TITLE : BUSINESS PLAN

BUSINESS NAME : SMART ENTERPRISE

AUTHOR : MUGO VICTOR NG'ANG'A

COURSE ELECTRICAL AND ELECTRONIC

ENGINEERING

COURSE CODE : 1602/207

INDEX NUMBER : 2071012521

INSTITUTION : THIKA TECHNICAL TRAINING INSTITUTE

EXAMINER : KENYA NATIONAL EXAMINATION

COUNCIL (KNEC)

SUPERVISOR : HENREY NJOGU

SERIES : NOV.2022

LOGO :

i
DECLARATION

I declare that this is my original work and has not been presented in any institution for the award

of certificate.

NAME : VICTOR NG'ANG'A

SIGN : ………………………

DATE : ………………………

The business plan has been to THIKA TECHNICAL TRAINING INSTITUTE with my approval

as trainer supervisor

NAME : HENREY NJOGU

SIGN : …………………………

DATE : ………………………….

ii
DEDICATION

I gratitude and respect this business plan is dedicated to my dear family. Am grateful to my

family's support and love during my training at Thika Technical Training Institute

iii
ACKNOWLEDGEMENT

I acknowledge that this business plan is my work. I also acknowledge to never failing support

from brothers and my friends.

iv
SLOGAN

providing clean and quality services, honestly, diligently before all men.

v
TABLE OF CONTENTS

DECLARATION.............................................................................................................................ii

DEDICATION...............................................................................................................................iii

ACKNOWLEDGEMENT..............................................................................................................iv

SLOGAN.........................................................................................................................................v

TABLE OF CONTENTS...............................................................................................................vi

EXECUTIVE SUMMARY..........................................................................................................viii

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

1 BUSINESS DESCRIPTION........................................................................................................1

1.3 FORM OF BUSINESS OWNERSHIP......................................................................................3

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

2 MARKET  PLAN.........................................................................................................................5

2.4METHODS OF PROMOTING AND ADVERTISING TO ATTRACT AND MAINTAIN

CUSTOMERS.................................................................................................................................8

CHAPTER THREE.......................................................................................................................10

3. ORGANISATION AND MANAGEMENT PLAN..................................................................10

3.2 BUSINESS MANAGER AND QUALIFICATIONS.............................................................11

3.6 OTHER SUPPORT SERVICES..............................................................................................14

CHAPTER FOUR........................................................................................................................15

vi
4 OPERATIONAL PRODUCTION PLAN..................................................................................15

4.2 PRODUCTION STRATEGY................................................................................................16

CHAPTER FIVE...........................................................................................................................20

5  FINANCIAL PLAN.................................................................................................................20

5.2 WORKING CAPITAL............................................................................................................20

5.4 PROJECTED INCOME STATEMENT..................................................................................23

5.5 PROFORMA BALANCE SHEET..........................................................................................24

5.7 PROFITABILITY RATIO......................................................................................................26

5.8 DESIRED FINANCING.........................................................................................................27

5.9 PROPOSED CAPITALIZATION...........................................................................................27

vii
 EXECUTIVE SUMMARY

CHAPTER ONE
In this chapter the owner :
   - Describes himself
   -Describes his business
   -Justifies his ventures
   -Describes the industry
   -Describes the products and services
   -Describes the entry and growth strategy

CHAPTER TWO
In this chapter the owner describes his potential customers.
Describes his competition outlining their strength and weaknesses, he also describes his pricing
strategy, sale tactics and promotion strategy

CHAPTER THREE
In this chapter  there is organization and management plan where the hierarchy of organization
structure is illustrated and stated the duties and responsibilities of each personnel in management.

CHAPTER FOUR
In this chapter there is description of operational facilities and capacity of proposed businesses

CHAPTER FIVE
This chapter describes the Financial plan and there is illustration of operational cost, working
capital, projected  income  statement  and projected balance sheet.

viii
          

i
 CHAPTER ONE

1 BUSINESS DESCRIPTION

The mission of my business is to give fair and good quality service to every willing client, make

life better to every one as we improve the living standards using our knowledge. My vision is to

the best electrician to bring changes to everyone within my business and the whole country at

large.

