TITTLE: THE POWER COMPANY

ANDRESS: P.O.BOX 443 KITENGELA

EMAIL: [email protected]
PRESENTED BY: KIPROP ARAP TANUI
INDEX NO.: 5151020488
DATE:
SUPERVISOR: AKETCH JUNIOR
PRESENTED TO: KENYA NATIONAL EXAMINATION
COUNCIL FOR PARTIAL FULFILMENT OF AWARD IN
DIPLOMA IN ELECTRICAL AND ELECTRONICS
ENGINEERING
EXAM SERIES: NOVEMBER SERIES

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DECLARATION

I declare that this business plan is my original work and has never been presented
to any examination body including Kenya National Examination Council for award
of Diploma, Certificate or even Degree.

NAME: KIPROP ARAP TANUI

SIGNATURE:

DATE:

This work was submitted with the approval of my supervisor.

NAME: ZACHARY ONUNGA.

SIGNATURE:

DATE:

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DEDICATION

I dedicate this work to my family members and friends for being supportive
morally and financially and being of encouragement to me.

GOD BLESS YOU ABUDANTLY.

3
ACKNOWLEDGEMENT

Many thanks to my family for support, encouragement and creating time for me,
secondly to my supervisor Mr. Aketch Junior for your guidance, thirdly and finally
to the entire college fraternity. May God bless you.

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 TABLE OF CONTENTS

DECLARATION 2

DEDICATION 3

ACKNOWLEDGEMENT 4

CHAPTER ONE: EXCECTIVE SUMMARY

1.0 BUSINESS DESCRIPTION 8

1.1 MARKETING PLAN 8

1.2 ORGANISATION AND MANAGEMENT PLAN 8

1.3 PRODUCTION/OPERATIONAL PLAN 9

1.4 FINANCIAL PLAN 9

CHAPTER TWO: BUSINESS DESCRIPTION

2.0 BUSINESS NAME 10

2.1 BUSINESS LOCATION 10

2.2 FORM OF OWNERSHIP 10

2.3 PRODUCTS AND SERVICES 11

2.4 JUSTIFICATION OF OPPORTUNITY 11

2.5 THE INDUSTRY 11

2.6 GOALS OF THE BUSINESS 11

CHAPTER THREE: MARKETING PLAN

3.0 CUSTORMERS 13

3.1 MARKET SIZE 13

3.2 MARKET SHARE 13

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3.3 COMPETITION 13

3.4 PROMOTION AND ADVERTISEMENT 14

3.5 SALES TACTICS 14

3.6 DISTRIBUTION STRATEGY 14

CHAPTER FOUR: ORGANISATION AND MANAGEMENT PLAN

4.0 ORGANISATION CHART 15

4.1 RECRUITEMENT, TRAINING AND PROMOTION 15

4.2 REMUNERATION AND INCENTIVES 16

4.3 SUPPORT SERVICES 17

CHAPTER FIVE: OPERATIONAL PLAN

5.0 PRODUCTION FACILITIES AND CAPACITY 18

5.1 PRODUCTION STRATEGY 18

5.2 PRODUCTION PROCESS 19

5.3 REGULATIONS AFFECTING OPERATIONS 19

CHAPTER SIX: FINANCIAL PLAN

6.0 PRE OPERATION COST 20

6.1 WORKING CAPITAL ESTIMATIONS 20

6.2 CASH FLOW PROJECTIONS 21

6.3 PROFORMA INCOME STATEMENT FOR THE YEAR ENDED 22

6.4 PROFORMA BALANCE SHEET 23

6.5 BREAK EVEN POINT ANALYSIS 24

6.6 DESIRED FINANCING 24

6
6.7 PROPOSED CAPITALIZATION 25

6.8 EXPECTED PROFITABILITY RATIO 25

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CHAPTER ONE: EXCECUTIVE SUMMARY

1.0 BUSINESS DESCRIPTION

The name of the proposed business will be the power company with its main
office located in Kitengela town in Kajiado County. It will be located next to Ninni
mall.

The company will be a sole proprietor working within and outside Kajiado County.

1.1 MARKETING PLAN

The proposed company will be designed in a manner that it will obtain large
number of tenders in the county and outside too. It also plans to carry out its
projects within the strict adherence of the profession requirements and to the
satisfaction of the client’s needs. The company shall use media, daily newspapers,
customer care, good public relations and quality projects as its marketing tools.

1.2ORGANISATION AND MANAGEMENT PLAN

The organization structure shall comprise of the managing directors, chief

engineers, field engineers, supervisors, marketers, suppliers, sales persons and
secretary.

Managing director will be the overall head of the company; supervisors shall
supervise the use of installation materials. Field engineers will be carrying out the
actual installation work of the company while the secretary will keep the
companies records and laying out procedures of conducting meetings.

