OL’LESSOS TEHNICAL TRAINING INSTITUTE

PO BOX 210,

LESSOS.

BUSINESS PLAN
OLKINA ACADEMY
P.O BOX 13-20401
CHEBUNYO
PRESENTER : BOR KIMUTAI EVANSON

INDEX NO : 29541101045

COURSE CODE : 1308

PAPER CODE : 307B

COURSE : CRAFT CERTIFICATE IN LAND SURVEY

SUPERVISOR : MS DAMARIS AKOMO

PRESENTED TO THE KENYA NATIONAL EXAMINATION COUNCIL

IN PARTIAL FULFILLMENT FOR THE AWARD OF DIPLOMA IN
LAND SURVEY.

EXAM SERIES : JULY 2018

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DECLARATION
I declare that, this business plan is my own original work and it has not been presented for

certificate examination purposes.

NAME: BOR KIMUTAI EVANSON

SIGNATURE:……………………………………………………………………….

DATE : …………………………………………………………………………….

The business plan has been submitted with the approval of my supervisor:

SUPERVISOR’S NAME: MS. AKOMO

SIGNATURE:…………………………………………………………………………..

DATE ;……………………………………………………………………………………

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DEDICATION

I dedicate this business plan to my loving and caring and eve supportive friends. There perspective
in life has taught me to strive patiently, residence and the art of self independence.

Secondly to my neighbor and church members for their unfailing love and support during the
writing and compiling of this work.

Last but no least this plan is dedicated to my lecturers and my supervisor for critical supervision
and encouragement. Finally to my dear classmates who we joined ideas on a better way of writing
this plan.

God bless you all.

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ACKNOWLEDGEMENT

My deepest appreciation goes to my God who gave me the strength and open mind with ideas to
apply to this business plan.

I express my sincere gratitude to the teaching staff in the Business department through my course
study

Special thanks go to ms Akomo for sacrificing a lot of his time to supervise my work

I am extremely great full for her patience and advice.

Lastly I thank my parents, teachers and my classmates for the moral support.

Thank you all.

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TABLE OF CONTENTS
DECLARATION................................................................................................................................................................... ii
DEDICATION...................................................................................................................................................................... iii
ACKNOWLEDGEMENT.................................................................................................................................................. iv
CHAPTER ONE.................................................................................................................................................................... 1
1.0 Executive summary.......................................................................................................................................... 1
1.1 Business description....................................................................................................................................... 1
1.2 Marketing plan................................................................................................................................................... 1
1.3 Organization and management plan...................................................................................................... 1
1.4 Operation /production plan........................................................................................................................ 1
1.5 Financial plan...................................................................................................................................................... 2
CHAPTER TWO.................................................................................................................................................................. 3
2.0 Business description.............................................................................................................................................. 3
2.1 Business location.............................................................................................................................................. 3
2.2 Form of ownership........................................................................................................................................... 4
2.4 Services................................................................................................................................................................... 5
2.5 Justification of the opportunity................................................................................................................. 6
2.6 Goals of the business....................................................................................................................................... 6
2.7 Entry and growth strategies........................................................................................................................ 6
CHAPTER THREE.............................................................................................................................................................. 8
3.0 MARKETING PLAN............................................................................................................................................ 8
3.3 Market share.......................................................................................................................................................... 8
3.4 Pricing strategy.................................................................................................................................................. 9
3.5 Methods of promotion and advertisement.......................................................................................10
3.6 Suppliers............................................................................................................................................................. 11
Chapter four..................................................................................................................................................................... 12
4.0 organization and management plan.................................................................................................... 12
Management personnel and qualifications.................................................................................................... 12
4.2 Other personnel, numbers and duties................................................................................................ 14
4.3 Remuneration and incentives................................................................................................................. 17

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4.4 Incentives.................................................................................................................................................................. 18
4.5 Support services.............................................................................................................................................. 18
4.6 Finance management................................................................................................................................... 19
4.7 Legal requirements....................................................................................................................................... 19
4.8 Promotion of staff........................................................................................................................................... 20
CHAPTER FIVE................................................................................................................................................................ 21
5.0 OPERATIONAL/PRODUCTION PLAN..................................................................................................... 21
5.1 Production facilities and capacity utilization.................................................................................21
5.2 PRODUCTION STRATEGY............................................................................................................................ 23
5.3 Operational processes................................................................................................................................. 23
5.4 Operation strategy............................................................................................................................................... 24
Chapter six........................................................................................................................................................................ 25
6.0 financial plans.................................................................................................................................................. 25
6.1 pre – operational costs................................................................................................................................ 25
6.2 WORKING CAPITAL....................................................................................................................................... 25
Assumption...................................................................................................................................................................... 26
6.4 Proforma Income Statements.................................................................................................................. 30
OLKINA academy profoma income statement for the year ending 2016, 2017,2018............30
6.5 Proforma balance sheet..................................................................................................................................... 31
OLKINA academy proforma balance sheet as at 31st Dec 2016, Dec 2017, Dec 2018.............31
6.6 BREAK EVEN POINT........................................................................................................................................ 32
Variable cost.................................................................................................................................................................... 32
6.6.1 Contribution margin............................................................................................................................... 33
6.6.4 Break even point........................................................................................................................................ 33
6.7 Profitability ratios......................................................................................................................................... 34
6.8 Desired financing............................................................................................................................................ 34
6.9 PROPOSED CAPITALIZATION................................................................................................................... 34
Appendix 1 :.............................................................................................................................................................. 35
Site plan of the business location.................................................................................................................. 35
Appendix 2:...................................................................................................................................................................... 36
Academic sketch plan................................................................................................................................................ 36

