BUSINESS PLAN

MACDONALD'S ELECTRICAL AND ELECTRONICS SHOP

PRESENTED BY : MACDONALD MAKOKHA

INDEX NO : 6371020031

COURSE NAME : ELECTRICAL AND ELECTRONICS ENGINEERING

COURSE CODE : 1601

PAPER CODE : 1601/207

CENTRE : MUSAKASA TECHNICAL TRAINING INSTITUTE

PRESENTED TO: THE KENYA NATIONAL EXAMINATIONS

COUNCIL FOR PARTIAL FULFILLMENT FOR THE
AWARD OF CERTIFICATE IN ELECTRICAL AND
ELECTRONICS ENGINEERING.

SERIES : MARCH 2023

DECLARATION

I kindly declare that this business plan is my original work and it has never been presented to

any person or college for an award of certificate in Electrical and Electronic Engineering .

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PRESENTER: MACDONALD MAKOKHA

SIGNATURE:…………………………….

DATE….......................................

SUPERVISOR: MR. BENEDICT SIFUNA

SIGNATURE…................

DATE…...........................

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 DEDICATION

I dedicate this business plan project to my beloved parents, teacher, sisters and my friends for

their motivational support towards the completion of this project.

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 ACKNOWLEDGEMENT:

First and foremost, I would like to say Glory to God for giving me strength and perfect health to do this

business plan. I will also not forget my family especially my Father, Mother and my beloved wife

Phostine Munyasia for their encouragement, guidance and financial support in this business plan. I also

like to acknowledge the contribution of my lecturer MR BENEDICT SIFUNA for his efforts of guidance

and making relevant corrections leading to the completion and success of this business plan project.

Lastly, vote of thanks goes to my friends for their constructive criticism that led to better work.

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Table of Contents
DECLARATION...............................................................................................................................................i
DEDICATION.................................................................................................................................................ii
ACKNOWLEDGEMENT:................................................................................................................................iii
CHAPTER ONE..............................................................................................................................................1
1.1 EXECUTIVE SUMMARY.......................................................................................................................1
BUSINESS DESCRIPTION...........................................................................................................................1
1.2 Marketing plan..................................................................................................................................1
1.3 Operation Plan...................................................................................................................................1
1.4 Organization management................................................................................................................2
1.5 Financial Plan.....................................................................................................................................3
CHAPTER TWO.............................................................................................................................................4
2.0. BUSINESS DESCRIPTION........................................................................................................................4
2.1. Background of owner.......................................................................................................................4
2.2. Business name..................................................................................................................................4
2.3. Business location and address..........................................................................................................4
2.4. Form of business ownership.............................................................................................................6
2.5. Type of business ownership..............................................................................................................6
2.6. Product and services.........................................................................................................................6
2.7. Justification of opportunity.............................................................................................................7
2.8. GOALS OF THE BUSINESS AND OBJECTIVES......................................................................................7
2.8.1. Goals..........................................................................................................................................7
2.8.2. Objectives..................................................................................................................................7
2.9. Entry and growth strategy..............................................................................................................7
2.9.1. Entry plan.................................................................................................................................7
2.9.2. Growth plan...............................................................................................................................7
CHAPTER THREE..........................................................................................................................................8
3.0. MARKETING PLAN.............................................................................................................................8
3.1. Customer..........................................................................................................................................8
3.2. Market share....................................................................................................................................8

