BUSINESS PLAN

TUMAINI COLLECTION ENTERPRISE

PRESENTED BY : ESTHER NEKESA

INDEX NO : 5741030021

COURSE NAME
: FASHION DESIGN AND GARMENT
MAKING TECHNOLOGY

COURSE CODE : 1801

CENTRE NAME

:KIMININI TECHNICAL AND VOCATIONAL COLLEGE

NAME OF SUPERVISOR : MADAM MILDRED DWEYIRA

: KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL

FULLFILMENT AWARD OF CERTIFICATE IN CRAFT IN FASHION
AND DESIGN.
 EXAM SERIES: NOVEMBER SERIES 2024

Table of Contents
Declaration........................................................................................................................................................... 4
Dedication............................................................................................................................................................ 5
Acknowledgment................................................................................................................................................. 6
CHAPTER 1........................................................................................................................................................ 7
BUSINESS DESCRIPTION...............................................................................................................................7
1.1Business Name....................................................................................................................................................7
1:2 Business locations............................................................................................................................................. 7
1:3 The business background..................................................................................................................................7
1:4 Capital acquisitions...........................................................................................................................................8
1:5 Business ownership...........................................................................................................................................8
1:6 Business vision and mission ON OF THE BUSINESS...................................................................................8
1.6.0Vision of the business......................................................................................................................................8
1.6.1 MISSION OF THE BUSINESS....................................................................................................................9
1:7 BUSINESS GOALS..........................................................................................................................................9
1.7.0. SHORT TERM GOALS................................................................................................................................9
1.7.1LONG TERM GOALS...................................................................................................................................9
1.9 Business entry and Growth strategy...............................................................................................................10
CHAPTER 2...................................................................................................................................................... 11
2.0 Summary of the chapter..............................................................................................................................11
2.1 Customers.....................................................................................................................................................11
2.1.0 Major Customers......................................................................................................................................11
2.1.1 Minor Costumers......................................................................................................................................11
2.1.2 Economic power.......................................................................................................................................11
2.2 Competitors..................................................................................................................................................11
2.2.0 Major competitors....................................................................................................................................11
2.3 Market shares...............................................................................................................................................12
2.4 Swot..............................................................................................................................................................12
2.5 Advertisement and Promotion.....................................................................................................................13
Promotion...........................................................................................................................................................13
2.6 Pricing and pricing strategy........................................................................................................................13
CHAPTER 3...................................................................................................................................................... 14
ORGANISATION AND MANAGEMENT PLAN.........................................................................................14
3.0. Summary.....................................................................................................................................................14
3.2.3 Other include.............................................................................................................................................16
3.4 Recruitment training and promotion...........................................................................................................18
3.4.1 Recruitment...............................................................................................................................................18
 3.4.2 Training.....................................................................................................................................................19
3.5 Legal Requirement......................................................................................................................................19
3.6 Support Service............................................................................................................................................19
CHAPTER 4...................................................................................................................................................... 20
OPERATION AND PRODUCTION PLAN....................................................................................................20
3.1 Organization Structure (hierarchy).................................................................................................................20
4.2 Production Facilities and capacity..............................................................................................................21
4.3 production and Operation strategy..............................................................................................................22
4.3.1 Production Strategy..................................................................................................................................22
CHAPTER 5...................................................................................................................................................... 23
FINANCIAL PLAN..........................................................................................................................................23
5.0 Summary......................................................................................................................................................23
5.2 Working Capital...........................................................................................................................................24
5.3. Projected Cash Flow...................................................................................................................................25
5.3 CASH FLOW PROJECTION FOR THE YEAR 2023.............................................................................25
5.4 CASH FLOW PROJECTION FOR THE YEAR 2024.............................................................................27
5.7 Proforma Balance Sheet..............................................................................................................................30
5.7.1 Proforma Balance Sheet for year 1..........................................................................................................30
Appendix............................................................................................................................................................ 31
Appendix 1. Work plan......................................................................................................................................31
Appendix II Budget...........................................................................................................................................32
Declaration
I ESTHER NEKESA do declare that this is my original work, it has never been submitted to any
Examining Body for award of any certificate.

NAME; ESTHER NEKESA DATE……………………………….

SIGNATURE…………............................

