2011-2012

GUIDELINES FOR PARTICIPATION

MINISTRY OF INDUSTRIALIZATION

J I T I H A D A : K e n y a s N a t i o n a l

Business Plan Competition

JITIHADA BUSINESS PLAN COMPETITION: GUIDELINES FOR PARTICIPATION

BACKGROUND INFORMATION ON JITIHADA BPC

Introduction JITIHADA is the brand name for the Kenya National Business Plan Competition, which was launched in 2009. It is a subcomponent of the Micro, Small and Medium Enterprises (MSME) competitiveness project, a World Bank funded initiative under the Ministry of Industrialization. The primary objective of the project is to increase productivity and employment in the MSME sector in Kenya. The Second Phase of Jitihada (JITITADA II) is running from July 2011 to June 2012. JITIHADA II lays emphasis on value addition in the MSME.

Value addition Value addition is improvement and enrichment of a product or service before the product is offered to customers. JITIHADA II is placing emphasis on entrepreneurs who take raw materials and turn them into a better and more customized product or service through the processes of manufacturing.

For example a caterer will use flour and other food products to transform them into a cake, buns, etc. A fish farmer will harvest different types of fish to extract oil from them or use fish skin to make thread. A carpenter on the other hand will transform timber into wood products. All these are aspects of manufacturing.

JITIHADA II defines manufacturing as the physical or chemical transformation of materials or components into new products. The work can be performed by power-driven machines or by hand. It can be done in a factory or even at home. The products can be sold at wholesale or retail.

JITIHADA II also recognizes manufacturing as assembly of component parts of manufactured products, activities of units primarily engaged in maintenance and repair of industrial, commercial and similar machinery and equipment, and manufacture of specialized components and parts of, and accessories by and attachments to, machinery and equipment, as well as recycling of waste materials.

CATEGORIES OF MANUFACTURING The following are some examples of manufacturing processes that are recognized by JITIHADA II. The list is not exhaustive, however.

Manufacturing food products and beverages Production, processing and preservation of meat, fish, fruit, vegetables, oils and fats Production, processing and preserving of meat and meat products Processing and preserving of fish and fish products Processing and preserving of fruit and vegetables Manufacture of vegetable and animal oils and fats

Manufacture of dairy products Manufacture of daily products; which includes milk processing, grading, filtering, testing or chilling fresh milk, production of ghee, cheese or curd, ice cream, casein or lactose.

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Business Plan Competition

Manufacture of grain mill products, starches and starch products, and prepared animal feeds Manufacture of grain mill products; grain, rice, vegetable milling and manufacture of breakfast foods, manufacture of prepared blended flour and dough Manufacture of starches and starch products; starches from maize, rice, potatoes, manioc, other vegetable material Manufacture of prepared animal feeds; manufacture of prepared pet food for dogs, cats, fish and the manufacture of prepared farm animals feeds. Manufacture of other food products Manufacture of bakery products Manufacture of sugar Manufacture of cocoa, chocolate and sugar confectionery Manufacture of macaroni, noodles, couscous and similar farinaceous products Manufacture of other food products; coffee roasting, nut roasting, tea and mate extracts, artificial honey and caramel, soups, spices, sauces, vinegar, pizza, food for infants Manufacture of beverages Distilling, rectifying and blending, of spirits; ethyl alcohol production from fermented materials Manufacture of wines Manufacture of malt liquors and malt Manufacture of soft drinks; production of mineral waters Manufacture of tobacco products Manufacture of cigarettes or cigars, pipe tobacco, chewing tobacco or snuff, manufacture of homogenized or reconstituted tobacco. Manufacture of textiles Spinning, weaving and finishing of textiles Preparation and spinning of textile fibre; weaving of textiles; reeling and washing of silk, degreasing, carbonizing or fleece dyeing of wool. Finishing of textiles; bleaching, dyeing, calendaring, napping, shrinking or printing. Manufacture of other textiles Manufacture of other textiles, except apparel Manufacture of carpets and rugs Manufacture of cordage, rope, twine and netting Manufacture of other textiles narrow woven fabrics, labels, badges, ornamental trimmings, braids, tassels, pompons, wadding of textiles, textiles winks, fabrics coat with gum, tracing cloth. Manufacture of knitted or crocheted fabrics and articles Products are knitted or crocheted fabrics by hand or more complicated machines.