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i
CHAPTER ONE
1.0 EXECUTIVE SUMMARY

1.1 BUSINESS DESCRIPTION

The name of the proposed business is OLKINA ACADEMY. Bor Kimutai Evanson as the
manager will own it. The business will be a sole proprietorship business. The main services
offered are: - Quality education, spiritual growth and exploiting the talents of the pupils
through co – curriculum activities thereby producing a round person capable of meeting
the challenges in the outside world. The aim of the proposed venture is to enhance quality
education through innovative teaching.

1.2 MARKETING PLAN

The competitors are: Chelemei, Kiribwet and olpopong primary school weakness and
strengths shall be studied to enable the proprietor choose the effective means of winning
competition. Proper and effective method of advertisement and promotion will be put in
place in order to attract high number of customers (pupils).

1.3 ORGANIZATION AND MANAGEMENT PLAN.

The, manger will be the owner of the business. He will employ the head teacher, the Deputy
Head teacher, members of the teaching staff and subordinate staff. The team will be
expected to cooperate during their course of discharging duties so as to effect satisfactory
achievement at the end of every year. The personnel will be employed according to their
qualification and experience. Adequate remuneration and incentives will be offered to staff
so as to boost their working effort. The support services that will be needed include: -
banking, accounting and transport.

1.4 OPERATION /PRODUCTION PLAN.

The operation of the business will be made in a systematic manner to a void
inconveniences. The right capacity and number of facilities will be made available. The
production process will start from advertising interviews, enrolment (recruitment), fee
payment, learning and realization of the goals. The regulations affecting the business will
be catered for.

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1.5 FINANCIAL PLAN.
This phase will deal with financial records aspects of the business. Preoperational cost will
be kshs 56,400. And the networking capital will e kshs443, 600.The loan will be obtained
from the Kenya commercial bank and will amount to kshs.350, 000. The rest that is
kshs.150 000 will be from owner’s equity. The loan from the bank will be form owners
equity. The loan from the bank will be repaid within three years.

CHAPTER TWO.
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 2.0 BUSINESS DESCRIPTION
The owner of the business is. Bor K. Evanson who is the manager and the following
address will be used:

OLKINA ACADEMY,

P.O BOX 13-20401

CHEBUNYO

E –mail address:Bor-Evanson [email protected]

2.1 BUSINESS LOCATION.

The business will be located 38kms east of Chepunyo town, 800m from Chelemei market.

EMURUA DIKIRR TOWN Chebunyo town Bomet town

POLICE STATION

SAGARA CENTER KAMANGET SECONDARY

Kilibwet market
OLKINA ACADEMY

Chelemei pri.
Kaboson town
Olopong
primary
Borur primary
SIGOR

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The area has been chosen as the business site owing to the following factors:-

1. Well set-up infrastructure

The area has good infrastructure, as these are well maintained roads, presence of
electricity, telephone and piped water services. The factors will ease the operation of the
business.

2. It’s the only academy in the location.

Being the only academy in the location there is little competition from other competitors.
All the schools around are public school which are faced with big problem of population
overhead and poor staffing leading to dismal academics performance. Its proximity to
chelemei sub – district hospital (400m) is an added advantage as the workers from
therefore can raise the fees required. It’s also 500m from Chelemei market the business
persons will send their children.

3. Good learning environment.

Since the location is outside town there are no disturbances that are usually experienced in
town situated learning institutions. Therefore it will be conducive for learning.

School Motto.

The academy will operate under the following motto “QUALITY EDUCATION FOR
QUALITY LIFE”.

School mission:-The mission of the school will be to produce a whole round pupil.

2.2 FORM OF OWNERSHIP.

The business will run under a sole proprietorship where the owner will be the sole
decision maker, controller and overall manager of all duties, which pertain to the business
venture. This form of ownership has been chosen due to the following advantages.

a) All profits will be entitled to the owner.

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 b) Decision making are cheap and faster as the proprietor will personally be
answerable to decisions made.
c) Any benefits obtained will be directly proportional to the amount of hard work,
dedication and management capability of the proprietor.
d) The owner will be the sole decision maker bearing control of his own destiny and
that of the business.
e) Ownership of the business is easy to register, cheap and faster to operate.
f) The owner will earn himself motivation towards the desire and need to exploit his
business potentials with an ambition to acquire satisfaction and economic benefits.

2.3 Type of ownership

The business will be a sole proprietor ship type of business and the business has the
following advantages:-

i. It will make the proprietor gain popularity within the business location and
nationality, and this will finally attract more customers.
ii. It enables the proprietor to exploit the business potential as it had never been
exploited before.
iii. The proprietor has a chance to exploit unused resources available within and
outside the business locality to improve his standard of living and those of the
natives.