SUPERVISOR’S NAME : MADAM MILDRED NDIEYIRA

SIGNATURE………………………………………………………………
DATE: ………………………………………………….
Dedication
High dedication to my family members, friend and my school mates for the support and good heart
they show towards my business. Much of all i give thanks to God for blessing the work of my hand.
Acknowledgment
My acknowledgment first and foremost goes to God for His gift of life, love and kindness I wouldn't
have made it for this far. My acknowledgment also goes to Mrs. Mildred for her guidance during this
time on writing my business plan and also my family members, friends for their support.
 EXECUTIVE SUMMARY

BUSINESS DESCRIPTION.
The proposed business will be owned by ESTHER NEKESA a student in FASHION AND
DESIGN at KIMININI TECHNICAL AND VOCATIONAL COLLEGE. It consists of;
background of ownership, type of business, products and services, justification of
opportunity, industry, goals of business entry and growth strategy .The business will
be located at ENDEBESS CONSTITUENCY,MOWLEM CENTER where there is availability
of churches and schools to facilitate the business products for sell. The business will
be offering church choir uniforms and school uniforms for learners in affordable price.

MARKET PLAN
The business will be providing a variety of uniforms for learning institutions in that, the
owner of the business will be able to sale her products with ease. There will be also
printing of school budges hence the owner of the business will be gaining profits on both
making and printing. The owner will also offer a discount on purchases like free ironing,
repairing of clothes in order to attract customers. The business is subjected with three
competitors as; Hill boutique, sky limit design and lions fashion. The weakness of
competitors is that they over-price their products and also limited to only few products.
The owner of the business will come up with several strategies to gain competitive
edge against each competitor. This is by working on competitors’ weakness.

ORGANISATION AND MANAGEMENT PLAN

The management duties and responsibilities of the business is that the entrepreneur will
come up with various policies for the staffs. The manager will be responsible for
estimation of qualities cost, sales, financial constraints, capital, expenditures, profit and
loss. The business owner will require twelve employees in total to work with.
They include; manager, financial manager, tailors, security guards and casual labourers.
The business will be advertising in case of any vacant position and an interview will be
conducted where by successful candidate will be picked. The owner will be motivating
the employees through providing tea and bread during morning hours. Since the business
is a sole proprietorship, she will only require a license from government; this will serve
the business to operate lawfully. She intends to apply for health certificate and NEMA
authorization in order to cater for the health of the workers.
PRODUCTION AND OPERATION PLAN
Production of goods and services will be necessary for the owner
to come up with an appropriate production planning. The
manager will ensure that the facilities are in good condition, well
maintained and better services will be offered to customers. The
business owner will ensure that he comes up with a production
method.

FINANCIAL PLAN
The owner of the business will prepare the financial statements
during the business operations. The owner will have books of
accounts that will show the profits and losses made in the business.
The manager who is the owner of the business will incur some costs
which are paid such electricity, water, license, furniture,
advertisement and promotions and equipment’s. The fixed assets
are expected to last for long periods of time e.g. equipment’s and
machines. The working capital of the business will be the current
assets minus the current liabilities. The business will have financial
statements that will show cash in and out of the business. An
entrepreneur will be preparing an income statement annually. The
business is expected to be profitable enough cost and to be able to
cover the operating cost and leave the manager with a satisfactory
amount. The total cost for starting will be Ksh 1000,000. The
expected projected profit will be Ksh 80000 in the business.

BUSSINESS GOALS

These goals will be achieved through short-term goals and long-term goals. These goals includes;

-Increasing profit margin

-Decreasing production cost
-Increasing customers/clients
-Improving customer’s satisfaction with the product/ service

BUSINESS ENTRY AND GROWTH STRATEGY

The advertisement and shows will be organized to ensure that people are aware
of the business and also as the owner of the business I will observe proper
relations with customers and good communication skills so as to ensure that the
business runs smoothly.
CUSTOMERS
The business will comprise of major and minor customers.

Minor customers will be; wholesalers, small business and people surrounding
area. Major customers will be; schools whereby it will be easier to supply
school uniforms.
CHAPTER ONE
BUSSINESS DESCRIPTION 1.0 Introduction this chapter will deal with; business
name, business location, the owner’s background, capital acquisition, business
vision and mission, business goals, justification of the business, business entry and
cloth strategy. ownership, business vision and mission, business goals, justification
of the business and business entry and cloth strategy.

1.1 BUSINESS NAME

The name of the business will be called TUMAINI COLLECTION ENTREPRISE .As the
name suggests the business will be hopefully successful. The name ‘TUMAINI’ is
derived from Swahili word meaning ‘expectation of something’ This means that
the business will be successful if well managed under controlled manner.
TUMAINI COLLECTION ENTREPRISE will be offering variety of fashions is short-
leaved and also provision of accessories that is item added in addition to the basic
outfit of cloth in order to enhance beauty such as belts, bangles, scarfs bags and
many others.

