ST PAUL’S UNIVERSITY

MACHAKOS CAMPUS

PRACTICAL PROJECT IV

BMA 420

BY

OGEGA JACKLINE MBULA

MMAM/MKS/2565/17

BUSINESS PLAN REPORT SUBMITTED TO THE DEPARTMENT OF BACHELOR

OF BUSINESS ADMINISTRATION AND MANAGEMENT OF ST PAUL’S
UNIVERSITY IN PERTIAL FULFILMENT FOR DEGREE

SEPTEMBER – DECEMBER 2017

 ST PAUL’S UNIVERSITY, MACHAKOS CAMPUS.

BACHELOR OF BUSINESS ADMINISTRATION AND MANAGEMENT

JACKLINE VEGETABLE SHOP

P.O Box 41847-00100, Machakos

Cell phone: 0718376541
Email: ogegajackline14 @gmail.com

BY BBAM/MKS/2565/17

UNIT: PRACTICAL PROJECT IV

SUBMITTED TO: WILLIAM SANG

September – December 2017

DECLARATION
I Ogega Jackline Mbula declare this work as my original business project and is not a
reproduction of any of the existing projects which have been forwarded to St. Paul’s university or
any other university for examination.

Signature ………………………………………… Date………………………………

This practical project iv has been submitted for examination with my approval as the St. Paul’s
University supervisor.

Lecturer…………………… Signature …………… Date ……………………………

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DEDICATION
This project is specially a dedication to God,my loving sister, brother and my family for their
support morally and financially.
Also to my friends Brenda and Joshua for their great love and support they have shown to me.
May God bless them abundantly in all their doing.

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ACKNOWLEDGEMENT
First and foremost I would like to acknowledge the Lord for the gift of life and knowledge. Also
to my lecture Mr. William Sang who volunteered and took his time to assist me through in teaching
different aspects in regard to the project. Lastly to my loving parents also who took charge in
supporting me financially.
May God Bless You All!!

