LIZZIE’S BUTCHERY

P.O. BOX 120 – 40300

KISUMU

BUSINESS NAME: LIZZIE’S BUTCHERY

PRESENTED BY: OCHIENG LIZZIE AWUOR

INDEX NO. : 7371010610

COURSE NAME: CERTIFICATE IN FOOD AND BEVERAGE PRODUCTION AND

SALES

COURSE CODE: 1802

CENTRE: RAMOGI INSTITUTE OF ADVANCED TECHNOLOGY

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL

SUPERVISED BY: MADAM CHRISTA AKOTH

SERIES: JULY 2024

DECLARATION PAGE
I declare that this is my own original work and it has not been presented before any
institution in partial fulfillment of award of any certificate

Candidate Name: OCHIENG LIZZIE

AWUOR Index

number:…………………………………

Sign:………………………………………… Date:……………………………….

This work has been presented to the Kenya National Examination council with my
approval as the supervisor

Supervisors Name: Madam Christa Akoth

Sign:………………………………………… Date:……………………………….

i
DEDICATION
I dedicate this work to my caring mother. She is a woman who has never been employed but
has lived through as an entrepreneur all through her life. She has inspired me throughout my
life and I wish I start the Lizzie’s Butchery and become an entrepreneur as she would wish
me to be. An independent business woman as she is

ii
ACKNOWLEDGEMENT
I would like to pass my sincere gratitude and thanks to my lectures, my family members,
classmates and the entire Ramogi Institute of Advanced Technology fraternity for their moral
support, encouragement and financial support.

iii
Contents
DEDICATION ................................................................................................................................................... ii
ACKNOWLEDGEMENT............................................................................................................................... iii
EXECUTIVE SUMMARY ................................................................................................................................. viii
CHAPTER ONE ............................................................................................................................................... 1
1.0 BUSINESS DESCRIPTION ...................................................................................................... 1
1.1 NATURE OF THE BUSINESS .............................................................................................. 1
1.1.1 BUSINESS NAME AND ADDRESS ..................................................................................... 1
P.O BOX 120-40300 KISUMU ............................................................................................................................... 1
1.1.2 BUSINESS PURPOSE ................................................................................................................ 1
1.1.3 BUSINESS OWNERSHIP .......................................................................................................... 1
1.1.4 BUSINESS LOCATION ............................................................................................................. 2
1.2 THE INDUSTRY ......................................................................................................................... 3
1.2.1 THE INDUSTRY SIZE .............................................................................................................. 3
1.2.2 THE INDUSTRY CHARACTERITICS ................................................................................ 4
1.2.3 INDUSTRY TRENDS ................................................................................................................. 4
1.2.4 INDUSTRY OUTLOOK .............................................................................................................. 4
1.3 PRODUCTS AND SERVICES ................................................................................................ 4
1.4 BUSINESS GOALS AND OBJECTIVES SHORT TERM GOALS ............................. 5
1.5 JUSTIFICATION OF BUSINESS OPPORTUNITY .......................................................... 5
1.6 ENTRY AND GROWTH STRATEGY ENTRY STRATEGIES ..................................... 5
GROWTH STRATEGIES .............................................................................................................................. 6
CHAPTER TWO ............................................................................................................................................... 7
2.0 MARKETING PLAN ................................................................................................................. 7
2.1 POTENTIAL CUSTOMERS .................................................................................................... 7
2.2 COMPETITION ........................................................................................................................... 7
2.3 MARKET SHARE/ SIZE .......................................................................................................... 8
2.4 PRICING STRATEGY AND POLICY .................................................................................. 9
2.5 SALES TACTICS ........................................................................................................................ 9
2.6 ADVERTISING AND PROMOTING STRATEGY ADVERTISING

