BUSINESS PLAN

BUSINESS NAME : ELECTRICALS ENTERPRISE

CENTRE CODE : 619105

PRESENTED BY :

COURSE CODE : 1601

INDEX NUMBER : 619105000

COURSE NAME : CRAFT CERTIFICATE IN ELECTRICAL AND

ELECTRONICS ENGINEERING (POWER OPTION)

INSTITUTION : GIMOMOI SALVATION ARMY VOCATIONAL TRAINING CENTRE.

SUPERVISOR:

EXAM SERIES : JULY, 2024

PRESENTED TO:KENYA NATIONAL EXAMINATION COUNCIL IN FULFILLMENT FOR

THE AWARD OF CRAFT CERTIFICATE IN ELECTRICAL AND ELECTRONICS ENGINEERING.

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Table of Contents
CHAPTER ONE………………………………………………………………………………………………………………………………………………………………1

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

ELECTRICAL ENTERPRISE................................................................................................................................................
Total number of customers............................................................................................................................................7
CHAPTER THREE.....................................................................................................................................................12
Own manager...............................................................................................................................................................11
Qualifications................................................................................................................................................................11
Duties and responsibilities...........................................................................................................................................11
Supervisor..................................................................................................................................................................... 11
Qualifications................................................................................................................................................................11
Qualifications................................................................................................................................................................12
ARTISANS....................................................................................................................................................................12
Qualifications................................................................................................................................................................13
SECURITY OFFICER................................................................................................................................................13
CHAPTER FOUR …………………………………………………………………………………………………………………………………………………………16

CHAPTER FIVE……………………………………………………………………………………………………………………………………………………..…….22

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 BUSINESS PLAN

CHAPTER ONE
ELECTRICAL ENTERPRISE

1.0 BUSINESS DESCRIPTION

The proposed business name that is “ ELECTRICAL ENTERPRISE” will be dealing specifically
with the sale of electrical materials, tools and equipment and also will be offering different services
like repair of electrical equipment, tools or gadgets, winding of motors etc.

1.1 BUSINESS NAME

Electrical Enterprise is the preferable name for the proposed business. is a term artistically twisted
from a real name which is very unique or the original name. Thus is a concrete word that can attract
many people. It acts as an advertisement.

1.2 BUSINESS LACATION AND ADDRESS

The business Electrical Enterprise) is located in Siaya County, Rarieda, Aram Market; Dorian-
Luanda highway, opposite Kisumu stage. The physical address is 861, Nyilima, with the business
email [email protected]. You can also contact ,0700456900-manager.
NDORI -LUANDA HIGHWAY
KISUMU STAGE

REMMIE ELECTRICAL ENTERPRISE

1.3 FORMS OF BUSINESS OWNERSHIP

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This business will be a Sole Proprietorship kind of business as it will be runned by one person. I will
be the owner of the business thus the manager.
I intend to invest ksh. 600,000 in the business, and that is from my savings ksh.100,000, loan
ksh.200,000, donations from family and friends ksh.300,000.
This will be so because of the following reasons,
i. I will be boss of my own thus run the business without any interruption.
ii. Easy to make decisions.
iii. I will enjoy all the profits as I will be the chief controller of the business since I will be the
manager.

1.4 TYPES OF BUSINESS

This business is to engage in much activities such as;
i. Selling of electrical materials like cables, switches, insulators, lighting systems etc., electrical
tools phase resters, electrical tool boxes and any other electrical related tools or equipment.
ii. Repairing of faulty electrical gadgets in different capacitors.
iii. Motor winding, rewinding, dismantling, repair and sell the rewarded motors.
iv. Leasing out services like lighting system, music stereo type, microphone etc. in special
occasions like funeral, political meetings weddings etc.

1.5 PRODUCTS AND SERVICES

The products to be sold will be of high qualities, convenient and cheap for customers to afford. The
services will be affordable to all people; sufficient motor rewinding will be done. All these will be
achieved by having skillful personnel and having a stock of high quality and durable to begin with.
The products and services will be readily available because its centrally located in the market along
the road.
1.6 JUSTIFICATION OF BUSINESS OPPORTUNITIES
Opening up an electrical shop was my passion, it stated at a tender age of owning an electronics shop.
The assurance that the success of this business will be profound because of the following
i. Availability of knowledge and skills required to run any business which I got through two
years of training in college.
ii. The experience got during attachment.
iii. The entrepreneurial skills
iv. The business will be situated in an area reachable by many people enhancing the business to
grow
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 v. Transportation of materials and workers will be easy as the business will be near the road