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Table of Contents
DECLARATION ..............................................................................................................................ii
DEDICATION ................................................................................................................................. iii
ACKNOWLEDGEMENT ............................................................................................................... iv
SECTION ONE ................................................................................................................................1
BUSINESS DESCRIPTION .............................................................................................................1
1.1 Name and Background information ........................................................................................1
1.2 Location ..................................................................................................................................1
1.3 Form of Business Ownership ...................................................................................................2
1.4 Type of Business ......................................................................................................................2
1.5 Products and Services ..............................................................................................................2
1.5.1 Products ............................................................................................................................2
1.5.2 Delivery Services ...............................................................................................................2
1.6 Justification viability of the Business .......................................................................................3
1.7 Industry Structure and Trends ................................................................................................3
1.8 Business Goals .........................................................................................................................3
1.8.1 Short term goals ................................................................................................................3
1.9 The Entry and Growth Strategies ............................................................................................4
SECTION TWO ...............................................................................................................................5
THE MARKETING PLAN...............................................................................................................5
2.1 Potential Customers ................................................................................................................5
2.2 Market share ...........................................................................................................................5
2.3 Competitors .............................................................................................................................5
2.4 Method of Promotion...............................................................................................................6
2.4.1 Advertising........................................................................................................................6
2.4.2 Public Relation ..................................................................................................................7
2.4.3 Personal Selling .................................................................................................................7
2.4.4 Marketing Promotion ........................................................................................................7
2.5 The pricing Strategy ................................................................................................................7
2.6 Sales Tactics ............................................................................................................................9
2.7 Marketing Strategies ...............................................................................................................9
 2.8 Distribution Strategy ...............................................................................................................9
2.9 Suppliers .................................................................................................................................9
2.10 Coping with Change ............................................................................................................ 10
2.10.1 Cultural change ............................................................................................................. 10
SECTION THREE ......................................................................................................................... 11
MANAGEMENT AND ORGANIZATIONAL PLAN..................................................................... 11
3.1 Organizational Structure ....................................................................................................... 11
3.2 Job Description...................................................................................................................... 12
3.3 Recruitment and Training ..................................................................................................... 16
3.3.1 Recruitment .................................................................................................................... 16
3.3.2 Training .......................................................................................................................... 16
3.4. Remunerations and Incentives .............................................................................................. 16
3.5 Licenses, Permits and By-laws ............................................................................................... 18
3.5.1 The N.S.S.F Number: ...................................................................................................... 18
3.5.2 Business Registration Certificate: ................................................................................... 18
3.5.3 Environmental Impact Assessment License: ................................................................... 18
3.6 Support Services .................................................................................................................... 18
SECTION FOUR ............................................................................................................................ 20
PRODUCTION AND OPERATIONAL PLAN .............................................................................. 20
4.1 Introduction .......................................................................................................................... 20
4.1.1 Plant Facilities and Equipment ....................................................................................... 20
4.2 The production Strategy ........................................................................................................ 20
4.3 Stages of Operations .............................................................................................................. 21
4.4 Regulation affecting The Organization .................................................................................. 21
4.5 Business Logo ........................................................................................................................ 22
SECTION FIVE ............................................................................................................................. 23
FINANCIAL PLAN ........................................................................................................................ 23
5.1 Introduction .......................................................................................................................... 23
5.2 Financial Objectives .............................................................................................................. 23
5.3 Pre- operational cost .............................................................................................................. 23
5.4 Pro-forma income statements ................................................................................................ 24
5.5 Pro-forma Balance sheet for two years .................................................................................. 25
 5.6 Break even Analysis............................................................................................................... 26
5.7 Profitability Ratios ................................................................................................................ 26
5.8 Desired Financing .................................................................................................................. 27
5.9 Proposed Capitalization......................................................................................................... 27
SECTION SIX ................................................................................................................................ 28
CRITICAL RISK ANALYSIS ........................................................................................................ 28
6.1 Introduction .......................................................................................................................... 28
6.2 Operational Risks .................................................................................................................. 28
6.3 Industry risk.......................................................................................................................... 28
6.4 Financial Risks ...................................................................................................................... 28
6.5 Political risks ......................................................................................................................... 28
6.6 Environmental Risks ............................................................................................................. 28
SECTION SEVEN: TIME PLAN ................................................................................................... 29
 SECTION ONE
BUSINESS DESCRIPTION
1.1 Name and Background information
The name of the business, Jackline vegetables Supplies Ltd is derived from the owners name-
Jackline and the kind of business- Vegetable supplies. Most of the time is when we get to face
shortages in the market in terms of poor supplies of vegetable products. This in turn leads to high
prices of the same due to increased demand and less supplies or else scarcity of these products.
I as the owner of the business have worked in a shop of such a kind before and i got the basics of
doing my own business and even better. In addition the knowledge I have acquired in school is of
great help. I have always had that concept of producing, selling and supplying agricultural
products, more so vegetables.
The Address of the Business owner will be;
Jackline M. Ogega
P.O Box 41847-00100, Machakos
Cell phone: 0718376541
Email: ogegajackline14 @gmail.com
1.2 Location
The business will be located in,Machakos Shopping center in Machakos County. The Address of
the business will be;
Jackline Vegetable Supplies Ltd.
P.O Box 42600-00200, Machakos
Tel: +254 088 8000
Email: [email protected]
Mobile: 0718376541
This is a place where there is a market for these products. The residents in that area depend on
bulk purchases of vegetables and fruits. There are also schools, churches, colleges and hotels
around there which require the supply of the same from a nearby supplier. To begin with, the
business will be getting the products from the market which is near and hence the cost of
transportation is less. With time I will get to invest in producing these products for myself.

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1.3 Form of Business Ownership
Jackline Vegetables Supplies Ltd will be a business owned a sole proprietorship kind of a business
owned by Miss.Jackline Mbula. I will suffer all the risks and losses as well as enjoy all the profits
of the business. The sole proprietor enjoys all the profits earned by the business alone, she keeps
the secretes of the business and also is easy for me to make decision, since I will not have to consult
anybody. Lastly, the reason as to why the I choose to be a sole proprietor is that there are less legal
formalities needed to start up the business and operate the business since other forms of ownership
will need memorandum of association and other documents needed by partnership or a company.
1.4 Type of Business
Jackline Vegetables Supplies Ltd will fall under the industry of Agri-business. It will entail buying
products from farmers and selling them probably at a profit. The industry is growing since there is
the need for persons to get their basic needs as well as other needs which they must purchase due
to the growing rural urban migration. It will as well provide employment opportunities to different
people since there is the need for transportation of such products, the business part of it for example
sales people, and also in the production of such products.
1.5 Products and Services
1.5.1 Products
The business will sell vegetable products as Cabbages, Kales, Potatoes, Tomatoes, Onions and
Carrots which are sold per kilograms. I will also sell and supply different fruits such as Apples,
Mangoes, Oranges, Pineapples, Lemons, Avocados, Grapes, Passion fruits, Bananas and Melons
which will also be sold per kilograms.
From such products, I will venture into producing fresh juice for sell. Other food products to be
sold will include Rice, Maize, Beans, Peas and drinking water.
1.5.2 Delivery Services
The business will offer delivery services to their customers’ majority being Institutions such as
Primary and Secondary Schools around, colleges and Hospitals this will also entail customers’
who buy my products in bulk.

