BUSINESS PLAN

JEDAMAR FOODCART MANUFACTURING

PRESENTED BY: MBURU SIMON KIMANI.

ADMISSION No: 11790S22.

INDEX NO: 5341011315

INSTITUTION: RIFT VALLEY TECHNICAL TRAINING INSTITUTE.

SUPERVISOR: MRS. JOAN KIRWA

SUBMITTED TO: THE KENYA NATIONAL EXAMINATION COUNCIL IN

PARTIAL FULFILLMENT FOR THE AWARD OF DIPLOMA IN MECHANICAL
ENGINEERING-PRODUCTION OPTION

i
 DECLARATION

Student Declaration

I declare that this business plan is my original work and has not been submitted or presented in

any other college or institution of higher learning for the award of diploma or any academic

credit.

MBURU S. KIMANI

Student (Mechanical Engineering)

Department of Mechanical & Automotive Engineering,

Rift Valley Technical Training Institute.

Signature……………………………………………… Date……………………………….

Certificate of Supervision

This is to certify that this project proposal has been written by MBURU S. KIMANI under our

guidance and supervision and is submitted with our approval for trade project.

Supervisor: MRS. JOAN KIRWA

Trainer, Department of Mechanical & Automotive Engineering, Rift Valley Technical Training

Institute.

Signature…………………………………………… Date ………………………………….

ii
 DEDICATION

I wish to dedicate this work to my Mother and Sister for the unrelenting support that they gave

me throughout.

iii
 ACKNOWLEDGEMENT

The development of this business plan took the effort, support and guidance of the following

people:

Mrs. JOAN KIRWA - Subject tutor.

Peter Kimani - Brother.

Thank you all for the support.

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Table of Contents
DECLARATION.............................................................................................................................ii
DEDICATION...............................................................................................................................iii
ACKNOWLEDGEMENT..............................................................................................................iv
CHAPTER ONE: EXECUTIVE SUMMARY…………………………………………………………7
1.1 Business Description………………………………………………………………………………………………………………………….7

1.2 Product & Services…………………………………………………………………………………………………………………………….7

1.3 Industry & Market…………………………………………………………………………………………………………………………….7

1.4 Marketing Plan………………………………………………………………………………………………………………………………….8

1.5 Production Plan………………………………………………………………………………………………………………………………….8

1.6 Financial Planning………………………………………………………………………………………………………………………………8

CHAPTER TWO: BUSINESS DESCRIPTION……………………………….…………………………………………………………….9

2.1 Owners Details……………………………………………………………………………………………………………………………….9

2.2 Business Name ………………………………………………………………………………………………………………………………….9

2.3 Location………………………………………………………………………………………………………………………………………….10
2.4 Address…………………………………………………………………………………………………………………………………………...10
2.5 Form and types of Ownership………………………………………………………………………………………………………….11
2.6 Product & Services………………………………………………………………………………………………………………………….12
2.7 Justification & Opportunity………………………………………………………………………………………………………………13
2.8 Industry…………………………………………………………………………………………………………………………………………...14
2.9 Goals……………………………………………………………………………………………………………………………………………….15
2.10 Entry Plan………………………………………………………………………………………………………………………………………16
2.10.1 Competitive Advantage…………………………………………………………………………………………………………….16

2.10.2 Weaknesses……………………………………………………………………………………………………………………………….16

2.11 Growth Strategy…………………………………………………………………………………………………………………………….17

2.11.1 Opportunities…………………………………………………………………………………………………………………………….17

5
CHAPTER THREE: MARKETING PLAN....................................…………………………………………………………………18
3.1 Potential Customer……….......................................................................................................................18
3.2 Competition ……………………………………………………………………………………………………………………………………19
3.2.1 Strength of Competitors........................................................................................................20
3.2.2 Weaknesses of Competitors..................................................................................................20
3.3. Market Share...........................................................................................................................20
3.4. Pricing strategy.......................................................................................................................21
3.5. Sales Tactics...........................................................................................................................21
3.6. Advertising & Promotion…………………………………………………………………………………………………………………22

CHAPTER FOUR: ORGANIZATION PLAN.........................................................................24

4.1 Organizational Structure..........................................................................................................24
4.2 Key Personnel..........................................................................................................................25
4.3 Ordinary Personnel……………………………………………………………………………………………………………………….28

