MESHINO RESTAURANT

BUSINNES NAME: MESHINO RESTAURANT

ADDRESS: P.O.B ox 210-903126 THIKA

EMAIL: [email protected]

PRESENTER NAME: MESHINO WANJIKU EUNICE

INDEX NO .2111080008

COURSE NAME: CRAFT CERTIFICATE IN FOOD AND BEVERAGES

SALES AND SERVICES

COURSE CODE: 1802/205

PAPER CODE: 205

SUPERVISOR NAME: Mr. NORMAN

PRESENTED TO: THE KENYA NATIONAL EXAMINATION

COUNCIL
ii
 DECLARATION

I declare that this business plan is my original work and has not been submitted for

examination or any award of certificate Food and Beverage Production, Sales and Services or

any other certificate in any institution of higher learning or the Kenya National Examination.

NAME: MESHINO WANJIKU EUNICE

SIGNATURE: …………………….

DATE: ……………………………..

This project has not been submitted for examination to the Kenya National Examination

Council with approval of my supervisor

Name: Mr. Norman

Date:

Signature:

iii
 DEDICATION

I wish to dedicate this business plan to my dear parents for their financial support. Also

special thanks to my friends.

iv
 ACKNOWLEDGEMENT

I wish to acknowledge my supervisor Mr. Norman for his tireless effort and guidance in

writing this project. I also acknowledge the protection of the almighty God when doing this

work.

v
 Table of Contents

DECLARATION.......................................................................................................................ii
DEDICATION..........................................................................................................................iii
ACKNOWLEDGEMENT........................................................................................................iv
EXECUTIVE SUMMESHINO WANJIKU EUNICE...........................................................viii
1.0 BUSINESS DESCRIPTION......................................................................................viii
2.0 MARKETING PLAN...................................................................................................viii
3.0 ORGANIZATION AND MANAGEMENT PLAN.....................................................viii
4.0 OPERATIONAL PLAN.................................................................................................ix
5.0 FINANCIAL PLAN........................................................................................................ix
CHAPTER ONE........................................................................................................................1
1.0 BUSINESS DESCRIPTION............................................................................................1
1.1 Business Sponsor.............................................................................................................1
1.2 Business Name.................................................................................................................1
1.2.1 Location Map................................................................................................................2
1.3 Business Ownership.........................................................................................................3
1.4 Justification of Opportunities...........................................................................................3
1.5 Products/Services.............................................................................................................4
1.6 Industry............................................................................................................................4
1.7 Entry And Growth Strategies...........................................................................................4
1.7.1 Entry..........................................................................................................................4
1.7.2 Growth Strategies..........................................................................................................5
1.8 Short Term And Long Term Goals..................................................................................5
1.8.1 Short Term Goals..........................................................................................................5
1.8.2 Long Term Goals..........................................................................................................6
CHAPTER TWO.......................................................................................................................7
2.0 MARKETING PLAN......................................................................................................7
2.1 Customers.........................................................................................................................7
2.2 Market size.......................................................................................................................8
2.3 The Business Competitors................................................................................................9
Competitor’s Name..............................................................................................................12
2.4 Market Share..................................................................................................................12
2.5 Pricing Strategies...........................................................................................................13

vi
 Overhead cost.......................................................................................................................13
Government policy...............................................................................................................14
Demand................................................................................................................................14
Firm’s Objectives.................................................................................................................14
The table below shows prices of various products..............................................................14
2.6 Sales Promotion.............................................................................................................14
2.6.1 Direct selling...............................................................................................................15
2.6.2 Agents.........................................................................................................................15
2.6.3 Sales Representatives..................................................................................................15
2.7 Promotion And Distribution Strategies..........................................................................15
2.7.1 Promotion Strategies...................................................................................................15
2.7.2 Method of promotion and advertising.........................................................................16
2.7.3 Distribution Strategies.................................................................................................16
CHAPTER THREE..................................................................................................................18
3.0 MANAGEMENT AND ORGANIZATIONAL PLAN.................................................18
3.1 Organizational Structure................................................................................................18
3.1.1 Business Manager Qualifications................................................................................18
3.2 Other Personnel..............................................................................................................19
3.2.1 Heads Of Department..................................................................................................19
3.2.2 Accountant Qualifications...........................................................................................19
3.2.3 Sales People................................................................................................................20
3.2.4 Delivery People...........................................................................................................20
3.2.5 Secretary......................................................................................................................21
3.2.6 Cleaner........................................................................................................................21
3.3 Recruitment, Training And Promotion..........................................................................22
3.3.1 Recruitment.................................................................................................................22
3.3.2 Training.......................................................................................................................22
3.3.3 Promotions..................................................................................................................22
3.5 Licenses and Permits......................................................................................................24
3.5.1 Licenses.......................................................................................................................24
3.6 Business Support Services.............................................................................................25
3.6.1 Banking Services.........................................................................................................25
3.6.2 Insurance Services.......................................................................................................26
3.6.3 Security.......................................................................................................................26
CHAPTER FOUR....................................................................................................................27

