TAJI INTERIOR DESIGN CONSULTANCY COMPANY

POSTAL ADDRESS: P.O BOX 14 NDORI

TELEPHONE NUMBER: 0745410040

EMAIL ADDRESS: [email protected]

PRESENTED BY: ODHIAMBO STEPHANIE ATIENO

INDEX NUMBER: 7121010044

CENTRE NAME: ST JOSEPH’S TECHNICAL INSTITUTE FOR THE DEAF

PRESENTED TO: THE KENYA NATIONAL EXAMINATIONS COUNCIL IN

PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD

OF DIPLOMA IN CIVIL ENGINEERING

SERIES: NOVEMBER 2024

 DECLARATION

I wish to declare that this project is my own original work and that it has not been presented

by anyone else to any examination body for the award of any certificate.

Candidate’s Name: Odhiambo Stephanie Atieno

Signature……………………………………………………..

Date……………………………………………………………..

Supervisor’s Name: Paul Awambo

Signature…………………………………………………

Date………………………………………………………..

i
 DEDICATION

This project is dedicated to my supervisor for the support she offered to me in the production

of this piece of work.

ii
 ACKNOWLEDGEMENT

I am very grateful for the generous assistance and encouragement of my parents for their

tireless efforts to sponsor my education and in writing this business plan. May the lord bless

you abundantly.

iii
 EXECUTIVE SUMMARY

The business shall be called TAJI INTERIOR CONSULTANCY COMPANY. The business

shall be located in at Ndori centre along the Bondo – Kisumu Road. This place has a very

good population as well as educational institutions who are all potential customers.

This business will be dealing in complete products. It intends to capture 41% of the market

share within the first two months of operations. The business intends to promote its products

by the use of road posters, gifts, magazines and the media. It will also offer discounts to

regular customers and for those who purchase in bulk. The goods will be sold directly to the

customers.

The owner-manager will have full authority and control over the business. The sales manager

will be a holder of a diploma in sales and marketing. The other personnel shall be, accounts

clerk, secretary, loaders and watchman. The personnel are going to be recruited through

advertisements, interviews and college training while promotion will be given by salary

increment. The salaries will depend on the duties of each personnel.

This business will need facilities working space, vehicle and furniture. This facility will be

bought before the business starts operations. Health regulations such as waste disposal and

good sanitation practices will be practiced. Other regulations to be considered will include

safe us of electricity.

The business will have a pre operational cost of 61, 000/= and will incur a preoperational cost

of 22, 000 shillings that will be provided by KCB Bank and a working capital of 350, 000

shillings.

iv
 TABLE OF CONTENTS
DECLARATION ........................................................................................................................ i
DEDICATION ...........................................................................................................................ii
ACKNOWLEDGEMENT ....................................................................................................... iii
EXECUTIVE SUMMARY ...................................................................................................... iv
CHAPTER ONE ........................................................................................................................ 1
BUSINESS DESCRIPTION ...................................................................................................... 1
1.1 BUSINESS NAME .......................................................................................................... 1
1.2 BUSINESS LOCATION AND ADDRESS ..................................................................... 1
1.2.1 LOCATION MAP ......................................................................................................... 1
1.3 FORM OF OWNERSHIP ................................................................................................ 2
1.4 TYPE OF OWNERSHIP ................................................................................................. 2
1.5 PRODUCTS AND SERVICES ....................................................................................... 2
1.6 JUSTIFICATION OF OPPORTUNITY .......................................................................... 2
1.7 INDUSTRY ...................................................................................................................... 3
1.8 GOALS OF THE BUSINESS .......................................................................................... 3
1.9 ENTRY AND GROWTH STRATEGY .......................................................................... 3
1.9.1 ENTRY STRATEGY ................................................................................................ 3
1.9.2 GROWTH STRATEGY ............................................................................................ 3
CHAPTER TWO ....................................................................................................................... 4
MARKETING PLAN ................................................................................................................ 4
2.1 CUSTOMERS .................................................................................................................. 4
2.2 MARKET SHARE ........................................................................................................... 4
2.3 COMPETITION ............................................................................................................... 4
2.3.1 COMPETITORS SWOT ANALYSIS TABLE ............................................................ 5
2.4 METHODS OF PROMOTION ADVERTISEMENT ..................................................... 5
2.5 PRICING STRATEGY .................................................................................................... 6
2.6 SALES TACTICS ............................................................................................................ 6
2.7 DISTRIBUTION STRATEGY ........................................................................................ 6
2.8 CHANNEL OF DISTRIBUTION .................................................................................... 7
CHAPTER THREE ................................................................................................................... 8
ORGANIZATION AND MANAGEMENT PLAN .................................................................. 8
3.1 BUSINESS MANAGER AND QUALIFICATION ........................................................ 8