4.4. Training...................................................................................................................................30
4.5 Promotion................................................................................................................................30
4.6. Licenses, permits and by-Laws...............................................................................................31
4.7. Support Services…………………………………………………………………………….31
CHAPTER FIVE: PRODUCTION PLAN................................................................................33
5.1. Production and Sales...............................................................................................................33
5.2 Machinery and Equipment.......................................................................................................33
5.3. Raw material Requirement.....................................................................................................34
5.4. Utilities/Infrastructure.............................................................................................................34
5.5. Labour.....................................................................................................................................35
5.6. Administrative & Selling costs...............................................................................................35
5.7. Summary of Production cost……………………………………………………………………………………………………….35

CHAPTER SIX: FINANCIAL PLAN.......................................................................................36

6.1. Pre – Operational Costs..........................................................................................................36
6.2 Income Statement....................................................................................................................37
6.3 Balance Sheet...........................................................................................................................38
6.4 Cash Flow Statement……………………………………………………………………………………………………………………….39

Conclusion....................................................................................................................................40

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 CHAPTER ONE
EXECUTIVE SUMMARY
1.1 Business Description.
JEDAMAR food cart manufacturing is an environment friendly
manufacturer of food vending carts. We have developed a unique
method of production and sourcing of materials that allows us to
create eco-friendly products at a low cost.
 MISSION: Our mission is to use recycled materials and
sustainable methods of production to create a product that
can act as a vehicle of earning a living during this hard
economic times thus beneficial to our customers.
 VISSION: To become a leader in the food vending cart
manufacturing industry in the region while generating a
positive impact on the society and environment.
1.2 Products & Services.
We offer high quality food vending products that cater for all food
vendor’s entrepreneurs at affordable prices.
Examples of our products; Boiled egg vending cart, Ice – cream
vending cart, Fruit & Vegetables vending carts, Grilled meat
vending carts etc.
1.3 Industry & Market.
Even though the manufacturing industry have been faced with
huge challenges ranging from taxes to cheap imports in recent
years. Data from Kenya Bureau of Statistics shows that the market
is expected to continue growing at a steady pace.

7
1.4 Marketing Plan.
Our marketing plan relies on the use of digital marketing
strategies and online sales which gives us a competitive advantage
over traditional retailers that focus their marketing efforts on
traditional methods.
1.5 Production Plan.
Our production plant is able to recycle different types of metals to
turn it into materials that can be used to manufacture our
products.
We have partnered with a transportation company that sorts and
distributes our products within the region efficiently and cost
effectively.
1.6 Financial Planning.
Our business is profitable as documented in our balance sheet,
income statement and cash flow statement.

Total startup capital obtained through investment and loans that

will enable the establishment of JEDAMAR and ensure its growth
to be a profitable business will amount to 3,500,000 KES.

65% of the total startup capital which is the amount needed for
JEDAMAR to set up a shop and be open for business.
While 35% of the total startup capital is the amount needed by
JEDAMAR to cover operating expenses for the first three months
in business.

Owner of a JEDAMAR has contributed cash and equipment

comprising of 60% of the total amount needed for the venture.
JEDAMAR will need 40% of the total startup capital which will be
obtained through a 3-year loan from a local bank at 5% interest.

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 CHAPTER TWO
BUSINESS DESCRIPTION.
2.1 Owners Details

JEDAMAR food cart manufacturing was founded by MBURU SIMON

KIMANI a 21-year-old student undertaking a Diploma in Mechanical
Engineering – Production option at Rift Valley Technical Training
institute.
Having qualifications and education pertaining manufacturing our
founder MBURU SIMON KIMANI will also act as our General manager.
2.2 Business Name

The proposed business venture will go by the name JEDAMAR

FOODCART MANUFACTURING. The name came about as a result of
honoring the two most important beings that were the inspiration and
motivation towards coming up with the business idea.

That is JEDIDAH – My beloved sister and DAMARIS- My loving mother.

Due to the main product of output (food vending carts) from the
business workshop hence the name FOODCART.

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2.3 Location.

A study has been conducted to determine the feasibility of JEDAMAR

FOODCART MANUFACTURING to operate in a strategic area in
ELDORET, UASIN GISHU County along NDALAT-ROAD opposite Kenya
Power & Lightning Company sub-station.

A couple of such operations exist in the area but none offer the services
that JEDAMAR FOODCART MANUFACTURING will offer.

2.4 Address

Email: [email protected].
Postal Address: PO BOX 8324-30100.
Website: www.jedamarfoodcart.co.ke.