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 4.0 OPERATIONAL/PRODUCTION PLAN.....................................................................27
4.1 Product Design Development........................................................................................27
4.2 Production Facilities And Capacity...............................................................................27
4.3 BUSINESS LAYOUT...................................................................................................29
4.4 Production/Service/Process............................................................................................29
4.5 Monthly Requirements...................................................................................................31
4.6 Government Regulations................................................................................................32
4.6.1 Environment Regulations............................................................................................32
4.6.2 Health Regulations......................................................................................................33
4.6.3 Safety Regulations......................................................................................................33
CHAPTER FIVE......................................................................................................................34
5.0 FINANCIAL PLAN.......................................................................................................34
5.1 Pre-Operational Cost......................................................................................................34
5.2 Estimation of working capital........................................................................................35
5.4 Proforma Income Statement..........................................................................................37
5.5 Proforma Balance Sheet.................................................................................................38
5.6 Breakeven point.............................................................................................................40
5.8 Desired financing...........................................................................................................42

viii
 EXECUTIVE SUMMARY

1.0 BUSINESS DESCRIPTION

The proposed business name will be MESHINO RESTAURANT in which it will be a sole

proprietor form of business in which it will be operating under the following address.

MESHINO RESTAURANT ’S

P .O BOX 10251 LIMURU

The business will be allocated 100M from Renate Institute of hotel and Catering on the same

lane and 300 meters from Lemur town.

2.0 MARKETING PLAN

The market services will be the customers with the market and surroundings of Lemur town.

The business popularity to all customers will be achieved through advertisement. Through

free samples, posters, business cards which will be accompanied by product of high quality.

The key competitors will be Society supermarket, four ways shops, Naives supermarket

bakers, and Sukhumi bakers.

The goods and services will be provided at a reasonable price and pricing strategy used will

be demand oriented pricing, consumer based pricing, and competitors based pricing. The

distribution strategy will be affected by theft, bad roads and the problems will be solved by

constructing good roads and use of security guards.

ix
3.0 ORGANIZATION AND MANAGEMENT PLAN

The management will ensure smooth running of the business and there will be an

improvement through training, experience, and frequent contracts with the customers.

The management will employ workers including head of departments, sales people,

deliverymen, secretary, accountant, and cleaner and they will be conducted towards

achievement of business objectives.

Promotion will be arranged, rewarded and increment of salaries to the effective workers.

Training activities will be carried annually for employees to gain skills and other incentive to

motivate workers so that they can put effort. The business will also obtain license and permits

from the government.

4.0 OPERATIONAL PLAN

The business will be driven towards carrying efficient service delivery to customers and

making sure, they are served well. The premise will move with the changing of technology

and thus will purchase modern machinery and equipment to ensure high quality goods and

services are provided to customers. The business will also have a product strategy, which will

include production price, production quality, and motivation. The business will also look

after for the safety of workers. This will be done by putting first aid kits in the premises and

cover insurance.

5.0 FINANCIAL PLAN

The business will require a capital of 5 million. That is owner contribution of 2,000,000

friends and relatives 1,000,000 and a bank loan of 2milion

x
Profit ratio will be calculated and be used to calculate the performance of the business where

the balance sheet will indicate the financial strength of the business by showing the fixed

current assets, liabilities, and capital interest in the business

xi
 CHAPTER ONE

1.0 BUSINESS DESCRIPTION

1.1 Business Sponsor

The business ownership will be a sole proprietorship, which will be solely owned by

MESHINO WANJIKU EUNICE . She is an extrovert and thus wants to serve her own

customers to ensure that customers’ demands are met thus able to meet customers’

satisfaction. She also has ideas, which he can generate to ensure that the business becomes

successful. Being young, she will ensure that the required products and the products

expectations are met. Through intensive research, she will also contribute to the business to

ensure that the business scales to greater heights in production and services offered.

1.2 Business Name

The business name will be MESHINO RESTAURANT . The strategic location of the

business will be at Thika town near Christian College. It will be found to the left side of the

road while coming from muchatha town. It will be 100 meters from Christian College but on

the same line and five metres from Thika stage.

It will be painted with a pink color to ensure visibility and easy location of the business

premises.

It’s logo will be MESHINO RESTAURANT. The business slogan will be Feel MESHINO

RESTAURANT ’s with the business email will be: [email protected]

CHRISTAIN
COLEGE
THIKA TOWN

MAKONGE
BR
NI OA
MESHINO D
RESTAURA WA
NT Y
1
1.2.1 Location Map

1.3 Business Ownership

The business will be a sole proprietorship thus the contributions will be from MESHINO

WANJIKU EUNICE who is also the owner of the business. The opening capital will be

raised from a loan from family bank amounting to one million. Family members and friends

will also aid in the business funds. The expected capital will amount to three million, which

will be used to buy the machinery and equipment, pay rent, and buy the raw materials. Some

capital will be used to cater for transport whiles other capital for wages and salaries of six

employees who will be employed to offer their services in different sectors.

1.4 Justification of Opportunities

Various opportunities have risen up thus through them it is the opportune time to invest in

order to saw the profits and benefits of the improved infrastructure in Thika town.

