BUSINESS PLAN

NAME OF THE BUSINESS: FAITH'S POULTRY

KEEPING.

PRESENTER: FAITH CHELANGAT.

INDEX: 5401010690

INSTITUTION NAME: KAIBOI TECHNICAL TRAINING

INSTITUTE.

SUPERVISOR: MR. BOAZ OYOLA

DATE: NOVEMBER 2022.

PRESENTED TO: THE KENYA NATIONAL

EXAMINATION COUNCIL FOR THE PARTIAL

FULFILLMENT FOR THE AWARD OF DIPLOMA IN

SOCIAL WORK.

1
DECLARATION
I hereby declare that the business plan is my original work and that it has not been presented
for the award of a diploma certificate to any institution.

NAME: FAITH CHELANGAT

DATE: ………………………………

SIGNATURE: ………………………

SUPERVISOR’S NAME: MR. BOAZ AYOLA

DATE: ……………………………

SIGNATURE: ………………………..

2
DEDICATION
I would like to dedicate this plan to God who granted me good health throughout and to my
parents who gave me emotional, financial and all the necessary support I required.

3
ACKNOWLEDGEMENT
I wish to sincerely thank the almighty God for the good health He has granted on to me
during all the period of preparing this plan.

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 TABLE OF CONTENTS
DECLARATION....................................................................................................................................i
DEDICATION.......................................................................................................................................ii
ACKNOWLEDGEMENT....................................................................................................................iii
TABLE OF CONTENTS............................................................................................................................iv
EXECUTIVE SUMMARY...................................................................................................................vi
CHAPTER ONE....................................................................................................................................1
1.0. BUSINESS DESCRIPTION..............................................................................................................1
1.1. BACKGROUND OF THE OWNER..................................................................................................1
1.2. BUSINESS NAME.........................................................................................................................1
1.3. BUSINESS LOCATION AND ADDRESS...........................................................................................2
1.4 FORM OF OWNERSHIP.................................................................................................................2
1.5 TYPE OF BUSINESS.......................................................................................................................2
1.6 PRODUCTS AND SERVICES...........................................................................................................2
1.7 JUSTIFICATION OF OPPORTUNITY................................................................................................3
1.8 INDUSTRY.....................................................................................................................................3
1.9 GOALS OF THE BUSINESS.............................................................................................................3
1.10 ENTRY AND GROWTH STRATEGY...............................................................................................4
CHAPTER TWO...................................................................................................................................5
2.0 MARKETING PLAN........................................................................................................................5
2.1 CUSTOMERS.................................................................................................................................5
2.2COMPETITION...............................................................................................................................6
2.2.1 DESCRIPTION OF COMPETITION STRENGTH AND WEAKNESS....................6
2.2.2 BUSINESS COMPETITION PLAN...............................................................................6
2.5 PRICING STRATEGY......................................................................................................................7
2.7 DISTRIBUTION STRATEGY.............................................................................................................8
CHAPTER THREE...............................................................................................................................9
3.0ORGANIZATION AND MANAGEMENT PLAN..................................................................................9
3.1 ORGANIZATION CHART................................................................................................................9
3.2 STAFF QUALIFICATIONS...............................................................................................................9
3.3 OTHER PERSONNEL....................................................................................................................11
3.4 RECRUITMENT, TRAINING AND PROMOTION............................................................................11
3.5 REMUNARATIONS AND INSENTIVES..........................................................................................12
CHAPTER FOUR: PRODUCTION AND OPERATIONAL PLAN...................................................................16
4.1. PRODUCTION FACILITIES AND CAPACITY..................................................................................16
4.2 FIRM LAYOUT.............................................................................................................................17
4.3. PRODUCTION STRATEGY...........................................................................................................18

5
 4.4 PRODUCTION PROCESS..............................................................................................................18
4.5 REGULATIONS AFFECTING OPERATION.....................................................................................19
4.5.1 HEALTH REGULATION............................................................................................19
4.5.2 SAFETY........................................................................................................................19
4.5.3 ENVIRONMENT REGULATIONS.............................................................................19
CHAPTER FIVE.................................................................................................................................20
5.0 FINANCIAL PLAN........................................................................................................................20
5.1 PRE-OPERATIONAL COSTS.........................................................................................................20
5.2 WORKING CAPITAL....................................................................................................................21
5.3 CASH FLOW PROJECTION...........................................................................................................22
5.4 INCOME STATEMENTS...............................................................................................................25
APPENDICES.......................................................................................................................................ii