1.7 INDUSTRY
This business will both commercial and service industry as it will base on purchasing materials, tools
and equipment to sell them to customers as well as doing services like repairing, rewarding of motors
etc.
This industry is suitable because transportation of these materials will be easy due to access of road,
there is market as the business will be located in an area where there is less competition, availability
of skilled personnel, tools and equipment required hence quality products and services offered.
1.8 BUSINESS GOALS
S -Systematic
M -Measurable
A -Attainable
R -Realistic
T -Time bound
In this changing world, the business will be very resourceful to many people as it will have the
following goals,
i. The business will create job opportunity to self and to others.
ii. To establish a very successful business which can win customers interest at large
within a very short period of time possible.
iii. To provide the best and quality products and services.
iv. To maximize profit while satisfying clients.
v. To expand into a bigger business dealing with large quantity of stock hence increasing
the capacity of sales and services and workers.
vi. To venture into other small businesses besides this one e.g., opening a cybercafé,
video show etc.
vii. To make sure all the personnel involved in the business get knowledge and skills with
time i.e., as the world changes, technology changes also they need to be updated.

1.9 GROWTH AND ENTRY STRATEGY

The business will employ many tactics and ways of penetrating the market by
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 i. Offering low prices to some product and services.
ii. Offering promotions like giving discounts and incentives.
iii. Making more advertisements through posters, radios, television, road shows etc.
The business to grow into a large enterprise, the following is required;

i. Employing dedicated and qualified personnel who can manage the business well.
ii. Creating more space for expansion of the business e.g. buying land or plots.
iii. Training the untrained staff so as to improve their production hence effective work.
iv. Steady carrying out of advertisement and frequent promotions.
Buying electronics devices like computer or laptop to help in storing information and other necessary work
like marketing

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 CHAPTER TWO
2.0 MARKETING PLAN

Remmie Electrical Enterprise has many strategic plans to achieve its objectives and to reach the market
demands. These are like expanding its operation, space and also employing skillful personnel to help in
management. The business will be located in a central place which can be reached by many thus capturing
many customers. The business will do throughout the advertisement of its services and products, offer
promotions, discounts etc. to win the interest of people. The pricing of items and services will be relatively
cheaper as compared to other competitors. These products and services will always be readily available.

2.1 CUSTOMERS

The business targets to win both domestic and commercial customers. The domestic customers will be
general public especially people around Aram market who are most targeted as they will buy as well as bring
their items for service. The commercial customers will be industries and institutions within the area.

My customers will be able to identify my business through social media platform, branding of tops for
employees with the business name and location, friends and relatives may also help in the advertisement.

The area around the business is occupied by people of different levels, therefore the income rate depends on
the level of an individual.

The demand rate is high mostly the youth, institutions and companies. The institutions do some renovations,
due to continuous worn out of some parts of the industrial machine they have to do frequent checkups,
repairs and replacement that the business will be available to offer.

My business will accept any form of payment depending on the individual. Institutions and industries and
any other organization will pay through cheque. The low level customers and medium level customers will
be allowed to pay through cash, via mpesa, telkash, airtel money, equity or any other source that will be
available and can be easily accessed by the business.

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2.2 MARKET SHARE

Through research done thoroughly on the market in Aram area, the business is expected to reach and serve
(2800) two thousand eight hundred customers who are potential.

There will be competition from other businesses like Cedric Electric shop, Obach Workshop (electrons),
Buyeng electrons and others.

Name of business Percentage share (%) Total number of customers

Cedric electro shop 23 650

Obach workshop 21 600

Buyeng electronics 19 520

Remmie electrical enterprise 26 730

Others 11 300

Total 100 2,800

100%

11%
19% Buyeng electronics
Remmie electrical enterprise
obach workshop
23% Cedric electro shop
others
26%

21%

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2.3 COMPETITION

Remmie Electronic Enterprise will face stiff competition from other businesses like Cedric, Obach, Buyeng
and others who were established 4 years ago. The business will base on the competitor’s weakness to
conquer the business scene. Despite these competition, the enterprise will have measures to cope and analyze
competition i.e.

a. Developing excellency in products and services provision.

b. Increase the size of the business by expanding in operations and shop floors.
c. Persuading more customers through promotions.
d. Choosing the right and low cost technology with high volume.
e. Improving the quality of goods and services each day.