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1.6 Justification viability of the Business
First of all having worked in a business of this kind, I have the knowledge and basics to doing
better, and also the entrepreneurial skills I have learnt in school. Secondly, Rural Urban migration
is what is happening off late with people migrating to the urban centers majorly been Machakos,
in search of jobs. These people need food which is lowly produced. As time goes by, the supply
of these products is becoming limited due to the increase in numbers. I really want to be that
outstanding supplier of these products who people will grow to trust.Thirdly, population growth is
another challenge. With time there will be fewer places left for cultivation. People are getting to
depend on buying of food from the market. Also in Eastleigh there is a potential market since there
is less supply of these products and people are forced to go to town or nearby places in search of
these products. Jackline Vegetables supplies Ltd will make sure that these residents find an easy
access of all these products from their locality.
1.7 Industry Structure and Trends
There is an increase in disease associated with eating of different products like cancer and other
chronic diseases. A diet high in fruits and vegetables is associated with decreased risk for chronic
diseases. In addition eating them can be beneficial for weight management. Nutritional
interventions are going beyond increasing individual awareness and are targeting the family, local
community and the overall society to emphasize nutritional policies that have an impact on the
society. The business will supply products which have no intervention by chemicals but are
directly and fresh from the farm. There is a possibility of shortages in rains, but there is this solution
of using green houses and also irrigation. This will ensure supply and production of these products
all through.
1.8 Business Goals
1.8.1 Short term goals
These will include the following;
 To meet up the standards of the business as expected by the law
 To improve the market share in the market every month
 To grow towards attracting the awareness of the general public.
 To emerge the best vegetable suppliers in the nearby institutions yearly
The long term goals of the business include;
 To reach raise its market share by 3% yearly

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  To be the price leading business in the area and beyond.
 To be the major trusted Vegetables and fruit suppliers within the Machakos area
and beyond.
 To meet grow beyond the Machakos county boundaries in two years.
 To ensure maximum profitability for every academic year
1.9 The Entry and Growth Strategies
The business purposes to get control of its customers by taking such strategies as giving of
discounts, and also suppliers or else delivery of its products to its customers. Also will create
awareness of the existence of the business by use of different marketing strategies such as
advertising, brochures, road shows and trainings on the importance of the products the business is
selling.

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 SECTION TWO
THE MARKETING PLAN
2.1 Potential Customers
The business targets institutions such as the nearby schools like St Mary's Primary School,
Muthini Primary School, Hotels such as Gelian Hotel, Garden Hotel, as well as hospitals like The
Machakos Level Five Hospital, Shalom Hospital and Bishop Kioko Hospital. Other potential
customers include the residents of within Machakos and its neighborhood. The business will work
towards providing fresh and quality products to the customers, timely delivery to the different
institutions and also different modes of payment including cash, use of credit cards and also Lipa
na Mpesa.
2.2 Market share
Vegetable Supplies ltd will be selling vegetables and other food products and its market share will
be at 10% at the very beginning which will go hand in hand with its growth and its products being
offered. The business will create Job opportunities to the youths by opening other branches across
the country and ensure that it works hand in hand with the community to increase its market share.
It will employ staffs of high qualification who are ready to work whole heartedly to ensure the
success and growth of the business. The owner of the business will work hard in the business
whereby the owner is allowed to bring in new changes in the business to sustain the business.
Within the first year, the business will have attained a market share of 15%.
2.3 Competitors
Jackline Vegetable Supplies Ltd will face three main competitors from its locality;
i. Name: Naivas Supermarket.
Location: Machakos
Market Share: 30%
ii. Name: Peter Mulley Supermarket
Location: Machakos
Market Share: 35%
iii. Name: Kwa Mose Shop
Location: Machakos
Market Share: 20%

