BUSINESS PLAN

EBUNTU’S BUTCHERY

PRESENTED BY : KIMANZI MUSYA

PAPER NO : 2312/307B

INDEX NO. : 295411010289

CENTER CODE : 29541101

CENTER NAME : OL’LESSOS TECHNICAL TRAINING

INSTITUTE.

RESENTED TO : THE KENYA NATIONAL EXAMINATION

COUNCILIN PARTIAL FULLFILLMENT FOR

THE AWARD OF DIPLOMA IN BUSINESS
MANAGEMENT.

SUPERVISOR : MR. RUTO AMOS

JULY 2019
DECLARATION
This project is my original work. It has never been produced and presented or presented to any
examination body for marking.

NAME: KIMANZI MUSYA

SIGNATURE ……………………………………

DATE ……………………………..

This project is approved by the supervisor and presented to the Kenya national examination

SUPERVISOR: MR. AMOS RUTO

SIGNATURE …………………………….

DATE …………………………..

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DEDICATION
My greatest dedication goes to my almighty father for giving me good health and knowledge
while writing this business plan

Also my dedication goes to my parents, my siblings for their support during development of this
business plan, May the almighty bless you all.

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ACKNOWLEDGMENT
First and foremost I thank my heavenly father for his protection over my life without him I could
have not accomplished my course. I also appreciate my parents for their moral and financial
support.

I acknowledge also my supervisor, and all the fraternity of Ol`lessos technical training institute.

TABLE OF CONTENTS

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DECLARATION............................................................................................................................i

DEDICATION...............................................................................................................................ii

ACKNOWLEDGMENT..............................................................................................................iii

TABLE OF CONTENTS.............................................................................................................iv

CHAPTER ONE............................................................................................................................1

1.0 BUSINESS DESCRIPTION PLAN......................................................................................1

1.1 MISSION STATEMENT......................................................................................................1

1.2 BUSINESS NAME................................................................................................................1

1.3 BUSINESS LOCATION PREMISES AND CONTACTS...................................................1

1.3.1 BUSINESS LOCATION....................................................................................................1

1.3.2 BUSINESS CONTACT......................................................................................................2

1.4 FORM OF OWNERSHIP......................................................................................................2

1.5 TYPE OF BUSINESS............................................................................................................3

1.5.1 THE INDUSTRY................................................................................................................3

1.6 BUSINESS GOAL.................................................................................................................3

1.7 PRODUCTS/SERVICES.......................................................................................................3

1.8 NATURE OF OPPORTUNITIES (JUSTIFICATION ) OF VENTURE..............................4

1.9 ENTRY AND GROWTH STRATEGY................................................................................4

CHAPTER TWO...........................................................................................................................5

2.0 MARKETING PLAN............................................................................................................5

2.1 OBJECTIVES........................................................................................................................5

2.2 CUSTOMERS ANALYSIS...................................................................................................5

2.3 MARKET SHARE ANALYSIS............................................................................................5

2.4 COMPETITION.....................................................................................................................7

2.5 LOCATION...........................................................................................................................7

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 2.6 PRODUCT SERVICE STRATEGY.....................................................................................9

2.6.1 CUSTOMERS.....................................................................................................................9

2.7 PRICING STRATEGY..........................................................................................................9

2.8 PROMOTION......................................................................................................................10

2.9 DISTRIBUTION STRATEGY............................................................................................10

2.9.1 SALES TACTICS.............................................................................................................10

2.9.2 MARKETING SWOT ANALYSIS..................................................................................11

2.10 ACTION PLAN.................................................................................................................13

CHAPTER THREE.....................................................................................................................14

3.0 ORGANIZATIONAL PLAN..............................................................................................14

3.1 OBJECTIVES......................................................................................................................14

3.1.1 ORGANIZATIONAL STRUCTURE...............................................................................14

3.2 MANAGEMENT TEAM....................................................................................................15

3.3 PERSONNEL.......................................................................................................................17

3.4 RECRUITMENT AND SELECTION.................................................................................17

3.5 RETAINING AND MOTIVATION....................................................................................18

3.5.1 REWARDS.......................................................................................................................18

3.6 TRAINING AND SUPERVISION......................................................................................18

3.6.1 APPRAISAL.....................................................................................................................19

3.7 LEGAL REQUIREMENTS.................................................................................................19

3.8 SUPPORT SERVICES........................................................................................................19

3.9 MANAGING CHANGES....................................................................................................19

3.10 ACTION PLAN.................................................................................................................19

CHAPTER FOUR.......................................................................................................................20

4.0 PRODUCTION PLANNING..............................................................................................20

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 4.1 OBJECTIVES......................................................................................................................20

4.2 PRODUCTION FACILITIES AND CAPACITIES............................................................21

4.3 OPERATIONAL/PRODUCTION PROCESS....................................................................21

4.4 PRODUCTION STRATEGY/OPERATION......................................................................21

4.5.1 OVERHEADS..................................................................................................................22

4.6 REGULATION....................................................................................................................23

4.6.1 RISKS AND PROBLEMS................................................................................................23

4.7 ACTION PLAN...................................................................................................................23

CHAPTER FIVE.........................................................................................................................24

5.0 FINANCING........................................................................................................................24

5.1 OBJECTIVES......................................................................................................................24

5.2 CAPITALIZATION INVESTMENT..................................................................................24

5.2.1 PROPOSED CAPITALIZATION....................................................................................24

5.2.2 DESIRED FINANCING...................................................................................................24