v
 3.2 PERSONNEL NUMBER AND DUTIES ........................................................................ 8
3.3 RECRUITMENT TRAINING AND PROMOTION ....................................................... 9
3.4 REMUNERATION AND INCENTIVES ........................................................................ 9
3.5 LICENSE PERMITS AND BY LAWS ........................................................................... 9
3.5.1 License ....................................................................................................................... 9
3.5.2 Permits ....................................................................................................................... 9
3.5.3 By Laws ................................................................................................................... 10
3.6 SUPPORT SERVICES .................................................................................................. 10
3.6.1 Banking .................................................................................................................... 10
3.6.2 Telephone ................................................................................................................ 10
3.6.3 Water ....................................................................................................................... 10
3.6.4 Insurance .................................................................................................................. 10
CHAPTER FOUR .................................................................................................................... 11
OPERATIONAL/ PRODUCTION PLAN .............................................................................. 11
4.1 PRODUCTION FACILITIES AND CAPACITIES ...................................................... 11
4.2 BUSINESS LAYOUT.................................................................................................... 11
4.3 PRODUCTION STRATEGY ........................................................................................ 11
4.4 PRODUCTION PROCESS ............................................................................................ 12
4.5 REGULATION AFFECTING OPERATIONS ............................................................. 13
4.5.1 SAFETY REGULATIONS ..................................................................................... 13
4.5.2 ENVIRONMENT REGULATIONS ....................................................................... 14
4.5.3 HEALTH REGULATION ...................................................................................... 14
CHAPTER FIVE ..................................................................................................................... 15
FINANCIAL PLAN ................................................................................................................. 15
5.1 PRE-OPERATIONAL COST ........................................................................................ 15
5.2 ESTIMATING OF WORKING CAPITAL ................................................................... 15
5.3 CASH FLOW STATEMENT ........................................................................................ 16
5.3.1 PROJECTED CASH FLOW STATEMENT FOR YEAR ONE ............................ 16
5.3.2 PROJECTED CASH FLOW FOR THE YEAR TWO ........................................... 17
5.3.3 PROJECTED CASH FLOW STATEMENT FOR YEAR THREE ........................ 18
5.4 PROFORMA INCOME STATEMENT FOR THE FIRST THREE YEARS ............... 19
5.5 PROFORMA BALANCE SHEET................................................................................. 19
5.6 CALCULATING BREAK EVEN POINT .................................................................... 20

vi
 5.7 PROFITABILITY RATIOS ........................................................................................... 21
5.8 PROPOSED CAPITALIZATION ................................................................................. 21
APPENDICES ......................................................................................................................... 22
APPENDIX A: REFERENCES ........................................................................................... 22

vii
 CHAPTER ONE

BUSINESS DESCRIPTION

1.1 BUSINESS NAME

The business name shall be TAJI INERIOR CONSULTANCY COMPANY. The name is

derived from an international interior designer Taraji P Henson who inspires me and also my

mentor. This will attract customers to the business as they can easily identify with it.

1.2 BUSINESS LOCATION AND ADDRESS

The business will be located in Siaya County, Bondo District, Sakwa southwest location at

Bondo Trading Centre along Bondo-Kisumu. This place is highly strategic as it has high

population, good infrastructure and good security as well. The people will benefit from

services that will be offered at a convenient location.

