Chapter 1

The name of the bussine will go by Kush bloggers which comes from a combination of the name kutata and shon who are the
business sole and a the directors as well the chairs in charge and in full control of the business

BUSINESS LOCATION

The business will be located in kitengela ward in kajiado county a place by the name 034 which is well know for high population
and good number of people residing there.The location is also in demand of the business since there are very few similar
businesses in the place this a nice market available.

Its located in: Kajiado County

Kajiado east constituency

Kitengela ward

Yukoz sub location

034 area

034 building 3rd floor

BUSINESS KUSH BLOGGERS ASSOCIATION

Po box 129-001 Kitengela

Email: [email protected]

Tel + 254 757005197/+ 44 6123456

FORM OF BUSINESS OWNERSHIP

The business will be a general partnership and is owned by the two of us.

Then both of the managers would be fully involved in the business operation and shares as well as its profits thus available in day
in day out activities.

There would be assistance as well from co workers .

Legal policies are required aswell.

Full control of the business profits.The owners would provide 70% of the financial requirements ,20%loans from banks and 10%
would be from supporting projects.

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Products and services

The company will provide digital products such as printables e.g ebooks and courses .

It will offer services such as virtual assistance on social media management,websites and magazines as well as coaching services
to customers .

Nature opportunities

The main reason as to why this business is started is to provise the products and services to the ready Customers as well as create
interest to the unware Customers as well as create positive image in and outside the business.

Justification of the business

Due to huge population and presence of many political environments in the area due to high residence in Kitengela,the business
would work well since many people would need to share their political manifeatos as well as their promises and others sharing
their information as well .

Govermment policies are required and are present in the area. Security is another trigger that assured the location of the business
since the area is off insecurity.

Goals and Objectives

Goals

The goal is to build our brand as well as those of our customers i.e politicians and other leaders aswell.

Attract new customers

Drive indirect income

Objectives

The purpose of the business is to create a more engaging website for our brand.This would also enable us teach our customers and
users about our products and services.

Lead generation and cross chanel content.

Entry plan

Kushon bloggers intends to use websites aswell as social media to guarantee customers needs. The use of instagram,twiter and
facebook which is used by many would create awareness faster.

Use of posters in the area would also be necessary in adverticement.

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3
 Chapter 2

Marketing plan

Finding the target audience and maintaining good relationship with customers.

Network with other bloggers

Use of smart blog layout

Email Marketing

Social media and Marketing

Guest blogging would be used as well

Benefits to the customers

Discount awards to all time and loyal customers

Credits are as well available for our customers.

Business promotion

Kushon bloggers will use adverticement as well as other strategies to create awareness and this are as follows;

The use of social media platformsp would help in creating awareness to consumers and customers of the business.

Would provide promotions such as purchase of our products more than twice guarantees afree service in addition depending on
what you have perchased.

Strategies against our competitors

Present of discounts to loyal customers would enable in maintainance of customers.

4
Maintaining the market and rhyming with changes to ensure we are always updated and we could achieve this through liason with
other bloggers.

5
CHAPTER THREE
ORGANIZATION AND MANAGEMENT PLAN
BUSINESS MANAGER AND QUALIFICATIONS

The business will be headed by the manager entitled, Operations Manager who is the sole proprietor of this business currently
holding a diploma of technology in library and information science, by the name Kutata and Shon.

Responsibilities of the operations manager:

The manager will be in charge of the following:

 Offering supervisory responsibility to all other staff

 Acting as a link between the business and other related businesses of the same type in the area.

 Approving decisions proposed by other members

 Ensuring quality service is rendered to all customers as well as the staff.

OTHER PERSONNEL, THEIR DUTIES AND QUALIFICATIONS

Accountant (1) Duties of an accountant

 Generating and carrying out monthly financial reports of the business

 Organizing financial plans in the business

 Keeping and managing of accounts for every product, asset, liability or service in the business.

Qualifications of an accountant

 Any CPA certification

 Proficiency in computer operations

 KCSE certificate with an average of C+

6
  Certificate of good conduct

Cashier (1)

 Duties and responsibilities of a cashier

 Organizing for payments of all other staffs and personnel in the business

 Issuing receipts and receiving cash and cheques upon any transaction made in the business.

 Organizing and paying bills and the rent of the business

 Keeping records of each transaction made in the business in a database.

 Reporting financial procedures to the accountant for bookings.

