BUSINESS PLAN

PRESENTED BY : KIPKURUI PATRICK

INDEX NUMBER : 29541101088

COURSE CODE : 2306

PAPER NUMBER : 307 B

SUPERVISOR : MISS: CHEROP

PRESENTED TO : THE KENYA NATIONAL EXMANITAION

COUNCIL IN PARTIAL FULFILLMENT FOR

THE AWARD OF DIPLOMA IN QUANTITY

SURVEY.

1
EXAM SERIES : NOVEMBER 2015

DECLARATION

I hereby declare that this is my original work and has never been submitted to any examination

body before for any award.

NAME OF CANDIDATE: KIPKURUI PATRICK

SIGNATURE: _______________________________

DATE: _______________________________

DECLARATION BY THE SUPERVISOR

I declare that this project has been submitted with my approval.

Name: MISS CHEROP

Signature: ___________________________________

Date: ___________________________________

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DEDICATION

I dedicate this project to my family members who supported me financially, my teachers, my

friends and classmates who encouraged me and supported me during the working of this project.

3
ACKNOWLEDGEMENT

First and foremost I would like to glorify the almighty for the strength and courage he accorded

me during the writing of this project, I sincerely wish to acknowledge with gratitude my parents

for their financial support throughout the writing of this project.

I also thank MISS CHEROP for her guidance and supervision during the writing of this plan.

Lastly my regards are to my colleagues for their correction during the early stages of this plan.

Table of Contents

4
DECLARATION.............................................................................................................................ii

DEDICATION................................................................................................................................iii

ACKNOWLEDGEMENT..............................................................................................................iv

CHAPTER ONE..............................................................................................................................1

1.0 Business name address and telephone...................................................................................1

1.1 LOCATION............................................................................................................................1

1.2 FORM OF BUSINESS OWNERSHIP..................................................................................2

1.3 TYPE OF BUSIENSS............................................................................................................2

1.4 PRODUCT /SERVICE...........................................................................................................2

1.5 JUSTIFICATION OF OPPORTUNITY................................................................................3

1.6 INDUSTRY............................................................................................................................3

1.7 GOALS OF THE BUSIENSS................................................................................................3

1.8 ENTRY AND GROWTH STRATEGY.................................................................................4

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

2.0 MARKETING PLAN............................................................................................................5

2.1.1CUSTOMERS......................................................................................................................5

2.2 MARKET SHARE.................................................................................................................5

PIE CHART REPRESENTATION OF THE MARKET SHARE................................................7

2.3 COMPETITON......................................................................................................................8

2.4 DEAL GARAGE...................................................................................................................8

5
 2.5 WASHO GARAGE...............................................................................................................8

2.6 RICKAP GARAGE...............................................................................................................8

2.7 DISTRIBUTION STRATEGY..............................................................................................9

CHAPTER THREE.......................................................................................................................11

3.0 OGANISATIONAL AND MANAGEMENT PLAN...........................................................11

3.1 RECRUITMENT.................................................................................................................11

3.2 ORGANISATION PLAN.....................................................................................................11

3.3 KEY MANAGEMENT PERSONNEL................................................................................12

3.4 RECRUITMENT TRAINING AND PROMOTION...........................................................13

CHAPTER FOUR......................................................................................................................14

4.0 OPERATIONAL AND PRODUCTION PLAN...................................................................14

4.1 PRODUCTION FACILITIES AND CAPACITY................................................................14

4.2 BUSINESS OPERATION....................................................................................................14

4.3 PRODUCTS DESIGHN AND DEVELOPMENT..............................................................14

4.4 PRODUCTION FACILITES...............................................................................................15

4.5 PRODUCTION STRATEGY..............................................................................................18

4.6 PRODUCTION PROCESS..................................................................................................19

4.5 REGULATION AFFECTING OPERATIONS....................................................................19

CHAPTER FIVE...........................................................................................................................20

5.1 FINANCIAL PLAN.............................................................................................................20

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5.2 PRE-OPERAITONAL COST..............................................................................................20