2.4 SERVICES
The academy will offer the following services to its customers

i. Quality education through innovative teaching

ii. Computer classes introduced at class five running from two years.
iii. Spiritual growth enhanced through christened environment.
iv. Foreign languages e.g. French and German introduction at class four running for
three years.
v. Exploitation of the pupils talents through co –curricular activities e.g. through
sports.

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2.5 JUSTIFICATION OF THE OPPORTUNITY
The business venture will succeed for it is the only academy in the locality that offers
quality education, computer classes and foreign lessons therefore producing a whole round
pupil capable of meeting future challenges that are evident in the world of today with
confidence and determination. It will also capitalize on the weaknesses of my competitors
for example the national examination(KCPE) is a parameter of academic performance and
over the years the surrounding schools have been performing dismally owing to high pupil
population in relation to the staffing position. The business venture will therefore work
tirelessly to produce outstanding academic results that will attract more customers. The
close proximity of the academic location to Kobel tea factory, Chelemei market and
Chelemei sub – district hospital is an added advantage. The parents from the locality have a
fair standard of living and hence they can afford to raise the required school fees without
much difficulty.

2.6 GOALS OF THE BUSINESS.

The academy will be started with the purpose of making profits and enhancing
development in the area. It is aimed at achieving the following:-

i. Create even more business venture after enough profit has been acquired.
ii. Enable the owner exploit his business potential.
iii. Contribution of business to community.
iv. Create employment too many hence will reduce employment in the country.

2.7 ENTRY AND GROWTH STRATEGIES.

Entry strategies.

The academy will offer free school uniforms to the first three pupils to be enrolled, small
presents e.g. exercise books, pens and pencils will be rewarded to the best three pupils per
class at the end of every term to motivate the pupils to strive for the best academic
performance. Academic trips will be organized annually for upper classes and these
vacancies will be offered free to the first three parents to clear the fee or prompt payment.
The best performing teachers will be rewarded yearly basing on the pupils’ performance.
The following techniques will be employed to enter the market:-

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 i. Price regulation to favour customers as regards to the economic difficulties.
ii. Promotion and advertisement methods will be intensified at the start of the
business to quickly attract many customers.
iii. Parent who can afford material goods that can be used by the academic – e.g.
foodstuff, firewood etc are welcome to supplying supplement of fees.

Growth strategy

The proprietor will ensure that the business grows satisfactorily by:-

i. Ensuring good personnel and customer relationship.

ii. Seek good means of advertisement and promotion to attract many customers so
that the profit increases.
iii. Maximize profits used on expansion of the business.
iv. Acquire adequate finances from established academies e.g. (Kalya academy) in
the same field.
v. Seek pieces of advice from established academies e.g. (kalya academy) in the
same field.

Once the academy ids fully established the business intends to start a secondary school and
purchase a photocopier meant to benefit the school and the community as a whole. The
projection is to acquire a school van or bus to cut down the cost of travelling and hired out
when the school does not use the vehicle. These will hence generate funds for the school.

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CHAPTER THREE.
3.0 MARKETING PLAN.
The academy will basically benefit the pupils from the geographical area and its environs.
The pupils whose parents can afford to raise the stipulated fees will be the beneficiaries of
the academy. The academy intends to come up with the correct choice of the orders and
materials of the school uniforms, which capture the sight of everyone. This will also market
the school in a way. The school premises will also be painted with colors similar to the
school uniforms. Kei apples will be planted all round the school compound to ease the
monitoring of the pupils and also enhance security of the school and its facilities, bottle
brush trees and Nandi flames will be interplant all round with a spacing of 5m apart. The
cleanliness of the pupils, sound academic performance, good discipline and sound spiritual
behavior will automatically be a marketing factor. This will precisely be achieved through
co-operate effort of the pupils, teaching staff, subordinate, management and the parents.

3.1 Potential customers.

The potential customers of the academy will be all the pupils from the locality and its
environs whose parents can afford to raise the required fees, generally the standard of
living and the income per capital is fairly and above average, since most are working class
who work in the near by adjacent Mogogosiek tea factory, Chelemei sub district hospital,
Chelemei market and other civil servants

3.3 MARKET SHARE.

According to the market survey done, it revealed that the pupils of the school going age are
between kindergarten and class five are 300. The business will target this population who
can afford to raise the fees required though it will not be shared among the school in the
locality i.e. Olpopong, Chelemei, Satiet and others. Therefore the business will experience a
market share of 33%.

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The table below shows the percentage market share of the existing competitors.

NAME OF THE COMPETITOR MARKET SHARE AVERAGE NO. OF PUPILS

Olpopong 28% 112
Chelemei 10% 40
Satiet 25% 100
OLKINA academy 33% 132
Others 4% 16
total 100% 400

Sales
Olpopong Chelemei Satiet OLKINA academy

29%
34%

10%

26%

From the table it is clear that the enterprise will get a bigger market share. The market
share is expected to grow as the business grows. The business will maximize the strengths
and minimize the weaknesses in order to outdo the competitors.