 Sales records and sales managing

Qualifications of a cashier

 Business management certification

 Have a knowledge in accounting

 Computer proficiency

 KCSE certificate

 Certificate of good conduct

Computer designers (2)

Duties and responsibilities of computer designer

 Receiving and recording while also executing customers requests

 Website designing upon a request by customers

7
  Graphics designs in regard to customers preferences

 Delivering finished materials, products and services to the respective customers

 Marketing and promoting of the business when needed

 Attending to customers in the reception

Qualifications of Computer designers

 Diploma in ICT

 Proficiency in computer applications, website designs and computer designs

 KCSE certificate with a mean grade of C-

 Good conduct certificate

 Good communication skills

Support staff (1)

Duties and responsibility of support staff

 Carrying out messengerial duties in the business

 Cleaning and organizing the office

 Organizing breakfast for the rest of the staff

 Qualification of support staff

 KCSE certificate of a mean grade of D

 Certificate of good conduct

RECRUITMENT, TRAINING AND PROMOTION

Recruitment

Kush bloggers will recruit the staff and the personnel of the business through the following methods:
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The job title will be advertised in the newspaper

The selection of the candidates who will proceed for interviews will then take place after the application duration is
over.

The shortlisted candidates will be call for interviews

Succeeding candidates in the interviews will be appointed in the business.

Training

After an appointment letter has been issued, the business will organize for training for the appointed candidates.

Kush bloggers will consider the following methods in order to make the staff be competent and be able to handle issues in the
real practical scenario.

Workshops – staff will be offered a three day workshop immediately on reporting to the business. This workshop will be
targeting to improve the communication skills, performance and relationships between themselves.

Seminars – a one week seminar will be planned to improve the skills of duty operations of the employees. The seminar
will also seek to improve the understanding of the staff towards the job as well as how and where their departmental
boundaries should not exceed.

Coaching – The business will undertake coaching in terms of supervision to the staff to ensure that they are doing the
right thing and what will be offered to the customers will the best product. This will also seek to make them be efficient in
their departments.

Counseling – this will be done to ensure that the relationship and the communication between the staff and the customers
keeps growing to enhance the understanding of the objectives set and goals required to be meet by the business.

Promotion

It is known that promotion must be done at some point in the business which is intended to increase employee performance
and the output of the business.
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Kush bloggers will thereby carry out promotions in all other departments of the business.

To motivate the staff, the following techniques and methods of promotion will be observed when the business picks the
momentum.

Title – at some point during the operation of the business, one or some of the staff will be give senior titles to
encourage and enhance their performance. Due to the fact that the staffs in the business are limited, at the growth of the
business SCD will seek to add and recruit more staff into the business and this will see the title of the existing staff being
promoted to supervisors and senior supervisor.

Credit – SCD will also increase the salary and wages of the staff to motivate them and thereby increasing their
performance in the job.

3.4. REMUNERATION AND INCENTIVES

All the staff in the business will be under a permanent basis, and will therefore paid by means of monthly salaries.

For the first six months as the business waits to pick the momentum, the remuneration guideline will take the form as indicated in
the table below, and this will be increased by 50% when the business gain the momentum:

Table 5. Remuneration and incentives

Job Title Basic salary House allowance Transport allowance Total

Manager 7,000 2,000 1,000 10,000

accountant 6,000 2,000 1,000 9,000

Cashier 5,000 2,000 1,000 8,000

Designers 4,000 2,000 1,000 7,000

Support staff 3,000 2,000 1,000 6,000

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The table above gives the remuneration guidelines for business.

In a period of six months the business will increment the salaries of all the staff by 50% of the normal.

Licenses, Permits and By-laws

For this business to start operating, it must be registered and acquire licenses and permits from the respective departments
of the government.

The table below summarizes the licensing, permits and by-laws that Kush bloggers will be required to undertake.

Table 6.Licenses, Permits and By-laws

License source cost status

Business Name Search Registrar of companies, Sheria 900 Not renewable

house

Business permit City council 7,000 Renewable, annualy

KRA registration Kenya Revenue Authority 3,200 Not renewable

SUPPORT SERVICES
Kush bloggers will seek to rely services from other organizations to enhance its services and operations.

The following ere the service providers and the nature of the services that they will be providing to Kush bloggers:

Bank

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SCD will be relying with banks to bank cash, cheques, forward cash to other accounts if need arises, payment of salaries
and goods via banks and saving cash for future developments.

Insurance
Insurances companies will be issuing assurance to the business in case of accidents and other emergencies.

However, National Hospital Insurance Funds will also be crucial to cover the staff in case of any illness. This means that when
all members are registered by NHIF, their medical bills will be assured in case of emergence.

Telecommunications
Telecommunications companies will come upon to the business premise to give communication services to enhance the
communication from one department to another.

SCD will seek this service from communication service providers.

3.6.2 The Kenya Power and Lightening Company (KPLC)

KPLC will be responsible for provision of power for machines and light in the offices. Depending on the consumption of power
in a month, there should be a monthly electricity bill. This is the most important of all services, as the business is technological
oriented, therefore powering of machines is a necessity to the business.