The business address will be;

Taji Interior Consultancy Company,

P.O Box 40601,

Bondo

1.2.1 LOCATION MAP

TAJI INTERIOR

ONYONORE
AKALA
HARDWARE

FROM BONDO TO KISUMU

SDA TINTOLER
CHURCH HOTEL

1
1.3 FORM OF OWNERSHIP

The business will be sole proprietorship. This business is normally managed by one person.

This is because it is easy to operate as decision making is very easy and also quick as one

does not have to consult a partner. The owner also enjoys all the benefits alone. The means of

raising capital will be from personal savings, friends, family, and well-wishers and from a

bank loan. The owner will be the overall manager and controller of all the business activities.

1.4 TYPE OF OWNERSHIP

This will be a sole proprietorship where the owner owns all the business resources. He will

contribute 80% of the capital and the remaining 20% from, parents 8%, 5% from friends and

7% from bank in form of a loan.

1.5 PRODUCTS AND SERVICES

The business will sell products like complete furniture, design ideas, and a show rooms on

how a house can be designed, etc. The services to be offered will include transport to

customers who buy in bulk. Discounts will be given proportional to the services offered and

good packaging to the goods purchased.

1.6 JUSTIFICATION OF OPPORTUNITY

Due to the high population growth in this area, there is a big demand for complete products.

The served population is 23% while the unserved population is 77% which is quite big.

Therefore, there is room for expansion and diversification.

To properly meet the customer demands, the business aims at doing the following;

• Offer high quality products and services

• Practice good customer relations

• Offer competitive prices that are pocket friendly

• Expanding the business onto a bigger one in order to generate bigger profit

2
1.7 INDUSTRY

This business is under the services industry. It will serve both the local population as well as

the wider catchment area. To ensure that this market is well served the business intends to

open other branches in other trading centres. The business will also introduce new technology

specially to improve on records management and in calculation of sales.

1.8 GOALS OF THE BUSINESS

• The business will have the following objectives;

• To maximize profit

• To improve the living standards of the people

• Generation of income

• To create employment opportunities

• To provide quality products and services

1.9 ENTRY AND GROWTH STRATEGY

1.9.1 ENTRY STRATEGY

The business will open its doors on 1st Sep 2024. At this time the business shall have acquired

all the necessary registration certificates, capital, and land and trading licenses.

1.9.2 GROWTH STRATEGY

On May 2023, the owner shall use profits to acquire materials in order to expand its

operations by acquiring a large stock of goods. The manager shall also seek a loan from KCB

bank to expand its branches in Bondo town, Kisumu and later on at other parts of the country.

It will also seek to buy a lorry to help in the transportation of goods. It will also employ

workers like a driver, watchmen and loaders who will be helping in loading goods to the

lorry.

3
 CHAPTER TWO

MARKETING PLAN

2.1 CUSTOMERS

TAJI INTERIOR DESIGN CONSULTANCY COMPANY will rely on customers who come

from around Nyanza region and other parts of the Country. It will serve individual customers

who directly walk into the premises and who will be buying in small quantities as well as

commercial customers who buy in large amounts usually interior designers who also

purchase frequently and institutions like schools. The business will be operating for 12 hours

per day for every day of the week. The business will serve people of diverse ages mainly

between 30 to 70 years who have better purchasing power. It will also offer after sales

service.

2.2 MARKET SHARE

The business will be able to serve a greater number of customers of the area whose

population is around 100, 000. The business intends to serve 38% of this population.

38% × 100,000
= 38,000 customers
100

To achieve this, the business will offer discounts to regular customers and also cater for

transportation of goods to customers who shall buy in bulk.

Advertising will be done to capture the customers and the service working hours will be well

spread from 8.00 AM to 8.00 PM.