5.3 PRE-OPERATIONAL COST..............................................................................................25

5.3.1 OPERATIONAL EXPENSES..........................................................................................25

5.3.2 PERSONAL EXPENSES.................................................................................................25

5.3.3 PRODUCTION COST......................................................................................................25

5.4 CASH FLOW STATEMENT..............................................................................................26

FOR THE 1ST YEAR 2019.........................................................................................................26

5.4.1 CASH FLOW STATEMENT FOR THE YEAR 2020....................................................27

5.4.2 CASH FLOW STATEMENT FOR THE YEAR 2021....................................................28

5.5 INCOME STATEMENT FOR THE 1St YEAR..................................................................29

5.5.1 INCOME STATEMENT FOR 2ND YEAR.......................................................................29

5.5.2 QUARTERLY PROJECTED INCOME STATEMENT FOR THE 3RD YEAR..............30

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 5.6 BALANCE HEET AS AT 1ST JANUARY 2019.................................................................30

5.7 BREAK-EVEN POINT (B.E.P) ANALYSIS......................................................................31

5.8 PERFORMANCE RATIO...................................................................................................32

5.9 ASSUMPTION....................................................................................................................33

5.10 ACTION PLAN.................................................................................................................33

CHAPTER SIX............................................................................................................................34

6.0 ECONOMY.........................................................................................................................34

6.1 INDUSTRY.........................................................................................................................34

6.2 LOCATION VALUE...........................................................................................................34

6.3 MARKETING......................................................................................................................34

6.4 OPERATIONS.....................................................................................................................34

6.5 FINANCIAL........................................................................................................................34

6.6 SECURITY..........................................................................................................................35

6.7 OTHERS..............................................................................................................................35

6.8 RISK ANALYSIS................................................................................................................35

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CHAPTER ONE

1.0 BUSINESS DESCRIPTION PLAN

The business name will be EBUNTU’S BUTCHERY. It will be located in the outskirts of
Mwingi town along Kyuso road. It shall be a sole proprietorship business. The business will
intend to satisfy the needs of its customers by providing quality meat from different animals e.g.
goats, cattle, sheep and chicken.

The business will operate under the following address;

EBUNTU’S BUTCHERY,

P.O BOX 7148

MWINGI .

TEL: 0760050760

1.1 MISSION STATEMENT

The business will be dealing with supply of meat from cattle, sheep, goats and chicken to the
inhabitants of and Kyuso center.

1.2 BUSINESS NAME

The name of the business will be EBUNTU’S BUTCHERY. A name derived from the owners
name, it is a easy name for quick identification of the business.

1.3 BUSINESS LOCATION PREMISES AND CONTACTS

1.3.1 BUSINESS LOCATION

The business will be located in the outskirts of Mwingi town along Kyuso road. The location of
the business is suitable because of the presence of large population of consumers.

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1.3.2 BUSINESS CONTACT
The address of the business will be:-

EBUNTU’S BUTCHERY,

P.O BOX 1600

MWINGI

TEL: +254760000760

1.4 FORM OF OWNERSHIP

EBUNTU’S butchery will be a sole proprietorship kind of business owned by Ebuntu Kimanzi .
She will enjoy the following benefits:-

Raising her living standard – Since chance of getting white color job is getting narrower and
narrower day by day the only way of living is non other than to go back to the reserve and this
will remain the ark and only means of survival

Job security – This firm will be an assurance of continuous employment because the owner will
not be laid off or retrenched as well as no retirement.

Statues – The owner receive attention and recognition through customers conduct and public
exposure

Independent – she will be able to make her own decision and be her own boss

Pride in ownership – He will enjoy seeing her own name and the name of her enterprise on her
building

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1.5 TYPE OF BUSINESS
The type of business shall fall under agricultural production industry. The business will be of
start up type it will be expected to start as from January 2019

1.5.1 THE INDUSTRY

The business fall under agricultural production industry. Since agriculture has been the back
bone of the country, agriculture industry consumes about 60% of the resource production in the
country with this regard therefore the industry has contributed a lot in production of horticultural
crops concerned within our locality. Furthermore the industry is a large sector ready to
accommodate more business of the same kind. The presence of very few competitors who are
unreliable give room to others to venture into this business.

1.6 BUSINESS GOAL

The goals of the business will be as follows:-

- Improve countries economy –

- Creation of employment – The farm will create job opportunities to some few individuals
thereby raising the living standards
- Improving health standards of citizens – Vegetables is the simplest and rich source of
vitamins
- Independences – he will be able o make her own decision, likeness and be his own boss

1.7 PRODUCTS/SERVICES
The products intended to be offered are meat from goats, cattle, sheep and chicken. The business
is expecting to curb customers from and its surrounding area. The products are expected to
satisfy the needs of the customer who tend to be dissatisfied by the unreliable competitors. The
business competitors are not in operation throughout the year because their products are bought
from other producers.

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 EBUNTU’S PRODUCTS COMPETITORS DIFFERENCES
PRODUCTS
Goat meat Cattle meat Low price
Sheep meat Sheep meat Better packing
Cattle meat Availability throughout the year
Chicken meat Fair quality and quantity
Discounts
Delivered at customer’s
premises

1.8 NATURE OF OPPORTUNITIES (JUSTIFICATION ) OF VENTURE

The business shall be located in , commonly known as stage. Acquisition of animals for
slaughter makes it a good spot to run business. Cattle, sheep, goats and chicken are weekly
auctioned at Mwingi on every Wednesday. This healthy for the continuous running of supplies to
the customers.