SWOT ANALYSIS TABLE

BUSINESS NAME STRENGTH WEAKNESS

Cedric Electro shop Its centrally located Poor relation
Long term experience High prices
Obach Workshop Readily available personnel No promotion offered
Quicker and better services
Buyeng Electronics Many employees Lazy personnel who are not
always available
Remmie Electronic Low prices Little capital
Enterprise Quality goods and services
Technical expertise
Promotion
Famous in the market
Others Famous in the market Few workers

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 ANALYSIS TABLE

Business name Product Pricing Promotion Personnel Location Size Total

service
Cedric electro 2 3 2 4 5 2 18
shop
Obach 3 2 1 3 2 1 12
workshop
Buyeng 2 2 1 3 4 3 15
electronics
Remmie 4 5 4 5 3 3 24
electronic
enterprise
Others 1 1 2 3 3 2 12
Total 6 6 6 6 6 6 36

2.4 ADVERTISING AND SALES PROMOTION.

Trade promotion will be done by the business through;
i. Offering discounts on goods and services bought from the business.
ii. Employing good character and well-behaved employees who can attend to all customers
without favor or fear.
iii. Purchasing enough stock of materials or items required to make sure that customers don’t
miss anything.
iv. Offering free samples on goods bought hence attracting more people.
v. Marketing the services and products through business exhibitions and shows.
The enterprise will employ the following advertisement methods;
i. Through posters where all the activities and location of the business will be written on and
spread all over Aram market.
ii. Through local FM radio e.g. LOLWE FM, DALA FM, which will pass information in local
language to many people.
iii. Use of sign post to show where REMMIE ENTERPRISE can be found.

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 iv. Through local newspaper like ‘olith jaganga’ which are locally written and do reach many
people.
v. Through direct email to the middlemen who can be potential customers.
All these methods will ensure that customers are well informed about the direction, location, operating time
and kind of services provided.

2.5 PRICING STRATEGY

The business will adopt different pricing strategies like;

i. Competitive pricing where competitors’ prices will be analyzed and compared then come up with a
suitable price which is relatively cheap for the products and services.
ii. Cost plus where prices will be determined through the cost of material used or involved.
iii. Psychological pricing where goods and services are blended to capture the customers’ psychology.
iv. Discriminating pricing where the enterprise will be selling a commodity at two different in cost, e.g.
time pricing where by during the day charges can be different from that of evenings.
2.6 SALES TACTICS

There are many sales tactics that the business is going to use e.g.

i. Opening its doors for long hours to make sure that customers get what they want at any time.
ii. Having enough stock and offering the best quality products and services.
iii. Adopting an attractive way of pricing where goods and services won’t be priced so high hence
affordable to everyone.
iv. Advertise frequently goods and services of the business through the radio, posters, newspapers etc.
v. Employing very polite, humble, friendly and educated workers who will attend to customers and any
other persons correctly.
2.7 DISTRIBUTION STRATEGY

The enterprise intends to employ the three-distribution channel; wholesalers, retailers and direct – to
consumer sales. The enterprise is centrally located in the market, which is also the largest market center
within the area, therefore, distribution through wholesale and retail will enable customers to get access to our
products easily. The direct-to-consumer sale will be convenient during the rewinding of motors (fault
motors), repair of electronic gadgets to customers’ satisfaction.

The problem likely to be anticipated is the discount offered to different wholesalers and retailers. Dealing
with different people obtaining different quantity and quality of products might be difficult since the pricing
of goods can be a challenge.

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Every customer will have access to the products and will have to pay in private. A receipt to be obtained to
customers for transparency and honesty to the business.

CHAPTER THREE
3.0 ORGANIZATION AND MANAGEMENT PLAN

The management team will comprise of people with many years of experience in the long-term service
provider and electrical development industries. The business philosophy is exceeding customer expectations
in everything we do and holding ourselves accountable at every step.

The business management comprise of manager and supervisor.

3.1 BUSINESS MANAGER AND QUALIFICATION

Own manager

Since the business is a sole proprietor, I will the one owning the business therefore being the manager of the
business.

Qualifications

 Should have at least craft certificate in electrical engineering.

 Should be computer literate.
 Should have 24 years and above.
 Should have two years’ experience in field of electrical.
 Should be fluent in English and Kiswahili.
Duties and responsibilities

 She will be the custodian of the business i.e. the owner and head of the business.
 Supervise business transactions and operations.
 Carrying out short-term and long-term planning of the business.
 Recruit the required personnel or staff.
 Paying salaries to employees.
3.2 KEY PERSONNEL
Supervisor

Qualifications

 Should have at least craft certificate in electrical engineering.

