BEEF ENTERPRISE

BUSINESS PLAN

PAPER CODE: 2425/307

PRESENTED BY:

EDWARD KIPKEMOI

INDEX NUMBER:

5521051399

RIFT VALLEY INSTITUTE OF SCIENCE AND TECHNOLOGY

SUPERVISOR:

WAMBUGU NGATIAH WAMBUGU

SUBMITTED TO:
KENYA NATIONAL EXAMINATION COUNCIL (KNEC) IN PARTIAL
FULFILMENT FOR THE AWARD OF DIPLOMA IN GENERAL
AGRICULTURE

NOVEMBER 2024
DECLARATION
I declare that this business plan project is our original work and has not been submitted for
examination or any award of Certificate in General Agriculture or any other certificate in any
institution of higher learning or the Kenya National Examination Council.

SIGNATURES `NAMES OF CANDIDATES

……………………. EDWARD KIPKEMOI

CANDIDATE
DATE: _______________________

This business plan has been submitted for examination to the Kenya National Examination
Council with the permission of our supervisor.

Signature: _______________________

WAMBUGU NGATIAH WAMBUGU

SUPERVISOR

DATE: _____________________________

ii
ACKNOWLEDGEMENT
I would like to express our deep gratitude to our parents for their financial support and to our

siblings for their unwavering encouragement and prayers throughout the preparation of this

business plan. I also extend our sincere appreciation to our project supervisor, Mr. Wambugu

Ngatiah Wambugu, for his ongoing support, valuable corrections, advice, and guidance

during the process.

May God bless them all.

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DEDICATION
I dedicate this work to our loving families who tirelessly assisted us in development of this
business plan in terms of finance. May God bless them abundantly

TABLE OF CONTENTS

DECLARATION........................................................................................................................i
ACKNOWLEDGEMENT.........................................................................................................ii
DEDICATION..........................................................................................................................iii
LIST OF TABLES....................................................................................................................vi
LIST OF FIGURES.................................................................................................................vii
EXECUTIVE SUMMARY....................................................................................................viii
CHAPTER ONE........................................................................................................................1
1.0 BUSINESS DESCRIPTION............................................................................................1
1.1 NATURE OF THE BUSINESS......................................................................................1
1.2 BUSINESS LOCATION AND ADDRESS.....................................................................1
1.3 FORM OF OWNERSHIP................................................................................................2
1.4 TYPE OF BUSINESS......................................................................................................2
1.5 THE PRODUCTS/SERVICES........................................................................................2
1.6 JUSTIFICATION OF OPPORTUNITY..........................................................................3
1.7 THE INDUSTRY.............................................................................................................3
1.8 BUSINESS GOALS.........................................................................................................3
1.9 ENTRY AND GROWTH STRATEGY...........................................................................4
CHAPTER TWO....................................................................................................................5
2.0 MARKETING PLAN..................................................................................................5
2.1 CUSTOMERS.............................................................................................................5
2.2 COMPETITION..........................................................................................................5
2.3 MARKET SHARE......................................................................................................6
2.4 ADVERTISING AND PROMOTION STRATEGY..................................................6
2.5 PRICING STRATEGY...............................................................................................7
2.6 SALES TACTICS.......................................................................................................7
2.7 DISTRIBUTION STRATEGY...................................................................................7
CHAPTER THREE....................................................................................................................8
3.0 ORGANIZATIONAL AND MANAGEMENT PLAN..............................................8
3.1 ORGANIZATIONAL.................................................................................................8
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 3.2 KEY MANAGEMENT PERSONNEL, NUMBER AND DUTIES...........................8
3.3 RECRUITMENT, TRAINING AND PROMOTION...............................................10
3.4 REMUNERATION AND INCENTIVES...................................................................11
3.5 LICENSES, PERMITS AND BY-LAWS (LEGAL REQUIREMENTS)................11
3.6 SUPPORT SERVICES..............................................................................................11
CHAPTER FOUR....................................................................................................................12
4.0 OPERATIONAL/PRODUCTION PLAN.................................................................12
4.1 PRODUCTION DESIGN AND DEVELOPMENT.................................................12
4.2 PRODUCTION FACILITIES AND CAPACITY....................................................13
4.3 PRODUCTION STRATEGY...................................................................................14
4.4 OPERATIONAL/PRODUCTION PROCESS..........................................................15
4.5 GOVERNMENT REGULATIONS AFFECTING OPERATIONS.........................16
CHAPTER FIVE......................................................................................................................18
5.0 FINANCIAL PLAN..................................................................................................18
5.1 PRE- OPERATIONAL COST..................................................................................18
5.2 WORKING CAPITAL REQUIREMENTS..............................................................18
5.3 PROJECTED CASH FLOW STATEMENT FOR THE YEAR 2025......................18
5.4 PRO-FORMA INCOME STATEMENT FOR THE FIRST THREE YEARS.........22
5.5 PRO-FORMA BALANCE SHEET..........................................................................22
5.6 BREAK – EVEN LEVEL.........................................................................................23
5.7 EXPECTED PROFITABILITY RATIO...................................................................24
5.8 DESIRED FINANCING...........................................................................................24
5.9 PROPOSED CAPITALIZATION.............................................................................24
REFERENCES.........................................................................................................................26
APPENDIX..............................................................................................................................27