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2.5 Legal structure

Having considered legal advice from various professionals JEDAMAR

FOODCART MANUFACTURING will be registered as a sole
proprietorship business to the register of companies of the government
of Kenya and later on advance to become a private limited company.

2.5.1 Advantages of Sole proprietorship

Here are some of the advantages and the reasons behind choosing this
type of ownership

Flexibility in Management: Owner can choose to have either a friend or

family member work in the business premises without requiring any
approvals from board members as in cases such as limited companies.

Fewer Compliance Requirements: Compared to corporations, sole

proprietorship typically have fewer formal compliance requirements.
There is often less paperwork, no need for annual meetings, and fewer
or no ongoing reporting obligations.

Ease of Formation: Creating a sole proprietorship is relatively

straightforward and less complex than forming a corporation. Most
counties offer a simplified process for registration and documentation.

Flexibility in Ownership: final decision maker and overall head as the

owner.

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2.6 Product & Services.

JEDAMAR will be associated with the production and selling of food

vending carts.

The food vending carts will contain the following features;

 Stainless sheet metal to ensure longevity and resistance from

harsh weather conditions (rust) on the bottom surface of the

product.

 Aluminum sheet on the interior part of the product to ensure the

stored food for selling is under good condition.

 Rubber tires to ensure movability from one location to another in

a seamless manner.

 Solar paneled roof.

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2.7 Justification of opportunity

The product will help improve the living standards of the citizens

because it will act as a tool for earning a living thus resulting to job

creation.

The product will improve the handling and storing condition of street

foods thus promoting better food handling and consumption practices.

The product will enable street food vendors increase their sales volume

because it will facilitate movement from one place to another in a

flexible and easy manner.

The product will be equipped with a cash deposit box with an

integrated high end security feature that ensure safe storage of income

accumulated from the sale of food stuffs.

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2.8 Industry.

Food cart manufacturing industry is characterized by slow but

consistence growth in the recent years within the region. Data from

KENYA NATIONAL BUREAU OF STATISTICS shows that the market is

expected to continue growing at a steady pace.

Nevertheless, there has been an upward trend/ increase of food

vendors in the urban areas due to lack of job opportunities and the

need to create multiple sources of income due to inflation and hard

economic times thus resulting to the increase in demand of our

products.

Also data from KNBS shows that most young citizens aged 18 – 35

prefer to be self-employed and own their own businesses rather than

being employed. In addition, the street food selling and buying culture

has been on an upward trend among children and youths aged 18 – 25

all over the world fueled by various social media platforms such as TIK

TOK, FACEBOOK etc.

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2.9 Goals

Here are some of the goals JEDAMAR would strive to achieve:

Customer Satisfaction: Ensuring high levels of customer satisfaction is

paramount.

Business Growth: Expanding the client base and increasing revenue are
common growth-related goals. This may involve introducing new
products, securing larger plant, or expanding services to reach a wider
audience.

Profitability: Achieving profitability and maintaining healthy profit

margins are essential financial goals. The company may set targets for
revenue, gross profit, and net profit.

Quality Workmanship: Striving for excellence in every project is a core

goal. This involves setting high standards for craftsmanship, attention to
detail, and the use of quality materials.

Marketing and Branding: Building a strong brand and marketing

presence is crucial. Goals may include increasing brand recognition,
expanding the company's online presence, and implementing effective
marketing strategies.

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2.10 Entry plan

2.10.1 Competitive Advantage

JEDAMAR FOODCART MANUFACTURING biggest competitive

advantages lies in the pricing of our product and time taken to produce

the product out of the workshop.

We plan on investing heavily in machines and equipment’s & in

addition utilize technology to reduce the time taken to produce the

food cart.

In due time we plan in offering wide variety of food cart products that

target various food vendors thus making our workshop a number one

stop for people venturing into food vending business.

2.10.2 Weaknesses

we will face a challenge in seeking growth capital from angel investors

and not forgetting seed funding. We are quite aware of that and we are

working on delivering a good business pitch to investors and reducing

the risk involved and capital required to a minimum.

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2.11 Growth strategy

JEDAMAR FOODCART MANUFACTURING will be alert on the following

trends that signals business growth:

Positive feedback from customers.

Increase in sales volume out of the business locality.

Increase in number of products manufactured monthly out of the

business workshop.

2.11.1 Opportunities

JEDAMAR FOODCART MANUFACTURING stands to leverage as much

opportunities as follows:

Partner with firms offering products that complement ours.

Opening of our wholesale stores in selective towns of potential across

Kenya.

