1

SCHOOL NAME: SANG’ALO INSTITUTE OF SCIENCE & TECHNOLOGY

COURSE CODE: 2425/307B

PRESENTED BY : GRACE NGULI

INDEX NUMBER : 602101/0066

SUPERVISED BY : MRS. HAMELYNE BOMET

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL FOR FULFULLMENT OF THE REQUIREMENT
FOR THE AWARD OF DIPLOMA IN GENERAL AGRUCULTURE

JULY SERIES, 2020

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DECLARATION

I hereby declare that this business plan is my original work. I also affirm that it has not been presented to
this institution or any other college for academic purposes, or for any other purpose.

Name : GRACE NGULI

Admin No: SIST/DGA/09666/17J

Signature: ………………………………………..

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

This business plan has been submitted to Kenya National Examination Council with my permission as the
trainee’s supervisors

Name : MRS. HAMELYNE BOMET

Signature: ………………………………….……………..

Date : ………………………………………………..

DEDICATION
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I must sincerely dedicate the trade project to MRS. HAMELYNE BOMET of Sang’alo
Institute of Science and Technology, my parents, brothers and concern protocols to a
achieve these as a agricultural officer, one needed transparency and total
accountability. Only those who are ready to sacrifice and pay the price have
supported transparency and total accountability and therefore dedicate those
scholarity works to all of you for sacrificing and paying my school fees

ACKNOWLEDGEMENT
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My appreciation goes to the Almighty God for giving me good health

during my studies also appreciate the agricultural department for their
knowledge and skills they imported to me which have helped me during
my research. Last my vote of thanks goes to MRS. HAMELYNE BOMET for his
supervision, guidance and support though my project.

TABLE OF CONTENT

DECLARATION…………………………………………………………………………………….2
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ACKNOWLEDGEMENT…………………………………………………………………………..3

Executive summary………………………………………………………………………………..4

CHARPTER 1……………………………………………………………………………….……..9

1.0 business description………………………………………………………………………….9

1.1 business name………………………………………………………………………………..9

1.2 locations……………………………………………………………………………………….10

1.3 forms of business……………………………………………………………………………..10

1.4 types of business……………………………………………………………………………..10

1.5 product and services………………………………………………………………………….10

1.6 justification of the business…………………………………………………………………..11

1.7 industry……………………………………………………………………………………,,….11

1.8 business goals……………………………………………………………………………..…12

1.9 business assumption…………………………………………………………………..…….12

CHAPTER 2………………………………………………………………………………...……..13

2.0 marketing plan…………………………………………………………………………………13

2.1 target consumers……………………………………………………………………….……..13

2.2 market share…………………………………………………………………………………..13

2.3 competitors……………………………………………………………………………….……13

2.5 advertisement and sales promotions………………………………………………….……14

2.6 pricing strategy………………………………………………………………………….…….15

2.7 sales tactics……………………………………………………………………………………15

2.8 distribution strategy…………………………………………………………………….……..16

CHAPTER 3…………………………………………………………………………………..……17

3.0 organization and management plan………………………………………………….…….17

3.1 organization structure…………………………………………………………………………17

3.2 organization managers………………………………………………………………………..17

3.3 employees’ duties and qualification…………………………………………………………18

3.4 recruitment, training and staff promotion…………………………………………………..18

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3.5 remuneration and incentives………………………………………………………………..19

3.6 legal requirements……………………………………………………………………………20

3.7 support services………………………………………………….…………………………..20

CHAPTER 4…………………………………………………………………………………..…..21

4.0 production/operation plan……………………………………..…………………………….21

4.1 production facilities and equipment………………………………………………..………21

4.2 production strategy……………………………………………………………………..……22

4.3 production process……………………………………………………………………….….23

4.4 regulation affecting operation…………………………………………………………..…..23

CHAPTER 5……………………………………………………………………………………….24

5.0 financial plans…………………………………………………………………………………24

5.1 preparation cost estimates…………………………………………………………………..24

5.2 working capital…………………………………………………………………………….…..24

5.3 pro-forma cash flow statements…………………………………………………………….25

5.4 pro-forma income……………………………………………………………………………..25

5.5 pro-forma balance sheet……………………………………………………………………..26

5.6 breakeven points………………………………………………………………………………26

5.7 profitability ratios………………………………………………………………………………27

5.8 desired financing………………………………………………………………………………28

5.8 proposed capital……………………………………………………………………….………28

References ………………………………………………………………………………………..29

Appendices………………………………………………………………………………………..29

LIST OF TABLES

Table 1-market share……………………………………………………………………………………..13

Table 2-competitors analysis………………………………………………………………………….…14

Table 3- sample list of prices………………………………………………………………………….…15

Table 4-employess duties and qualifications…………………………………………………………..18

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Table5-project wage bill………………………………………………………………………………….19