v
 LIST OF TABLES
TABLE 1-COMPETITION.......................................................................................................5
TABLE 2-PRODUCTION STRATEGY.................................................................................14
TABLE 3-MONTHLY LABOUR REQUIREMENT.............................................................15
TABLE 4-PRODUCTION EXPENSES..................................................................................15
TABLE 5-PRE OPERATION COST......................................................................................18
TABLE 6-WORKING CAPITAL REQUIREMENT..............................................................18
TABLE 7-PROJECVT CASHFLOW STATEMENT FOR THE YEAR 20225.....................18
TABLE 8-PROJECT CASHFLOW STATEMENT 2026.......................................................19
Table 9-project cdashflow 2027...............................................................................................21
TABLE 10-PROFOMA INCOME STATEMENT..................................................................22
TABLE 11-PROFOAM BALANCE SHEET..........................................................................22
TABLE 12-BREAK EVEN COST..........................................................................................23
TABLE 13-DESIRED FINANCING.......................................................................................24

vi
 LIST OF FIGURES
FIGURE 1-MARKET SHARE..................................................................................................6
FIGURE 2-ORGANIZATION STRUCTURE..........................................................................8
FIGURE 3-FACTORY LAYOUT...........................................................................................14

vii
 EXECUTIVE SUMMARY
In this chapter I have indicated the business name, the location and address of my business.
Also explain the form of ownership and the type of business. I have also indicated the type of
product offered, justification of the opportunity, the industry in each belong and the goals of
business. Explain also is the entry and growth strategy.

This chapter states the different types of customers, market share and completion. Also
explain methods of promotion and advertising include the pricing strategy, sales tactics and
finally highlighted the distribution strategy. This chapter also contains the potential
competitor’s methods of advertisement price strategy sales strategy and also distribution
strategy.

The chapter highlights the duties and responsibilities of a manager. Also outline personnel
duties and responsibilities, recruitment, training and promotions. Explain is the remuneration
and incentives, license permit and by-laws

The detailed production facilities and capacity is highlighted here, also is product process and
finally regulations affecting operations. This is the tactic that should be used in production.
E.g. monthly material requirements monthly labor recruitment monthly production expenses
all this should be effective

Financial plans, pre-operational costs, working capital requirements, project cash flow
statement, pro-forma income statement, Pro-forma balance sheet, break-even level, expected
profitability ratio, desired financing, proposed capitalization

viii
 CHAPTER ONE
1.0 BUSINESS DESCRIPTION
The sponsor’s name is EDWARD KIPKEMOI, aged twenty-21 years old. She is a resident of
Baringo County and born in 2003. The owner completed her primary school in the year 2010.
Having passed, he joined Cheberen High School from 2019 to the year 2023. Currently he is
taking Diploma course in General Agriculture at Rift Valley Institute of Science and
Technology.

1.1 NATURE OF THE BUSINESS

The name of the business will be Beef Enterprise. The name is derived from his name Kelvin.
The business will involve keeping of beef cattle, processing and supplying it to institutions
and beef processing firms.

The business will commence on 15th September 2023. It will be owned by Edward Kipkemoi,
the founder. The owner will be sole decision maker and will enjoy profits and suffer losses
alone.

1.2 BUSINESS LOCATION AND ADDRESS

The business will be located along Baringo-Nakuru highway in a center known as Kabarak.
This business is placed in a strategic location in the place is accessible to vehicles. The place
has good means of transport, availability of water and security and good telephone networks.
Employee’s houses are located just opposite the road hence making them report on their
duties promptly. There is availability of supplies and demand is high.

The business address will be written as

BEEF ENTERPRISE

P.O.BOX 991

BARINGO

For Business Location Address Refer Appendix I

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1.3 FORM OF OWNERSHIP
The business name is BEEF ENTERPRISE owned by EDWARD KIPKEMOI. It will be a
sole proprietorship form of business. Decision making will be easier and faster. The owner
will own the business. Business capital will be sh.400000. Family members’ savings and
loans will also be there.