1.1BUSINESS BACKGROUND

The name of my business is SMART ENTERPRICE and the address of my business is

                                                            SMART ENTERPRICE

                                                            P.O BOX 04011

                                                            MWINGI

1.2BUSINESS LOCATION.

The business _SMART ENTERPRICE will be located at Mwingi Central. The main reason why

I have chosen the place is because of the market. Around that town there is no other Enterprise

that is offering services like I offer the market is developing steady hence there is need of

electrical installation within the town. My Enterprise avails all the electrical equipment needed.

1
     

MACHAKOS
ROAD
TO GARISSA

GARISSA

2
ROAD

TO NANYUKI
MWINGI
1.3 FORM OF BUSINESS OWNERSHIP

The form of my business ownership is a sole proprietorship as it is very simple to start and run

smoothly. I decided to choose from both business because I was able to start it without straining

on how to get capital and on how to manage is a very simple business offering goods of high

quality is also enjoyable because i fully exercise my working potential and enjoy the profit alone.

1.4 TYPE OF BUSINESS

My business will be selling electrical equipment’s, electronic devices, making a new installation

within the area, that is wiring of building and installing electronics my business I also offer free

delivery service to the customers who buy goods at large quantity.

1.5PRODUCT AND SERVICES

In my business I will be selling goods like switch boxes, circular boxes, cables, PVC pipes and

all equipments used in electrical installation. I will also be selling electronics like phone,

televisions and many others. I will be giving instructions to the customers on how to use and how

to maintain the products they buy. I will also be offering  electrical installation services to

customers who are in need of it.

1.6 JUSTIFICATION OF OPPORTUNITY

The research was carried out and I found that the location is very favorable due to the climate,

good security and there is market around. The area is well networked with tarmac road and

transport is very easy. High population in the area will provide a good market there will be more

customers that will result to success of my business.

3
1.7INDUSTRY

I will be getting my products from larger enterprise in Kenya that sells goods as a wholesale,

goods for resell and where the products will be sold in low prices. I will be buying a quality

products so that I may make a difference with other electrical enterprises that will be similar to

my business.

1.8 BUSINESS GOALS

I will be aiming to get more profit from my business and use it to expand the business so that it

can cover large area and offer service to many. I will ensure that after using the money I make

from my business is worthy a profit. I would like to be offering education about electrical and

electronics like giving chance to the students to come for attachment and pay for the service.

1.8.2 Long term goals My long term goal is to expand my business make more profit and have

several branches across the country. Having a large Enterprise, I will employ workers and still in

those branches I will employ many people and train them to give a good service to clients.

1.9 ENTRY AND STRATEGY PLAN

I will make sure that my business offer good services to customers when a customer buy goods

of high quantity, I will give a product to my customer as a promotion. I will also give a discount

and a free transport service to the customer who will buy many products. I will ensure that there

is enough security to the customers as they will be delivering their products to their destinations.

I will be advertising my business through radio, magazines, TVs and newspapers and also use

trade shows as I give fair prices of products and  maintain high quality of the product.

4
 CHAPTER TWO

2 MARKET  PLAN

2.1CUSTOMERS

My targeted customers are people within the area, local people and institutions.

2.1.1 INSTITUTION

Institutions like school and hospital they will contribute a lot in my business. In schools I will be

taking the contract of installing everything concerning electrical and electronics installation,

hospital within the area, I will make sure that my worker are the one who will be giving services

of installing  electricity and maintaining electronic equipments.

2.1.2 LOCAL PEOPLE

These are mainly the people nearby my business. They will be customers number one for buying

electronics equipments from my business.

2.2 MARKET SHARE

Due to many businesses around the town, my business will carry out exercises to identify the

shares in the market. The town has a population of about 350,000 people inclusive environment,

70,000 can afford to own their own business hence inclusive of the institution and local people it

will add up to 9,000 potential customers which will be total market share.