Competitors are also acquiring their raw materials from this market, but they acquire them in
small quantities. From all the competitors, non of them slaughters chicken. This is a great
opportunity venture for the proprietor. introduction of chicken meat in the butchery will attract
more customers.

1.9 ENTRY AND GROWTH STRATEGY

The business will operate under supervision thus facilitates continuous operation throughout the
year for successful growth, attainment of the goal and objective of this particular business,
skilled personnel will be required especially in performing the managerial function like
controlling, co-ordinating and budgeting of the business operations. Also the unskilled personnel
will have some part to play to effect the functioning of the firm activities. A vehicle will be hired
for transportation of the products. Furthermore a telephone will be needed in the office for
smooth running of the business and effective communication with the customers. In addition the
farms require power.

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CHAPTER TWO

2.0 MARKETING PLAN

2.1 OBJECTIVES
The market is determined to be quite viable owing to the fact that consumers need meat
frequently. The business will be ready to offer cheap prices for quality and quantity producers
unlike the competitors, cleanliness and hygiene will be highly observed and it will be a
prioritized issue. Customers seldom want dirty products or un hygienic environment.

The sales are expected to rise by 10% for the second and third year. Moreover there will be
variation between the given months. So the business continuous to be fully established, the
profitable sates volume is expected in the business.

2.2 CUSTOMERS ANALYSIS

The potential customers will be individual customers who will consist of staff and student of the
also the institution in surrounding area. Consumers of all status are expected to buy the products
to satisfy their needs. An average number of customers are expected to buy from this business
who have been buying from Kyosu market. The product will be offered at the customers
convenience, the business stands a great chance winning those customers. Furthermore my
competitors products are not all that fresh as compared to the business which shall be transported
to the market due to the fact that the slaughter house is a short distance from the potential
customers,. The quality of the products will also change the customer buy in from competitors
hence more will go for product which are high quality and as well quantity. Time factors will
also pave way to more customers especially students who will be the potential customers, they
will save a lot of time instead of going to Kyosu.

2.3 MARKET SHARE ANALYSIS

The business is expected to constitute 50% of the in the horticultural whereas the competitors are
expected to constitute 30% and 20% respectively of the market share.

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The sales forecast for the first year will be as in the table below

YEAR MONTH AMOUNT (KSHS)

1st 1 -
2 -
3 160,000
4 163,000
5 164,000
6 165,000
7 168,000
8 169,000
9 171,000
10 172,000
11 174,000
12 175,000
TOTAL 1,681,000

For the second year the sales are expected to increase at the rate of 10% therefore the quarterly
cash will as shown in the table below

YEAR QUARTER AMOUNT (KSHS)

2nd 1st 176,000
2nd 514,200
3rd 558,800
4th 573,100
TOTAL 1,849,100

For the third year the sales are also expected to increase by 10%, therefore the predicted sales are
as in the table below

YEAR QUARTER AMOUNT (KSHS)

3rd 1st 193,000
2nd 595,000
3rd 614,000
4th 630,000
TOTAL 2,034,010

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2.4 COMPETITION
There will be one major competitorwho is now settled near the area:-

Mwingi Cottage Hotel butchery

2.5 LOCATION
The business will be located in the outskirts of Mwingi town along Kyuso road. The location of
the business is suitable because of the presence of large population of consumers.

Again the business shall be secure in that, divisional headquarters is located just few metres from
the business and the police usually patrol around the area, hence any unlawful act like theft will
be dealt with.

Furthermore, there is a great demand for the commodities by the potential customers who will be
the staff and students of the . The business shall be located in strategic place where it shall curb
most of the customers.

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2.3.1 SKETCH OF BUSINESS LOCATION

Highway

Shopping Centre

Petrol station
Shopping
centre

To mwingi

Churo high
Mwingi
Ebuntu’s school
resort
Butchery
Khuso road

Shopping
centre

Shopping
centre
Hospital

Bus stage

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2.6 PRODUCT SERVICE STRATEGY
The proposed business will only deal with selling of fresh meat from cattle, sheep, goats and
chicken. Introduction of chicken into the butchery business strikes a different cord in the
industry. There is always tendency to exclude chicken meat in the butchers list, this is because of
fear of prices. The venture will boost the economy by increasing the window for chicken sale.
The business will beat and pass its competitors by offering quality services that include excellent
customer relations and hygienic products. The health of customers will be prioritized by ensuring
that meat is clean and well package right from slaughter house to the butcher shop. This will
attract more customers increase supplies.

2.6.1 CUSTOMERS
The principle customers are the students of the and the neighboring schools, students are
expected to buy because they prefer cooking for themselves rather than buying food from the
cafeteria. The schools on the other hand can by means avoid buying for their students. Other
customers will be the staff of the both teaching and non-teaching staff who have a capability of
buying due to financial status. Most of the customers will be attracted to buy from the business
due to its full time operation and discounts offered. Apart from that, the commodities will be
transported to customers premises if ordered. The location of the business will also facilitate easy
access by the customers at their own appointed time.

Seasonally might affect the business in that when there is higher productivity, the market might
be forced with similar product hence interfering with the business. Another factor is economical
situation which might cause fluctuation in the price of the products day after day. All in all the
business will be manned by skilled personnel and profitable sales volume for are expected.