CHAPTER FOUR

OPERATIONAL/PRODUCTION PLAN

Kush bloggers will need to acquire several items which will assist in the running, operation and production process in the
business.

In the below table, all the facilities that are of vital important in the operation of the business, have been summarized together
with their cost and the suppliers as identified by this plan.

OPERATIONAL/PRODUCTION FACILITIES Table 7.facilities

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 FACILITY CAPACITY QUANTITY COST/UNIT TOTAL SOURCE/SUPPLIER

(level of output) COST

Machines

1 Computers 4.1 channel 4 16,000 64,000 Conrad Kenya Services

(complete)

2 Printers 550-sheet 2 12,000 24,000 Copier Force (K) Ltd

3 Laminating 80g:20sheets 1 9,500 9,500 Copier Force (K) Ltd

machine

4 Binding Machine 700 sheets 1 11,800 11,800 Conrad Kenya Services

5 Scanner 2 Sheet-feed 1 7,000 28,000 Conrad Kenya Services

SUB-TOTAL 137,300

Tools/Equipme

nts

1 Paper cutter A4/A3 1 4,000 4,000 Conrad Kenya Services

2 Software Win 10 3,000 30,000 Conrad Kenya Services

vista/xp/win7

3 UPS 500VA 4 6,000 24,000 Conrad Kenya Services

4 Trash 20l 1 700 700 Afro Plastics (Kenya)

5 Digital camera 12 mega pixel 1 17,000 17,000 Conrad Kenya Services

6 blank DVDs 480 mb each 40packets 300 300 Conrad Kenya Services

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 7 backup drive 1 tera-byte 1 12,000 12,000 Conrad Kenya Services

8 Calculator Scientific 1 1,000 1,000 Office Max

9 clear ruler 30cm 1 100 100 Office Max

10 phone line Telcom enabled 5 3,000 15,000 Conrad Kenya Services

SUB-TOTAL 104,100

Furniture and

fittings

1 Computer desk 3m*4m 5 6,000 30,000 CopyriteFurnitures Ltd

2 File Cabinets and 5m 3 5,000 15,000 CopyriteFurnitures Ltd

Carts

3 Office chairs 1 seater 6 3,000 18,000 Victoria Furniture Ltd

4 Office sofa set 6m, leather 1 9,000 9,000 Victoria Furniture Ltd

5 Carpet 7m*8m 2 1,500 3,000 PVC Carpet Stall

SUB-TOTAL 75,000

GRAND 316,400

TOTAL

The table above summarizes the machines, tools, equipments, furniture as well as fittings that would be required by the business
to facilitate operation and production.

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The business premise layout

The work stations and the layout will be arranged in such a manner that communication and flow of information will be
enhanced.

It will operate under two major rooms, where one room will have three work stations while room two will have two work
stations.

The following are the major work stations that will be observed in Kush bloggers:

ROOM 1

This is the first room of the business which will take three work stations as listed below:

Work station 1 (WS1): This is the first work station in the business. This willaccommodate any of the two designers, but
will strictly cater for graphics designing activities only as it will contain a computer which is equipped with software and
drivers for designing of graphics.This department will also cater for reprographic services, conservation services and sale
of CDs, DVDs and publications of different kinds.

Work station 2 (WS2):The second work station will be taken by the web designer, which will be responsible for all
activities that include web designing, web development and web creation.

Work station 3 (WS3): The third station will be taken by the operations manager of the business who will be
incorporating all other activities in the business.

ROOM 2

The second room in the business will take two workstations, but not as big as room one.

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Work station 4 (WS4): This work station is answerable for the accountant and accounting is the major activity that will be
taking place here.

Work station 5 (WS5): This is the work station of the cashier in the company which will be responsible for pays and bills
clearance, and will be working closely with the accountant, and that is why they are in the same room.

The sketch below, represent the business layout as described above according to the work stations and the departments in
Kush bloggers.

WS1: Designer graphics

WS2: Designer - web

WS3: Manager
WS4: Accounta t
WS5: Cashier

OPERATION AND PRODUCTION STRATEGY

The following are the measures required to be adopted in the business to ensure efficient supervision, minimum cost and
maximum output as per the objectives of this particular business:
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Accounting for each and every material used in the business and ensuring that the final product of that raw material will
bring in the maximum profit required.

Delegation of duties will be taken as an important aspect in the business to ensure that every procedure has the maximum
support required to maximize the output in the business as well as minimizing the cost.

The business will encourage alternative option of acquiring materials and will as well scan the suppliers of raw materials to
make a conclusion on the best and the least expensive materials that are required in the business thus minimizing the total
and current expenses in the long run at the business.

Kush bloggers will concentrate in database creation and maintenance which will alert the officers and in particular the
accountant in the business when materials are limited in the business so that an action can be taken in terms of acquiring
stock.