 Should have enough experience in electrical field.

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  Should be above 25 years.

Duties and responsibilities.

 To supervise all the operations of the business.

 Analyze and report sales performance.
 Generate new ideas on how to run the business.
 Serving customers.
 Takes over responsibilities in absence of the manager.
3.3 OTHER PERSONNEL
SECRETARY

the proposed business will have one secretary.

Qualifications.

 Should be at least a stage (II) module and above with basis.

 Knowledge ON BOOK keeping and office practices.
 Should also be computer literate.
Duties and responsibilities.

 Responsible for office records and book keeping.

 To handle issues relating to customers i.e. acting as receptionist and clerk.
 Receive and make calls on behalf of the business organization.
TECHNICIAN.

The business will employ two technicians.

Qualifications

 Should be a certificate holder or above in electrical engineering.

 Should be computer literate.
Duties and responsibilities.

 Look for contracts of work.

 Design and operate all electrical projects.
ARTISANS

The proposed enterprise will have three artisans.

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Qualifications

 They should have skills at least in determining any faults, knowledge on electrical gadgets.
 Should be able to communicate either in Kiswahili or English.
Duties and responsibilities.

 Should be able to detect any fault in an equipment and service or diagnose.

 Carrying out duties delegated to them by the seniors i.e. acting as sales agent.
SECURITY OFFICER

The business will have one security officer.

Qualification.

 Should be a form four leaver as a minimum requirement.

 Should have five years’ experience in security force.
Duties and responsibilities.

 Keeping vigilant security during the night and daytime.

3.4 RECRUITMENT, TRAINING AND PROMOTIONS.
Recruitment
The business will make advertisement of its job opportunities through local newspapers, local FM radio
station like dala fm.
There will be interviews for the recruits done by the manager. Questions will be asked concerning the job
ascertained. Individuals dignity hour will be considered so as to reach the satisfaction of the customers.
Employees will have at least a week to adopt and familiarize with the business.
Training
The new employees will be trained according to their qualifications to improve their efficiency and
knowledge.
They will be taught safety measures, their roles etc. in the business.
They will also be attending seminars or workshop.
Promotions
The employees will be promoted according to their performance and working ability.
The following will be considered when promoting employees.
 The level of performance.
 Training and qualification of each individual.
 Punctuality and accountability.
 Good public relation.

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  Loyalty to the enterprise.
 Trust worthiness
 Diligence.
 Creativity.
3.5 REMUNERATION AND INCENTIVES.
Remuneration will be done so that salaries set for employees can be realistic according to their
experience and level of education.
Employees earnings will include salaries and monthly allowances.
Incentives.
i. Financial incentives.
Employees will be paid according to their productivity and hours worked for, also they can earn
overtime bonus and interests.
ii. Non-financial incentives.
There will be safety at work place, health facilities, sick pays, transportation to and from work,
free lunch, free tea, safety clothing etc.
REMUNERATION AND INCENTIVES TABLE

Staff No. of personnel Basic Allowance Total monthly Total annual

salary salary salary
Manager 1 8,000 2,000 10,000 120,000
Accountant/sec 1 6,000 2,000 8,000 96,000
Supervisor 1 5,000 2,000 7,000 84,000
Driver 2 4,000 1,000 5,000 120,000
Loader 2 4,000 500 4,500 108,000
Watchman 1 3,500 500 4,000 4800
Total 8 30,500 8,500 39,000 588,000

3.6. LICENSES PERMITS AND BY LAWS

The business will require legal procedures for it to start its operations.

These will include clearances, permissions, licenses from the government ministries and other agencies. Some of
these documents are;

 Trading license from the ministry of trade which is free of charge.

 Certificate of ownership from the registrar of ownership (chargeable).
 Labor laws governing the employees’ insurance whereby employees will be insured by the business.
 Public health act which deals with sanitation, drainage, ventilation, hygiene.

3.7 SUPPORT SERVICES

The most vital services include;

 Banking services where the business will open an account with Equity Bank, Bondo branch.
 Auditing books of account; auditors will be hired and be paid daily upon delivering an auditing report.
 Medical services which will be provided by the local dispensary at Aram market.
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 Water will be provided by the Obaga water project from the lake.
 Security will be provided by the officer in charge and also the business will be located near a police post
hence there will be a tight security.
 Power will be supplied from KPLC and there will be a generator and solar panels.
 Postal services will be provided.
 Legal services which will be provided by;

FAHIM FAHIZA AND ADVOCATE COMPANY,

P.O BOX 378,

BONDO.