Improved transport networking including roads will enhance easy accessibility of raw

materials into the premises. It will also help in transportation of the products, which will

prevent the products from going bad, and customers can access the premise with ease. Wheat

products are perishable and thus quick transport is required to minimize losses.

Availability of fresh water which is also a major raw material towards the firm which will

help in the bulking, cleanliness and running machines which will ensure quality products and

services.

Availability of high population will also provide market for the products, which will boost

the performance of the business to facilitate continuity and business success. are on high

2
demand thus by production of various varieties it will reduce competition due to customers

preferences.

1.5 Products/Services

The products to be offered will be food and drinks including Pilau, Stews, Pizza, sodas e.t.c.

cookies of various shapes and attractive designs will also be provided. They will be packaged

in hard polythene papers, which will be pink in color and with a baked cakes picture at the

paper sticker. They will be of high quality in order to suit the customers’ specifications and

required standards in order to ensure that they suit each customer. They will be ranging in

prices from ten shillings to what a customer feels he/she is worth buying. This will ensure

that the target group is for both high and low income earners to avoid any sense of

discrimination in the product offered in the market. If an order of a product is made and in

large scale or of a high price the product will be offered a discount. The product will meet all

the healthy standards. This is to ensure that the firm is not mainly onto profit but also caters

for the customers’ health.

1.6 Industry

The firm will be registered annually under the ministry of labor. This is because much of

techniques and labour contribution is needed to make the product reach the customer

including production distribution to making sales. The business will be legitimate

1.7 Entry And Growth Strategies

1.7.1 Entry

The business entry into the market will be through intensive promotion, which will be done

by advertising. Leaflets, which will have relevant details about the business, will be issued to

both the passersby who might be also customers and those who inquire about the firm

products. In addition, advertisements will be carried out through various media including

3
through the radio and television in order to serve a large geographical region and to arouse

the unaware target group about the existence of the firm and the products. This will help

reduce the competition level and also generate more interest in the customers about the

product.

A billboard will also be placed beside village market junction, Gachie Junction and at Thika

town which will show the direction.

1.7.2 Growth Strategies

The growth will include establishment of outlets or mini-outlets in various towns including,

Banana, Gacharage, Kabuku, Gachie, Ndenderu & Nairobi. This is to ensure that anytime one

can access the products in these outlets to avoid leaving out customers who might not be

available during the daily delivery time. This will help in continuity in production and act as

a storage facility plan. The expected firms output in terms of profits and increase in demand

will be used to modernize the machinery and equipment to avoid any inferior products being

offered in the market.

The business might also establish partnership with other business in order to maximize profits

to avoid specialty in only one line of production. Having seen the progress of the business

also the distribution region or area served by the business. This will help reduce competition

and improve the quality of product and services offered. A restaurant consultancy firm will

also be established.

1.8 Short Term And Long Term Goals

1.8.1 Short Term Goals

The short term goals will be to ensure that quality products are offered in the market and that

customer fill satisfied with the products. Having won the loyalty of customers the business

will offer job opportunities to the society to ensure that mutual benefit is experienced this will

4
be through providing transport contacts to individuals , creating employment to both skilled

man power to ensure that individual earn a living and that the business becomes established

in the society. Also a short term goal is to ensure that all loan are paid to avoid bad debt or

the firm may be unable to progress due to various difficulties. The firm will also run

promotions to ensure that the customers are aware and that the firm has a competing power in

the market through acceptance by customers.

1.8.2 Long Term Goals

The business long-term goals will include buying transport vehicles and motor cycle, which

will ease the transportation or the restaurant products to the required destination. This ensures

that all products reach the market on time to avoid any delay. The firm is also expected to

purchase some pieces of land which it will use them to construct various product outlet this

will help to reduce the rent expenses and also provide some storage facilities to ensure that

the stock is adequate to service the market. The firm will also invest in research institutes that

they are ensure that they are always meeting the required standards in the market. The firm is

also expected to run donations to various services e.g. sponsoring students, supporting old

people, supporting orphanage homes, cleaning programs and supporting government events.

5
 CHAPTER TWO

2.0 MARKETING PLAN

This is the chapter which information pertaining to the market is provided. In this chapter,

intensive principles of marketing are done including analysis customer in the business.

Determining the market size, competitors, market share and various marketing strategies to

be followed are included.

2.1 Customers

For any business to be termed successful, customers must be available. Each business require

customers for it to operate efficiently. The buying behavior and the customer relationships are

what determine the business future and leads to gains inform of profits. In any business,

every customer is of great value thus customer satisfaction must be provided.