5.3 ESTIMATING OF WORKING CAPITAL..........................................................................21

5.4 PROFORMA BALANCE SHEET.......................................................................................21

5.5.1 PROJECTED CASH FLOW MONTLHY DATA FOR THE YEAR 2016......................22

5.5.2 PROJECTED CASH FLOW MONTLHY DATA FOR THE YEAR 2017......................23

5..3 PROJECTED CASH FLOW MONTHLY DATA FOR THE YEAR 2018.........................24

5.5 PROFORMA BALANCE SHEET.......................................................................................27

7
CHAPTER ONE

1.0 Business name address and telephone

The name of the business will be RICKAP GARAGE derived from the name PATRICK

KIPKURUI. The sponsor of the business will be in charge of all operation.

RICKAP GARAGE

P.O BOX 002 KERICHO

CELL PHONE 0729081709

1.1 LOCATION

The business will be located along Tengecha Road in Kericho Town because it has a lot of

people and it will be easy for the customer to access to the business the place is surrounded by

many building which need garage equipment for repair and maintenance. The business is

adjacent to various institutes and market as addition to this people from Kericho,Kericho buses

terminals who normally use Tengecha road will be able to be served at the garage. equipments

road will be able to get services in the garage, and acquire equipments from the garage which are

portable in large quantities because of easy access to the business and quantity of goods. The

sponsor of the business will choose the places because it captures nearly all the customers along

Kericho town and various institutions and industries. The business will lease high quality

serviced and equipment to attract more customers to enable the business succeed and expand in

greater height. The business will sell portable item to it customer lie lamps, socket outs water

heater, switches cables of different sizes buckle clip tuck hammer switch boxes tack nails

junction boxes lamp holders couples conduct, electric kettles’, electric iron box etc.

1
BUSINESS LOCATION MAP

Shops Shopping centre

Rickap garage

Bus stage

Total Petrol station

KERICHO – TENGECHA ROAD

2
1.2 FORM OF BUSINESS OWNERSHIP

The business ownership will be a sole proprietorship. This will be due to the sponsor of the

business will be the general manager of the business. He will share all the profit and losses

incurred in the business. The owner of the business will be able to plan organize and

co0rdinate all tenders and purchases involved in the business. The name of the sponsor of the

business will be PATRICK KIPKURUI he is currently a student in Ol’lessos Technical

Training institute undertaking diploma in land survey

1.3 TYPE OF BUSIENSS

The business will be dealing with car diagnostics and car repair, with sale of their spare parts.

The business will be selling spare parts of various car models

1.4 PRODUCT /SERVICE

The business will be offering quick and affordable prices also the business will render better

services like repair and maintenance of vehicle equipment in addition to that the business will

offer quality products which are durable and proper in functionality the business will offer

good prices for Garage commodities’ for customers to be able to purchase them.
Better service like nut rewinding, maintenance of Garage drills will be done at affordable and

cheap prices this will enable business create good and proper relationship with its customers

also repair of grinding machine, Garage fans generation and other garage machines will be

done in the business.

1.5 JUSTIFICATION OF OPPORTUNITY

The business will Rickap that all repairs are checked and tested before return to the

customers. This will verify the effectiveness and durability of the equipment the business will

3
 also create employment opportunities to the local community through mobile services like

conduct work strategy house building also the sponsor of the business will employ qualified

personnel to aid other duties involved in the business.

Trained personnel will be offered to workers who will be able to acquire basic necessary

skill in garage field and other works.

1.6 INDUSTRY

RICKAP GARAGE will fall under the energy industry. It will be a sole proprietor business

but with other personnel working under it. The level of technology in the business will be

modern due to it quality products and services to customers. The capital needed to start up

this business will be ksh 400,000 but as it starts the amount will increase as it expand.

1.7 GOALS OF THE BUSIENSS

The goals of the business will be profit animation and expansion of the business. In addition

to this the main goals of the business will be to offer high quality products and services to

satisfy customer’s wants

 To promote the sales of goods to customers through posters and internal

memorandum
 To provide employment opportunities to the people surrounding the business area and

other from other various places and the town centre.

 To purchase a lorry and pickup for catering for the transportation of the good.
 To create a wider market for the goods through advertisements.