Stated below are the operational cost in the business, i.e. monthly cost of raw materials, monthly cost of labor and monthly
overheads costs.

Monthly cost of raw materials

The table (table 8) below summarizes the monthly cost of raw materials in the business.

Table 8. Monthly cost of raw materials

Item Amount (Kshs)

Pens 2,000

printing papers (all sizes) 12,000

Pencils 1,200

DVDs/CDs and envelopes 16,000

File folders 11,000

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 Envelopes 7,000

Fountain pens 3,000

Laminating porches 8,000

Paper glue 1,000

TOTAL COST OF MATERIALS 61,200

The above table gives the total cost of raw materials in one month which has been reflected as Kshs. 61,200.

Monthly cost of labor

Labor is also an expense in the business. The labor cost in one month in the business has been summarized in the below
table (table 9).

Table 9. Monthly cost of labor

Job Title Total Monthly Salary (Kshs)

Manager 10,000

Accountant 9,000

Cashier 8,000

Designer (website) 7,000

Designer (graphics) 7,000

Support staff 6,000

TOTAL COST OF LABOR 47,000

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The above table gives a summary of the total labor cost of the staff in the business as quoted earlier in chapter four of this plan,
(3.4 Remuneration and incentives),which is 47,000.

Monthly overheads costs

It is noted that, there are indirect expenses which are required to operate and run the business and at the same time facilitate
production and operation.

The table (table 10) below gives a summary of all these overheads expenses.

Table 10. Monthly overheads costs

Item Amount (Kshs)

Rent 25,000

Electricity 2,000

Water 2,000

Telephone 2,000

Mail 1,000

Transport 3,000

Advertisement 10,000

Insurance 3,000

Loan payment 20,000

Interest on loan 5,000

Taxes 6,000

TOTAL OVERHEAD COSTS 79,000

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Monthly overhead costs as presented in the above table is Kshs. 29,000 in maximum, but this is usually not fixed as electricity
and water normally fluctuate according to the consumption.

Total cost of production per month

The below table, (table 11) gives the total operation and production expenses shown in table 8, 9 and 10 above.

Table 11. Total costs of production per month

Item Amount (Kshs)

Cost of materials 61,200

Cost of labor 47,000

Overheads costs 79,000

Total cost of production/operation 187,200

PRODUCTION/OPERATIONAL PROCESS

Website development process

Designing a web site is a process consisting of six phases:

Project Definition

Site Structure

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Visual Design

Site Development

Testing

Launch Plus

Graphics production process

The Brief Sketching &Conceptualizing

Research

Visual Research

21
Reflection

Positioning

Presentations

Celebration

22
The Brief
The initial accumulation of information from the client is the most important step, either by a face to face interview or a
questionnaire. This is where the business must establish the design brief. We really need to understand our clients very
thoroughly before getting started.

Research
After molding the design brief, getting to know our client's businesses is the next crucial step in making a graphics designing
successful. Research includes general reading on the industry itself, sometimes on its history, and on its competitors. If budgets
allow, external research can be carried out.

Visual Research
This is research not into the clients business, but into the actual graphic style. This is where we seek out a look, a style, an
approach or attitude, usually to attain a period or style that we are unfamiliar with, or to refresh ourselves with what is new or
successful. E.g. Find logos of similar businesses and critique them. This is where you look for inspiration.

Sketching &Conceptualizing
Developing the graphic design concept(s) is where creativity comes into play, this is where the designers in Kush bloggers must
create the graphics by using the design brief and the research conducted. SCD designers will use a napkin to sketch, a
sketchbook or computer as paper, this is all a matter of personal choice, however using a computer first up is not recommended
and will not be common in Kush bloggers.

When conceptualizing, the designers are mainly concerned with the graphic style and image of a piece but at times, they try to
convey deep meaning or some sort of visual puzzle.

Reflection
Taking breaks is as important as the physical research and the design brief. It is so easy to get stuck in a creative cul-de-sac
(learn how to be creative) and get tired of a project and this is why graphics designers take breaks. By resting, the designers'
ideas mature and develop in the back of their head. When they go back to their project in Kush bloggers, they have renewed
enthusiasm, insight and opportunity. This is also a good stage to get feedback from others.

Positioning
This is where designers choose how to work, they either position themselves like contractors and take orders according to their
client's wishes (i.e. don't advise their clients of design matters) or they position themselves like a business and build themselves a
long term relationship (i.e. Guide clients to a more appropriate solution much alike how a lawyer does). Designers in Kush
bloggers have to choose how they wish to work.

Presentation
This is where the designer must present their work to the client.
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They can choose whether to show the client a huge variety of logo design concepts (if it is hard to gauge a client's taste) or they
could choose to showcase just a few select logo designs. This is another debatable issue.