Table6-legal requirements………………………………………………………………………………..20

Table7-sport services……………………………………………………………………………………..20

Table8-production facilities equipment………………………………………………………………….21

Table9-labour and skills require…………………………………………………………………………22

Table10- working capital estimate……………………..……………………………………………….24

Table11- pre-operational cost estimates………………………………………………………………24

Table12-working capital……………………………….………………………………………………..24

Table13-performa cash flow statements………………………………………………………………25

Table14-performa income statements…………………………………………………………………25

Table15-performa balance sheet………………………………………………………………………26

Table16-breakeven point……………………………………………………………………………….26

Table17-profitability ratios………………………………………………………………………………27

Table18-disired financing……………………………………………………………………………….28

Table19-proposed capitalization……………………………………………………………………….28

List of figures……………………………………………………………………………………………

1 figure1-location and address…………………………………………………………………………..10

2 figure2-ogarnisational structure of joy production enterprise………………………………………17

3 figure3-premises layout…………………………………………………………………………………21

4 figure4-production process…………………………………………………………….……………….23

List of abbreviations

1 C.M-CONTRIBUTION MARGIN…………………………………………………………………

2 Y.C-VARIABLE COSTS………………………………………………………………………….

3 B.E.P-BREAK EVEN POINT……………………………………………………………………

4 T.Y.C TOTAL FIXED COSTS…………………………………………………………………..

5 S-SALES………………………………………………………………………………………….

6 K.T.C-KENYA TRAINING COLLEGE………………………………………………………….

7 K.R.A-KENYA REVENUE AUTHORITY……………………………………………………….

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CHAPTER ONE

EXECUTIVE SUMMARY

Business description.

The business name is called JOY DAIRY ENTERPRISE that will run by the owner Ms Grace Nguli as a sole
proprietor. The business will begin at the end of the year 2020. Within Nyeri town in Nyeri county .the business
address will be 502 Nyeri ,the business will be dealing with milk processing and its products like butter ,cheese to
start this business will require ksh 500,000 and the business will require 10 workers ,the business in future will be
able to be expanded based on the short-term and long-term progress.

Marketing plan.

Business shall be dealing with milk processing where by the following will be processed youghurt, byproduct of milk
like butter and cheese. The market of my products will be advertised through radios and television and the prices of
the same products will be sold at very affordable prices and packed well for them to be safe and healthy for human
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consumption. Targeted customers of my enterprise will be in schools, hospitals and centers surrounding Nyeri
town .therefore according to Armstrong & kotler states that products and services marketing ,mix planning begins
with building an offering that brings value to targeted customers.

Organization plan.

The enterprise will aim at the key management personnel’s and this will include farm owner and other workers .

The business will offer duties and responsibilities and academic qualification will also be given out.

There shall be rewards given to motivate workers those have done the best in contributing success of the enterprise.

Recruitment shall be done annually and training will also be given out to new workers .according to Derek & Taylor
states that strategic aspects of employees relation and training is about developing employees skills that they need to
perform their job.

Production /operation plan.

The business requires tools and equipment in order to produce quality products .equipments required are milking
cans, strip cup, sieving items and milking machine whose total cost will be ksh 150,000.the business will also be able
to hire some qualified people to produce high quality yoghurt.

The working schedule hours will be as follows working hours-10 hours per day, working days -5 days per week,
working weeks -4 per month.

Working time will be starting at 8.00Am upto 5.00 Pm.the regulations affecting the enterprise are as follows safety
regulation, public health, business logo and employment act .According to John .M.Irangerish states that
development can be determined by employees through training and can help evaluate the results of training program
and this will encourage and also help in observing behavior of the employees.

