploma in information technology and this will enable him to use the recent gadgets and forms of communication.
 Must be aged between 22-28 years of age
 Must have good communicational skills to enable him to communicate with the customers in order to bring the development of the business.
 Must have at least one year experience in relation job from a busy firm.
Duties of operation manager will be as follows:
 Coordinate the entire operation with the business in order for business operation go smoothly without any implication
 Ensuring that all the customers are served to completion in order to make up a good relation between the business and the customers.

Finance manager
Since the business is an upcoming business and not established in the market it will only have one financial manager. The financial manager
must be able to meet the following qualifications:
a) She or he have a B plain in accounting option or diploma in accountancy from a recognized institution and must be aged between 22-28
years of age.
b) Must have good communicational skills to enable good relationship between customers and the business staff.
c) Must be have at least one year of experience in operation from a busy firm of business
d) Must be computer literate.
The duties of the financial manager will be as follows:
i) Keeping good financial records for the business which will be used in future improve of the firm.
ii) Facilitate payment of salaries to both business management team and the entire support staff.

4.1 L1KEY PERSONNEL

i) Library manager
Library manager will carry out the following duties:
a) Will be taking records of goods and devices bought and the entire places of the business and stoke and then alerting the higher hierarchy
for the undertaking of responsibilities to carry out the business progress.
b) Attending to customers in the workshop and taking them through all the business parts
Here are qualifications of the library manager:
i) must have C plain in KCSE certificate
ii) must a certificate in library management
iii) Must have a certificate of good conduct.

ii) Secretary
The secretary will be the secretary general for the business and has to achieve the following qualifications:
 Must be computer literate because the position will be computer specified section.
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  Must have a KCSE mean grade of C plain or relevant qualification to the job.
 Should have good communicational skills and must have work in a busy firm for at least six months
Duties
i) Reporting her work to the operation manager who will be carrying out the analysis.
ii) Receiving payments for the customers and accounting for every purchase made.
iii) Receiving and welcoming the customers into the business firm and introducing to the goods offered
iv) Carrying out any transaction within the business.
iii) Messenger

The messenger for the business will be acting as the business office messenger.
The messenger must be able to meet the following qualifications:
 Must have KCSE mean grade of C minus.
 Must produce the certificate of good conduct and clear curriculum vitae.
Duties
i) Cleaning the business buildings mainly the office and putting everything in place.
ii) Posting and receiving mails for the business
iii) Attending to customers
Watchman
The watchman will be the security officer for the business premise.
He must be able to achieve the following qualifications:
Must have at least D plus in KCSE and must have one year of experience from the experienced and known premise.

3.2 SUPPORT STAFF

The business will have the following individuals in the support staff. They will include drivers, typist and cleaners.
Drivers
The driver for bookshop will be Mr. Nelson Demo. He must meet the following qualifications to acquire the post.
i) Must have a recommended license by the government of Kenya.
ii) Must be 30-49 years of age.
iii) Must have at least one year experience in the field of driving for a very prominent company or institution.
Duties
Will be responsible for transportation of goods from the manufacturers firm to the business.
Typist
The typist will be responsible for typing of letters and memos that will be used to pass information in the business.
Qualifications
i) Must be computer literate
ii) Must have attained mean grade of C plain in KCSE.
iii) Must be 25-30 years of age
Duties
Typing letters and memos that will be used as a form of communication among the members of the business premise.
Cleaners
This will include a team of young youths that will be undertaking the cleanliness of the business premise.
Qualifications
Must have at least mean grade of D plus in KCSE and have the national identity card.
Must be 18 years of age and above.

