VELUMA GOLDEN HART HOTEL

P.O. BOX 170

NAKURU

MOBILE: 0717-643434

BUSINESS PLAN

PRESENTED BY: NJUGUNA ANGELA NYAGUTHII

INDEX:

VENUE: THE NYERI NATIONAL POLYTECHNIC

DEPARTMENET: HOSPITALITY

PRESENTED TO: THE KENYA NATIONAL EXAMINATIONS COUNCIL IN N PARTIAL

FULFILLMENT OF THE REQUIREMENT TO AWARD OF CERTIFICATE IN CATERING
AND ACCOMODATION MANAGEMENT.

SUPERVISED BY: DAN GITHINJI

EXAM SERIES: JUNE/JULY 2019

TABLE OF CONTENT
COVER PAGE

TABLE OF CONTENT

TERMS OF REFERENCE

DECLARATION

EXECUTIVE SUMMARY

DECLARATION
I dedicate the project to my beloved parents, my sisters and brothers who supported me
financially and encouraged me all through. May the Almighty God bless them abundantly.

ACKNOWLEDGEMENT
I first acknowledge the Almighty God for giving me good health to be able to do this. I also
acknowledge Mr. and Mrs. Njuguna who assisted me financially and encouraged me to keep on
and finally to Mr. Ngure who impacted me with the skills and who has worked tirelessly for the
success of this project.

DECLARATION

The work that I have submitted to the Kenya National Examination Council is my original work.
All the reports are researches from various sources.
Signature :

Date : 11/02/2019

Index :

The project is being presented to the Kenya Examinations Council with the recommendation of
the supervisor.

Signature :

Date :

CHAPTER ONE

1.BUSINESS DESCRIPTION

a) Business name

b) Business location and address

c) Form of ownership

d) Type of Business

e) Services

f) Justification of opportunity

g) Industry

h) Goals of business

i) Entry and growth strategy

CHAPTER TWO

2. MARKETING PLAN

a) Customers

b) Market share

c) Competition

d) Methods of promotion and advertising.

e) Pricing strategy

f) Sales tactics

g) Distribution strategy

CHAPTER THREE

3. ORGANISATION AND MANAGEMENT PLAN.

a) Business managers and qualifications

b) Personnel, number and duties

c) Recruitment, training and promotions

d) Remuneration and incentives

e) Licenses, permits and by-laws

f) Support services

CHAPTER FOUR

4. OPERATIONAL PLAN

a) Product design and development

b) Production facilities and capacity

c) Production strategy

d) Production process

e) Regulations affecting operations.

CHAPTER FIVE

5. FINANCIAL PLAN.

a) Pre-operational costs

b) Estimation of working capital

c) Cash flow projections.

d) Proforma income-statement

f) Calculation of break even point

g) Expected profitability ratios

h) Desired financing

i) Proposed capitalization
CHAPTER ONE

1: BUSINESS DESCRIPTION

a) BUSINESS NAME

The name of the proposed business will be Veluma Golden Hast hotel. The name was chosen
after combining the letters of the members of the family. The name is significant because it
shows the importance of family to those people who will be visiting the hotel with their families.
This name will lead to many people coming together with their families to have fun and spend
quality time together. The business will be operated as a partnership type of business. The
partners are three ladies aged thirty, thirty one and twenty.

b) BUSINESS LOCATION AND ADDRESS.

The hotel will be located in Nakuru at the highway road to Kisumu and its just near the
electricity company. This was chosen because of its conducive environment and people can just
enter there and have a drink or food as the hotel is clearly visible. The name is written in bold
letters VELUMA GOLDEN HART HOTEL that is easy to read even at nights. Also some few
metres from the hotel is a police station thus enhancing security and people should not fear.