2.3 COMPETITION

The business will face competitor from other businesses offering the same services and

products. There will be two businesses offering the same services. However, then business

will try to exploit the weaknesses of the competitors in order to dominate as shown in the

SWOT analysis table below:

4
2.3.1 COMPETITORS SWOT ANALYSIS TABLE

Business Strength Weakness Opportunity Threat

Vivian • Owner is • Does not • High • • Stiff
enterprises well operate on • population competition
known weekends & • Better
• Long holidays products
• experience • No transport
• Good • Poor
• capital customer
relations
Hebekaoh • Well • No • Offer • More
enterprises • stocked • technology • discount • experience
• Adequate used • Capture
labour • Poor time more
• Good management customers
• location • No after • Availability
• sales service of raw
materials

2.4 METHODS OF PROMOTION ADVERTISEMENT

The business shall promote its services using roadside posters indicating the services offered,

gift calendars, cards and T shirts containing the name of the business and its services.

Booklets and pamphlets will also be used. It will also invite people to come to view its

products. Mass media will also be used including radio and newspapers.

The business shall advertise using the following methods;

• Supplying posters

• Magazines with pictures showing its products and services

• Loud speakers and road shows

• Exhibitions

• Media e.g. radio and newspapers

5
2.5 PRICING STRATEGY

The business will price its products using following these factors:

• Availability of the products in the market and its demand

• Tax rate levied by the government

• Competitor’s prices to price slightly lower than competitors

• Taste and preference of customers

• Cost of raw materials

2.6 SALES TACTICS

The business will use the following tactics to create awareness to customers:

• Discounts to bulk buyers and regular customers

• Offering transport to bulk buyers and those who come from far

• Use of sales agent to sale on its behalf

• Direct sale to customers in far flung places

2.7 DISTRIBUTION STRATEGY

Goods will be sold to customers through wholesalers and retailers then to the customers and

even directly to the customers. Customers who buy in bulk can be given transport directly to

their premises at a cost of 10, 000/= per month. The business however anticipates

encountering problems such as insecurity due to vehicle hijackings especially when working

at night. This may be avoided by transporting most of these products in the day.

6
2.8 CHANNEL OF DISTRIBUTION

Producer

Wholesale • Customers

Retail

Customers

7
 CHAPTER THREE

ORGANIZATION AND MANAGEMENT PLAN

3.1 BUSINESS MANAGER AND QUALIFICATION

The organizational structure will be as follows;

Title Number Qualification

Owner 1 Diploma in building and construction experience in
management
Supervisor 1 Two years’ experience as supervisor at least 30 years old
Cashier 1 A.t.c certificate
Two years’ experience below 30 years
Watchman 1 Kcse
Below 30 years
Employees 2 Certificate in building and construction
Below 30 years
Good knowledge of construction materials
Cleaners 1 Able to work with minimum supervision

3.2 PERSONNEL NUMBER AND DUTIES

The business shall require other personnel who will assist in its operations. They will be as

follows;

Position Number Duties

Sales manager 1 Prepare customer orders
Advice manager on goods available on the market
Accountant 1 Keep accounts records
Pay workers
Manage business accounts
Secretary 1 Typing business documents
Manage business correspondence
Loaders 2 Packing and loading goods for customers
Watchman 2 Providing security for business premises
Cleaner 1 Maintaining the cleanliness of the business premises

8
3.3 RECRUITMENT TRAINING AND PROMOTION

The business will get its staff from advertising for such positions in posters and through

friends and then by interviewing the potential workers and employing the most suitable.

Title No. Training Recruitment Promotion

Owner 1 Trade fairs, seminars - General manager
Salesman 1 Seminars Advertising, Manager
interviewing and
recruitment
Accountant 1 Seminar Interview Chief accountant
Loader 2 Workshop Interview Sales
Watchman 2 Seminar Interview Store keeper
Cleaner 1 On job training Advertisement Receptionist

3.4 REMUNERATION AND INCENTIVES

The workers will be paid according to their qualification and their responsibilities.

Title Number Salary Incentives

Owner 1 10, 000 House allowance Lunch
Accountant 1 60, 000 Commuter allowance
Tea
Medical allowance
Salesman 1 8, 000 Commuter allowance
Uniform
Lunch
Loader 2 4,000 Tea
Helmet and gloves overall
Watchman 2 4, 000 Uniform spotlight, tea, lunch

3.5 LICENSE PERMITS AND BY LAWS

3.5.1 License

The business shall acquire a trading license from the County government of Siaya.