2.7 PRICING STRATEGY

Since it is a start up business, price inflation has not been predicated yet. But following the
location of the business the firm will be selling at a cheap price because it will incur a lot of
expenses. Transportation for instance will be cheaper because of the nearness and good tarmac
road. Price reduction will be more attractive to customers and will enhance buying in large
quantities. However too much reduction might cause problem in business so this should be done
to a limited extend.

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2.8 PROMOTION
To promote the sale of products she will use the following methods.

Posters – Will pin posters about the products and services offered at EBUNTU’S butchery he
will stick them on shops and kiosks, on trees along the road and on telephone and electricity
poles

Print on T-shirts – Will print T-shirts for all the workers on them he will print EBUNTU’S
butchery

Leaflets – He will print brief information about service provided in the farm, so that it will be
distributed to all the targeted groups

Bicycle labels – Bicycles for transportation of vegetables will be printed EBUNTU’S butchery

2.9 DISTRIBUTION STRATEGY

Location of EBUNTU’S farm is favorable place to carry the business, he believes beyond any
reasonable doubt that he will occupy a niche i.e. offer products and services that meet specific
needs of customers. The location for the business is best suited on the following reasons:-

- Nearness to present and potential customers

- The place is accessible to customers
- The location favor the business
- Nearness to electricity

2.9.1 SALES TACTICS

EBUNTU’S butchery will use direct selling for its products. Some of the produce shall be sold
from the farm whereas others shall be transported to customers premises. The farm shall employ
one sales personnel who should have good public relation, tactful, and ever in good moods to
attract customers. He farm will be offering quick and reliable services to its customers owing to
full time availability of products. The sales personnel shall be paid in terms of salaries and shall
be required to have worked in the same field with good qualification. He shall go in person to
various neighboring schools who might be interested in making orders for the products.

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2.9.2 MARKETING SWOT ANALYSIS
AREA STRENGTHS WEAKNESS OPPORTUNITI THREATS
ES
Marketing The business will Lack of Due to increase in These are
be located in a knowledge by demand for the established
strategic position customers of its produce the competitors. The
where it is able existence as it’s business will be in risk of attack by
to curb most of a start up a position to pests and
customers. The business become profitable. diseases
technological Availability of
know how will product
foster efficiency throughout the
in production year will attract
more customers
hence establishing
a good market
Production Knowledge in Quality control. High quality and The business
the market and Lack of quantity products might be
its strategies will knowledge of the capitalizing on the affected by over
improve products competitors population due
production weaknesses to seasons
modern fluctuations of
technology will prices as a result
affect production of mass
of quality production
products
Finance Knowledge on High initial cost Available lending The cost of
proper budgeting for starting up institutions. Low maintenance
of available little business. High loan interest on since all the
finance. salaries and borrowed/money finance have
Knowledge on other expenses been put into
how to borrow business since
from lending all the finance
institutions have been put
into business.
High interest on
loan
Personnel Basic skills on Difficulty in Good public Resigning of
business handling relation will some workers
operations employees. attract more incase of strikes
knowledge in Absenteeism customers. by workers,
entrepreneurship may result in Availability of production will
poor production cheap labour from be offered.
unemployment.
Motivation of
workers

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 Environment Good Hiring of lorries Due to the fertility Natural
infrastructure e.g for of the land less calamities like
tarmac roads transportation money shall be floods. The risk
availability of may cost a lot ,of used to buy of attack by
water and power. money. The fertilizers. There is pests and
Enough breakdown in land for future diseases. Decline
resources will social amenities expansion in prices due to
affect continuity mass production
in business in the market.
Management Knowledge of Difficult to get Advanced of Lack of
proper trained managerial skills cooperation may
management personnel. proper result in poor
skills. Skills Exposure in management production.
personnel proper terms of salary policies Registering of
positioning of payment established. some workers
personnel Availability of will interfere
both skilled and with
unskilled workers management
strikes by
workers
Selling Profitable sales Lack of storage Quality products Flooding of the
volume than facilities. advertisement will market due to
maximum sales Perishability of help promote the mass
volume. Use of products selling of the production .
salesman will produce. Proper fluctuation of
improve on the facilities proper price
selling of interaction with
products customers

2.10 ACTION PLAN

Since the farm is a start up, credit terms will not be offered in the first earlier stages of its
operation. This may ruin the performance. However, as time goes by, some of customers who are
believed to be trustworthy shall be given credit facilities in accordance to the duration they have
been buying from the farm. For any order made deposit will be required and will be paid in terms
of cash.

Also the products shall be sold directly to the customers who had been buying from the business
to increase the market areas will make sure that there is frequency in the market.

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CHAPTER THREE

3.0 ORGANIZATIONAL PLAN

3.1 OBJECTIVES
EBUNTU’S butchery is a sole proprietorship kind of business organized and managed by the
owner, the with assistance from other members of the organization or business will exercise their
powers and authority in their respective position facilitate the accomplishment of the farm
objectives. Proper organization of activities will ensure that the farms function have been well
coordinated

3.1.1 ORGANIZATIONAL STRUCTURE

This is the breakdown of the management from top down to junior employees. Its levels could
channel their observation and grievances to the top management or how orders from above
(managers) reach the employees lowest rank.

Below is the organizational chart.

Manger

Accountant

Salesman Labourers Watchman

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3.2 MANAGEMENT TEAM
The management team participates in decision making on matters concerning the running of the
organization. Since the proposed EBUNTU’S butchery will be a small enterprise on its early
days of operation the management will consist of only few people designated.