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 CHAPTER FOUR
4.0. PRODUCTION/OPERATIONAL PLAN
I am looking forward to increase the premise growth by 50% within three years, I therefore need an operational plan
to help my employees to understand the goals of the company. It also works to achieve them by taking the actionably
and necessary steps to help the company succeed. It also ensures that the business stays on track. By creating
operational plan, I will be in a position to identify areas of the business that need improving.

4.1. PRODUCTION/ OPERATIONAL FACILITIES AND CAPACITY

Remmie electrical enterprise will require a premise to operate from. This premise will be situated at Aram market in
Aram area. The enterprise will require offices for the manager, supervisor and accountant(secretary). There are other
facilities that will be required as listed below;

Facility Details
Material cost Quantity Total cost Supplier
/equipment
Computer system 5 100,000 Dealers’ inn
Cashbook 1 1,100 Kiki bookshop
Telephone 1 2,000 Dealers inn
Electrical toolbox 1 10,000 Koskos suppliers
Electronics toolbox 1 20,000 Koskos suppliers
Furniture and fittings
Furniture cabinet 3 8,000 Jalore suppliers
Chairs 10 6,000 Jalore suppliers
Tables 3 5,000 Jalore suppliers
Total 26 184,800

ENTERPRISE LAYOUT
In the main workshop is where all the business operations will take place.

Motors will be rewarded in the motor rewinding room by experts (fault motors).

Book keeping and recording is done in the account’s office. This is where purchase of stocks to be sold is done.

All the purchased stock will be stored in the store plus other important items.

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 manager's supervisor's clerk/secretary
office office office/store

motor rewinding room(fault gadget repair

motors) room

shop

REPAIR AND MAINTENANCE

The following maintenance measures will be taken by REMMIE ELECTRICAL ENTERPRISE in maintaining the tools and
equipment used.

a) Regular maintenance where tools and equipment will be checked for maintenance to make sure they work
effectively. Every tool or equipment to be checked thoroughly.
b) Corrective maintenance whereby tools and equipment shall be attended to when need a rise so as to correct
the prevailing situation e.g., sharpening of blunt parts, greasing moving parts etc.
c) Preventive maintenance where tools and equipment are kept clean or maintained in order to prevent them
from harm, rust, destruction.

These maintenances will be done because of the following reasons;

a) To increase the efficiency of the tools or equipment.

b) To increase durability of tools and equipment.
c) To increase the accuracy of the tools.
d) Maintenance is done to improve safety when working with tools or equipment.
e) To reduce the cost of buying new one.

4.2. PRODUCTION/ OPERATIONAL STRATEGY

Cost of materials per month.
Material items Cost
Insulating tape 3,750
Receipt book 4,000
Superglue 10,000
Soldier wire 40,000
Computers 75,000
Pens 1,000
Totals 138,750

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Cost of labor per month
Personnel Amount
Manager 10,000
Supervisor 9,000
Secretary 8,500
Technician 7,500
Artisans 9,000
Security officers 4,000
Total 55,000

Overhead costs
Items Amount
Furniture 25,000
Purchase of a plot 30,000
Machines and equipment 50,000
Deposit 10,000
Repair and maintenance 5,000
Advertising 20,000
Licensing 2,000
Telephone 2,000
Loan 50,000
Electricity bill 3,500
Transport 10,000
Water bill 800
Rent 5,000
Total 213300

Total cost of production per month.

Item Amount
Cost of material 138,750
Cost of labor 55,000
Overhead cost 213300
Total 407,050

4.3. PRODUCTION/OPERATIONAL PROCESS

Remmie electrical enterprise is a business that will deal with offering services like repair of electrical accessories or
gadgets, motor rewinding etc., and also selling of electrical equipment, materials, tools etc. therefore the following
steps will be used in the production process.

Step one

Purchasing of the stock i.e. materials, tools and equipment to be sold and used in the business.

Step two

Transportation of the purchased goods to the place of business.

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Step three

Unloading of the goods from the tracks and storing them in the store. Sound to be arranged in shelves ready for sale.

Step four

Customers will be welcomed warmly into the premises so as to make their choice on purchase.