v
PROGRAM PROMOTIONAL PLAN ....................................................................................................................... 9
2.7 ADVERTISING STRATEGY ................................................................................................. 10
2.8 CUSTOMER SERVICES ........................................................................................................ 10
CHAPTER THREE ....................................................................................................................................... 11
3.0 ORGANIZATION AND MANAGEMENT PLAN .......................................................... 11
3.0 ORGANIZATION STRUCTURE ......................................................................................... 11
3.1 ORGANIZATION CHART .................................................................................................... 11
3.2 KEY MANAGEMENT PERSONEL ................................................................................... 12
3.3 OTHER PERSONELS DRIVERS ........................................................................................ 14
3.4 RECRUITMENT, TRAINING AND PROMOTION ...................................................... 14
3.4.2 TRAINING POLICY ................................................................................................................. 14
3.4.3 PROMOTION POLICY ............................................................................................................ 15
3.5 REMUNERATION AND INCENTIVES ........................................................................... 15
3.5.1 RENUMERATION POLICY .................................................................................................. 15
3.6 LEGAL REQUIREMENTS .................................................................................................... 17
3.6.2 COMPLIANCE .......................................................................................................................... 18
3.7 SUPPORT SERVICES ............................................................................................................. 18
CHAPTER FOUR .......................................................................................................................................... 19
4.0 OPERATION/PRODUCTION PLAN .................................................................................. 19
4.1 PRODUCTION FACILITIES AND CAPACITY ............................................................. 19
4.2 PRODUCT/SERVICES DESIGN AND DEVELOPMENT .......................................... 20
Product design and development (tangible products) .................................................................................... 20
Services, design and development (intangible products) ................................................................................ 21
4.2.1 QUALITY CONTROL .............................................................................................................. 21
4.3 PRODUCTION/OPERATION STRATEGY ...................................................................... 21
4.4 PRODUCTION PROCESS ..................................................................................................... 24
4.5 REGULATIONS AFFECTING PRODUCTION/OPERATIONS ............................... 27
CHAPTER FIVE ............................................................................................................................................ 28
5.0 FINANCIAL PLAN .................................................................................................................. 28
5.1 PRE-OPERATIONAL COST .................................................................................................. 28
5.2 WORKING CAPITAL .............................................................................................................. 29

vi
 5.3 PROJECT CASHFLOW STATEMENT FOR THE YEAR ENDED 31ST DEC
2023 30
6.4 INCOME STATEMENRS ...................................................................................................... 31
5.5 BALANCE SHEET ................................................................................................................... 33
5.6 PROFITABILITY RATIOS FOR YEAR 2023 ................................................................... 34
5.7 DESIRED FINANCING.......................................................................................................... 35
5.8 DESIRED FINANCING.......................................................................................................... 36
5.9 PROPOSED CAPITALIZATION ......................................................................................... 36

vii
 EXECUTIVE SUMMARY

Business Description

The name of the proposed business shall be Lizzie’s butchery. It will be selling various food
stuffs such as meat, hot dog. The business will be located in Kisumu town. It will be a sole
proprietorship managed and owned by Lizzie Awuor with a starting capital of KSH 275600
through better management better policies used and through providing quality services and
quality products.

Marketing plan
The proposed business will deal with people between ages 23 to 45 years old. Public
institution like schools, hospitals, colleges both working and non-working class who can afford
the prices of our products availed to them so long as their needs are satisfied.
The business will be expecting 75% of the market share as the remaining % shall be shared
by Blue Ridge, Kisumu Tourist Lizzie’s butchery and the Kisumu. The business will use
both direct and indirect methods of employment and also it will use different methods of
selling their goods for example advertisement in TVs, Radios, posts etc.

Organizational and management plan

It is the fundamental outcome of the success of the intended business. The business shall
apply management skills and use of proper organizational chart like people in the business
who we will employ are manager, assistant manager, cashier, chefs, and driver
etc. The employee shall recruited, selected and placed based on job description and their
qualification to help in future human planning. Difference remuneration structure shall be
established and incentives like allowances will be used to promote morals to the employees,
training will also be available.

Operational production plan

The proposed business falls under Lizzie’s butchery, it shall be in contact with the procedures
for the purpose of better and quality services that meets our potential needs and expectations
modern machines will be used and this will enable to detect problems

viii
that is associated with blockages and problems such as CCTVS, computers etc. various tools
and equipment which fit the intended business to help in the business operational for effective
growth of the business, maintenance of the materials will be available too and production
strategies shall be based on the production market.

Financial plan
The intended business will commerce with a starting capital of 275600 found from the
owner’s contribution parents contribution and bank loans. With assumption forehead, the
intended business to manage its finances to ensure no losses are made i.e. balance sheet,
income statements, profitability ratios and the working capital requirement is expected to be
KSH 1100000, profitability is 87590 and desired financing is 3025750.

ix
 CHAPTER ONE

1.0 BUSINESS DESCRIPTION

The business owner is known as Lizzie Awuor, 21 years old, Christian (Catholic Church) single, a
Kenyan who currently lives in Kisumu town, Kisumu County. Lizzie’s started his studies i.e.
primary education at Mumias primary school then later joined Butula School to take his
secondary studies and currently in second year at Ramogi Institute of Advanced Technology
pursuing Certificate in Food and Beverage.

1.1 NATURE OF THE BUSINESS

1.1.1 BUSINESS NAME AND ADDRESS

My business name will be Kisumu town because I want it to be the best in terms of housing and
Lizzie’s butchery i.e. quality foods and services to customers. The name will enable the business
to gain popularity and increase its sales in that region where it will be located.

The proposed business address will be:

LIZZIE’S BUTCHERY

P.O BOX 120-40300

KISUMU

Tel: 0705176839

1.1.2 BUSINESS PURPOSE

The proposed business is a LIZZIE’S butchery business to provide catering and
accommodation services, the compound of the proposed business also provide
employment to the community hence improving their living standards.