MANAGER

The general manager of Ebuntu’s butchery will ensure that all the operation in farm, goes on as
require and the final target and objectives are met on the time.

DUTIES AND RESPONSIBILITIES

 Supervises activities being performed in the farm

 Control the activities of the business
 Co-ordinates the activities being done to enhance achievement of the objectives
 Plans on how the business should be run
 Degree on how the business should be run
 Delegates duties to the juniors
 Recruit, promote or demote employees

QUALIFICATIONS

 O-level or equivalent
 Should be a diploma holder
 Should have entrepreneurial skills
 Should have good leadership qualities
 Should have knowledge in management
 Age 23 – 28 years of age

AGRICULTURAL EXTENSION OFFICER

DUTIES AND RESPONSIBILITIES

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  Supervises activities in the absence of the manager
 Test the meat from slaughter house

QUALIFICATIONS

 Must have a K.C.S.E mean grade of C- with a credit in Mathematics, Agriculture and
English and Kiswahili or K.C.S.E division II
 A diploma holder in agriculture
 Must have experience in the same field of not less than two years

ACCOUNTANT

DUTIES AND RESPONSIBILITIES

 Supervise the entire junior employee

 Check on performance of each employee
 Make daily reports on a total income and expenditure

QUALIFICATION

 Must be born again Christian

 Kenya certificate of secondary education with C plain grade
 KATC II certificate holder
 Age 23 – 30 years of age
 Should have 2 years experience

SALESMAN

DUTIES AND RESPONSIBILITIES

 Marketing of farm produce

 Performs promotional duties
 Supplies to customers i.e institution
 Must be able to work for longer hours without supervision

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QUALIFICATION

i. K.C.S.E holder of C pain grade

ii. Certificate holder in marketing
iii. Have one year experiences in similar field
iv. Mentally tactful

WATCHMAN

DUTIES AND RESPONSIBILITIES

i. To guard firm equipment and facilities

ii. Security to firm produce from theft

QUALIFICATIONS

i. K.C.S.E certificate holder

ii. Must have worked as a watchmen
iii. 35 years and above of age
iv. Should be strong and energetic

3.3 PERSONNEL
These personnel are involved in daily operation in the firm. However they don’t take part in
decision making on the activities to be carried out in the firm. Those personnel are grounds man
and transporters

3.4 RECRUITMENT AND SELECTION

There will be various jobs created at the start and growing period of this business

From the vacancies to be filled by appropriate people will follow steps below:-

Writing down qualification of each vacancy. His will help the owner when designing posters
from interview for those vacancies

Advertisement will advertise all the vacant position through poster, which will be stick on shop
walls, windows and doors, electricity and telephone and trees along the road

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Interview all those with right qualification and are able and willing to work under the conditions
and terms of our agreement.

3.5 RETAINING AND MOTIVATION

Retaining and motivation of any employee will depend on his/her hard work and dedication to
work

3.5.1 REWARDS
For any employee to give the best output he/she must be rewarded. Giving incentives and
benefits is the best way to motivate which it will be given through:-

Giving them vegetables – After every two days each employee will be given some vegetables

Wearing protective clothing – provide the employees with protective clothing to suit their
occupation e.g. thick jackets for the watchman, gumboots and gloves for ground man etc.

Overtime pay – All overtime work should be gathered for during the payment of salary

Advance payment – Any employee who will need an advance payment of his/her salary will be
paid

Medical services – Any employee who will require any medical attention whose charges will be
not more than two hundred shillings will be assisted

Christmas allowance – Every year employee will be given an increment of one thousand five
hundred shillings on her/his November salary. This will enable them have good feast during the
Christmas day

3.6 TRAINING AND SUPERVISION

Unlike some other organizational practice vegetable farm do not require much technical skills
but require full common sense.

EBUNTU’S butchery therefore will not offer any type of formal training. However it will allow
her employees to go for seminars. They will also allow them to go to Mwingi Agricultural
Show, which will enable them equip their knowledge on crop farming practices

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Farm supervisors and his being the manager will work hard in supervising all the activities going
on in the farm

3.6.1 APPRAISAL
The work done by workers should be measured by its performances. So anon-active members
will be replaced if they do not perform well

3.7 LEGAL REQUIREMENTS

For any kind of business operation, legalization is utmost importance to minimize irregularities
and misunderstanding with the government authorities. The purpose business shall secure a
license from Baringo county council as required by ministry of Trade, this will ensure that the
business is run smoothly and harmoniously

3.8 SUPPORT SERVICES

The only selected supporting organization by the business is the banking organization the farm
has chosen Kenya commercial bank where it has some friends who will assist in securing finance
for the farm. They are capable reputable and well known individuals who will add to the
credibility of the venture

3.9 MANAGING CHANGES

There are different changes that affect or expected in the firm. His is quality verse demand.
When there is dry season the owner will make sure that the management are expected to irrigate
the crops. The owner will make sure that the farm will offer quality commodities which are fresh
and pest free owing to the fact that the farm is manual by personnel is experienced. The owner
will make sure that the commodities are always available hence curbing more customers by
capitalizing the competitors weaknesses and unreliability.

3.10 ACTION PLAN

The owner being the general manager, he will be in charge of all the management. The owner
will the only one depositing and withdrawing money from the bank. When vegetable is sold
customers give ones to salesman at the end of each day the salesman hands the daily earning to
the owner. The owner will accumulate and take them to the bank every offer seven days.