3.4 PRICING STRATEGY

Under the pricing strategy the proprietor will select best methods to be employed so that
the prices look attractive to the customers as compared to those of the competitors. To
achieve this the following principles will be put into consideration so as to enable the
proprietor calculates the fee of the services offered:-

i. The effect of the service prices will have at the profit of the business and the
operation of the business.
ii. All costs uncured at the start and during operation must be covered.

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Considering the above pricing principles the owner will apply the following formula in
order o obtain the most appropriate services price:-

Selling price = price of input +profit margin / profit% +other costs.

3.5 METHODS OF PROMOTION AND ADVERTISEMENT.

For the business to gain customer awareness win competition and acquire market share, to
achieve the desired goals the proprietor will exercise all effort to advertise and perform
efficient promotion to attract more customers and hence realize maximum profit.

Advertisement.

This is a means of making people aware of available services ad where they are found. To
achieve this proprietor intends to use the methods as follows.

1. Posters

Posters will be printed and distributed to strategic places to be pinned on walls and notice
boards also placed at any other convenient point that will attract peoples attention e.g.
market centers, tea buying centers e.t.c

2. Sign boards

Signboards nearing the name of the school, services available, location address and school
motto will be situated at the following points.

i. Koiwa market
ii. Olpopong – Chelemei junction
iii. Kobel centre
iv. Chelemei centre
v. Tengecha junction.

4. Bill boards

One billboard will be placed at the academy’s gate and will assist the pupils and parents
from far identify and locate the academy.

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5. Media

The academy will be advertised through the local media like: - Radio Injili station (RIS Fm)
and Chamge Fm, as many locals are ardent listeners of these local radio stations and
therefore many will be made aware of the existence of the academy.

3.6 SUPPLIERS.
The main supplies of stationery e.g. books, rulers, chalks, receipt books, invoices, delivery
notes, payment vouchers, fees registers, dusters, calendars etc will be CHEPUNYO
BOOKSELLERS CENTRE based at Chepunyo town. these is because it is an established
bookseller with good reputation, good terms of services and delivers the commodities right
up to the school for fees, also the foodstuffs e.g. maize, bans, milk etc tender will be issues
to any reliable parent who will supply throughout the term. The quantity supplied will be
transacted to the stated fee other supplies e.g. building materials will be done through
JINAL TRANSPORTERS, other commodities e.g. sugar, tea leaves, cooking fat, salt etc will be
purchased at wholesale price at lump sum and will be offered at reduced price.

CHAPTER FOUR

4.0 ORGANIZATION AND MANAGEMENT PLAN.

B.O.Gs

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Organization structure

MANAGER

DEPUTY ACADEMICS DEPUTY TEACHER

TEACHING STAFF BURSAR

PUPILS
SECRETARY CASHIER WATCHMEN COOK

MANAGEMENT PERSONNEL AND QUALIFICATIONS

a) Manager
Qualifications.
i. Diploma holder in management
ii. From family business and from other competent manager able to act
rationally and solve problems amicably.
iii. Passes in entrepreneurship education and management studies

Roles of the manager

i. To ensure staff discipline, hard work and dedication.

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 ii. Be in charge of recruitment, firing and staff promotion
iii. To perform overall planning of the business
iv. To coordinate all activities that pertains the school activities.
v. To make a budget of business expenditure.
vi. To control and supervise all operations of the business
vii. To organize and direct business operations.
viii. To make decisions concerning business operation.

b) Head teacher.

Qualifications.

i. Should have produced impressive results in national examination i.e. KCPE

ii. Should be trained S1 teacher with at least three years teaching experience.
iii. Should be a role model and to sacrifice his time to serve the academy

Duties.
i. Keeping records and circulars relating to the school
ii. Guides and advices the manager and teaching force positively for the success of the
academy.
iii. Chairs for staff meetings and takes minutes during management staff meetings.
iv. To co-ordinate the issue work programme to the staff.
v. Oversee day to day running of the academy.
vi. To assist the manager to carry out his roles.
vii. Be in charge of management roles in absence of the manager.
viii. To be mediator between the manager and the teaching staff.
ix. Represent the academy at every ministry representation
x. Address the issues affecting the parents, teachers and pupils.

c) Deputy Head teacher

Qualifications

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 i. Committed and dedicated to deliver
ii. Should be a trained S1 teacher
iii. Should have at least two years teaching experience.
iv. Should be a disciplinarian.

Duties.

 In charge of the pupils discipline.

 Checks and signs the schemes of work and lesson plans
 Prepare and ensure that the timetable is followed.
 Acts in the capacity of the head teacher in his /her absence.

4.2 OTHER PERSONNEL, NUMBERS AND DUTIES.

D) Teaching staff (teachers)

Qualifications

i. Should be self motivated, willing and ready to serve the expected standards.
ii. Trained S1 and P1 teacher with at least one year teaching experience.

Duties.

i. Assist the pupils and foster spiritual growth.

ii. Carry out the learning process as per the ministry’s curriculum.
iii. Guide the pupils realize and nature their talents.
iv. Set, administer exams, mark, prepare and analyze the list of performance
v. Prepare the schemes of work lesson plan and teaching aids to facilitate effective
teaching.

e) Management board

i. Should have sound judgment and able to influence positively.