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Figure 2.1 Market share

Market Share

Key
30%
35%
Naivas Supermarket

jackline Vegatables

Kwa Mose Shop

Peter Mullay
15%

20%

Source (Author)
Jackline Vegetable Supplies Ltd. Will be located centrally, Machakos Shopping Center, making it
easy for everyone to access it and also track the many people who visit the shopping center for
different purposes.
2.4 Method of Promotion
Jackline Vegetable Supplies Ltd will use various methods of promotion that will help the business
to grow. Such methods include the following;
2.4.1 Advertising
This will involve producing information the sale of commercial products and services. This
method will enable customers to get information about products the business is selling and it will
be done through online marketing, use of media like television and Radio stations, social media
by creating a website for the business and also use of Facebook and also print giving of brochures
to the public.

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2.4.2 Public Relation
The business will embrace honesty, transparency and create a good customer rapport to ensure that
they build the image and create trust from its customers. This will also build a good reputation of
the business in the society.
2.4.3 Personal Selling
This will include the employees and owner of the business interacting directly with the public and
convincing them to buy from Jackline Vegetable Supplies Ltd. This will in a way create a room
for price negotiation for those who will want to buy or be supplied frequently in bulk.
2.4.4 Marketing Promotion
The business owner will make business cards showing the business name, location and its address
and also the products its offering. The business card will also show offers and discounts the
business will be giving. This will create awareness of the existence of the business to the society.
2.5 The pricing Strategy
The business will price its products according to the prices of its competitors, offer an introductory
offer price in some of its products and use psychological selling, for example, 99/= 250/= 150/=
The selling price will be gotten by considering factors such as buying price from the market, the
cost of transport from the market and also the cost of delivery, the price the competitors are doing.
The price will be variable considering the changes in the market, availability of the products and
also the economic factors trading at a particular time.

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Table 2.0 Price strategies
Product Price in Kshs / kg
Kales 80
Cabbages 60
Carrots 50
Onions 100
Tomatoes 100
Potatoes 90
Apples 180
Mangoes 100
Pineapples 120
Bananas 100
Melons 120
Eggs 320 per tray
Fresh Juice 50 per 500 ml bottle
Sweet Potatoes 120
Beans 90
Fresh Maize 70
Green grams 120
Capsicum 80
Source (Author)

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2.6 Sales Tactics
Jackline Vegetable Supplies Ltd will reach its customers by selling its products directly to them.
This includes selling from the shop where the customers come individually to shop. The business
will also have sales persons who will be supplying its products by delivering them to the
customers’ premises like for the institutions and also other customers who buy in bulk. The
business will open branches in different places to reach even more people. Distribution channels
will also be used.
2.7 Marketing Strategies
The business will price its products considering the economic changes, availability of the products
in the market and also the prices prevailing in the marketing considering its customers. It will give
discounts to customers buying in bulk and also promotions to tap more customers. The location of
the business will be in such a way that it suits all the customers, easily accessible, from any part
of Machakos and beyond.
2.8 Distribution Strategy
Jackline Vegetable Suppliers Ltd will be involved in direct form of distribution. This is where the
products will be sold directly to the final consumer and therefore no intermediary will be involved
and also will ensure direct contact between the customers and the business that will serve as an
added strength of the business. This will be well equipped through the provision of transportation
of products for our customers.
2.9 Suppliers
The business main suppliers will be
i. Mully Children’s Family (MCF)
P. O Box 557 – 00606 Machakos
Tel: +254 203873483
They will supply vegetables, cereals, Eggs Sweet potatoes.
ii. Avenue Fresh Produce
P.O Box 3865 -00606 Machakos
Tel: +254 720886729
They will supply Fresh fruits

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 iii. Everest Enterprises Ltd
P.O Box 52448- 00100
Tel: +254 722848120
They will supply vegetables.
2.10 Coping with Change
Technology keeps on advancing and therefore the business will embrace this development through
online marketing. This will ensure that the customers are able to access all the information they
may require about the business its products, usage, its services which in turn will increase business
knowhow suggestions and also enquiries. Also modern form of payment will be embraced to, use
of cash, credit card and lipa na Mpesa. This will enforce efficiency on the business operations.
2.10.1 Cultural change
The way of life differs from person to person or even a group of people live a different life from
the other and hence they will tend to prefer eating different kinds of food. There are those people
who like traditional dishes and are used to them. It’s very difficult to have such people as your
customers because they are adapted to their cultural way of life. In the other hand there are those
who will wish to shift from their cultural living ways and adapt a new or advanced way of life, in
such a case, the business will sell different types of vegetables and food products to suit every
customer.

