BUSINESS NAME: RISE AND SHINE BAKERY

BUSINESS NAME: RISE AND SHINE BAKERY

NAME OF CANDIDATE: FIONA WAGAKI KARIRA
INDEX NUMBER: 4061040031
NAME OF THE INSTITUTION: KIBONDENI COLLEGE OF
CATERING AND HOSPITALITY MANAGEMENT
SUPERVISOR’S NAME: MRS. YALA
SUBMITTED TO: KENYA NATIONAL EXAMINATION
COUNCIL FOR THE AWARD OF DIPLOMA IN CATERING
AND ACCOMMODATION OPERATION
SERIES: JUNE/JULY 2024

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ii
DEDICATION

I dedicate this business plan to my incredible dad, mum, and sister, whose unwavering support
made this endeavor possible. Their financial backing and encouragement were invaluable. I am
also profoundly grateful to my friends, whose constant motivation and insight fueled my
progress. Special thanks to my supervisor, whose sage advice and meticulous corrections guided
me through every step of this journey.

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ACKNOWLEDGEMENT

I am profoundly grateful to my dad, mum, and sister, whose sacrifices and unwavering support
provided the foundation for this business plan. My heartfelt thanks also go to my friends, whose
encouragement and resources were pivotal throughout this journey. I extend my deepest
gratitude to God for blessing me with the health, strength, and wisdom needed to bring this plan
to fruition. Special thanks to my dedicated supervisor, Mrs. Yala, whose tireless efforts and
guidance helped me navigate and correct every challenge along the way.

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Executive Summary

Chapter One
Business Description
Fiona Wagaki Karira intends to start a bakery and cuisine business named Rise and
Shine, located in Limuru Town, Kiambu County, opposite K Unity Mall, which hosts
Chicken Inn. Rise and Shine will open on the 12th of December 2024 and will operate
every day except Sundays. The main activities of the business will include preparing,
packaging, and delivering cakes as per customers' orders. Rise and Shine will offer
unique services to attract and retain customers. Fiona sees this opportunity as a way to
contribute to the exciting bakery and cuisine industry and believes she has the required
knowledge and skills to run this business successfully. Rise and Shine will ensure they
sell high-quality bakery products and establish good relationships with customers to
maintain them. The business will be financed using personal savings, along with
contributions from friends and family members as well as loans. These resources will
be properly managed to avoid wastage.

Chapter Two
Marketing Plan
Rise and Shine Bakery will cater to pedestrians, including Limuru town residents and those
heading to or coming from the bus station, as the business will be located in town. The bakery
will also serve students, teachers, and parents, given its proximity to schools and universities. It
will also major on its market share of 18.2%.

Chapter Three
Business Manager
As the manager of the business, I will ensure that the company achieves its goals. My role is to
guarantee that everything runs smoothly within the business unit. I will make sure the company
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has adequate strategies to promote the attainment of its objectives. I must also be able to solve
problems effectively. Employees will benefit from recruitment training, incentives, and
promotions.
There are also legal requirements to operate the business. Rise and Shine must obtain a food
service permit before starting operations to meet the necessary standards for food safety and
hygiene, as mandated by the local government. Additionally, we must adhere to noise regulations
to maintain a good relationship with the community. The support services that will assist the
business include banking services, security training services, and garbage collection services.
Chapter Four
Production Plan
The facilities required to operate the business include a deep fryer, oven gloves, chopping
boards, knives, tables, sinks, shelves, slicers, weighing scales, cleaning materials, mops, and
buckets. Before purchasing the equipment, I will consider the availability of space, the durability
of the equipment, as well as the cost and maintenance. The plan for repairing the machines
involves servicing them every two months. I will purchase high-quality equipment at a higher
price to ensure they last a long time before needing replacement.

Chapter Five
Financial Plan
It deals with all finance required for business to operate, and also the cash outflows that the
business need to paid out to employees or any other expenses. I will manage all the finances
required for the business to operate, including the cash outflows needed to pay employees and
other expenses. Before starting the business, I will estimate the working capital. By calculating
the break-even point, I can determine the total cost and total revenue, ensuring that the business
earns more profit than losses. I will finance the business through personal savings and
contributions from family members and friends.

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Contents
DECLARATION ...........................................................................Error! Bookmark not defined.

DEDICATION ............................................................................................................................... iii

ACKNOWLEDGEMENT ............................................................................................................. iv

Executive Summary ........................................................................................................................ v

CHAPTER ONE ............................................................................................................................. 1

Business Description....................................................................................................................... 1

1.0 Business Sponsor .................................................................................................................. 1

1.1 Business Name ...................................................................................................................... 1

1.2 Business Location ................................................................................................................. 2

1.3 Business Address .................................................................................................................. 2

1.4 Form of Ownership ............................................................................................................... 4

1.5 Type of Business ................................................................................................................... 4

1.6 Products and Services ........................................................................................................... 4

1.7 Justification of the Business Opportunity ............................................................................. 5

1.8 The Industry .......................................................................................................................... 6

CHAPTER TWO ........................................................................................................................ 8

Marketing Plan ............................................................................................................................ 8

2.0 Customers ............................................................................................................................. 8

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 2.1 Market Share ......................................................................................................................... 8

2.2 Competition........................................................................................................................... 9

2.3 Methods of Promotion and Advertising .............................................................................. 10

2.4 Brand Promotion ................................................................................................................. 11

2.5 Pricing Strategy................................................................................................................... 12

2.5 Table of products and prices for certain bakery products ................................................... 12

2.6 Sales Tactics........................................................................................................................ 13

2.7 Distribution Strategy ........................................................................................................... 13

CHAPTER THREE ...................................................................................................................... 14

3.1 Business Manager ............................................................................................................... 14

3.2 Personnel, their duties and Salaries .................................................................................... 15

3.4 Remuneration and Incentives .............................................................................................. 17

3.5 Legal requirements, licenses, permits and by laws. ............................................................ 18

3.6 Support services and professional advisors ........................................................................ 18

CHAPTER FOUR ......................................................................................................................... 20