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 ii. A parent with a pupil in the class he /she represent and have the interests of the
pupils and the school at heart.
iii. Should at least be a form four laver able to comprehend the decisions of education

Roles of the management board.

i. Ensure that what has been discussed and agreed in the board meetings is executed.
ii. Guides and advice the managers and the teachers accordingly on matters affecting
the school.
iii. Analyze and advice the school’s progress both academic and development progress.

e) Bursar one

Qualifications.

i. Should be over 24 years of age

ii. Should have at least CPA III certificate
iii. Should have at least two year working experience
iv. Should have no record of financial embezzlement.

Role of the Bursar

i. Keep all the books of accounts of the Business.

ii. Prepare a balance sheet at the end of each trading period
iii. Pay salaries and wages to the employees
iv. Banks money of the business
v. Monitors the performance of the non – teaching staff and report to the schools
management board.

g) Secretary

i. should be a diploma holder in computer studies

ii. should posses good communication skills
iii. should be humble and polite
iv. should be able to keep secrets and act professionally

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 v. Should have at least one year working experience in the same capacity.

Roles of the Secretary

i. File and keep any relevant documents

ii. Type and reduce any relevant documents

h) Watchman (one)

Qualifications

i. Should have an ability to detect crime.

ii. Should bear no criminal record

Duties

i. Detect and stop any criminal offence

ii. Ensure that all the premises properties are secure during the day and night.

Cooks (two)

Qualifications

i. Spotlessly clean at all times

ii. A form four leaver, a certificate holder in catering or a related field will be an added
advantage.
iii. Meets the required sanitary inspection records

Roles of the cooks.

a) Prepare and serve meals at the scheduled times.

b) Clean the utensils.
c) Maintains cleanliness of the kitchen and its environs at all times.

Cleaner/ grounds man

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Qualifications

a) Hardworking and honest

b) Swift to act
c) Diligent in his /her work

Roles of the cleaner / grounds man

i. Repairs and puts up the fence.

ii. Runs errands e.g. deliver and collecting parcels
iii. Maintain general cleanliness in the compound e.g. weeding flowerbeds, planting
trees and burning the rubbish.

4.3 REMUNERATION AND INCENTIVES.

The salary increment will depend on the performance and quality of the service offered.
The following shows the salaries that the employees will earn per month.

personnel no Net salary per month Total kshs.

manager 1 6500 6500
Head teacher 1 6000 6500
Deputy head teacher 1 5500 6500
Teaching staff 3 5000 15000
Cashier 1 4500 4500
watchman 1 3500 3500
grounds man / 1 3500 3500
cleaner
Cooks 2 3500 7000
Secretary 1 4500 4500
Total monthly pay 56500

The manger will ensure that the entire employee’s receive satisfactory salaries and
incentives so as to boost their motivation in performing their duties. The salary increment
will be done at the rate that will be determined by the state of finance achieved at the end
of every year.

4.4 INCENTIVES.

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Incentives will be given to employees so as to motivate them and boost their working
effort. Such incentives include:-

i. Financial assistance incase of any arising emergency cases e.g. accidents.

ii. Presents will be awarded to employees at the end of every year.
iii. Salary advances will be given to employees incase of any pressing financial need.
iv. Tea at break time and lunch will ne provided free of charge to all employees. The
employees should report and leave for work at the stated time without failure
unless compelled by a situation control will be justified. The people will be issued
with school rules and regulations on admission and the parent or guardian should
sign duly. The hitches arising should be channeled through the right chain of
command and acted upon decisively and without delay.

4.5 SUPPORT SERVICES.

OLKINA academy will need several services to make it steady and firm in its operations.
The following organizations will offer the business support services that will require:-

1. Banking services

Banking services will be gotten from:-

Kenya Commercial Bank

Chepunyo branch

P.o Box 451,

Chepunyo.

2. Advisory services.

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Advisory support services will be sorted from teacher’s advisory centres (TAC) that will
advice accordingly on matters pertaining to the economy. The TAC office is located at Kitala
centre which is 200 m away from the academy.

3. Insurance services.

The academy will be insured against calamities e.g. lightning. ; This service will be obtained
from

CIC insurance company limited

P.o Box 4431

Nairobi.

4.6 FINANCE MANAGEMENT.

The academy will have an account with the Kenya commercial Bank and therefore all the
money received should be deposited before the end of the day. The account records and I
will keep statements at the end of the day. All expenditure and income should be recorded
at the end of the day on the respective journals. A balance sheet will be prepared every
month to tell whether the schools are operating at a loss or profit.

All financial and record books should be updated and kept properly at all’ times. External
auditors will mount sport checks at regular intervals and advice where necessary.

4.7 LEGAL REQUIREMENTS.

The academy has to meet some few formalities for it to operate legally. The school has to be
registered with the ministry of education science and technologies through the district
Education Board (DEB) which will be valid for a year and later on reapply for the
registration certificate. A sanitary inspection certificate will be sought from the ministry of
health.