3.3 ORGANIZATIONAL CHARTS

GEN

OPR FIN

LIB SEC WA 10
SU
MES
3.4 RECRUITMENT, TRAINING AND PROMOTION.
RECRUITMENT
The general manager will recruit new employees based on the academic qualifications and relevant skills in the field of sales and marketing. The
vacancies will be advertised in the media mainly in local Radio stations clearly showing the posts, responsibility, duties and qualifications. Some
advertisements will also be shown on notice board within and outside the business premises.
The successful applicant will then be called for an interview in order to select the best among them.
Training
Induction training will be offered to the newly employed staff and also who are promoted. Forms of training will include seminars and
workshops and granting study leave for the employees. This will motivate them and improve their skills in their respective fields.
The manager will go for further studies and training and also attend seminars that will help them improve on their management skills.
Promotion
Promotion will be based on the employee competence and academic qualification. After an employee will have acquired additional skill related
to his or her qualifications she/he will be promoted to perform other duties e.g. after the messenger has gone to training in computer application
packages he will be promoted to the field of secretary.
As the business grows, employees will be given a monthly salary increase of 5% of the salary during the last financial year by distributing their
duties among employees and giving the salary rise. Proprietor will finally maximize on profit rather than employing more staff in order to with
the increase in number of customers

3.5 REMUNERATIONS AND INCENTIVES

The employees will be employed on a contract basis and each employee’s contract shall be renewed after every financial year. The renewal of
contract will depend on employee’s competence and performance during the previous financial year

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Salaries for the business staff will be as follows:-
Post Basic salary Transport Medical Net salary per Net salary per year
allowance allowance month

General manager 20.000 1,200 1,400 22,000 271,200

Operation 15.000 800 600 16,000 196,800
Manager
Furniture Manager 14.000 800 600 15,400 184,800
Library Manager 10.200 400 600 11,200 134,400
Secretary 8,000 400 600 9,000 108,000
Messenger 6,000 400 600 7,000 84,000

Business support staff will be paid as follows

Post Basic salary Medical allowance Net salary per Net salary per year
month

Driver 5,000 600 5,600 67,200

Security 4,800 600 5,400 64,800
Typist 4,600 500 5,100 61,200
Cleaners 3,000 400 3,400 40,800
Total 17400 2100 19500 234000

Incentives
The support staff will be given one allowance which will be medical allowance and this will be 2% of the basic salary

3.6. LICENSE, PERMIT AND BY-LAWS

LICENSE
The trading license will be obtained from the ministry of commerce at a cost of Kshs. 2,200 and this will enable the business to operate smoothly
without any inconvenience to the business operations.
The license will be renewed at the beginning of every year. And the general manager will make sure that the renewal is done in good time in
order to avoid interference of the business operations.
Permit
The proprietor will obtain the training permit from the ministry of Local government at a cost of 3500 and the business will be registered by the
local government at a cost of 1000 shillings. The permit will be renewed every year at Vihiga County council.
By-laws
Bylaws such the normal and general hygiene of the business premise will be made sure that are adhered to by the proprietor. Proprietor will
ensure that taxes are paid in time

3.7 SUPPORT SERVICES

The business will require support service to enable it carry out its operations effectively. The Services will include:
 Banking services
 Insurance services
 Transport services
 Advertising services
A. Banking services
Money and funds collected from the business will be banked to safety purposes. The proprietor has opened an account for the business with the
Commercial Bank. The details of the Bank are as follows
KCB BANK
TEL: +254 207835516

B. Insurance Services
The proprietor will ensure the business theft or damage. Therefore the proprietor decided to get the insurance cover from the Alico Insurance
Company Kisumu at cost 30,000 shillings per year
C. Transport Services
The proprietor will get transport services from:

12
JETLINK TRAVELLERS COMPANY
P.O.BOX 513-40100
Mbale
Tel: 0746342588
The transport company will assist the business in delivering goods and services and other materials in to the business since most goods are going
to be obtained locally the proprietor will spend as little as 3000 for transport service
D. Advertising Services
The proprietor will hire marketers to market and advertise the business to the business to the public this will inform the customers about the
goods and services that are offered by STIMA electrical.
This will be done by the recruiting some people temporarily and they will be paid Kshs.500 per day.

13
 CHAPTERS FOUR

4.0. OPERATION AND PRODUCTION PLAN

The business will need proper fittings of pipes raw materials and other equipments in order to carry its operation effectively.
Business will need the fitting of shelves where the arrangement of materials will be done. The cost of furniture and fittings products to be offered
to the business will be firings and cables. This will enable the business to happen in mode of retail since the business will not be a production
business since it will only be selling products that acquired from the manufacturing companies.
The business will be using modern technology to offer effective and reliable services to the customers.
The type of technology used is flexible in that all the required materials will be available at this workshop.
The business will always provide the new and technological goods as it will be updating the customers on how the changes are taking place in
the production process.
Since the business has good support staff that will interact with the customers and this will ensure that all the services are offered to every
customer without delay.