6
EXECUTIVE SUMMARY

Poultry farming in Kenya is probably one of the most lucrative in the world especially when
it is set up and managed properly. This aspect of livestock farming present one of the finest
opportunity for us as entrepreneurs to make good money in Kenya within the shortest time
possible due to the quick maturity of chickens. FAITH'S POULTRY KEEPING is a sole
proprietorship business which will be run and managed by myself. I will get assistance from
at least two employees who I will employ and supervise them. Being the supervisor of
business I have experience in poultry enterprise. First I was brought up in a family who
practice poultry farming though it was subsistence production. Also I have been visiting
various farms and Universities like Egerton University which is a well popular school in our
country known for agriculture. I have done several courses including entrepreneurship, small
holder business operation which equips me on skills on how to manage poultry business to be
productive and profit maximizing farm.

The important factor I consider in this business is that food is the most important basic human
need and necessity for human life. In Kenya, we have over 40 million people where you will
probably find 10 million consumers in the country who buy poultry products on daily basis.

After conducting an effective external environment evaluation in Narok County,I found that
there are very few poultry farms; poultry products are imported from other parts of Kenya.
This increases the cost of sales and transportation. Sometimes they find it difficult to meet the
consumers’ need.

Considering all these factors this makes my idea viable and feasible.The business is set to
involve the capital investment of Ksh.700,000 including the assets, expenditure and other
expenses involved.

Egg production via the process of raising poultry layers birds from point of lay (POL) for the
purpose of producing table eggs and birds using battery cage. 2,400 PLO birds, feeding and
medication of the birds and sales of eggs and spent layers produced from them in the fast one
and a half year after construction, increasing the number thereafter 1000 birds in the second
year utilizing day old chicks, 3000 capacity in the third and 6000 in the fifth. In the fast year,
at peak production, the farm should produce about 60 crates (30 eggs/crates) per day and
generate Ksh.1.5 million in revenue and about grossly Ksh 90000 as gross profit after
deduction of cost of feed on monthly basis. Spent layers would be sold at the end of one year
of lay and utilized in the purchase of replacement birds. Annual revenue could be up to 3
million shillings and profit grossly could be up to 1.2 million in the first year. At full
7
capacity, the project, housing 6,000 laying birds would generate up to 5 million shillings in
revenue and about Ksh.3 million on net profit every year. The business idea among members
came in on realization of malnutrition especially lack of proteins among members of the
society. I thought to come up with a possible solution of beginning this farm business. The
management team shall come among members who initiated this idea, I shall have three
employees. I shall have line of style to manage, plan and co-ordinate the activities of
business. It comprises of owner manager, employed staff and veterinary officer. It defines
roles and functions each of them is designed in the daily operation of business. The materials
needed for production shall include chick mash, water trough, feed trough, brooding kits,
sawdust and light. These materials shall be readily available throughout the year and required
skills shall be provided by the employees.

8
 CHAPTER ONE
1.0. BUSINESS DESCRIPTION.

1.1. BACKGROUND OF THE OWNER.

The owner of the Business is FAITH CHELANGAT twentyfive years old. In the year 2019 she
joined Kaiboi Technical Training Institute for the tertiary education undertaking a diploma
course in Social work and community development.

Her business exposure started when she was temporarily employed in a wholesale shop as a sales
man and a record keeper.

Her address is

FAITH CHELANGAT

P.O BOX 657,

KILGORIS

1.2. BUSINESS NAME

The business name is Faith's poultry keeping. The name was selected because of the existing
enterprise which was there before and doing well, employees working in the enterprise are
working hard and anybody employed here should work hard to ensure that the enterprise
maintain a good name.

1
1.3. BUSINESS LOCATION AND ADDRESS.
Feith's enterprise is located in Narok county, Bomet county,Ndamama center

1.4 FORM OF OWNERSHIP

The status of the business is categorized under commercial sector and its nature is sole
proprietorship. The main reason for sole proprietorship is that.

(1) All the profit will go to the owner.

(2) Decision making will be quick
(3) It builds confidence in the owner does exercising personal talents.

Disadvantages

(i) All the work is done by one person

(ii) Low capital when starting a business.

The purpose of the business is to provide quality goods and services to the members of public
since it gathers all their needs.

1.5 TYPE OF BUSINESS.

Feith's enterprise is a new business.

Feith'senterprise will be selling eggs to the customers and consumers especially the commercial
customers.

2
1.6 PRODUCTS AND SERVICES.
The products that Faith’s poultry keeping offers are selling of eggs which are of high quality.

The products will be packed into various packages which are attractive to consumers.

The customers will be served fairly to maintain healthy business relationship.