In my business although the target customer are the young generation aged from 9-40years

which will be the majority customers in the business. The business will handle commercial

individuals and:

i. The individual customers

These customers will buy directly from the business or any business outlet. Mostly students

who are the majority within the surrounding business environment will be the main

individual customers. Other individual customers will be from Naivasha, kiambaa, Ruaka,

Kiambu, kikuyu, Raini, and Tigoni outlet who will receive the restaurant products upon

demand. The outlets will serve the customers within that respective area. Individual

customers whom purchase per head is expected to be of low quantity through their

summation will be high will receive quality products, at favored prices and discounts will be

offered during. Also other individual customer are those who buy the restaurant product for

6
their own consumption or family consumption thus all customers will constitute to the

business areas of customers concern and handling. All individual customers are expected to

pay the goods in cash to avoid any bad debts since not all customers the business might be

familiar with

ii. The institutional customers

Mostly the business expects support from either the financial institutions e.g. banks including

National bank, cooperative bank, equity bank, and Sacco’s support who will receive delivery

in their respective business premises through the business motorcycles. Learning institutions

that include MESHINO WANJIKU EUNICE, secondary, universities and colleges whom

also compromise the target group will also receive the products on demand. Colleges

including Raynata institute, premier institute, St Paul University, karuri driving school and

also Topaz driving & institute of business are expected to receive daily delivery either in the

canteens and also the institutions.

iii. Commercial customers

Turskys supermarket is the targeted shop since it has been in the market for a long time. It is

well connected to its customers and retail outlets due to commitment in meeting their

customers. It will serve the customers with our products. In addition, john snacks will help us

in selling our products since it is located near our business.

2.2 Market size

The business targets a large market size including the aged and young population. The target

customers are about one hundred thousand customers who are also the potential customers.

The business demographic factor that is of a high population also has influenced the target

population being high. The total sales expected are of about five hundred thousand daily. This

total will include both cash and debts from debtors.

7
2.3 The Business Competitors

Truly, the restaurant industry has a stiff competition though through strategic marketing,

good customer care and good public relations will improve the firm’s image and products

over the business competitors. The business does not take competitors as a challenge but as

contributors of the business success through improvement of quality and offering standard

services, which will make the business prevail. Both direct and indirect competitors are

expected in the business but the business strategic planning and high promotion level will

make sure the business is of:

8
 i. Direct competition

This will be the competitors who provide similar bakery products and also use the

same channels that the business uses or the consumers are the same.

ii. Indirect competition

These are the competitors who offer other restaurant products though not of the

similar type but consumers can purchase them to serve the same purpose as the

business products. They may use other different various channels but they do serve

the same market as we do.

The competitors will include:

1. Mangu Restaurant

P.o. box 34

Makongeni

2. Sliver Spoon Restaurant

P.o. box 25

Nairobi

3. MESHINO RESTAURANT ’s

P.O. BOX 210-903126

Thika

9
Table 1: SWOT ANALYSIS TABLE

Competitor’s Strengths Weakness Opportunitie Threats

Name s

MESHINO i) Quality i) Shortag i) High i) Insecurity

RESTAURAN products. e of raw population ii) Perishabilit
T ii) Affordable material which will y of the
prices. s provide restaurant
iii) Quality market. products
customer ii) Well
care improved
iv)Quantity infrastruct
of the ure.
product iii) Room for
expansion.
Mangu i) Have the i) Poor Skilled Competition
Restaurant customers’ pricing. manpower
loyalty. ii) Poor
ii) High custome
number of r care
employees services
. .
Room for Competition
expansion
Sliver Spoon i) Skilled i) No
Restaurant manpower credit
ii) Good ii) No
manageme custome
nt r
iii) High service
profits offered
iv) High
market

10
 coverage

Table 2: Likert Scale Table

Competitor’s Strengths Weakness Opportunities Threats

Name

3 1 6 0

MESHINO

RESTAURAN

MANGU

Restaurant

2 2 1 2

Sliver Spoon 2 3 4 1

Restaurant

11
2.4 Market Share

In order for the business to become suitable and efficient, it must also win customers’ to get a

market share in relation to the competitors.

Being in the introduction stage the firm, the expected market share will be about 25% while

other competitors take the remaining 75%. The market share may improve after acceptance

by the customers and this will result in more profits and sales.

Figure 1: Market Share

Market Share

20%
25%
MESHINO RESTAURANT
MANGU RESTAURANT
FOUR WAYS RESTAURANT
SILVERSPOON RESTAURANT

25%
30%

2.5 Pricing Strategies

The business pricing mechanism will be relatively low since the restaurant products are

offered at cheap prices. Considering the average target consumers are of middle class

consumers, the business will take precautions against charging high prices to the consumers.

Though the firm will offer quality services, the prices will be favorable to win customers and

maintain the required government pricing system. For any individual cakes, e.g. birthday,

wedding, and events cakes the charges will be determined by the quality, size,

12
design,quantity and shape that the client wants to have. To reduce competition discounts will

be offered on bulk buying. Various pricing methods may be used depending on the market

situations.

Overhead cost

The transport, water, electricity cost is high. The cost of transporting goods and services is

high. The electricity and water cost is high since most of the services done is used by

electricity. These include baking, packaging.

Government policy

The pricing strategy is accordance to the government is low compared to the products. This is

because the government reduces its price so that the final consumer can afford.

Demand

The proprietor will consider the law of demand that states that the lower the price, the higher

the demand. The higher the price the lower the demand

Firm’s Objectives

The objectives of the business will affect the pricing because he must achieve his goals.