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Business Plan Competition

Manufacture of wearing apparel; dressing and dyeing of fur Manufacture of wearing apparel, except fur apparel Dressing and dyeing of fur; manufacture of articles of fur

Tanning and dressing of leather; manufacture of luggage, handbags, saddler, harness and footwear Tanning and dressing of leather Manufacture of luggage, handbags, saddler, harness and footwear Manufacture of footwear

Manufacture of Wood and of products of wood, and cork except furniture; manufacture of articles of straw and plaiting materials, Straw and Plaiting Materials Sawmilling and planning of wood Manufacture of veneer sheets, plywood, lamin board, particle board and other panels and boards Manufacture of builders carpentry and joinery, wooden containers Manufacture of wooden containers Manufacture of other products of wood; manufacture of articles of cork, straw and plaiting materials

Manufacture of paper and paper products Manufacture of pulp, paper and paperboard Manufacture of pulp, paper and paperboard Manufacture of corrugated paper and paperboard and of containers of paper and paperboard

Manufactured of other articles of paper and paperboard; carbon-paper, envelopes, letter cards, filter blocks, slabs, paper boardsPublishing, printing and reproduction of recorded media Publishing Publishing of books, brochures, musical books and other publications, Publishing of newspapers, journals and periodicals Publishing of recorded media Other publishing; publishing of photos

Printing and service activities related to printing Printing; newspapers, magazines, periodicals, journals Service activities related to printing; bookbinding and manufacture of loose leaf binders.

Reproduction of recorded media; Reproduction of records, audio, video, computer tapes from master copies, reproduction of floppy, hard or compact disks oven products

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Business Plan Competition

Manufacture of coke, refined petroleum products & nuclear fuel Manufacture of coke oven products Manufactured of refined petroleum products Processing of nuclear fuel Manufacture of chemicals and chemical products Manufacture of refined petroleum products and processing of nuclear fuel Manufacture of basic chemical, plastics in primary forms and synthetic rubber Manufacture of pesticides and other agro-chemical products, fertilizers, nitrogen compounds Manufacture of paints, varnishes and similar coatings, printing ink and mastics, pharmaceuticals, medicinal chemicals and botanical products Manufacture of soap and detergents, cleaning and polishing preparations, perfumes and toilet preparations Manufacture of man-made fibres, rubber tyres and tubes; retreading and rebuilding of rubber tyres, and other rubber products Manufacture of other non-metallic mineral products Manufacture of glass and glass products, non-structural non-refractory ceramic ware Manufacture of cement, lime and plaster, Cutting, shaping and finishing of stone Manufacture of metal products and metal working service activities Manufacture of basic metals, basic iron and steel, casting of metals, basic precious and non-ferrous metals, structural metal products, tanks, reservoirs and steam generators Manufacture metal containers, steam generators, forging, pressing, stamping and roll-forming of metal; powder metallurgy Manufacture of fabricated metal products, cutlery, hand tools and general hardware Manufacture of machinery and equipment Manufacture of pumps, compressors, taps and valves, bearings, gears, and driving elements Manufacture of ovens, furnaces and furnace burners, lifting and handling equipment Manufacture of agricultural and forestry machinery, machinery for mining, quarrying and construction, machinery for food, beverage and tobacco processing, and machinery for textile, Manufacture of office, accounting and computing machinery, electrical machinery and apparatus, accumulators, primary cells and primary batteries, and other electrical equipment Manufacture of radio, television and communication equipment and apparatus, television and radio transmitters and apparatus for line telephony and line telegraphy

Manufacture of medical, precision and optical instruments, watches and clocks Manufacture of medical appliances, instruments and appliances for measuring, checking, testing, navigating and other purposes, Manufacture of motor vehicles, trailers and semi-trailers, bodies (coachwork) for motor vehicles, and motorcycles. Manufacture of musical instruments, games and toys, jewellery and related articles
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Business Plan Competition

Recycling Recycling of metal waste and scrap, non-metal waste and scrap.

