CREAMY BAKEHOUSE

P. O. BOX 244, KERICHO

PHONE: 0729371597
Email: [email protected]

PRESENTED BY : MERCY CHEBET

REG NO. : DBT

PRESENTED TO THE DEPARTMENT OF BAKING

TECHNOLOGY FOR THE PARTIAL FULFILLMENT AND

REQUIREMENT FOR ATTAINMENT OF DIPLOMA IN BAKING

TECHNOLOGY

©MAY 2023
DECLARATION
I firmly declare that this business plan is my own work and it has not been produced in any other

Institution.

Name: MERCY CHEBET

Date: …………………………………

Signature: …………………………………

Supervisor’s name: …………………………….

Date: ………………………………..

Signature: ………………………………..
Table of Contents
DECLARATION.................................................................................................................2
EXECUTIVE SUMMARY.................................................................................................5
CHAPTER ONE..................................................................................................................6
BUSINESS DESCRIPTION...............................................................................................6
1.1 Name of the Business................................................................................................6
1.2 Location and Address................................................................................................6
1.3 Form and Type of Business.......................................................................................6
1.4 Products and Services................................................................................................6
1.5 Justification of Opportunity.......................................................................................6
1.6 Industry......................................................................................................................6
1.7 Goals of Business......................................................................................................6
1.8 Entry and Growth Strategy........................................................................................7
CHAPTER TWO.................................................................................................................8
MARKETING PLAN..........................................................................................................8
2.1 Customers..................................................................................................................8
2.2 Market Share..............................................................................................................8
2.3 Competition...............................................................................................................8
2.4 Method of Promotion and Advertising......................................................................9
2.5 pricing strategy..........................................................................................................9
2.6 Sales tactics................................................................................................................9
2.7 Distribution Strategy................................................................................................10
CHAPTER THREE...........................................................................................................11
ORGANIZATIONAL PLAN............................................................................................11
3.1 Organizational Structure..........................................................................................11
3.2 Managers and Qualifications...................................................................................11
3.3 Personnel Number and Duties.................................................................................11
3.4 Recruitment, Training and Promotion.....................................................................13
3.5 Remuneration and Incentive....................................................................................13
3.6 Licenses, Permits and By-Laws...............................................................................13
3.7 Support Services......................................................................................................13
CHAPTER FOUR.............................................................................................................14
OPERATIONAL PLAN....................................................................................................14
4.1 Product/Service Design and Development..............................................................14
4.2 production/operational facilities and capacity.........................................................14
4.3 Production/Service Strategy....................................................................................14
 4.4 production Process...................................................................................................14
4.5 Regulations Affecting Operations...........................................................................14
4.6 Equipment/Materials................................................................................................14
CHAPTER FIVE...............................................................................................................16
FINANCIAL PLAN..........................................................................................................16
5.1 PRE-OPERATION COST ESTIMATES................................................................16
5.2 WORKING CAPITAL............................................................................................16
5.3.1 PROJECTED CASH FLOW MONTLHY DATA FOR THE YEAR 2023.........17
5.3.2 PROJECTED CASH FLOW MONTLHY DATA FOR THE YEAR 2024.........18
5.3.3 PROJECTED CASH FLOW MONTHLY DATA FOR THE YEAR 2025.........20
5.4.1 PROFORMA INCOME STATEMENT.........................................................22
5.4.2 PROFORMA BALANCE SHEET OF ELDORET BAKERY AS AT 31ST
DECEMBER 2023.........................................................................................................23
5.5 BREAK EVEN POINT...........................................................................................23
5.6 PROFITABILITY RATIOS....................................................................................24
5.7 DESIRED FINANCING.........................................................................................26
5.8 PROPOSED CAPITALIZATION...........................................................................26
REFERRENCES................................................................................................................27
 EXECUTIVE SUMMARY
The name of the business will be Creamy Bakehouse. The name is derived from the
sweet nature of products that will be provided by the proposed business.
The proposed business will be a sole proprietorship. This will enable the entrepreneur to
have a full control of the business activities. Sole proprietorship is easy and simple to
manage. All the financial activities are strictly maintained by the owner
Creamy Bakehouse aims to provide delicious yet affordable products to students, young
professionals, families and teenagers in general. It will be providing cakes, muffins,
cookies, pastry and scones. In addition with a 24/7 free delivery service anywhere within
Kabianga Area.
 CHAPTER ONE