1.1.3 BUSINESS OWNERSHIP

The proposed business is a sole proprietorship which makes it more advantageous since it will be
easy to manage, easy to start as it requires less capital and also I can be able to get assistance from
my family members in case there is a busy day and employees are tired. The profit will not be
1
shared as I will enjoy all of it. On the other hand, the business employs few workers after its
existence. Besides all those benefits listed above am also facing challenges in terms of finance i.e.
well trained employees need to be paid well and I found this as a challenge.

1.1.4 BUSINESS LOCATION

The proposed business will be located in Kisumu town. The business will draw its potential
customers from Kisumu town and tourist who comes in research institute in Kisumu i.e. ICPE
and are stranded where to get accommodation. The business will enjoy its maximum security due
to Kisumu police station located near the premises. The location will have an advantage of good
infrastructure and communication development which will improve trading activities and
transport service. It will be also centrally located enabling easy accessibility from directions.

2
The diagram below shows the direction where my business location is.

KERICH
O

AHERO TO
JUNCTION KISII

KISUMU

EQUITY
BANK
FROM COURSE WAY

KISUMU TO
KISUMU
TO
MIGORI

1.2 THE INDUSTRY

The proposed business shall fall under hospitality.

1.2.1 THE INDUSTRY SIZE

The business is a wide industry which has several players with different firms. The business also
got its competitors i.e. there are also Lizzie’s butchery s located around, besides all these, people
employ are enough and fall under the same ratio with my monthly income that is invested and
also the annual returns.
3
1.2.2 THE INDUSTRY CHARACTERITICS
The business will be advocated for proper environmental conversation measures to be part of
climate law, ensure proper environmental Enovation. This will create a good relationship with
business environment hence with good relationship with the customers, the business will be
reliable for high expansion and that will make the version of the business comes true. The
business will also comply with tolerant acts of parliament regulations and by laws prohibit or
regulate activities that census harmful pollution just to create good relationship. Successful
business requires that business has to satisfy consumers better than the competitors. The industry
will adopt the strategies that one being used by competition who will be serving the same
targeted market.

1.2.3 INDUSTRY TRENDS

The business will have entry barriers which will make it less attractive so that it can discourage
no entrances in the region with the knowledge of competition in the industry. The business will
aim at employing qualified staff which dedicates brilliant ideas that are relevant to the industry
for good results in terms of business growth and proper public relations. This will make the
industry more profitable.

1.2.4 INDUSTRY OUTLOOK

The business in the near future plans to train people like chefs, cleaners, receptionist etc, this will
enable to increased yields, to solve the market with minimum shortage. The business will also be a
good example for other firms within the industry as it will ensure it does its operations differently
from other firms which will be resulting on the high yields and to ensure its promise of
maximizing profit and maximizing loss (cost).
1.3 PRODUCTS AND SERVICES
LIZZIE’S Butchery will majorly deal with accommodation services and provision of food,
beverages and drinks and it will also involve itself in outside catering services. Robert’’s butchery
is unique in terms of accommodation i.e. spacious rooms with well ventilation and well

4
organized, warm water, chair, table or even a bible in each room, the rooms are clean and
favorable for our customers and also there is customization of our foods.

1.4 BUSINESS GOALS AND

OBJECTIVES SHORT TERM
GOALS

Within a period of 6 months my business should:

Be center of development in Kisumu town to win in provision of good accommodation. To

improve in terms of technology i.e. use of computers

To increase market availability in terms of catering services my business provides. LONG

TERM GOALS

By the end of one year, my business will focused on how;

To at least expand the business by building its branch at some 100m from the main to facilitate
more service we off hence more profit.

To introduce transport services i.e. buying a Nissan or even a bus that can help the business in
transport services we offer.

Introducing outside catering services i.e. the facilities to be used such as tends etc.

1.5 JUSTIFICATION OF BUSINESS OPPORTUNITY

I chose a Lizzie’s butchery because of the increased local and international tourists visiting ICPE
which is a research institution in Kisumu town and the background knowledge from my parents.
The business will be located in an area with few competitors and good infrastructure showing
future success hence business growth.

The business will also create job opportunities hence improve the standard of the villagers.

1.6 ENTRY AND GROWTH

STRATEGY ENTRY

5
STRATEGIES

The business will slightly reduce its food prices for it to penetrate the market. After penetration
the firm will increase its price slowly to catch up with the competition. The business will ensure
that their employees are treated well and remunerated properly to maintain them. The firm will
always maintain their relationship with their employees and motivate them in order to maintain
them.

The Lizzie’s butchery will also create awareness by putting a billboard on the road to course way
which will attract customers.

The firm will produce quality service which will be in demand in market hence dominating in the
business. The firm will target new markets in the business to reduce amount of competition hence
dominating in those markets. The Lizzie’s butchery will allow customization of the services. The
firm will draft contracts with an existing customer for a period of time. This will help the firm to
grow and gain trust for their customers.