Contributions Ksh percentage

Personal manager 120000 30%
Family members and 120000 30%
Friend’s contributions
Loan from bank 160000 40%
Total 400000

1.4 TYPE OF BUSINESS

The type of business she is going to produce all kinds of quality beef products like fresh
beef, fermented beef and yoghurt. The business growth will increase depending on the
availability of infrastructure and the favorable climatic condition as they will contribute to
move production. The aim is to produce directly to customers too her center and others being
distributed to local factories for processing.

Potential customers are those owning factories of beef for processing and others are directly
owners which will be buying frequently. Those employed are people who have experience in
handling and distributing products. Forms of advertisement are through magazines, posters
and advertising in television. Price policy will depend with the government policy concerning
beef production and the quality of the beef.

1.5 THE PRODUCTS/SERVICES

The products are beef which she will produce while still fresh from the producers and the
products for her business are fresh beef, fermented beef and yoghurt which act. As daily
bread. The packaging of the products will depend on the quality and quantity of her beef e.g
small sized beef are produced in different styles; the comfort of her customers would be the
durability of beef production over his competitors is the way she packs her products and her
way of advertising. The small packets of beef will be a tetra pack form colored yellow and
pink in colour with the label Kelvin’s products. The Kenya Bureau of standards code will be
indicated to show the product packaging.

2
1.6 JUSTIFICATION OF OPPORTUNITY
The business justify the need of people for e,g her business will be needed for industrial
process and direct consumption by customers. It also satisfied local demand. The contribution
of her business to the economy is that it creates employment of people and also the business
will expand. It will improve country’s economy through export of beef therefore earns
country’s foreign exchange. Also, it will promote local beef production thus foreign country
will venture in the locally available beef production thus encouraging more investors into the
country.

1.7 THE INDUSTRY

The business falls under the ministry of Agriculture which is livestock keeping?
Characteristics of proposed business is that it is mainly dominated to beef production only.
Another characteristic is that it supplies to beef to the doorstep of potentials customers and
also supplies to beef processing industries. Modern technology is applied or used due to
advancement in beef industry.

Number of employees is even and basic capital required is 400000 that can be used to start a
medium enterprise. Sales level are sustainably high since it is a foot that people drink beef
whatever the season and therefore making profit.

1.8 BUSINESS GOALS

The business goals include;

1. Creation of other forms through increased production within 5 years

2. Stimulate competition by having quality production methods.
3. Facilitate rural development by expanding firm hence reducing rural- urban
migration.
4. Facilitate structural transformation, innovation by facilitating transformation from
traditional agriculturally based economy to modern industrialized economy.
Purchasing distributing and delivery vehicle within 4 years.
5. Facilitate community development through participating in community development.

The goals will be achieved by, buying more equipment that are technologically advanced
hence increasing production of beef. Expanding the form hence creating employment
opportunities to peoples which reduces rural- urban irrigation. Community development will
be achieved by using the industry saving on constructions of roads, schools church and

3
networking. The business will have savings account within a period of 5 months. Increase of
sales will be 15% in a period of 6 months.

1.9 ENTRY AND GROWTH STRATEGY

The business enterprise is registered enterprise with valid license. The business will start by
advertising its products through radios, newspapers and posters. To penetrate and gain
acceptance in the market the business will deliver its products and services promptly to
customers and will be more concerned about the dislikes and likes of customers.

The anticipation of the business is that its weaknesses among competitors will be solved
through technological advancement. The sponsor of business will expand business beyond
the entry products by opening new outlets and ensuring easy supply and distribution of those
outlets. The owner also has plans of visiting to learn on better management and mode of work
for success of developed beef production.

4
 CHAPTER TWO
2.0 MARKETING PLAN
2.1 CUSTOMERS
Potential customers are those who are willing and able to buy the available commodities from
the business. The customers will be;
(a) Individual customers – who include people of Kabarak town and its environs. They
are financially stable and comfortably as they have regular source of income.
(b) Commercial customers - retailers in the town will buy beef at wholesale price in order
to go and sell it in their small shops.
(c) Institutional customers – this includes the surrounding shops and schools even
collages who will have contacts the product they need from the business. That’s beef
sold in large quality.
Old, young and middle customers who are of high-income earners will be working
Convenience of the product to customers
Beef is always available at the firm. The production industry works for 24 hours as from 8
am. Customers are free to come and buy it from the firm at any time. For those who stay far
the van will be distributing to them in the morning by 7.00a.m. The product will be purchased
by individual customers though cash terms only.