Operation Production Plan ............................................................................................................ 20

4.1 Production Facility .............................................................................................................. 20

4.2 Production Strategy............................................................................................................. 21

4.3 Production Process .............................................................................................................. 22

4.4 Regulations affecting operation .......................................................................................... 23

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CHAPTER FIVE .......................................................................................................................... 24

5.1 Pre-Operational costs .......................................................................................................... 24

5.2 Estimation of the working Capital ...................................................................................... 25

5.3 Cash Flow Statements ........................................................................................................... 1

5.4 Pro-Forma Income Statement ............................................................................................... 2

5.5 Pro-Forma Balance Sheet ..................................................................................................... 3

5.6 Break-even analysis .............................................................................................................. 4

5.7 Profitability Ratio.................................................................................................................. 6

5.8 Desired Financing ................................................................................................................. 7

5.9 Proposed Capitalization ........................................................................................................ 7

6.0 Potential Risks ...................................................................................................................... 8

References ....................................................................................................................................... 9

Figure 1 ........................................................................................................................................... 3

Figure 2 ........................................................................................................................................... 9

Organization Structure of Rise and Shine Bakery Figure 3 .......................................................... 14

Business Unit Layout Figure 4 ..................................................................................................... 21

BREAK EVEN CHART Figure 5 .................................................................................................. 5

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CHAPTER ONE

Business Description

1.0 Business Sponsor

The business sponsor is Fiona Wagaki Karira and she is twenty years old. The entrepreneur is the
third born in the family of four from Nairobi County in Limuru. The business will be under
catering and accommodation operation. The owner joined Kibondeni college in the year twenty
twenty-two and she is currently in second year pursing diploma in catering and accommodation
management. The owner has an experience in outside catering with the assistance of the school
and gained more skills through that and the practical in Kibondeni college. The owner of the
business lives in Gishagi area in Kangemi. The business will be under sole proprietorship’s sole
proprietor went through primary and secondary level of education. The business will require a
capital of 2million Kenyan shillings as the initial capital to start the business where 1 million is
the sponsors savings,500000 thousands of shillings is obtained from loan from KCB bank where
the owner will use her title deed as a guarantee and 500000 thousand shillings from donations
from friends, relatives and family. And this is how the business will be able to raise the capital of
the business.

1.1 Business Name

The name of the business is rise and shine bakery. The owner chose the name because the
meaning of rise initially means to get up and this means the business will be ever getting up and
to be able to move forward while the word shine means to make the most of the day and this will
always apply in the business where the business will be making profit at each every day and also
the business will be able to have a positive impact on peoples’ minds to provide delicious baked
items to customer. The aim of the business is to build up a strong reputation of attracting
customers and to generate a consistent sales volume.
Business location and Business Address

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1.2 Business Location
Rise and shine bakery is located along Limuru town. It is found near clean shelf mall opposite K-
unity bank. I chose this area because of the favorable business opportunity such as availability of
customers mostly due to the nearness to other large business blocks, thus one can make a good
income from the business. Secondly the reason choosing the area is because it has a tight security
so opening and closing hours will not be much risky as there are minimal to zero cases of theft.
Thirdly the reason chose the area is because it is easily accessible by people of all walks of life at
all time. The business is likely to grow at a high rate because of the good infrastructure of the
place enhancing good transportation of people coming to the business center. Presence of water
has also made work easier because it has ensured the business to promote standard of hygiene in
the business

1.3 Business Address

The business address will be:
Rise and Shine Bakery
P.O BOX:2627-6050 Kiambu Kenya
Tel: 0700604054
Email: Rise and Shine [email protected]
Online address: [email protected]
Instagram: https://www.instagram.com/riseandshine
The reason of choosing these addresses is to maintain our online presence and connect with
clients easily for feedback on our

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Rise and Shine Bakery location
Figure 1

map from Nairobi

To Kamakis mkt
From Nairobi Town
St Paul’s University

Shelf
supermarket

Rise and Shine

Bakery
k unity mall To Kijabe hospital

To Nakuru town

To Limuru town

We Love to Bake and through Baking we share love with our community and Neighbors through
Yummy and Tasty cakes.

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1.4 Form of Ownership
Rise and shine bakery being a sole proprietorship form of business it enjoys the following
advantages:
i. Easy and inexpensive to start.
ii. Decision making is easy as you can control the business by your own.
iii. All profits go to you directly.
iv. You require minimal capital to start your business.
v. It requires few legal formalities to start the business.
The disadvantages of sole proprietorship form of business they include:
i. It has unlimited liability because if you have business debts claims are be made
against your personal assets to pay them off.
ii. There is less free time.
iii. The sole proprietor tends to suffer alone because he/she is alone in the business.
As seen the advantages are many than the disadvantages that’s why the owner tend to choose
sole proprietorship as the form of ownership of the business.

1.5 Type of Business

The activities involved in rise and shine bakery is selling baked products such as mandazi muffin
cakes cookies doughnuts and sweet buns and also the non-baked goods will be coffee tea and
soft drinks. Targeted customers will be the students the teachers and the parents of the students
and also the pedestrians. The business will be opened Monday to Sunday and working hours will
be from 6.00am to 9.00pm.

1.6 Products and Services

Mandazis muffin cakes cookies doughnuts and sweet buns will be the main baked products in the
business. The business will be selling the products at affordable prices so as to attract more
customers to come and buy the products. The business will tend to have customer satisfaction.
The reason why the customers should consider always buying my products are:
The business will be producing baking products of high quality.
i. The business will be having packaging deals where they will be branding of the
packages as customers will be having somewhere to be carrying their products.

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 ii. The business will be flexible and speedy so as to be able to run our operations
smoothly.
Things which the owner will be doing so as to be make the business unique:
i. The owner will ensure that the customers will be having discounts so as to
increase customer.
ii. The owner will ensure to have free packages to the customers.
iii. The owner will ensure the products are fresh and readily available.