GROWTH STRATEGIES

The business will find and develop new markets for new and modified products and special
service; this will help in the firm growth.

The firm will develop new products, markets outside existing business. This will enable the firm to
grow and increase its profit.

The firm will increase the market. It will do product improvements which will increase their
quality and reduce their competition.

The business will increase its market from 15% to 20% within 9 months of operation, by the end of
three months the business will have advertised its products through the media e.g. Radios,
magazines, bill boards, paper fliers to expand its existence.

6
 CHAPTER TWO

2.0 MARKETING PLAN

2.1 POTENTIAL CUSTOMERS

My business will be located at Kisumu center just after crossing the course way from Kisumu
town and our customers will be individuals who will be buying food in small and large quantities.
These customers will be coming from icpe the research institute and people coming from
Rusinga centre not only those places but also from CBD town.
They will be buying the products including the take-away foods.

2.2 COMPETITION
Key competitors to my business will be the following ones which is located 30m from our
business, highly populated. Our business is the best because it is easily accessible due to improved
transportation means. The weakness which makes it hard to capture potential customers is
because its over charges.

Name of competitors Strength Weakness

1. Hill-View butchery Accessible Price strategies

2. Mayienga butchery Good customer store highly Poor quality services

populated

3. Lizzie’s butchery Wide variety of foods, Slow services

beverages
Price strategies

4.Summerlake Lizzie’s butchery Accessible New to market

High quality services and

products

7
Pie chart showing sales

2.3 MARKET SHARE/ SIZE

The approximate numbers of people who will acquire the services are the people around Kisumu
town. There will be competitors who will be running the same business but with different names
e.g. as shown in the table below

Competitor Perfect share % share calculated

1. Blue Ridge Lizzie’s 5000 5000×360 =520

Butchery
35000

2. Kisumu Tourist Lizzie’s 10000 10000×360=1020

Butchery
35000

3. Kisumu Point Lizzie’s 8000 8000×360=820

Butchery
35000

4. Rusinga Guest House 12000 12000×360=1240

35000

8
2.4 PRICING STRATEGY AND POLICY
Penetration pricing; the Lizzie’s butchery will charge low prices to their services in order to
penetrate the market. This will enable the firm beat the competition and have a market share. The
main advantages are: easy penetration to the market and the firm will be increasingly acquiring a
market share. The challenge will be those customers who are price oriented and always buy
expensive products hence rejecting the low priced food and services being offered.

Promotional pricing; the Lizzie’s butchery will use approaches like buy 1 get 1 free or discount
pricing. The advantages are: it will attract customers easily and the firm will create a relationship
with its consumers. The disadvantages will be low profits and losses.

2.5 SALES TACTICS

The Lizzie’s butchery will sell their goods and services directly to the customers whereby this
will enable the customer and the business to be contact with each other. There will also be
personal selling in the business. Transport will be offered to customers so that they can buy foods
in large quantities. The firm will ensure that their existing customers are happy with the services
they offer them. This will enable the customers to refer other customers to them. The firm also
always involves their customers bin production and processing. This will enable the customers to
have trust with the firm, also the firm will often call its customers and how they are doing. This
will enable the firm maintain their customers.

2.6 ADVERTISING AND PROMOTING STRATEGY

ADVERTISING PROGRAM PROMOTIONAL PLAN

Directly marketing, this will enable the Lizzie’s butchery to target specific customer group very
accurately. The firm will target specific customers who will offer good terms and good prices. The
advantages are; information collected from the customers will enable creating of data base and
also information to the customers will be confidential. The disadvantages are; it is time
consuming and will allow approach to be tailored to the needs of an individual customer, this will
be done by having a constructive dialogue with customers to listen to their needs and promote the
services. The advantages are; customers will understand more of the services hence service
knowledge. The disadvantage is that this type of promotion is expensive. Sales promotion; this
will be done to move old stock of raw foods in store easily. The firm will do short term
9
promotion to their target customers in order to move old stock. The advantages will be attraction
of new customers and building a strong relationship with the customers. The disadvantage is that
this type of promotion is costly.

2.7 ADVERTISING STRATEGY

The method of advertising the products will be; adverts; it will be done through newspapers e.g.
daily nation in order to inform large group of customers about the business existence, hence high
profit. Posters, it will be hanged at specific points to inform the customers about new services
being offered and how they are of high quality. Paper fliers, some of the services offered will be
advertised using fliers so that many customers may purchase and this will increase my
profitability. Posts, they will be selected at strategic points to ensure the existence of the
business, hence more customers. Media, we will majorly use the radios most of the people can be
able to afford. We never choose electronic materials e.g. TVs because not everyone can afford
them DISTRIBUTION STRATEGY

The distribution will be directly to customers. The customers may come physically to the
Lizzie’s butchery and purchase the food stuffs. They may also order online through a call i.e. a
phone call, then delivery would be done at the shortest time possible at the customers required
place free of charge and well packed in a clean containers can also be used i.e. available.