Services offered in faith's enterprise are durable and have a warrant services include;

a) Transportation of bulky goods.

b) Repairing of poultry houses.

The benefit resulting from the running of the business will be used in maintenance of the
business as profits of the owner, emergencies arising from the business.

1.7 JUSTIFICATION OF OPPORTUNITY.

The business is creating since at the rural areas where there business is that other business shop
buy and sell eggs but they don’t keep poultry.

The business will succeed since the owner has experience of 5 months on agricultural held.

The business will service and expand due to the following factors.

1. Good communication- good communication as the owner communicates with many people.
2. Security- the security person take care of the business
3. Competition- every enterprise will improve their products so as to have good market.
4. Good management.

1.8 INDUSTRY.
The name Faith’s is purely designed a commercial industry. The only business is mainly on
keeping of poultry chickens and selling of their products; though at the beginning the business
will be small it will gradually expand. There is a slight competition but they are depreciating
since they are experiencing management problems with the proper management of the business
and the improvement of the business services employed to the customers.

1.9 GOALS OF THE BUSINESS

The main goal is to:

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 i. To offer goods and services of quality products so that they get a reasonable number of
its customers on the business.

The other goals are:

i. To promote relationship between the suppliers themselves and the manufacturers

ii. To provide the room of the development of the firms since the profit is generated.

What to be achieved in the long term is the expansion of the business and this may take place
within a period of two years having had a lot of profits.

1.10 ENTRY AND GROWTH STRATEGY

In order for the business to expand and strategy for it to be accented by the business would:

i. Reduce the prices of products e.g. eggs so as to get more customers.

ii. Application of the loans to help in the expansion of the business
iii. Changing technologies used in advertisement and market research.

Plan to attract customers by:

(i) Improving business turn-up by making business flexible e.g. in terms of payment i.e. cash,
Hire purchase etc.

Weakness of your competition

i. Have not employ skilled personnel

ii. Have no means of transport
iii. Do not advice farmers about new system of farming

ENTRY PLAN

Strength of competition

1. Have been in a business for a long period and have a large share.
2. Most have produced large goods hence have no fear of getting into

4
 CHAPTER TWO
2.0 MARKETING PLAN

2.1 CUSTOMERS
The customers are divided into three broad categories

I. Tertiary institution customers - which are the various college, schools and hospitals
which are neighboring the Faith’s poultry keeping
II. Individual customers who buy the product for their own consumption e.g. the employees
around the faith's poultry keeping
III. Commercial customers who operate the hotel and restaurants who buy in wholesale price
and in turn resell to customers with an intention of earning profit.

Tertiary institution customers 1 5 0 , 0 0 0 e g g s

Individual customers 5 0 , 0 0 0 0 e g g s

Commercial customers 4 0 , 0 0 0 e g g s

2 4 0 , 0 0 0 e g g s

E g g @ S h . 1 0
2 4 0 , 0 0 0 * S h . 1 0 2 , 4 0 0 , 0 0 0 p e r y e a r

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2.2COMPETITION
Name of the competition S t r e n g t h s W e a k n e s s e s
Oyas poultry keeping -operates for 7 days in a week -high prices as compare to others
-famous in the region -poor relationship with others
-quality products -low production levels
olalima poultry keeping -familiar to the customers -high price of product
-quality products -poor motivation of customers
-qualified staff and personnel -not operating regularly
Feith'spoultry keeping -offer trade discounts -operated strictly 6 days in a week
-good relationship with customers -not familiar to most people
-trained staff of hygiene and because it is a new start.
sanitation

2.2.1 DESCRIPTION OF COMPETITION STRENGTH AND WEAKNESS.

2.2.2 BUSINESS COMPETITION PLAN

 The business produce high quality products to the customers

 The business would ensure steady and prompt supply of the products
 There would be fair price charged on the products
 The business would ensure constant advertisements and promotion to enable its publicity
 Expansion of more branches in other areas to reduce market area competition

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 2.3 METHODS OF PROMOTION AND ADVERTISEMENT

2.3.1 PROMOTION
 Offering of trade discounts to customers
 Offer after sales services to customers
 Offer quality products to customers
 Rewarding customers who buy regularly

2.3.2 ADVERTISEMENT
I. Faith’s poultry keeping advertises the services through:
II. Advertising posters and strategic position
III. Newspapers – this will explain the enterprise activities products and services offered and
leaflets will be circulated to the rest of the people to read

Cost of promotion and advertising activities

Advertising activity C o s t
Posters 1 0 0 0
Media 1 5 0 0
Newspapers 4 0 0 0
Field exhibition 5 0 0 0
Printing calendars 6 5 0 0

T o t a l S h . 1 8 , 0 0 0

2.5 PRICING STRATEGY

The selling price will depend on calculating the cost of raw materials till goods are ready for
sale, transport cost feeds treatment electricity and water bills

7
The price will be monitored and evaluated to determine if they are responsible for effective
management and accountability purposes.