In this case, for the purpose of proper time management, Kush bloggers will adopt the behavior of presenting only the best 1 or 2
concepts.

GOVERNMENT REGULATIONS AFFECTING OPERATIONS

Operations in Kush bloggers can be affected in two major ways, either economic policy or legal changes.

Economic policy

Taxation policy affects business costs. For example, a rise in corporation tax (on business profits) has the same effect as an
increase in costs. Businesses can pass some of this tax on to consumers in higher prices, but it will also affect the bottom line.
Other business taxes are environmental taxes (e.g. landfill tax), and VAT (value added tax). VAT is actually passed down the line
to the final consumer but the administration of the VAT system is a cost for business.

Another area of economic policy relates to interest rates. In this country the level of interest rates is determined by a government
appointed group - the Monetary Policy Committee which meets every month. A rise in interest rates raises the costs to business
of borrowing money, and also causes consumers to reduce expenditure (leading to a fall in business sales). Government spending
policy also affects business.

Legal changes
The government of the day regularly changes laws in line with its political policies. As a result the business continually has to
respond to changes in the legal framework.

Examples of legal changes include:

 The creation of a National Minimum Wage which has recently been extended to under-18.
 The requirement for businesses to cater for disabled people, by building ramps into offices, shops etc.
 Providing increasingly tighter protection for consumers to protect them against unscrupulous business practice.
 Creating tighter rules on what constitutes fair competition between businesses.
 Today British business is increasingly affected by European Union (EU) regulations and directives as well as national
laws and requirements

24
CHAPTER FIVE

FINANCIAL PLAN

PRE-OPERATIONAL COSTS

While preparing to start the actual activities in the business, there are cost which must be incured in the business.

The pre-operational costs that are mandatory to the operation of the business are summarised in the table below (table 12):

Table 12. Pre-operational costs

ITEM AMOUNT (Kshs)

Labor 47,000

3-month Rent 75,000

Machines 137,300

Tools and equipments 104,000

Funiture and fittings 75,000

Licenses, Permits and By-Laws 11,100

TOTAL PRE-OPERATIONAL COSTS 449,400

The above table signifies the total cost that the business will incur in preparation to start the operations in the business.

WORKING CAPITAL ESTIMATIONS

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Kush bloggers will require some amount of cash in the normal circumstances of operations. Working capital is the different
between the sum total of the current assets less the sum total of the current liabilities;

Working Capital = Current assets – Current liabilities

Table 13 below shows a summary of working capital estimations in the company for three years from 2022 to 2024:

Table 13: Working Capital for the first three years

Item Year 2022 Year 2023 Year 2024

Amount (Kshs) Amount (Kshs) Amount (Kshs)

Current assets

Cash at bank 600,000 620,000 650,000

Cash in hand 80,000 50,000 60,000

Stock 20,000 100,000 120,000

Debtors

Total current assets 700,000 770,000 830,000

Fixed Assets

Machines 137,000 110,000 100,000

26
Tools and equipments 104,000 35,000 20,000

Funitures and fittings 316,000 50,000 15,000

Total fixed assets 557,000 195,000 135,000

Total assets 1,257,000 965,000 965,000

Liabilities

creditors 50,000 75,000 90,000

Bank loan 400,000 100,000 100,000

Friends contribution 200,000 100,000 100,000

Owners equity 300,000 100,000 100,000

Total liabilities 950,000 375,000 390,000

27
The assumption made is that all friends were willing and able to give their contribution in raising the working capital of the
business as well as all assets are not prone to challenges such as theft and destruction.

The working capital for the first three years have been estimated as follows:

Year 2022: 700,000 – 650,000 = 50,000

Year 2023: 770,000 - 275,000 = 495,000

Year 2024: 830,000 - 290,000 = 540,000

PROJECTED CASH FLOW STATEMENTS

Earlier in this document, it stated that acquiring a loan is one of the methods of raising capital to start this business, with regard
to this loan, the payment will be done monthly. i.e. 20,000 every month for the first 15 months of operation.

There will be also a loan interest of 1.67% of the total amount every month, which is equivalent to 5,000 each month for 15
months.

Projected cash flow statements for Kush bloggers for the first theree years of operation:

Table 14. Projected cash flow statements for the year 2022

the below table shows the projected cash flow statement for the year 2022, at which loan repayment and interest on loan is
proceeding and will take 15 months up to the tear 2023 March.