2.8 CUSTOMER SERVICES

The business will extend to its customers by;

-packing all the products and food stuffs taken to potential customers just to retain them

- Services will be of quality i.e. neat and clean rooms, well aerated well-arranged conference halls
for meetings if incase there is one.

-Discount will also be given to our potential.

10
 CHAPTER THREE

3.0 ORGANIZATION AND MANAGEMENT PLAN

3.0 ORGANIZATION STRUCTURE

The business since it is a sole proprietorship I will appoint manager. The manager will have a
degree in business management which will enable her to pursue the business smoothly because
she will be having the knowledge and the skills. The assistant manager I will also include, he/she
will ensure that all the objectives of the business are realized well.

3.1 ORGANIZATION CHART

BUSINESS MANAGER

ASSISTANT MANAGER

SALES PERSON

CASHIERS

CLEANERS

SECURITY GUARDS

11
3.2 KEY MANAGEMENT PERSONEL
Business manager

Qualification: a degree in business management from a re-cognized institution

Be computer literate good knowledge of English and Swahili

Minimum experience of 1 year in management in a busy and large Lizzie’s butchery. Not below

24 years and above 40 years

Duties

The business manager will be in charge of the overall running of the business. Will

forecast the progress of the business

Will calculate and make payments of wages and salaries for the workers prepare the

budget plan and financial reports of the business activities.

ONE CASHIER

Qualifications

Possess at least CPA 3 or equivalent accounting background from a re-cognized college or

university

Computer literate

Be conversant in English and Kiswahili

Have worked as a cashier for at least 2 years at a medium sized LIZZIE’S butchery.

Should be hospitable

Duties

Keep records related to finance in the book of account Prepare

business transactions

Balance all financial accounts and following up on debtors and ensure credits are paid.
12
FOUR CHEFS

At least a diploma in catering, food and beverages or a related field in a recognized institution

2 years minimum experience

Medical certificate indicating their well-being in handling foods

Above 25 years and below 35 years

Duties

Asses the quality and quantity of the products

Should keep in touch with the cashier

Carry out promotional campaigns

organizing training of employees

Determines job description

Security guards

Posses an O-level certificate

At least one year of experience in a medium sized firm. Certificate

of good conduct

Duties
Guard the business

Carry out supervision around the premises

Cleaner

Qualifications; certificate in housekeeping

Above 23 years

Duties
13
Clean the compound and maintain cleanliness in the business

3.3 OTHER
PERSONELS
DRIVERS

They will be dealing with the delivery of the goods to the specific location, in charge of movement
of employees of the business and also other tasks given to them by the business.

Office managers

They will be delivering the organization’s messages such as; meeting updates, orders and stocking.

3.4 RECRUITMENT, TRAINING AND PROMOTION

3.4.1 Recruitment policy

The business will;

Advertise the vacant position

Appoint qualified applicants to the relevant fields that they qualify for. By

receiving applicant document and short listing them.

Giving feedback to the organization main objective of this policy are;

To maximize the worker’s loyalty. To increase in business

To encourage hard work among the employees

To have the workers loyalty

Advantages are;

To ensure that a good relationship between the customers and the employee is maintained

To create conducive working environment for both employees and customers.

3.4.2 TRAINING POLICY

The successful applicants will be required to attend full process training on their area of duty as
14
 well as basic orientation into the business premises. Training will be as follows;

Identification of the trainees

Selection of the best among the trainees Training the

selected few individuals

3.4.3 PROMOTION POLICY

This will be done by;

conducting interview

Short listing those who applied

Granting promotions to the best candidates Objective for promotion include;

To work towards achieving maximum profits

To create good relationship and trust among staff

3.5 REMUNERATION AND INCENTIVES

3.5.1 RENUMERATION POLICY

Remuneration policy involves payments of salaries and additional motivational methods to
increase staff and performances.

Objectives for this includes

To maintain skilled and experienced workers force through attractive remuneration and appealing
displays.

Methods involved in Remuneration includes

Gifts and rewards for good performances Overtime

payments

15
TABLE SHOWING REMUNERATION STRUCTURE

Job Title Basic salary Allowances Total Total annual

monthly Salary

Manager 20000 15000 rent 49000 480000

5000-
commuting
allowances

Assistant 15000 10000 rent 30000 360000

16
manager 5000
commuting

Cashier 15000 5000 20000 240000

commuting

Waiter’s 15000 5000 20000 240000

commuting

4 chefs 20000 5000 25000 300000

commuting

Cleaner 10000 5000 15000 180000

commuting

Security guard 10000 5000 15000 180000

commuting

TOTALS 105000 60000 165000 1980000

3.5.2 Incentives program

The employees will be paid for overtime because there will be extra work in the business. The
business will be organizing on how the employees will be trained so as to gain more skills and
knowledge to apply in the business when working. The employees will also be taken for lunch
and super in the Lizzie’s butchery for free.