2.2 COMPETITION
TABLE 1-COMPETITION

Names of the strength weakness

competitors
Michael beef Good services offered No after sale services
production
Has high capital Untrained employees
Loyal and friendly employees Poor management due to lack of skills
Has technologically advanced equipment Lack of infrastructure
Samuel beef production Well trained and paid employees Poor management
They offer sales- services Untidy premises
Fair prices Lack of popularity among customers
Dorry’s beef Skilled and experienced workers. Unpopular because there is no enough
production capital to start the business
Fair prices
Regular opening and closing hours
Judies beef production Wide popularity Poor management
High quality products Not specious and untidy premises
Fair prices No after sales service

5
2.3 MARKET SHARE
The business will have large market for the product sold will rely on the business for the beef
supplies. The small shops around the area will have their products. The estimated total sales
per day will be ksh50,000 during the low sales period and the business expects higher sales of
ksh.300,000 per day because people or customers has enough money.

The customers total share will be customers who will be shared by the competitor’s
percentage share to other business firm will be as:

Firm’s percentage
Michael 50%
Edward 80%
Dorry 45%
Mary 25%

Sales

25
50 micheal farm
edward beef fartm
Dorry farm
Mary farm
Val's
80

45

FIGURE 1-MARKET SHARE

2.4 ADVERTISING AND PROMOTION STRATEGY

Method of advertisement include, posters, magazines, sign posts, verbal communication
through salesmen, media such as radio e.g. radio citizen, Q FM, KBC, Kiss FM and
newspapers which will be used to cover a wide area adaptability, quality and reliability of the
product will cost ksh.6000 per period of I month . The effectiveness will be visible through
the increment of customers coming to buy products. The business will gain greater awareness
and will attract customers from the competitors in the town. This high price will be a sign of
advertisement effectiveness of writing at the top of the premises will also advertise the new
business. The salesman will go far into the beef as it is being processed. The quality products
and their fair prices to the customers. The business will visit regular shops in purchase and
6
sponsors. The promotion through beef will ksh6000 will be obvious that the number of
individual customers and orders being placed in situation will be higher and regular within a
short period.

2.5 PRICING STRATEGY

The prices of commodities will be determined by the expenses during production i.e food
costs of the beef cattle, machines used to beef them and payments to those offering services
like cleaning the production areas. During the month of December demand for the product is
high since many people will be celebrating festive season and population of people is high
since schools and even jobs have a break. So, the higher the demand, the higher the increase
of prices. The mode of payment will be cash only and no credit services will be offered
expect for the employees who only pay at the end of the month. After sales services will be
offered free of charge for the large quality customers who buy the products. The business
pick-ups will be used for transportation. For those who buy/who do not buy in large qualities
will be provided with a paper to carry their products. That is the papers that bear business
name and address for further advertisement.
2.6 SALES TACTICS
Individual customers will buy our products through self-selection. Beef will be displayed
openly and attractively for people to see and know where they are sold. They will also be
advertised according to their prices and the quality. The sales assistance will help in
advertising and he/she must have acquired at least a certificate in business. They should keep
the attractive displays of products in their appropriate position all the time.
2.7 DISTRIBUTION STRATEGY
The products will be purchased by other retailers or small shops and will use public transport
in transporting individual customers from hereby homes will come by footing to the premises
for shopping, road transport customers’ goods to distant places in large qualities which may
cost 10000per month. Salesman will also distribute the products as they advertise the product
through attraction. The van may have mechanical breakdown thus causing a problem at
transporting and the delivery time may not be fulfilled. This means that, transportation is not
economical. The distant travelers’ customers with more commodities will be forced to share
the cost of transport with company. Or the company may request the customers to transport
the products for themselves.

7
 CHAPTER THREE

3.0 ORGANIZATIONAL AND MANAGEMENT PLAN

Manager

Production officer Accountant Sales Officer

Cleaner
Watchman Turns man

FIGURE 2-ORGANIZATION STRUCTURE

3.1 ORGANIZATIONAL
The manager of the business will be the owner of the business. For the business to perform,
some fundamental requirements or qualifications have to be observed in order to offer
managerial work properly include;
- Highly trained over the duties and responsibilities of a manager.
- Higher education understanding and managerial prospects
- Ability to plan and control the business without fear
Duties and responsibilities
Ensuring that office work is done properly and control office staff.
Giving instructions
Ensuring rules and regulations are followed
Providing equipment and supplies for the sectional office.
Salary
The determining factor of how the manager is paid is related with the effectiveness running
of the business activities within the organization. Payment for the month will be 38000 as a
personal income from the business.