Strategic alliances offering sources of referrals and joint marketing

activities to extend our reach.

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 CHAPTER THREE

MARKETING PLAN

We at JEDAMAR FOODCART MANUFACTURING have Created an

effective marketing plan which involves understanding of our target
audience, setting clear objectives, and selecting appropriate marketing
tactics.

3.1 Potential Customers.

JEDAMAR FOODCART MANUFACTURERS will primarily target the

following customer profiles:

Entrepreneurs and small business owners i.e. individuals who want to

start their own street food vending business or expand the existing
ones e.g.

Ice – cream vendors.

Boiled egg vendors etc.

Restaurant owners and chefs who want to extend their presence to

outdoor events or showcase specific dishes outside their place of
business.

Event organizers e.g. companies or individuals organizing events such

as concerts and want to provide diverse dinning to attendees.

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3.2 Competition

JEDAMAR FOOD CART MANUFACTURERS exists in a competitive market

but is the opinion of the company other competitors cannot match in
addition to the company’s work ethics and service skills.

JEDAMAR will compete directly with the following key organizations;

JOHPET MANUFACTURERS LTD

PO BOX 215-30100

ELDORET

DAHRIS FOODCART FABRICATORS

PO BOX 380 – 0100

NAIROBI

JEDAMAR faces a stiff competition with company A due to similarities in

business location and differences in size.

JEDAMAR FOOD CART MANUFACTURING will leverage on the use of

technology (use of product life cycle management software) that will
enable the follow up of the product from its inception phase in the
market to the growth maturity and decline phase. Thus ensuring
product growth and development.

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3.2.1 Strength of competitors:

Outstanding reputation.

Experience of over five years in business

3.2.2 Weaknesses of competitors;

Lack to fabricate a custom made food cart

Lack of following up the life cycle of the product

JEDAMAR will compete directly with these other companies by

effectively meeting customers’ needs and fulfilling the clients demands
because it will aid the company in generating future business.

3.3 Market Share

Market Shares

10%

20% 40%

30%

DAHRIS FOODCART FABRICATORS JOHPET MANUFACTURERS LTD ELDO FABS LTD JEDAMAR FOODCART

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3.4 Pricing

JEDAMAR FOOD CART MANUFACTURING having put all matters into

consideration and to ensure profitability and competitiveness has
decided on employing the following pricing strategy.

Market based pricing whereby we as a business we will align our

product price with that of our competitors so as to grow our market
share meet our financial goals and be sustainable. But with flexibility
we plan on conducting pricing experiments to gauge customer
response.

3.5 Sales Tactics

JEDAMAR FOOD CART MANUFACTURING emphasizes on excellent

customer relation skills and work ethics as the primary focus.

These skills will be useful in making customers comfortable in trusting

the company to provide them services.

The following are the methods of direct selling JEDAMAR plans to use:

 Setting up of a retail store where customers can walk in and

purchase our product that’s already manufactured.
 Use of direct sales force (sales agents).

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These channels are most appropriate because of time to market,
reduced capital requirements and easy access.

Methods of indirect selling employed by JEDAMAR:

 We plan on utilizing various distribution channels such as use of

wholesalers, agents and brokers to sell our products and services.
 We plan on implementing affiliate marketing/referral programs
where we as a business can partner with individuals who promote
and endorse our product and services and in return earn a
commission.
 In addition, we plan in participating in trade shows or expos which
will allow us to showcase our product and services to targeted
audiences.

JEDAMAR geographical primary focus will be on the urban living areas

i.e. cities across Kenya such as ELDORET, NAIROBI, NAKURU, KISUMU
where the general public are looking for investment vehicles such as
our product to increase their income.

3.6 Advertising and promotion

JEDAMAR FOOD CART MANUFACTURING marketing strategy will

include the use of targeted print media advertising.

Print media advertising weekly newspaper with expansion to the

surrounding areas and other local newspaper.
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Flyers and Mailings

Flyers and brochures will be created promoting the business services

and explaining the benefits and mailed to target markets and delivered
to clients.

Social Media

JEDAMAR will create different social media accounts where we will

keep clients informed of promotions and new products.

Online Marketing

JEDAMAR will create an interactive web page with all the information
needed for the client to request services.

Frequency of advertisement will be based on JEDAMAR previous year’s

sales history the planned increase in advertising for the company and
future expansion will make JEDAMAR FOOD CART MANUFACTURING
even more appealing to prospective customers.