3.6 LEGAL REQUIREMENTS

3.6.1 Licensing/permit requirement

Since the business will be located in Kisumu County, the following apply;

The premise structure and design should be approved by the Kisumu County council and should
contain adequate sanitary facilities adding up to a total of 25000

Registration of the business name first at the Huduma centre which is free.

17
Obtain business permit to be renewed yearly by 31st March of current trading year of KSH 25000

Food and beverages business license should be obtained from the county council for KSH 3500

waste management service; of KSH 1000 per month Premises

health inspection of KSH 3500 per year.

3.6.2 COMPLIANCE
In addition the business will be required to adhere to the following by-laws Labor Act of

Kenya 2007

The occupational safety Act

The companies Act

The constitution of Kenya generally.

3.7 SUPPORT SERVICES

The support services that will be required in the business to facilitate the operation of that business will be
insurance services, the business will be insured in ease of any destruction/ damage, banking institution and
transporters.

18
 CHAPTER FOUR

4.0 OPERATION/PRODUCTION PLAN

4.1 PRODUCTION FACILITIES AND CAPACITY

4.1.1 Machinery, tools and equipment

Since the business will be dealing with butchery, a lot of sophisticated machines will be used.
However, it will require machines such as digital meat weighing machine.

TOOLS AND QUANTITY COST PER UNIT TOTAL COST

EQUIPMENT KSH KSH

Computers 2 50000 100000

Dryer 1 20000 20000

Mixer 2 10000 20000

Microwave 2 11000 22000

Furniture and 10 tables 1500 55000
fittings

50 chairs 1000 50000

Total 517000

4.1.2 Repair and maintenance

Since most of this equipment require high technical repair we intends to employ specialists.
Who will be able to repair and maintain our tools and equipment? Trolleys will be used to
transport them indoor. High level of maintenance will be observed to ensure that tools and
equipment last longer by regular dusting them especially electronic equipments, oiling and
sharpening tools such as knives.
19
4.1.3 Layout of the business premises
The business will be own solely by me as the sponsor and my family will be my side helping
me run the business. The business will not be leased at any cost as we will buy a piece of land
and build our own premises there.

Security Reception Manager’s rooms Rooms

check office

Washroom s Rooms Rooms

Main gate/
Entry

rooms Rooms

Depot area Store dock kitchen

4.1.4 Other equipment

Business will need several tools and equipment such as telephones for communication between
suppliers and customers and even uniforms for our workers.

ITEM DATE QUANTITY UNIT COST TOTAL COST

telephones 29/8/2022 5 phones 10000 50000

Uniforms 29/8/2022 70 uniforms 1000 70000

4.2 PRODUCT/SERVICES DESIGN AND DEVELOPMENT

Product design and development (tangible products)

The business will be offering types of services such as food stuffs, beverages and even supplying
20
foods to our customers need customization incase. We will also use modern technology when
comes to catering services.

Services, design and development (intangible products)

The Lizzie’s butchery will have a lot of space for our potential customers such as conference halls
where they can use for their meeting; there are also security cameras that we have installed in
every corner of our building and the entire LIZZIE’S butchery compound. Waiting seats are also
available outside with tends that protect our potential customers from strong solar radiation and
finally we will invest on modern technology in carrying out our services so that we be fast and
cost effective.

4.2.1 QUALITY CONTROL

The business intends to use different methods to ensure everything comes effective to our
potential customers. The methods include;

Assurance; food stuffs and beverages will be of good quality to our potential customers.

Well trained and skilled workers this enables them to satisfy our potential customers needs.

We will also ensure the raw materials we use are of high standards and high quality and safe for
human consumption and this will be done through the help of (National standard board) KEBS.

4.3 PRODUCTION/OPERATION STRATEGY

Business will be effective and economical because of the major production strategy that shall be
focused on; product quality, the business will produce products that will be of high quality,
customer can purchase. Product pricing, the price of the product will not be very high for our
customers.

21
4.3.1 Material requirements
ITEM REQUIREMEN SOURCE QUANTITY TOTAL COST
T PER UNIT

Potatoes Daily Market 50bag@2000 100000

Maize Weekly Market 5bag @300 15000

Meat daily Butchery 1000kg@400 400000

Wheat flour Daily Supermarket 1000kg @1600 160000

Salt Weekly Shop 25kg @100 2500

Sugar Weekly Supermarket 2kg@30 750

Kales Daily Market 100kg@100 10000

Cabbage Daily Market 30Kg@80 24000

Rice Daily Shop 500kg@100 50000

Milk Daily Shop(kcc) 100litres@40 4000

Fish Daily Market 10@500 5000

TOTAL (771250

4.3.2 Labor requirement

The business will employ both permanent (indirect) and casual (direct) workers will be paid daily
basic through cash. The permanent employee will be paid per month. The casual workers will
only be employees to be hired will depend on number of product and size of establishment.