The competitors who we can compete with in the market are three;

        1Nyanyu electronics-having a market share of 25%

        2Electronic system-having a market share of 15%

5
        3 Mwanga Enterprise- having a market share of  20%

The following pie chart below show the potential of SOLUTION GENERAL ENTERPRICE and

its competitors in the market

             MARKET SHARE

               

MARKET SHARE
NYANYU
ELECTRONICS
25%

MWANGA ENTERPRISE
ELECTRONICS SYSTEM
NYANYU ELECTRONICS

ELECTRONICS MWANGA
SYSTEM ENTERPRISE
15% 60%

This shows that my business will be capable to progress successful

2.3COMPETITION

The competition expected to be in the market will be from the three businesses that are in the

market.

6
To make my sales and services, I will ensure that I offer quality sales at a fair prices, give good

services that I know other business are not giving. I my business I will ensure proper

management and supervision to maintain business in good position to provide good services and

quality goods.   

2.3RESEACH

Due to research I have done, I have identified weaknesses and strength of my competitors

Some weaknesses that they have is that;

       *They don't give offer to their sales

       *Their workers are not trained on how to service customers

       *They do not advertise their products

       *They don't motivate their employees

My business will all these services to avoid those weaknesses and by doing that my business will

grow in steady rate. 

STRENGH WEAKNESS

Solution general Efficiency customers Poor quality products

Nyanye electronics Promoting services Poor customers

Electronic system Good structure Few customers

7
2.4METHODS OF PROMOTING AND ADVERTISING TO ATTRACT AND

MAINTAIN CUSTOMERS

Different ways with be used to notice our customers on services offered in the business. Some of

these methods include:

      (i) Posters

They will be placed all over in the market where they will display information on the location of

the business, working hours, products in the  business and the address of the business.

      (ii)Free services

This involves services such as repairing the equipments, free transport when customer buy more

products.

       (iii) Calendar

The business will be producing a calendar every year with a description of the business. ie,

address and contacts, products and offer.

2.5 PRICING STRATEGY

The pricing strategy will ensure there is profit and all expenses are met .pricing will be

determined by the level of the market demand.

Cost of product is equal to the cost of labour plus cost of market plus overhead expenses.

Competitor's prices also will determine the pricing of my products

8
2.7 SALES TACTICS

The business will sell at the store to retailers who will sell the products in the market. The

business will introduce more means of selling its products. It will sell thought television channel,

newspapers and for advertisement. Other selling methods include:

   (i) Sales police

The business will offer credit facilities to it's customers

Discount will also be allowed for a customer who will buy bulky products

    (ii) Direct selling

This is where selling will be done through the business store

    (iii) Indirect selling- This is where the business will be selling to the retailers and then they

sell to customers

      

9
 CHAPTER THREE

3. ORGANISATION AND MANAGEMENT PLAN

Management is very important in an organization and necessary for effective performance in

order to archive organization goal. The management provides or set values of an organization,

rules and regulations which govern the employees as they carry their duties. The management

plan shows ordering  and selection for tasks necessary in achieving the proposed plan.  It will

also involve the assignment and the coordination of duties to be performed by each worker  in an

organization. 

3.1 ORGANIZATION STRUCTURE OF THE BUSINESS

The organization is going to be operated under compented supervision by the manager. Various

duties will be assigned to respective employees. I as a manager, I will have a good experience of

managing a business. Salesman will be acquired to have an experience of 1 year or have a

certificate in accounting. The store keeper should have a second school certificate and hard-

working.

                         

10
 MANAGER

SALES MANAGER

WATCHMAN
STORE KEEPER

 3.2 BUSINESS MANAGER AND QUALIFICATIONS

The manager will perform many duties in the business. For him to carry out his duties, his must

have a diploma from well recognized institution. 

      (i) DUTIES AND RESPONSIBILITIES

   (a) Planning for busy activities

   (b)Making payments of delivered stock

   (c) Monitoring at recruiting employees

   (d)Organizing the staff

3.2.1 ASSISTANT MANAGER

Assistant manager should have a diploma course from a well recognized institution and an

experience of 8months.