The table below shows prices of various bakery products

Table 3: bakery products

Product Quantity Packages Ksh Total

Pilau Plated 1 plate 150 150

Soda 300ml crates 30 360

snacks 150g 1 pack5 100 500

pizza 250grm 3piecies8 50 1200

13
2.6 Sales Promotion

The business has invested largely into promotions and sales clerks. This is to boost sales and

attract the target customers. The business also has a sales department, which will be handled

by skilled sales people. Through various distribution channels which will also assist in

making sales. The business will need customers to fill satisfied with the products and also

making the customers not buyers but habitual buyers.

The business will establish the following strategic selling mechanisms:

2.6.1 Direct selling

This will involve direct purchasing either from the business premises or from various

business outlets. This will be the most effective and preferred business sale strategy to ensure

effective customer care services are well implemented and that the customers are informed

about the products and that if there are any complains they can forward them.

2.6.2 Agents

Various sales agents will also be deployed in various towns. They will act as deliverymen,

data collectors and they may help in promotion. Mostly the distributors are the retailers who

may be shop owners, customers and canteen operators may be useful in sale.

2.6.3 Sales Representatives

These people whom the business will expect as major contributors and sources of information

concerning either the market situation, customers’ perception.

14
2.7 Promotion and Distribution Strategies

2.7.1 Promotion Strategies

The business will invest heavily on promotion to ensure that customers are aware and

informed about the existence of a product in the market. The preferred promotion tool will be

through leaflets and road shows. Purple color, which is the business and products layout, will

help in advertisements and encouraging recognition of the products. Discounts will also be

offered to encourage bulk buying which will also boost the sales.

2.7.2 Methods of promotion and advertising

i) Advertising strategy

Advertising is an effective promotional tool that not only makes the business known

but also arouses interest among the consumers who will make purchases.

i) Information advertising: - This will be encouraged in order to increase the

customers’ knowledge and the availability of the products.

ii) Persuasive advertising: - This is in order to convince the buyers about the quality

and standard of the products in the market. Though impulse buying is not our target in

selling, though without persuasion no sales will be made in order to win customers.

iii) The media: - It will be largely used because this is the most influential in the

advertising industry to the public. This will help to serve the largest geographical

location. This will enable the firm to become known and gain in large market. The

forms of media to be used will include:

i) The radio

Many people have access to the radio thus; an advertisement done through the radio

will serve a large geographical area reach many people.

ii) Television

15
 This is to create an interest through the vision since most customers like what they see

and they are able to access the premises easily having the details about the products,

location, and the email address.

2.7.3 Distribution Strategies

Distribution is the process by which the products move from the production area to the

consumption area. This oral accessibility to many customers to avoid delays and also any

inconveniences which may result to product delay and also products spoilage. Bakery

products are perishable thus direct distribution method is preferred though indirect method is

also appropriate and it may be used to curb any delay or satisfaction.

The direct method will involve the following channels

PRODUCER

CONSUMER

This will also help in data gathering since through a direct media the consumers are able to

voice their demand.

The indirect distribution channels to be used may include the following:

Producer → wholesaler’s → retailer→ consumer

Or

Producer → retailer → consumer

16
 CHAPTER THREE

3.0 MANAGEMENT AND ORGANIZATIONAL PLAN

Various plans need to be formulated for a business to become successful. Various

organizational departments including staffing department, ICT department, storage

department, distribution department and information department. This is to create an efficient

and well-managed business since without good management there is

3.1 Organizational Structure

Manager

Heads of departments

Accountant Salespeople Deliverymen Cleaners

s

3.1.1 Business Manager Qualifications

iii. Above 27 years

iv. Good public relations person

v. Computer advanced

vi. 3 year baking experience

vii. Diploma in business management

viii. Must be deligent and good decision maker

17
Duties and Responsibilities

i) Data gathering, sampling

ii) In charge of all other various department

iii) Decision making and implementation

3.2 Other Personnel

3.2.1 Heads Of Department

i) Must have a degree in their various departments.

ii) 6years working experience in their various departments.

iii) Requires minimum supervision

iv) Good decision makers and planners

v) Must have a degree in public relations.

Duties and Responsibilities

i) Meet the expected firm’s production units.

ii) Coordinating the juniors in his/her department.

iii) Ensure good management

3.2.2 Accountant Qualifications

i) Must possess a degree in accounting.

ii) Computer literate

iii) Five years working experience

iv) Good conduct is also required

v) Kenyan citizen

18
Duties and Responsibilities

i) In charge of the business account

ii) Payment of all expenses

3.2.3 Sales People

Qualifications

i) Diploma in sales and marketing

ii) Certificate in public relations

iii) Four years working experience

iv) Eloquent in both English and Kiswahili

v) Must have selling skills

Duties and responsibilities

i) Providing customer care services

ii) Data gathering

iii) Conducting promotions

iv) Attending presentation and demonstrations

v) Making sales

3.2.4 Delivery People

Qualifications

i) Must have a driving license

ii) 2years of driving experience

iii) Must have good conduct

19
3.2.5 Secretary

i) Must have a diploma in secretarial

ii) Computer literate

iii) Age20 and above

iv) No working experience

Qualifications

i) Taking the order

ii) Booking of appointments

3.2.6 Cleaner

Qualifications

i) Age 30 and above

ii) Has a K.C.S.E .certificate

Duties and responsibilities

Cleaning the premises

Class primary and secondary level and above

20
3.3 Recruitment, Training And Promotion

3.3.1 Recruitment

Recruitment is the process by which division of labor and specialization is done to enhance

advancement in production and employees satisfaction in their respective areas and duties.

