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CHAPTER FOUR Akinyi

Business plan

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31 views9 pages

CHAPTER FOUR Akinyi

Business plan

Uploaded by

obieromoffat2
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CHAPTER FOUR

4.0 PRODUCTION AND OPERATIONAL PLAN

4.1 Production facilities


ITEM FACILITY QUANTITY COST PER UNIT TOTAL COST

1 Oven 1 10 000 10000


2 Cooking pans 12 500 6 000.00

3 Shelves 2 1 000 2 000.00

4 Chair 30 400 12 000.00

5 Serving utensils 50 dozen 3 00 15000

6 Counter 1 2 500 2 500.00

7 Phone system 1 9 000 9 000.00

8 Fringe 1 10 000 10 000.00

9 Music system 1 4 000 4 000.00

10 Mop/Bucket 4 120 480.00

11 Hand towels 10 100 1000.00

Kisumu ndogo will need the following facilities before it start its operations. The manager will
make sure that the facilities are supplied by reliable supplier who will supply quality products
and services at a fair costs and a guarantee or after sales services to the equipments and
maintenance.
4.2 Production layout

KEY
Toilet
WALL
SERVING ROOM
DOOR

Sink
4.3 Production Process
In the process of population there will be necessary machines and equipment that will be used
in production.
All necessary materials must be available before production process started as this will help to
save time and energy.
.The production process will incorporate a number of steps that will be done in different rooms
as shown below.

STEP1 RECEIVING PRODUCTS

STEP2
PRODUCTION

STEP3 SERVING CLIENTS

STEP 4 RECEIVING PAYMENTS

4.4 Government Regulation Affecting Operation


The manager of Kisumu ndogo hotel will acquire a trading license from Kisumu town council..
This is a provision under trade license Act (Cap 479).The business will be situated on a well
ventilated room with enough floor space which will allow free circulation of fresh air and safe
arrangement of furniture .The room is built to the required standard hence suitable for business
operation.
Trading license will cost 10 000 shillings and KSHS 10 000 of insurance. It will be legible for
value added tax (VAT) which the business will pay 16% and 30% income tax of total profit per
year .Incase when there will be no electricity the computers cannot operate and so the manager
will ensure that he installs a standby generator to take up immediately when power goes off.
CHAPTER FIVE
5.0 FINANCIAL PLAN
5.1 Pre-Operational Cost
These are the cost to be incurred before the business commences.
Item Amounts in KSHS
Equipment and installation 100000
Trading license 10 000.00
Water Deposit 1 500.00
Renovations/Remodeling 3 000.00
Project Research on 4 000.00
Staffing Inventory/Stock 50000.00
Professional fees 1 000.00
Miscellaneous 3 000.00
TOTAL 172,500

5.2 Working Capital/Operation cost


Item Monthly*12 Total
Rent 5 000 60000:00
Electricity 1000 12000
Water 1000.00 12000
Professional fee 2 000 24 000.00
Purchases/Material 20000 240000
Maintenance 5 000 6 000.00
TOTAL 34000 408000
5.4 Proforma Income Statements (Profit And Loss Account)
Assumption

 Sales increases by 10% every year


 Purchases increases by 10% every year
 Depreciation was at rate of 10% yearly on straight line basis
 Tax will be paid at 30% of net profit

Trading profit and Loss Account Statement

Particulars Year one Year two Year three


Sales 16,500,000 2000000 2450000
Less cost of sales
Purchases 500000 750000 1000000
Total cost of sales
Gross profit 1,150,000 1250000 1450000
Overhead
Salaries 100,000 150,000 200,000
Rent 120,000 120,000 120,000
Water 12000 13000 14000
Telephone 12000 15000 17,000
Electricity 15000 15000 18,000
Stationery 1000 2000 2000
Repair and maintenance 3000 5000 5,000
Legal fee 2000 4000 4,000
Depreciation 1500 3000 3,000
Professional fee 1000 2000 2,000
Miscellaneous 10000 150000 200,000
TOTAL OVERHEAD 280,000
Net profit before tax
Provision for tax 30%
Net income
5.5 Proforma balance sheet

Item Year 1 Year 2 Year 3


Fixed Asset
Equipment 25,000 28,000 28,000
Furniture 10,000 28,000 22,000
Total fixed asset 35,000 56,000 50,000
Current Assets
Stock 12,000 19,000 25,000
Cash at hand 6,000 11,000 17,000
Cash at Bank 25,000 50,000 48,000
Debtor 18,000 18,000 20,000
Total current asset 61,000 98,000 1,10,000
Total assets 96,000 1,54,000 1,60,000
Current liabilities
Creditors 50,000 120,000 18,000
Overdraft 15,000 60,000 2,000
Bank loan 20,000 40,000 1,000
Total liability 85,000 200,000 21,000
Capital 45,892 39,820 24,580
Net income 41,608 130,000 1,365,420

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