1.7 Justification of the Business Opportunity

Analysis Ride and Shine Waridi Bakery Yummy Bakery

Strengthens  Prime Location  High operating costs.  High skills
The business will be  Having quality baked  Unique product
easy to access. products offerings
 Strong branding
 Sustainability
Weaknesses  Limited working  Having seasonal  Poor quality product
hours demands  Less customers
 Limited online  Poor packaging
platforms
Opportunitie  Sustainability  Income is more  Using skilled
s trends due to branding  Offers variety of personnel
 Using skilled baking products  Having customer
personal satisfaction
Threats  Competition with  Intense competition  Price wars
direct competitors with indirect competitors  Economic downturns
 Regulatory  No skills
changes

The owner will ensure that the business will lead to job opportunities to create employment. The
owner will also ensure that the weaknesses of the competitors will end up being the strengthens
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of the business. The owner will ensure to increase opportunities of the business to ensure the
business has high operational costs.

1.8 The Industry

The business will operate under selling baked products which include cookies mandazi muffin
cakes doughnuts cookies and sweet buns. The owner tends to provide employment opportunities
and will constantly supply the products.
The characteristics and features for rise and shine bakery include:
i. The business will make sure to be selling fresh products to customers.
ii. The business will be producing high quality baking products to increase
customers.
iii. The business will have brand identity to the packaging deals foe the business to be
known by other customers or also to attract customers.
The business will use the appropriately technology in the industry which
are:
i. Computers which are needed for keeping records of the business.
ii. Mobiles phones which are needed to promote the business in the online platforms
like the social media page
The industry is also affected with problems which includes:
i. Having seasonal demands like during the festive seasons people will need to buy
the products but when the festive seasons ends the demands of the products will be low.
ii. Limited online presence this is because of using an outdated website or lack of
social media engagement can limit the reach
1.9 Business Goals
Rise and shine bakery will have the following goals which are short term goals and long-term
goals.
Short Terms goals
i. Profit maximization
ii. produce high quality products
iii. To increase the number of customers to come to the business.

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Long Terms Goals
i. Achieve a 20% annual revenue growth by expanding the business to corporate
clients and increase repeat bookings.
ii. Maintain an average guest satisfaction by enhancing offerings to our customers.
iii. Increasing brand awareness through targeted marketing campaigns within next
year.
iv. Implement eco-friendly practices reducing the carbon foot print by maintaining
profitability.
These goals will help the business to be able to improve the standards of living of people and of
the business. To be able to attain the goals the entrepreneur will attend with the management
skills seminars and interact with others managers to improve on the management skills and the
business will eventually grow.
Entry and Growth
The owner will create the business awareness through adverts like paying for adds in the content
creation in you tube face book and WhatsApp. The business is expected to run the operation one
year immediately after acquiring the initial capital to start the business and also after completing
school. The technology used will be the internet which will improve the business sales and create
a wide market gap for the business. The entrepreneur will use flyers to create awareness to
increase the number of customers since the business is located in town this will make the
business to be known by customers
The owner will introduce sales promotion and discounts to attract customers to come to the
business. Instagram videos will be used by the business as a means of advertising the products
since most people will reach out easily to the business and also it is the most leading trends of
the business technology.

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CHAPTER TWO

Marketing Plan

2.0 Customers
Rise and Shine Bakery will cater to pedestrians, including Limuru town residents and those
heading to or coming from the bus station, as the business will be located in town. The bakery
will also serve students, teachers, and parents, given its proximity to schools and universities. It
will open six days a week from 6:00 AM, targeting parents who will buy snacks for their
children’s school tea time, as these are not provided at schools. In the mornings, the bakery will
also cater to pedestrians on their way to work, ensuring they have breakfast.
Parents will often place orders for birthday cakes for their children, prompting the bakery to offer
cakes for various ceremonies, such as weddings and birthdays. The demand for products will be
high when schools and universities are in session since the primary customers will be parents,
teachers, and students. The owner of Rise and Shine Bakery will attract more customers by
advertising the business effectively.
Characteristics of my customers which include:
i. High income earners.
ii. Most of the customers are working class level.
iii. They are loyal customers.
The reason why the customers are loyal is because the business has unique products offerings
like for example buying a full packet of muffin cakes get a free packaging bag and this enhanced
the business to grow. The customers pay for the products their have bought through Mpesa
where the owner came up with a till number and also, they make their payments through cash.

2.1 Market Share

This is the percentage of the total sales volume in the market. The market size of rise and shine is
18.2%, Waridi bakery is 36.4% and Yummy bakery is 45.5%. The market size of the business is
low because the business is new so most people have not yet known the business. The factors
which the entrepreneur will consider to contribute to the growth of the business are:
i. Having high operational costs.
ii. Safety and security around the town.

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The challenges that might incur the business are:
i. High competition due to direct competitors.
ii. Strong brand identity like for yummy bakery
How to deal with the challenges will include:
i. To produce quality baked products.
ii. Starting branding my packages to attract customers.

Figure 2

2.2 Competition
Competition-is the activity of striving to gain or win something by defeating or establishing
superiority over others. The owner has direct competitors and indirect competitors. The direct
competitors are clean shelf supermarket, Waridi bakery and yummy bakery. The clean shelf
supermarket is located opposite to the entrepreneur business while Waridi and yummy bakery is
located in Limuru town besides the clean shelf supermarket. This has created competition since
clean shelf super market is widely known by most costumers and this has led to most customers
to purchase products at clean shelf supermarket and also clean shelf supermarket is usually
opened 24 hours and this has enabled customers to go any time they want since the supermarket
is not usually closed. There is also Waridi bakery which offers the same products like rise and
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shine bakery so the entrepreneur tries to compete with Waridi bakery through having free
packages to offers customers and ensuring my business offer discounts to customers so as to
attract more customers. The entrepreneur also ensures that the weakness of Waridi bakery
becomes the strengthens of the business, for instance, one of the weaknesses of Waridi bakery is
that it opens 9.00am so this has the helped the business because customers come to the business
during the morning hours. There is yummy bakery which is also a direct competitor, this has
created competition to the business. This has helped the entrepreneur to compete by ensuring she
sell the products at affordable prices and selling products of high-quality baked products.
Indirect competitors are the business who sell samosa and fast foods products and this has
created competition since most customers go to their business. The owner has tried to compete
by ensuring when customers come to the business to talk to the customers nicely.