The hotel address will be:

VELUMA GOLDEN HART HOTEL

P.O. BOX 170 NAKURU

MOBILE: 0717-444643.

c) FORM OF OWNERSHIP

The proposed business will operate as a partnership form of business. Each owner will contribute
200,000 Kenyan shillings. 40% of what the proposed business will use will be financed by
unpaid sources. The other partners will also be involved in the management of the business.

d) TYPE OF BUSINESS

The proposed business will major in provision of food and drinks to customers, accommodation
and recreational services to the customers. The business will also engage in community projects
like building of a rehabilitation as well as offer scholarship to KCPE candidates from poor
families who score good marks. The proposed business is a new business. The proposed business
will instill virtues like hard work among the staff and the importance of families to our
customers.

e) SERVICES.

The Veluma Golden Hart hotel will be providing foods of every category like traditional food,
snacks, junks and others. They will also provide soft drinks and beverages and offer take away of
all food and drinks by packaging efficiently. The alcoholic beverages will be sold to people who
have attained the age of 18 years. The hotel will also provide accommodation facilities to those
who may want to sleep there or have business around that place. The accommodations will be
well organized and clean. Enough security will be provided to guard guests’ belongings. These
will be attendants to help the guests in case of anything.

The hotel will also provide swimming services. It will have two kinds of swimming: form
children and for adults. The water is clean and also the swimming pool is cleaned everyday so
that people do not get infections. The hotel will also have a dispensary, equipped with drugs and
learned people incase somebody gets ill, but it will also have an emergency vehicle to rush sick
people to hospital. The customers who will visit the hotel enjoy comfort, and it will also be good
for their health to relax. The hotel will ensure a high level of privacy on the customers who visit
the hotel.

f) JUSTIFICATION OF OPPORTUNITY.

By use of available skills, experience and also the technological change example use of
computers it will facilitate the hotel to easily increase its demands as it continuous from a start-
up. The hotel is also having chances of succeeding because all the competitors are not located in
accessible places and they offer poor food stuffs quality and unaffordable price which the
customers cannot be able to afford.

The owner justified this opportunity after she found that there was no hotel on the highway from
Nairobi to Kisumu and located it to Nakuru as the center. She found that by starting this hotel the
customers need will be satisfied. The business will also be a beneficial to the residents of this
area because it will provide employment opportunities example the hotel may need people who
are good in cooking, serving and also cleaning the hotel and improve its standards. The hotel has
good, enough and efficient infrastructure to make work easier.

g) INDUSTRY.

The business is under service industry. It will be a partnership form of business where it will be
operated by three partners. The business will employ some more people, so that they can assist in
operation of duties. The size of the business is a bit small as it is a startup business but it will
expand ranging with the profits the business make. The capital required for starting of the firms
is not a large amount and the business makes profit depending on the customers who visit the
hotel. The business will target on providing services in small and large quantities depending on
the needs of the customers.

The characteristics of this industry are:-

 Capital needed is minimal

 Limited number of employees.

In Nakuru there are three similar hotels which are located in different places that is Kings web,
Safari mall and Teshan hotel which are not accessible. The hotel will promote the community
development by offering services which are beneficial to them and of better quality.

h) GOALS OF BUSINESS

The general goals of the business is to become successful, profitable and expand.

The business short-term goals are as follows:-

i) To create employment opportunities for both learned people and illiterate.

ii) To make more profit
iii) To succeed in the business
iv) To provide extra services to customers
v) Providing products for affordable price to customers.

The long-term goals are:-

a) Open other branches around the country and outside.

b) Expand the hotel. The vision statement of the business is to provide the best quality of
services in the region and county. The mission statement of the business is to be the most
leading hotel in the region and beyond.

i)ENTRY AND GROWTH STRATEGY

The hotel intends to penetrate and gain the acceptance in the market. This will be done by
offering swimming opportunities for the first time as it starts and also offer cheap
accommodation prices for the first five people. The hotel intends to expand and provide all
kinds of foods and also employ educated employees who knows languages of different
people and knows foreign languages so as to satisfy every customers need.
 CHAPTER TWO

2. MARKETING PLAN

a) CUSTOMERS.