3.2 KEY MANAGEMENT PERSONNEL, NUMBER AND DUTIES

The business will have at least 6 personnel who will stand for the departments within the
organization. They include;
(a) Secretary
8
Qualifications:
At least 25 years and above
Computer illiterate
Honest, humble and accountable for his duties.
Responsibilities
Keeping records for the business
Writing minutes during meetings
Receiving calls on behalf of the manager
Sending mails and letters
Salary: salary is Ksh 150000 per month.
(b) Accountant
Qualifications
Must be between 25yrs to 35 years
Must have at least 3 years’ experience in the field of accountancy.
Computer literate
Must be honest accountable to her duties.
Responsibilities
Keeping financial statements
Preparing payroll for employee
Preparing budget of the business
Paying employees monthly
Salary: accountant salary will be sh.25000 monthly.
(c) Driver
Qualification
Well trained from a recognized driving institution
At least two-year experience in the field of driving.
Be 35 years of age.
Duties
In charge of all the transport in the business
Delivery of goods and from the business
Salary: earns basic salary of Ksh.12000 monthly.
(d) Security guard
Qualifications
Ability to communicate in both Kiswahili and English.
9
 Brave and sincere
Accrued education either primary or secondary.
Both gender is considered.
Duties
Ensuring the safety of the business premise; that is the main gate the machines in the
production area and the boarders.
Salary: a salary of 10000 monthly.
(e) Cleaner
Qualification
Aged between 18-25 years old.
Should be time keeping and active
Able to work under no supervision
O level certificate holder with mean grade of at least D+
Duties
Responsible for maintaining a conclusive working environment.
Maintaining high degree of cleanliness
Salary: 2000 monthly payment.
Qualified employees will be obtained through advertisement on radios, newspapers, notices
and interviews date set for all the applicants to select suitable employees.
Cocktail parties will be held every year as an incentive to members of the management team.

3.3 RECRUITMENT, TRAINING AND PROMOTION

Recruitment will be done in the business after the advertisement posts via media’s like radios,
newspapers and televisions.
Steps to be followed.
1. Overseeing the qualifications of the applicants and shortening their names.
2. Inviting the applicants for the interviews.
3. Selecting the most suitable ones
4. Notifying the applicants who did not qualify for the interview through means like
phone calls, letters.
Training
Workers/employees will undergo training through:
Organizing of seminars, workshop and offer them certificates

10
Encouraging motivating employees through means like outing, touring to other production
firms to gain knowledge from others.
Promotion
Workers who fit for promotion must undergo the following factors which are considered.
Working performance
Work experience and competency
Professional qualification.

3.4 REMUNERATION AND INCENTIVES

The amount of remunerations to the workers will be based on the following features.
(a) Performance of particular employees
(b) Diligence of particular employees
(c) Work experience.
Incentives
Organizing them for lunch and dinners
Salary rewards
Offering them trips to visit places of their wish
Organizing for a party in order for them to feel appreciated.

3.5 LICENSES, PERMITS AND BY-LAWS (LEGAL REQUIREMENTS)

1. Trade license – will be obtained from Nairobi County Council. It will specify the
goals and products to be offered by the business premises.
2. Business registration license – this will state the type and form of business
location and any other filled operation.
3. The health policy – this is to satisfy the regulation and its environs
4. The employment act (cap 299) – this protects the welfare conditions of the
employees. The license will be obtained at the beginning of every year i.e January
at a fee of sh.3000.

3.6 SUPPORT SERVICES

1. KENYA COMMERCIAL BANK
P.O BOX 4002-100
NAIROBI KENYA
2. ALICO INSURANCE COMPANY
P.O BOX 49

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TEL 072294646
NAIROBI
3. KINGSTONE ADVOCATES
P.O BOX 469
TEL 070012112
BARINGO

CHAPTER FOUR
4.0 OPERATIONAL/PRODUCTION PLAN
4.1 PRODUCTION DESIGN AND DEVELOPMENT
The business products will include beef products such as beef. There packets will have
different designs that will be made with to suit or be environmentally friendly.

Packets meant for beef will be in tetra pack design colored on cover with blue and pink
colour. The pack for yoghurt will be plastic container with a cover on top colour blue and
pink on the cover of the container.
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4.2 PRODUCTION FACILITIES AND CAPACITY
(i) Type of machines being used
Van: for the transportation of commodities out of the business and into the business.
Elevator: packaging of goods into the trucks for transportation which replaces human labour.
Tractor: used to transport commodities that are heavy e.g manure to the firm.
Generator: used to supply electric energy when electric power goes off during the process of
production.
(ii) Service of machines and maintenance

In order to sustain and maintain the damages and breakdown of the machinery within the
organization, proper maintainers should be observed i.e regular servicing to reduce wear and
tear. The machines are served by personnel who are identified with to operate the servicing
activities. Where they open-up machine one at a time to ensure the current condition of each
particular machinery repairing and replacing where possible. After servicing is done the
business has to meet the cost of servicing the machine whereby an amount summing to sh
50000 incurred monthly for maintenance. Replacing of broken machine will be done soon as
possible to avoid inconveniences in production process. The machine spare parts will be kept
readily available for replacement.