4.1 OPERATION PLAN

For the effective and smooth running of the business, furniture fittings and raw materials will be carried out as follows:
Item Quantity Unit Cost Total cost
Office 3 rooms 1200 12,000
Chairs 24 400 4000
Shelves 10 1600 1,600
Computer 3 14000 14,000
Records and 4 700 700
receipts
Furniture 20 3900 3,900
fittings
Totals 36,200

Office-this will be a room that contains three rooms that will be used by the key personnel which include the General Manager and finance
manager.
Chairs-these will be used in the office and the entire workshop where customers will wait when they are being served.
Shelves-these will enable the arrangements of the materials that will be sold within the workshop.
Computer-this will be used in entering database and storing the records regarding the progress of the business.
Receipt books will enable the issuing of the receipts to the customers that which will purchase goods from the business and this will enable
easily tallying of records.

.4.1.1Geographical location of Business

The business will be located in Western province, Vihiga County, Sabatia constituency at t- junction opposite KCB bank.
The size of the land where the business premises will be located is purchased land of three hectares and was purchased from the municipal
council of Vihiga at a cost of 57,000 Kshs. shillings.
The land was chosen to be the best place for the building premises because of the following factors.
a) The surrounding area has colleges, offices and estates with the number of people living that will need immediate assistance during their
studies and this will enable the purchase of electrical devices and materials to be high since the schools and colleges will need them
hence promoting the business development.
b) The area has reliable power supply and this will allow the business to perform up to late hours as source of lighting is available.
c) There are good transport and communication networks hence making the business to be easily accessible by the customers and supply
of required materials for the business growth.
d) The area is both secured for the customers and the business itself since the patrolling policemen from nyamira police station will make
customers feel safe hence making the business secured.
e) Water is readily available and this is important in cleaning the business premise and basic use by the employees of the business.

14
 4.1.2 Work schedule.
In the commencement of the business operation, the business will perform as follows in a week.
On week days the business will start from Monday to Friday from 8.00 am to 7.00 pm.
On weekends that is Saturday and Sunday the business will open from 2.00 pm to 6.00 pm. This will enable the premises development by giving
the employees the time for attending church services
Days Opening time Closing time
MON-FRIDAY 8.00 AM 7.00 PM
SATURDAY 2.00 PM 6.00 PM
SUNDAY 2.00 PM 6.00 PM

4.1.3 Receiving and dispatching of goods services

The business will be a retail shop offering direct services to customers. This will bridge the gap between suppliers and customers. And this will
be carried as follows.
Carl Gilberts will be able to supply goods to the business making all required goods available to customers through sewer line workshop which
will act as the store of goods and tools used by the employees

4.2 PRODUCTION PLAN

The business is going to require the following raw materials for the running of the business operation:Chairs, shelves, computer, records and
receipt books, supply of books, pipe fittings, washing materials, stationeries, tables and cleaning materials.

Items Cost Quantities Total cost

Chairs 12,000 24 12,000
Shelves 17,000 10 17,000
Computers 34,000 2 34,000
Records and receipt 900 3 900
books
Installation materials
Conduits 9,000 300 9,000
Pipes and fittings 36,000 600 36,000
Washing materials 3,600 8 3,600

4.3 REGULATIONS AFFECTING THE BUSINESS

License and permits
For the business to operate within Busia municipality, the proprietor will obtain a trading permit from the ministry offices within Busia county
council offices . The proprietor will also obtain trading license from the municipal offices at Busia district headquarters.
Tax
The proprietor will pay tax of 3% of the net profit for the whole trading period.
Safety

15
The proprietor will ensure the business is secured against environmental hazards such as fire, theft and burglary. The silver alternative sewer
system will be insured by the county government of Busia hence enquiring that work have Protective fercilities which will help them do the
work without fear
Government Regulations
Employee Act
The proposed business is going to offer its employees be it casual or permanent worker terms and conditions of the contract as per described by
the employees act which protect employees against the government.
Sales of goods Act
The business is going to be entitled to practice the sales of its products and services within trading line of business.