2.3 Methods of Promotion and Advertising

Advertising is creating awareness to the customers of existence of a certain service or products in
the business enterprise. The owner has to create awareness to make the business to be known so
as to increase customers or to get more customers. The owner tends to use posters at public areas
so that people who are passing at bus stations or even people in town will know about the
business to increase customers. The entrepreneur will also use Facebooks, Instagram account and
make YouTube adds for people on online platforms to know about the business and also know
the products for this the entrepreneur will have a business account number in case anyone who
would like to know more about the business. The owner can always be available to reach to them
through the business account number. The owner will also male flyers and brochures about the
business which will be distributed twice a week to create awareness about the business. The
owner will make sure that the fliers will be distributed to densely populated areas to make my
products or the business to be on high demand. Since the owner cannot close the shop, the owner
will hire one person to be distributing the flyers and brochures around bus station along Limuru
town residents and any pedestrians along the way. The flyers and brochures will contain the
business name, where the business is located and the products which the business is selling.
The advantages of advertising include:
1. It helps in gaining an advantage over your competitors.
2. It helps in communicating information about your business.
3. It increase sales and demand.

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4. Builds customer awareness of your business and brand.

The owner tends to go through challenges when advertising which includes:

1) Limited financial resources can restrict the reach and frequency of
advertisements.
2) Difficulty in accurately identifying and reaching the right target audience.
3) Competing against numerous brands in a crowded market can make it hard to
stand out.
The owner, thus will come up with solutions to deal with the challenges which includes:
1) Clearly define and communicate what sets the brand apart from competitors.
2) Conduct thorough market research to understand the demographics, interests, and
behaviors of the potential customers.
3) Leverage social media, email marketing, and content marketing, which can be
more affordable than traditional advertising.

2.4 Brand Promotion

Promotion refers to any type of marketing communication used to inform target audiences of the
relative merits of a product, service brand or issue persuasively. For customers to be attracted
one has to create different strategies of sale for customers. The owner intends to make offers and
promotions to attract more customers to come to her business. The entrepreneur will come up
with discounts and special offers which will create quick response for customers. For instance,
special offers will be created in that for every packet of muffin cakes a customer gets one packet
of cookies, and this can always be done twice a month. The competitors to the business use free
offers as a form of sales promotion with monetary estimates of around two hundred thousand
shillings.

Challenges the owners goes through during promotion

1) Lack of funding.
2) Competition with direct business owners.
3) Message clarity to target audience.
4) Sourcing the most appropriate business ideas and resources before the intended
business venture.

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2.5 Pricing Strategy
Pricing strategy is the process by which a business sets a price limit at which it's services or
products will be sold. When setting pricing strategy, I will depend on the following factors:
1) Pricing my products and services with average prices close to those of my
competitors.
2) Government policies such as taxation policies will play a vital role in determining
prices of my products and services.
3) The profit margins. I will ensure that my profit margins meet the standardized
thresholds of about 25% of the total cost of the production processes.
4) Defining market positioning. Before adjusting on the prices of my products, I
would verify them to ensure they align with my target market.
Strategic business goals is one of the most important considerations when thinking about the
price point alignment with your company goals. The owners price compared to those of her
competitors should be affordable and pocket friendly to their customers.
The owner who offers discounts to customers when having promotions for her products will be
5% off the selling price, thus, having a consolidated grip of the market share.

2.5 Table of products and prices for certain bakery products

Products column Prices in (Kshs)
1. Muffin Cakes 30
2. Cookies 50
3. Doughnuts 10
4. Sweet buns 20
5. Mandazi 10
6. Cakes (black forest cakes) 900, 1800 per kg
7. Velvet cakes, Wedding cakes 2500, 3500, 5000 etc.
8. Birthday cakes (vanilla cake) 900 per kg
9. Soft drinks 60 per 500ml

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2.6 Sales Tactics
These entails an entrepreneurs trained and experienced sales team who are motivated to perform
and produce the required standards. The entrepreneur will come up with sales strategies for the
business to grow which includes:
1) Solution selling which focuses on the customers main points rather than our
products or services.
2) Decide on a timeline for your goals and tactics.
3) The entrepreneur will describe the target audience and product on service
positioning.
In order for the sales volume in the marketing industry despite the competitors, the business is to
sell directly through agents and distributors within the area. The entrepreneur will also mobilize
people and make awareness for the existence of her products. The entrepreneur will focus on
engaging prospects in personalized sales conversations that are meaningful and mutually
beneficial to the business. Also, using effective sales techniques will enhance the outreach efforts
and build meaningful relationships with my customers.

2.7 Distribution Strategy

Rise and Shine Bakery will be delivering their products to suppliers since most people are aware
of our products. To ensure this the entrepreneur will come up with channels of distribution. The
channels of distribution that the entrepreneur will involve modes such as bicycles and
motorcycles. The entrepreneur will buy 2 motorcycles and 5 bicycles for supplying the business
products to clients. For instance, when a customer makes orders for a birthday cake.
Challenges that an entrepreneur will encounter during distribution
1) It is costly because of fuel exorbitant consumption.
2) Inaccessible roads' networks

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 CHAPTER THREE

3.1 Business Manager

The bakery will be managed by Fiona Karira who is a graduate with a Diploma in Catering and
Accommodation Management. She will organize other trained staff in the business. The manager
of the business has enough skills because she has undergone intense training. The business
manager will ensure that the bakery operates efficiently and profitably while maintaining their
reputation as well as keeping their financial records of the business and managing production,
supervising staff and ensuring quality control.
Organization Structure of Rise and Shine Bakery Figure 3

Manager (Business Owner)