Financial plan.

In this chapter it shows all the amount used to promote start and run of the enterprise .the capital required is ksh
50,000 ,here operational cost estimation, cash flow, profit ratios ,are carried out to show the flow of capital used on
the enterprise. as Paul & Mc Graw stated that individuals in business make decision that results in accounting
transactions and the above can be done individually or combined

Location and address

The enterprise is located in Nyeri area, along Nairobi-Meru road.it is in Nyeri village,Karatina sub-location,Kabati
location,Nyeri county.the business address is dairy production enterprise P.O BOX 130-90200 NYERI ,EMAIL
ADDRESS [email protected].

Figure 1

Location map of the business

Hospital
Joy dairy enterprise

Nyeri shopping centre

To Nyeri
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Forms of business ownership

The enterprise in this case is a partnership with to some advantages such us all disputes we do share the profit. Thus
making short and long term developmental plans.

Type of business

This business is designed to offer products which are supplied in the society and in big business like supermarket
and also in wholesalers and we also distribute to the neighborhood members.

Our enterprise will be able to produce the customers with:

 Fresh milk
 Yoghurt
 Butter
 Cheese

Fresh milk will be packed into packets, yoghut will be of high quality mat is Vanilla.

Butter and cheese will be also of high quality whereby our products will be of affordable prices and will be very easy
to deliver to our customers.

Justification of business opportunity

 The business suits to in Nyeri due to readily market.

 There is enough space and accessibility of our products due to good roads and network.
 There shall be enough security proved by Nyeri police station in the nearest town.
 There shall be fresh products like yoghurt and fresh milk for our customers.
 There shall be enough water supplies in our enterprise.
 There shall be availability of power throughout provided by Kenya power.

Industry

The enterprise fails in producing milk of which we shall be providing fresh milk producing milk so as we manufacture
yorghut,also we share be producing butter.

Size of the business in the industry

The business enterprise started as a small firm due to limited capital and has a rapid sales for profit and expand the
business, the enterprise has the willing to offer little service that cannot be expand to those offered in medium and
large firms.

Micro
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 The enterprise involved in simple whereby qualified to be a micro business involved to have some machines
which shall be of high essence to the business.
 Technology involved in the business.
 The business intends to incorporate some minor machines, most of the business operational time share be
labour incentives.

Trends in the industry

The enterprise is advancing technologically day to day. As the world face technological advancement, the business
will not be left behind.

Trends and prospect in the enterprise

For our enterprise to shine, it should be first published to entire market before development.

We have to offer advertisement in and outside Nyeri to capture as many customers as possible.Pertnership believes
that in the five months, the business shall acquired 60% of the market. We intend to improve the enterprise by the
following technologies:

 By use of banners
 Providing t-shirts bearing the name of our enterprise to workers.
 Organizing road shows aimed at business promotion.
 Posters pining in public areas.
 Advertizing in roads and television.

Business goals

 To employ other workers who will be qualified in 3 years time

 To expand our enterprise in 5 years time.
 To improve service delivery to our customers in 2 years time.
 To be providing promotion to our customers according to their frequent shopping.
 To make sure we buy another making machine in our enterprise thus,to improve work efficiency.
 To add 5 dairy animals in our farm in the year time.
 To improve the qualities of our products.

Entry and growth strategy

Entry strategy

Customers shall be aware of the business products by use of posters of which will be displayed on the streets and all
accessible areas within Nyeri district especially in Karatina town and it’s neighboring regions.

Growth strategy

The business shall ensure to take the following measures to ensure expansion of the business:

 Introduction of the new machines to facilitate faster production of products.

 Opening an account for the business in the banks.
 Employing more skilled personnel.
 Improving in quality facilities.
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CHAPTER TWO

Marketing plan

The targeted market will be hotels, supermakerts, wholesale, and the residents of Nyeri market of which it will serve a
good numbers of customers. The enterprise will major advertising through radio stations, posters and also in
television to create awareness and target new customers of the business. Cash discount on large goods bought on
cash will be offered to customers of the business. All will be done to close a loop of strong relations between the
business and its customers.