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 SECTION THREE
MANAGEMENT AND ORGANIZATIONAL PLAN
3.1 Organizational Structure
Jackline Vegetable supplies Ltd will have 10 employees. They will have various roles and duties
based on their abilities skills and knowledge and therefore will hold different organizational levels
as follows: 1 managing director, 3 departmental managers, 1 overall supervisor, 3 delivery staff, 1
cleaner and 1security guard.
Figure 3.1 Organization Structure

Managing Director

Operational Manager

Delivery Staff Security Guard Cleaner

Source (Author)

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Table 3.1 Summary of employees

Position No’s

Managing Director 1

Operations Manager 1

Delivery Staff 3

Security Guards 1

Cleaners 1

Total 7

3.2 Job Description

The Managing Director
The Business owner will be the managing director of the business
Qualifications of the Managing Director
 Bachelor degree in business related fields.
 Three year work experience in a similar position.
 Strong selling and negotiation skills.
 Proven analytical and leadership skills as well as a strong business acumen.
 Ability to engage team members and develop talents through strategic development
and encouragement.
Duties and Roles
 Develop and maintain collaborative relationships with both internal and external
people

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  Stay current on development within the regions and communicate trend and
development
 Lead, monitor, coach and manage the workforce through adequate planning.
 Formulate and implement strategies for areas under jurisdiction in various given
regions by effective supervision and control.
 Achieve standard of excellent through training motivation and guidance by
identifying training needs.
 Collating, preparing and interpreting reports, budgets, accounts, commentaries
and financial statements
 Undertaking strategic analysis and assisting with strategic planning
 Producing long-term business plans
 Undertaking research into pricing, competitors and factors affecting performance
 Controlling income, cash flow and expenditure

Skills required
 Excellent communication skills.
 Good understanding of management High level of confidentiality
 Computer literacy
 Change agility (flexible)
Operations Manager
Qualifications
 A bachelor degree in business related field.
 Should demonstrate excellent people management skills
 At least 2 years working experience in a Administration or Human Resource Position
 Excellent understanding of current business trends in the department of HRM.
Duties or roles of Human Resource Manager
 Maintaining the work structure by updating job requirements and job descriptions for all
positions.
 Maintaining organization staff by establishing a recruiting, testing, and interviewing
program

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  Preparing employees for assignments by establishing and conducting orientation and
training programs.
 Maintaining historical human resource records by designing a filing and retrieval system;
keeping past and current records
The Delivery staff
Qualifications
 Must have at least a KCSE mean grade of c- minus
 A valid driving license from a recognized driving school
 One year relevant work experience
 Good communication skills either in Kiswahili or/and English
 Good time management skills and one who can work well under pressure
 Other specialization in related field will be an added advantage
Duties and Responsibilities
 Collecting goods from a the market
 Loading the vehicle in a order that matches the deliveries that you will make
 Planning the route to make sure that deliveries are made on time
 Unloading goods at the right addresses
 Getting signatures for goods and giving invoices when they deliver
 Updating delivery records
 Returning undelivered items to your base
Skills
 Excellent practical driving skills and road safety awareness
 The ability to work alone and concentrate
 Patience and a polite attitude towards other road users
 Good spoken and written communication skills
 A reasonable level of fitness
 The ability to complete record sheets and paperwork

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Cleaner
Qualifications
 Must have at least a KCSE mean grade of D+
 One year relevant work experience
 Good communication skills
Duties and Responsibilities
 Ensure that the business premises is clean at any given time
 Organizing the shelves and the different products to their specific places
Skills
 A good team work personnel
 Computer literate
 Highly ethical
 Time conscious
Security guard
Qualifications
 Basic education qualifications
 Reference persons
 Certificate of good conduct
 High moral observant
Duties and Responsibilities
 Ensure proper and convenient parking of cars
 Ensure all gates and entrances are locked when not in use
 Care checkups of people and cars entering the business premises
 Ensure safety of the insiders through ensuring alarms good working conditions
Skills
 A good team work personnel
 Computer literate
 Highly ethical
 Time conscious