BUSINESS DESCRIPTION
1.1 Name of the Business
The name of the business will be Creamy Bakehouse. The name is derived from the
sweet nature of products that will be provided by the proposed business.

1.2 Location and Address

It will be located in Kericho county, Kabianga. Kabianga is situated off Sotikroad.
CREAMY BAKEHOUSE
Tel: 0729371597
Email: [email protected]

1.3 Form and Type of Business

The proposed business will be a sole proprietorship. This will enable the entrepreneur
to have a full control of the business activities. Sole proprietorship is easy and simple
to manage. All the financial activities are strictly maintained by the owner.

1.4 Products and Services

Creamy Bakehouse aims to provide delicious yet affordable products to students,
young professionals, families and teenagers in general. It will be providing cakes,
muffins, cookies, pastry and scones. In addition with a 24/7 free delivery service
anywhere within Kabianga Area.

1.5 Justification of Opportunity

Kabianga town has a massive number of bakers who do personalized events’ cakes
thus guaranteed maximum potential customers for my products.

1.6 Industry
The proposed business will be under the baking industry.

1.7 Goals of Business

1.7.1 Short term Goals
i. Increase products awareness to the market
ii. Aims to attract and retain loyal customers
iii. To maximize on profits
 iv. To invest on products improvement
1.7.2 Long term Goals
i. To expand on market research
ii. To enhance online presence of products
iii. To introduce new flavours and specialty products

1.8 Entry and Growth Strategy

The proposed business will utilize a multi-faced approach to advertising and
promotion including online marketing through social media platforms.
Creamy Bakehouse will use a competitive pricing strategy based on market research
and analysis.
It will also employ a multi-channel distribution approach to ensure the availability of
its products and services.
 CHAPTER TWO

MARKETING PLAN
2.1 Customers
The proposed business’ customers will mostly be students, young professionals,
families and teenagers in general celebrators. Celebrators are people that have reasons
to do just that, celebrate: Birthday, anniversaries, graduation, valentine’s day and
Christmas among the most occasions of many holidays or special occasions that
family and loved ones celebrate encompassing a variety of people including the
young, middle aged, old and both men and women.

2.2 Market Share

The proposed business will establish a large regular customer base, and will therefore
concentrate its business and marketing on local residents, which will be the dominant
target market. This will establish a healthy, consistent revenue base to ensure stability
of the business.

2.3 Competition
Competition in the local area is somewhat sparse and does not provide nearly the
level of product quality and customer service as the proposed business. Local
customers are looking for a high quality product in a relaxing atmosphere. They
desire a unique, classy experience. The proposed business will set apart from the
competition in four main ways:
i. Each of our products will contain extra detail to set it apart from the
competition. We ensure that our products appeal to the eye as well as to the
stomach.
ii. The sky is the limit when developing a pastry fondant design and we cater to
the wants and needs of our customers in every way possible.
iii. Customers’ service is our number one priority where we ensure that each
customer is treated with kindness, respect and warm welcome on each visit. In
an era where food is becoming chemistry, we focus on raw, natural
iv. And sometimes organic and local ingredients to create its product. Thus our
products taste better and better for you
2.4 Method of Promotion and Advertising
The proposed business will utilize a multi-faced approach to advertising and promotion
including online marketing through social media platforms.
Creamy Bakehouse will use a competitive pricing strategy based on market research and
analysis.
It will also employ a multi-channel distribution approach to ensure the availability of its
products and services.