Supervisor Cashier

Baker I Baker II

Cleaner

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3.2 Personnel, their duties and Salaries
Job Title Qualifications Duties Salaries
1. Manager Diploma in Catering Overseeing all business operations. 35000
and Accommodation In charge of all business operations.
Management. Ensuring quality control in the business.
He/She should have at Hiring and firing staff.
least two years of
experience
2. Supervisor Diploma in Catering Plan and organize the production, 25000
and Accommodation storage and dispatch of bakery products.
Management. Supervise, coordinate and schedule the
He/She should be activities of staff in the business.
above 25 years. Ensuring that work schedule is running
smoothly.
Ordering bakery ingredients and
suppliers.
3. Cashier Diploma in Business Processing and receiving payments. 20000
accounting. Issuing receipts to customers as they
Have at least one year leave with their purchases.
of working Reviewing financial status of the
experience. business.
Possess good
communication skills.
5. Baker 2 Certificate in Catering In charge of decorating cakes and 15500
and Accommodation pastries.
Management Processing orders from customers.
Packing and service of the products for
customers.
6. Cleaner Certificate in Help in providing cleaning equipment. 10000
housekeeping Keeping and cleaning the working areas
management

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3.3 Recruit, Training and Promotion (People's System)
Recruitment
Recruitment is the total compensation received by an employee.
Benefits of recruitment
i. New employees bring fresh ideas and perspectives, fostering innovation and creative
problem-solving.
ii. Hiring individuals with various skills and expertise can enhance the overall capabilities of
the business.
iii. Recruitment allows for specialized roles, ensuring that tasks are handled by individuals
with the right expertise.
Training
Training is the action of teaching a person a particular skill.

Benefits of training
i. Training in a business setup offers numerous benefits that can significantly impact both
the employees and the organization.
ii. It enhances employee skills and knowledge, leading to increased efficiency and
productivity.
iii. It fosters a culture of continuous improvement and innovation, which can give the
business a competitive edge.
iv. Training also boosts employee morale and job satisfaction, reducing turnover rates and
attracting top talent.
Promotion
Promotion is a way of encouraging an employee by giving them a higher rank position within the
business.
Benefits of promotion
i. It serves as a powerful motivator for employees, encouraging them to perform at their
best and strive for excellence.

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 ii. Promotions also help in retaining top talent by providing them with career growth
opportunities, reducing the likelihood of turnover.
iii. Enhances organizational loyalty and morale, as employees feel valued and recognized for
their hard work.
iv. It also ensures that leadership positions are filled by individuals who are already familiar
with the company's culture and operations

3.4 Remuneration and Incentives

Remuneration is the total amount paid to an employee. It may include a salary or hourly rate
payments, bonuses, and commissions. Incentives is something that motivates someone to do
something. The mode of payment of paying the staff will be through cash made payments and
bank transfer.
Factors that Rise and Shine Bakery will put into consideration for remuneration
1) The hard work and dedication of the employees to the business.
2) The performance and contribution of the employees.
3) The market demand variations.
The owner will use 10 percent of the total monthly income for remuneration. The organization
will organize the benefits through remuneration as it gets the best from the staff members. The
entrepreneur will use both the group and individual incentives will be adding some cash to the
employees to motivate them to work an extra hard. The owner of the business will come up with
group incentives where the staff will be having end of year parties to their employees to promote
togetherness and cohesion within the staff members. The cost of incentives will be included in
the total expenditure during financial planning of the business.
Benefits of incentives
i. Helps to increase productivity of the employees.
ii. Motivates employees to do better in the workspace.
iii. Promotes the employees’ loyalty to the business.
iv. Improves industrial and interpersonal relations as a result of increasing the overall
profit of the organization.
v. Improves the performance of the employees.
Challenges of Incentives and Remuneration
i. May encourage bullying and underperformance.

17
 ii. Can under evaluate individual skills.
iii. Cost management.
How the business will overcome the challenges on Incentives and Remuneration
i. Focus on non-monetary rewards and benefits such as flexible work hours,
professional development opportunities or a positive work culture.
ii. Having a good well planned performance management system.
iii. Using tied prizes to point staff to long-term goals

3.5 Legal requirements, licenses, permits and by laws.

Licenses is an official document that it authorized by the government to business owners in their
business activities. Permits are official document issued by the government to allow or give
permission to individuals to do different business activities. By laws are set of rules or
regulations set by laws to establish or regulate business activities. The licenses will be obtained
from the chief's clerk of Limuru town at a cost of about Kshs 5500 while permits will be
obtained from Kenya licensing board through the county council of Limuru at a cost of about
Kshs 4500.The permits will also contain the food handlers permits which will be required by the
business to avoid food poisoning and provide proper sanitation of the place. By laws ensures that
the business must give back to the community by employing the local residents and improving
the area of infrastructure such as roads and communication channel. The by-laws of the business
have fundamental laws and regulations which will include the food safety acts and food hygiene
rating scheme which will improve the health hazard of our customers.

3.6 Support services and professional advisors

The Support Services of Rise and Shine Bakery will be:
i. The banking services will be done through Eco bank for various activities and
business services such as
 Checking and Savings accounts.
 Depositing and lending money.
 Facilitating money transfers.
 Help in payment transactions from customers for example through credit cards.
ii. The water supply for Rise and Shine will be enhanced through the services of
Nairobi water supply and drainage project in partnership with our drainage services.