16
 CHAPTER FIVE

FINANCIAL PLAN

5.1 PRE-OPERATIONAL COST

Description Amount(Kshs)
Electricity 8,000
Rent 11,000
Water merte 8,000
bills
Advertisements 6,800
Equipment 50,000
permits 4,500
⁸Insurance 30,000
Total 124,300

5.2. WORKING CAPITAL

PARTICULARS YEAR 1 YEAR 2 YEAR 3

Current assets
Debtors 80,000 85,000 95,000
Stock 150,000 135,000 156,000
Cash at hand 850,000 750,000 470,000
Cash at bank 150,000 130,000 160,000
Total assets 1,230,00 1,100,000 851,000
Current liabilities
Bank over drafts 60,000 88,000 80,000
Creditors 80,000 92,000 82,000
Payable bills 150,000 120,000 120,000
Total liabilities 290,000 260,000 242,000
Working capital 949,000 840,000 609,000

5.3 CASH FLOW PROJECTION

Cash flow projection for the year 2024

Cash inflow JAN FEB MARCH APRIL MAY JUNE JULY AUG SEP OCT NOV DEC TOTAL
Balance b/f 0 1,131,7 1,466,40 1,734,10 1,815,9 1,900,7 1,935,50 1,997,3 2,100,1 2,158,2 2,267,3 2,385,4 20,892,6
00 0 0 00 00 0 00 00 00 00 00 00
Cash at hand 850000 - - - - - - - - - - - 850,000
Loan 150000 70000 70000 - - - - - 5000 - - - 295,000
Debtors 90000 80000 89000 - 17000 - - 20000 - 30000 40000 40000 406,000
Sales 28z000 270000 200000 187000 160000 160000 160000 176000 180000 176000 178000 180000 2,307,00
0 0
Total cash inflow 1,370,0 1,551,7 1,825,40 1,921,10 1,992,9 2,060,7 2,095,50 2,193,3 2,285,1 2,364,2 2,485,3 2,605,4 24,750,6
00 00 0 0 00 00 0 00 00 00 00 00 00
Cash outflow 0
Pre-operational cost 124300 - - - - - - - - - - - 124,300
Salaries 19500 19500 19500 19500 19500 19500 19500 19500 19500 19500 19500 19500 234,000
Rent 5000 5000 50000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60,000
Wages 14000 14000 14000 14000 14000 14000 16000 16000 16000 16000 16000 16000 180,000
Purchases 30000 34000 32000 33000 34000 36000 32000 33000 34000 36000 32000 36000 402,000
Furniture 8000 - 8000 - - 7000 - - 8000 - 7000 - 38,000
maintenance
Electricity and 12000 13000 13000 13000 14000 18000 18000 18000 18000 18000 18000 18000 191,000
water bills
Advertisements 2500 - - 4000 5000 - 6000 - - - - 5,00.00 17,500
Transport 18000 - - 16000 - 24000 - - 24000 - - 18000 100,000
Permits 2200 - - - - - - - - - - 2,200
Loan interest 2500 700 1000 3,700
Insurance 30000 - - - - - - - - - - - 30,000
Security 4800 4800 4800 5700 5700 6700 6700 6700 7400 7400 7400 7400 75,500
Total cash outflow 238,300 85,300 91,300 105,200 92,200 125,20 98,200 93,200 126,90 96,900 99,900 114,90 1,367,50

17
 0 0 0 0
Net cash flow 1,131,7 1,466,4 1,734,10 1,815,90 1,900,7 1,935,5 1,997,30 2,100,1 2,158,2 2,267,3 2,385,4 2,490,5 23,383,1
00 00 0 0 00 00 0 00 00 00 00 00 00
33