Features of proposed factory layout

Because of financial limitation the owner will have a small plot where all the production are
done. The sections will incorporate all the business departments and departmental sections.
For Business Layout Refer On Appendix II

Fixed assets
Machinery: this will help to facilitate either the transportation of products from the
production unit to the store where they await supply to the market.
Land: Required in order to pen up business activities in other places hence expanding the
business premise. For approximately 140000.
Building: extinctions or expanding the storage facility where the ready products will be kept.
Amount of ksh.60000

4.3 PRODUCTION STRATEGY

(i) Monthly material requirements
TABLE 2-PRODUCTION STRATEGY

Item (sh) Cost

13
 Stock 200000
Stationary 20000
Coming materials 10000
TOTAL 230000
(ii) Monthly labour requirements

Table 3-Monthly Labour Requirement

Position No. of Amount paid

Secretaries 2 15000
Accountant 1 52000
Driver 3 12000
Manager 1 35000
Security guards 5 15000
total 201000
Production expenses

Table 4-Production Expenses

Item Cost
Electricity 18000
License 3000
Water 22000
Phone 2000
Transport 6000
Stationary 12000
Packaging 24000
TOTAL 85200

(iii) Cost of production

Monthly material + Monthly labour + Monthly expenses

230000 + 85200 + 201000 = 516200

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4.4 OPERATIONAL/PRODUCTION PROCESS
The business will have a section where the packets and containers for product will be
produced.
(i) Sewing room – these where the cartons and packets for storing beef and yoghurt
are prepared by use of machines. Ready packets and containers are placed healthy
and arranged in their corresponding sizes ready to have the products stored in.
(ii) Dispatch or product sale- transport will be provided for a large quality of products
ordered by an institution or anyone who has placed an order for more products.
The products will be sold to individual customers at the shop too.
(iii) Payment of the sold products – payment will be made to suppliers according to the
amount appearing in the invoice send. Delivery of products ordered will be
accompanied with a receipt showing the amount to be paid through cheques to be
received by the manager.
(iv) Individual customers will pay on cash only over the counter. A sale receipt will be
given showing weather it beef or yoghurt bought.
(v) Packing this the final stage after purchase and payment. Attractive designed paper
bags will be used for packing the sold item to an individual customers while
cartons will be used for parking heavy volumes of products. The paper bags will
involve the name of company that is Kelvin’s Beef Production.

4.5 GOVERNMENT REGULATIONS AFFECTING OPERATIONS

Health regulation
Preventing and protecting, controlling and providing preventions against the rising of
infections. Beef should be properly handled to prevent bacteria.
Ensuring the health conditions of employees.
Safety regulations
Adhering to all cases of emergencies
All employees should wear the required attire during/while on duty. In case of an emergency
everyone should assemble at the five assembly.

Trade marks
The appropriate trade mark which will suit the business entire is the “BEEF ENTERPRISE”
will enable people to identify and locate it easily.
Environment Regulation

15
Well disposed of waste products
Reducing of noise pollution
Work in a clean and healthy environment
Wearing of required clothes depending on the nature of environment.
Burning of waste properly to reduce air pollution.
Employees act
Right to be paid salary
An employee has get a night to be respected
Freedom of expression/speech
Right to leisure
Freedom of demonstration and strike.

16
 CHAPTER FIVE

5.0 FINANCIAL PLAN

This is where all financial to be incurred in proposed business are shown, such finances are
pre-operational costs, working capitals requirements, projected cash flow statement, pro-
forma balance sheet, break- even level, expected profitability ratios, desired financing and
capitalization.

5.1 PRE- OPERATIONAL COST

Table 5-Pre Operation Cost

Items Amount(Ksh)
Electricity 18000
Trade license 4200
Water 2000
Telephone 17000
Rent prepayments 14000
Total 55200
5.2 WORKING CAPITAL REQUIREMENTS
This is the amount of money required for current daily running of the business. The table
shows the estimate of working capital for the first three years.

Table 6-Working Capital Requirement

Item Amount(Ksh)
Stock of raw material 400000
Working in progress 53200
Stock of finished goods 20000
Debtors 8000
Cash in hand 64000
Cash at bank 72000
Total 559600

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5.3 PROJECTED CASH FLOW STATEMENT FOR THE YEAR 2025
Table 7-Project Cash flow Statement for the Year 20225