The type and source of certificate are clearly indicated in the table that follows:-

Type Source Cost per year

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 Provision certificate MOEST 1500
Registration certificate MOEST 3500
Sanitary certificate MOH 2500
Totals 7500

4.8 PROMOTION OF STAFF

As the business progresses promotion will be awarded to employees who will have shown
high standards of competence in their field of specialization. Other factors that will be
considered while offering promotion include:-

 Experience
 Age
 Level of academic qualifications
 Merit

All promotions will be decided and done by the manager and the management board.

CHAPTER FIVE

5.0 OPERATIONAL/PRODUCTION PLAN.

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 ADVERTISING INTERVIEWS PUPIL ENROLMENT

GOAL REALISATION LEARNING FEE PAYMENT

The available vacancies will be advertised through posters and the media; these will then
be followed by interviews conducted by the teachers where qualified students will be taken
for the respective classes. The pupils are then enrolled after clearing the fees required and
having met all requirements learning begins which will lead the pupils to sit for the internal
and national exams.

5.1 PRODUCTION FACILITIES AND CAPACITY UTILIZATION

The following is a summary of the required items and equipments together with their cost,
capacity and supplier

Furniture and fittings

Item supplier Quantity Total cost(kshs)

Tables Kipkirui carpentry 10@500 5000
Desks Kipkirui carpentry 80@200 16000
Cupboards Kipkirui carpentry 5@1500 7500

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 Shelves Kipkirui carpentry 10@50 500
Chairs Kipkirui carpentry 20@200 4000
Brooms Kipkirui carpentry 10@20 200
Total 33200
Tools and equipment.

Item Supplier quantity Size Total cost

(kshs)
Text books Chepunyo 30@400 medium 12000
bookshop
Exercise books Chepunyo 48pages medium 10800
bookshop 4cartons@2700
Payment Chepunyo 5@30 medium 300
vouchers bookshop
Fees registers Chepunyo 6@50 medium 400
bookshop
Receipt books Chepunyo 7@50 medium 350
bookshop
Invoice Chepunyo 4@35 medium 110
bookshop
stapler Chepunyo 4@85 small 255
bookshop
Staple pins Chepunyo 2parkets @20 medium 400
bookshop
Paper punch Chepunyo 2@800 medium 1600
bookshop
Office glue Chepunyo 3@50 medium 150
bookshop
Chalks Chepunyo 2parket@45 medium 90
bookshop
Dusters Chepunyo 3@28 medium 84
bookshop
Padlocks Chepunyo 5@80 medium 400
bookshop
totals 26939

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5.2 PRODUCTION STRATEGY
The proprietor will come up with the most efficient strategy to apply in order to improve
operations and enhance quality education and performance. The following factors will be
implemented and strictly adhered to in order to achieve that.

1. Dedication and devotion to duties

Each and every employee will be motivated and if necessary strengthened to devote all his
skills towards better provision.

2. Program adherence

The set program and syllabus will be strictly followed so that the required learning
sessions are exhausted in time generally free learning environment and free interaction
between the management, staff and pupils will be developed to ensure smooth continuity
of the operation so that achievement of all set goals is obtained within the right time.

5.3 OPERATIONAL PROCESSES

All employees will be under the supervision of the manager in conjunction with the
management board. The ministry of education team will also conduct impromptu
inspection and advice the teachers accordingly. Those who can’t deliver after being advised
counseled and encouraged.

The institution rules and regulations should be strictly adhered to without compromise.
Disciplinary action should be taken against the defaulter accordingly without favors and
partiality.

5.4 OPERATION STRATEGY.

The proprietor will develop the effective and relevant means of operating the business and
ensure the availability of adequate and quality facilities within the premise.

They will e4nsurevthat there is an adequate supply of materials like chalks, textbooks,
receipt books, fee registers and many other requirements in the office.

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They will ensure adequate supply of furniture and facilities e.g. tables, desks. Chairs and
sanitation materials.

Overhead requirements

At the start of the operation some overhead requirements are required and are as shown in
the table below:-

Monthly overheads Cost per month

Electricity 1000
Water bill 500
Rent 3000
Meals 5000
miscellaneous 1000

CHAPTER SIX

6.0 FINANCIAL PLANS

6.1 PRE – OPERATIONAL COSTS

ITEM AMOUNT
Renovation and partitioning 7500
Installation 1500
Water deposit 500
Electricity deposit 1000
Telephone deposit 500
License 32370
Furniture and stationery 2530
Advertisement 2530
Machinery 3000
Miscellaneous 3000
Totals 56400

6.2 WORKING CAPITAL

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 Item Year 1 Year 2 Year 3
Current assets
Stock
Debtors 1299802 1803000 2105000
Cash at bank 100000 115000 120000
Cash at hand 15000 5000 10000
Less current
liabilities
Creditors 971202 420000 740000
Working capital 443600 1503000 1495000

ASSUMPTION
The constant increase in working capital yearly is due to the increase in the number of
pupils like in year two and year three. The classes were increased to class five and six
respectively.