Sales persons will conduct sales at the main offices.

1.3 PRODUCTION/OPERATIONAL PLAN

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The proposed business will be operating from Monday to Saturday as from
8:00am to 5:30pm. Except on Saturdays when the business shall close at noon.
Furthermore the business shall remain closed during holydays.

1.4 FINANCIAL PLAN

The starting capital of the proposed business will amount 2,000,000 and the
source shall be as follows;

SOURCE AMOUNT

BANK 1,000,000

PERSONAL SAVINGS 1,000,000

TOTAL 2,000,000

CHAPTER TWO: BUSINESS DESCRIPTION

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2.0 BUSINESS NAME

The proposed name of the company will be the power company preferred due to
its self-explanatory nature.

The address of the company being;

THE POWER COMPANY

P.O BOX 443

KITENGELA

EMAIL: [email protected]

2.1 BUSINESS LOCATION

The business offices will be located in Kitengela town next to Ninni mall.

To kajiado
Eastmatt

Supermaket

Wrens lounge

Ninni Power company

Mall

2.2 FORM OF OWNERSHIP

The business shall be a sole proprietor business to ensure that there is quick
decision making and planning on its expansion as days go by.

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The company shall be registered under registration of power installation authority
and licensed by the national government in order to work in the entire country.

2.3 PRODUCTS AND SERVICES

The company aims at installation projects. It will own an electrical shop from
which it will sell electrical materials and accessories. The company will own a
means of transport to deliver installation materials at installation sites.

2.4 JUSTIFICATION OF OPPORTUNITY

Kitengela town lies at the outskirts of Nairobi and it is fast growing in population
with a lot of construction work making my business suitable due to the need of
sustainable power supply.

These also nesseciates the need of backup systems in case of power outages.
Kitengela borders Nairobi and Machakos and again the two towns are growing in
population of which my services shall be essential.

2.5 THE INDUSTRY

The company is under power industry due to increasing demand of power in most
projects and constructions. Safety precautions shall be adhered to during
installation.

2.6 BUSINESS GOALS

The company targets both long term and short term goals;

Short term goals

The company intends to achieve the following in the first two years;

 To gain confidence of clients within the area by carrying out quality

projects.

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  To obtain tenders from county government.
 To ensure the staff members comes up with creative and innovative ideas
on how to improve the company strategies.

Long term goals

 To open branches within and outside kajiado county

 To collaborate with financial institutions to facilitate bigger projects.
 To collaborate with the national government.

2.7 ENTRY AND GROWTH STRATEGY

The business intends to enter the market by selling commodities at a reduced

price and doing payable installation services of the commodities ensuring
customer satisfaction at a central point.

Advertising through the use of posters and social media platforms e.g. Facebook,
twitter shall also create awareness.

For growth and prosperity shall ensure that qualified personnel work and manage
the business. Computerized stock management will also ease record keeping
therefore reducing fraud and stealing from the business.

CHAPTER THREE: MARKETING PLAN

3.0 CUSTOMERS

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The company targets a large number of sites which include; residential areas,
learning institutions, health centers, business premises and county government
projects.

3.1 MARKET SIZE

The market will cover approximately an area of about 200,000 square meters
which is enough for the business. It is near the urban with an approximate
population of 100,000 people. We will target about 10,000 customers and
increase as time goes by.

3.2 MARKET SHARE

The business intends to target about 40% of the total customers within the
location this is because other business offers substandard and expensive goods.

3.3 COMPETITION

The company shall out do other companies by ensuring timely and quality goods
and services rendered by qualified staff. Valuable goods shall have a warrant as an
incentive. All installations by the company shall be done timely checks and this
will make the company to sprout well amongst other companies of the same
type.

My competitors are companies that existed in the market though they have
weaknesses.

Competitor strength weakness opportunity threats

Live line ventures Many customers Goods only Customers

Watt company Average customers Solar only Customers

Strength

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The company strength lies within the determination of owners and employees to
give the personalized service learning clients’ needs and tender references and
keeping record on corporate accounts as the type of previous tender in order to
anticipate their future needs.

Weakness

The company weakness in the case of entry in the market but is lessened because
we are both capital and labor intensive.

3.4 PROMOTION AND ADVERTISEMENT

The power company intends to advertise through posters, banners, flyers and
distribution of company cards to clients. Good public relations shall also be a key.

Promotions shall also be done occasionally depending on amount purchased.

3.5 SALES TACTICS

The proposed business will ensure good public and industrial relation which will enable the business to
recruit and retain its sale it will also offer short term credit to its customers in order retain and attract
more.

3.6 DISTRIBUTION STRATEGY

Distribution of products will be involved in making the product available for consumption, a level one
channel will have no intermediary, and these will flow typically from manufacturer to customer.