18
Cash flow projection for the year 2025

Particulars JAN FEB MARC APRIL MAY JUNE JULY AUG SEP OCT NOV DEC TOTA
H L
Cash in 1962500 234680 262550 2834100 3211600 3351000 336800 3372000 3335800 3407100 3482400 3497700 36,794,
flowball.b/f 0 0 0 500
Loans 150000 7000 8000 - - - - 5000 - - - - 170,00
0
Debtors 90000 80000 89000 170000 130000 - 24000 2000 - - 30000 40000 655,00
0
Sales 270000 280000 200000 300000 100000 100000 70000 50000 156000 170000 80000 60000 1,836,0
00
Total cash 2,472,50 2,713,8 2,922,5 3,304,10 3,441,60 3,451,00 3,462,0 3,429,000 3,491,800 3,577,10 3,592,400 3,597,700 39,45
flow 0 00 00 0 0 0 00 0 5,500
Cash out 0
flow
Salaries 234,00
19,500 19,500 19,500 19,500 19,500 19,500 19,500 19,500 19,500 19,500 19,500 19,500 0
Wages 14000 14000 14000 14000 14000 14000 16000 16000 16000 16000 16000 16000 180,00
0
Purchases 32000 34000 32000 33000 34000 36000 30000 32000 34000 34000 34000 36000 401,00
0
Electricity 1200 1300 1300 1300 1400 1800 1800 1800 1800 1800 1800 1800 19,100
& water
bills
Advertisem 2500 - - 4000 - 5000 - - 6000 - - 5000 22,500
ents
Transport 18000 14000 16000 15000 16000 - 16000 16000 - 16000 16000 16000 159,00
0
Loan 1500 700 800 - - - - 700 - - - - 3,700
Interest
Permits 2200 - - - - - - - - - - - 2,200
Insurance 30000 - - - - - - - - - - - 30,000
Security 4800 4800 4800 5700 5700 6700 6700 7400 7400 7400 7400 7400 76,200

Total cash 125,700 88,300 88,400 92,500 90,600 83,000 90,000 93,200 84,700 94,700 94,700 101,700 1,127,5
out flow 00
Net cash 2,346,80 2,625,5 2,834,1 3,211,60 3,351,00 3,368,00 3,372,0 3,335,800 3,407,100 3,482,40 3,497,700 3,496,000 38,328,
flow 0 00 00 0 0 0 00 0 000

19
Cash flow projection for the year 2026

Particulars JAN FEB MARCH APRIL MAY JUNE JULY AUG SEP OCT NOV DEC TOTAL
Cash in 3,496,000 3,845,40 4,181,30 4,405,10 3,586,1 3,589,10 3,623,50 3,599,9 3,558,30 3,586,70 3,643,10 3,697,5 44,812,0
flowball.b/f 0 0 0 00 0 0 00 0 0 0 00 00
Loans 140000 80000 9000 - - 60000 - - - - - - 289,000
Debtors 80000 90000 89000 - - - - - - - - - 259,000
Sales 280000 270000 200000 89000 110000 100000 89000 70000 156000 170000 180000 160000 1,874,00
0
Total cash 3,996,000 4,285,40 4,479,30 4,494,10 3,696,1 3,749,10 3,712,50 3,669,9 3,714,30 3,756,70 3,823,10 3,857,5 47,234,0
flow 0 0 0 00 0 0 00 0 0 0 00 00
Cash out 0
flow
Salaries 23600 23600 23600 23600 23600 23600 23600 23600 23600 23600 23600 23600 283,200
Wages 14000 14000 14000 14000 14000 14000 14000 16000 16000 15000 16000 16000 150,000
Purchases 32000 34000 3000 32000 34000 36000 33000 32000 34000 34000 34000 38000 376,000
Furniture 8000 - - 800000 - 7000 - - 8000 - 7000 - 830,000
maintenanc
e
Electricity 12000 13000 13000 13000 14000 16000 18000 17500 17000 18000 18000 18000 187,500
& water
bills
Advertisem 3500 - - 4000 - 5000 - - 6000 - 5000 - 23,500
ents
Transport 18000 14000 15000 16000 16000 16000 16000 16000 16000 16000 16000 16000 191,000
Loan 1400 800 900 - - 600 - - - - - - 3,700
Interest
Permits 2200 - - - - - - - - - - - 2,200
Insurance 30000 - - - - - - - - - - - 30,000
Security 4700 4700 4700 5400 5400 5400 6000 6000 6000 6000 6000 6000 66,300
Total cash 150,600 104,100 74,200 908,000 107,00 125,600 112,600 111,60 127,600 113,600 125,600 117,60 2,178,10
out flow 0 0 0 0
Net cash 3,845,400 4,181,30 4,405,10 3,586,10 3,589,1 3,623,50 3,599,90 3,558,3 3,586,70 3,643,10 3,697,50 3,739,9 45,055,9
flow 0 0 0 00 0 0 00 0 0 0 00 00