Everyone is eligible to apply the various job vacancies and submit their curriculum vitae in

the office starting from 1st July to 8thAugust. Though if qualified to proceed to the interviews

section one is required to meet a special interviewer’s panel in the business premises to

ensure that all employees are competent and deligent enough to be entrusted in the various

department.

3.3.2 Training

The business will be conducts regular training to ensure that the employees are developing in

the intelligence and also determine and adapt the various vital marketing and customer

handling techniques. It is also the aim of the business not to create qualified employees but

perfect and responsible business people in the nation. Each employee within the various

departments must attend the training. This will be to promote moral guidance, career

progression and spiritual guidance. Many employees are competent with what they have but

it will also be the responsibility or the business to ensure that despite the employee having

skills the moral guidance, which might decay, may be due to stress or the community that all

employees meet the required behavior and also that employees are respectable and also

presentable to the society.

3.3.3 Promotions

The business will be conducting promotions depending on the productivity, self-esteem and

conduct of individual employees. This will be due to motivate and encourage the workers to

maintain a high progression spirit. The business will be on the lookout for the best employees

21
and it is the duty of employees not to just wait for promotions but to work with commitment

from them to sustain the business since being truthful from your hard work rather than being

promoted through dubious methods. Various promotions will be done through various

methods including ability of decision-making and commitment will be great consideration to

ensure that the promotions done are fair.

Table 4: Remuneration Table

JOB TITLE NO OF SALAR MEDICAL - HOUSE - TOTAL

EMPLOYEES Y ALLOWANCE ALLOWANCE

MANAGER 1 30,000 2,000 4,000 36,000

HEAD OF 3 27,500 1,500 4,000 33,000

DEPARTMENT

ACCOUNTANT 1 25,000 1,000 3,000 29,000

SALES PEOPLE 7 7,000 1,000 2,000 10,000

DELIVERY 3 7,000 1,000 1,000 9,000

MEN

SECRETARY 2 9,000 1,000 1,000 11,000

CLEANERS 4 7,000 1,000 1,000 9,000

WATCHMEN 2 7,000 2,000 1,000 10,000

Several incentives will be offered to motivate and reward the employees who are committed.

22
3.5 Licenses and Permits

3.5.1 Licenses

The law requires all businesses to have a license thus the business will acquire a license that

it is legally allowed to operate and that all the government legal operation requirements are

met. The license will be renewed annually to avoid any inconvenience in the running of the

business. The business will acquire the business from Kiambu County Council Limuru

Branch. Several other licenses will be obtained including environmental conservation under

National Environment Management Authority (NEMA) to ensure that the environment

remains clean being one of the business policies. A charge of Ksh. 5,000 will be paid to

acquire the license and the business but the license policies.

These are the requirements required by the Kenyan laws that every business must meet in

order to ensure that it meets all the legal formalities under the Kenyan constitution. Most of

the permits being also being form of rules will also require licenses and permits from various

business organizations including NACADA and NEMA. The business will abide by the laws

to create a conducive environment for business operations.

The laws will include the following:

1. There will be no waste disposal to the environment and if, any it must be well disposed to

avoid any environmental degradation and also to avoid land, air and water pollution.

2. All goods must be designed to suit the customer as specification and to ensure that all the

health and...

23
3.6 Business Support Services

3.6.1 Banking Services

The business will open an account with equity bank since there is easier access to loans and

their withdrawal charges are less. Being the start of the business, this will also borrow a loan

from the bank. The business will make sure that it repays the loan fully to avoid any banking

inconveniences. In addition, the business will use the bank to deposit all the wages and

salaries of the employees to ensure accountability and that all the records are accessible and

that all the withdrawal charges made….

The business will also use the bank to store valuable items including the employees, business

records and C.V.s to avoid damage or loses. The business will also invest in several co-

operative societies to ensure that interest is earned and that to avoid any loss of cash through

robbery or theft.

K-UNITY BANK

P.O. BOX 88660094-01

A/C NO: 00011116543

THIKA

24
3.6.2 Insurance Services

However, it is not the wish of any entrepreneur, a risk occurring on his/her premises it is also

a good idea to ensure the firm against any risks. The business will undertake several

insurance covers including lie assurance for the employees, motor vehicle insurance and the

business. The business will undertake all the insurance covers from Life Insurance Company.

The various insurance covers will be against the following risks:

Fire and theft risks

Life assurance

Loss under perish ability of product

3.6.3 Security

KK security will be offered the security contact since they are well equipped with modern

security equipment. The firm also offers quality farming to its personnel thus; we need skilled

people who can offer quality services.

The business will also enroll for a government force security and other special unity forces.

25
 CHAPTER FOUR

4.0 OPERATIONAL/PRODUCTION PLAN

4.1 Product Design Development

Due to the existing modern technology and also globalization the product design will be

gotten from the internet, websites and also various artists collaborations who are well

equipped with designing technology will also be called upon to assist in the product design.