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 3.3. Competitors......................................................................................................................................9
3.4. Methods of promotion and advertisement......................................................................................9
3.5. Pricing strategy...............................................................................................................................10
3.6. Sales tactics.....................................................................................................................................10
3.7. Distribution strategy.......................................................................................................................10
CHAPTER FOUR..........................................................................................................................................11
4.0. ORGANISATION AND MMANAGEMENT PLAN................................................................................11
4.1. Management team.........................................................................................................................11
4.1.1. Describe each manager...........................................................................................................11
4.1.2. Describe human resource management..................................................................................11
4.2. Describe all the individuals.............................................................................................................11
4.3. Recruitment, training and promotion.............................................................................................12
4.3.1. Recruitment.............................................................................................................................12
4.3.2. Training....................................................................................................................................12
4.3.3. Promotion................................................................................................................................12
4.4. Remuneration and incentives.........................................................................................................13
4.4.1. Remuneration..........................................................................................................................13
4.4.2. Incentives.................................................................................................................................13
4.5. Licenses and by laws.......................................................................................................................13
4.5.1. Licenses....................................................................................................................................13

4.5.3. By laws.....................................................................................................................................13
4.6. Support service...........................................................................................................................14
4.6.1. Banking services.......................................................................................................................14
4.6.2. Insurance services....................................................................................................................14
4.6.3. Consulting services..................................................................................................................14
CHAPTER FIVE............................................................................................................................................15
5.0. PRODUCTION AND OPERATION......................................................................................................15
5.1. Production facilities and capacity...................................................................................................15
5.1.1. Firm layout...............................................................................................................................15
5.2. Production strategy....................................................................................................................15
5.3. Production process.........................................................................................................................16

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5.4. Production affecting operation.......................................................................................................16
5.4.1. The health regulation...............................................................................................................16
5.4.2. Safety.......................................................................................................................................16
5.4.3. Environmental regulation........................................................................................................16
CHAPTER SIX.....................................................................................................................................17
6.0. FINANCIAL PLANS...........................................................................................................................17
6.1. Preoperational cost........................................................................................................................17
6.2. Pro-forma balance sheet................................................................................................................18
6.3. Working capital...............................................................................................................................19
6.4. Cash flow project............................................................................................................................20
6.5. Income statement..........................................................................................................................21
6.6. Break even analysis.........................................................................................................................21
6.7. Desired financing............................................................................................................................22
6.8. Proposed capitalization..................................................................................................................22

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 CHAPTER ONE

1.1 EXECUTIVE SUMMARY

BUSINESS DESCRIPTION
The business is called Mashal electronics shop..The business name was derived from owner’s nickname

due to Mashal electrical and electronics shop

P.O BOX 1249-50200,

BUNGOMA.

0741965317

EMAIL: [email protected]

This business is a sole proprietorship. Its nature will be to offer quality sufficient, and affordable

electrical components and all requirements for installation expected to be sold within and outside

Bungoma Maraji market.

1.2 Marketing plan

Macdonald's electrical and electronics shop is located along Maraji stage which is a very busy market in

Bungoma given the number of clients and lots of buildings that requires installation, hence a ready

market.

1.3 Operation Plan

My business will supply high quality products and will be reliable and sufficient to all my customers at

the right time and place. The following equipment, tools and machines are needed for the smooth

operation of this business.

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1.4 Organization management
The business as fore told is sole proprietorship will be run and managed by manager, supervisor,

accountant, sales people and a watch man.

ORGANIZATION AND MANAGEMENT LAYOUT

MANAGER

SUPERVISOR

ACCOUNTANT

Sales people

WATCHMAN

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1.5 Financial Plan
As earlier indicated this electrical shop requires a total of 150,000 for a start and successful

operations. To raise this amount or the source of finance will be personal savings, bank loans,

donations and contributions from friends. This amount will enable the business to start, run and

operate successfully; it will be used to buy stock, rent a premise and operational costs. The sale

of the stock will help maintain profit throughout three year.

Source of finance Amount

Personal savings 50,000

Bank loan 10,000

Donation and contribution 90,000

Total 150,000

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 CHAPTER TWO

2.0. BUSINESS DESCRIPTION

2.1. Background of owner

The owner of the business is called Macdonald Makokha. He is twenty nine years old .He is a

certificate holder in Electrical and electronics engineering from MUSAKASA TECHNICAL

TRAINING INSTITUTE.