18
iii. Electricity Services. The owner will cooperate with Kenya power supply
company through their Limuru offices via their communication channels.
Limuru Town
P.O BOX 264166
Limuru
Tel: 07074064166.
iv. Security Services. The owner(I) will cooperate with GLS Security team in Limuru
town via:
GLS Limuru town
P.O BOX 27112
Limuru
Tel: 0724674894

19
CHAPTER FOUR

Operation Production Plan

4.1 Production Facility

Equipment model Quantity Purchase Capacity Price
Mixers Samsung 1 Kamkunji 6l 10 000
Skewers Aluminum 3 Gikomba 10cm 250
Oven Ramtons 1 Kamkunji Medium 30 000
Microwave L. l. g 1 Carrefour 20l 15 000
Fridge Ramtons 1 Naivas 180l 45 000
Deep fryer Mika 1 Kamkunji medium 20 000
Blender Ken poly 1 carrefour 5l 8 000
Basins Ken poly 7 Gikomba large 500
Weigh scale Ramtons 1 Kamkunji medium 7 000
Bowls metallic 10 Gikomba medium 400
Web spoons aluminum 2 Kamkunji large 1 000
Water jugs h 5 Khetias 1litre 2 000
Water glasses glass 50 Khetias 500ml 5 000
Baking Sheet 6 Kamkunji Medium 10 000
Plates melanin 50 Naivas Joint forks 2 500
Spoons steel 30 Gikomba Dessert 650
spoons
Forks aluminum 20 Naivas Joint forks 1 500
Measuring cups 8 Khetias medium
Chopping 5 Kamkunji large 2 800
board
Sauce pans 10 Jumia large 8 000
1 Quick Mart medium 25 000
Waiyaki way 196500

20
(I)The business owner I’m planning to consider the following factors when purchasing
equipment:
 The cost or the budget
 The space
 The lifespan of the equipment for example it should be durable.

Business Unit Layout Figure 4

Main
Preparation Area Entrance

Cashier
Area

SASS

Store Managers
Production Area Office

4.2 Production Strategy

The business will require some raw materials to be able to produce its’ final products. Some of
the raw materials include:
Flour, vanilla essence, salt, caster sugar, margarine or butter, sugar, gelatin, eggs, cooking oil,
milk, chocolate, cocoa, yeast, syrups, sweeteners, jam and baking powder.
Rise and Shine Bakery will purchase the raw materials from James wholesalers’ where the raw
materials are quite cheap when buying. The production cost of raw materials for the business
estimated to be 600 000 shillings.

21
4.3 Production Process
The business will have a proper recipe when producing and preparing the items. For instance,
i. Mandazi;
Ingredients; Flour Cooking oil
Sugar Cardamon
Baking powder Warm water or milk
Procedure for making Mandazi
 Mix in the dry ingredients which are flour, sugar, baking powder and cardamon.
 Add warm water with some milk.
 Add a little cooking oil for the dough to become soft.
 Cut the mandazi into the required shape.
ii. Doughnuts;
Ingredients; Flour Caster sugar
Yeast Eggs
Sugar Milk
Procedure for making Doughnuts
 Mix in the ingredients which are flour, yeast and sugar.
 Add in the eggs to add flavor on the doughnuts.
 Add in the milk and start kneading the dough until the doughnuts is not sticky.
 Roll into balls and make a hole in the dough using a rolling pin.
 When the dough has proved carefully place in a deep fat fryer for the doughnuts
to be golden brown.
 Toss the doughnuts in caster sugar.

iii. Sweet buns;

Ingredients; Flour Milk
Yeast Warm water
Sugar
Procedure for making Sweet Buns
 Mix in the dry ingredients which are flour, yeast, sugar and a pinch of salt.
 Add in the warm water and start kneading the dough until it is 50%.

22
  Let the dough to prove.
 Bake at 220 degrees for 15 - 20 minutes.
Muffin Cakes
Ingredients; Flour Milk
Baking powder Vanilla essence
Eggs Chocolate
Margarine Sweeteners
Procedure for making Muffin cakes
 Cream in the mix which is margarine and sugar
 When the mixture is fluffy add eggs and flour when folding in the mixture.
 Grease in the muffin coke tins.
 Bake the muffin cokes at 180 degrees for 20 – 30 minutes.
The business will use some of the new technologies to boost the business which are:
i. The business will make use of social media platforms where the business will
have social media handles for marketing the business products.
ii. The business will implement an online ordering and delivering platform to expand
the business and reaching a wider geographical market.
iii. The business will ensure that the stock level of the inventory of the products will
be maintained because the products are the main products offered to the business.
The business will be working 15 hours per day for 6 days weekly from Monday to Saturday.

4.4 Regulations affecting operation

The business will require some regulations for the business to run smoothly which include:
i. The business will require tax codes which will help it to avoid errors that can
subject you and the business to risk and cost you money.
ii. The business will obtain a license which is crucial for it to operate legally and
ensure it complies with its sector specific regulations.
iii. The business has acquired a public health policy to help and protect the health and
safety of employees, thus ensuring a productive workforce.
iv. The business has acquired an environment regulation which serves as vital
framework
for promoting sustainable development and safeguarding ecosystems

23
CHAPTER FIVE

5.1 Pre-Operational costs

Pre-Operational costs are the costs that the business will incur before the business starts.
Items Amount
Registration fees 8 000
Trading license 1 000
Equipment and Installation costs 196 500
Water deposit 2 500
Electricity deposit 3 000
Renovation and Remodeling 30 000
Project Research costs 5 000
Advertising 6 000
Drainage deposit 1 500
Fixture and Fittings 30 000
Recruitment and training costs 12 000
Miscellaneous 3 000
Total 298 500

24
5.2 Estimation of the working Capital
These is the amount of money that the business will work with to keep the business running. This
done so as to establish what the owner has at hand to work with.
Working capital = Total current assets – Total current liabilities

Year 1 Year 2 Year 3

Item Amount Amount Amount
Current Assets
Cash at hand 30 000 50 000 65 500
Cash at bank 60 000 80 000 100 000
Debtors 10 000 15 000 20 000
Stock 60 000 70 000 90 000
Totals 160 000 215 000 275 000
Current liabilities
Bank overdrafts 15 000 17 000 20 000
Creditors 18 000 20 000 25 000
Totals 33 000 37 000 44 000
Working capital 127 000 178 000 231 500