The methods which will be used to reach many customers include

1. Use of agents which will mobilize people in towns by supplying to their premises and
collecting money after the stock is finished.
2. Direct selling to the customers at form levels.
3. Services patterns where no credit environment of credit facility be offered at a reduced
price.

2.7 DISTRIBUTION STRATEGY.

Means of transport used.

 Hired pick-up will be used to transport the products from farm to various customers
 Motorcycle and bicycles will be used.

Distribution problems

 Insecurity during transport

 Hired vehicles are expensive
 Poor communication network
 Stiff competition.

Solution to problems.

1. Police post to be erected near the poultry farm to ensure security.

2. Provision of improved and quality services meets the targeted competitors.
3. Borrowing loans to buy a pick-up to eliminate hiring cost.
4. Improvement of roads to ease transportation.

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 CHAPTER THREE
3.0ORGANIZATION AND MANAGEMENT PLAN

3.1 ORGANIZATION CHART

MANAGING DIRECTOR

Marketing manager

Finance Marketing Sales representative

Manager Manager

Security officer

3.2 STAFF QUALIFICATIONS

1. Managing director

Duties and responsibilities.

 Ensure that the business policies are implemented

 Controls the activities within the business.
 Ensures that the business goals are achieved.
 Coordinate with various department within the enterprise.
 Is the decision maker to the enterprise

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Qualifications

 A degree holder in general agriculture.

 Should be fluent in both English and Kiswahili
 Must be a computer literate
 Must be self-motivated
 Must have a work experience of at least 15 years in related field.
2. Finance manager

Duties and responsibilities.

 To receive money from customers.

 To keep daily records of transactions.
 Preparing payroll for the workers.
 Issues cash sales receipts to customers.

Qualifications.

 Should be a diploma holder in business administration with CPA 1

 Must speak in English and Kiswahili.
 At least 2 years’ experience in accounting
 Computer literate.
3. Purchasing manager

Qualifications.

 Diploma in sales and marketing

 Ability to speak in English and Kiswahili.
 Should be hardworking
 Must be 2 years’ experience.
 Age between 20-25 years.

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Duties and Responsibilities

 Advertising the products and services of the business.

 Doing promotion
 Selling the products
 Doing market research.

3.3 OTHER PERSONNEL.

T i t l e N o Qualifications D u t i e s
A c c o u n t a n t 1 B Com. CPA (K) Budgeting financial report
Repayment of salaries.
S a l e s r e p 2 K C P E ( C ) Distributing products
Diploma in sales and Sales promotion
marketing
Security officer 1 KCSE at least Premises security
Experiments

3.4 RECRUITMENT, TRAINING AND PROMOTION.

Recruitment.

Faith's poultry keeping will advertise for the vacancies using posters which will be published and
spread all over.

The letters of applicants will be sorted according to position applied for and the applicant will
then be informed to attend interview on specific date.

Interview will then be conducted basing on the specific date.

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Appointment letters will be sent to qualified interviewees indicating the reporting date who wish
to take up the jobs.

Training

Faith's poultry keeping will train its workers so that quality standards of products are maintained.

Workers should learn to become specialist in their field and attached through attending seminars,
shows and exhibition.

The management team will organize and programme days of to educate its workers using
television and videos.

The enterprise will ensure that there is enough television and video tapes that have relevant
information.

The workers will also acquire relevant skills and knowledge supply the magazines to all the
employees.

Promotion

The employees of Faith’s poultry keeping shall get promotion according to their performance of
work no according to where someone comes from or the relationship.

This is done to motivate the workers in order to continue performing well and do the best in the
field hence a positive attitude towards achieving the firms vision and mission.

They will get promotion by modifying their salaries and improving their grades to job group.

3.5 REMUNARATIONS AND INSENTIVES

Remuneration

The enterprise will pay the employees according to their duties and responsibilities,
qualifications, status and experience.