Not more than 10% of annual gross sales will be allocated to the
marketing budget regardless of what type of marketing campaign is
developed management must make a conscious effort to research and
gather data supporting the campaign test it and analyze the direct
expenses associated with the campaign against its potential profit to
determine whether the campaign is cost justified.

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 CHAPTER FOUR

ORGANISATION PLAN
4.1 Organizational Structure

To increase efficiency and effectiveness of the business operation JEDAMAR FOOD CART

MANUFACTURING will implement functional organization structure.

OWNER/GENERAL
MANAGER

PLANT SUPRINTENDENT MARKTING

BOOKKEEPER
COORDINATOR
-Engineering
-Production control
SALES
REPRESENTATIVE
-Shipping
-Finishing
-Assembly
-Machinig
DEPARTMENT SUPERVISORS

SKILLED WORKER

UNSKILLED WORKER

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4.2 Key Personnel

A. Number of position:1

Title of position: Owner/General Manager

Duties:

Responsible for strategic decision.

Overall management.

Business development.

Remuneration level:

Highest paid by keeping all profits of the business.

Incentive package:

Health

Flexible working hours

Profit.

B. Number of position:1

Title of position: Plant superintended

Duties:

Manages production activities

Coordinates work flow

Supervises the production team

Responsible for inspecting products ensure they meet standards

25
 In charge of general maintenance

Remuneration level:

Third highest paid with a salary scale of 60,000 – 70,000 KES.

Incentive package:

Health

Professional development Opportunities.

Raises.

Recognition

C. Number of position: 4

Title of position: Department supervisor

Duties:

Remuneration level: Fifth highest paid with a salary sale of 50,000 – 55,000 KES.

Incentive package:

Health

Professional development Opportunities.

Raises.

Recognition

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 D. Number of position:1

Title of position: Bookkeeper

Duties:

Remuneration level:

Second highest paid with bonuses ranging from 80,000 -90,000 KES per month.

Incentive package:

Bonuses.

E. Number of position:1

Title of position: Marketing Coordinator

Duties:

Handles marketing activities

Advertising

Promotional campaigns

Market research

Remuneration level:

Fourth highest paid with a salary scale of 55,000 – 60,000 per month.

Incentive package:

27
Health

Professional development Opportunities.

Bonuses.

Recognition

4.3 Ordinary personnel

F. Number of position: 5

Title of position: Sales Representatives

Duties:

Responsible of finding potential customers

Negotiating sales

Maintain customer relationships

Remuneration level: Third lowest paid with a salary scale of 45,000 – 50,000 per month.

Incentive package:

Health

Professional development Opportunities.

Bonuses.

Recognition

G. Number of position: 5

Title of position: Skilled worker

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 Duties:

Engage in the actual manufacturing task

Operating machinery

Assembly/fabricating products

Remuneration level: Second lowest paid with salary scale of 40,000 – 45,000 per month.

Incentive package:

Health

Professional development Opportunities.

Raises.

H. Number of position:2

Title of position: Unskilled worker

Duties:

Maintain security of the business premises when in use and when not in use

Remuneration level: Lowest paid with a salary scale of 25,000 – 30,000 per month.

Incentive package:

Health

Raises.

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4.4 Training

Training and promotion are essential components of the success of the business. Properly
trained employees deliver high-quality services, while effective promotion helps attract new
clients and retain existing ones.

At JEDAMAR we will provide comprehensive onboarding for new employees, including safety
procedures, company policies, and introductions to equipment and tools.

Also we will train Technicians in various aspects of their job, such as plant operating techniques,
Machine system installation, machining, and maintenance and encourage employees to obtain
relevant certifications, such as those for Engineers Board of Kenya, Kenya Technical Registration
Board if required by local regulations.

They will be also trained in safety protocols and procedures to prevent accidents and injuries.
Conduct regular safety meetings and provide ongoing safety training.

Also they will be trained in customer service, equipment handling and sustainability practices.

4.5 Promotion

Promoting employees in the business is essential for recognizing and rewarding their
contributions, motivating them to excel, and retaining top talent.

In order for JEDAMAR to effectively promote employees based on:

1. Performance Evaluation: Conducting regular performance evaluations to assess

each employee's skills, work ethic, and contributions to the company.

Promoting employees within our company not only benefits the individuals but also contributes
to the overall growth and success of your business. By recognizing and nurturing talent from
within, you can build a loyal and skilled workforce that helps your company thrive.