20
5.4. SILVER ALTANATIVE SEWER SYSTEM

Pro-former income statement for the year ending

Particulars 31/Dec/2024 31/Dec/2025 31/Dec/2026
Sales 2,467.000 1,923.000 1,874.000
Purchases 40,200 401,000 406.000

Opening stock 30,000 32,000 32,000

Cost of goods available 372,000 369,000 374,000

for sale
Closing stock 36,000 36,000 38,000

Cost of goods sold 336,000 333,000 336,000

336,000 333,000 336,000

Gross profit 2,131,000 1,590,000 1,538,000
Expenses
Pre operational cost 124,300 -

Salaries 273,000 286,000 176,000

Wages 180,000 180,000 180,000

Purchases 402,000 401,000 405,000

Furniture & maintenance 37,000 38,000 38,000

Advertisements 22,500 22,500 22,500

Transport 100,000 159,000 191,000

Permits 2,200 2,200 2,400

Insurance 30,000 30,000 32,000

Security 75,500 76,200 36,300

Electricity water bills 191,000 191,000 167,600

TOTAL EXPENCES 1,437,500 1,437,500 1,362,400 1,362,400 1,251,800 1,251,800

Net Profit 693,500 227,600 286,200
Tax 10% 69,350 22,760 28,620
Net profit after tax 624,150 2072528501 257,580
94,840

21
5.5.1 PRO-FORMER BALANCE SHEET AT 31ST DEC.2024
ASSESTS COST
Current Assets
Cash 2,135.800
Debtors 80,000
Stock 150,000
Total current Assets 2,365.800
Fixed Assets
Machinery and equipments 140,000
Accumulated depression 20%
28,000
Vehicle 690,000
Accumulated depression 38%
207,000
Furniture and fittings 80,000
Accumulated depression 20%
16,000
Total fixed assets 303,000
Total Assets 2,668,800
Liabilities
Current liabilities
Creditors 60,000
Bank Overdrafts 50,000
Total current liabilities 110,000
Long term Liabilities
Bank liability 150,000
Owners equity 2,408.800
Total liability and owners Equity 2,668.800

22
5.5.2 PRO-FORMER BALANCE SHEET AT 31ST DEC.2025
ASSESTS COST
Current Assets
Cash 3,302.400
Debtors 85,000
Stock 135,000
Total current Assets 3,522,400
Fixed Assets
Machinery and equipments 2,000.000
Accumulated depression 20%
400,000
Vehicle 1,500.000
Accumulated depression 30%
450,000
Furniture and fittings 90,000
Accumulated depression 20%
18,000
Total fixed assets 868,000
Total Assets 4,390.400
Liabilities
Current liabilities
Creditors 62,000
Bank Overdrafts 70,000
Total current liabilities 132,000

Long term Liabilities

Bank loan 150,000
Owners equity 4,108.400
Total liability and owners Equity 4,390.400

23
5.5.3PRO-FORMER BALANCE SHEET AT 31ST DEC.2026
ASSESTS COST
Current Assets
Cash 4,134.300
Debtors 95,000
Stock 156,000
Total current Assets 4,385.300
Fixed Assets
Machinery and equipments 2,000.000
Accumulated depression 10%
200,000
Vehicle 1,500.000
Accumulated depression 15%
225,000
Furniture and fittings 90,000
Accumulated depression 10%
9,000
Total fixed assets 434,000
Total Assets 4,819,300
Liabilities
Current liabilities
Creditors 62,000
Bank Overdrafts 70,000
Total current liabilities 132,000
Long term Liabilities
Bank loan 170,000
Owners equity 4,517.300
Total liability and owners Equity 4,819.300