11
DUTIES OF ASSISTANT MANAGER

    -To assign duty

    -To supervise workers

3.2.2 OTHER BUSINESS PERSONNEL

CASHIER

He/she should be qualified having a diploma in accounting, His/her duties will;

    * Collection money from the customers

    *Assisting the accountant in book balancing

3.2.3 TECHNICIAN

He will be in change of repairing and education customers on how to use the equipment’s

3.3RECRUITMENT, TRAINING AND PROMOTION

3.3.1 Recruitment

Recruitment shall be contacted within the business ground, if we need any employee we shall be

advertising for the vacancy for a qualified person to apply for the job. After application, short

listing be done and interview date will be given. After interview, the most qualified person with

be giving that job

3.3.2 Training

Employees shall be trained according to their allocations. They will be attending seminars to

improve their working performance

3.3.3 Promotion

Promotion will be given to a workers according to their performance in their sectors. The

12
promoted personnel shall be awarded with certificate of merits during annual lunch which shall

be held after the end of every successive year of hard work

3.4 REMUNERATION AND INCENTIVES

The employees shall be remunerated using straight fixed salary method. The manager shall give

salaries in good time and over time shall be paid

3.4.1 Remuneration

All employees shall be paid using a bank cheque and paid in time. Remuneration including

commission and compensation shall also be paid to ensure satisfactory of employees

3.4.2 Incentive

Employees shall also be giving things that motivate and encourage then like allowance, paid in

time and most hard working employee shall be given something to encourage him/her.

3.5LICENSE PERMIT AND BY-LAWS

The business shall get license from the government which shall be valid for 2 year. The county

government will have fully connection to my business to ensure safety of my business.

3.5.1 License permit

The business will get licensed by the national government in and be renewed when it expires.

3.5.2 By-laws

My business will run under law made by a local authority and have rule which control the way

an organization will run.

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3.6 OTHER SUPPORT SERVICES.

The business will require body support for efficient operation of the business.

3.6.1 Banking services

The business will have Equity bank account for keeping money, paying employees through bank

and for loans if needed.

3.6.2 Insurance body.

The business will be registered by several insurance companies. Bui will be insured for

compesantion in case of losses that may be caused by outbreak of fire, cover employees and they

whole business. 

14
 CHAPTER FOUR

4 OPERATIONAL PRODUCTION PLAN.

The proposal will require facilities such as computer, printers, calculators and logbooks for

proper recording of it's transactions. The reception will be designed properly to welcome

customers while making their purchase.

4.1PRODUCT FACILITIES AND CAPACITIES

The business facilities will enhance efficiency and high quality services. This plan will assist the

workers to know the right tools and equipments to be used when performing the services. This

proprietor will be in a position to know the quality of the facility as he draft the products

cost .This will also be helping during times of record keeping. All the needed facilities shall be

tabulated.           

Office layout.

These are various parts of a section of the business which clearly SOLUTION GENERAL

ENTERPRICE place.

indicate the exact place or the section where different operations of SOLUTION GENERAL

ENTERPRICE OFFICE LAYOUT

15
 COMPUTER

OPERATORS
BATTERY CHARGING ROOM

ROOM

ACCOUNTANT
SALESMAN

RECEPTION DESK

MANAGER

4.2 PRODUCTION STRATEGY

Solution General tend to design and develop product which will meet needs of the potential

customers measure in terms of the taste and preferences. The service facilities will be more

accurate and of high sensitivity measure and also long lasting. The technical design of a product

should always be recognized as a productive factor to maintain efficiency. Therefore the

planning and progressing of good results and important for direct operation of a business.

The factor has to be taken into consideration because product capability varies from one person

to another person. The will enable them to:

     -Interprate the business policy relation to planning of its services and customers needs.