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
CASH INFLOW
SALES 40500 51000 53000 57000 62000 65000 68500 71000 76500 82500 88500 134500 850000
DEBTORS 500 600 550 700 710 740 770 850 1050 1120 1600 1800 10990
CASH FOR REPAIR 14000 15500 17000 17500 18600 19000 19100 19500 20000 20500 22000 25500 228100
TOTAL CASH INFLOW 55000 67100 70550 75200 81310 84740 88370 91350 97550 104120 112100 161800 1089090
SALARIES AND WAGES 6000 6000 6000 6000 6000 6000 6000 6000 7000 7000 7000 7000 76000
ADVERTISEMENT 400 400 500 550 550 600 700 800 900 850 1200 1000 8450
STATIONERY 400 520 550 600 625 660 720 780 1040 890 1690 1525 10000
ELECTRICITY 2000 2007.5 2100.5 1950 1900 1999 1985.5 2115.5 1988 2017 2000 1989.5 23952.5
WATER BILL 300 350 350 400 450 480 480 480 500 490 700 600 5580
TELEPHONE 300 300 420 480 500 620 730 810 960 930 900 930 7900
CREDITORS 300 360 430 460 490 530 600 730 930 840 1370 960 8000
TRANSPORT 2400 2640 2800 2970 3120 3510 3960 4200 8700 6000 10700 9000 60000
TOTAL CASH OUTFLOW 12100 12637.5 131505.5 13380 13635 14399 15175.5 75534.5 75534.5 85103 86540 138798 199782.5
NET CASH BALANCE 42900 54472.5 57150.5 61820 67675 70341 73194.5 75534.5 75532 85103 86540 138795.5 889307.5
CASH B/F 42900 97372.5 1154712 216592 284267 354608 427802.5 503337 578869 663972 750512

18
Table 8-Project Cashflow Statement 2026

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
CASH INFLOW
SALES 40500 51000 53000 57000 62000 65000 68500 71000 76500 82500 88500 134500 850000
DEBTORS 500 600 550 700 710 740 770 850 1050 1120 1600 1800 10990
CASH FOR REPAIR 14000 15500 17000 17500 18600 19000 19100 19500 20000 20500 22000 25500 228100
TOTAL CASH INFLOW 55000 67100 70550 75200 81310 84740 88370 91350 97550 104120 112100 161800 1089090
SALARIES AND WAGES 6000 6000 6000 6000 6000 6000 6000 6000 7000 7000 7000 7000 76000
ADVERTISEMENT 400 400 500 550 550 600 700 800 900 850 1200 1000 8450
STATIONERY 400 520 550 600 625 660 720 780 1040 890 1690 1525 10000
ELECTRICITY 2000 2007.5 2100.5 1950 1900 1999 1985.5 2115.5 1988 2017 2000 1989.5 23952.5
WATER BILL 300 350 350 400 450 480 480 480 500 490 700 600 5580
TELEPHONE 300 300 420 480 500 620 730 810 960 930 900 930 7900
CREDITORS 300 360 430 460 490 530 600 730 930 840 1370 960 8000
TRANSPORT 2400 2640 2800 2970 3120 3510 3960 4200 8700 6000 10700 9000 60000
TOTAL CASH OUTFLOW 12100 12637.5 131505.5 13380 13635 14399 15175.5 75534.5 75534.5 85103 86540 138798 199782.5
NET CASH BALANCE 42900 54472.5 57150.5 61820 67675 70341 73194.5 75534.5 75532 85103 86540 138795.5 889307.5
CASH B/F 42900 97372.5 1154712 216592 284267 354608 427802.5 503337 578869 663972 750512

19
Table 9-project cash flow 2027

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
CASH INFLOW
SALES 40500 51000 53000 57000 62000 65000 68500 71000 76500 82500 88500 134500 850000
DEBTORS 500 600 550 700 710 740 770 850 1050 1120 1600 1800 10990
CASH FOR REPAIR 14000 15500 17000 17500 18600 19000 19100 19500 20000 20500 22000 25500 228100
TOTAL CASH INFLOW 55000 67100 70550 75200 81310 84740 88370 91350 97550 104120 112100 161800 1089090
SALARIES AND WAGES 6000 6000 6000 6000 6000 6000 6000 6000 7000 7000 7000 7000 76000
ADVERTISEMENT 400 400 500 550 550 600 700 800 900 850 1200 1000 8450
STATIONERY 400 520 550 600 625 660 720 780 1040 890 1690 1525 10000
ELECTRICITY 2000 2007.5 2100.5 1950 1900 1999 1985.5 2115.5 1988 2017 2000 1989.5 23952.5
WATER BILL 300 350 350 400 450 480 480 480 500 490 700 600 5580
TELEPHONE 300 300 420 480 500 620 730 810 960 930 900 930 7900
CREDITORS 300 360 430 460 490 530 600 730 930 840 1370 960 8000
TRANSPORT 2400 2640 2800 2970 3120 3510 3960 4200 8700 6000 10700 9000 60000
TOTAL CASH OUTFLOW 12100 12637.5 131505.5 13380 13635 14399 15175.5 75534.5 75534.5 85103 86540 138798 199782.5
NET CASH BALANCE 42900 54472.5 57150.5 61820 67675 70341 73194.5 75534.5 75532 85103 86540 138795.5 889307.5
CASH B/F 42900 97372.5 1154712 216592 284267 354608 427802.5 503337 578869 663972 750512