1.2 BUSINESS LOCATION

The business will be located along Endebess-Mowlem road Endebess Constituency, Matisi street,
Kitale town. In that the business will be located around Mowlem area, there is a short distance in
between to the border of Kenya-Uganda hence to get materials or fabrics will be unique through
production of ‘vitenge’ from Uganda fabrics. The business will offer services to customers because
purchasing of dyes and inks will be available. There must be also popular features around the place to
facilitate the productivity and services offered. Such features includes constructed buildings such as;
churches,schools, hospitals and warehouse. .
1:3 Capital acquisitions
The business shall be started with a capital of Ksh 1,000,000 which shall be
raised as follow:
Source of capital Amount

Savings 500000

Family contributions 300000

Fiends and donations 100000

Loans 100000

TOTAL 1,000,000

1:4 FORM OF BUSINESS OWNERSHIP

The business is owned by solely. It’s a sole proprietor. The type is chosen due to
the following advantage, one is that the decision making is easy, Two is that the
profit is enjoyed by the owners herself or himself, Thirdly is that the supervision is
closed and lastly is that the owners is boss by himself or herself. The business will
operate under sole proprietorship though there will be hired assistants who can
assist the owner to carry out other operations and also serve customers with
respect of time. The owner will operate the business under her control and enjoys
the profit. Whenever loss occurs, the owner must find solutions to recover the
wasted resources for better expanding of the business.

1.5 OWNERS BACKGROUND

The owner will be Esther Nekesa aged 23 years. Her academic qualifications
indicates that the owner joined standard one in the year 2007 at Yuyaa primary
school, Maili Nane –Cheranganyi. She enrolled upto standard six then transferred
to a private school due to change in the environment. In the year 2016, she sat for
her Kenya Certificate of Primary Education and scored 290 marks. She later joined
S’t Marry’s Sossio Girls’ High school for secondary level and sat for K.C.S.E in
the year 2021 whereby she attained a mini-grade of enrollement to Kiminini
Technical and Vocational College. Before joining Kiminini T.V.C, she decided to
move to the urban centre to look for a skill from there and hence decided to join
Kiminini T.V.C for knowledge and skills in Fashion and Design.

1.6 Business vision and mission

The vision is to be an honest , empathetic and impactful project leader and to be

recognized internationally within my industry. I am committed to growing as
leader and delivery value which will favor people in the business.

MISSION OF THE BUSINESS

The entrepreneur intended to make enough profit to generate a fair return for our
investors a

nd to finance continued growth and development in quality products. We also

maintain a friendly, fair and creative work environment which is condussive

Business Goals

The entrepreneur will have both short-term and long-term goals for the existence
of the business as the achievement to the owner and the entire society that the
business is operating in.

-SHORT-TERM GOALS

These are aims that the business will achieve in a period of less than a year. These
short-term goals also will be used to give the business a sense of direction and
purpose, as well as to motivate the team members as it is easier to achieve than
long-term goals. This term serves as an important goal in that, it provides a sence
of completion and achievement which motivates the workforce to move on to the
next goal. The business will operate near schools so that it will identify all it’s
competitors to improve customer services and productivity.

It includes;
-increasing profit margin
-decreasing production cost
-increasing customers or clients through affordable price
-improving customer’s satisfaction
-offering products and services to customers

-LONG-TERM GOALS

The proposed business in the next two years will invest a huge saving investment
in terms of growth. The business intend to put financing source like helping the
poor and the need. It will also intend to expand to a fashion technology platform
and also plans to grow and expand the business into new opportunities owners
personal wealth.
They are considered intermediate steps that will lead to ultimate goals.
These may include; expanding the business by enlarging into an industry and also
providing a good working environment for better production.

1.8 JUSTIFICATION OF THE BUSINESS

Through research the proprietor decided to start the business to satisfy the
peoples’ need and the availability of ready market due to high demand as they
buy fashionable and durable clothes for themselves at a cheap and affordable
price for them. The business also attracts people due to enough knowledge and
skills towards the business success.

1.9 BUSINESS ENTRY AND GROWTH STRATEGY

The business owner will offer free service in the starting day to the available
customers of the day . The advertisement and shows will be organized to ensure
that people are aware of the business. There will be also free sample to the people
and free delivery for heavy and bulky goods. To ensure smooth running of the
business, the owner will ensure that she uses the right language and make good
relationship among customers.