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3.3 Recruitment and Training
3.3.1 Recruitment
Recruitment of the most senior staffs will be done one month prior to the start of the business. The
recruitment process will generally rely on outsourcing from the mass or the available workforce
through conducting an interview. Recruitment will be conducted whenever necessary by the
human resource department through creating awareness to the general public through posters, one
on-one hunting and through the media and newspapers. The interested members will be allowed
to apply by writing a letter and attaching all the relevant forms. After receiving of the application
forms the competent individuals will be shortlisted and called for the interview after which those
who meet the qualifications will be selected.
3.3.2 Training
The training will be carried out for any level after recruitment to only those who qualifies for the
position being offered. This will involve educating the recruits on how to produce their best
through practically participating in their expected duties, it will also involve a forum whereby new
employees will be given an opportunity to meet and familiarize themselves with people and
structures through orientation. This will ensure proper handling of expected duties, effective
communication to the upper levels and proper time management.
3.4. Remunerations and Incentives
They employees will receive the following remunerations as their salary including any given
allowances: Managing director Kshs36,000,Finance manager Kshs32,000 Marketing Manager
Kshs32,000, Human Resource Manager Kshs29,000, Driver Kshs20,000, The other two delivery
staff Kshs15,000 each, cleaner Kshs10,000 and the guard Kshs9,500. The business will assume to
be offering the best remunerations and therefore hold no future expectations of raising the
employees’ salaries in the short-term.

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Table 3.2 Salary payments for the first financial year
Job No. Basic Medical Gross PAYE NSSF NH Net
Description Salary Allowan pay (15%) IF Pay
ce
Managing 1 40,000 1,000 36,000 5,400 200 320 30,080
Director
Operations 1 31,000 1,000 32,000 4,800 200 320 26,680
Manager
Driver 1 19,000 1,000 20,000 3,000 200 320 16,480
Delivery 2 28,000 2,000 30,000 4,500 400 640 24,640
Staff
Cleaner 1 9,000 1,000 10,000 1,500 200 320 7,980
Security 1 8,500 1,000 9,500 1,425 200 320 7,555
Guard
Source (Author)

Table 3.2 Salary payments for the first financial year

Job No. Basic Medical Gross PAYE NSSF NH Net
Description Salary Allowan pay (15%) IF Pay
ce
Managing 1 40,000 1,000 36,000 5,400 200 320 30,080
Director
Operations 1 31,000 1,000 32,000 4,800 200 320 26,680
Manager
Driver 1 19,000 1,000 20,000 3,000 200 320 16,480
Delivery 2 28,000 2,000 30,000 4,500 400 640 24,640
Staff
Cleaner 1 9,000 1,000 10,000 1,500 200 320 7,980
Security 1 8,500 1,000 9,500 1,425 200 320 7,555
Guard
Source (Author)

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3.5 Licenses, Permits and By-laws
The business will be expected to acquire various legal documents for legal operation that will
ensure smooth business operations without much government interventions.
3.5.1 The N.S.S.F Number:
It will be paid by the employer on behalf of each employee and will be renewed at the end of every
month.
3.5.2 Business Registration Certificate:
The certificate will be obtained from Sheria house after a payment of a non-renewable fee of
Kshs800.
3.5.3 Environmental Impact Assessment License:
This is a certificate provided by the National Environmental Management Authority (NEMA). It’s
paid once at the beginning or else during the registration of the business.
3.6 Support Services
The business will operate in support of such services as Insurance, Banking, Lawyers, Auditors
and Security.
Business bank
Equity bank
P.O Box 51209-00200
Nairobi, Kenya
Equity bank has a branch in Machakos and all our customers will be able to bank money anywhere
within the city or beyond because of the bank’s convenience. Equity bank has a competitive
lending rates and this will help the business in the financial borrowing.
Business Lawyers
BENARD KITONGA
P.O Box 163890-00100
Machakos, Kenya
He is located in Susu Center, in Machakos town. He will assist the business in dispute resolution,
represent the business in court, advice the firm in taxation compliance and other legal issues.