CHAPTER FOUR: ORGANISATION AND MANAGEMENT

4.0 ORGANISATION CHART

The hierarchy of the authority will be clearly outlined from managing director to
the rest of the team as follows;

Managing director

Chief engineer

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 Head clerk Field engineer

Marketers / Suppliers Installation personnel

Supervisors

4.1 RECRUITEMENT, TRAINING AND PROMOTION

The company will employ qualified employees with different roles that cannot be
interchangeable amongst us in order to attain perfection.

4.1.0 Recruitment

The recruitment methods that I will use are just simple. I will advertise the job
opportunities through the social media platforms hence employ those who have
required qualifications e.g. education and experience.

4.1.1 Training

It will take place in the company whereby I will invite trainers to equip the staff
with more skills with the aim of improving production.

Potential students and graduates will have the opportunity to learn from the
company.

4.1.2 Promotion

Promotion shall be carried out on the basis of performance, creativity and also
considering newly acquired skills.

It comes as a form of motivation to be more innovative and creative. It also comes

with additional responsibilities.

4.2 REMUNERATION AND INCENTIVES

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4.2.0 Data on remuneration

POSITION SALARY PER DAY SALARY PER MONTH

Managing director 3000 90000

Chief engineer 2500 75000

Supervisor 2000 60000

Field engineer 1800 54000

Secretary 800 24000

Sales person 700 21000

Workers 500 15000

Total 11300 339000

4.2.1 Incentives

Workers shall be promoted depending on their performance. Financial support in

case of a family member the entire fraternity shall support.

Also long serving casual workers will get permanent employment upon there
consistence.

4.3 SUPPORT SERVICES

The company shall provide the following support services; postal and
communication services, legal services, advertisement and legal banking
communication services will be provided by KCB bank while Airtel rendering
communication services. In case of any legal aspect of the business Njiru
advocates will take charge.

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CHAPTER FIVE: OPERATIONAL PLAN

5.0 PRODUCTION FACILITIES AND CAPACITY

The business requires some equipment before operation.

ITEMS DATE NO. REQUIRED COST COST OF TOTAL

REQUIRED INSTALLATION
SHELVES Beginning 12 1200 1400 2600
TABLES Beginning 3 7000 300 7300
RECEIPT BOOKS Beginning 2 300 _ 300
CHAIRS Beginning 8 4000 150 4150
RUBBER STAMP Beginning 2 500 _ 500
COMPUTER Beginning 2 50000 50,000
TOTAL 63000 1850 64,850

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5.1 PRODUCTION STRATEGY
The proposed business will require the following stock

TYPE OF QUANTITY COST PER UNIT TOTAL (KSH)

MATERIAL
Phones and 20 5000 100000
accessories
Radio 5 5000 25000
Laptop 3 25000 75000
Television 4 16000 64000
DVD’s 4 1000 4000
Installation cables 1000M 100 100000
Conduits 300 100 30000
Bulbs 125 80 5000
Fridges 1 20000 20000
Heaters 40 100 4000
Microwaves 1 7200 7200
TOTAL 434200

EXPENSE AMOUNT (KSH)

Transport 12000
Electricity bill 4000
Rent 15000
Maintenance 1000

Salaries 124000
Water bill 4000
Telephone 500
TOTAL 160500

5.2 PRODUCTION PROCESS

The proposed business will offer other services to the customers like helping them locate item
they require. Also offering discount at various seasons.

5.3 REGULATIONS AFFECTING OPERATIONS

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The following licenses will be required by the proposed business

LICENSE REQUIRED SOURCE COST

Trade license Ministry of commerce and 2300
industry
Health license Ministry of health 300
Certificate of registration Register of company 700
TOTAL 3300

The proposed business will also pay local taxes like

Service charges 2000

Parking 1000
Rate charges 500
TOTAL 3500

Trade license is required to approve the business starts running. Health license requires to be
renewed every year. Other requirements are facilities like toilets and clean water.

CHAPTER SIX: FINANCIAL PLAN

6.0 PRE OPERATIONAL COST

It will show cost incurred before opening the company. The expenses are tabled
as shown;

Item amount

Company registration 10,000

Insurance policy 20,000

Company license 10,000

Tools & equipment 50,000

Electricity services 5,000

Water services 15,000

Advertisement 50,000

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Materials 1,000,000

Total 1,160,000

6.1 WORKING CAPITAL ESTIMATIONS

They are the daily requirements for the smooth running of the company. Working
capital is obtained by evaluating the difference between the current assets and
liabilities.

The working capital is liquid money or the cash resources at disposal of the
company available to meet its immediate needs.

Current assets amount

Cash at bank 25,000,000

Cash in hand 1,500,000

Debtors 100,000

Total assets 26,600,000

Current liabilities amount

Creditors 500,000

Working capital 24,100,000

Starting capital 2,000,000

Working capital = 26,600,000 - 2,500,000

24,100,000

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6.2 CASH FLOW PROJECTIONS

It is a statement of accounts showing the resource and application of funds or

movement in an entity or organization.