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4.6 Licenses Permits & By – Laws

According to the law of Kenya for any business to run one needs to obtain a trading license.
Therefore, JEDAMAR will obtain its permits from UASIN GISHU county government, this will
enable the business to be legal in its operations and activities and also ensure that all the laws
are adhered to.

4.7. Support Services

Book keeping

JEDAMAR FOODCART MANUFACTURING will source services such as: management of financial
records, accounts payable and preparing of financial reports from;

LS WAIKIKI ACCOUNTANCY LTD

PO BOX 2012-30100
ELDORET

Due to their skilled manpower and excellent customer service.

Banking

JEDAMAR will seeking banking services from:

JAMII INVESTMENT BANK

PO BOX 101-30100
ELDORET

Due to their favorable interest rates on loans and transactional cost not forgetting its
tremendous track record of helping small and medium enterprises grow into profitable
companies.

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Legal services

For matters regarding corporate law JEDAMAR will engage:

LESTER & CO ADVOCATES LLP

PO BOX 325 -30100
ELDORET

Due to their over 25 years work experience regarding legal matters.

Management Advice

CHASIM CONSULTANCY LTD

PO BOX 909-30100
ELDORET

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 CHAPTER FIVE

PRODUCTION PLAN
5.1 Production & Sales

No Item Total Quantity Sales per year Capacity

per year
1 Boiled egg ‘Mega’ Food Cart 60 pieces 1,500,000 25,000
2 Boiled egg ‘Mini’ Food Cart 80 pieces 1,200,000 15,000
3 Mega Ice – Cream Vending Cart 50 pieces 1,000,000 20,000
4 Mini Ice – Cream Vending Cart 60 pieces 1,170,000 18,000
5 Mega Grilled Meat Vending Cart 100 pieces 1,200,000 12,000
6 Mini Grilled Meat Vending Cart 120 pieces 960,000 8,000
7 Mega Cone Roasting Cart 90 pieces 450,000 5,000
8 Mini Cone Roasting cart 130 pieces 520,000 4,000

9 Mega Fruit & Vegetable Cart 100 pieces 1,200,000 12,000

10 Mini Fruit & Vegetable Cart 110 pieces 1,110,000 10,000
11 Mega Coffee Vending Cart 50 pieces 800,000 4,000
12 Mini Coffee Vending cart 60 pieces 950,000 15,833

5.2 Machinery/Equipment

No Item Unit Price Total Value Maintenance cost

1 5 Computers @ 40,000 each 200,000 25,000
2 3 60L Air Compressors @ 30,000 each 90,000 15,000
3 Hydraulic Press Brake Machine @300,000 300,000 100,000
4 3 MIG Welding Machine @ 60,000 each 180,000 20,000
5 3 TIG Welding Machine @ 65,000 each 195,000 22,000
6 2 Oxy Acetylene Welding @ 50,000 each 100,000 15,000
Machine
7 2 Spot Welding Machine @ 65,000 each 130,000 25,000
8 3 Drilling Machine @ 50,000 each 150,000 15,000
9 Milling Machine 200,000 200,000 35,000
10 Power Hacksaw 160,000 160,000 40,000
11 Lathe Machine 250,000 250,000 50,000
12 Grinding Machine 80,000 80,000 15,000
13 Miscellaneous Tools 150,000 150,000 20,000
14 Electric Generator 250,000 250,000 40,000
15 Diesel Generator 150,000 150,000 20,000

33
5.3 Raw material Requirement

No Item Quantity Total Annual Requirement

Value Source
1 Aluminum Sheets 50 tones 280,000 Revoke Steels LTD
2 Stainless Steel Sheets 300 tones 150,000 Revoke Steels LTD
3 Iron bars 200 tones 120,000 Revoke Steels LTD
4 Scrap Metals 200 tones 200,000 Gag Scrap Metal
Dealers
5 Rubber 100 tones 150,000 Pack Limited
6 Glass 50 tones 100,000 Pats Glass Works
7 Wood 50 tones 120,000 Raps Limited
8 Paints 50 gallons 80,000 Eagles Hardware
9 Plastics 80 tones 70,000 Kens Limited
10 Electrical components 60 tones 100,000 Eaves Electrical
Supplies LTD