The product will be developed upon various factors including price, demand, Quality and

Quantity also the shape this will to enhance customer satisfaction and also create a top mind

position among the customers.

4.2 Production Facilities And Capacity

The business to succeed should have several equipment’s and the ability to handle the

capacity of the firms either production, distribution or also other support services in the

business. Several equipment’s need to be purchased in order to increase the productivity aid

in daily business operation and add up to the business assets.

The table below shows the basic and virtual equipment is that will aid in the business

operation.

26
Table 5: Production Facilities And Capacity

Machine and Quantity Suppliers Cost (in Kshs)

Equipment

LORRY 3 Four-wheel drive 5,500,000

automobiles

Pickup 3 Subaru- Kenya 15,000

Baking oven 2 U- electrical 100,000

Furniture 20 Quality furniture 170,000

Generator 1 Kenya suppliers- 135,000

electricals

Fire extinguisher 6 Japenis- 120,000

extinguisher ltd

First aid kit 5 boxes Uchumi shop 45,000

Packaging bag 4boxes Limurupaper 90,000

company

Total 40 60,700,015

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4.3 BUSINESS LAYOUT

The business layout will be as shown below

Figure 2: Business Layout

STORE

LOBBY

O
F
Restaura
F
nt
I
Area
C Attendance

E Desk

Conference area

4.4 Production/Service/Process

All the production will be carried out within the business premises and later distributed to the

various established outlets then to the customer. Some bakery product is perishable that it

will not be advisable to store them nor delay them thus; a direct distribution channel will be

28
used. Cakes will be packaged in cartons to avoid any breakages thus loading will be easier

and offloading will not be a bother though care should be taken.

Any service to be offered from either demand, customer complaints or also the various

suggestions either from the employees, customers will be handled at the business premises in

the customer care unit office.

The prices will be fare and any order made by a customer will be delivered to him or her. The

business will run under the cash on demand basis to avoid any bad debts or any stagnation in

business operations due to lack of funds.

Customers are required to collect either their orders.

The supply of goods will be as follows

Table 6: The supply of goods

Material Suppliers

Wheat flour Pembe wheat manufacturers located at

jogoo road

Sugar Mumias distributors located at kakamenga

Food color James distributors located in Mombasa

Packaging papers Ruiru factory located at thika

Yeast Kaimsoi factory Wheat manufacturers

located at trans-zoia

Flavoring and Spices Daniel color distributors located at Kiambu

29
4.5 Monthly Requirements

Every firm must incur several expenses thus the business monthly expenses will be accounted

for. The expenses will include various sectors including wages and salaries, Transport, Water

and Electricity, Maintenance and repair among others.

The table below shows the various summations of monthly expenses.

Table 7: Summation of monthly expenses

Material Cost in ksh

Soap, detergents, transport, communication 14,000

Receipt books 2,500

Total 16,500

Employees

Manager 50,000

Heads of Department 45,000

Accountants 30,000

Sales people 18,000

Delivery men 18,000

Secretary 15,000

Cleaners 10,000

Security officer 12,000

Total 198,000

30
Other expenses

Labour 44,000

Rent 60,000/=

Electricity 25,000

Water 40,000/=

Total

Total of monthly expenses=169,000

4.6 Government Regulations

Various laws have been set up by the government which are mandatory for each business

thus they may affect the business operations either positively or negatively. Most of the

government regulations are external factors which may either affect the entire surrounding

environment thus they are a major considerations of the business since the business is legal it

will be.

The regulations include:

4.6.1 Environment Regulations

The firm will ensure that it maintains a clean environment and that any disposal done is

cautiously done to avoid pollution. Air conditioners will be put in place to ensure that there is

free and fresh air within the business premises. Garbage bins will also be provided to ensure

that garbage disposal is done correctly and that no health hazards are met. The business will

also be funding various environmental cleaning programs and participate in litter collections

to the various areas of operations.

31
4.6.2 Health Regulations

The business will ensure that all the employees are ensured under the endowment policy and

that incase of any risks the business will be responsible for the medical bills. Sewage

drainage system will be constructed and that only treated water will be disposed. Bush

cleaning will be done to avoid any habitation or any mosquitoes or other harmful insects

within the area this is to prevent various disease transmission occurring. The business will

also ensure that regular health checkups are done and that they are free thus various

employees will have to undergo the checkups that they are fit and also that they sustain the

productivity.

4.6.3 Safety Regulations

First aid kits will be put in place to ensure that any emergency risks are met .