16
     -Keeping business records

     -Work within business policies and standards

     - Maintain the reputation to minimise the production cost

     -Supervise and co-ordinate whenever they are their duties

Monthly production expenses

Monthly preliminary

    Description                Cost (Ksh)

1 Rent 5000

2Electricity 300

3Insurance 1200

4Water 800

5Advertisement 1000

TOTAL 8300

    Monthly production cost

    Cost of production

  Particulars                 Cost (Ksh)

1Material 40000

2Labour 50000

17
3Prodution overhead 35000

TOTAL 125000

For one to be successful in any business undertaking in any Organizing one must be dedicated to

never-ending improvement in quality goods and services. The business will only be viable to

survive if it provides satisfaction to it's customers

4.3 PRODUCTION PROGRESS

The entreprise will be getting products from the manufacturer company and wholesaler who sale

quality products. During the operation of the business I will be able to know the type of product

that is mostly needed by customers. Some of external factors that might affect my business

negative are:

     -Lack of customers

     -Inability to understand how to use some products

     -Financial factor

     -High competition from my competitors

      -High taxation

4.4 ELEMENTS AFFECTING PRODUCTION OPERATION

4.4.1 Safety

I will ensure every worker is working at a good condition and where they are there is safety

equipment’s like fire extinguisher, wear gloves and  head gear to protect themselves. I will also

acquire health regulations from the ministry of health and display them within the business area

18
for everyone to access them easily to have knowledge on how to take care to himself.

4.4.2 Health regulation

Workers will be paying services like NHIF and life insurance to cover themselves against

sickness and injuries. There will be a list of rules to guide them like when someone is  in the

field of work have to wear boots, helmet, dust coat and mask.

4.4.4 Environmental regulations

Environmental conditions will be maintained environmental pollution and there will be recycling

of what is not in use to ensure that environment is clean. More plants will be planted  to make the

area more attractive. 

                                     

  

19
 CHAPTER FIVE

5 FINANCIAL PLAN
This shows financial position of the business and it's intended performance in the course of the
year. In account for all the funds in the business and shows it accountability.
5.1 OPERATIONAL CAPITAL

ITEMS AMOUNT
Machinary and equipments 900000
Wages 500000
Power maintenance 100000
Advertisement 150000
Transport 40000
Insurance 20000
Material 50000
Water bill 80000
Insurance 20000
TOTAL 1860000

5.2 WORKING CAPITAL

    CURRENT ASSETS

ITEMS AMOUNT

Cash at hand 500000

Cash and bank 1000000

Debtors 700000

Stock 1500000

TOTAL 3700000

20
 5.3 PROJECTED CASHFLOW FOE THE YEAR 2022-2023

Particular FEB MAR APRIL MAY JUN JUL AUG SEP OCT NOV DEC JAN TOTAL

Opening cash 35000 31000 30000 35000 35000 40000 20000 35600 35500 25600 37000 206700

Cash sale 10500 13000 20000 25000 34000 34000 30000 45000 42000 37000 12000 15000 115500

Debtors 24000 540000 64000 24000 21000 43500 21320 8500 12000 11000 10600 17000 85500

Loan required 40000 40000

Total cash 42000 44500 37000 8600 10000 41000 35000 32000 32100 28900 34000 45000 243000

Payment to 5000 65000 8000 5000 20000 8000 45000 7500 208000
creditors
Cash purchase 25000 20000 5000 15000 25500 30000 32000 35000 28000 26500 26000 18000 98500

Rent 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 4500 54000

Transport 2000 1500 1100 1500 1800 1000 3000 3600 2800 3000 1700 18500

Insurance 5500 5500

Water 2000 2100 2000 2300 2350 2050 2000 2650 2400 2500 2400 2350 28850

Electricity 3000 3000 3000 3100 3250 3200 3500 3300 2700 2150 3000 3000 46400

Tax 4500
Maintenance 2500 2500 5000
Total cash flow 30000 43000 40000 210000 32000 30000 32000 23000 21000 40000 15300 47000 38000

Net balance 16450 20500 33100 30000 28500 40500 45000 40000 36000 43000 26000 61000 2603701