12
 E m p l o y e e s N o Monthly pay A l l o w a n c e T o t a l
Managing Director 1 3 0 , 0 0 0 1 0 , 0 0 0 4 0 , 0 0 0
Human Resource Manager 1 2 5 , 0 0 0 7 , 0 0 0 3 2 , 0 0 0
Finance Manager 1 2 5 , 0 0 0 5 , 0 0 0 3 0 , 0 0 0
Marketing Director 1 2 3 , 0 0 0 6 , 0 0 0 2 9 , 0 0 0
Procurement manager 1 2 0 , 0 0 0 3 , 0 0 0 2 3 , 0 0 0
Security office r 1 1 0 , 0 0 0 3 , 0 0 0 1 3 , 0 0 0

Incentives

The following incentives shall be provided by Faith's poultry keeping for the motivation and
steady performance of workers hence achieving high goals at the end.

The employees will be paid for entry and extra time work.

The overtime work will be paid in terms of hours.

There will be travelling allowances.

Travelling the workers and organizing seminars for them.

Serving of the breakfast between 9:30 a.m-10:00 am and a lunch from 1 p.m-2 p.m.

There will be medical services offered to employees.

Annual leaves will be given

There will be bonus for all workers.

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3.6 LICENSE, PERMITS AND BY LAWS.

3.5.1 LICENSE.

Faith's poultry keeping will be operated legally, shall obtain the operational and trade licence to
overcome interruption of the opening of the enterprise. The business acquire the operational
certificate of license itself will cost sh 1000 per month.

Purpose of trading license.

(i) To allow my enterprise trade freely.

(ii) To prove that goods and services offered are allowed.

3.5.2 PERMITS.

The enterprise will obtain a healthy permit caters for hygiene and sanitation of the business from
ministry of public health.

Trade permit will be obtained from the district which ensures operation are legal.

The electricity permit will be obtained from the Kenya power and lightening company limited.

Water permits from the ministry of water.

3.6.3 BY LAWS.

Faith’s enterprise work with the laws governed by the municipal council

Municipal council laws are;

(i) All items should be sold at a normal prices (no increasing or decreasing of the price)
(ii) Expired items should not be sold.
(iii) All items should be confirmed by KEBS.

The main reason why the business should comply with the by-laws are;

To maintain the business products.

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3.7 SUPPORT SERVICES.

The business will require support services to enable it to carry out its operational effectively.

3.7.1 BANKING SERVICES.

The enterprises open up an account from Kenya commercial bank in Eldoret town.

The purpose of the account is to;

(i) Ensure safe keeping of the business cash

(ii) To pay all the employees.

3.7.2 INSURANCE SERVICES.

The firm which will insure the Faith’s poultry keeping will be multipurpose insurance company.

The enterprise shall be insured against theft and fire risk.

The cost of insurance will cost sh 100,000.

3.7.3CONSULTING SERVICE.

The consulting services offered for Faith’s enterprise will be offered by the business offering
related services.

The kind of advice expected at Faith's’s enterprise will be either increasing or reduction of price
of goods and service offered.

3.7.4 LEGAL SERVICES.

The enterprise will obtain factory act which will contain all the precaution in the business.

A lawyer will be required to secure the business against any issues and inconvenient by the
government.

15
 CHAPTER FOUR: PRODUCTION AND OPERATIONAL PLAN
4.1. PRODUCTION FACILITIES AND CAPACITY.
Faith's poultry keeping will require a number of facilities which will enable it to operate
comfortably

F a c i l i t y Q u a l i t y C o s t S o u r c e Mode of payment
Piece of land ¼ h a c 1 0 0 , 0 0 0 Buying by the owne r C a s h
Feeding through 3 2 , 0 0 0 K e n c h i c k C a s h
Water through 3 2 , 5 0 0 K e n c h i k C a s h
I n c u b a t o r 2 6 , 0 0 0 K e n c h i k C a s h
Water tank 2 2 9 , 0 0 0 Kentank –Eldoret C r e d i t
Electricity 2 p h a s e 2 8 0 K P L C C a s h
Pick up vehicle 1 850,000 Y a s m i n m o t o r s C r e d i t
F e e d s 5 0 K g 2 , 4 0 0 K e n c h i k C a s h
T o t a l s 9 8 3 , 1 8 0

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4.2 FIRM LAYOUT.

ABCDE
STAFF QUARTERS

DRINKING/FEEDING TROUGH

CASHIER
MANAGERS OFFICE
OFFICE

ASSISTANT SALES MAN

MANAGERS OFFICE OFFICE

RESERVED
PARKING LOT

NON- RESERVED
PARKING LOT

LADIES GENTS WASH SECURITY

STORE
WASH ROOMS GATE GUARD SHADE
ROOMS

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4.3. PRODUCTION STRATEGY.