3.5.2 Permits

The business shall acquire business permit from the ministry of trade and industry a required

by law.

9
3.5.3 By Laws

The business shall be governed by by-laws including the business registration name and the

health permit that safeguards the employee’s welfare.

3.6 SUPPORT SERVICES

The business will obtain services in order to offer normal services efficiently and

conveniently. These will include the following;

3.6.1 Banking

The business will open an account with KCB bank in Bondo Town. The firm’s monies shall

be kept with the bank. This was selected because of its efficient services and its product of

current accounts that is suitable for business.

3.6.2 Telephone

A telephone shall be used for purposes of communication. This shall be provided Safaricom.

3.6.3 Water

The business shall receive its water through Siaya Water Services Company.

3.6.4 Insurance

Insurance services shall be acquired from Madison Insurance Company, which is situated at

Siaya Town. This shall be against the risks of fire as well as personal insurance to the

employees.

10
 CHAPTER FOUR

OPERATIONAL/ PRODUCTION PLAN

4.1 PRODUCTION FACILITIES AND CAPACITIES

The business shall acquire equipment and machinery like a vehicle, typewriter that will assist

the business to increase its daily production services and maintain proper services to the

customer.

The business will have the following machines and equipment in additional to those

mentioned above.

Items No. Capacity Cost Mode Of Payment

Chair 5 5 2, 500 Cash
Building 1 Large 60, 000 Cash
Calculator 4 10 digits 1, 200 Cash
Vehicle 1 15 Tones 500, 000 Hire purchase
Typewriter 1 Medium 1, 500 Cash
Steel gate 1 Medium 2, 000 Cash
Torch 2 Medium 400 Cash
Computer 1 Medium 50, 000 Cash
Total 631, 100

4.2 BUSINESS LAYOUT

Secretary Store Washroom

Accounts General
Manager
Sales manager

Washroom
Car park Gate Security

4.3 PRODUCTION STRATEGY

The business shall fully exploit the production strategy. This shall be done in following ways.

11
The business shall offer very high-quality products at reasonable prices to attract customers.

This will create more profit within a shorter period. There shall be a healthy stock of goods at

all times to ensure that there is a steady supply of goods. The business shall stock mainly the

goods that are on demand according to the customer tastes. There shall also be quality

packaging of products as well as transport services to the customers who buy in bulk and are

without alternative means of transport. Insurance shall be obtained to protect the business

from losses due to burglary and theft.

4.4 PRODUCTION PROCESS

For the business activities to run smoothly, production is the most important activity to be put

into consideration in order to meet the customer satisfaction and also in order to retain the

customers. Service delivery will be the best. Some of the potential risk areas include theft,

electricity blackouts and also competition from other businesses. The production process will

be as follows ;

12
 Making of Inquiry from manufacturers

Making order

Purchasing of goods

Transporting to ODECAMA

Sorting out goods

Packaging of goods into the ideal sizes

Display of goods for sale

Serving the customer

Payment of Goods by customers

4.5 REGULATION AFFECTING OPERATIONS

For the business to operate successfully, it will be required to comply with certain legal

requirements. These will include regulations laid down by the ministry of health and the

ministry of industry and that of public works. This requires that the business shall maintain

the highest level of cleanliness and that the employees are to be of good health. The business

shall also be expected to only sell goods that have been inspected by the Kenya bureau of

standards.

4.5.1 SAFETY REGULATIONS

This shall be achieved by insuring the business against risks such as fire and theft as well as

other accidents. Workers shall also be given uniforms and appropriate working gear when

handling goods that pose health risks e.g. gypsum.

13
4.5.2 ENVIRONMENT REGULATIONS

The premises will be maintained in the highest levels of cleanliness. There shall be proper

disposal of waste. A latrine will be put into place for use by the workers.

4.5.3 HEALTH REGULATION

The business shall dispose wastes in an appropriate manner as well as good sanitary practices.