Potential customers of the proposed business will range from individual customers who want
to have food and drinks to a group of people wanting to have fun and bond. The customers
will be looking from comfort, security, privacy, convenience and also the need to satisfy their
hunger and thirst. The proposed business will operate 24 hours thus attract customers even at
night.

b)MARKET SHARE

Velima Golden Hart hotel being in hospitality industry will fulfill all the customers need. Due to
high temperatures during sunny days the hotel will provide cold drinks to guests and during the
cold season it will provide hot drinks. The service offered by the staff will be of high quality and
high standards of hygiene will also be observed.

c) COMPETITION.
The proposed business potential competitors are safari hotel,Teisha hotel and *****hotel . Safari
hotel is located 1900 meters away from the business, teisha hotel is located 2200metres from the
business and ******hotel is located 2000metres away from the business. Safari hotel deals
mainly with beverages, thus it does not have too many customers. All their firms are small and
neither offers accommodation services, thus customers interested in accommodation services
visits our hotel. Teisha hotel and **********hotel do not have recreational services which is
advantageous to our proposed business.

d) METHODS OF PROMOTION AND ADVERTISEMENT

The first five customers who visit our hotel will not be charged accommodation charges. The
business will offer customers free appetizers as they wait for the main meal to be served. The
customers who frequent the hotel more annually will be sponsored to a holiday by our business.
The business will also be advertised on televisions and radio stations so as the information can
reach to a wide range of people. The staffs will be persuaded to wear hotel t-shirts while
working. The business also will be advertised by a billboard set up along Nairobi-Kisumu
highway for those travelers and others people near the area to see. The billboard will contain the
location of where the business is located.

e) PRICING STRATEGY

Selling price will be aimed at 100% so as to meet customers purchasing price. The pricing
strategy will be done efficiently to meet price of goods offered. The selling price of food and
beverages will be fixed. The selling price of the food and beverages will be determined by the
amount of profit the proposed business should earn, the selling prices of the competitors, the
original among the goods costed and the government price control.

f) SALES TACTICS

Selling will be done by qualified employees so that they persuade customers on purchasing of
food and beverages. The food and beverages will be sold direct to customers on visit to the hotel.

g) DISTRIBUTION STRATEGY

The staff will serve food to customers according to their needs and do so quickly in order to
avoid delays and inconveniences to customers.
CHAPTER THREE

ORGANISATION AND MANAGEMENT PLAN.

a) BUSINESS MANAGERS AND QUALIFICTAIONS.

The proposed business will be managed by the three partners. The decisions affecting the
business will be decided by the three of them. The partners will be leading the top management
and will be controlling other employees some of them being accountants, cashiers, waiters, chef,
stewards and the watchman. The partners acquired their skills from Amboseli Institute having
graduated with diploma’s in catering and accommodation management thus have the skills to
handle the business.

Qualifications.

i)Holders of Diploma in catering and accommodation management

ii)Good English and Kiswahili

iii) Good work attitude and etiquette.

iv) Innovative and creative

v)Is a Kenyan citizen

Duties and responsibilities

- Provide all the requirements of the hotel.

- Paying other workers in the hotel
- Supervising employees
- Allocating duties to employees.

b) Personnel Number and duties.

Personnel No Qualifications Duties Salary

Cashier 1 Computer literate KCSE C+ Collecting cash compiling (KSHS)
and above two years financial records 20,000
experience holders of CPA II preparing of financial
statement
Accountan 2 Holder of CPAII Age between Receiving money from 15,000
t 25 – 35years customers. Prepare
One year experience payment vouchers of
Computer literate employees receiving
books of accounts
Waiters 3 Age between 21-25years Wiping the tables serving 10,000
KCSE main grades C- the customers
Diploma in food and beverage
Chef 4 Age between 21-35years Cooking 15,000
KCSE mean grade of C- and
above Diploma in catering and
hotel management
Cleaner 5 KCSE certificate Cleaning the hotel
Good conduct attending to any other
duties as maybe assigned
by the managers.
c) RECRUITMENT, TRAINING AND PROMOTION
The managers of the proposed business will recruit people by advertising the vacancies by
writing on posters and distributing them to colleges within Nakuru town and local towns and
this will enable her to get people interested with the job advertised. The recruitment of
employees will be based on qualifications because the purpose of the business is to satisfy
the customers needs by providing services. The staff will be t6aken for short training lesson
where they will be explained about all the activities, policies and procedures of the business.
The managers will use further studies as a way of training them. Promotion of the employees
will be according to the qualifications, experience and job performance. The hardworking
employees will be added extra promotions in order to motivate them. Promotion will involve
upgrading of the scale and others allowances.

d) REMUNERATION AND INCENTIVES.