The total cost of production labor per month will be,

22
No. of direct workers × cost per hour × number of months

100×330×220=66660000

No. of indirect workers × cost per hour ×number per month

100×1000×220=22000000

Therefore 66660000+22000000

=88660000

4.3.3 Production cost

EXPENSES COST KES

Monthly material requirement 1056500

Monthly material requirement 260000

Monthly production requirement 117000

Total (1433500

OVERHEAD COST KES

Electricity 10000

Transport 12000

Water bills 10000

Insurance 8000

TOTAL (40000

23
4.4 PRODUCTION PROCESS
The main features of offering to the

proposed services or selling the merchants

will be; Timely offering of services.

Replacement of unused machine Discount

on basis of purchased goods Clean and

well packed food Arrangement of tables

and chairs Good reception of the users

External factors affecting the continuity of the LIZZIE’S butchery like; Weather

condition

Pricing from the business competitors

Security threats

Water shortages

Communication

Debts

Internal factors such as; Poor

handling of food

Lateness and delivery products Salary

attachment

Stealing

Misunderstanding and communication Poor

24
hygiene among employees

25
To overcome internal cooperation the following shall be done

Ensure proper hygiene in the kitchen

Ensure salary adjustment and bonuses awarded

Ensure time adhered to so that the goods are delivered online and everything which if important
has been removed.

Communication will be enhanced

Tight security will be provided

Product process is shown below;

Prospecting

Presentation of the product

Inspection

Payments

Order retrieval

26
4.5 REGULATIONS AFFECTING PRODUCTION/OPERATIONS
The regulations include;

The premises structure and design should be approved by the Kisumu County council and should
contain adequate sanitary facilities.

Registration of the business name

Obtain business permit to be renewed yearly by 30th March of current trading year. Obtain trading

license before the commencement of the business given once.

An application form for business permit delivery to the county clerk not less than 30th days from
the start of the business to be renewed yearly.

Every employee handling the food must have update medical certificate Obtain

drainage system inspection card per instance

Having a working fire extinguishers

27
 CHAPTER FIVE

5.0 FINANCIAL PLAN

5.1 PRE-OPERATIONAL COST

ITEM COST

Rent and deposit 24000

Tools and equipment 507000

Business permit 25000

Internet installation 5000

Telephone cost 8000

Trading licenses 16000

Water installation 10000

Electricity installation 10000

Stock 888150

Insurance policy 12000

Total (1505150

28
5.2 WORKING CAPITAL
PARTICULARS Year 1 Year 2 Year 3

CURRENT
ASSETS
Cash in hand 400000 200000 400000

Cash at bank 500000 500000 1000000

Stock of goods 500000 500000 700000

Total C.A 1,400,000 1,200,000 1,300,000

CURRENT
LIABILITIE
S
Creditors 100000 200000 300000

Bank overdraft 200000 100000 100000

Short term loans 400000 600000 800000

Total C.L (700000 (900000 (1200000

Working capital 700000 300000 100000

NB/ working capital are obtained from subtracting current assets from current liabilities.

29
 5.3 PROJECT CASHFLOW STATEMENT FOR THE YEAR ENDED 31ST DEC 2023

PARTICUL S

JAN FEB MAR APRI MAY JUNE JULY AUG SEP OCT NOV DE TOTAL
C

ash inflow

BEGINNIN G 1000 200 40000 6000 4000 60000 20000 1000 2000 10000 1000 200 3200000
00 000 0 00 00 0 0 00 00 0 00 000

BALANCE
2000 100 10000 2000 1000 90000 40000 1000 5000 50000 2090 100 2550000
CASH 00 000 0 00 00 0 00 00 00 00 000
sales
Collection from 4000 600 10000 3000 1000 30000 50000 2000 3000 10000 1000 500 275000
creditors
00 000 0 00 00 0 0 00 00 0 00 00

Total cash 7000 900 60000 4000 1000 16000 70000 1000 1600 70000 6000 250 735000

inflow 00 000 0 00 000 00 0 000 0000 0 00 000

Cash out
flow

Salaries and 5000 100 10000 1000 1000 20000 10000 5000 1000 50000 1000 500 730000
wages
00 00 0 0 0 0 0 0 0 0 00
Purchases 5000 100 10000 1000 5000 10000 10000 5000 1000 10000 1000 500 50500
0 00 0 0 0 0 0 0 00 00

Payments to 1000 100 10000 1000 1000 10000 10000 1000 1000 10000 1000 100 120000
creditors
0 00 0 0 0 0 0 00