14
 CHAPTER FIVE

FINANCIAL PLAN

5.1 PRE-OPERATIONAL COST

This is the amount of money which is likely to be used in the operational before the business

actually starts.

Item Cost
Furniture 30,000
Salary 90,000
Electricity 15,000
Rent 5,000
Insurance 15,000
Telephone 7,000
Advertisement 6,000
Wages 60,000
Total 228,000

5.2 ESTIMATING OF WORKING CAPITAL

These are the day-to-day operating expense. Some of the cost may be pain on a weekly basis

daily basis and monthly basis. Therefore, it is required to list all the operating costs the

business will incur in the process of running the business.

Items Month
Aug Sep Oct
Transport 8,000 8,000 8,000
Stock 10,000 10,000 10,000
Repair and 3,000 3,000 3,000
maintenance
Salaries 5,000 5,000 5,000
Water 2,000 2,000 2,000
Electricity 1,000 1,000 1,000
Rent 4,000 4,000 4,000
TOTAL 33,000 33,000 33,000

15
5.3 CASH FLOW STATEMENT

5.3.1 PROJECTED CASH FLOW STATEMENT FOR YEAR ONE

Items Jan Feb March Apr May June July Aug Sep Oct Nov Dec
Opening 433,00 475,000 521,000 110,000
stock
Cash sales 80,000 90,000 100,000 110,000
Credit sales
Cash outflow
Salaries 5,000
Transport 4,000 4,000 3,000 3,000
Water 4,000 3,000 2,000 2,000
Electricity 3,000 2,500 3,000 3,000
Rent 5,000 5,000 5,000 5,000
Tax 16% 12,800 14,400 16,000 17,600
Stock 10,000 15,000 20,000 25,000
Total expense 38,000 43,900 49,000 59,600
Net profit 420,000 46,100 51,000 50,000

16
5.3.2 PROJECTED CASH FLOW FOR THE YEAR TWO

Items Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec
Opening 622,400 655,400 703,300 750,900 801,700 841,200 876,700 919,700 970,700 1,020,500 1,059,500 1,100,90
stock 0
Cash sales 100,000 110,000 115,00 120,00 100,000 100,000 110,00 115,000 120,000 100,000 110,000 115,000
Credit sales
Cash flow
Salaries 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,0000 5,000 5,000 5,000 5,000
Transport 4,000 3,500 3,000 3,000 2,500 3,000 3,000 4,000 4,000 4,000 4,000 3,000
Water 3,000 3,000 2,000 3,000 4,000 2,500 3,000 3,000 4,000 3,000 4,000 3,500
Electricity 4,000 3,000 4,000 4,000 3,000 3,000 4,000 3,000 3,000 3,000 3,000 3,000
Rent 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
Tax 16% 16,000 17,600 18,400 19,200 16,000 16,000 17,600 18,400 19,200 16,000 17,600 18,400
Stock 30,000 25,000 30,000 30,000 25,000 30,000 30,000 25,000 30,000 25,000 30,000 25,000
Total 67,000 62,100 67,400 69,200 60,500 64,500 67,600 63,400 70,200 61,000 68,600 62,900
expenses
Net profit 33,000 47,900 47,600 50,800 39,500 35,500 42,400 51,600 49,800 39,000 41,400 52,100