25
5.3 Cash Flow Statements
Statement for Year 1
Cash inflows Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Totals
Balance - 98000 63500 25000 12000 15500 49000 29500 13000 111500 83000 114500 -
brought
Capital 127000 127000
Debtors 30000 20000 25000 15000 35000 40000 30000 50000 80000 20000 10000 50000 405000
Cash sales 125000 130000 120000 150000 160000 135000 120000 141500 160000 100000 148000 146000 1635500
Total cash 282000 248000 208500 190000 207000 190500 199000 221000 253000 231500 241000 310500 2782000
inflows
Cash outflows Jan Feb Mar Apr Mar June July Aug Sep Oct Nov Dec Totals
Purchases 50000 60000 70000 65000 70000 30000 50000 75000 30000 35000 15000 25000 575000
Rent 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 240000
Salaries 80000 80000 80000 80000 80000 80000 80000 80000 80000 80000 80000 80000 960000
Water bills 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 30000
Electricity 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Transport 1000 - - 1500 - - - 1000 - 2000 - 2500 8000
Creditor - 11000 13000 - - 10000 - - 15000 - - 10000 59000
Advertisement 6000 - - 6000 - - - 6000 - - - 6000 24000
Taxes - 2000 - - - 1000 - - - - 1000 4000
Stationary - 1500 - - - - - 2000 - - - 1000 4500

1
Repairs - - 2000 - - - - 3000 - - - 2500 7500
License 1000 1000
Total Cash 184000 184500 183500 178000 191500 141500 169500 208000 141500 148500 126500 159500 2016500
outflows
Net Cash 98000 63500 25000 12000 15500 49000 29500 13000 111500 83000 114500 151000 765500
Accumulated - 63500 88500 100500 116000 165000 194500 207500 319000 402000 516500 667500 2840500
cash

2
Statement for Year 2
Cash inflows Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Totals
Balance 15100 255500 23100 180700 136900 133200 154900 122100 75700 97700 105450 10375 174790
brought 0 0 0 0
Capital 17800 178000
0
Debtors 20000 10000 5000 15000 12000 18000 25000 10500 24000 21000 9800 8600 178900
Cash sales 13000 145000 13800 126000 121800 148000 112600 135600 155000 132000 128000 14800 162000
0 0 0 0
Total cash 47900 410500 37400 321700 270700 299200 292500 268200 254700 250700 243250 26035 372480
inflows 0 0 0 0
Cash Jan Feb Mar Apr Mar June July Aug Sep Oct Nov Dec Totals
outflows
Purchases 90000 60000 65000 70000 20000 15000 55000 75000 30000 35000 28000 40000 583000
Rent 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 240000
Salaries 80000 80000 80000 80000 80000 80000 80000 80000 80000 80000 80000 80000 960000
Water bills 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 30000
Electricity 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Transport 1500 - - 1800 - - 2100 - - 1750 - 2150 9300
Creditor 15000 - 16800 - - 12500 - - 15500 - - 12800 72600
Advertiseme - 6000 - - 6000 - - 6000 - - - 6000 24000
nt

3
Taxes 2000 - - - - 2500 - - - - - 2180 6680
Stationary 1000 - - 1500 - - 1800 - - - - 1200 5500
Repairs - 2000 - - - 2800 - - - - - 2300 7100
License 2500 2500
Total Cash 22350 179500 19330 184800 137500 144300 170400 192500 157000 145250 139500 17813 204568
outflows 0 0 0 0
Net Cash 25550 231000 18070 136900 133200 154900 122100 75700 97700 105450 103750 82220 167912
0 0 0
Accumulate 40650 637500 81820 955100 108830 124320 136530 144100 153870 164415 174790 18301 147159
d cash 0 0 0 0 0 0 0 0 0 20 70

Statement for year 3

4
Cash inflows Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Totals
Balance 82220 265920 251320 239520 178620 185070 152970 136270 142870 146870 117120 110820 2009590
brought
Capital 231500 231500
Debtors 10000 9100 8500 6400 12000 5600 3000 18000 8000 6500 1600 7500 120600
Cash sales 158000 174500 148600 134800 165000 116600 126400 176800 136000 125750 134200 186000 1782650
Total cash 481720 449520 408420 380720 355620 307270 292370 331070 286870 279120 267320 304320 4144340
inflows
Cash outflows Jan Feb Mar Apr Mar June July Aug Sep Oct Nov Dec Totals
Purchases 100000 60000 54000 75000 56400 40000 36000 54000 26000 30000 45000 25000 601400
Rent 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 240000
Salaries 80000 80000 80000 80000 80000 80000 80000 80000 80000 80000 80000 80000 960000
Water bills 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 30000
Electricity 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Transport 1800 - - 1200 - - - 2600 - - - 3500 9100
Creditor - 16400 - 15600 - - - 18000 - 17000 - 15000 82000
Advertisement 6000 - - 6000 - - - 6000 - - - 6000 24000
Taxes - 2500 - - - 2800 - - 2500 - - 1500 9300
Stationary - 1800 - - 1450 - - 2100 - - - 1000 6350
Repairs - - 3400 - - - 2600 - - 3500 - 2000 11500

5
Total Cash 215800 198200 168900 202100 170550 154300 156100 188200 140000 162000 156500 165500 2078150
outflows
Net Cash 265920 251320 239520 178620 185070 152920 136270 142870 146870 117120 110820 138820 2066190
Accumulated 348140 5999460 838980 1017600 1202670 1355640 1491910 1634780 1781650 1898770 2009590 2148- 16327-
cash 410 600

6
Summary of Cash Flow
Cash inflows Year 1 Year 2 Year 3
Balance brought 151000 82220
forward
Capital 127000 178000 231500
Cash sales 1635500 1620000 1782650
Debtors 405000 178900 120600
Total cash inflows 2782000 3724800 4144340
Cash outflows Year 1 Year 2 Year 3
Purchases 575000 583000 601400
Rent 240000 240000 246000
Salaries 960000 960000 960000
Water bills 30000 30000 30000
Electricity bills 36000 36000 36000
Transport 8000 9300 9100
Creditor 59 000 72 600 82 000
Advertisement 24 000 24 000 24 000
Taxes 4 000 6 680 9 300
Stationary 4 500 5 500 6 350
Repairs 7 500 7 100 11 500
License 2 500 2 500 2 500
Total cash outflows 2 016 500 2 045 680 2 078 150
Net cash 765 500 1 679 120 2 066 190