1.9.1 TYPE OF BUSINESS

The proposed business will be offering high quality products which includes;

-school uniforms
-church uniforms
-men’s wear
-ladies wear
-children’s wear
-maternaty wear
-ready-made clothes

Garments produced will be fashionable depending with trending designs.

The business will also offer the following services to clients;

-Fabric decoration which is applying embloidery stitches on garments.

Fabric colouration which will be tye/dye and printing.

There will be enough dyes for dyeing fabrics and also a small-dark room for
exposing screens be used in printing.

1.9.2 PRODUCTS AND SERVICES

The business will provide high quality products to satisfy the client’s need. In
addition , it will offer services to customers.

Products offered will include;

-Wemen’s wear
-Men’s wear
-Children’s wear

Services will include;

-printing which is one of fabric colouration
-dyeing of plain fabrics
-use of embloidery stitches on plain fabrics

Products will be produced in a high demand with good quality hence it will be durable in that the wearer
may wear a garment for a long period of time. Services will be offered regulary to satisfy customer’s need
in that it will be able to attract many customers and also the demand of service will be highly available.
Many will be able to access fabric colouration with ease when needed such as printing of school budges.
The business will be registered so that the owner may be able to acquire a licence for the business to run
smoothly without disturbsnces.
CHAPTER

2.0 Summary of the chapter

In this chapter the entrepreneur will deal with; the customers, the competitors,

market share, advertisement and promotion and pricing strategy.

MARKETING PLAN
2.1 Customers
TUMAINI COLLECTION ENTREPRICE will intend to establish regular customers in
provisions of the targeted products.

The business will comprise two types of customers namely; major and minor.

2.1.0 Major Customers.

The customers will be institution, where will have tender to supply school
uniform. The institution s located 100 meters away from the business location.
The owners intend to approach the nearby institution in the in the area to market
its products.

Learning institutions around business location includes; Endebess primary and

secondary school, Andersan Boys and Girls, Kilimani academy and Zabwani
secondary school.

The business offer uniforms for such schools in affordable price and printing of
school budges.

2.1.1 Minor customers

Minor customers will be those from the surrounding business location like
hospitals which includes Endebess Sub-county Hospital for provision of
maternanaty wear and lab coats for nurses.

The minor customers to be targeted also will be wholesalers, retailers and small
business and people in the surrounding areas.

2.1.2 Economic power

The customers are mainly depending on their farm products to buy their good in
the market. Few are monthly paid hence facilitating business growth and
expansion.
2.1.3 Purchasing patterns
The purchasing patterns are regular as any new fashion coming in people tend to
be interested with hence capable for purchasing different kinds of fashion.

2.2 Competitors
Due to improved technology for garment construction, the market is very competitive. The researcher
established that most that many competitors are from same location.

There are usually two types of competitors in a given business. They include major and minor
competitors.

2.2.0 Major competitors

The entrepreneur will have to face stiff competition from nearby business. The
business includes
Sky limit design
Hill boutique
Lions fashion design

THEIR GEOGRAPHYCAL LOCATION

West

Sky limit design

 Lions fashion design
2.3 Market shares

The share will be distributed evenly in the market hence high demand for the share.
There are several market shares within the business. These includes;

TOTAL MARKET

Name of Business share in percentage Real shares

Hill boutique 32 15,000

Sky limit 20 9,000
design
Lillian’s limit 20 9000
design
Lion fashion 28 8000
Total 100% 41,000
2.4 Swot Analysis

Name of Strength Weakness Opportuni Trends

the ties
competito
rs
Margaret Already Poor time Own the No mean
boutique well managem premise of
establishe ent transport
d
Sky Good Not having It has it Good
workers enough own mean beer to
limit good of customer
design transport s
Lillian’s Good No Well No
limit pricing motivation establishe
design of workers d mean of
transport
Lions Well Poorly It Good
fashion establishe located beer to
d owns the customer
premise s
2.5 Advertisement and Promotion
The entrepreneur uses the following to advertise and promote her business.
Method of Frequency Charges Total
advertisement
Road show 2 5000 10,000
Poster 1 3000 3000
Radio 3 10,000 30,000
Television 3 20,000 60,000
Total 103,000
Promotion
The entrepreneur will use free samples and free gift to promote their products.
There will help hero market her products in a wide range.
It will also lead to high purchase of product and thus generating more profit.