Targeted customers

 Individual customers
-Customers shall be needed for to have good market for their products.
The institution shall be Karaina University, Nyeri technical and those other institutions located in Nyeri.

 Business customers
-Those with supermarkets, wholesales and other mini-shops will be providing our products at the right time and
also in affordable prices in order to attract as many customers as possible.
 Local customers
-These will be buying of goods in small quantities and less after .these customers will not be able to obtain
goods on credit facilities because their buying capacity is low.

Market share
In regards of our enterprise with other enterprises we should improve our services to capture the other
competitors in the market.
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Table 1

Farms Sales per (ksh)

Farmers enterprise 400,000
Youth enterprise 600,000
Munene enterprise 500,000
Dairy production enterprise 260,000
Total

Market share = 260,000 x100

1,760,000 =14.8%

Competition

The enterprise located in Karatina west expects to get competitors like:

 Meat production
 Dairy production

Meat production

Located 3 km away from the town.

Dairy production

This one is located 2 km from the town of which they have poor infrastructure for displaying their products while
selling them. The products offered are of high prices compared to the income of potential customers.

Table 2

Ite Criteria Firm in the market Average

m
Farmers Youth Munene Dairy
enterprises enterprise enterprises production
s enterprises
1. Product quality Excellent Good Fairly good Excellent 5
2. Pricing Fair Good Excellent Good 0.5
3. Packaging Good Fair Excellent Fair 5
4. Security Fair Excellent Good Good 0.5
5. Location Fair Good Fairly good Excellent 0.5
6. Cleanliness Good Fair Good Good 0

Key:

0.5-possible score
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0-nil

5-maximum score

Conclusion

The enterprise in the market performance is fairly goo according to the performance above.

Advertisement and sales promotion

It is a vital role in increasing the sales thus generating profit since these are techniques used to motivate the minds of
customers to buy certain products from a particular enterprise.

Business advertisement is done through

 Posters bearing the name and the logo of the business shall be placed allover locality and strategic places in the
town.
 The media can also be used as the best form of remitting the information.
 Business promotion can be done especially by offering discounts to the customers.busines will offer 2% discount
at the total of selling price to the customers who buy goods in large quantity.

Sales promotion

 We should be offering free samples to our customers.

 Provision of free printed t-shirts to the workers and customers.
 Demonstration services to our customers.
 Those who will purchase large quantity of products will have free delivery.
 Provision of printed calendars bearing the organization name and the logo.
 Having warranties to our products.

Pricing strategy

The pricing of our products depends on the cost of production that is human capital, processing, distribution and
advertisement strategy.

The enterprise will also consider the price of other business. It will change relating lower process than its competitors
but keeping in mind the maximum profit. Realization of profit growth and sterling in the market.

Competitors’ policy

Sponsors shall price the products basing on the amount of tax paid to the government and small percentage for
profit.

Customer’s affordability

Sponsor shall give credit facilities of 3% discount to customers who buy goods regularly and also buy in bulk. They
shall also be transporting customers for them to obtain this discount.

Table 3
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Sample list of prices

Item Products Quality Quantity Competitors

price
1. Product Tuzo 250l 30-50
2. Fresh milk Vanilla 500l 150-200
3. Yoghurt Butter 250l 200-250

Sales tactics

Dairy production enterprise shall ascertain orders before delivering and place them to potential customers and also
consumer’s service use in all the branches will be made available.

Employees code of ethics and conduct will help out employee act professionally and fairly to be able to capture and
retain customers.

Distribution strategy

The enterprise shall be using pick-up in distributing of goods to the customers destinations. This is because the pick-
ups can carry many goods at once. It is also easy to maintain and the rate of fuel consumption is little a bit lower.

Advantage

 The competitors’ enterprises do not have free deliveries to those customers who buy large amount and bulky
products.
 The problem is other enterprises yes they have means of transportation but the customers have to pay for that
service.

Marketing plan

According to Armstrong and Kotter(2013),Pearson Horizon 14th edition PP(246-248).states that products and
services marketing mix-planning begins with building and offering that brings value to target customers. This includes
both tangible goods and services products become more commoditized many companies are moving to a new level
in creating value for their customers.
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CHAPTER THREE

Organization and management plan

It is a plan that allocates the offices and bringing basic skills and academic levels together with working experience.
This enables efficient working to increase production through producing quality products which will be able to fetch
high prices.