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Paticulars Jan Feb Mar April May Jun Jul Aug Sep Oct Nov Dec Total

Cash in Flow

Opening balance or 96,400 84,200 144,800 102,400 65,500 20,600 122,200 284,400 238,900 130,000 104,100 1,394,000

balance b/f

Owners equity 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000 3,600,000

Bank loan 300,000 - - - - - - - - - - - 300,000

Cash sales 160,000 250,000 289,000 188,000 199,000 201,000 300,000 380,000 250,000 203,000 200,000 198,000 2,818,000

Debtors 3,000 35,000 51,000 50,000 60,000 45,000 88,000 85,000 50,000 70,000 65,000 80,000 682,000

Total cash in flow 763,000 681,400 724,200 682,800 661,400 611,500 708,600 887,200 884,800 811,900 695,500 682,100 8,794,400

Cash out flow

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Pre-oprational cost 449,400 449,400 449,400 449,400 449,400 449,400 449,400 449,400 449,400 449,400 449,400 449,400 5,392,800

Purchases 61,200 20,000 10,000 11,000 21,000 15,000 13,000 20,000 35,000 45,000 10,000 15,000 276,200

Payment to creditors 30,000 10,000 3,000 1,000 5,000 10,000 9,000 10,000 30,000 46,000 11,000 17,000 182,000

Salaries and wages 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 564,000

Rent 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 300,000

Electricity 2,000 1,500 1,000 2,000 2,000 1,500 1,000 2,000 2,000 2,000 1,000 2,000 20,000

Water 2,000 1,000 1,000 1,000 1,500 2,000 2,000 2,000 2,000 2,000 1,000 1,000 18,500

Telephone 3,000 2,300 1,000 1,000 2,000 1,000 2,000 1,000 2,500 3,000 1,000 2,000 21,800

Transport 3,000 2,000 2,000 4,000 2,000 2,000 1,000 2,000 4,000 3,000 2,000 3,000 30,000

Advertising 10,000 5,000 6,000 5,000 7,000 4,000 3,000 10,000 15,000 25,000 10,000 13,000 113,000

Insurance 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 36,000

Loan payment 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 240,000

Interest on loan 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Taxes 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 72,000

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Total cash out 666,600 597,200 579,000 580,400 595,900 590,900 586,400 602,400 645,900 681,400 591,400 608,400 7,326,300

Net cash for the month 96,400 84,200 144,800 102,400 65,000 20,600 122,200 284,400 238,900 130,500 104,100 73,700 1,468,100

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Table 15. Projected cash flow statement for the year 2023

Loan repayment and interest on loan ends on March this second year of operations.

Paticulars Jan Feb Mar April May June July Aug Sep Oct Nov Dec Total

Cash in Flow

Opening balance or 1,468,100 1,423,100 1,231,900 1,254,900 1,172,900 1,136,900 1,268,900 1,618,900 2,059,900 2,454,900 2,743,900 3,060,700 20,895,000

balance b/f

Cash sales 80,000 76,000 90,000 30,000 100,000 200,000 400,000 450,000 400,000 500,000 512,800 410,100 3,248,800

Debtors 20,000 30,000 35,000 10,000 19,000 50,000 100,000 150,000 100,000 10,000 15,000 25,000 564,000

Total cash in flow 1,768,,100 1,549,100 1,556,900 1,494,900 1,491,900 1,586,900 1,968,900 2,418,900 2,759,900 3,164,900 3,471,700 3,695,700 27,107,800

Cash out flow

32
Pre-operational cost 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 1,800,000

Purchases 60,000 38,200 20,000 70,000 80,000 55,000 60,000 65,000 40,000 120,000 100,000 90,000 798,200

Payment to creditors 20,000 17,000 15,000 10,000 35,000 25,000 50,000 55,000 25,000 60,000 70,000 80,000 462,000

Salaries and wages 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 564,000

Rent 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 300,000

Electricity 2,000 1,000 2,000 2,000 2,000 2,000 2,000 2,000 1,000 2,000 2,000 2,000 22,000

Water 2,000 2,000 2,000 2,000 2,000 1,000 1,000 2,000 2,000 2,000 2,000 1,000 21,000

Telephone 2,000 1,000 3,000 2,000 2,000 1,000 2,000 1,000 2,000 1,000 2,000 3,000 22,000

Transport 3,000 2,000 4,000 5,000 3,000 3,000 4,000 3,000 4,000 5,000 4,000 5,000 45,000

Insurance 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 36,000

Loan payment 20,000 20,000 20,000 60,000

Interest on loan 5,000 5,000 5,000 15,000

Taxes 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 72,000

Total cash out flow 345,000 317,200 302,000 322,000 355,000 318,000 350,000 395,000 305,000 421,000 411,000 412,000 4,217,200

Net cash for the 1,423,100 1,231,900 1,254,900 1,172,900 1,136,900 1,268,900 1,618,900 2,059,900 2,454,900 2,743,900 3,060,700 3,283,700 22,890,600