Taxes 5000 100 10000 2000 5000 50000 50000 1000 1000 10000 1000 100 380000
00 000 0 0 0 0 0 00

Stationary 1000 200 10000 1000 1000 10000 10000 1000 1000 10000 1000 100 130000
0 00 0 0 0 0 0 00
Electricity 5000 100 10000 1000 5000 5000 5000 1000 5000 5000 5000 100 426000
00 0 0 000

30
Loan payments 5000 100 10000 5000 5000 5000 5000 1000 5000 5000 1000 500 71000
00 0
Rent 1000 100 10000 1000 1000 10000 10000 1000 1000 10000 1000 100 97000
0 00 0 0 0 0 0 00

Telephone 1000 100 1000 1000 1000 500 1000 1000 1000 500 1000 100 50000
0 0
Repairs 5000 500 5000 5000 1000 10000 5000 5000 1000 1000 2000 100 64000
0 0 00
Advertise ment 1000 150 1000 1000 1000 1500 1000 1000 1000 1000 1000 300 24000
00 0
Transport 5000 500 1000 1000 5000 5000 5000 1000 5000 1000 1000 100 90000
0 00 00
Total cash out 3370 277 18700 3300 4650 95500 39600 1990 8700 10500 2430 105 3686500
flow
00 500 0 00 00 0 0 00 0 0 00 400

Ending 3630 622 41300 6700 2350 45000 12040 5010 5130 14500 1570 245 4878500
cash
000 500 0 00 00 00 00 00 0 00 000
balance

6.4 INCOME STATEMENRS

PRO-FORMA INCOME STATEMENT OF LIZZIE’S BUTCHERY FOR THE YEAR ENDING
31ST 2023, 2024 & 2025

PATICULARS YEARS

31/12/2023 31/12/2024 31/12/2025

Sales 4000000 3000000 3500000

Cost of goods sold 500000 100000 400000

Gross profit 3500000 2900000 3100000

Expenses

31
Salaries & wages 2000000 1000000 2500000

Electricity bill 20000 25500 35000

Transport 11000 10500 25500

Rent 100000 50000 100000

Repair and 10000 25000 50000

maintenance

Telephone 20000 15000 10000

Loan repayment 100000 50000 40000

Postage 10000 15000 15500

Advertisement 14000 14500 12500

Stationary 25000 24500 20500

Water bill 17000 16000 14500

Total expenses (2327000 (1246000 (2823500

Net profit(before tax) 1198000 1880000 2777000

Provision for tax 119800 188000 277000

Net profit(after tax) 1,078,200 832000 2499300

32
5.5 BALANCE SHEET
PRO-FORMA BALANCE SHEET AT THE START UP AND END OF THE YEAR 2023

ASSETS COST KES

CURRENT ASSETS

CASH 70000

STOCK 80000

DEBTORS 50000

TOTAL CURRENT ASSETS 200000

NON-CURRENT ASSETS(FIXED ASSETS)

Machinery 125600

Furniture 100000

Tools and equipment 100000

TOTAL NON-CURRENT ASSETS 425600

TOTAL ASSETS (751200

LIABILITIES

Current liabilities

Creditors 100000

Contingent liability 150000

TOTAL CURRENT LIABILITIES 250000

33
LONG TERM LIABILITIES

Bank overdraft 15000

Equity(owners’ equity) 160600

TOTAL LIABILITIES 426200

5.6 PROFITABILITY RATIOS FOR YEAR 2023

1. Gross profit percentage for 2023

Gross profit percentage= gross profit×100

Sales

Gross profit=3,500,000

Sales=4000000

=3500000×100 =87.5%

4000000

2. Return-on-equity

Return on equity=net profit before tax × 100

Owner’s equity Net

profit before tax= 1198000 Owners

equity=160600

=1198000×100
34
 160600

=746.00

3. Return-on-investment

Return-on-investment= net profit after tax × 100

Total invested Net

profit after tax= 1078200

Total invested=100000

=1078200×100

100000

=107.82

5.7 DESIRED FINANCING

ITEM AMOUNT (KES)

Pre-operational costs 1500150

Working capital 1100000

Fixed assets; balance sheet 425600

TOTAL DESIRED FINANCING 3025750

PROPOSED CAPITALIZATION

ITEM AMOUNT (KES)

Bank loan 15000

35
Savings contribution 160600

Parents contribution 100000

TOTAL 275600

5.8 DESIRED FINANCING

ITEM AMOUNT

PRE OPERATIONAL COSTS 15000

WORKING CAPITAL 4100

NON CURRENT ASSETS 5200

Total desired Financing 24300

5.9 PROPOSED CAPITALIZATION

ITEM AMOUNT

Owner`s Contribution(Equity) 120000

Borrowed Funds (Loans) 10000

Total 22000

36