5.4 Utilities/Infrastructure

No Item Annual Total Annual cost Maintenance

Requirement
1 Water 500,000 gallons 100,000 20,000
2 Electricity 500 Mega Watts 150,000 30,000
3 Internet Connectivity 120 Giga bytes 60,000 10,000
4 Fuel 5000 gallons 120,000 30,000
5 Compressed Air system 50,000MPa 120,000 30,000
6 Storage Areas 1000 SQ Ft 100,000 15,000
7 Loading Docks 500 SQ Ft 50,000 10,000
8 Work Station & Equipment 5000 SQ Ft 60,000 15,000
9 Security Systems - 80,000 25,000
10 Fire Systems - 60,000 20,000
11 Heating Ventilation & Air - 100,000 40,000
Conditioning
12 Waste Water Disposal 250,000 gallons 150,000 35,000

34
5.5 Labor

No Particulars No of staff Annual wages Further Training

Required
1 Sales & Marketing 6 200,000
2 Production Workers 12 300,000
3 Security Personnel 4 220,000
4 Maintenance Technicians 5 300,000
5 Drivers 5 350,000
6 Book Keepers 2 200,000
7 Supervisors 5 500,000
8 Engineers 4 500,000
9 Quality control Inspectors 2 250,000
10 Logistics Coordinators & 2 300,000
Managers

5.6 Administrative & Selling costs

N Item Amount
o
1 Administrative staff salaries 400,000
2 Office Supplies & Equipment 200,000
3 Rent & Utilities for office spaces 300,000
4 Sales Team Salaries & Commissions 350,000
5 Marketing & Advertising Expenses 150,000
6 Travel & Entertainment Costs for Business Development 300,000
7 Customer Support & Services 150,000

5.7 Summary of Production Cost

Types of Cost Monthly Cost

Source of Materials 50,000
Materials Required 50,000
Transportation 15,000
Workers 300,000
Overhead Expenses 150,000
Cost Per Unit 60,000
TOTAL COST 625,000

35
 CHAPTER SIX
FINACIAL PLANNING
6.1. Pre-Operational Cost

JEDAMAR is seeking ksh3,500,000 to launch its manufacturing

business. The funding will be dedicated towards securing the office
space and purchasing equipment and supplies. Funding will also be
dedicated towards three months of overhead costs to include payroll of
the staff and marketing expenses. The breakout of the funding is below:
 Office space build-out: ksh270,000
 Landscaping equipment, supplies, and materials: ksh800,000
 Three months of overhead expenses (payroll, utilities):
ksh730,000
 Marketing costs: ksh700,000
 Working capital: ksh1,000,000

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 6.2 Income Statement

FY1 FY2 FY3 FY4 FY5

Revenues
Total Ksh3,600,000 Ksh7,937,280 Ksh8,750,006 Ksh9,646,060 Ksh10,063,382
Revenues
Expenses & Costs

Expenses Ksh640,800 Ksh1,428,710 Ksh1,575,010 Ksh1,736,290 Ksh1,914,090

& Costs
Lease Ksh500,000 Ksh512,500 Ksh520,531 Ksh530,845 Ksh550,191

Marketing Ksh100,000 Ksh80,000 Ksh80,000 Ksh80,000 Ksh80,000

Salaries Ksh1,570,150 Ksh2,140,300 Ksh2,359,680 Ksh2,477,660 Ksh2,601,550

Initial expenditure Ksh1,000,000 0 0 0 0

Total Ksh2,910,950 Ksh4,161,510 Ksh4,535,221 Ksh4,824,795 Ksh5,145,831

Expenses
& Costs

EBITDA Ksh689,050 Ksh3,775,770 Ksh4,214,785 Ksh4,821,265 Ksh4,917,551

Depreciati Ksh271,600 Ksh271,600 Ksh271,600 Ksh271,600 Ksh271,600

on
EBIT Ksh417,450 Ksh3,504,170 Ksh3,943,185 Ksh4,549,665 Ksh4,645,951

Interest Ksh234,620 Ksh205,290 Ksh175,960 Ksh146,640 Ksh117,310

PRETAX Ksh182,830 Ksh3,298,880 Ksh3,767,225 Ksh4,403,025 Ksh4,528,641

INCOME

Net Operating Loss 0 0 0 0 0

Use of Net Operating Loss 0 0 0 0 0

Taxable Ksh182,830 Ksh3,298,880 Ksh3,767,225 Ksh4,403,025 Ksh4,528,641

Income
Income Ksh61,470 Ksh1,154,610 Ksh1,316,870 Ksh1,538,400 Ksh1,784,080
Tax
Expense
NET Ksh121,360 Ksh2,144,270 Ksh2,450,355 Ksh2,864,625 Ksh2,744,561
INCOME