The managers will be organizing for trips and parties at the end of the year and also give
them rewards like calendar, ballpen etc and also vouchers for shopping will be given to the
staff so that they can be able to put more effort on working hard to boost the hotel. Also
during holidays such as Christmas and Easter season she will be taking them to trips and also
offer them gifts. Those who perform well will be added tips on top as recognition of their
effort, and the owner will set aside like thirty thousand shillings for all that activities and it
will always continue thus the workers should put more efforts. Also if a worker is having a
ceremony the owner of the hotel will give the offer of celebrating in the hotel without paying
as a reward.

e) LICENCES, PERMITS AND BY-LAWS

Requirement Description Where to get assistance How much (ksh)

License Registration of business Municipal council 3000
Labour law NHIF Labour office 500each
Taxation 1000
Health permit Public health Ministry of health 400
Insurance Property and life Insurance company 10,000
f) Support services.

Banking services.
The enterprise will open a current account with co-operative bank at Nakuru Branch. This
will be important for depositing and withdrawal of money. Also the business can obtain loans
from bank incase need arises.

CO-OPERATIVE BANK

P.O. BOX 0187-166 NAKURU

Insurance services

The proposed business will be insured against risk which might arise such as fire, theft,
natural disaster or sickness of an employee at work. This will reduce the losses of the
business if any of the damage occurs due to compensation.

IMARA INSURANCE COMPANY.

P.O. BOX 52 NAKURU

Postal services.

Kenya postal and communication will be supportive to the enterprise for the purpose of
ensuring smooth flow of communication in and outside the premises. This will be through
telephone line, telex and fax.

TELCOM L.T.D

P.O BOX 526 NAKURU.

Security services.

The company will also need securing so as to protect the premises and also the employees
and customers.

G4S Security

P.O. BOX 667 NAKURU

 CHAPTER FOUR

OPERATIONAL PLAN.

a) PRODUCT DESIGN AND DEVELOPMENT.

The hotel will be preparing services after the customers orders so as to avoid wastage of raw
materials and also spoilage which may lead to a loss to the hotel. The services will be of high
quality and at an affordable price. The purchasing of raw materials will be suitable and of
lower prices than the profit that she will be getting and they will be well parked.

The owner will buy or use ‘Meko’ for cooking food since its so fast and does not pollute the
air through soots and prefex to use it because its affordable, available and also flexible that is
it can serve other duties. Its also easy to maintain and effective. She will also use computer
that will help to know the budget and how much is the profit and also on booking services on
lodgings and other work.

Due to change in the technology and as life goes the manager will cope by buying the
updated technology and will start by buying bit by bit until the hotel has all the technological
devices that will be suitable for the hotel so that it can reach its objectives and goals of the
hotel.

b) PRODUCTION FACILITIES AND CAPACITY.

For the Veluma Golden Hart Hotel to succeed it will need capital of shs. Five hundred thousand
so that it will be able to purchase equipment and infrastructures such as fridge, microwave, oven,
cooker, fan, tent and other such as paying the employees. The hotel will also need a vehicle for
transporting services that may have been requested by the customer to her of his name as she or
he is having an occasion and also to bring tents to them if they have ordered. This will help to
create a good relationship with the customers. The equipments will be repaired after every four
months if they will be having any breakage or anything that can create discomfort to the
customers or employees when performing their duties. The vehicle will be served at the end of
every week. This is to ensure that the transport means will be available at all times.