1.8 ENTRY AND GROWTH STRATEGY

The business will start with sales of small items for example couples socket outlets healers

electric kettle at affordable prices to attract more customers. The business will put up posters

along the streets and various points medial to attract more customers. The sponsors of the

4
 business will Rickap that the customer are well attended to and Rickap that no case of

pilferage occurs. The sponsor of the business will open other branches of the same business

of various places around Kericho town to enhance wider growth and success of the business.

CHAPTER TWO

2.0 MARKETING PLAN

2.1.1CUSTOMERS

The customers will include public customers who will come from various estates and centre

adjacent to the business place also customers from Kericho west market and Kericho bus

terminus will be able to buy their products from the shop on a fairly service. This will increase

the sales of the business as its start. The expected Garage items to be purchased by the customers

are water heaters witches switch boxed socket outlets electric kettle couplers conducts fans metal

chip tuck nails adaptors boxes and thermostats’ residents along Kericho west market will benefit

a lot from the street will access to the business Easley and purchases’ these items. This will

promotes sales of the business and profits maximization this group is the largest among

5
customers and will promote the success of the business large institution will also purchase the

goods according to the type and application of the items kisii university college will benefit

from the business commodities like water heater cables socket outlets because it adjacent to the

business building. This institution will offer high market or the business products.

2.2 MARKET SHARE

The sponsor of the business is expected to arrange for high quality production is better services

for maintenances of machine and good customer relationship.

The business will be top among all other existing business the business will offer affordable

prices to its customers to create food profit animation at the end of a week or month also good

display and enough stock that is a warehouse will attract more customers from other existing

garage business are as follows. Ideal Garage has poor storage of goods because the business has

a wider range of products that is congestion in the working area making customers to leave and

search for other garage dealers where there is enough space for dumping the items. Although it

has number customers the business has poor customer’s relationship. The expected number of

customers will be 12,000customers when both had and enough stock in the business. The

number of customer will depend on the market and quality of the garage equipment. This is a

major factor because good quality goods and provision of skill and better service for repair of

garage machine will attract more customers.

Business name Customer Market share

DALYNES GARAGE 950 23.75%
RICKAP GARAGE 800 20%
WASHO GARAGE 850 21.25%
SHAMTY GENERAL 600 15%
GARAGE
IDEAL GARAGE 800 20%
TOTAL 4000 100%

6
 PIE CHART REPRESENTATION OF THE MARKET SHARE

Sales
RICKAP GARAGE WASHOGARAGE SHAMTY GENERAL GARAGE IDEAL GARAGE

24.56%
38.60%

17.54%

19.30%

Description of items number of items sold for customers

Description of No of items No of Total no of Charge per Total sales per

item sold to customers per item sold item month
customers month
Motor 3 100 150 21000 60000
Iron box 6 200 200 500 30000
Water heater 10 250 150 150 23000
Cooker unit 2 200 250 800 25000
Electric fan 4 100 100 600 13000
Electric kettel 5 250 200 400 20000
GARAGE 2 300 200 2000 40000
microwave
Total 213,000

2.3 COMPETITON

Competition is important it makes the business to grow due to provision of better services than

the other existing ones. The major existing potential competitors are ideal garage shamty general

garage, darlyn’s garage and washo garage.

7
2.4 DEAL GARAGE

It is located 4km from KerichoTown,it is involved in the sales of garage installation services to

customers’ on request. The weakness of this business is that it only sells garage items but do not

offer services like repair of motors and installation of garage equipment in new houses and

building.

2.5 WASHO GARAGE

WASHO GARAGE and electronics has well trained employees who get employed after

finishing course in Garage installation. This business had opened other branches around the town

and other different areas.

In this business the weakness is that there is congested item, wrong storage of equipment and

further more there is less operation period.

2.6 RICKAP GARAGE.

This business location is quite unique areas which are different from the competitors. It is an

easily accessible place for any customers or from and therefore will assist the business to capture

the customer at large before reaching the competition place. It is an open area where any

customer needing equipment or tool will see and purchase . RICKAP GARAGE has a big bill

board to advertise garage sales, this will bring customer easily away from its competitors.