Step five

Transactions (legal) will be made if the customer wants to buy items whereby, he/she will be issued with a receipt
which consists of;

i. Name of the enterprise.

ii. Name of the customer.
iii. The item(s) bought.
iv. The date to which transaction was made.
v. Signature of the salesman

Step six

Packing of the purchased goods into cartons or special bags if transportation is needed, special arrangements to be
made between the enterprise and the customer.

Step seven

The customer leaves since there will be no idling.

Step eight

Replacing and purchasing of other items

When offering the services of repairs then the following steps will be taken for production

 Welcoming the customer to enjoy the services offered.

 To diagnose the fault gadget or equipment brought for service then advice accordingly.
 Initiate payment over the work and agree on how to be paid.
 The customer to collect his/her item in good and working condition.

4.4. REGULATION AFFECTING OPERATIONS

For remmie electrical enterprise to run well as it is dealing with already made goods, it will have to adhere to
regulation measures. The following are some of the regulations;

Environmental protection

Remmie business will participate fully in cleaning and conserving the environment. The premises will be kept tidy and
all its surrounding. The enterprise will make sure that it does not do anything to contract the environment. Also all
workers MUST be clean.

Ventilation

The workshop and all offices will be well ventilated to allow fresh air in. this is to create a comfortable working
condition for the workers and also to give better conditions for storage of source tools and equipment.

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Sanitation

Remmie electrical enterprise will build well trained sanitations like toilets and bathroom of standards.

Protection garments

The enterprise will purchase protective clothes for every worker in the premise. These includes; apron or dust coat,
helmets, boots, gloves etc. the security men will be provided with raincoats etc., these garments will protect the
workers from harm when working within the premises.

First aid kit

There will be a first aid kit in every room to help when there is an injury case or any other problem. This kit will
contain pain killers, bandages, disinfectants, cotton wool, etc.

Fire extinguisher

There will be a fire extinguisher in each room to help in overcoming the menace of fire outbreak. Every worker will be
taught how to handle the situation and use the extinguishers.

safety protection
The enterprise will ensure that all workers are protected from oppressions and other harm. They have to put on
protective closings.

Trade license
For legal operations of the business to take place, the enterprise will obtain a trade license.

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 CHAPTER FIVE.
5.0 FINANCIAL PLAN

5.1 PRE- OPERATIONAL COSTS

Are costs to be incurred before the business starts becoming operational

The costs are as follows

Pre- operational costs Amount

Furniture 47,000
Tools and equipments 50,000
Totals 97,000

5.2 WORKING CAPITAL

The amount of money required to carry out business transaction during the 3 years

I.e. current Assets – Current liabilities

Debtor Creditors

Stock Bank overdrafts

Item 2020 2021 2022

Stock of raw materials 150,000 120,000 170,000
Stock of finished goods 100,000 140,000 180,000
Debtors 100,000 8,000 12,000
Cash 80,000 100,000 14,000
Total 430,000 368,000-dip 376,000-dip
500 150,000=252,000
318,000

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5.2 PROFROMA CASHFLOW STATEMENT YEAR 2024

PARTICULARS JAN FEB MAR APRIL MAY JUN JULY AUG SEPT OCT NOV DEC TOTAL
Cash inflow 600,00 430,60
opening balance 0 0 282,100 164,200 85,300 57,400 69,000 101,100 153,200 225,300 247,400 269,500 2,685,100
Sales 250,000 260,000 280,000 290,000 320,000 340,000 350,000 360,000 370,000 350,000 360,000 370,000 3,900,000
Total cash inflow 850,000 690,000 562,700 454,200 405,300 397,400 419,000 46,100 523,200 575,300 607,400 639,500 6,584,500
Cash outflow
350,00 340,00
Purchases 0 0 330,000 300,000 280,000 260,000 250,000 240,000 230,000 260,000 270,000 280,000 3,390,000
10,00 10,00
Salaries 0 0 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000
39,00 39,00
Labour 0 0 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 468,000
60
Telephone 600 0 600 600 600 600 600 600 600 600 600 600 7,200
1,00
Adver/Promotion 0 - - 1,000 - - - - - - - - 2,000
4,00 4,00
Rent 0 0 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 48,000
Repair/Maint 500 - - - - 500 - - - - - - 1,000
1,00 1,00
Insurance 0 0 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
10,00 10,00
Loan repayment 0 0 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000
2,00 2,00
Interest on loan 0 0 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000
20
Electricity 200 0 200 200 200 200 200 200 200 200 200 200 2,400
10
Water bill 700 0 100 900 900 100 100 100 100 100 100 100 1,200
1,00 1,00
Miscellaneous 0 0 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Total outflow 419,400 407,900 397,900 347,900 347,900 328,400 317,900 307,900 297,900 327,900 337,900 34,900 4,207,800
430,6 282,1 164,20 85,30 57,40 69,00 101,10 225,30 247,40 291,60
Closing Balance 00 00 0 0 0 0 0 153,200 0 0 269,500 0 2,291,400