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Business Auditors
Munene Group of Auditors
P.O Box 20392-00200
Machakos, Kenya
Location: Machakos
Business Insurance
Jubilee Insurance Company Limited
P.O Box 27032-00100
Machakos, Kenya
Security Services
Lavington Security Firm Limited
P.O Box 76283 – 00508
Machakos, Kenya
Table 3.3 Expenses for the support services
Bank Auditors Lawyers Insurance Totals
Opening 3000 5000 4000 12000
Fess

Annual 5000 5000 50000 60000

Payment

Source (Author)

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 SECTION FOUR
PRODUCTION AND OPERATIONAL PLAN
4.1 Introduction
This section highlights the activities through which the business will be operating its function.
4.1.1 Plant Facilities and Equipment
Table 4.1 plant facilities and equipment
Facilities Size Quality Cost Total
Office Tables Medium 5 medium 5 medium @
2,000 = 10,000
Office chairs Highchair 4 Highchairs 4 Highchairs @
4,000 = 16,000 26, 000
Office cabinets Big 2 Japan Made 2@ 15,000 = 30,000
30,000
Shelves Medium - 30, 000 30,000
Books of A4 Hard cover @200
Account 1000
Office writing - - 3, 500
pens and
stationary 3, 500
Office wall clock Medium size Quartz @1,500
1,500
TOTAL 92, 000
Source (Author)
4.2 The production Strategy
The business will mainly be involved in outsourcing whereby it will acquire its products and
equipment’s from different producers and suppliers. The products will be purchased and ordered
and purchased considering their perish ability. The business will use paper bags with the business
name and logo branded on them to package for the customers who buy the goods. The use of
modern modes of payment will be used to increase the efficiency of service of the customers.

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The waste materials will be collected and packed in a dustbin and disposed correctly to ensure that
the business considers the environment and the society as a whole.
4.3 Stages of Operations
The business will embrace the following process or stages for every customer who shops at
Jackline Vegetable Supplies Ltd.

Purchase of the Any perished The customer will go

Products and products will be through a thorough
delivery into the separated as they are security check at the
Business arranged properly entrance done by the
into their specific security guard
shelves

Measurement and Packaging

Pick a shopping
payment of the
basket and pick
purchased products
whatever products
one needs

The customer leaves

4.4 Regulation affecting The Organization

Various governmental regulations and other non-governmental requirements which may hinder
efficient operation of the business will be met. These regulations include City council Permit,
N.S.S.F number, Business Registration Certificate and the Environmental Impact Assessment
License

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4.5 Business Logo
Figure 4.1 Business Logo

22
 SECTION FIVE
FINANCIAL PLAN
5.1 Introduction
Jackline vegetable Supplies Limited is projected to have a starting capital of Kshs700,000 to
finance its expenditure and operations. This will be gotten by borrowing a bank loan, contribution
from family members and also personal savings.
5.2 Financial Objectives
The business will have the following financial objectives for a period of the two three years
 Profit maximization/increasing profits margins.
 Maintain statutory requirement.
 To improve the cash flows.
 Increase the revenues by considerable rates.

5.3 Pre- operational cost

Below are the costs the business will incur before and during its start up
Table 5.1 Pre-operational cost
Items Total cost for 2017 in Total cost for 2019 in
kshs kshs
Furniture and fittings 70,000 60,000
Equipment installation 25,000 -
Certificate of incorporation 4,800 4,800
Electricity 35,000 10,000
Telephone 25,000 15,000
Internet 35,000 25,000
Research cost 65,000 60,000
Advertisement 65,000 35,000
Insurance premiums 40,000 25,000
Total 364,800 234,800
Source (Author)

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5.4 Pro-forma income statements
This will be the business income statements for the first two years
Table 5.2 Income statement for the first two years
YR1 YR2
Sales 3,000,000 4,000,000
Less cost of goods sold 1,000,000 1,800,000
Gross profit 2,000,000 2,200,000
Expenses
Wages 114,515 120,315
Rent 25,000 20,000
Water 15,000 14,000
Telephone 25,000 8,000
Electricity 40,000 28,000
Advertising 50,000 30,000
Stationery 15,000 10,000
Transport 35,000 27,100
Depreciation 0 40,000
Loan repayment 100,000 100,500
Interest 30,000 50,000
Repairs/maintenance 20,000 30,000
Total Expenses 469,515 477,915
Net profit before tax 1,530.485 1,722,085
TAX (15%) (220,987) (260,750)
Net profit after tax 1,309,498 1,461,335