The table below shows RICKAP GARAGE compared to the competitors in tem of location

capital size and competitors works.

Business name Location Capital size No. of competitive workers total

Dalynes GARAGE 4 6 4 15
RICKAP GARAGE 2 4 3 10

8
Washo GARAGE 4 5 4 13
Shamty general 3 4 3 12
GARAGE
Ideal GARAGE 5 4 3 12

2.7 DISTRIBUTION STRATEGY

The business will be dealing in sale of goods and provision of services to customer. Distribution

will be mandatory supplied by the supply agency as stated. The supply agency will supply goods

on contact with the sponsor of the business. Also use of communication will be contract between

the supply agency of the GARAGE equipment and the sponsor of the business. Below is a

distribution network on the business.

Manufacturer

Distributor /supplier

Wholesaler

Retailer 9
 Customer

The most convenient method of transportation from the supplier to the dealers will be use of

road transport. This will be efficient because it will be faster and easily available to enhance

growth of the business. The expected cost for transport per month will be ksh 12000 due to

the distance and weight of the delay of the commodities. Problems involved in this whole

process will be delay of the commodities and shortage by the supply agency.

CHAPTER THREE

3.0 OGANISATIONAL AND MANAGEMENT PLAN

3.1 RECRUITMENT

The owner of the business will acquire employees from the town centre which are qualified

in GARAGE from the town centre who are qualified in GARAGE installation. This will be

done through advertisement and poster hanged from one plan to another. This will keep the

customer informed. Also other workers will get employment on security cleaner secretary

assistant accountant the owner if the business expects to get hardworking disciplined and

honesty employees.

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 3.2 ORGANISATION PLAN

The business will be organized from top to bottom. The owners of the business will organize

the business from the manger to other individuals involved in the business. The business is

expected to set the following people working under it. The business will have manager who

will be in charge of all activities occurring in the business. The manger will take

responsibility of supervising cash flow in the business signing in new GARAGE materials

brought from suppliers.

This will Rickap that there is smooth and better flow of income in the business. A sales

person will be needed to be in charge of total sales of raw materials to customers on a

monthly and daily basis. He will also be in charge of all items in display to consumers. A

technician will also be needed to be responsible for maintenance of machines and worn-out

equipment also he is expected to do wiring of various installations outside the business on a

contract basis

ORGANISATION STRUCTURE.

General Manager

Assistant manager Assistant manager

Sales manager Technician

Security manager Cleaner

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3.3 KEY MANAGEMENT PERSONNEL

The business will have the following employees under the sponsor of the business.

Accounts

An accountant will be responsible for all total sales involved in the business premises. Also will

give record of total sales of the raw materials involved in the business premises, also will give

record of total sales of the raw materials sold in the business.

Technician.

A qualified technician will be needed to do goods services to customers that are repair and

maintenance of GARAGE machines and wiring of various installation sites in relation either the

clients available.

Sales clerk.

The sales clerk will assist the business in selling raw materials to customers which need garage

equipment and services. He is expected to check that all GARAGE items are on display and sell

them at the correct rice to create good customer relationship thus enhance growth and expansion

of the business.

Other personnel

12
A security guard will be hired on payment on a monthly basis. He will be responsible of all

items in the business area and surrounding when cloRickap of the business occurs, he will be

responsible for scoring all property.

3.4 RECRUITMENT TRAINING AND PROMOTION

The owner of the business expects to recruit workers from the surrounding communities in town

there will be through advertisement through posters memos to keep them informed about the

recruitment to the business premises also letter will be printed and given. Various

CHAPTER FOUR

4.0 OPERATIONAL AND PRODUCTION PLAN

4.1 PRODUCTION FACILITIES AND CAPACITY

The following points will be highlighted under these:

o Business operation
o Product design and development
o Product facilities and capacity utilization production strategy
o Relevant regulation affecting the business.

4.2 BUSINESS OPERATION

As explained earlier in the businesses description the business operation will be carried within

the premises and outside premises. Also the service will be offered.