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PROFORMA CASHFLOW STATEMENT YEAR 2025

PARTICULARS JAN FEB MAR APRIL MAY JUN JULY AUG SEPT OCT NOV DEC TOTAL
Balance /forward 291,600 512,200 525,300 429,000 661,700 535,400 708,000 751,700 1,029,400 1,063,100 1,116,800 1,190,500 8,714,700
Sales 290,000 280,000 270,000 300,000 320,000 340,000 380,000 370,00 350,000 360,000 370,000 390,000 4,020,000
Total cash inflow 581,600 792,200 795,300 729,000 881,700 875,400 1,088,000 1,121,700 1,379,400 1,423,100 1,486,800 1,580,500 12,734,700
Cash outflow - - - - - - - - - - - - -
Purchases 400,000 200,000 300,000 100,000 280,000 100,000 270,000 26,000 250,000 240,000 230,000 220,000 2,866,000
Salaries 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000
Labour 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 468,000
Telephone 600 6000 - - - 600 - - - - - 600 2,400
Adver/Promotion 1,000 - - 1,000 - - - - - - - - 2,000
Rent 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 48,000
Repair/Maint 500 - - - - 500 - - - - - - 1,000
Insurance 1,000 - - - - - - - - - - - 1,000
Loan repayment 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000
Interest on loan 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
Electricity 200 200 200 200 200 200 200 200 200 200 200 200 2,400
Water bill 100 100 100 100 100 100 100 100 100 100 100 100 1,200
Miscellaneous 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Total outflow 69,400 266,900 366,300 167,300 346,300 167,400 336,300 92,300 316,300 306,300 296,300 286,900 3,018,000
Closing Balance 512,200 525,300 429,000 561,700 535,400 708,000 751,700 1,029,400 1,063,100 1,116,800 1,190,500 1,293,600 9,716,700

24
PROFROMA CASHFLOW STATEMENT YEAR 2026

PARTICULARS JAN FEB MAR APRIL MAY JUN JULY AUG SEPT OCT NOV DEC TOTAL
Balance /forward 1,293,600 1,044,300 1,057,400 1,141,100 1,024,800 1,058,500 880,100 1,003,800 1,087,500 1,071,200 1,134,900 1,108,00 11,797,200
Sales 270,000 280,000 300,000 250,000 200,000 240,000 450,000 400,000 220,000 360,000 390,000 350,000 3,710,00
Total cash
inflow 1,563,600 1,324,300 1,357,400 1,391,100 1,224,800 1,298,500 1,330,100 1,403,800 1,307,500 1,431,200 1,524,900 1,458,000 16,615,200
Cash outflow - - - - - - - - - - - - 0
Purchases 450,000 200,00 150,000 300,000 100,00 350,000 260,000 250,00 170,000 230,000 350,000 150,000 2,410,000
Salaries 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000
Labour 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 39,000 468,000
Telephone 600 600 - - - 600 - - 170,000 - 600 - 172,400
Adver/Promotion 1,000 - - - - 1,000 - - - - - - 2,000
Rent 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 48,000
Repair/Maint 500 - - - - 500 - - - - - - 1,000
Insurance 1,000 - - - - - - - - - - - 1,000
Loan repayment 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000
Interest on loan 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
Electricity 500 200 200 200 200 200 200 200 200 200 200 200 2,700
Water bill 100 100 100 100 100 100 100 100 100 100 100 100 1,200
Miscellaneous 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Total outflow 519,300 266,900 216,300 366,300 166,300 418,400 326,300 316,300 236,300 296,300 416,900 216,300 3,761,900
Closing Balance 1,044,300 1,057,400 1,141,100 1,024,800 1,058,500 880,100 1,003,800 1,087,500 1,071,200 1,134,900 1,108,000 1,241,700 12,853,300

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5.3 PROFORMA INCOME STATEMENT