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month

34
Table 16. Projected Cash Flow for statement for the year 2024

Paticulars Jan Feb Mar April May Jun Jul Aug Sep Oct Nov Dec total

Cash in flow

Opening balannce 22,890,600 22,340,600 21,723,600 21,070,600 20,422,600 19,773,600 19,136,600 18,540,600 17,963,600 17,384,600 16,813,600 16,061,600 211,231,600
or balance b/f

Owners equity 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 600,000

Cash sales 45,000 60,000 100,000 115,000 121,000 135,000 180,000 208,000 220,000 230,000 261,000 270,000 615,000

Debtors 10,000 20,000 50,000 55,000 60,000 68,000 70,000 71,000 75,000 78,000 79,000 79,000 615,000

Total cash in flow 22,995,600 22,470,600 21,923,600 21,290,600 20,653,600 20,026,600 19,436,600 18,869,600 18,308,600 17,742,600 17,203,600 16,460,600 214,391,600

Cash out flow

Pre-operational 300,3000 350,000 360,000 365,000 367,000 375,000 377,000 385,000 388,000 390,000 391,000 396,000 4,414,000
cost

Purchases 100,000 120,000 180,000 183,000 186,000 186,000 187,000 187,000 189,000 189,000 295,000 395,000 2,399,000

35
Payment to 150,000 160,000 190,000 192,000 193,000 197,000 198,000 201,000 203,000 205,000 309,000 310,000 2,508,000
creditors

Salaries and 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 47,000 564,000
wages

Rent 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 300,000

Electricity 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000

Water 2,000 1,000 2,000 2,000 2,000 2,000 1,000 1,000 1,000 1,000 2,000 2,000 19,000

Telephone 3,000 2,000 3,000 3,000 3,000 2,000 3,000 2,000 2,000 2,000 2,000 3,000 30,000

Transport 5,000 4,000 3,000 3,000 4,000 3,000 5,000 5,000 5,000 5,000 3,000 3,000 48,000

Advertisement 10,000 25,000 39,000 35,000 40,000 40,000 40,000 40,000 51,000 52,000 55,000 57,000 475,000

Insurance 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 36,000

Taxes 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 72,000

Total cash out 655,000 747,000 853,000 868,000 880,000 890,000 896,000 906,000 924,000 929,000 1,142,000 1,253,000 10,467,000

Net cash for the 22,340,600 21,723,600 21,070,600 20,422,600 19,773,600 19,136,600 18,540,600 17,963,600 17,384,600 16,813,600 16,061,600 15,207,600 203,924,600
month

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PRO-FORMA INCOME STATEMENT
Kush bloggers is not an existing business, it a proposed business, therefore the income statement is pro-
forma and not a real profit and loss account.

Pro-forma income statements for Kush bloggers for the years ending 30th Dec 2022, 30th Dec 2023 and
30th Dec 2024:

Table 17. Pro-forma income statements

paticulars 30th Dec 2022 30th Dec 2023 30th Dec 2024

Sales 8,794,400 27,107,800 214,391,600

Less cost of sales 5,326,300 4,217,200 10,467,000

Gross profit 3,468,100 22,890,600 203,924,600

Expenses

Purchases 276,200 798,200 2,399,000

Payment to creditors 182,000

Salaries and wages 564,000 564,000 564,000

Rent 300,000 300,000 300,000

Electricity 20,000 22,000 48,000

Water 18,500 21,000 19,000

Telephone 21,800 22,000 30,000

Transport 30,000 45,000 48,000

Advertising 113,000 - 475,000

Insurance 36,000 36,000 36,000

1
 Loan repayment 240,000 60,000 -

Interest on loan 60,000 15,000 -

Taxes 72,000 72,000 72,000

Total expenses 1,932,200 1,955,200 3,991,000

Net profit before tax 1,532,900 20,935,400 199,933,600

Tax (30% of income) 459,870 6,280,620 59,980,080

Net profit after tax 1,073,030 14,654,780 139,935,520

The assumptions made is that the taxation rate is at 30% of the total income, the loan repayment is 20,000
each month for 15 months and the interest on loan is 1.67% of the total amount, equivalent to 5,000 every
month for 15 months.

PRO-FORMA STATEMENTS OF FINANCIAL POSITIONS

Kush bloggers is not an existing business, and therefore the balancce sheet is termed as a pro-forma.