13
The business hours of operation will be from 6.00am -11.00pm but during 0ccasions like

wedding and other ceremonies it will operate according to the time booked.

4.3 PRODUCTS DESIGHN AND DEVELOPMENT

It will offer product which will be designed together with addictive or like tomato source and

chilies hips will be prepared according to order and soda kept in refrigerators during hot

weather.

4.4 PRODUCTION FACILITES

Machines will be used in most cases to make the work simple the machine to be used are like :

 Deep fried
 Potato peelers
 Sling machines

type of machine quality cost per unit total cost

equipment
computer 3 1500 45000
Grinder 2 4000 8000
Bending spring 3 500 1500
Hacksaw branches 5 50 250
Welding machines 1 12000 12000
Multi meter 4 250 1000
Combination pliers 4 150 600
Phase tester 5 50 250
Screw drivers 6 80 480
Steel tapes 5 200 1000
70080

14
The table below shows the amount and number or raw materials required by the sponsor of the

business in order to create smooth work and cash-flow in the business in order to create smooth

work and cash flow in the business premises.

Raw materials quality Cash per unit Total cost

Metal clip 20pkts 80 1600
Wood clip 20pkts 100 2000
Pvc screw 200lengts 300 560000
Soldering iron 3metres 250 750
Cables flexible 8 rolls 10000 80000
Cables clips 30pccs 200 6000
Uckles clips 20pcs 150 2000
total 155,350

Repair and maintenance

The will be done effectively to enhance good relationship either expected customers.

Maintenance for garage machine like motors will be done in the business premises under a

workshop this will enhance use of technology for better services also repair of water heaters and

repair of GARAGE accessories and fittings will be done in the business by a proposed technical

in charge. Also new installation like wiring of house will be done to create more relationship

with available customers around the business this will enhance better growth and expansion of

RICKAP GARAGE.

Feature of proposed workshop

As explained before the businesses will be a workshop for repair and maintenance of GARAGE

equipment. The workshop will contain stationary appliances like bench vices and welding

machines. This will give practical lessons to the workers to gain skills in GARAGE technology

the diagram below show s the layout of the workshop.

15
 gate

S.O.R

P.A T.R
S.O

M.O
A.O W.C.K

The above figure shows the business arrangement. The sponsor of the business will ensue that

there is congestion and also Rickap enough free space for work and other various duties. Also the

business will have enough space for future expansion like installation of motors and drilling

machines.

OTHER FIXED ASSETS

Other fixed assets include spaces room will be constructed for special cases in the business. Also

furniture will be installed. This will enhance efficiency in the business with the existing workers.

Also parking areas will be constructed for parking of cars to Rickap proper security services with

the customers properties. Also installation of computers which will be used to store information

concerning the business and preservation of projects.

16
4.5 PRODUCTION STRATEGY

The owner of the business will have all products available in the market. The products are

expected to be of high quality and durable. Raw materials will also be available due to buying

them in bulk by the customers. New spare part for GARAGE machine like motors will be bought

by our dealers’ shanty company limited. The sponsor the business is expected to purchase them

like switches conducts couples fuses top plugs lamp holder water heaters electric fans and all

other commodities. Transport will be catered for by the distributor but as the business grows the

sponsor of the business will purchase a lorry for the carriage of GARAGE products to reduce

cost for transport.

Monthly Production Expenses

The monthly production expenses will be determined by the owner of the business the expenses

incurred by RICKAP GARAGE are water, electricity rent and transport. The amount will be used

to cater for all this bills in order to reduce high expenses.

4.6 PRODUCTION PROCESS

RICKAP GARAGE will deal with installations rives and good for sales to the customer. The

owner of the business will install bending machine for steel conducts and purchase of welding

machine. There items are important in trade activities around the business to capture potential

customers. The business owners intend to make item from the business like steel doors grills and

steel gates. The available materials will be in the business that is soldering rod and the welding

17
machine. theirs train workers and give them skills in joint of metals arc welding will be a source

of capital to be business and other GARAGE items.