1
5.4 Pro-Forma Income Statement
Item Ye ar 1 Year 2 Year 3
Sales 1 635 500 162000 1782650
Less cost of goods 280 125 304 330 473 200
sold
Gross profit = sales - 1 355 375 1 315 670 1 309 450
cost of goods sold
Labor cost wages 840 000 840 000 840 000
Net margin profit 515 375 475 670 469 450
overhead
Rent 240 000 240 000 240 000
Electricity 36 000 36 000 36 000
Water 30 000 30 000 30 000
Advertising 24 000 24 000 24 000
License 2 500 2 500 2 500
Repairs 7 500 7 100 11 500
Stationary 4 500 5 500 6 350
Transport 8 000 9 300 9 100
Taxes 4 000 6 680 9 300
TOTALS 356 500 361 080 368 750
Net profit 158 875 114 590 100 700
Tax of 5 % 7 944 5 730 5 035
Net profit after tax 150 931 108 860 95 665

2
5.5 Pro-Forma Balance Sheet
Assets Year 1 Year 2 Year 3
Current Assets/Short term Assets
Cash at hand 30 000 50 000 65 500
Cash at bank 60 000 80 000 100 000
Debtors 10 000 15 000 20 000
Stock 60 000 70 000 90 000
Total current assets 160 000 215 000 275 500
Non-current Assets/ Long term Assets
Machinery and 28 500 30 000 25 000
Equipment
Furniture and fittings 30 000 26 600 30 000

Stationary 4 500 5 500 6 350

Vehicle 110 000 35 000 38 000
Total non-current 103 000 97 100 99 350
assets
Current liabilities
Creditors 59 000 72 600 82 000
Bank Overdraft 15 000 17 000 20 000
Totals 74 000 89 600 102 000
Financed by capital 337 000 401 700 476 850
127 000 178 000 231 500

Net Profit 210 000 223 700 245 350

337 000 401 700 476 856

3
5.6 Break-even analysis
Total sales for year one = 1 635 500
i. Variable cost: Total fixed costs = 324
000
 Electricity 36 000
 Water bills 30 000
 Advertisements 24 000
 Transport 8 000
 Stationery 4 500
 Repairs 7 500
110 000
ii. Fixed costs:
 Rent 240 000
 Salaries 80 000
 Taxes 4 000
iii. Contribution margin = Sales – Total variable cost
=1 635 500 – 110 000
=1 525 500
iv. Contribution Percentage Margin = Contribution Margin *100%
Sales
= 1 525 500 * 100 %
1 635 500
= 93.2 = 93 %
v. Break-even level of sales = Fixed cost * 100
Contribution margin
= 324 000 * 100
1 525 500
= 21 %
vi. Total cost = variable cost + fixed cost
= 110 000 + 324 000

= 434 000

4
BREAK EVEN CHART Figure 5

5
5.7 Profitability Ratio
i. Gross Profit Ratio = Gross Profit * 100
Sales
1385 375 * 100
1 635 500
= 82.8 = 83%

ii. Net profit ratio = Net profit ratio before tax * 100 %
Sales
= 158 875 * 100 %
1 635 500
= 9.7 = 10%

iii. Return Equity = Net Profit after Tax * 100 %

Owners’ Equity
= 150 931 * 100 %
337 000
= 44.7 = 45%
iv. Return on Sales = Net profit after sales tax * 100 %
Total Investment
= 150931 * 100 %
2 000 000
= 7.54 = 8 %

6
Break Even Analysis Table
KEY
Particulars Amount
Sales 1 635 500
Variable costs 110 000
Fixed costs 324 000
Total costs 434 000

5.8 Desired Financing

Particulars Amount
Pre-operational cost 293 500
Working capital 127 000
Fixed assets 103 000
Others (advertising) 6 000

Total startup finance 561 500

5.9 Proposed Capitalization

Particulars Amount
Owners’ contribution 500 000
Debtors 10 000
Bank loan 500 000
Family contribution 250 000
friends 250 000

Total 1 510 000

7
6.0 Potential Risks

Potential Risks associated with Rise and Shine Bakery Business

i. Food Safety and Health Regulations: Ensuring compliance with health and safety
standards is critical in the bakery business. Violations can lead to fines, business closures,
and damage to reputation. However, there is need to Implement a rigorous food safety
management system, such as Hazard Analysis Critical Control Point (HACCP) and
regular training of employees on hygiene practices and conduct routine inspections to
ensure compliance with local health regulations.
ii. Supply Chain Disruptions: Dependence on suppliers for ingredients means that any
disruption in the supply chain can affect production and sales. Establishing relationships
with multiple suppliers to avoid reliance on a single source, keeping buffer stock of
essential ingredients and develop a contingency plan to address supply chain disruptions
can help to minimize the risk.
iii. Competition: The bakery industry is highly competitive, with many players vying for
market share. This can lead to price wars and reduced profitability. Differentiating your
bakery by offering unique products, exceptional customer service, creating a strong brand
identity, investing in marketing and continuously been innovative can help you to stay
ahead of competitors.

8
References
i. Lagioia, G., Amicarelli, V., Strippoli, R., Bux, C., & Gallucci, T. (2024). Sustainable
and circular practices in the hotel Industry in Southern Italy: Opportunities, barriers and
trends in food waste management. British Food Journal, 126(1), 428-452.
https://doi.org/10.1108/BFJ-12-2022-1144.
ii. Luu, T. T. (2020). Reducing food waste behavior among hospitality employees through
communication: dual mediation paths. International Journal of Contemporary
Hospitality Management, 32(5), 1881-1904.
https://doi.org/10.1108/IJCHM-09-2019-0779
iii. Maggon, M., & Chaudhry, H. (2015). Revisiting relationship marketing and customer
relationship management in leading tourism and hospitality journals: Research trends
from 2001 to 2013. Journal of Relationship Marketing, 14(1), 53-77.
https://doi.org/10.1080/15332667.2015.1022110