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MONTHS JAN FEB MAR APR MAY JUN JULY AUG SEPT OCT NOV DEC TOTAL
Balance b/f 247500 153937 94607 86957 52277 101985 92860 92920 61975 71440 73850 1130308
Receipts - - - - - - - - - - - -- -
Bank loan 350000 - - - - - - - - - - - 350000
Personal Equity 150000 - - - - - - - - - - - 150000
Sales 105000 110433 150393 113433 163333 103305 110290 110230 120475 110510 102400 1299802
Total receipts 500000 352500 264370 245000 200390 215610 205610 205290 203150 182450 181950 176250 2930110
Payments
Purchases 30000 31000 3000 31000 28500 29000 27500 26500 24500 26500 30000 40000 354500
Creditors 61303 62000 29500 18000 10000 9000 6000 5000 5000 8000 - - 213803
Salary 505000 50500 505000 50500 50500 50500 505000 50500 505000 50500 505000 50500 606000
Rent 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000
Telephone 1000 1000 1200 1000 1200 1600 1200 1600 2500 1000 1000 2500 16800
Water 150 150 170 130 120 170 150 130 110 105 135 125 1645
Electricity 500 500 500 500 500 512 505 525 500 500 520 480 6042
Stationery 27134 32000 35000 36000 37000 3780 3780 3790 38000 3790 3850 3790 227884
Transport 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 14400
Postage 600 300 200 250 150 250 200 200 350 200 250 450 3500
Repair 400 200 300 200 150 150 100 120 430 400 300 600 3370
Maintenance 220 120 100 170 200 400 200 120 120 170 200 500 2520
Insurance 800 800 800 800 800 800 800 800 800 800 800 800 9600
Drawing 4500 4000 5000 3500 3000 15000 4500 4800 2500 300 400 5500 45800
Loan Repayment 9722.20 9722.20 9722.20 9722.20 9722.20 9722.20 9722.20 9722.20 9722.20 9722.20 9722.20 9722.20 116666.40
Interest on loan 102.80 102.80 102.80 102.80 102.80 102.80 102.80 102.80 102.80 102.80 102.80 102.80 12261.60
Pre-operation cost 56400 - - - - - - - - - - - 56400
Service charges 50 50 50 50 50 50 50 50 50 50 50 50 600
Advertisement 3000 - - - - - - - - - - - 8500
Total payments 2525000 198563 1699.63 158043 148113 113625 112430 110230 141175 111010 108100 124740 1748298
Balance b/d 247500 153937 94607 86957 522.77 101985 92860 92920 61975 71440 73850 51510 1181818

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 6.3.1 OLKINA ACADEMY QUARTERLY
6.3 PROJECTED CASH FLOW STATEMENT FOR THE YEAR ENDING 2016
PROJECTED CASH FLOW STATEMENT FOR THE YEARLY ENDING 2016

Months Jan - March April -June July - Sept Oct - Dec Totals
Balance B/F 51510 1089470 146340 126505 482825
Receipts 49500 468000 415000 425000 1083000
Total received 546510 576470 561340 551505 2235825
Purchases 85000 82000 83000 89000 339000
Creditors 15000 10000 12000 50000 42000
Salaries 192000 192000 12000 192000 768000
Rent 12000 12000 12000 12000 48000
Telephone 900 850 980 820 3550
water 450 500 410 450 1810
Electricity 1580 1720 1650 1450 6400
Stationery 75000 72000 73000 62000 282000
Transport 36000 36000 36000 36000 144000
Postage 1100 1050 850 900 3900
Repair 700 650 330 220 1900
Maintenance 250 650 830 720 2450
Insurance 2400 2400 2400 2400 9600
Drawing 15000 18000 19000 11000 63000
Loan 29166.60 29166.60 29166.60 29166.60 116666.40
repayment
Interest on 3068.40 3068.40 3068.40 3068.40 12273.60
loan
Service charge 150 150 150 150 600
Advertisemen 675 325 400 1600 3000
t
Total 438040 430130 434835 415545 1718550
payments
Balance B/F 108470 146340 126505 135960 517275

Assumption

Salaries increased due to employment of these two more teachers to merge the enrollment
of more pupils.

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 6.3.2 OLKINA ACADEMY

QUARTERLY PROJECTED CASH FLOW STATEMENT FOR THE YEAR ENDING 2017

Months Jan - march April -June July - Sept Oct - Dec totals
Balance B/F 135960 175555 222040 239555 773110
sales 565000 530000 515000 495000 2105000
Total received 700960 705555 737040 734555 2878110
Payment Purchases 95000 92000 98000 85000 370000
Creditors 45000 38000 32000 25000 140000
Salaries 201000 201000 201000 201000 804000
Rent 18000 18000 18000 18000 72000
Telephone 650 750 250 1750 3400
water 350 250 350 450 1400
Electricity 1620 1380 1250 1750 6000
Stationery 85000 45000 65000 55250 250250
Transport 4000 4000 4000 4000 16000
Postage 1250 1350 1500 1200 5300
Repair 250 250 200 300 900
Maintenance 250 200 300 200 950
Insurance 2400 2400 2400 2400 6400
Drawing 17000 2000 15000 1200 64000
Loan repayment 29166.60 29166.60 29166.60 29166.60 116666.40

Interest on loan 3068.40 3068.40 3068.40 3068.40 12273.60

Service charge 200 200 200 200 800
Advertisement 1200 1500 800 500 4000
Machinery and 20000 25000 25000 - 70000
equipment
Total payments 525405 483515 497485 431235 1937640
Balance B/d 175555 222040 239555 303320 940470

Assumption

 Two computers were required.