2.5 pricing strategy

Due to high quality of ingredients made from scratch products carefully and at times
customized decorated goods, the pricing will be slightly higher than that of the typical
grocery store bakery. Depending on the detail of special orders, the margin may increase
for that specific item.

2.6 Sales tactics

The proposed business will offer after sales services and organize football tournaments
which are the most popular gave errand and loved by many. It will employ very qualified
and competent sales agents.

2.7 Distribution Strategy

The proposed business venture will develop a number of ways of distributing its products
that is retail products may be picked up at the retail location by the customers or
delivered at a nominal fee depending on the distance.
 CHAPTER THREE

ORGANIZATIONAL PLAN
3.1 ORGANIZATIONAL STRUCTURE

The proposed business will have 2 distinct levels of management hierarchy that is lower and
higher level of management. Higher level consists of managers while lower consists of
supervisors and other senior staff members.

Owner Manager

HR. Manager Production T. Manager

Supervisor Technicians

Senior staff

Subordinate staff

3.2 MANAGER
The manager will be Lucy Kibue who is the owner of the enterprise.
Duties and Responsibility
 Support in handling specific human resources matters.
 Help in interpreting and implementation of police and regulations coordinating duties to
the junior.
 Managers and ensures that all lower manager perform their duties.

Human Resource Manager

 Responsible for producing of human resource and labor.
 Support in handling some specific issues related to management.
 Diligence authority and responsibilities to supervisors
Qualifications
 Diploma in baking technology
 Computer literate
 Ability to work with less supervision

Production Manager
Duties
 To be in charge of production work.
 Control production capacity

Qualifications
 Diploma in mechanical production engineering
 Computer literate

3.3 PERSONNEL; NUMBER AND DUTIES

The enterprise will ensure that the other staff members made up of able and hardworking
members for it to gain maximum efficiency.

Job Specification
Watchman
 He ensures that the enterprise is out of bound, to any an authorized person and take care
of goods within the factory.
 Ensures on worker goes out with the products of the enterprise without any information.
 He will be paid Kshs 1500 per month.
 Must be hardworking and twisted
 They will maintain all the cleanliness required in the enterprise right from highway to the
offices, bathrooms and toilets the number to be employed in ten and payment Kshs 1,500
per month per person must obtain high standard of hygienic and hardworking.
Store keeper
This sis the person who keeps all the products, materials both raw and processed good and
services must be hardworking and trustworthy will be paid Kshs 3,000 per month.
Staff regulation
 These comprises of the following:
 Every employee must report and leave the working place in specified time.
 Wearing of protective clothing as provided by the enterprise during working hours is
a must.
 Employees must be ready to work whether with supervisor or without.
 Respect among employees and managers must be highly observed at all time.
 Rewarding the outstanding performance.
 The employees will be given certificates of good performance and good conduct.
 When there is good production and high profit, workers can be given something small as
a token of appreciation.
3.4 RECRUITMENT AND SELECTION
The owner will do the following:
 State vacancies to be filled
 Job analysis that is source of the knowledge, skills and attitude needed to do the job.
 Advertise the job
 Sort at the application
 Shortlist the candidates for interview
 Select the best and give out appointment letters
 Induction process
Training
The new employees will require general training such as:
 Five outbreak management
 Management training
 First aid training
 Safety training
It will be in house where experts from outside will be invited to help in training. The training will
be funded by part of the starting capital since the training cost was already included in the initial
budget.
Supervisors will check the impact of training by ensuring/confirming whether the employees
work according to how they were trained.

Promotion
Promotion will be based on revisit and be based on the following performance of each employee
 Leadership skills of the employment
 Competency
 Remuneration and incentives
 Academic duration taken since employment
 Government policy and salary and wages
 Position and duties of the employees
 Salaries and wages paid by similar business competitors
3.5 REMUNERATION AND INCENTIVES
Item Position Salary in Kshs Subtotal
1 Human Resource manager (1) 30,000 30,000
2 Accounts Clerk (1) 20,000 20,000
3 Quality Manger (1) 20000 20,000
4 Production manager 18,000 18,000
5 Technician (2) 1,500 x 2 30,000
6 Quality Analysist (1) 15,000 15,000
7 General Supervisor 15,000 15,000
Total 148,000
.