Its importance is to;

I as the owner shall calculate and show the cash inflow in the business. This shall
be shown for three years and the first twelve months of operation.

The following assumptions shall be made;

 Sales will increase gradually as the purchase also increase

 Rent, salaries, loans payment and interesting loan are to remain constant
throughout the year while other payments being variable.
 Postal rent is made only once in the year at ksh2500
 Maintenance cost thrice in a year i.e. January, July and November.
 It is used by the government department like KRA income tax for taxation
purposes.

6.3 PROFORMA INCOME STATEMENT FOR YEAR ENDED 2022

particulars JAN FEB MA APR MA JUN JUL AU SPT NO DEC

R Y G V
O/C 800 18 300 405 200 300 30 400 500 600 300
000 0 000 000 000 000 0 000 000 000 000
00 00
0 0
SALES 800 60 770 480 600 300 90 660 507 700 400
000 0 000 000 000 000 0 000 000 000 000
00 00
0 0
TOTAL 160 78 377 585 800 600 39 800 130 130 700
0 0

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C/OUT 000 00 000 000 000 000 00 000 000 000 000
0 0
PURCHASES 100 20 300 200 900 500 90 500 230 456 400
000 0 000 000 000 000 0 000 000 989 000
00 00
0 0
WATER 500 50 500 500 500 500 50 500 500 500 500
0 0
TELEPHONE 800 80 800 800 800 800 80 800 800 800 800
0 0
TRANSPORT 900 90 900 900 900 900 90 900 900 900 900
00 0 00 00 00 00 0 00 00 00 00
00 00
POSTAL 800 80 800 800 800 800 80 800 800 800 800
SERVICES 0 0
ADVERTISEMENT 100 10 100 100 100 100 10 100 100 100 100
00 0 00 00 00 00 0 00 00 00 00
00 00
SALARIES 340 34 340 340 340 340 34 340 340 340 340
000 0 000 000 000 000 0 000 000 000 000
00 00
0 0
INSURANCE 300
00
ELECTRICITY 900 90 900 900 900 900 90 900 900 900 900
0 0
MAINTAINANCE 100 75 230 180 150 100 90 500 500 500 200
00 0 00 00 00 00 0 0 0 0 0
0 0
MISELLENEOUS 200 60 800 170 120 890 00 000 700 890 540
0 00 00 0 0 0 0
0
TOTAL CASH 230 43 950 670 880 540 78 246 450 606 820
FLOW 000 8 754 120 000 000 0 000 000 000 000
00 00
0 0

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6.4 PROFORMA BALANCE SHEET

There are the books of accounts that show the financial position of the company.
It gives what the company owns and owes.

THE POWER COMPANY

BALANCE SHEET AS AT 31ST December 2021

ASSETS AMOUNT LIABILITIES AMMOUNT

FIXED ASSETS CAPITAL 2000000
TOOLS& EQUIPMENT 70,000 LONG TERM LIABILITIES
FURNITURE 100,000 BANK LOAN 20 000 000
LORRY 1,200,000
BUILDING 500,000
TOTAL FIXED ASSETS 1,870,000

SHORT TERM LIABILITIES

CURRENCY ASSETS CREDITORS 500 000
DEBTORS 100,000 TOTAL LIABILITIES 22 500 000
CASH IN BANK 25,000,000
CASH IN HAND 1,500,000 GROSS PROFIT 6 970 000
STOCK 1,000,000 TOTAL 29 470 000
TOTAL CURRENCY 27,600,000

TOTAL 29,470,000

6.5 BREAK EVEN ANALYSIS

It is the point at which cost incurred equals the revenue generated so that no
profits or losses are realized at this point. This is a financial tool used to determine
the input of the volume of activity level the enterprise shall yield profit and below
a loss will be incurred.

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PARTICULARS AMMOUNT
SALES 8,000,000
VARRIABLE COST 500,000
WATER 60,000
MAINTENANCE 150,000
ELECTRYCITY 50,000
TELEPHONE 10,000
STATIONERY 30,000
ADVERTISEMENT 200,000
SALARIES AND WAGES 4,068,000
FUELS 700,000
MISELLENIOUS 80,000
TOTAL 15,848,000

6.6 DESIRED FINANCING

ITEM COST
PRE 0PERATIONAL 560 000
WORKING CAPITAL 1 000 000
FIXED ASSETS 352 000
TOTAL DESIREDFINANCING 1 912 000

6.7 PROPOSED CAPITALIZATION

ITEM COST
OWNER 1 000 000
TOTAL BORROWED 1 000 000
TOTAL INVESTMENT 2 000 000

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