2.6 Pricing and pricing strategy

The raw materials needed in the factory include;
Raw materials + labour + percentage profit
250000+80000+80%
Raw materials 250,000
Labour. 80,000
Percentage profit 80%
CHAPTER 3

ORGANISATION AND MANAGEMENT PLAN

3.0. Summary
In this chapter the entrepreneur will deal with the following; the organization
structure, management team, remuneration and incentives, recruitment training
and promotion, legal requirement, support service and factors affecting the
operation of the business

3.1 Organization structure

The organization shows the flow of authority and responsibilities of each
employee in the organization. The organization structure of the business at the
start of its operation will be as follows

MANAGER

FINANCIAL MANAGER

TAILORS

SECURITY GUARDSS

CASUAL LABOUR
 MANAGER

ANAGER

ACCOUNT CLERK
COMPUTER
OPERATOR
SECURITY OFFICER

CLEANER

3.2 Management and production team

3.2.1 The manager

The proposed business will be owned by the help of the supervisor. The manager
is the owner of the business and the director of the business. She also control the
business and make decision for the business and discuss issues with the rest of the
organization. She solves the cases that may arise in the business

Qualification
1. Must be two years of experiences.
2. Must have a national id card.
3. Must be honest
4. Must be at least 25 years and above

Duties and responsibilities

1. Be responsible for planning for the business and ensure plans are
implemented.
2. Be responsible for coordinating of all resources and channeling them into
production.
3. Be in charge of ensuring adequate staff is provided and necessary training
given to them.
4. Ensure that the set standard is attained.
 Salary
He will be having a monthly salary of 55,000

3.2.2 Supervisor
Qualification
1. Must undergo management courses
2. Must be at least three years of experience
3. Should be a person of high integrity
4. Should be of between 25 and above of age. Duties and
responsibilities
1. Will be coordinating all the activities in the business in absence of
the manager.
2. Supervising the work of the employees
3. Reporting to the manager concerning the daily duties of the
business
4. Advice the manager in decision making
5. Analyses the progress of the business

Salary
She will be having a monthly salary of 45,000

3.2.3 Other include

Account clerk Qualification
1. Must have one year of experience
2. Should be honest and creative

Duties and responsibilities

1. Maintain date record in the business
2. Processing of payroll and payment of workers 3. Preparing and
balancing of books of accounts
4. Preparing of final accounts.

Salary
She will be having a monthly salary of 20,000

Computer operator
Qualification
1. Have a certificate in computer study
2. At least two years of experiences
3. Should be creative and innovative 4. Should be at least 20 year and above.

Duties and responsibilities

1. Keeping the business data in computer
2. Will be operating the business and reproduction of documents

Salary
He will be having a monthly salary of 15,000

Photocopy Qualification
1.Should be of 20 year and above
2.Three Year of experience
3.Should be honest

Duties and responsibilities

1. Assist the operator
2. Operation of copies and printers
Salary
She will be having a monthly salary of 7000

Security officer Qualification

1. Must be at least three years of experiences
2. Must be above 25 years
Duties and responsibilities
1. Providing the overall security to the firm and the assets
2. Checking both outgoing and incoming visitors
3. Taking names of the visitors entering the business
Salary
He will be having a monthly salary of 25,000
Cleaner Qualification
1Must be at least 20 years and above
Duties and responsibilities
1. To ensure that the working environment is clear
2. Ensure that there is no dust in the surrounding business
Salary
He will be having a monthly salary of 12000
 3.3 Remuneration and Incentive
The entrepreneur will remunerate her employees depending on parts of the job
done. They will earn their salaries according to their duties.
There will be allowance for free medical, free transport and houses to Host
themselves.
Position Salary Number Total
Manager 55,000 1 55,000
Supervisor 45,000 1 45,000
Account clerk 20,000 1 20,000
Computer 15,000 1 15,000
operator
Photocopy 7,000 2 14,000
Receptionist 6,000 3 18,000
Watchman 25,000 2 50,000
Total 217,000
3.4 Recruitment training and promotion

3.4.1 Recruitment
Through the advertisement the business as market more of the products to
various place and thus enhancing good market for the products.
By the relative and friends, the business has marketed the products to many
leading to marketing of the products
By use of training institution, the business will be able to produce goods of high
quality products
By use of other competition section, the business has been able to identify their
weak areas and come with solutions.
3.4.2 Training
The business will require trained and experienced performing the job.
The business will offer training on new equipment and
technology and introduction of new service to the employees to meet demand on
the market. The training courses will be offered through the seminar, short course
on the job training and refresh course to equip them appropriately.

3.5 Legal Requirement

An entrepreneur intends to apply for a license and permit for government
licensing authority in order to start and run the business. She intends also to apply
for health certificate for the health of workers and also intend to ensure the
business against any security hazard like fire, theft or bankruptcy.