4.5 REGULATION AFFECTING OPERATIONS

Regulation affecting Rickap Garage will be trade license and registration. Also weights and

measures ,act by the government policy. If the business will not have registered and the authority

will take action because of illegal nature. Therefore the owner of the business will already pay

the licenses amount to the authority to reduce trouble from the government policy the amount to

be paid for the license will be ksh 8,000 this include the business. The amount paid to the

government keeps increasing due to the high rate of inflation in the country. Taxes will be paid to

the government through the headsof the municipal council. The regulations regarding the

business and the authority involved will affect the operation in the business.

18
CHAPTER FIVE

5.1 FINANCIAL PLAN

5.2 PRE-OPERAITONAL COST

This are all the expenses incurred in the business to the owner of the business. It will also

indicate the starting and working capital expected before it starts.

The table below shows the pre-operational cost.

ITEM AMOUNT IN KSH

Machinery and equipment 20000
Electricity and water deposit 2000
Insurance (annually) 6000
Licenses permits 5000
Business permits 3000
Postal servicers’ 2000
Advertisement 4000
Raw materials 7000
Telephone deposits 2000
TOTAL 51,000

5.3 ESTIMATING OF WORKING CAPITAL

Theirs is the total estimate of the e0078pected working capital for running the business

effectively. The table below shows the estimate per year for RICKAP GARAGE .

Items Year I Year II Year III

Cash In Hand 30000 20000 25000
Cash In Bank 15000 20000 35000
Debtors 5000 10000 5000
Stock In Progress 35000 25000 30000
Stock Of Finished 20000 25000 30000
Good
TOTAL 105000 1000000 125000

19
5.4 PROFORMA BALANCE SHEET

Assets

Fixed assets Amount (ksh)

Machinery and equipment 1,200,000
Vehicles 500,000
Furniture 300,000
Total fixed assets 2,000,000

20
 5.5.1 PROJECTED CASH FLOW MONTLHY DATA FOR THE YEAR 2017

PARTICULARS JAN FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
Cash Balance 1400000 2051000 2887000 4029000 5021000 5664000 6346000 7028000 7501000 8183000 8852000 9730000 68692000
Cash inflow
Cash sales 1200000 1300000 1300000 1200000 1200000 1300000 1300000 1200000 1300000 1400000 1200000 1200000 15200000
Data collection 400000 450000 450000 700000 350000 300000 300000 200000 300000 200000 600000 300000 4750000
Loans 300000 350000 306000 200000 400000 400000 300000 200000 3000000 2450000
Total cash inflow 1900000 2100000 2056000 19000000 1750000 2000000 2000000 1700000 1800000 1900000 1800000 1500000 22400000
Total cash 3300000 4157000 4943000 5929000 6771000 7664000 8346000 8728000 9301000 100083000 10652000 11230000 91092000
available
Cash outflow
Rent 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 600000
Salaries 148000 148000 150000 150000 148000 148000 148000 150000 150000 1520000 1520000 1520000 1796000
Raw materials 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 7512000
Transport bill 50000 50000 60000 60000 50000 50000 50000 60000 60000 60000 70000 70000 690000
telephone bill 10000 10000 12000 11000 11000 12000 12000 12000 11000 10000 11000 11000 132000
Repairs &maint 20000 20000
Stationery 5000 5000 6000 5000 6000 6000 6000 5000 6000 6000 6000 6000 67000
Loan repayment 320000 370000 420000 210000 420000 420000 320000 210000 320000 2890000
Consultancy 15000 15000 150000
Miscellaneous 5000 5000 6000 6000 5000 6000 6000 5000 6000 6000 6000 7000 70000
Total cash 1249000 1264000 1344500 908000 1107000 1381000 1318000 1227000 1118000 1231000 9229000 922000 13492000
outflow
Net cash out flow 2051000 2887000 4029000 5021000 5664000 6346000 7028000 7501000 8183000 8852000 9730000 10308000 77600000