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Also to the bank every recruitment of personnel will be conducted as per their qualification.
Everything will be transparent, at the end of every-year award to the best performing personnel is
awarded and afterwards their will be increment of salary. Also all the personnel will be given
chances to attend agricultural show.

CHAPTER FOUR

4.0 PRODUCTION PLANNING

For the firm to obtain its final products, it will have to perfume several processes. In each step, a
variety of materials equipments and labour are required. This chapter gives an overview of all
activities performed by the firm top obtain its set objectives cost.

4.1 OBJECTIVES
Its objectives is to offer satisfactory services, growth of development, increases profits and turn
expand premises

MATERIALS

There are several materials and equipment required in one firm to perform its clothes. They
include chopping boards, hacksaw, axe, weighing machine.

LABOUR

The farm has employed four laborers who will work in the farm. They will also be assisted by
agricultural extension officer and the satisfaction

OVERHEADS

The firm will also incur some other expenses like transportation cost, water, salaries and other
expenses. The table below gives a summery of all process performed, material and equipment,
labour requirement and overheads.

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4.2 PRODUCTION FACILITIES AND CAPACITIES
PROCESS REQUIREMENT QUANTITY PRICE
Setting up of MATERIALS many 14,500
butchery shop This includes
partitioning and
putting hanging nails.
Installation of pipes Materials e.g. pipes 30 X 10 m 15,000
Labour
Technician 1 5,000
Shop setup MATERIALS
Nails 5 2,000
Ply wood 3 2,000
Paint 20 4,000
Glass 5 1,500

Transportation LABOUR
4 800
2 4,000
TOTAL 48,800

4.3 OPERATIONAL/PRODUCTION PROCESS

Animals to be slaughtered are bought from Kyuso auction market, they are then taken to the
slaughter house before being transported to the butcher shop.

4.4 PRODUCTION STRATEGY/OPERATION

PERFORMANCE ANALYSIS

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The monthly production of each production below

PRODUCTION TOTAL PRODUCTION FOR ONE

WEEK
Chicken meat 200
Cattle meat 5
Sheep Meat 7
Goat meat 10

4.5.1 OVERHEADS
OVERHEADS AMOUNT (KSHS)
Owner/managers salary 15,500
Adm/sales staff salary 4,000
Water 483
Electricity 1,203
Repair and maintenance 933
License 1,000
Transport 1,254
Telephone 647
Advertisement 650
Miscellaneous 1,233
TOTAL 26,903

Total production costs = Total material cost + Labour cost + Total overheads

Total material cost 87,200 31,700

Total labour cost + 55,500

Total overhead 16,903

TOTAL 104,103

4.6 REGULATION
Proper regulation like proper sanitation which include disposal of waste should be done. Also
putting on protective clothing when performing duties

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4.6.1 RISKS AND PROBLEMS
Risks enable an entrepreneur to be prepared and not to be taken by surprise by the happening of
events. These risks will enhance flexibility and reality in making business decisions. Below are
some of the risks predicted by the firm?

 FORESEEN RISKS

These are the risks which are predicted from the prevailing environmental factors. Fluctuation of
animal prices in the market.

 UNFORESEEN RISKS

These arte the risks which cannot be predicated. The major risks which may hinder proper
accomplishment of the farm’s objectives are natural calamities like floods for instance el-nino
hail/storms and low rain falls.

 NORMAL BUSINESS RISKS

These are the obvious business risks for example a lot of competitors may put business at risk of
prosperity of failing. Following the success of the business of its initial stages. Many competitors
may venture into the same business hence flooding the market with similar produce.

4.7 ACTION PLAN

Before employing any person he will make sure that each has met the minimum qualification and
requirement needed for one field he is aspiring for.

The farm will never offer training service services to any worker nor sponsor him/her at any
training institute. The farm has decided to set aside funds to cater for any risks hence giving an
assurance of business continuity in spite of any risk occurrence.

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CHAPTER FIVE

5.0 FINANCING

5.1 OBJECTIVES
This indicates the farm production of the expected financial performances of the business. It’s a
crucial tool for evaluating progress towards attainment of goal and for obtaining desired
financing. The plan include cash flow projection, income statements, projection, pro-forma
balance sheets, break-even analysis, tools for interpreting the financial statement and financing
proposal.

5.2 CAPITALIZATION INVESTMENT

5.2.1 PROPOSED CAPITALIZATION

SOURCE AMOUNT
Personal savings 80,000
Bank loan (KCB) 150,000
Family/friends 70,000
TOTAL INVESTMENT 300,000

5.2.2 DESIRED FINANCING

ITEM AMOUNT
Pre-operational cost 31,700
Working capital cost 55,500
Fixed assets/overheads 16,903
TOTAL DESIRED FINANCING 104,103

The above show the capital required for the start of business

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5.3 PRE-OPERATIONAL COST
ITEM COST
Owner/manager’s salary 5,500
Sales staff salary 4,000
Water 483
Electricity 1,203
Repair and maintenance 1,000
License 1,254
Transport 647
Telephone 650
Advertisement 1,233
Miscellaneous
TOTAL 16,903

5.3.1 OPERATIONAL EXPENSES

Total production (kshs) = Overhead + Labour cost + Material cost

=55,500 + 31,700 + 16,903

= 104,103

5.3.2 PERSONAL EXPENSES

The start up capital will be kshs. 300,000

The projected capital which the owner manager intends to invest is as follows

5.3.3 PRODUCTION COST

Total capital cost will be rate at kshs. 60,000 which will be used to pay employees, while 87,200
will be used for material cost and labour cost.