THE JITIHADA MISSION As such, the mission of Jitihada is to run and manage a Business Plan Competition (BPC) whose effort is to: Promote and support entrepreneurship and the development and growth of sustainable and globally competitive MSMEs, thus creating wealth and increasing employment, incomes and economic opportunity for the people of Kenya. THE JITIHADA PARTNERSHIP The contract for JITIHADA I was signed between the Kenya Institute of Management led consortium and the Ministry of Industrialization on 24th February 2009. Other members of the consortium include: TechnoServe/Kenya (TNS/K) and The Jomo Kenyatta University of Agriculture and Technology/Institute for Human Resource Development (IHRD/ JKUAT) JITIHADAI took place between May 2009 and March 2010. We appreciate your participation and support as Board members in Jitihada Phase One. The second phase of Jitihada was signed in May 31st 2011 and it will focus on the manufacturing sector and will be implemented within 12 months till June 2012. The program will be implemented in all the eight provinces, thereby giving equal opportunities to the majority of Kenyans to participate. The competition is designed to incorporate3 Stages, namely: Competition Stage I This stage involves the launching of the competition on 24 August 2011. Participants will be called upon to apply by filling in an application form and pay a fee of Ksh. 1000. After applications have been received, initial screening and evaluation of business ideas will be conducted. The eligible forty percent of the competition entrants will be identified to proceed to the next stage. Competition Stage II After successful completion of stage one, successful entrants will receive a variety of business development services through training and seminars. They will be trained in entrepreneurship and industry with focus on manufacturing and value addition, and will receive individual mentoring and support to build their business plans and develop winning business plans that will compete at the national level. Judging at this level will be done by a panel from the private sector and written feedback on the business plans will be provided to the participants. The best three business plans at the national level will be awarded prizes. The top entrepreneur will receive a prize of Kshs 1 million, while the second and third best winners will receive Kshs. 750,000 and Kshs. 500,000, respectively. Special awards of Kshs. 250,000 each will go to the best woman entrepreneur and social entrepreneur. Winners will be given award prizes in the National price giving Gala. To encourage interaction and enhance relations, alumni associations will be registered and feedback encouraged from the participants. A JITIHADA II directory bearing contacts of all stakeholders will be compiled. Thereafter, a final report will be prepared and aftercare services shall be ongoing into the next stage. Post-competition In this final stage, feedback on Jitihada process from all stakeholders, as well as review design, process, training curriculum and materials shall be captured. Further targeted aftercare services will be implemented and follow-up with participants to assess impact (business income, growth in assets, employment creation, loan application and repayment) will be conducted. Aftercare services will involve providing linkage with financial institutions, incubation and linkage to business development services

J I T I H A D A : K e n y a s N a t i o n a l

Business Plan Competition

1. ELIGIBILITY CRITERIA The general criteria for participation in the competition include the following: 1. Any resident over the age of 18 that seeks to invest in Kenya by starting a new business venture, or expanding or diversifying an already existing one, within the manufacturing sector and the value adding chain. 2. Existing business which have less than 99 employees at the time of application 3. Contestants may either be entrepreneur, sole proprietor, association, limited company or in partnership. 4. No employees of the JITIHADA consortium may participate. 5. The content of all submissions must be the original work of the individual submitting the idea