3.6 Support Service

In order to enhance smooth running and provisions of quality service from banks,
insurance services and postal office.
1. Banks
The business will be having loan from cooperative bank of Kenya for smooth
running of the business and improve its products.
2. Postal Offices
The business will be able to send and receive message and sending mail and also
executing payment through money order.
3. Insurance Services
Sometimes the business needs insurance services to compensate the loose of
product. Insurance service have aided the business not to break down In case of
any arising damage that can be compensate.

CHAPTER 4

OPERATION AND PRODUCTION PLAN

4.0 Summary
In this chapter an entrepreneur will deal with factory or organization layout,
production facilities and capacity, production and Operation strategy, production
process of product or service and regulations affecting the operation.

4.1 organizational structure

3.1 Organization Structure (hierarchy)

Entrance

security
Manager
office
 washroom

4.2 Production Facilities and capacity

The proposed business will require premises
Serial Facilities Model Capacity Price Total
number number per item
3 Comput Hp 2 40,000 80,000
er
1 Table Office 5 8000 40,000
table
2 Chair Benches 4 14,000 56,000
Office 2 20,000 40,000
chair

Grant 216,000
total
 4.3 production and Operation strategy

4.3.1 Production Strategy

The monthly material required for the intended business will be as follows;
Type of material Quality Cost per item Total
Roll of fabric 20 rolls 500 10,000
Thread 50 100 5,000
Needle 30 150 4,500
Total
The hired run for transportation will cost 2000 to deliver the material.
4.3.2 Operation

Measurements -Designing- procurement -stitching- finishing - packaging - Delivery

Measurements -is the process in which a person takes sizes of different garment
ready for sewing and running the operation
Designing -process involved in applying details that are needed to be sewed in a
garment for a particular purpose
Procurement -is where by the business ensure that there is flow of material for
running the business enterprise without delay
Stitching -is the main procedure for assembling garment together to achieve the
final product
Finishing -The garment is iron and arrange ready for packaging
Packaging -The final product is arranged and package according to the sizes
needed
Delivery - the end product is delivered to different place as they are needed

4.5 Regulations Affecting the Operation

1. Government Policy
Since government requires that any business before commencing its
operation must acquire a trading license, health certificate and permit. The
business will have to acquire such documents from municipal council of
Endebess at a cost fee of 10,000 renewable yearly.
Environment Protection
3.
The waste products must be disposed to river after been treated and a
sewage tank should be constructed to hold prods before disposing it. Dust bins
should be also provided for dumping the waste products. The fire extinguisher and
first aid kit should be within the business for purpose of employees in case of
accident at the work place.
4. Licensing

The entrepreneur will ensure that she pays licensing fee in order for the
business goods to be protected by the government

4. Health Regulations and Conditions

The owner of the business will ensure modern toilet that will serve both
ladies and gentlemen of the business. The owner of the business will also ensure
clean drinking water for customer and the workers.
CHAPTER 5

FINANCIAL PLAN

5.0 Summary
In this chapter it will deal with the pre-operational cost, working capital,
projected cash flow, Performa Income Statement, Performa Balance Sheet,
breakeven point, proposed Capitalization, desired financing and expected
profitability ratio.
5.1 pre-operational cost

Serial number Item Amount

1 Insurance 20,000
2 Water 400
3 Electricity 500
4 Licensing permit 25,000
5 Rent 10,000
4 Purchase of machine 300,000
6 Advertisement 25,000
7 Water 10,000
TOTAL 345,900

5.2 Working Capital

 Current assets 2023 2024 2025
Cash in hand 71,300 61,970 101,000
Cash at bank 200,000 250000 300000
Debtors 3000 4000 60000
Stock 60,000 65000 75000
Total 380970 482000
334,300
Creditors 4000 4500 5000
Total liability 4000 4500 5000
assets
Working Capital 2763000 218070
Current assets 312100
liability

5.3 CASH FLOW PROJECTION FOR THE YEAR 2023

ITEM Jan Feb Mar Apr Ma Jun Jul Aug Sep Oct Nov Dec
y

Cash - - - - - - - - - - - -
in flow

Loans 15,0 40,0 20,0 10,0 600 40,0 12,0 20,0 10,0 500 20,0 6,00
00 00 00 00 0 00 00 00 00 0 00 0

Sales 40,0 40,0 40,0 43,0 45,0 45,0 40,0 40,0 40,0 42,0 42,0 42,0
00 00 00 00 00 00 00 00 00 00 00 00