Organization structure of Joy production enterprise

Figure 2

Manger

Asst.Mange
r

Sales & Clerks Technicians

marketing
officer

Security Workers

Managers
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The manger shall be the overall boss of the business, he will be able to manage the whole welfare of the business
and also the workers .

Duties and responsibilities

 Supervision for all matters concerning the business.

 Employ new workers
 In charge of all machine in the business.
 Checking of the workers attendance in the workplace.
 Overall person in the business.
 He /she must keep save records of the business.

Qualifications/abilities of the manger

 Should be 35-50 years old.

 Should have work experience of at least 3 years.
 Should be computer literates.
 Should be hardworking and responsible.
 Must have no records of criminal offences.
 Should be honest in his/her work.
 Should be future oriented.

Table 4

Employees’ duties and responsibilities

Item Position No Duties Qualifications/responsibilities

1. Asst.Manager 1  Take the responsibilities of  Work experience of at least
the manager if absent. 2 years in business.
 Train unskilled workers  KCSE grade c- and above.
 Prepare work reports.  Possess good
communication skills.
 Above 26 years old.
2. Marketing officer 2  To advertise the business  Possess certificate in sales
products. and marketing.
 To find better market for the  Possess good
business. communication skills.

3. Store keeper 1  Keeping records of  Form four levers.

procurement.  Host and hardworking.
 In charge of store matters.
4. Security 3  Provision of tight security to  Possess KCPE certificate
the business.

Recruitment, training and staff promotion

As the business rules and regulation the requirement of new workers which will be conducted in case the company
has a lot of work and the workers are less, also if there is inadequate of workers in the firm.

 We shall be engaging new employees through advertisement in the radio stations.

 New employees will be offered an interview before we employee new.
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 The interview will be conducted by the assistant manager.

 The organization will be offering seminaries to the workers.
 The orientation of new workers and training will be conducted by mangers and assistant mangers.

Training

 This involves reducing of frequency accidents in the firm.

As the manger the training of our workers will be determine through:

a) Observation
This is the way workers will be performing their duties and this will determine if they need more to be trained on.
b) Public complains
Through our customers we will be able to know if our workers need some training on the way they deliver the
products and also how they behave and interact with our customers.
c) Questionnaires
Through asking of questions this will determine more if our workers need training.
d) The entry qualification of workers will determine the position and duties of the employees
e) The training program within twice per year to all the workers and will be costing ksh.500 each.
f) Through performance appraisals of the employees.

Staff promotion

 Hardworking workers will be promoted in levels and also salaries increment.

 Level of education will be considered when we need to promote.
 Work experience will be also considered to promote an employee.
 In case of new vacancy promotion can be conducted accordingly with increment of 5% salary.

Remunerations and incentives

o Remunerations and payments of workers after service delivery.

o The salaries of workers can be determined through
i. Duties assigned.
ii. Nature of duties
iii. Salary/wages scale
iv. Input and output of the worker to the business.

Project wage bill

Item Position No Salaries Sub-total

1. Manager 1 40,000 40,000
2. Asst.manager 1 35,000 35,000
3. Marketing manager 2 40,000 80,000
4. Store keeper 1 10,000 10,000
5. Security 3 8,000 24,000
Total 149,000
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Statutory deductions

The workers will be deducted 12% of their salaries to outstand the following:

 Retirement
 National social security.(NSSF)
 National hospital insurance fund(NHIF)

There will be incentives for workers that for motivation.

There will be provision of tea for all staff at 10 o’clock.

Legal requirement

The license and business permit is mandatory for the business operations. This will be issued by the ministry of trade
and industrialization for ksh.1, 000 only.