The statutory deductions which the staff incurs, include-

National Social Security Fund (NS’)
National Hospital Insurance Fund (NHIF)
Incentives
 The manager intends to use both the group and individual forms of giving incentives.
 Individual incentives such as cash leave and so on.
 To motivate on individual to work harder.
 Increase competition among employees
 Group incentives such as end year parties, daily transport and overtime.
 To increase team work
 To promote cohesion and togetherness.
 The cost of incentives will be included in the total expenditure during financial planning.
COMMUNICATION CHANNELS
The enterprise will employ an upward communication channel where information is passed from
the lower level of employee to the top most personnel that is the owner manager.
3.6 LICENSES AND PERMITS
The license of the business will be obtained from the county council of Kabianga which will cost
5,000 while permit will be obtained from Kenya licensing board through the Ministry of Heath
which cost 4,000.

By laws
The business must give back to the community be employing the local residents and improving
the area infrastructure such as roods. The business should not be health hazard but a health
promoter and thus will be directing the waste products to the Municipal sewage since they have a
well-constructed and managed sewage system to avoid information communication or water
pollution.

3.7 Support Services

The proposed business will be strategically located to acquire all the support services
needed especially the police for security, judiciary for legal needs, the county hospital for
medical emergencies and the banks for banking. It will specifically bank with the
cooperative bank of Kenya.
 CHAPTER FOUR

OPERATIONAL PLAN
4.1PRODUCTS/SERVICES
Since most of the customers like yellow sweet cake and they are not available in Naivas. The
owner of the proposed business intends to increase the number of customized cake to satisfy
customer.
The owner of the business also intends to increase the production of scones since most of primary
schools can easily go for scones since they are of affordable price.
Yellow cake in % Scones in % Demand
Naivas 20 30 10%
The proposed 50 60 80%
business

4.2 PRODUCTION FACILITIES AND CAPACITY

Item Description Specification Quantity Unit cost Sub total
1 Oven China 400 4 800,000 3,200,000
2 Trolleys Wi-Fi 126 5 7,000 35,000
3 Hand cart Metallic 5 2,000 10,000
4 Wheel barrow Metallic 5 3,000 15,000
5 Pick up Nisan hard body 2 1,400,000 2,800,000
6 Computer Dell 7 30,000 210,000
7 Furniture/fitting Wooden 2 set 100,000 200,000
8 Files Anri 10 150 1,500
9 Wall clock Quartz 2 250 500
10 Cell phone Nokia 110 2 2,500 5,000
11 Packing material Kenton 56 250 12,500
12 Stationeries General 1 6,000 6,000
Total 6,495,500

Repairs and maintenance on the equipment and machines will be done once a year by Jabot
mechanical engineering works
4.3 PRODUCTION STRATEGY
Project output
Particular Projected output per month
Cake 100,000
Total 100,000

Raw materials
Item Description Quality Unit cost Sub total
1 Wheat flour 300 bags 1440 432,000
2 Vegetable oil 200 kg 130 26,000
3 Sugar 400 kg 100 40,000
4 Slat 50 kg 40 2,000
5 6ms 20 bags 800 16,000
6 Yeast 50kg 200 10,000
7 Acetic acid 1,000 ml 100 100,000
Total 626,000

The stocks will be supplied by Kanini Haraka enterprise on requisition by Kabianga Bakery. The
manager will use a pin card at the store to show the flow of stock and balance.
Labour and skills
Item Position Grade No Wages/salary Sub total
1 Production manager Diploma in mechanical 1 18,000 18,000
2 Quality assistant Diploma in analytical chemistry 1 15,000 15,000
3 Technician Certificate in electrical 2 12,000 24,000
4 Cleaners Form four certificate 5 5,000 25,000
Total 82,000