Cost monthly

M a t e r i a l s Q u a l i t y Amount per unit Total amount

C h i c k s 6 0 0 3 0 1 8 , 0 0 0
F e e d s 5 0 1 0 0 5 , 0 0 0
V a c c i n e s 1 , 2 0 0
T r a n s p o r t 2 5 0 l t r s 2 , 2 0 0
L a b o u r 2 0 , 0 0
T o t a l s 6 6 , 2 0 0

4.4 PRODUCTION PROCESS

For Faith’s poultry keeping to obtain goods and services effectively and efficiently. It will
involves steps in which the products will reach the customers hence the goods shall be of high
quality to satisfy the customers’ requirements.

FEEDING OF LAYERS

a. A well balanced feed is necessary at an early stage of growth to sustain fast growth rate.
b. The chicks are fed with chick starter feed or chick mash at the rate of 30 g per chick per
day up to the age of 8weeks.
c. Birds aged between 9 to 20 weeks are fed on growers mash to ensure that they are
healthy and strong by the time they begin laying.
d. Provide adequate layers mash when the birds begin to lay at the rate of 120g per bird per
day
e. Ensure the birds have enough calcium by feeding them with oyster shells and limestone
f. Feed the birds with the grit to help in digestion.
g. Feeds the birds with green vegetables to supply them with vitamins
h. Spread grains on the litter to avoid cannibalism by keeping the birds busy scratching.
i. Provide the birds with clean water at all times.
j. Provide adequate feeders and waterers.

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Natural brooding
In natural brooding the hen is allowed to stay with the chicks and provides warmth until the
chicks are old enough to protect and dent for themselves. Water and feed are provided to the
hen and chicks. Natural brooding is cheap but uneconomical.

DISEASES CONTROL

There must be regular vaccination against Newcastle and fowl typhoid.

Checking birds of symptoms of diseases regularly isolation and treatment of birds booster
vaccine of NCD6 at 20 weeks, vaccination against form pox at 18 weeks
There should be regular drenching and dusting, proper disposal of dead chicken.

4.5 REGULATIONS AFFECTING OPERATION

4.5.1 HEALTH REGULATION
All the employees at Faith’s poultry keeping should confirm their health status at a nearby
center.

4.5.2 SAFETY
Faith's poultry keeping safeguards his employees against physical injuries by providing them
with mask, boosts, jackets, helmets and gloves.

4.5.3 ENVIRONMENT REGULATIONS.

Faith's poultry keeping workers will ensure the environment looks beauty by maintaining
hygiene, planting of beautiful flowers and trees.

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 CHAPTER FIVE
5.0 FINANCIAL PLAN

5.1 PRE-OPERATIONAL COSTS

I T E M C O S T ( K S H )
P U R C H A S E S 8 0 , 0 0 0
R E N T 5 0 0 0
ELECTRICITY BILL 7 0 0 0
W A T E R B I L L 3 0 0 0
MACHINERY AND EQUIPMENTS 1 5 0 0 0 0
I N N O V A T I O N 3 0 0 0 0
LICENSE AND PERMITS 5 0 0 0
REPAIR AND MAINTENANCE 4 0 0 0
I N S U R A N C E 5 0 0 0
S E C U R I T Y 9 0 0 0
TRANSPORT AND FUEL 3 0 0 0
ADVERTISEMENT 4 0 0 0
P O S T A G E B I L L 8 0 0
MISCELLANEOUS 6 0 0 0
S A L A R Y 7 5 , 0 0 0
T O T A L 3 8 6 , 8 0 0

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5.2 WORKING CAPITAL
Current assets
Cash at hand 500,000
Cash at bank 400,000
Stock 200000
Debtors 90,000
Total 1190000
Current liability
Creditors 200,000
Loans 500,000
Total 700,000
W.C 119000– 700,000 = 490000

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5.3 CASH FLOW PROJECTION
Year 1
PARTICULARS J A N F E B M A R A P R M A Y J U N E J U L Y A U G S E P T O C T N O V D E C TOTAL
Cash inflow
Balance cash brought down 3210100 5535300 7810500 10145700 12540900 14996100 17511300 20086500 22721700 25436900 28192100 168187100

Cash at 2200000 22200000 2240000 2260000 2280000 2300000 2320000 2340000 2360000 2380000 2400000 2420000 2772000 0
hand
L o a n 1000000 - - - - - - - - - - - 1000000
S a l e s - 5 2 0 0 0 54000 5 6 0 0 0 5 8 0 0 0 6 0 0 0 0 6 2 0 0 0 6 4 0 0 0 6 6 0 0 0 6 8 0 0 0 7 0 0 0 0 7 2 0 0 0 682000
C re di t ors 100000 140000 180000 220000 260000 300000 340000 380000 420000 460000 500000 540000 3840000
Total inflow 3300000 5622100 8009300 10346500 12743700 15200900 17718100 20295300 22932500 25649700 28406900 31224100 201449100