Table 6

Item Description Specification Quantity Unit cost Totals

1. Milking cans Aluminum 30 m 500 15,000
2. Milking machine Steel 40 m 20,000 800,000
3. Milking jell Solid 30 m 400 12,000
4. Dairy meal Powder 6,000 6,000
Total 833,000

Table 7

Supportive services

Ite Support services Organization Address Email/contact numbers

m
1. Legal service Hassan advocate Box 32 Nyeri [email protected]
2. Management training K.T.C training Box 50 Kiambu 0715304665
3. Banking financial Equity bank Box 115 Nyeri [email protected]
4. Taxation K.R.A Box 60 Nyeri [email protected]
5. Curior servise G4S Box 60 Nyeri 0730675430
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CHAPTER FOUR

Production/operational plan

Production facilities/equipments

Table 8

Item Description Specification(capacity) Quality Unit cost Total

1. Packets 500-800l 4 5,000 20,000
2. Computers Compaq 1 40,000 40,000
3. Telephone Techno 5 1,500 7,500
4. Machines Steel 1 30,000 30,000
5. Posters Modern 1 15,000 15,000
6. Trays Aluminum 6 300 1,800
Tota 114,300
l

Business location layout

Premises layout

C D

B A E

Key:

A-Machine shade

B- Milking parlor

C-Milk processing

D-Gracing area
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E-Houses

Item Position Grade No Wage per month Totals

1. Manager 1 40,000 40,000 Labour and
2. Asst. manager 1 35,000 35,000 skills
3. Store keeper 1 10,000 10,000 required
4. Security 3 8,000 24,000
5. Marketing officer 2 20,000 40,000 Table 9
Total 149,000

Item Position Grade No Wages per month Total

1. Manger 1 40,000 40,000
2. Assist. 1 35,000 35,000
manger
3. Security 3 8,000 24,00
4. Store keeper 1 10,000 10,000
5. 2 20,000 24,000
Total 149,000

Hourly rate per hour = Total wages labour

Total man hours

=149,000 =ksh. 356

419

Indirect expense

Table 10

Item Particulars Amount (ksh)

1. Management 300,000
2. Rent 4,000
3. Repair & maintenance 5,000
4. Electricity bill 10,000
5. Water bill 8,000
6. Address bill 400
7. Stationeries 5,000
8. Postal address 800
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9. Incentives 12,000
10. Employee benefits 1,000
11. Transport 500
Tota 546,700
l

Facilities to be hired

The only facilities can be hired from our organization is computer and machines.

Repairs and maintenance

Once you hire anything from our organization and interfere with its operation you will be able to repair it before you
bring in back. One item in the organization should be managed well.

Production strategy

 As organization we will be offering products of high quality, giving promotion to our customers those who buy
large amounts.
 Offering transport to our customers who purchase bulk items.
 Selling our products at a fairly prices.

Production process

Figure 4

Milking Processing of Flavor adding

milk

Sealing Packaging

Regulations affecting the operation of the business

 High taxation from the government.

 Machines breakdown.
 Expenses such as procurement of protective equipment i.e gumboots.
 Training of the workers expenses.
 Public insurances.

Production /operational plan

According to John .M. Irangerich (2008) human resource, Tata Mc Graw-Hill publishing company limited 10th edition
states that development can help evaluate the results of training programmes.it also helps the subordinate –
supervisor counseling relationship and the encourages supervisors to supervisors observes subordinates behavior to
help employees.
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CHAPTER FIVE

Financial plan

Pre-operational cost estimates

Table 11

Item Particulars Amount (ksh)

1. Permit/license 5,000
2. Business registration 1,000
3. Rent deposit 4,000
4. Initial advertisement 1,000
5. Feasibility studies 500
Total 11,500

Working capital estimates

Amount which is set aside to address day to day running expenses of our organization is ksh. 500,000.

Table 12

Current assets (ksh)

Cash in hand 70,000
Cash at bank 150,000
Stock 8,000
Debtors 5,000
Prepayments 14,000
247,000
Current liabilities
Creditors 5,000
Loans 100,000
Capital (co-operatives) 80,000
Total 185,000

Working capital = current assets-current liabilities

274,000-185, 000= 62,000

Pro-forma cash flow statement

Table 13
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Particulars Monthly entries

Jan Feb Mar April May June July Aug Sep Oct Nov Dec Total (ksh)
Beginning cash 50,000 58,750 80,000 68,000 75,000 68,000 57,000 71,000 60,000 71,000 49,000 50,000 1,198,750
balance
Cash flow 20,000 30,000 35,000 42,000 41,000 47,000 52,000 60,000 57,000 60,000 57,000 60,000 453,000
Cash sale