Serial Description How many Cost per machine(ksh Total ksh

 no
1 Computer 1 20,000 20,000
2 Fridge 2 25,000 50,000
3 Microwave 2 10,000 20,000
4 Fan 1 5,000 5,000
5 Plates 20 50 1,000
6 Spoons 20 20 4,000
7 Telephone 2 1000 2,000
8 Chairs 10 500 5,000
9 Tables 5 700 3,500

Total 106,900
c) PRODUCTION STRATEGY

For the business to increase its production of services the manager will be incharge of all the
operational controls of hotel. The managers will make orders of raw materials earlier to make
sure they are available in time when they are needed and everytime. To ensure that people follow
up and duty is done on daily basis and one should report if one will be absent or come late. The
hotel will update the modern technology so as to enhance good quality of services production.
The technology used is simple to use, effective and flexible as it can serve many work. The hotel
being new in the market, it will be required to produce better service compared to its
competitors. All the services offered by the hotel will be advertised and displayed in public to
attract all the customers. The hotel will make sure that it meets customers need and wants by
providing all quality of services offered in hotels. The hotel has direct workers and indirect
workers. The direct workers include the managers, accountant, cashier, chef and others. Indirect
workers are the technicians who are involved in repairing and servicing the equipment’s and
machine such as generators which can be used incase electricity goes off. The manager will send
an inquiry note to the supplier enquiring if the goods needed will be available, the suppliers will
send quotation notes back to the enterprise. The managers will then make an order for the goods.
The inspection of goods or services will be done immediately by the purchasing officer. This is
to ensure that the specifications of the products supplied are of good quality and price. The
supply of the services will be done monthly where they will be inspected before being accepted
in the business.

The purchase of the services will be usually ordered on the first week of every month. The
managers will purchase the services on cash basis and on cheque where the cash involved is big.

d) PRODUCTION PROCESS.

This process will involve how goods will be delivered from the manufacturer to the customer.
The first process will be ordering of items or materials from different suppliers than the service
will be delivered to the manager. The suppliers will describe their items in terms of price,
quality, quantity then the suppliers who have the required thing about the services that the
business need will be sorted out to remove those with damages or not appropriate and will be
returned back with a delivery note for replacement . The perfect services will be kept to be
offered to the customers. During this stage is when the inspection of goods will take place before
they are stored. Some of the services will be re-weighed because they will be supplied by the
manufacturer without being weighed to affordable sizes.

e) Regulations affecting operations

a) Building regulations.

As the building will be on construction the owner will employ the engineer to ensure that the
building will be built with good foundation to avoid collapsing. The floor will be made with tiles
and it will have enough space for the workers and it will be well roofed and ventilated. This will
be convenient for both the employees and customer as they will have good air conditions.

b) Safety regulations.

The business will be equipped with fire extinguishers devices for protection incase of fire and
also emergency doors. It will also have the first aid kits.

c) Healthy regulations.

All workers will be required to get a certificate declaring that they are medically fit and the
public officers will be visiting the premises to check its condition. The health consideration will
include:- Proper drainage, sewage, proper and clean water so as to avoid the bad diseases that
may be harmful for both the workers and the customers.
 d) Environmental regulations

The environment will be clean, and the grass will be cut short so as to avoid harmful animals to
come, also it will ensure there will be no stagnant water and thus there will be good drainage.

CHAPTER FIVE

FINANCIAL PLAN

a) PRE-OPERATIONAL COSTS.

ITEM COSTS
Trading licences sh.5000

Repairs and maintenance sh.30,000

Electricity costs sh.5,000

Professional fee sh.12,000

Equipment and installation sh.400,000

Miscellaneous sh.4000

Total sh.456,000

b) Estimation of working capital

Current Asset

Item Year 1 Year 2 Year 3

Stock 100,000 120,000 200,000

Cash at bank 300,000 600,000 750,000

Cash at hand 20,000 50,000 100,000

Total 420,000 770,000 1,050,000

Current Liabilities

Item Year 1 Year 2 Year 3

Creditors 120,000 150,000 110,000

Bank loan 50,000 150,000 200,000

Total 170,000 300,000 310,000

Cash flow projection year 1

(pls check ) Excel)

4. PROFORMA INCOME STATEMENT.

VELUMA GOLDEN HART HOTEL

PROFORMA INCOME STATEMENT
FOR THE YEAR ENDED 31.12.2017.
Amount
Sales 2,300,000
Cost of goods sold
Opening stock 150,000
Add purchases 100,000
Less closing stock 18,000
Gross profit
Expenses
Rent 84,000
Telephone 96,000
Water 24,000
Salary 96,000
Purchases 1,240,000
Licences 20,000
Insurance 10,000
Total expenses 1,483,600
Net profit 816,400