20
5.4 PRO-FORMA INCOME STATEMENT FOR THE FIRST THREE YEARS

Table 10-Profoma Income Statement

Item Ksh2025 Ksh2026 Ksh2027

Cash sales 350000
Add working in progress 53200 53200
Less closing stock 42600 42600
Opening stock 400000 400000
Gross profit 274000
Wages 102000 102000
Repair and maintaince 15000 15000
Rent 12000 12000
Electricity 10000 10000
Advertisement 6000 6000
Transport cost 6000 624000 6000
Total expenses 151000 151000
Net profit before tax 63000 63000

5.5 PRO-FORMA BALANCE SHEET

Table 11-Profoam Balance Sheet

Fixed assets Amount

Motor vehicle 180000
furniture 120000
Current Assets
Stock cash in hand 6400
Cash in bank 72000
Total 378400
Less Liability 8000
Debtors 370400
Financed by;
Owners equity 12000
Add: Net profit 110700

21
 230700

5.6 BREAK – EVEN LEVEL

Variable cost

Table 12-Break Even Cost

Item Amount
Sales 256000
Electricity 12000
Repair and maintenances 8000
Transport 6000
Total 26000
(i) Total variable cost = 26000
(ii) Total contribution margin = sales – total variable cost
Total variable cost = 12000 + 8000 + 6000 = 26000
256000 – 26000 = 230000
Contribution margin% =
margin
contribution ∗100
sales
230000
= ∗100
256000

= 8984375

(iii) Total fixed cost

Fixed cost
Insurance 5000
Salary 6000
Rent 12000
77000
Total fixed cost = 77000
(iv) break-even level (in shillings)

22
 costs
= totalfixed margin
con ㄰ributio 眸
77000
=
89.84375
= 857.04

5.7 EXPECTED PROFITABILITY RATIO

profit
Gross profit percentage = gross ∗100
sales
274000
= ∗100
256000

= 10703125
tax
Return on Equity = netprofitafter equity∗100
owners
110700
= ∗100
120000
= 92.25
tax
Return on investment = netprofitafter investment∗100
total
110700
= ∗100
400000
= 27675

5.8 DESIRED FINANCING

Table 13-Desired Financing

Item Amount (ksh)

Pre-operational cost 120000
Working capital 400000
Fixed assets
Motor vehicle 180000
Other
Furniture 12000
Total desired financing 300000 412000

23
5.9 PROPOSED CAPITALIZATION
Total investment = Ksh 400000
Your own contribution = Ksh 120000
Funds from borrowing sources = Ksh 280000

24
 REFERENCES
Brown, H., & Edwards, L. (2021). Economic impact and sustainability of beef production in
rural communities. Journal of Agricultural Economics, 24(3), 59-73.
https://doi.org/10.1080/jae.2021.0042

Chavez, J., & Mendoza, R. (2020). Sustainable practices in beef farming: Rotational grazing
and pasture management. International Journal of Livestock Management, 15(2), 75-90.
https://doi.org/10.1007/ijlm.2020.0076

Johnson, P., & Liu, K. (2019). Animal health and disease prevention in beef production:
Reducing risks and improving yield. Veterinary and Livestock Journal, 13(4), 24-36.
https://doi.org/10.1177/vlj.2019.0057

Miller, G. (2020). Optimizing beef quality through integrated feedlot and pasture systems.
Journal of Animal Husbandry Science, 10(3), 41-55. https://doi.org/10.1093/jahs.2020.0039

Nguyen, T., & Anderson, D. (2021). Feeding strategies in beef farming: Balancing cost and
nutrition for enhanced productivity. Journal of Animal Nutrition and Growth, 18(3), 36-52.
https://doi.org/10.1016/j.jang.2021.0082

Patel, A., & James, R. (2021). Grazing and feed management for sustainable beef production.
Journal of Agricultural Practices, 19(1), 60-77. https://doi.org/10.1080/jap.2021.0061

Smith, R., & Carter, M. (2022). Market trends in the beef industry: Pricing, demand, and export
potential. Journal of Agricultural Economics and Policy, 17(4), 48-64.
https://doi.org/10.1507/jaep.2022.0034

25
 APPENDIX I

Location map

Hospital

Nakuru
School beef
Kelvins butchery

BEEF ENTERPRISE

26
 APPENDIX II

key

A. Main gate, entrance and exit

B. Reception office
C. Secretaries office
D. Accountants office
E. Managers office
F. Production unit
G. Gents washroom
H. Store
I. Ladies washroom

27