Debt collection 100,000 100,000 100,000 100,000 100,000 100,000 100,000 102,000 95,000 80,000 80,000 80,000 1,714,000

Loans 100,000 50,000 40,000 40,000 40,000 40,000 40,000 42,000 40,000 41,000 41,000 41,000 37,5000
Total cash flow 220,000 135,000 45,000 42,000 43,000 43,000 43,000 41,000 49,000 40,000 44,000 40,000 3,740,750
Cash flow
Out flow
Rent 300 400 500 500 500 500 500 500 500 500 500 500 5,7000
Salaries 104,000 102,400 110,000 100,000 100,000 100,000 100,000 95,000 80,000 79,000 69,000 39,000 1,010,000
Repairs 7000 4500 4500 4500 40,000 40,000 40,000 45,000 39,000 39,000 39,000 41,000 387,000
Maintenance 200 1,500 1,500 1,500 1,500 1,500 1,000 1,000 850 850 940 42,000 54,360
Water bills 2,000 2,000 2,000 2,000 2,000 2,000 1,500 2,000 1,900 1,900 2,000 2,000 23,300
Electricity 1,000 1,000 400 1,000 1,000 1,000 200 1,000 950 950 1,000 1,000 10,520
Materials 5,000 5,000 2,500 2,500 2,500 2,500 1,500 2,500 2,500 2,500 2,500 2,500 34,000
Inventory 4,000 4,000 4,000 4,000 4,000 4,000 3,000 1,000 1,000 1,000 1,000 1,000 32,000
Loan repaying 20,000 20,000 20,000 20,000 20,000 20,000 1,500 400 400 20,000 20,000 20,000 122,300
Loan interest 2,000 2,000 2,000 2,000 2,000 2,000 1,500 9,000 1,500 1,990 2,000 2,000 29,990
Insurance 2,000 2,000 4,000 4,000 4,000 4,000 4,000 3,500 4,000 4,000 4,000 4,000 28,500
Transport 8,000 8,000 8,000 8,000 8,000 8,000 2,500 7,500 7,500 8,000 8,000 8,000 89,500
Total 161,300 140,000 180,000 178,000 160,000 157,000 140,000 174,000 169,000 147,100 174,200 174,000 178,860

Total cash flow- cash flow out= net cash flow

667,550-178,860=488.690

Pro-forma income statement

Table 14

Particulars Year 1(2020) Year 2(2021) Year 3(2022)

Less cost of sales 488,690 438,690 490,000
Gross margin 50,000 67,000 50,000
Net sales -438,690 -371,690 -440,000
Operational expenses 5,000 5,000 4,500
Salaries 200,000 35,000 40,000
Transport 8,000 8,000 8,000
Repair 41,000 40,000 21,000
Insurance 4,500 4,500 4,500
Electricity bills 800 800 1,000
Loan interest 500 480 950
Rents 2,000 1,900 2,000
Phone bills 350 350 350
 25

Pro-forma balance sheet

Table 15

Particular Year 1(2020) Year 2(2021) Year 3(2022)

Fixed assets
Machinery 40,000 40,000 30,000
equipments
Net value 25,000 25,000 15,000
Hatcheries 40,000 40,000 40,000
Trays 12,000 12,000 12,000
Buildings 40,000 15,000 16,000
Total fixed assets 1,570,000 1,320,000 1,130,000
Current assets
Cash in hand 40,000 44,000 48,000
Cash in bank 100,000 50,000 50,000
stock 25,000 50,000 45,000
Total current assets 165,000 144,000 143,000
Current liabilities
Loans 20,000 18,000 20,000
Capital 10,000 12,000 10,000
Add profit 15,000 10,000 8,000
Total liabilities 45,000 40,000 38,000

Breakeven point (BEP)

Table 16

Particular Year 1(2020) Year 2(2021) Year 3(2022)