5. PROFORMA BALANCE SHEET

VELUMA GOLDEN HART HOTEL
BALANCE SHEET
AS AT 31.12.2017
Ksh
Current Assets
Stock 200,000
Cash in hand 100,000
Cash in bank 750,000
Total current assets 1,050,000
Non-current assets
Fridge 50,000
Cooker 50,000
Furniture 80,000
Computer 50,000
Fixtures 30,000
Motor van 150,000
Television set 40,000
Less depreciation 25,000
Total fixed assets 450,000
LIABILITIES
Current liabilities
Creditors 110,000
Long term liabilities
Bank loan 200,000
Total liabilities 310,000

6. CALCULATION OF BREAKEVEN POINT.

BREAK EVEN POINT.
Particular Year 1
Sales 230,000
Fixed costs
Rent 84,000
Telephone 96,000
Water 24,000
Salary 96,000
Purchases 1,240,000
Licences 20,000
Insurance 90,000
Total 1,483,600
Variable cost
Water and electricity 12,000
Advertisement 120,000
Repairs 180,000
Telephone 8,000
Total 496,400

(i) Contribution = Total sales – total variable cost

Year 1 = 2,300,000 – 496,400
= 1,803,600
(ii) Contribution margin %
1,803,600 x 100 = 78.42%
2,300,000
(iii) Total fixed costs.
Salaries s 800,000
License 9000
Insurance 9000
Depreciation 10,000

iv) Break even point = Fixed costs x 100

contribution margin %
828000 x 100
78.42
= 1,055,853.09
7. EXPECTED PROFITABILITY RATIOS
i) Gross profit percentage = 90300 x 100
2,400,000
Gross profit % = Gross profit x 100
Sale
= 3.76%
ii) Return on earity = Net profit after tax x 100
 Owners equity
74100 x 100
400,000
= 18.53%
iii) Return on investment = Net profit after tax + interest on loans x 100
Total investment
74100 x 100
1,200,000
6.16%

5.8 DESIRED FINANCING

Pre-operational cost 400,000
Working capital 200,000
Fixed asset 450,000
Total 1,050,000

5.9 PROPOSED CAPITALIZATION

Total Investment 360,000
Owners Equity 640,000
Funds from borrowing sources 200,000
Total proposed capitalization 1,200,000
APENDICES
Nakuru stage Annex school

Nairobi – Nakuru road

Veluma Golden hart hotel

Spears supermarket

FINANCIAL PLAN.
Proposed business will have pre-operational cost Ksh.400,000, working capital 200,000 and
fixed asset 450,000.
Proposed capitalization will be 1,200,000 which will be derived from total investment, owners
money and funds from borrowing sources.
EXECUTIVE SUMMARY

BUSINESS DESCRIPTION

The name of the business will be Veluma golden Hart Hotel. It will be a partnership kind of
business. It will be located in Nakuru. The business is executed to start on 1st August 2019 and
major activities will be provision of food & beverages.

MARKETING PLAN.

The potential customers of the business shall be Nakuru residents and its environment. Other
customers will include foreigners and estate residents.

The business therefore will intend to reach these potential customers by use of roadshow,
radio, advertisement and use of posters.

ORGANIZATION & MANAGEMENT PLAN.

Veluma Golden Hart Hotel will be comprised of the following personnel.

The manager - will oversee all the business operation

Accountant – Doing all the accounting transaction

Storekeeper- Keeping record of stock in the store.

Waiters – Attending the customers

Watchman – Maintain security.

The manager will be responsible for all activities and entire business management. The waiters
will attend to customers. The watchman will be expected to maintain security around the
business.

OPERATIONAL PLAN.

Veluma Golden Hart hotel will require variety of operational facilities for effective product and
services. Equipment will include ovens, fridges, cookers, mixers and composers.

The business will be operating 24hrs from Monday to Sunday.