2.2. Business name

The business is called Macdonald's electrical and electronics shop .

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2.3. Business location and address

Macdonald's electrical and electronics shop is located in Bungoma , Maraji market

opposite TOURIST hotel.

MACDONALD'S ELECTRICAL AND

TO BUNGOMA CBD

ELECTRONICS SHOP.
MARAJI
MARKET SHARIFF'S ROAD
CENTER

TOURIST HOTEL

MACDONALD MAKOKHA'S ELECTRICAL AND ELECTRONICS SHOP

P.O BOX 1249-50200,

BUNGOMA.

EMAIL: [email protected]

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2.4. Form of business ownership
Macdonald makokha's electronics shop is a sole proprietor business. The owner of this electrical shop

choose the sole proprietor because it is easy to manage and the owner enjoys profit alone.

2.5. Type of business ownership

Macdonald makokha electronics shop is the start up business which intends to sale phones, radios,tv,s,

woofers, conduits, installation cables and electronic components.

2.6. Product and services

Macdonald's electrical and electronics will be dealing with salling all installation equipments e.g bulbs,

sockets,cooker terminals,shower, conduits, meter boxes, ccu,s,cables,testa,s, flouresce,Solar equipments,

and motors.

Macdonald makokha's electronics shop products have low competition in the market and the owner sales

them without owner discrimination .The product prices are affordable .also the products are of high

quality in the market.

2.7. Justification of opportunity

The owner of the business located the business at MARAJI because there were no businesses

providing the same quality products, it is also realized that there were unsatisfied customer needs

and wants, and the environment was favorable.

2.8. GOALS OF THE BUSINESS AND OBJECTIVES

2.8.1. Goals
The goals of macdonald makokha's electronics shop is to ensure that at the end of one year it will

be able to serve one thousand people per day and have several branches inside and outside

Bungoma town.

This would be achieved through aggressive marketing research.

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2.8.2. Objectives
The Macdonald makokha's electronics shop intends to make sales of ninety percent of their

products per day at the maximum profit possible. This will lead to expansion of market share in

the long run.

2.9. Entry and growth strategy

On entry the market Macdonald makokha's electronics shop will lower the price to attract more
customers.

2.9.1. Entry plan

Macdonald makokha's electronics shop used pricing strategy whereby at some point lower prices of its product to be perceived

the high quality of their product at affordable price which will favor the customer.

2.9.2. Growth plan

Macdonald's electrical and electronics shop will use a pricing strategy to expand his business, this is lowering prices of its

product .Macdonald makokha's electronics shop will also apply promotion of its business as a growth strategy.

CHAPTER THREE

3.0. MARKETING PLAN

3.1. Customer
The Macdonald's electrical and electronics shop customers will be given free installation when

they but installation equipments in Macdonald makokha's electronics shop.

3.2. Market share

Electrical equipments People within Bungoma

Sales 30000 200000

Market share 60% 50%

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3.3. Competitors People within Bungoma
Description Five star auto spares People within kanduyi

Strengths Good advertisement More popular

Quality products Public relations

weakness Poor customer relations Unfavorable prices

unpopular Low quality products

Threats Stiff competition Insufficient finance

insecurity technology

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3.4. Methods of promotion and advertisement
Macdonald makokha's electronics shop use road show and print media to promote its

business .Macdonald makokha's electronics shop will ensure that the potential customers will be

informed about the new products twice on a month. The business will advertise it product

through TV,(Citizen TV ,KTN,KBC) radio (kiss FM,West Fm, Citizen,Radio jambo) . The

expected amount to be used is 45000.Macdonald makokha 's electronics shop is expecting to

reach 1000 customers .

3.5. Pricing strategy

Macdonald makokha's electronics shop will calculate the invested capital and the cost incurred in

order to come with the price of its products. Then,will also use a pricing strategy known as

penetrating pricing. The shop will offer a discount of 20% for frequent customer. Macdonald

makokha's electronics shop also offers after sells services of fixing the problems in installation.