17
5.3.3 PROJECTED CASH FLOW STATEMENT FOR YEAR THREE

Item Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec
Opening 1,153,00 1,206,80 1,262,00 1,301.00 1,349,80 1,402,80 1,441,80 1,493,40 1,546,20 1,590,80 1,644,60 1,699,80
stock 0 0 0 0 0 0 0 0 0 0 0 0
Cash 120,000 130,000 130,000 120,000 125,000 130,000 140,000 145,000 140,000 120,000 130,000 120,000
sales
Credit
sales
Cash
flow
Salaries 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000
Transpo 5,000 5,000 5,000 4,000 4,500 5,000 6,000 7,000 6,500 5,000 5,000 4,000
rt
Water 3,000 4,000 3,000 4,000 4,500 5,000 6,000 7,000 6,500 5,000 5,000 4,000
Electrici 3,000 4,000 4,000 3,000 4,000 3,000 4,000 5,000 5,000 3,000 4,600 3,000
ty
Rent 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
Tax 19,200 20,800 28,000 19,200 20,000 28,000 22,400 23,200 22,400 19,200 20,800 19,200
16%
Stock 30,000 30,000 40,000 30,000 30,000 40,000 40,000 40,000 45,000 30,000 30,000 30,000
Total 66,200 74,800 91,000 71,200 72,000 91,000 88,400 92,200 95,400 66,200 74,800 71,200
expense
Net 53,800 55,200 39,000 48,800 53,000 39,000 51,000 52,800 44,600 53,800 55,200 48,800
profit

18
5.4 PROFORMA INCOME STATEMENT FOR THE FIRST THREE YEARS

Item 2023 2024 2025

Opening stock 433,000 622,400 1,153,000
Add sales 380,000 1,305,000 1,550,000
Less purchase 70,000 335,000 315,000
Total 743,000 1,592,400 2,388,000
Gross profit 743,000 1,592,400 2,388,000
Expenses
Salary 5,000 60,000 720,000
Transport 14,000 41,000 62,000
Water 11,5000 38,000 49,000
Electricity 11,000 40,000 45,000
Rent 20,000 60,000 60,000
Total 61,500 239,000 936,000
Net profit 743,000 1,592,400 2,388,000
-61,500 -239,000 -936,000
681,500 1,353,400
1,452,000

5.5 PROFORMA BALANCE SHEET

Item 2023 2024 2025

Assets
Fixed Assets
Motor Vehicle 166,667 166,667 166,667
Equipment +19,200 +19,200 +19,200
Total 185,867 185,867 185,867

Current Assets
Stock 70,000 335,000 425,000
255,000 520,000 610,867
+ 237,000 + 311,933 +804,533
Total 493,800 832,800 1,415,400
Liabilities
Long Term Liability
Capital 433,000 622,000 1,153,000
Total 433,000 622,000 1,153,000

Current Liability
Tax +60,000 +210,400 + 262,400
Total 493,800 832,800 1,415,400

19
5.6 CALCULATING BREAK EVEN POINT

Contribution Margin = 𝑆𝑎𝑙𝑒𝑠 ×𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝐶𝑜𝑠𝑡

1,305,000

Water = 38,000

Transport = 41,000

Electricity = 40,000

Tax = 210,400

1,305,000-(38,000+40,000+41,000+210,400)

(1,305,000-329,400)

=975,600

Total fixed cost

Salary = 60,000

Rent = 60,000

(60,000+60,000)

= 120,000

975,600×100%

Contribution Margin Percentage = =74.84%

1,305,000

𝑐𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑚𝑎𝑟𝑔𝑖𝑛%

Break-even point =

𝑡𝑜𝑡𝑎𝑙 𝑓𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡

= 0.000062%

20
5.7 PROFITABILITY RATIOS

𝐺𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡 × 100

𝑆𝑎𝑙𝑒𝑠

1,592400 × 100
1,305,000

=119.02%

Net Profit Ratio

𝑁𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡 × 100

𝑁𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡 =
𝑆𝑎𝑙𝑒𝑠

= 103.71%

Return in Equity =

= 13.11%

5.8 PROPOSED CAPITALIZATION

Source Amount
Personal Saving 310,000
Parents 86,600
Friends 56,290
Loan 30,310
Total 433,000

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 APPENDICES

APPENDIX A: REFERENCES

Baracco-Miller, E (1987). Planning for Construction Unpublished MS Thesis, Dept. of Civil

Engineering, Carnegie Mellon University,

Sacerdotal, E.D. (1977). A Structure for Plans and Behaviour. Elsevier North-Holland, New

York,

Zozaya-Gorostiza, C (1988.). An Expert System for Construction Project Planning.

Unpublished PhD Dissertation, Dept. of Interior design, Carnegie Mellon University.

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