21
 5.5.2 PROJECTED CASH FLOW MONTLHY DATA FOR THE YEAR 2018

PARTICULARS JAN FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
Cash Balance 10308000 11088000 11889000 12867000 1356500 1496200 1595800 1694700 1789800 188690000 10068000 21362000 22453000
0 0
Cash inflow
Cash sales 1400000 1500000 1600000 1600000 1600000 1700000 1600000 1600000 1600000 1700000 1700000 1700000 1930000
Data collection 400000 300000 400000 500000 300000 400000 350000 400000 500000 600000 400000 300000 4950000
Loans 200000 300000 400000 300000 400000 200000 300000 400000 2500000
Total cash inflow 2000000 2100000 2400000 21000000 2000000 2300000 2400000 2150000 2300000 2200000 2300000 2500000 26750000
0
Total cash 12308000 1318800 1428900 14967000 1596500 1726200 1858000 1909700 2019800 21069000 22368000 23862000 21293100
available 0 0 0 0 0 0
Cash outflow
Rent 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 600000
Salaries 160000 160000 160000 160000 160000 160000 160000 170000 170000 170000 170000 170000 1970000
Raw materials 650000 650000 650000 650000 650000 650000 650000 650000 650000 650000 650000 650000 7800000
Transport bill 100000 100000 120000 120000 120000 120000 120000 100000 110000 100000 100000 100000 1320000
telephone bill 10000 9000 10000 12000 12000 10000 9000 8500 7000 8000 6000 7000 107500
Repairs &maint 30000 30000
Stationery 5000 5000 6000 5000 6000 6000 6000 5000 6000 6000 6000 6000 67500
Loan repayment 320000 370000 420000 210000 420000 420000 320000 210000 320000 2890000
Consultancy 150000
Miscellaneous 5000 5000 6000 6000 5000 6000 6000 5000 6000 6000 6000 7000 70000
Total cash 1220000 1299000 1422000 1002000 1003000 1324000 1411000 1199000 1329000 1001000 1006000 1409000 14650000
outflow
Net cash out flow 11088000 11889000 1286700 13965700 1496200 1595800 1694700 1789800 1886900 20068000 21362000 22453000 19832600
0 0 0 0 0

22
 5..3 PROJECTED CASH FLOW MONTHLY DATA FOR THE YEAR 2019

PARTICULARS JAN FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
Cash Balance 22453000 2357800 2485600 26033000 2727050 2826400 29411000 3062700 3174300 32858000 84064000 35258000 34396000
0 0 0 0 0 0
Cash inflow
Cash sales 1700000 1700000 1800000 1800000 1800000 1800000 1800000 1800000 1900000 1900000 2000000 2000000 22000000
Data collection 300000 200000 300000 300000 400000 350000 400000 500000 600000 400000 300000 4950000
Loans 200000 300000 400000 300000 300000 400000 300000 2500000
Total cash inflow 2300000 2300000 2450000 26000000 2400000 2650000 2300000 2200000 2200000 2600000 2700000 2650000 29550000
0
Total cash 24953000 2587800 2728600 28633000 2967050 3091450 31711000 3227000 3394300 35458000 36764000 37908000 375946000
available 0 0 0 0 0
Cash outflow
Rent 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 600000
Salaries 170000 170000 170000 170000 180000 180000 180000 180000 180000 180000 180000 180000 2120000
Raw materials 650000 650000 650000 650000 650000 650000 650000 650000 650000 650000 650000 650000 7800000
Transport bill 150000 150000 150000 150000 160000 160000 160000 160000 160000 150000 160000 150000 1860000
telephone bill 10000 11000 11000 10000 12000 10000 10000 10000 12000 11000 12000 11000 130000
Repairs &maint 15000 15000
Stationery 5000 5000 6000 6500 7000 6000 6000 7000 7000 6500 7000 6500 78000
Loan repayment 320000 210000 320000 320000 420000 320000 420000 2680000
Consultancy 150000
Miscellaneous 5000 5000 6000 6000 5000 6000 6000 5000 6000 6000 6000 7000 77000
Total cash 1375000 1042000 1253000 1362500 1406000 1503500 1084000 1084000 1085000 1394000 1506000 1395000 15490000
outflow
Net cash out flow 23578000 2483600 2600330 27270500 2826400 29411000 3062700 3174300 3285880 34064000 35258000 36573000 360456000
0 0 0 0 0 0