Debtor - - - - - - - 6,00 - - - 30,0

0 00
Donati - - 50,0 - - - 70,0 - - - - 10,0
on 00 00 00

Total 55,0 80,0 110, 53,0 51,0 95,0 122, 120, 50,0 47,0 62,0 87,0
00 00 0 00 00 00 000 000 00 00 00 00
00
Cash - - - - - - - - - - - -
out
Flow

Salary 30,0 30,0 30,0 30,0 30,0 35,0 35,0 35,0 35,0 40,0 40,0 40,0
00 00 00 00 00 00 00 00 00 00 00 00

Rent 5,00 5,00 5,00 5,00 6,00 6,00 6,00 6,50 6,50 7,00 7,00 7,50
0 0 0 0 0 0 0 0 0 0 0 0

Bills 4,00 4,00 4,00 4,00 4,50 4,50 5,00 5,00 6,00 6,50 6,50 7,00
0 0 0 0 0 0 0 0 0 0 0 0

Tax 1,50 1,50 1,50 1,50 1,50 2,00 2,00 2,00 2,00 2,00 2,00 2,50
0 0 0 0 0 0 0 0 0 0 0 0

Licens 1,00 1,00 1,00 1,00 1,00 1,00 1,50 1,50 1,50 1,50 2,00 2,00
e 0 0 0 0 0 0 0 0 0 0 0 0

Purcha 2,00 2,00 2,00 3,00 3,00 3,00 3,00 4,00 4,00 4,00 4,00 5,00
ses 0 0 0 0 0 0 0 0 0 0 0 0

Total 61,5 61,5 61,5 71,5 73,0 78,5 79,5 90,0 91,0 97,0 97,5 109,
00 00 00 00 0 00 00 00 00 00 00 000

Gross profit=cash inflow -cash outflow

869,000-759,000
Gross profit=110,000
 Net profit=gross profit -VAT
VAT=16%ofgross profit
16%/100×110,000=17,600
Net profit=110,000-17,600=92,400
5.4 CASH FLOW PROJECTION FOR THE YEAR 2024.

ITE JA FE MA AP MA JU JU AU SE OC NO DE TOT
M N B R R Y N L G P T V C AL

Balan 90,0 - - - - - - - - - - -
ce 00
90,00
0
Cash 10,0 15,0 15,0 10,0 10,0 10,0 20,0 20,0 20,0 25,0 25,0 25,0 205,0
00 00 00 00 00 00 00 00 00 00 00 00 00

Sales 15,0 15,0 20,0 20,0 15,0 19,0 20,0 1,50 - - - -

00 00 00 00 00 00 00 0
126,0
00
Depor 20,0 - - - - - - - - - - -
ts 00
20,00
0
Donat - - - - - 40,0 - - 50,0 - - - 90,00
ions 00 00 0

Gross 25,0 30,0 35,0 30,0 25,0 29,0 40,0 35,0 20,0 25,0 25,0 25,0 304,0
Profit 00 00 00 00 00 00 00 00 00 00 00 00 00

Salary 40,0 40,0 40,0 40,0 40,0 40,0 40,0 40,0 40,0 40,0 50,0 50,0 500,0
 00 00 00 00 00 00 00 00 00 00 00 00 00

Rent 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 5,00 60,00
0 0 0 0 0 0 0 0 0 0 0 0 0

Bills 2,00 - - 3,00 - - - - - 6,00 - - 11,00

0 0 0 0

Tax 1,50 1,50 1,50 - - - - 20,0 - - 6,00 - 30,50

0 0 0 00 0 0

Expen 7,00 8,00 9,00 24,00

ses 0 0 0 0

Purch 1,00 1,00 1,00 2,00 2,00 2,00 2,00 3,00 4,00 3,00 4,00 3,00 28,00
ases 0 0 0 0 0 0 0 0 0 0 0 0 0

Water 300 400 400 300 300 300 500 600 300 600 700 300 5,000

Insura 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 1,00 120,0
nce 0 0 0 0 0 0 0 0 0 0 0 0 00

Total 58,0 49,0 48,0 50,4 48,3 55,3 48,5 51,6 50,3 63,6 66,7 68,3 658,0
Cash 00 00 00 00 00 00 00 00 00 00 00 00 00
out
Flow

Gross profit=cash inflow -cash outflow

835000-778000
Gross profit=57000
Net profit=gross profit -VAT
VAT=16%ofgross profit 16%/100×57000=9,120
Net profit=57,000-9,120=47,880
5.5 PROFORMA INCOME STATEMENT FOR THE YAR 2023