GUIDELINES FOR JITIHADA II, NATIONAL BUSINESS PLAN COMPETITION Rules for Participation 1. All participants are expected to pay a fee of Ksh. 1000 with the Application form 2. Only one submission of a new business plan per application form is permitted. The plans should not exceed 50 pages. 3. All submissions must focus on the manufacturing sector and the value adding chain, whose details are outlined above. 4. Ideas must represent the original work of the contestants. Participants are required to fill in the confidentiality agreement and the declaration in the business plan and the application form respectively. No software generated business plan will be accepted. 5. If the business venture has received funding from any outside sources, the contestants should indicate it in their business plans. The participants must also indicate if they have submitted the same business plan to financial institutions and donors 6. a) Submitted ideas are protected in the spirit of non-disclosure, where all entry materials will be treated as company confidential. The only persons with access to the entry materials will be judges and select members of the organizing committee. Materials will not be distributed to any other party, unless requested by the participant. No other special provisions are made to protect intellectual property. The judges, trainers, mentors and the organizers will take utmost care in handling entries with confidence and integrity. Your business idea and business plan will be treated in the strictest confidence. All organizers, sponsors/judges and mentors are highly respected professionals who regularly deal with confidential information in the course of their work. However, the protection of intellectual property is the ultimate responsibility of each participant

b)

7. All deadlines and guidelines for submissions must be adhered to. NO late submissions will be accepted. Any submissions that are greater in length than specified will not be considered. 8. Submitted business plans shall under no condition change after submission.

9. The consortium reserves the right to disqualify, in its sole and absolute discretion, any entrant/ business plan from the competition at any time (before or after a judging round or the award of any prize) for any reason. Reasons for disqualification may include, but are not limited to, plagiarism, misappropriation or infringement of the intellectual property of others, and any failure to comply with these rules and regulations. Disqualified entrants shall forfeit any and all prizes awarded to them. 10. Before the winner may receive any monetary prize, he/she must agree to the terms and conditions in the Winners Agreement. However winners are under no obligation to accept financing from any institution. 11. Prize money is granted only to the winning business entity. 12. English shall be language used for all aspects of the Competition, including for the submission of Business Ideas and Business Plan and all presentations at the Finals.

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Business Plan Competition

JUDGING PROCESS Judging of entries will be performed by a panel of independent judges, consisting of professionals and banking institutions involved in entrepreneurship. Judges will include successful entrepreneurs, venture capitalists, investors, or professional service providers working with the venture community; Any entry is subject to minimum criteria in terms of market potential, viability, and other factors, as determined by the judging panels experience; The judges will evaluate the plans not as documents, but as visions for potential new ventures and, as such, focus on the idea, its potential for economic success and the likelihood of achieving that success based upon the teams plan and experience; The competition will evaluate both the innovativeness of the idea and the quality of the plan being evaluated; Judging will be fair, objective and transparent. All decisions related to evaluations shall be final; the scoring shall however be available for review by an independent panel. There are NO opportunities for participants to appeal.

EVALUATION PROCESS AND CRITERIA Stage I Initial verification of submitted documents to assess: Presentation of the company Products and services Sales and marketing strategy Operations strategy Business model Financial projections Initial investments sales forecasts Willingness to invest in the project Environmental and social impact

Stage II Evaluations by two independent judges to asses as above as well as: Competitive advantages Sensitivity analysis Costs and expenses Long- term objectives Costs and countermeasures Job creation and profit potential after 1 year of operation

Stage III Oral presentation to a panel of judges to select the winners based on the following criteria: Presentation of the company Management team qualifications

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Business Plan Competition

 Competitive advantages Business model Financial projections Sensitivity analysis Initial investment Institutional and individual willingness to invest Environmental and social impact

JITIHADA AWARDS To be awarded only at the National Level Award First Prize Second Prize Third Prize Value (Kshs.) 1 million 750,000 500,000

Special Awards* Best Woman Entrepreneur Social Entrepreneur 250,000 250,000

*Special awards are expected to be contributed by private sector sponsors.

GUIDELINE FOR WRITING YOUR BUSINESS PLAN Brief Description of a Business Plan A Business plan is a written document that describes the goals and objectives of a business and lists the steps that will be taken to achieve those goals and objectives. Structure of a Business Plan 1. Cover Page Name Of Business Address Name Of Presenter Organization Presented To Date Of Presentation

2. 3.

Table Of Contents Executive Summary Gives a brief summary (overview) of the entire document and highlights the main issues/points.

4.

Statement Of Purpose Outline the purpose of the business plan

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Business Plan Competition

5.