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 Proforma income statement –quarterly

Descriptions Jan-Mar April-June June-Aug Aug-Oct Oct-Dec Total

revenue 1150000 1200000 15000000 145000 1250000 6550000
sales 1000 18000 9000 15000 18000 71000
debtors 1161000 1218000 1509000 1465000 1268000 6621000
Total revenue 60000 45000 50000 70500 50500 276000
Cost of goods sold 60000 1173000 1459000 1394500 1217500 634000
Gross profit 1,101000 1173000 1459000 1394500 1217500 634000
expenses
Transport 12000 9000 8000 11000 14000 18900
Electric bill 3600 3800 3750 3850 3900 2300
Telephone bill 600 300 450 550 400 24000
Salaries 45000 45000 60000 55000 35000 407000
Purchases 41000 62000 78000 98000 128000 501200
Total expenses 1022000 115100 150200 168400 181300 5627800
N.P.B 998800 1057900 1308800 1226100 1036200 140695
TAX 2.5% 24970 264475 32720 3062550 25905 140695
profit After tax 973830 10314525 1276080 11954475 1010295 5487105

Profoma Income Statement

Description Yearly 2017

Revenue 6550000
Sales 74000
Debtors 6621000
Total revenue 276000
Cost of good sold 12690000
Gross profit 12690000
Expenses
Transport 37800
Electric bill 4600
Telephone bill 24000
Salaries 407000
Purchases 522400
Net profit before tax
Tax 2.5 % 304
Profit after tax 11863410

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5.5 PROFORMA BALANCE SHEET

Assets

Fixed assets Amount (ksh)

Machinery and equipment 1,200,000
Vehicles 500,000
Furniture 300,000
Total fixed assets 2,000,000

PROFORMA BALANCE SHEET

Fixed assets Amount ksh

vehicles 500000
furniture 300000
Total fixed assets 8000000
Current assets
debtors 158000
Stock 1200,000
Cash in bank 13000000
Total current assets 2558000
Total sum of 3358000
liabilities
Initial capital 400000
Wages and salary 185000
Tax payable 10756.25
Insurance e
Total sum of liabilities 59570625

25
 Total sum of liabilities
Owners equity = total assets-total liabilities
Breakeven point

Fixed expenses Cost ksh

licence 8,000
salaries 185000
rent 20,000
total 213,000
Variable expenses
electricity 15,150
Water bill
telephone 1,900
total 17,050

totalvariableexpenses
×100
totalsales

17,050
×100 =4.2625
4000,000

Liabilities

Initial cost 3,500,000

Long term liability

Wages and salaries

1,400,000

Tax payable 70,000

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Insurance 20,000

Total liability 4,990,00

Total sum of liabilities

Total equity = total assets –total liability =810,000

BREAK EVEN POINT

Break event point cost

Fixed expenses
licenses 50,000
salaries 1,250,000
rent 25,000
Other service
total 1,325,000

Variable expenses

electricity 4,500
Water bill 31000
Telephone bill 2,500
Repair and maintenance 3,500
Advertising and promotion 4,000
total 17,500

Profitability ratios

grossprofit
i. Gross profit = × 100
sales
4997 ,500
= 5 , 150 , 000 ×100
= 97.038%
netprofitaftertax
ii. Return on equity = × 100
netequity

27
 4 , 318 , 713. 75
= × 100
200 , 000
= 21.593%
netprofitaftertax
Return of investment = totalinvestment
4 , 318 , 713. 75
568 , 050

= 7.6027

Desired financing

i. Purchase of machinery and equipment ksh 317,000

ii. Wages ksh 185,000
iii. Installation ksh 150,000
Total ksh 652,000

Proposed capitalization
i. Personal saving ksh 2,250,000
ii. Bank loan ksh 3,200,000
iii. Donors ksh 1200,000
Total ksh 6,650,000

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APPENDIX 1

BUSINESS LOCATION MAP

Shops Shopping centre

Rickap garage

Bus stage

Total Petrol station

KERICHO – TENGECHA ROAD

29
APPENDIX 11

Business logo

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