Cash
outflow
P u r c h a s e 50000 5 2 0 0 0 54000 5 6 0 0 0 5 8 0 0 0 6 0 0 0 0 6 2 0 0 0 6 4 0 0 0 6 6 0 0 0 6 8 0 0 0 7 0 0 0 0 7 2 0 0 0 732000
s
L i c e n s 8 0 0 - - - - - - - - - - - 8 0 0
e
Installation expenses 2 0 0 0 - - - - - - - - - - - 2 0 0 0
Salaries and 12000 1 2 0 0 0 12000 1 2 0 0 0 1 2 0 0 0 1 2 0 0 0 1 2 0 0 0 1 2 0 0 0 1 2 0 0 0 1 2 0 0 0 1 2 0 0 0 1 2 0 0 0 144000
wages
Insurance cover 2 0 0 0 - - - - - - - - - - - 2 0 0 0
Cash 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 6 0 0
books
Ledger book 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 6 0 0 0
Electricity bill s 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 4 0 0 0
R e n 20000 2 0 0 0 0 20000 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 240000
t
p e r m i t 3 0 0 - - - - - - - - - - - 3 0 0
Total 89900 8 6 8 0 0 88800 9 0 8 0 0 9 2 8 0 0 9 4 8 0 0 9 6 8 0 0 9 8 8 0 0 100800 102800 104800 106800 1154700
outflow

Loan amount - - 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 1000000
payable
Interest on loa n - - 10000 1 0 0 0 0 1 0 0 0 0 1 0 0 0 0 1 0 0 0 0 1 0 0 0 0 1 0 0 0 0 1 0 0 0 0 1 0 0 0 0 1 0 0 0 0 100000

Reconciliation cost 3210100 5535300 7810500 10145700 12540900 14996100 17511300 20086500 22721700 25436900 28192100 31007300 199194400

22
YEAR 2
PARTICULARS J A N F E B M A R A P R M A Y J U N E J U L Y A U G S E P T O C T N O V D E C TOTAL
Cash inflow
Balance cash brought down 31007300 33879600 36921500 40023400 43185300 46407200 49689100 53031000 56432900 59894800 63416700 66998600 580887400
Cash at hand 241000 0 246000 0 248000 0 250000 0 2520000 2540000 2560000 2580000 2600000 2620000 2640000 2660000 30600000
S a l e s - 7 6 0 0 0 7 8 0 0 0 8 0 0 0 0 8 2 0 0 0 8 4 0 0 0 8 6 0 0 0 8 8 0 0 0 9 0 0 0 0 9 2 0 0 0 9 4 0 0 0 9 6 0 0 0 946000
Creditors 580000 620000 660000 700000 740000 780000 820000 860000 900000 940000 980000 1020000 9600000
Total inflow 33997300 37035600 40139500 43303400 46527300 49811200 53155100 5655900 60022900 63546800 67130700 70774600 622003400

Cash
outflow
P u r c h a s e s 7 4 0 0 0 7 6 0 0 0 7 8 0 0 0 8 0 0 0 0 8 2 0 0 0 8 4 0 0 0 8 6 0 0 0 8 8 0 0 0 9 0 0 0 0 9 2 0 0 0 9 4 0 0 0 9 6 0 0 0 1020000
L i c e n s 8 0 0 - - - - - - - - - - - 8 0 0
e
Installation expenses 2 0 0 0 - - - - - - - - - - - 2 0 0 0
Salaries and wages 1 5 0 0 0 1 5 0 0 0 1 5 0 0 0 1 5 0 0 0 1 5 0 0 0 1 5 0 0 0 1 5 0 0 0 1 5 0 0 0 1 5 0 0 0 1 5 0 0 0 1 5 0 0 0 1 5 0 0 0 1 8000 0
Insurance cover 2 0 0 0 - - - - - - - - - - - 2 0 0 0
Cash books 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 0 0 3 6 0 0
Ledger book 8 0 0 8 0 0 8 0 0 8 0 0 8 0 0 8 0 0 8 0 0 8 0 0 8 0 0 8 0 0 8 0 0 8 0 0 9 6 0 0
Electricity bills 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 4 0 0 0
R e n 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 0 0 0 0 2 4000 0
t
p e r m i 8 0 0 - - - - - - - - - - - 8 0 0
t
Total outflow 117700 114100 116100 118100 120100 122100 124100 126100 128100 130100 132100 134100 1482800