Table 18. Statement of financial position as at the begining of year 1 to the end of year 2:

Assets Start End of year 1 End of year 2

Current assets

Cash in bank 300,000 1,468,100 22,890,600

Cash at hand 300,000 50,000 40,000

Stock 61,200 60,000 120,000

2
Debtors 3,000 10,000 20,000

Total current assets 664,200 1, 588,100 23,070,600

Fixed assets

Machines 137,000 110,000 100,000

Machine depreciation (20%) 27,400 22,000 20,000

Tools and equipments 104,000 35,000 20,000

Tools/equipments depreciation (10%) 10,400 3,500 2,000

Funiture and fittings 316,000 50,000 15,000

Funiture/fittings depreciation (20%) 63,200 10,000 3,000

Total fixed assets 656,600 210,500 160,000

Total assets 1,320,800 1,798,600 23,230,600

Liabilities

Current liabilities

Creditors 50,000 75,000 90,000

Friends contribution 200,000 100,000 100,000

3
 Total current liabilities 250,000 175,000 190,000

Long-term liabilities

Owner’s equity 300,000 350,000 400,000

Bank loan 240,000 60,000 0

Retained earnings 60,000 15,000 0

Total long-term liabilities 600,000 425,000 400,000

Total liabilities and equity 850,000 600,000 590,000

Assumptions made is that the depreciation rate of machines is 20%, for tools and equipments is 10% and
that of funiture and fittings is 20%.

BREAK-EVEN POINT CALCULATION

Break-even point is a point where total costs (expenses) and total sales (revenue) are equal. Break-even
point can be described as a point where there is no net profit or loss.

Break-even point, BED = contribution margin%

Fixed costs CM% = Contribution Margin / Sales x 100

Table 19. Variable Costs

Item Amount

Pre-operational costs 11,636,800

Purchases 3,473,400

Payment to creditors 3,152,000

4
 Electricity 66,000

Water 58,500

Telephone 73,800

Transport 123,000

Advertisement 588,000

Interest on loan 75,000

Loan repayment 300,000

Total variable costs 19,546,000

Table 20. Fixed costs

Item Amount

Salaries/Wages 1,692,000

Rent 900,000

Insurance 108,000

Taxes 216,000

Total fixed costs 2,916,000

5
CM = 4,961,000 – 19,546,000

= - 14,585,000

CM% = -14,585,000 / 4,961,000 x 100

-294%

BEP = CM / Fixed Costs

= -294 / 2,916,000

= + - 0.01%

This break-even point tells that the business will sustain with profit margin of 0.01% of the total sales and
will also survive with loss not exceeding 0.01%.

PROFITABILITY RATIO

Having the net profit, gross profit, return on investment and return on equity, their ratio has been expressed
in Kush bloggers:

Gross profit ratio

GP ratio = Gross profit/sales x 100

6
Year 2022: GP = 3,468,100 / 8,794,400 x100

GP = 39.4%

Year 2023: GP = 22,890,600 / 27,107,800 x 100

GP =84.4%

Year 2024: GP = 203,924,600 / 214,391,600 x 100

GP = 95.1%

Net Profit ratio

NP ratio = Net Profit before Tax / sales x 100

Year 2022: NP = 1,532,900 / 8,794,400 x 100

7
NP = 17.4%

Year 2023 = 20,935,400 / 27,107,800 x 100

NP = 77.2%

Year 2024: 199,933,600 / 214,391,600 x 100

NP = 93.2%

Return on Equity

Return on equity = Net Profit after Tax / Owners equity x 100 Year 2022: Return on Equity = 1,073,030 /
300,000 x 100

= 375.7%

Year 2023: Return on equity = 14,654,780 / 3,600,000 x 100

= 407.1%

Year 2024: Return on equity = 139,935,520 / 14,654,780 x 100

8
= 954.9%

Return on Investment

Return on Investment = Net Profit after tax + Interest / Total investment

Year 2022: Return on Investment = 1, 073,030 + 60,000 / 1,000,000

= 1.1%

Year 2023: Return on Investment = 14,654,780 = 15,000 / 1,000,000

= 14.7%

Year 2024: Return on Investment = 139,935,520 = 0 / 1,000,000

= 139.9%

9
DESIRED FINANCING
Desired financing shows the amount that the business should possess for investing, if everything worked as
planned.

Table 21. Desired finances

Item Amount (Kshs)

Pre-operatonal costs 11,606,800

Working capital 1,085,000

Contigengency funds 1,000,000

Total Desired Financing 13,691,800

10
PROPOSED CAPITALIZATION

Proposed capitalization shows the total amount invested in the business as of the start of operations.

Table. 22 Proposed capitalization

Source Amount (Kshs)

Owners equity 300,000

Bank loan 300,000

Friends contribution 400,000

Total Investment 1,000,000

BIBLIOGRAPHY

Survey of Kenya

Government of Kenya

Kenya Bureau of Statistics

Kenya ICT Board

11
APENDIX A – Directory Sketch of Business Location

Uhuru Highway Uhuru Highway Uhuru Highway

Ufundi Cop. Plaza

Kenyatta Avenue
Bazaar Plaza University Way
Business Location: Bazaar Plaza

Nation Center

12
 Central Police Station

TUM

Gevanjee Garden

Moi Avenue Moi Avenue

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14