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5.5 Pro-forma Balance sheet for two years
Represented below are the pro-forma balance sheets for Jackline Vegetable supplies Ltd for two
years
Table 5.3 Pro-forma Balance Sheet for two years
End of Yr 1 End of Yr 2
Current Assets
Cash 300,000 1,640,500
Debtors 200,000 715,000
Stock of Materials 1,387,900 1,450,000
Total Current Assets 3,053,645 3,915,600
Fixed Assets
Machines and Equipment 500,000 450,000
Depreciation 100,000 200,000
Furniture and fittings mko 90,000 50,000
Depreciation 15,000 25,000
Total Fixed Assets 705,000 725,000
TOTAL ASSETS 4,758,645 4,640,600
LIABILITIES
Current Liabilities
Creditors 450,600 710,500
Short term Loan 200,000 450,000
Bank Overdraft 300,000 450,100
Total Current Liabilities 950600 1610600
Long Term Liabilities
Bank loan 2,000,000 1,000,000
Owner’s equity 500,000 650,500
Total liabilities 2,950,600 1,700,500
Total liability & Equity 4,199,645 4,961,600

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5.6 Break even Analysis
Break-even point= fixed cost/ contribution margin * sales
Contribution= sales- variable costs
Sales =3,200,000
Variable cost= 453,515
Contribution margin =3200000/453,415 = 7.056
Break even in sales = 453,415/7.056*3,200,000
5.7 Profitability Ratios
1. Gross profit ratio
Gross profit * 100/ sales
5005530 * 100/6250500
= 80.08%
2. Net profit ratio
Net profit before tax * 100/sales
3712100* 100/6250500
= 59.38%
3. Net profit margin
Net profit after tax * 100/sales
3155285 * 100/6250500
=50.48%
4. Return on investment
Net profit after tax * 100/ total investment
3155285 * 100/5000000
=63.11%

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5.8 Desired Financing
Table 5.4: The Desired financing
Description Cost in kshs
Pre- operational costs 229,200
Working Capital 570,800
Total Start-up Capital 600,000
Source (Author)

5.9 Proposed Capitalization

The business will obtain the desired capital as follows
Table 5.5 Proposed Capitalizations
Personal savings 300,000

Support from family and friends 100,000

Bank loan 300,000

Hire purchase 100,000

Totals 800,000

Source (Author)

27
 SECTION SIX
CRITICAL RISK ANALYSIS
6.1 Introduction
This chapter will look on the possible risks that the business may be exposed to and the plans the
business has laid down to deal with them.
6.2 Operational Risks
This includes the possible risk which will be associated with the operational and administrative
procedures of the business such as internal control problems, human error and fraud, computer
system failure, injuries, strikes or natural disasters. This will be controlled by use of appropriate
segregation of duties, evaluating quality of the internal controls, taking of insurance covers and
allocation of necessary capital for the same.
6.3 Industry risk
These will include the particular risks associated or affecting the agricultural industry like the
climate and weather change which may affect the supplies of the products in the market. The
business will control such risks by use of adhering to weather forecasts, strategic diversification to
spread the risk and use of different relevant financial instruments such as insurance, hedging and
sales contracts.
6.4 Financial Risks
This will include such risks which will be associated with the business financial structure and
transactions. Such risks can be brought about by inflations, increased interest rates and also price
fluctuations. The business will hedge against such risks by taking of insurance covers from the
business insurance firm.
6.5 Political risks
This will include the probability of the political decisions, events or conditions significantly
affecting the profitability of the business. The business will control such risks by taking an
insurance cover, understanding macro and micro political risks environments by researching and
diversifying the business operations to different regions.
6.6 Environmental Risks
These will include the potential threats or any adverse effects to the business surrounding which
may be caused by wastes, resource depletion, effluents or emissions. The business management

28
the business is not affected by any such kind of risks within its locality. This will also be achieved
going for a strategic location for the business.

SECTION SEVEN: TIME PLAN

This section shows the schedule and plan of activities for the first three months.
Table 7.1 Time Plan
Month Activities
 Sourcing of the support services
 Establishing a business office as the business headquarters
1st month  Running competition and market analysis
 Establish business infrastructure
 Recruitment of the operations manager
 Sourcing for a bank and other finances
 Recruitment of any other personnel that may be required by the
business.

nd
2 month Marketing the business
 Offering sales promotions to customers
 Training of employees
3rd month  Advertisement
 Sales promotions
 Business enlargement
 Intense marketing campaigns
Source (Author)

29