Loan amount payable - - - - - - - - - - - - -

Interest on loan - - - - - - - - - - - - -

Reconciliation cost 33879600 36921500 40023400 43125300 46407200 49689100 53031000 56432100 59894800 63416700 66998600 70640500 620520600

23
Year 3
PARTICULAR J A N F E B M A R A P R M A Y J U N E J U L Y A U G S E P T O C T N O V D E C TOTAL
S
Cash inflow
Balance cash brought down 70640500 74323400 78072900 81882400 85751900 89681400 93670900 97720400 101829900 105999400 1059994000 110228900 1104320400
Cash at hand 2680000 2700000 2720000 2740000 2760000 2780000 2800000 2820000 2840000 2860000 2880000 2900000 33480000
S a l e s 100000 102000 104000 106000 108000 110000 112000 114000 116000 118000 120000 122000 1332000
Creditors 1060000 1100000 1140000 1180000 1220000 1260000 1300000 1340000 1380000 1420000 114688900 119040400 1154492400
Total inflow 74480500 78225400 82036900 25908400 89839900 93831400 97882900 101994400 106165900 110397400 114688900 119040400 1154492400

Cash outflow
Purchase s 9 800 0 100000 102000 104000 106000 108000 110000 112000 114000 116000 118000 120000 1308000
L i c e n s e 8 0 0 - - - - - - - - - - - 8 0 0
Installation expenses 3 0 0 0 - - - - - - - - - - - 3 0 0 0
Salaries and wages 1 900 0 19000 19000 19000 19000 19000 19000 1 9 0 0 0 1 9 0 0 0 1 9 0 0 0 1 9 0 0 0 1 9 0 0 0 228000
Insurance cover 2 0 0 0 - - - - - - - - - - - 2 0 0 0
Cash 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 5 0 0 6 0 0 0
books
Ledger book 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 0 0 0 1 2 0 0 0
Electricity bills 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 0 0 0 2 4 0 0 0
R e n 30000 30000 30000 30000 30000 30000 30000 3 0 0 0 0 3 0 0 0 0 3 0 0 0 0 3 0 0 0 0 3 0 0 0 0 360000
t
p e r m i 8 0 0 - - - - - - - - - - - 8 0 0
t
Total 157100 152500 154500 156500 158500 160500 162500 164500 166500 168500 170500 172500 1944600
outflow

Loan amount payable - - - - - - - - - - - - -

Interest on loan - - - - - - - - - - - - -

Reconciliation cost 74323400 78072900 81882400 85751900 89681400 93670900 97720400 101829900 105999400 110228400 114518400 118867900 1152547800

24
5.4 INCOME STATEMENTS
YEAR 1
SALES 940,000
LESS PURCHASE - 93,000
GROSS PROFIT 847,000

LIST EXPENSES
PURCHASES 93,000
LINCENCE 30,000
ELECTRICITY 29,200
WATER 29,100
COMMUNICATION 32,000
RENT 120,000
TRANSPORT 34,700
TOTALS 588,300

NET PROFIT 1,435,300

3% TAX 43,059
NET PROFIT AFTER TAX 1,392,241

25
 YEAR 2
SALES 2,540,000
LESS PURCHASE 184,000
GROSS PROFIT 2,356,000

EXPENSES
RAW MATERIALS 184,000
LICENCE AND PERMITS 15,000
ELECTRICITY 29,200
WATER 29,100
COMMUNICATION 32,300
TRANSPORT 34,700
RENT 120,000
TOTALS 444,300

NET PROFITS 2,800,300

LESS 3% TAX 84,009
NET PROFITS AFTER TAX 2,716,291

26
YEAR 3
SALES 4,000,000
PURCHASE 376,000
GROSS PROFIT 3,816,000
EXPENSES
LICENSING AND PERMITS 1,500
ELECTRICITY 29,200
WATER 29,100
COMMUNICATION 32,300
TRANSPORT 34,700
RENT 120,000
RAW MATERIALS 376,000
TOTALS 636,300

NET PROFITS 4,452,300

3% TAX 133,569
NET PROFIT AFTER TAX 4,318, 731

27
5.7.5 OPERATING EXPENCES
Bank loan 500000
Friends and family 400000
Savings 800000

Total 2200000

28
 APPENDICES.
BUSINESS LOCATION MAP.

ELDORET 28KM TURBO 15 KM KAPSABET

FAITH'S

POULTRY
KEEPING

29