5.6BREAK EVEN ANALYSIS

Operating expense for the year 2024
24
 Fixed costs Amount
Insurance 30,000
Permits 2,200
Rent 60,000
Loan interest 3700
Total fixed cost 95,900
Variable costs
Wages 180,000
Water and electricity bills 191,000
Advertisements 17,000
Transport 100,000
Salaries 234,000
Total variable costs 722,000

Operating expense for the year 2025

Fixed costs Amount
Rent 60,000
Loan Interest 3,700
Insurance 30,000
Permits 2,200
Total fixed cost 95,900
Variable costs
Wages 180,000
Water and electricity bills 191,000
Advertisements 22,500
Transport 159,000
Salaries 234,000
Total variable costs 786,500

Operating expense for the year 2026

Fixed costs Amount
Rent 60,000
Loan Interest 3700
Insurance 30,000
Permits 2,200
Total fixed cost 95900
Variable costs
Wages 150,000
Water and electricity bills 187,500
Advertisements 23,500
Transport 191,000
Salaries 283,200
Total variable costs 835,200

i) Contribution margin

25
Year 1(2024)
= (sales-total variable cost)
= 2,307,000-722,000
= 1,585,000

Year 2(2025)
= (sales-total variable cost)
=1,836,000-786,500
=1,049,500

Year3(2026)
= (sales-total variable cost)
1,874,000-835,200
=1,038,800

ii) Contribution margin percentage

Year 2022
Contribution margin percentage
= {contribution margin} ×100
Sales

= {1,585,000} ×100
2,307,000
=68.70%

Year 2023
Contribution margin percentage
= {contribution margin} ×100
Sales
= {1,049,500} ×100
1,836,000
=57.13%

Year 2021
Contribution margin percentage
= {contribution margin} ×100
Sales
= {1,038,800} ×100
1,874,000
=55.43%
Total fixed cost
Year Total fixed cost
2015 95,900
2016 95,900
2017 95,900

26
iii) Break-even level point

Year 2024
Breakeven level point = {fixed cost}
Contribution margin %
= {95,900}
68.70
=1,395.93

Year 2025
Breakeven level point = {fixed cost}
Contribution margin %
= {95,900}
57.13
=1,678.62

Year 2026
Breakeven level point = {fixed cost}
Contribution margin %
= {95,900}
55.73
=1,720.77

iv) Break-even units

Year 2024
Break even units = {contribution margin}
Fixed cost
= {1,585,000}
95,900
=16.527

Year 2025
Break even units = {contribution margin}
Fixed cost
= {1,049,500}
95,900
=10.944

Year 2025
Break even units = {contribution margin}
Fixed cost
= {1,038,800}
95,900
=10.832

27
5.7 FINANCIAL RATIOS

Gross profit percentage

Gp %={ gross profit}×100

Sales

Year 2024
Gp %={2,131,000} ×100
2,307,000
= 92.37%

Year 2023
Gp %={1,590,000} ×100
1,836,000
=86.60%

Year 2024
Gp %={ 1,538,000} ×100
1,874,000

=82.07%

Net profit percentage

Np %={ net profit} ×100

Sales

Year 2021
Np %={ 693,500} ×100
2,307,000
=30.06%

Year 2023
Np %={ 227,600} ×100
1,836,000
=12.39%

Year 2021
Np %={ 286,200} ×100
1,874,000
=15.27%

28
Return on equity
Return on equity= {net profit} ×100
owners’ equity
Year 2023
= {693,500} ×100
2,408,800
28.79%
Year 2024
= {227,600} ×100
2,408,800
=9.45%
Year 2024
= {286,200} ×100
2,408,800
=11.88%
Return on investment
For the year 2023
Return on investment= {net profit after tax}×100
Total invested capital
= {624,150} ×100
4,819,300
=12.95%
For the year 2024
Return on investment= {net profit after tax}×100
Total invested capital
= {204,840} ×100
4,819,300
=4.25%
For the year 2024
Return on investment= {net profit after tax}×100
Total invested capital
= {257,580} ×100
4,819,300
=5.34%

5.8DESIRED FINANCING

Desired financing for the year 2023

Item Amount
Pre-operational cost 1,24,300
Working capital 949,000
Long term assets 303,000
Cost of fixed assets 95,900
Total desired financing 0
29
30