Business Description A brief description of the business Main Features Business Location and Address: what is the business postal address Business Ownership: indicate the nature of your business whether it is a Sole Proprietorship, Partnership, Registered Company Products/Services: indicate the main products and/ or services the organization offers Industry: what sub sector/ industry will your business operate under. Justification: What is the main aim for the choice of the business opportunity? Goal: indicate both the short term and long term goals of your business venture. Entry and Growth Strategy of the proposed venture/ business opportunity.

6.

Marketing Plan How do you plan to market your products/services? Main Features Potential Customers Competition: look at Who will be your competitors? What are their strengths? What are their weaknesses? How do you intend to capitalize on their weaknesses? Market share: what is the expected total market share Pricing strategy: how will you price your products/services Advertising and promotion strategy: how will you attract your customers. Indicate: Initial strategy Long term strategy/ future plans Distribution strategy Sales tactics: Over the counter, Telephone selling, Through sales people and Multi-level marketing Any other tactic

7.

Organization And Management Organizational Structure Draw The Organization Chart Of Your Proposed Business Management Team Indicate The Composition Of Your Management Team, Its Qualifications/ Post, Duties And Responsibilities. Other Personnel What Other Personnel Will You Require? Recruitment & Training How Will Your Recruit And Train Your Staff? Remuneration/Incentives How Will You Remunerate Them? Salary/Wages
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Business Plan Competition

 8.

Fringe Benefits

Support Services What Support Services Will You Require? Licenses/Permits What Licenses/Permit Will You Require? Who Will Provide The Licenses/Permits And At What Cost?

Operational/Production Plan How Will You Operate Your Business? Main Features Production Facilities And Capacity Utilization What Machines, Equipment And Tools Will Be Required? Write A Brief Description On The Cost, Capacity And Supplier Of The Required Machines And Equipment. Production Strategy Material Requirement (Month/Year) Material Cost Source Production Design And Development How Do You Intend To Design And Develop Your Product? What Will It Cost You To Design And Develop Your Products? What Is Your Estimated Cost Of Product/Service? Direct Material Cost + Direct Labour Cost + Overheads Relevant Regulation What Patent And Trademarks Will You Require? What Will Be The Cost Of Obtaining The Patent Trademarks? What Other Legal Rights Will You Seek?

9.

Risk Reduction Strategies: How Will You Analyse And Reduce Business Risks? Main Features Future Business Risks Counteracts Mechanisms

10. Exit And Harvest Strategies: Identify Exit Strategies Which Include: Main Features Type Of Exit/ Harvest Strategy Initial Public Offering Private Sale Management Buy Out Advantages Of Using Strategy

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Business Plan Competition

11. Financial plan How will you obtain and use business finance? Main features Pre-operational cost What will be your pre-operational costs? What will be your proposed capitalization? Your own contribution Funds from borrowing sources Total investments What will be your working capital requirement? Prepare your pro-forma income statement for the first three years for year ending 2009-2011. Show the annual income you expect from your business. List all the expenses you expect to incur. Show your net profit or loss for the year. Prepare your pro-forma balance sheet at start up and at the end of the first two years of operation. Prepare Your Projected Cash Flow Statement On A Monthly Basis For The First Year Of Operation And For The Next Two On A Quarterly Basis. How Do You Expect To Finance Your Operations?

Working capital requirements Pro-forma income statement

Pro-forma balance sheet Cash Flow Projection

Desired Finance Capitalization What Is Your Initial Capitalization For Existing Business What Is Your Proposed Capitalization Break-Even Level Units You Can Sell In A Given Period Without Making Profit Or Loss. At This Point You Will Only Be Able To Meet Your Variable And Fixed Costs Only. How Do You Measure Your Profitability?

Profitability Ratios

12. Appendix Any Useful And Relevant Information Such As: Maps Data Copies Of Licenses (Copies Of Company Registration/ Incorporation Certificates) Copies Of Collateral Official Correspondence Curriculum Vitae For Owners/ Managers
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Business Plan Competition