21
 CASH FLOW FOE SOLUTION GENERAL FOR YEAR 2022
Particular FEB MAR APRIL MAY JUN JUL AUG SEP OCT NOV DEC JAN TOTA
L
Cash flow
Cash sale 40,000 45,000 50,000 50,000 47,000 45,000 48,000 43,000 52,000 51,000 45,000 58,000 450,00
0
Receipt from debtors 5,000 8,000 1000 14,000

Total cash flow 40,000 45,000 50,000 52,000 47,000 45,000 46,000 43,000 52,000 51,000 56,000 53,000 480,00
0
Cash out flow

Cash purchase 15,000 12,000 13,500 150,000 90,000 10,000 950,000 155,000 150,00 120,000 110,000 115,000 980,0
0
Rent 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 4,500 54,00

Transport 500 800 350 500 500 550 800 550 450 600 400 550 8,500

Insurance 6,000 6,00(

Water 250 250 200 250 280 200 200 180 150 200 200 250 2,550

Electricity 200 150 180 200 200 200 250 200 280 250 260 200 2,280

Advertisement 1000 500 1,500 3,000

Tax 6,000 6,000

Maintenance 6,000 6,000

Total out- flow 45,550 40,840 40,000 48,650 38,500 38,000 35,500 40,850 41,600 45,840 41,000 10,000 480,50
0
Net balance 15,000 14,500 14,650 15,800 13,000 13,500 12,000 14,850 12,680 13,650 14,200 13,300 128,40
0

22
5.4 PROJECTED INCOME STATEMENT.
This is statement showing the profit or loss made by a business during a special period of
operation like for one year.
PROJECTED INCOME STATEMENT AS AT JANUARY 2022.

Total sales 308500 883200

Less cost of sales 594300

Gross profit 883200 883200

Gross profit

Expenses

Rent 54000

Salaries 85000

Transport 18500

Water 28850

Electricity 46400

Insurance 5500
560600
Loan repayment 50000
264500
Net less 5000

60400
4500
4500

Tax less

Net loss after tax

5.5 PROFORMA BALANCE SHEET

This shows the assets liabilities and capital of the business at a given time.

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SOLUTION GENERAL PRODUCTION AS AT 31 JANUARY 2022

FIXED ASSETS                          KSH

Furniture                                    11000       

Machinary and equipments    15000

Building                                       6000

                                                    32000

Current assets                    

Stocks.                                  160000

Cash at hand                        80000

Debtors                                 50000

Cash at bank                        200000

                                               526530 

Total assets                         580520 

CAPITAL LIABILITIES

Bank loan                            1,000,000

Equity share                        55000

Total                                    4232000

Current liabilities

Creditors                              60000

24
Tax                                        70000

Net loss                                38000

Total                                     170000

Total liabilities                     506240

Estimation of working capital=current assets -current liability

5.6 BREAK EVEN ANALYSIS

This helps to determine the level of sales at business does get a business profit or loss

ITEMS

VARIABLE COST

Transport 10000

Creditor 180000

Electricity 3000

Miscellaneous 2000

Water bill 1500

Total variable cost 196500

Contribution margin =sales- variable cost

25
 1,000,000 – 196,500 = 833,500

Contribution margin in percentage

833,500×100 ÷1,000,000 =83%

Breakeven Point = { fixed cost ÷ contribution margin } × 100

5.7 PROFITABILITY RATIO

Sales turn over = { net profit after tax ÷ total sales } × 100

{190,000 ÷ 1,000,000} × 100 = 19%

Current asset ratio = { net profit after tax ÷ total current assets } × 100

{ 350,000 ÷ 2,500,000} × 100 = 14%

Long term liabilities = { net profit after tax ÷ total long term liabilities } × 100

{ 350,000 ÷ 2,000,000} × 100 = 17.5%

5.8 DESIRED FINANCING

ITEMS PARTICULARS AMOUNT

1 Pre-operational cost 3500500

2 Working capital 3090000

26
3 Total 6790500

5.9 PROPOSED CAPITALIZATION

ITEMS PARTICULARS AMOUNT

1 loan 500000

2 Creditor 200000

3 Contribution 30000

Total 1000000

27