3.6. Sales tactics

Macdonald makokha's electronics shop will use direct selling in Bungoma town.

3.7. Distribution strategy

Macdonald makokha's electronics shop will advertise and promote its business idea to sellable

products by indicating the price of a product and its quality.

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 CHAPTER FOUR

4.0. ORGANISATION AND MMANAGEMENT PLAN

4.1. Management team

4.1.1. Describe each manager
Managing director (managing the entire staff, supervision of all department)

Qualification certificate in Electrical and electronics engineering

Experience-5years experience

4.1.2. Describe Electrical engineering management

Supervise electrical engineering

Decides the rate of remuneration

Qualification –certificate in Electrical and electronics engineering

Experience -2years

4.2. Describe all the individuals

Title number qualification experience Duties

Sales 1 Certificate in electrical 1year Distributing electrical

representative and electronics equipments.

engineering

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 accountant 1 Certificate in electrical 2years Budgeting

and electronics

engineering

security 2 Form four certificate 1 year Premises security

cleaners 4 Form four certificate 1year cleaning

MANAGER

SALES ACCOUNTANT SECURITY CLEANERS

MANAGEMENT MANAGEMENT

4.3. Recruitment, training and promotion

4.3.1. Recruitment
Macdonald makokha's electronics shop will use interviews to recruit its personnel. The shop will

also choose interviews because it is a cheaper method of recruitment to the enterprise.

4.3.2. Training
Macdonald makokha's electronics shop will conduct training during induction and during the start of the

year. Will also trains manually to gain more skills to improve the business expectations.

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4.3.3. Promotion
Macdonald makokha's electronics shop promotes individuals through hard work of the employees by rewarding them.

4.4. Remuneration and incentives

4.4.1. Remuneration
Title number amount allowances total

Manager 1 30000 10000 40000

Sales representative 1 20000 9000 29000

Accountant 1 20000 9000 29000

Security 1 15000 5000 20000

cleaners 1 10000 5000 15000

4.4.2. Incentives
Macdonald makokha's electronics shop will offer tea break and lunch as incentives to its

employees. These incentives will motivate the employees to work harder and also it will save

time as employees will not move around to look for lunch.

4.5. Licenses and by laws

4.5.1. Licenses
Macdonald's electrical and electronics shop will acquire its license from Bungoma monicipal council at 2000 per year .This will ensure safety of

the business.

4.5.2. Permit
Macdonald makokha's electronics shop will acquire permit from Kenya revenue authority.

4.5.3. By laws

Macdonald makokha's electronics shop comply with the law of county and the law of Kenya since it is running

a legal business which is certified by city council.

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4.6. Support service
Macdonald makokha' electronics shop will require a support service to enable it carry out the

business effectively and efficiently. The services will include banking services, insurance

services and consulting services.

4.6.1. Banking services

Macdonald makokha's electronics shop will open a bank account in Kenya Commercial Bank

Bungoma branch .will open current account. The current account will enable the business to

deposit anytime and withdraw anytime.

4.6.2. Insurance services

Macdonald makokha's electronics shop will be a customer to Britain insurance where it

will be paying a premium of 5000 against the risk of fire and attacks from thieves and
outsiders.

4.6.3. Consulting services

Macdonald makokha's electronics shop will consult its friends who have been running the same

business.

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 CHAPTER FIVE

5.0. PRODUCTION AND OPERATION

5.1. Production facilities and capacity

Item Quality cost Capacity

Office 3 9000 3 personnel

store 2 4000 4 personnel

5.1.1. Firm layout

SUPPLIES STORES

MANAGERS ACCOUNTS

OFFICE OFFICE

5.2. Production strategy

These strategies are formulated to ensure that goods and services are always available to avoid

shortage .Strategies are going to be fulfilled by potential suppliers to enhance good relationship.