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5.4 CASH FLOW STATEMENT

FOR THE 1ST YEAR 2020

JAN. FEB. MARCH APRIL MAY JUNE JULY AUG SEP OCT NOV DEC.
Begging cash 200000 114990 26280 69670 110160 154350 202260 262850 308440 350780 401130 451020
Sales - - 16000 163000 164000 165000 168000 169000 171000 172000 174000 175000
Total cash 200000 114990 186280 232670 274160 319350 370560 431850 479440 522780 575130 626020
inflow
Equipment 30000 - - - - - - - - - - -
Farm inputs 20000 550000 80000 85000 82000 80000 70000 85000 90000 83000 85000 75000
Salaries 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000
Electricity 700 500 1000 1200 1300 1130 1200 1400 1450 1500 1500 1550
Water 300 300 400 500 500 600 400 500 500 600 600 600
Telephone 300 300 500 600 600 700 700 700 800 800 800 900
Transport 500 500 1200 1200 1300 1350 1400 1450 1450 1500 1600 1600
Loan payment 2780 2780 2780 2780 2780 2780 2780 2780 2780 2780 2780 2780
Loan interest 830 830 830 830 830 830 830 830 830 830 830 830
Repair and - - - 1000 1200 1000 1000 1300 1350 1400 1450 1500
maintenance
Advertisement - - 900 400 - - - - - - - -
Miscellaneous 600 500 1000 1000 1300 1400 1400 1450 1500 1500 1550 1600
License 1000 - - - - - - - - - - -
Total expenses 850101 88710 116610 122510 119810 116990 107710 123410 128660 121650 124110 114360
Ending cash 114990 26280 69670 110160 154350 202560 262850 308440 315780 401130 451020 511660

5.4.1 CASH FLOW STATEMENT FOR THE YEAR 2021

JAN. FEB. MARC APRIL MAY JUNE JULY AUG SEP OCT NOV DEC.
H
Begging cash 511660 447360 398560 391760 351260 459460 567160 680860 786260 896260 896260 970960
Sales - - 48000 150000 164000 165000 170000 165000 162000 16000 162000 150000
Total cash 11660 447360 446560 406760 515260 624460 737160 845860 951560 1056260 1132960 1197660
inflow

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 Equipment 20000 - - - - - - - - - - -
Farm inputs 10000 15000 20000 20000 20000 20000 20000 20000 20000 15000 15000 15000
Salaries 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000
Electricity 900 900 900 900 900 900 900 900 900 900 900 900
Water 400 400 400 400 400 400 400 400 400 400 400 400
Telephone 200 200 200 200 200 200 200 200 200 200 200 200
Transport 500 1000 1500 2000 2000 2000 2000 2000 2000 2000 2000 2000
Loan payment 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000
Loan interest 800 800 800 800 800 800 800 800 800 800 800 800
Repair and - - - - - 1000 - - - - - -
maintenance
Advertisement - - - - - 1000 1000 1000 - - - -
Miscellaneous 500 500 1000 1200 1500 1000 1000 1000 1000 1000 1000 1000
License 1000 - - - - - - - - - - -
Total expenses 64300 48800 54800 55500 55800 57300 56300 56300 5530 853000 85300 85300
Ending cash 447360 398560 391760 351260 459460 567160 680860 789560 896260 970960 1047660 1112360

5.4.2 CASH FLOW STATEMENT FOR THE YEAR 2022

JAN. FEB. MARC APRIL MAY JUNE JULY AUG SEP OCT NOV DEC.
H
Begging cash 1112360 1000160 930460 980760 1051060 1081360 1111660 1166960 1232260 1292560 1249860 1395160
Sales - - 100000 120000 110000 125000 115000 120000 115000 112000 100000 120000
Total cash inflow 111236 1000160 1030460 1100760 1161060 1206360 1226660 1288960 1347260 1404560 1146860 1515160
Equipment 50000 - - - - - - - - - - -
Farm inputs 20000 15000 - - 30000 10000 5000 5000 5000 5000 5000 5000
Salaries 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000 40000
Electricity 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000 12000
Water 500 500 500 500 500 500 500 500 500 500 500 500
Telephone 500 500 500 500 500 500 500 500 500 500 500 500
Transport 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000
Loan payment 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000
Loan interest 500 500 500 500 500 500 500 500 500 500 500 500
Repair and - - - - - 30000 - - - - - -
maintenance
Advertisement - - - - - 5000 5000 - - - - -
Miscellaneous 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 32000

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License 2500 - - - - - - - - - - -
Total expenses 122200 67200 49700 49700 79700 94700 59700 54700 54700 54700 54700 84700
Ending cash 1000160 930460 980760 1051060 1081360 1111660 1166960 1232260 1292560 1249860 1395160 1430460

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 5.5 INCOME STATEMENT FOR THE 1St YEAR

JAN. FEB. MARC APRI MAY JUNE JULY AUG SEP OCT NOV DEC.
H L
Sales - - 160000 16300 16400 16500 16800 16900 17100 17200 17400 17500
0 0 0 0 0 0 0 0 0
Gross - - 160000 16300 16400 16500 16800 16900 17100 17200 17400 17500
profit 0 0 0 0 0 0 0 0 0
Expense 5223 8593 113830 11973 11703 11030 11401 10493 12063 12588 18887 12133
s 0 0 0 0 0 0 0 0 0 0
Net 5223 8593 46170 44270 46970 50970 43070 48370 45120 53130 52670 63420
profit 0 0

5.5.1 INCOME STATEMENT FOR 2ND YEAR

JAN. MARCH APRIL JUNE JULY SEP OCT DEC.