Refers to the summary of all activities income taxes and expenses incurred by business during a
particular financial period . The manager of the proposed business will be preparing income statement
annually.
Sales. 499000
Loans. 204000
Debtors. 36000
Donation 130000

Salaries. 410000
Rent. 72,500
Bills. 56,500
Tax. 220000

5.6 PROFORMA INCOME STATEMENT FOR THE YEAR 2024

Balance. 90000
Cash. 205000
Sales. 126000
Debtors. 20000
Donation 90000
Gross profit 304000

Salaries. 500000/=
Rent. 60,000/=

Bills. 11000/=

Tax. 30,000/=

Expense. 24,000/=
Water. 5,000

Purchase. 28,000/=

Insurance. 120,000/=

5.7 PROFORMA BALANCE SHEET

5.7.1 Proforma Balance sheet for year 1

Current assets Current liabilities

Cash at hand. 1,500,000 Creditors. 140,000
Debtors. 9,000 Salaries. 330,000
Total. 1,509,000 Rent 60,000
Fixed asset Advertisement. 120,000
Machinery. 10,000 License 30,000
Equipment. 50,000 Electricity. 20,000
Total. 60,000 Water. 9,000
Balance brought down 150,000 Insurance. 25,000
Transport. 50,000
Total long term liabilities
Total. 500,000
Balance carried down 460,000

1,719,000 1,719,000

TOTAL 2,179,000

5.7.2PPREFORMA BALANCE SHEET FOR THE SECOND YEAR

Current assets Current liabilities

Cash at hand. Creditors.
1,500,000 120,000
Debtors. Salaries
30,000 500,000
Total. Rent.
1,530,000 80,000
Advertisement.
150,000
Fixed asset License.
25,000
Machinery. Electricity.
20,000 30,000
Equipment. Water.
50,000 10,000
Total. Insurance.
70,000 30,000
Transport.
100,000
Balance brough down. Total long term liabilities
150,000 t
Total.
505,000
Balance carried down.
200,000

1,750,000 1,750,000

5.8 BREAK-EVEN ANALYSES

This is a tool which helps a company to determine the stage at which the company or a new
product will be profitable.

YEAR 1 YEAR 2 YEAR 3

FIXED COST
License and permit 17000 17000 17000
Salaries 642000 642000 642000
Rent 132000 144000 144000
Loan 1000000 1000000 1000000
Interest on loan 150000 150000 150000
Insurance 15000 15000 15000
TOTAL FIXED 1956000 1968000 1968000
COST
VARIABLE COST
Purchases 169000 289000 398000
Creditors 132000 68000 227000
Electricity 72000 60000 48000
Water 40000 12000 36000
Repair and 11000 11000 11000
maintenance
Advertisement 30000 15000 45000
Incentives 36000 36000 36000
Transport 31000 66500 27000
Miscellaneous 57000 57000 57000
TOTAL 578000 614500 883000
VARIABLE COST

5.9DESIRED FINANCING
Desired financing indicates the level of investments expected or anticipated in the business e. g
things a business person intends to do to ensure growth and development of the business. They
include the following:

1 Increase stock; the sole trader intends to increase stock this is due to the anticipated increase in
number of customers.
2 Opening branches; the manager also wishes to expand the business probably by opening
branches in within the town in order to curb COVID-19 and minimize transportation cost.

3 Purchase a pick-up; this will help in transportation of goods from the producers to the business’
premise.

4 Hire an internal auditor; hiring an auditor will help the manager in knowing the progress of the
business that is whether it is making profits or incurring losses.

5 Employ an advisor; by so doing the business shall have a smooth running.

PROPOSED CAPITALIZATION
FUNDING PRINCIPLE RATE OF PERIOD OF INTEREST TOTAL
SOURCE LOAN INTEREST PAYMENT ON LOAN REMARKS

KCB BANK
100,000 30.5 7 months 50,000 130,000
Grants 150,500 30.5 5months 20,000 200,000

Appendices

Appendix 1. Work plan

J F M A M J J A S O
S/N Items
 1 Brainstorming of 
business idea
2 Retting of topic 

3 Chapter one 

4 Chapter two    

5 Chapter three    

6 Chapter four 

7 Chapter five  

8 Typing and   
printing
9 Submission 

Appendix II Budget

Item Amount
Stationary 8,000
Typing 2,000
Printing 800
Binding 200
Total 11,000/=
Appendix iii Map

TUMAINI
FASHION

ENTERPRISE