The enterprise will be working 11 hours a day, 6 days a week. The total hours in a month;
(Daily worked hours x No. of days)
(11 x 25) = 275 hours
Man hours = total hours x number of workers = (275 x 9) = 2475 hours
Labour cost = (82,000)
2475
= Kshs 33.1
Overhead cost (indirect cost)
Particulars Amount in Kshs
Rent 50,000
Management salaries 148,000
Transport bill 50,000
Water bill 7,000
Electricity 12,000
Telephone bill 10,000
Repair & maintenance 20,000
Stationeries 5,000
Consultancy services 5,000
Depreciation of fixed assets 5,000
Total 322,000

Hourly overhead cost = 322,000

33.1
= Kshs 9728.00
Total production cost
Particulars Amount in Kshs
Raw materials 620,000
Labour cost 82,000
Overhead cost 322,000
Total 1,030,000
Sales projection
Sales = 100200,000 + (20 x 1030000)
100
= Kshs 1,236,000

4.4 PRODUCTION PROCESS

Steps in producing cake
1. Availability of ingredients
2. mixing
3. doughing
4. fermentation
 5. sizing
6. baking
7. packing
8. storage/display /sales
1. Availing of ingredients
The raw materials are brought together near the point of action that is processing zone.
2. Mixing the ingredients are mixed considering the prescribed ration by the quality
assistant. This ratio must always be observed to ensure quality and safety of the
customers in terms of their health.
3. Doughing – the boiled water is mixed together with flour and all the ingredients,
serious attention given to the prescribed rotation by the quality control analyst. This process is
very necessary to ensure that there is proper mixing and balancing of the ingredients.

4. Fermentation
The properly mixed dough is left to stay overnight in well covered drums. This process is done to
give yeast a better and required time for proper reaction. This time given to yeast to react is very
essential from a better quality product.
5. Sizing
The fermented dough is then made into required size usually 500g. at this stage serious
cleanliness precautions are taken.
6. Baking
The sized dough is then placed in an oven for baking in order to obtain the consumable cake. The
oven temperature require to bake a dough into cake is normally about 100-150 0c. Attention must
be put to oven temperature in order to obtain uniform and quality baked cake.
7. Packing
The processed cake is then packed into the correct polythene packing with all the ingredients
clearly indicated on the packs including date of manufacture, date of expiry and the mass of cake.
9. Sales/display
The processed cake is then therefore ready for display and subsequent sales to the customers.

Availing of Mixing Doughing Fermentation

ingredients

Sales display Packing Baking Sizing

4.5 REGULATIONS AFFECTING OPERATION
1. Firefighting equipment’s – every room will be fitted with firefighting equipment
And proper escape doors must be constructed in case of fire.
2. Trade mark logo
The proposed business has a registered logo under the company acts.
3. Public health
The business has acquired food handling certificates, provided clean toilets and treated
élan water for drinking and washing hands.
4. Safety
The proposed business has a provision of safety years to its employees. This includes
gloves, eye goggles, coats and boots among others.
5. Labour laws
The business employment policy is very clear on employment that is 21 years of age and
above. This is so to conform to the employment act and labor laws of Kenya. Any worker
who will be interested to register with the workers union is fully allowed to do so.