Sales - 176000 - - 141200 - - 558800 - - 573100 -

Credit sales - 200000 - - - - - - - - - -

Gross profit - 376000 - - 545200 - - 558800 - - 573100 -

Expenses - 265360 - - 376270 - - 376240 - - 372640 -

Net profit - 110640 - - 164930 - - 182560 - - 200400 -

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5.5.2 QUARTERLY PROJECTED INCOME STATEMENT FOR THE 3RD YEAR
JAN. – FEB. APRIL - JUNE JULY - OCTOBER –
SEPTEMBER DEC.
Sales 1936000 595320 614680 630410
Credit sales 50000 - - -
Gross profit 243600 595320 614080 630410
Expenses 193550 376070 376070 376040
374150Net 50050 219250 238640 256260
profit

5.6 BALANCE HEET AS AT 1ST JANUARY 2020

ASSETS LIABILITIES
CURRENT ASSETS LONG TERM LIABILITIES
Cash at hand 200,000 3 years (KCB) loan 300,000
Cash at bank 100,000 Net worth/owners 230,000
300,000 Equity 330,000
FIXED ASSETS
Equipments 30,000
TOTAL ASSETS 330,000

5.7 BREAK-EVEN POINT (B.E.P) ANALYSIS

This is the point at which the expenses of the owners march the sales

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 ITEMS COST
Variable expenses 890,000
Farm inputs 1,300
Advertisement 14,430
Electricity 5,800
Water 15,050
Transport 14,800
Repair and maintenance 14,800
Miscellaneous 6,000
Telephone 1,700
TOTAL 960,200

STEP 2

ITEMS COST (KSHS)

Fixed assets 9,960
Loan increase 300,000
Salaries 36,000
License 1,000

Step 3: Calculating total fixed assets

960,280 X 100/168,000

= 57%

Step 4: Subtracting the divided percentage from

100% - 57%

= 47%

Step 5: Dividing fixed expenses by this percentage to get break-even point

346,960 X 100/43

= 806,884 (BEF)

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5.8 PERFORMANCE RATIO
Gross profit ratio

Gross profit X 100/Sales

YEAR 1

175,000 X 100/238,420

= 73.4%

YEAR TWO

573,100 X 100/773,560

= 74.1%

YEAR THREE

630,410 X 100/886,670

= 71.1%

5.9 ASSUMPTION
Since the business will be located in the outskirts of Mwingi town along Kyuso – road. It shall
be a start up business and its intended to satisfy the needs of its customers by providing quality
vegetables therefore its expected to commences as from 1st January 2014

5.10 ACTION PLAN

For any economical production activity to be favorable, one will at all times try to produce the
quantity he will be able to sell with minimal surplus, in order to reduce unnecessary wastage.

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Since vegetable is a perishable commodity, daily produce will be said within 24 hours of its
production.

The products will not undergo ant processing. This means that the vegetable will not undergo
any processing. This means that it will be sold when still fresh from the farm. Market survey will
be carried out frequently to gather the latest consumer needs and market trends.

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CHAPTER SIX

6.0 ECONOMY
Due to increase economy, the industry is growing due to new department in technological know
how. Again economic situation may cause the prices of farm inputs to increase by a certain rate.
Rise in price of fertilizers or pesticide will be determined, the cause of farm outputs and
therefore the prices will not be constant. In addition to that, seasonal patterns may also
determine the industry trends.

6.1 INDUSTRY
The business shall fall under agricultural production industry, since agriculture has been the
backbone of this country. Agricultural industry constitutes about 60% of the resources
production in the country with this regard therefore, the industry has contributed a lot in
production of vegetables consumed within our locality.

6.2 LOCATION VALUE

The proposed business will be situated South of Mwingi town, Rift Valley provinces, in .

6.3 MARKETING
The potential customers will be individual customers who will consist of staff and student of
the , also the institution in the surrounding area. Consumers of all status are expected to satisfy
their needs. An average number of customers are expected to buy from this business who has
been buying from Cheboiywo market. Since the product will be offered at the premises of the
customers, the business stands a great chance winning these customers.

6.4 OPERATIONS
The business will operate under irrigation thus facilitating continuous operation throughout the
year. For successful attainment of the goal and objectives of this particular business, skilled
personnel will be required especially in performing the managerial functions.

6.5 FINANCIAL
The financial plan is projected for fiscal period of three years. Starting from January 2014. All
transaction involved are shown in their specific records. Inflow indicates all the income whereas

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outflow indicates all the expenses in a specific period. When the two varies are compared,
surplus in inflow indicates that the business is in a favourable condition whereas surplus in
outflow indicates that the business is in adverse condition.

6.6 SECURITY
The business will employ watchman to guard farm equipments and facilities and farm produce
theft. Also the farm will adhere to all labour laws set by central organization of trade union
(COTU). The cap 226 which deals with regulation of wages and employment condition will be
followed. Workers will normal working hours and any overtime services should be accounted for

6.7 OTHERS
The taxation of the business will be according to the taxation law in the business act as laid
down in the constitution

6.8 RISK ANALYSIS

At the commence of operation in the farm it will hire some equipments, therefore in case any
breakdown there must be security in order to increase their lifespan.

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