YEAR I 2024

Gross Profit = Sales – Purchases

G.P= 3,900,000 - 3,390,000

GP= 3,561,000

Expenses = 7,317,000

Net Profit =G.P – Expenses

= 3,756,000

YEAR II 2025

Gross Profit = Sales – Purchases

= 4,020,000- 2,866,000

GP = 1,154,000

Expenses = 13,536,700

Net profit = G.P – Expenses

Net profit = 12,382,700

YEAR III 2026

Gross Profit = Sales – Purchases

= 40,000,296-2,810,000

G.P= 37,190,296

Expenses = 15,959,200

Net profit =GP –Expenses

Net Profit = 21,231,096

5.4 BALANCE SHEET

YEAR I 2024

26
FIXED ASSETS

Premises – 20,000

Furniture and fittings – 23,000

Tools and equipment - 25,000

Total - Kshs. 68,000

CURRENT ASSETS

Cash - 80,000

Debtors - 10,000

Stock of finished goods - 100,000

Stock of raw materials - 150,000

Total - Kshs 340,000

LONG –TERM LIABILITIES

Capital - 250,000

Bank loan – 50,000

Total – Kshs. 300,000

Short term liabilities

Creditors - 16,000

Tax - 12,000

Net profits - 80,000

Total – Kshs. 108,000

Total liabilities – Kshs. 408,000

YEAR II 2025

Fixed assets

Old building - 50,000

27
New building - 20,000

Furniture and fittings - 20,000

Tools and equipments - 150,000

Less depreciation – 20,000

Total – Kshs. 107,000

CURRENT ASSETS

Cash - 200,000

Debtors – 5,000

Stock of finished goods - 120,000

Total – Kshs. 325,000

Total Assets - Kshs. 432,000

LONG –TERM LIABILITIES

Capital - 200,000

Bank loan - 50,000

Net profit - 122,000

Total - Kshs. 372,000

SHORT –TERM LIABILITIES

Creditors - 50,000

Tax - 10,000

Total - Kshs. 60,000

Total liabilities - Kshs. 432,000

YEAR III 2026

FIXED ASSETS

Premises - 30,000

28
Vehicle - 200,000

Furniture and fittings - 23,000

Tools and equipment - 15,500

Less depreciation - 4,000

Total - Kshs. 275,500

CURRENT ASSETS CASH

Cash - 210,000

Debtors - 15,000

Cash in Bank – 200,000

Stock of finished goods - 50,000

Total - Kshs. 505,000

Total Assets – Kshs. 777,500

LONG –TERM LIABILITIES

Capital - 300,000

Bank loan - 200,000

Net profit - 100,000

Total – Kshs. 600,000

SHORT –TERM LIABILITIES

Creditors - 150,000

Tax - 27,000

Total - 777,500

Total liabilities - Ksh777,500

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5.5 BREAK EVEN POINT

Contribution Margin

YEAR I

VARIABLE COST AMOUNT

Electricity 200

Water 700

Advertising 1,000

Telephone 600

Total 2,500

YEAR II

VARIABLE COST AMOUNT

Electricity 200

Water 100

Advertising 1000

Telephone 600

Total 1900
YEAR III

VARIABLE COST AMOUNT

Electricity 500

Water 100

Telephone 1000

Total 2,200

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C.M= Sales –Variables Sales

YEAR I= 3,900,000-2,500

= 3,897,500

YEAR II

C.M= Sales –Variables Sales

4,020,000- 1,900

= 4,018,100

YEAR III

40,000,296 – 2,200

= 39,998,096

CM as %

= CM x 100
Total Sales

Year I = 3897500 x 100

3900000

= 99%
YEAR II
= CM x 100
Total Sales

4018100 X 100
4020000
=99%

YEAR III

= CM x 100
Total Sales
39998096 X 100
40000296
=99%

5.6 PROFITABILITY RATIO

31
GROSS PROFIT RATIO

= G.P x 100
Total Sales

YEAR I
=3561000 X 100
3900000

= 91%

YEAR II GROSS PROFIT RATIO

G.P x 100
Total Sales

1154000 x 100
4020000

=29%

YEAR III GROSS PROFIT RATIO

G.P x 100
Total Sales
37190296 x 100
4000296

= 93%

5.7 DESIRED FINANCES

ITEM COST

Pre- operational cost 100,000

Working capital 200,000

Machinery and equipment 100,000

Furniture 200,000

Total 600,000

5.8 PROPOSED CAPITALIZATION

32
ITEM COST

Saving capital 100,000

Loan 200,000

Donation 200,000

Friends and relatives 100,000

Total 600,000

33