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5.3. Production process
The acquisition of goods in the business is going to be done through proper procedures. To avoid

under estimation and over estimation of required goods and also purchase the right items at the

right time and the right quantity with the right price. this helps the business to avoid unnecessary

cost of acquiring unwanted materials. Once an order is received from the customer it is dealt

with by the sales man or the manager.

5.4. Production affecting operation

5.4.1. The health regulation
The business will ensure that there is a high standard of hygiene. This condition shall be

maintained by workers. Ventilation of the building and sanitation are the most important things

that the organization will work on.

5.4.2. Safety
Macdonald makokha's electronics shop will ensure there are protective clothes to the staffs like

dust coats , gloves and helmets .

5.4.3. Environmental regulation

The business will ensure that all waste materials are properly disposed off

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 CHAPTER SIX

6.0. FINANCIAL PLANS

6.1. Preoperational cost

Item cost

Rent 13000

Designing 40000

Electricity 5000

Research 15000

Advertisement 35000

Recruitment 20000

TOTAL 128000

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6.2. Pro-forma balance sheet
Macdonald makokha's electrical and electronics shop

Balance sheet

As at 31st Dec 2021

Fixed assets (ksh)

Building 30000

Furniture 20000

Domestic installation 500000

Total amount 550000

Current assets

Cash in hand

cash at bank 50000

Debtors 20000

Stock 15000

Prepayment 30000

Total amount 25000

140000

LESS: Liabilities

Creditors

Bank overdraft 30000

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 Working capital 20000

90000

Financed by: Opening capital 100000

ADD: Net profit(previous selling) 50000

LESS: Drawings

Closing capital 20000

120000

6.3. Working capital

Current assets-liabilities=working capital

Cash in hand 50000

Cash at bank 20000

Debtors 15000

Stock 30000

Prepayment 25000

LESS: current liabilities

Creditors 30000

Bank overdraft 20000

Working capital 90000

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6.4. Cash flow project
Inflow JAN FEB MARCH APRI MAY JUNE JULY AGU SEP OCT NOV DEC

LOANS 20000

SALES 10000 3000 33000 25000 28000 40000 5200 54000 45000 4500 48000 48000

0 0 0

DEBTORS 5000 1000 12000 12000 10000 5000 7000 10000 5000 1300 12000 10000

0 0

CASH INFLOW 2000 3000 5000 7000 3000 2000 5000 7000 8000 7000 8000 5000

DISCOUNT RECEIVED 1000 3000 1500 2000 4000 3000 1000 1500 2000 4000 1000 1500

TOTOL 38000 4600 52000 46000 55000 50000 6500 72500 60000 6900 69000 64500

0 0 0

OUTFLOW

PURCHASES 4000 5000 10000 12000 5000 11000 1500 14000 9000 1300 18000 20000

0 0

RENT 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000

CREDITORS 2000 1000 1500 1000 2000 1000 1500 1200 1100 1300 1000 2000

SALARIES 20000 2000 20000 20000 20000 20000 2000 20000 20000 2000 20000 20000

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 0 0 0

ELECTRICITY 300 300 300 3000 300 300 300 300 300 300 300 300

TOTAL 32500 3450 40000 41500 35500 39500 4500 43700 38600 4280 46500 50500

0 0 0

NET PROFIT 5500 1150 12000 4500 19000 10500 2000 28800 21400 2620 22500 14000

0 0 0

6.5. Income statement

Items Cost

Sales 468,000

Cost of sales 136,000

Gross profit 332,000

Less expenses 162,000

Net profit 170,000

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6.6. Break even analysis
Breakeven point in units=contribution

Contribution=selling price-marginal cost

468000-136000=332000

Contribution margin percentage

6.7. Desired financing

Item Cost/

Preoperational cost 128000

Working capital 90000

Fixed assets 550000

Total 768000

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6.8. Proposed capitalization
Item cost

Loan 20000

Borrowed from friends 30000

Personal savings 45000

Total 95000

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