 Two more teachers were employed.

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 Item 31.12.2016 31.12.2017 31.12.2018
Sales cash received 1130308 1803000 2105000
Cost of sales 2930110 339000 370000
Gross profit 1181818 1769100 1735000
Expenses
Salaries 606000 768000 804000
Rent 48000 48000 72000
water 1645 1810 1400
Telephone 16800 35500 3400
Electricity 6042 6400 6000
Stationery 227884 282000 250250
transport 14400 14400 16000
Postage 3500 3900 5300
Repair 3370 1900 1000
Maintenance 2520 2450 950
Depreciation 400 400 2500
Interest on loan 12261.61 12273.60 12273.60
Advertisement 8500 3000 4000
Total expenses 951322.60 1148083.60 1179073.60
Net profit before tax 230495.40 531916.40 610926.40
Provision for tax 5% 11524.80 26595.80 30546.30
Net profit after tax. 218970.60 505320.60 580380.10

6.4 PROFORMA INCOME STATEMENTS

OLKINA ACADEMY PROFOMA INCOME STATEMENT FOR THE YEAR ENDING 2016,
2017,2018
Assumption.

Depreciation of furniture @2% on cost. Depreciation on machinery and equipment @ 3%

on cost

6.5 PROFORMA BALANCE SHEET

OLKINA ACADEMY PROFORMA BALANCE SHEET AS AT 31ST DEC 2016, DEC 2017,
DEC 2018

Item Opening 1st Jan Ending 31st Dec Ending 31st Dec Ending 31st Dec
2016 2016 2017 2018

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Assets:
Current Assets
Cash at Hand/bank
Debtors - 1299802 1803000 2105000
Total current assets 433600 1414802 192300 2235000
Fixed assets, Machinery _ _ _ 70000
and equipment
Accumulated Depreciation _ _ _ 2100
Furniture 20000 20000 20000 20000
Accumulation depreciation - - - -
Total fixed assets 56400 19600 19200 86700
Total assets 500000 1436602.00 1942200 2321700
Liabilities:
Current Liabilities
Bank Loan 350000 233333.60 116666.40 _
Personal equity 150 15000 15000 15000
Profit - 837265.40 1633533.60 2181700
Total long term liabilities 50000 1220599 1900200 2181700
Total liabilities 500000 1434402 1942200 2321700
Assumption.

Depreciation on furniture @ on cost per annum

Depreciation on machinery and equipment @ on cost

6.6 BREAK EVEN POINT.

item Cost
Rent 48000
Salary 60600
Insurance 96000
Loan repayment 116666.40
Interest on loan 12261.60
Total fixed cost 7925528

VARIABLE COST
Item Cost
Purchases 354500
Telephone 16800
Electricity 6040
Water 1645
Advertisement 8500
Repair 3370

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 Maintenance 2520
Transport 14400
Stationery 227884
Postage 3500
Drawing 45800
Service charger 600
Total variable cost 685561

6.6.1 CONTRIBUTION MARGIN

Total sales – variable cost

2321700 -685561

Kshs. 1636139

6.6.2 Contribution margin (%)

(Contribution margin X 100)%

Total sales

6.6.3 Total fixed cost (Expenses for year one)

=kshs.792528

6.6.4 BREAK EVEN POINT

Fixed cost x 100

Contribution margin %

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 = 792528 x 100
1636139

= kshs.4 844.00

6.7 PROFITABILITY RATIOS.

Profitability ratios for the year 2016, 2017, 2018

RATIO TYPE WORKING FORMULAE 2013 2014 2015

Gross profit Gross profit x 100 82.39% 86.50% 77.09%
ratio Total sales
Return on Net profit after tax x 100 145.98% 336.88% 386.92%
equity Owners equity
Return on Net profit after tax - interest 41.34% 98.61% 113.62%
investment Total investment

6.8 DESIRED FINANCING

Item Amount
Pre operational cost 56400
Working capital 443600
Total financial requirements 500000

6.9 PROPOSED CAPITALIZATION

Item amount
Owners equity 150000
Bank loan 350000
Total investment 500000

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 APPENDIX 1 :

S ITE PLAN OF THE BUSINESS LOCATION

EMURUA DIKIRR TOWN Bomet town

POLICE STATION

SAGARA CENTER KAMANGET SECONDARY

Kilibwet market
OLKINA ACADEMY

Chelemei pri.

Kaboson town
Olopong
primary
Borur primary

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 SIGOR

APPENDIX 2:

ACADEMIC SKETCH PLAN

Girls Toilet’s
H/T Manager’s
STD 1 STD 2 STD 3
Office office

Kinder
Garten Assembly

Kitchen store Staff Toilets

Main
gate