Fixed assets
Rent 2,000 2,000 2,000
Licenses 1,000 1,000 1,000
Management salaries 10,000 10,000 10,000
Depreciation(fa) 5,000 5,000 5,000
Total fixed costs 108,000 108,000 108,000
Labour 10,000 10,000 10,000
Electricity bills 5,000 5,000 5,000
Water bills 2,500 2,500 2,500
Internet charges 500 500 500
Advertisement 2,000 2,000 2,000
Sales promotion 1,500 1,500 1,500
Stationeries 1,000 1,000 1,000
Employess benefits 10,000 10,000 10,000
Insurance 1,000 1,000 1,000
Materials 10,000 10,000 10,000
Phone bills 1,000 1,000 1,000
Total variable cost 44,500 44,500 44,500
Total cost 152,500 152,500 152,500
 26

Sales 300,000 950,000 900,000

Contribution margin 800,000- 950,000- 900,000-
152,000=647,500 152,000=798,000 152,500=747,000
Breakeven margin 566,632 10,880,440 1,625,506

BEP= TFC

1-(CM)

Year 1 (2020) Year 2(2021 Year 3(2022)

108,000 108,000 108,000

1-(647,500) 1-(798,000) 1-(747,000)

800,000 800,000 800,000

=565,632 =10,880,440 =1,625,506

Table 17

Profitable ratios

Ration Year 1(2020) Year 2(2021) Year 3(2022)

Net profit x 100 647,500 x100 647,500 x100 647,500 x100
sales 800,00 800,000 800,000
=80% =80% =80%
80:100 80:100 80:100
Net profit x100 152,500 x 100 647,500 x100 647,500 x100
T production 152,500 152,500 152,500
=19% =424:100 =424:100
19:100
Net profit x 100 647,500 x100 647,500 x100 647,500 x100
Working capital 800,00 800,00 800,00
=80% =80% =80%
80:100 80:100 80:100
Net profit x 100 647,500x100 647,500x100 647,500x100
Total assets 908,000 908,000 908,000
=71% =71% =71%
71:100 71:100 71:100

Desired financing

Table 18
 27

Particulars Amount (ksh)

Pre-operational cost
Loans 400,000
Capital 40,000
Add loans 20,000
Fixed assets
Machineries 40,000
Buildings 40,000
Working capital
Working cash 50,000
Loans 45,000
Total desired 635,000

Proposed capitalization

Table 19

Particular Amount (ksh)

Equity financing 40,000
Personal selling 627,000
Disposal of personal properties 40,000
Sub-total 707,000
Debt financing 40,000
Commercial bank loans 50,000
Trade credit 25,000
Hire purchase 20,000
Government grants 15,000
Sub-total 150,000

According to Jeff,(1995),international financial management, west publishing company.4th edition states that if
interest arbitrage parity exists the attempts of covered interest rate currency will result in an effective financing rate.
Similar to the domestic rate and corporations typically use long term source of fund to finance long term project.

References

1. Armstrong & Kotter (2013), Pearson Horizon of marketing education 14th edition.
2. Derek Torrington. Laura Hall and Stephen taylor (2008) strategic management Pearson education 7th edition.
3. John M Itangerian (2008) human resource Tata Mc Graw-Hill publishing company limited 10th edition.
4. Paul Solomon (2004) finance management Mc Graw-Hill 6th edition.

Business logo

Appendix 1
 28

Appendix 2

Location map of the business

Hospital
Joy dairy enterprise

Nyeri shopping centre

To Nyeri
town

Appendix 3

Premises layout

C D

B A E
 29

Key:

A-Machine shade

B- Milking parlor

C-Milk processing

D-Gracing area

E-Houses

Appendix 4

Name: Grace Nguli

Date of birth: 20/05/1996

Sex: female

Marital status: single

Religion: Christian

Nationality: Kenyan
 30

Address: 40 Nyeri

Cell phone: 0706704869

Email : [email protected]

EDUCATION BACKGROUND

2019-to date: Sang’alo institute of science and technology

Diploma-General agriculture

2016-2018: Sang’alo institute of science and technology

Certificate- General Agriculture

2010-2013: Kenya certificate of secondary education

2000-2009- Kenya certificate of primary education

WORK EXPERIENCE

May –August, 2017

Naguru farm products (Nairobi)

September-December-2019

Dairy choice farm

Skills

 Ability to work in any climatic condition

 Ability to work under pressure
 Ability to work under minimum supervision.

HOBBY:

 Singing
 Reading novels
 Swimming

REFEREES