32
 CHAPTER FIVE

5.0 FINANCIAL PLAN

5.1 Pre-Operational Cost

Table 8: Pre-Operational Cost

Particular Amount

Tool and equipment 453,000

Telephone 160,000

Advertising 300,000

Electricity 99,000

License and permits 10,000

Insurance 25,000

Transport 130,000

Water bill 75,000

Total 12,523,000

Cash balance = Capital – preoperational cost

= 1,000,000 -54, 910

= 745, 090

33
5.2 Estimation of working capital

Table 9: Estimation of working capital

Item 1st year 2nd year 3rd year

Current asset

Stock 550,000 600,000 750,000

Cash in hand 300,000 400,000 550,000

Debtors 10,000 15,000 9,000

Total current 860,000 1,015,000 1,309,000

assets

Current liabilities

Bank loan 200,000 150,000 180,000

Creditors 500,000 200,000 100,000

Total liabilities 700,000 350,000 280,000

Working capital = current assets – current liabilities

1st year

860,000 – 700,000 = 160,000

2nd year

1,015, 000 – 350,000 = 665,000

3rd year

1,309,000 – 280,000 = 1,029,000

34
5.3 Projected Cash Flow john computer repair cash flow statements for year 2020

Table 10: Projected Cash Flow Statements

Particulars Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec

Sales 240000 250000 203000 220000 198000 203000 217000 216000 225000 220000 200000 230000

Debtors 10000 17000 14000 8000 12000 5500

Total 250000

Purchases 60000 65000 68000 66000 60000 69000 66000 70000 71000 60000 62000 73000

Salaries 83000 83000 83000 83000 83000 83000 83000 83000 83000 83000 83000 83000

License & permit 20000

Electricity 2500 2700 3000 3000 3200 3400 2800 3000 3100 3000 2800 2900

Water 1000 1500 1600 1400 1700 1400 1200 1100 1000 1000 1200 1000

Insurance 10000

Telephone 1000 1300 1350 1200 1100 1300 1600 1700 1200 1000 1200 1400

Transport 12000 11000 12000 13050 13000 12000 12100 12000 11000 10000 10000 10000

Advertisement 2700 2800 3000 4000 5000

Total outflows 192200 164500 168950 167650 164800 170100 1169700 170800 174300 158000 165200 171300

Net cash 57800 112500 34050 52350 47200 32900 55300 45300 62700 62000 40300 58700

35
Accumulation 57800 160300 194350 246700 295900 326800 382100 427300 490000 552000 592300 651000

36
5.4 Proforma Income Statement

JOHN COMPUTER REPAIR PROFORMA STATEMENT YEAR ENDING 2020, 2018,

2019

Table 11: Proforma Income Statement

Item 2019 2020 2021

Sales 2,662,000 2,650,000 2,700,000

Cost of goods 1,903,000 2,000,000 2,000,000

Gross profit 719,000 650,000 699,300

Expenses

Salaries and wages 996,000 99,6000 996,000

License and permit 20,000 20,000 20,000

Electricity 35,400 33,200 35,300

Water 15,100 15,100 15,150

Insurance 1,000 10,000 10,000

Transport 117,450 116,750 110,250

Advertisement 17,500 17,500 16,350

Total expenses 1,211,450 1,207,050 1,203,550

37
5.5 Proforma Balance Sheet

MESHINO RESTAURANT ’s proforma balance sheet as at start up and end of the first two

years of operation

Table 12: Proforma Balance Sheet

Item As at opening date End year 2020 End year 2020

Current assets

Cash 300,000 500,000 700,000

Stock 550,000 600,000 650,000

Debtors 10,000 30,000 30,000

Total 860,000 1,130,000 1,380,000

Tools and 5,710 5,710 8,000

equipment

Land and building 500,000 500,000 700,000

Van 400,000 400,000 450,000

Total fixed 905,710 905,710 1,158,000

liabilities

Current

Creditors 500,000 600,000 800,000

Bank overdraft 20,000 150,000 200,000

Total 70,000 70,0000 1,000,000

Long-term

Bank 400,000 500,000 600,000

Owners equity 165,710 235,710 138,000

Net profit 500,000 600,000 800,000

38
Total 1,065,710 1,335,710 153,800

Total assets 1,765,710 2,085,710 2,538,000

Total liabilities 1,765,710 2,085,710 2,538,000

39
5.6 Breakeven point

Table 13: Breakeven point

Particulars Amount

Fixed cost

Rent 38,000

Salaries 996,000

Insurance 10,000

License and permit 20,000

Loan payment 60,000

Total 1,044,000

Variable cost

Advertisement 2,700

Transport 117,450

Telephone 1,000

Electricity 35,400

Water 15,100

Total 171, 650

5.6.1 Total Contribution

Total contribution = sales – variable cost

= 2,622,000 – 171,650

= 2, 450, 350

40
5.6.2 Total Contribution margin

contribution
Total contribution= x 100
sales

2,450,350
Total contribution= x 100
2,622,000

= 93.5%

5.6.3 Breakeven point

¿ cost
BEP=
contribut ion

1,044,000
¿
93.5

= 11,165.8

5.7 Expected profitability ratios

Gross profit
Gross profit percentage= x 100
sales

719,000
¿ x 100
2,622,000

= 27.4%

Return on equity

net p rofit after tax

return on equity= x 100
owners equity

100,000
¿ x 100
165,710

= 60.3%

41
Return on investment

net profit aftertax

x 100
total investment

100,000
x 100
1,765,710

= 5.7%

5.8 Desired financing

Table 14: Desired financing

Item Amount

Preoperational cost 54,910

Working capital 160,000

Fixed assets 90,710

Total 305, 620

5.9 Proposed Capitalization

Item Amount

Owners savings 400,000

Bank loan 1,000,000

Friends and relatives 600,000

Total 2,000,000

42