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6.3 Balance Sheet

FY1 FY2 FY3 FY4 FY5

ASSETS
Cash Ksh1,542,570 Ksh3,487,600 Ksh5,731,950 Ksh8,385,500 Ksh11,492,860
Account 0 0 0 0 0
receivable
Inventory Ksh300,000 Ksh330,720 Ksh364,590 Ksh401,920 Ks443,080
Total current Ksh1,842,570 Ksh3,818,320 Ksh6,096,540 Ksh8,787,420 Ksh11,935,940
assets
Fixed tax Ksh1,809,500 Ksh1,809,500 Ksh1,809,500 Ksh1,809,500 Ksh1,809,500
Depreciation Ksh271,600 Ksh543,200 Ksh814,800 Ksh1,086,400 1,358,000
Net fixed Ksh1,537,900 Ksh1,266,300 Ksh994,700 Ksh723,100 Ksh4,511,500
assets
Total assets Ksh3,380,470 Ksh5,084,620 Ksh7,091,240 Ksh9,510,520 Ksh16,447,440

Liabilities & Equity

Debt Ksh3,158,310 Ksh2,707,130 Ksh2,255,940 Ksh1,804,750 Ksh1,353,560

Account Ksh108,000 Ksh119,060 Ksh131,250 Ksh144,690 Ksh159,510

Payable
Total liability Ksh3,266,310 Ksh2,826,180 Ksh2,387,190 Ksh1,949,440 Ksh1,513,070

Share capital 0 0 0 0 0

Retained Ksh114,160 Ksh2,258,430 Ksh4,704,050 Ksh7,561,080 Ksh10,874,370

earnings
Total equity Ksh114,160 Ksh2,258,430 Ksh4,704,050 Ksh7,561,080 Ksh10,874,370

Total Ksh3,380,470 Ksh5,084,620 Ksh7,091,240 Ksh9,510,520 Ksh16,447,440

Liabilities &
Equity

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6.4 Cash Flow Statement
FY1 FY2 FY3 FY4 FY5
CASH FLOW FROM OPERATIONS
Net Income Ksh114,160 Ksh2,144,270 Ksh2,445,620 Ksh2,857,030 Ksh3,313,290
(Loss)
Change in Ksh192,000 Ksh19,660 Ksh21,670 Ksh23,890 Ksh26,340
working capital
Depreciation Ksh271,600 Ksh271,600 Ksh271,600 Ksh271,600 Ksh271,600
Net cash flow Ksh193,760 Ksh2,396,210 Ksh2,695,540 Ksh3,104,730 Ksh3,558,550
from
operations

Cash flow from investments

Investment Ksh1,809,500 0 0 0 0
Net cash flow Ksh1,809,500 0 0 0 0
from
investments

Cash flow from finance

Cash from 0 0 0 0 0
equity
Cash from debt Ksh3,158,310 Ksh451,190 Ksh451,190 Ksh451,190 Ksh451,190
Net cash flow Ksh3,158,310 Ksh451,190 Ksh451,190 Ksh451,190 Ksh451,190
from finance

Net cash flow Ksh1,542,570 Ksh1,945,020 Ksh2,244,360 Ksh2,653,550 Ksh3,107,360

Cash at 0 Ksh1,542,570 Ksh3,487,590 Ksh5,731,950 Ksh8,385,500
Beginning of
Period
Cash at End of Ksh1,542,570 Ksh3,487,590 Ksh5,731,950 Ksh8,385,500 Ksh11,492.860
the Period

39
CONCLUSIONS

JEDAMAR FOOD CART MANUFACTURING has the possibility of

operating a profitable business with positive results from its first year of
operations and is aiming to steadily increase revenues for the next five
years by broadening its market share and taking advantage of the need
of many making tools such as our product in the society due to harsh
economic times.
The recommendations derived from this analysis fall in the market
domain. The use of marketing tools as discounts, coupons and loyalty
cards will help grow customer’s base. Use of the “word of mouth”
advertising of satisfied customers as well as the personal promotion of
the business to the current and potential corporate and institutional
clients will drive the sales to the desired level.
The service offers, equipment and technology, along with managerial
proficiency, marketing effort and MR MBURU business expertise will
allow the business to expand its facilities and broaden its local
influence.
However, it is fundamental for JEDAMAR FOOD CART
MANUFACTURING to have MR MBURU in direct charge of the business
expansion and consolidations of the business relationships with
principal clients.

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