4.6 EQUIPMENT/MATERIALS
Item Description Specification Quantity Unit cost Sub total
1 Oven China 400 4 800,000 3,200,000
2 Trolleys Wi-Fi 126 5 7,000 35,000
3 Hand cart Metallic 5 2,000 10,000
4 Wheel barrow Metallic 5 3,000 15,000
5 Pick up Nisan hard body 2 1,400,000 2,800,000
6 Computer Dell 7 30,000 210,000
7 Furniture/fitting Wooden 2 set 100,000 200,000
8 Files Anri 10 150 1,500
9 Wall clock Quartz 2 250 500
10 Cell phone Nokia 110 2 2,500 5,000
11 Packing material Kenton 56 250 12,500
12 Stationeries General 1 6,000 6,000
Total 6,495,500
 CHAPTER FIVE

FINANCIAL PLAN
5.1 .1 PRE-OPERATION COST ESTIMATES
Particular Cost in Kshs
Feasibility studies 5,000
Business registration 9,000
Rent deposit (3months) 21,000
Renovations 15,000
Initial advertisement 3,000
Miscellaneous 3,000
Total 56,000

5.2 WORKING CAPITAL

Current assets (Kshs) Current liabilities
Cash at bank 300,000Creditors 100,000
Cash at hand 50,000 Bank overdraft 100,000
Stock 50,000 Accrued Salaries 100,000
Debtors 10,000 Accrued taxes 50,000
Total 410,000 Total 350,000
Working capital = current assets – current liabilities
= (410,000 – 350,000)
= Kshs 60,000
5.3 PROJECTED CASH FLOW MONTHLY DATA FOR THE YEAR 2023
After a few months of operation, the owner will be able to project monthly cash flow instead of
speculating.
5.4.1 5.4.1 PROFORMA INCOME STATEMENT
PARTICULARS YEAR 2023
Wet sales 600000
Operating expenses
Rent 84,000
Transport bill 50,000
Repair and maintenance 5,000
Stationeries 2,000
Telephone 12,000
Water bill 30,000
Electricity bill 30,000
Miscellaneous 10,000
Total 223,000
Net profit before tax 377,000
Less 5% tax 18,850
Net profit 358,150
5.4.2 PROFORMA BALANCE SHEET OF CREAMY BAKEHOUSE AS AT 31ST
DECEMBER 2023
PARTICULAR YEAR 2023
Assets
Fixed assets
Machine & equipment 35,000
Less depreciation 10% 3,500
Net value 31,500
Furniture & fitting 15,000
Net value 13500
Total fixed assets 45000
Current assets
Cash at bank 300,000
Cash at hand 50,000
Stock 20,000
Total current assets 370,000
Total assets 415,000
Liabilities
Creditors 0,000
Bank overdraft 0,000
Accrued taxes 20,000
Accrued salaries 0,000
Total current liabilities 20,000
Long term liabilities
Capital owners’ equity 0
Add net profit 0
Loans -
Total 0
Total liabilities 20,000

5.5 BREAK EVEN POINT

PARTICULAR YEAR 2023
Fixed cost
Rent 84,000
Total fixed cost 84,000
Variables
Water bill 30,000
Electricity bill 30,000
Repair/maintenance 20,000
Miscellaneous 10,000
Total variable cost 90,0000
Total cost 174,000
Sales 600,000
426 ,000

5.6 PROFITABILITY RATIOS

PARTICULAR YEAR 2023
Net profit x 100% 358150 x 100
Sales 600000
= 59.69%
Net profit x 100 358150x 100
Working capital 223000
= 160.6%

Net profit x 100 358150 x 100

Total operation 223000
=160.6%
Net profit x 100 358150x 100
Capital employed 223000
= 160.6%
Net profit x 100 358150x 100
Owners’ equity 350000
= 102.32%
5.7 DESIRED FINANCING
PARTICULARS AMOUNT IN KSHS
Pre-operational cost
Feasibility studies 5,000
Business registration 9,000
Rent deposit 21,000
Renovation 15,000
Initial advertisement 2,000
Miscellaneous 1000
Fixed assets
Machine &equipment 20000
Less depreciation 10% 2000
Net value 18000
Furniture & fitting 15,000
Less depreciation 10% 1500
Net value 13500
Total fixed assets 31500
Working capital 53000
Total desired financing 84500

5.8 PROPOSED CAPITALIZATION

Financial source (particulars) Amount (kshs)
Personal saving 350,000
Total 350,000