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BUSINESS PLAN

P. O BOX 0100-24, KIAMBU, KENYA

TEL: 0792388368

EMAIL: georgekungu@gmail.com

SCHOOL NAME: SANG’ALO INSTITUTE OF SCIENCE &

TECHNOLOGY

COURSE CODE: 2425/307B

PRESENTED BY : GEORGE .K. WAITHAKA

INDEX NUMBER : 602101/0082

SUPERVISED BY : MRS. HAMELYNE BOMET

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL FOR

FULFULLMENT OF THE REQUIREMENT FOR THE
AWARD OF DIPLOMA IN GENERAL AGRUCULTURE

JULY SERIES, 2020

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DECLARATION

I hereby declare that this business plan is my original work. I also affirm that it has not been
presented to this institution or any other college for academic purposes, or for any other purpose.

Name : GEORGE .K. WAITHAKA

Admin No: SIST/DGA/09666/17J

Signature: ………………………………………..

Date : ………………………....................................

This business plan has been submitted to Kenya National Examination Council with my
permission as the trainee’s supervisors

Name : MRS. HAMELYNE BOMET

Signature: ………………………………….……………..

Date : ………………………………………………..
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DEDICATION

I must sincerely dedicate the trade project to MRS.

HAMELYNE BOMET of Sang’alo Institute of Science and
Technology, my parents, brothers and concern protocols to
a achieve these as a agricultural officer, one needed
transparency and total accountability. Only those who are
ready to sacrifice and pay the price have supported
transparency and total accountability and therefore
dedicate those scholarity works to all of you for sacrificing
and paying my school fees
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ACKNOWLEDGEMENT

My appreciation goes to the Almighty God for

giving me good health during my studies also
appreciate the agricultural department for their
knowledge and skills they imported to me which
have helped me during my research. Last my vote
of thanks goes to MRS. HAMELYNE BOMET for his
supervision, guidance and support though my
project.
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TABLE OF CONTENTS (page no)

DECLARATION………………………………………………………………………………………..…………..2

ACKNOWLOGMENT………………………………………………………….................................................3

EXECUTIVE SUMMARY……………………………………………………………………………..…………..4

CHAPTER ONE……………………………………………………………………………………..…………….8

BUSINESS DISRIPTION…………………………………………………………………………..……………..9

LOCATION AND ADDRESS………………………………………………………………,,,,,,,,,,,,,,,,,,,,,,,,,,,…9

FORM OF BUSINESS OWNERSHIP…………………………………………………………….……………10

TYPE OF BUSINESS……………………………………………………………………………………………10

PRODUCT/SERVICES………………………………………………………………………………………….10

JUSTIFICATION………………………………………………………………………………………………….10

THE INDUSTRY………………………………………………………………………………………...………..10

BUSINESS GOAL……………………………………………………………………………………..…………10

CHAPTER TWO…………………………………………………………………………………………..……..12

MARKETING PLAN………………………………………………………………………………….………….12

TARGET CUSTOMERS……………………………………………………………………………….……….12

MARKET SHARE……………………………………………………………………………………….………12

COMPETITION………………………………………………………………………………………….………12

ADVERTISEMENT AND SALE PROMOTION………………………………………………………………13

CHAPTER THREE………………………………………………………………………………………….…..15

ORGANIZATION AND MANAGEMENT PLAN……………………………………………………………...15

MANAGER………………………………………………………………………………………………………15

EMPLOYER’S DUTIES AND QUALIFICATION…………………………………………………………….15

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TRAINING AND RECRUITMENT…………………………………………………………………………….16

REMUNERATION AND INCENTIVES……………………………………………………………………….17

LEGAL REQUIREMENT……………………………………………………………………………………….17

CHAPTER FOUR…………………………………………………………………………………….………..19

PRODUCTION AND OPERATION PLAN…………………………………………………….…………….19

PRODUCTION STRATEGY………………………………………………………………………………… 19

PRODUCTION PROCESS……………………………………………………………………….…………..22

CHAPTER FIVE……………………………………………………………………………………………….23

FINANCIAL PLAN…………………………………………………………………………………………….23.

PRE-OPERATIONAL COST ESTIMATE…………………………………………………………..……...23

WORKING CAPITAL ESTIMATE…………………………………………………………………….…….23

PROFORMA CASH FLOW STATEMENT………………………………………………………….……..23

PROFORMA INCOME STATEMENT.................................................................................................24

PROFOMA BALANCE SHEET…………………………………………………………………..…………25

BREAK EVEN POINT………………………………………………………………………………….……25

PROFITABLE RATIOS………………………………………………………………………………..…….26

DISERED FINANCING PROPOSED CAPITATION………………………………………………..……27

REFERENCES……………………………………………………………………………………..………..27

LIST OF FIGURES 1-LOCATION MAP…………………………………………………………………..9

FIGURE 2-…………………………………………………………………………………………………..15

ABRIVATIONS……………………………………………………………………………………………….

T.C-Total Cost………………………………………………………………………………………………..

C.M-Contribution Margin……………………………………………………………………………………

T.F.C-Total Fixed Cost………………………………………………………………………………………

V.C –Variable Cost………………………………………………………………………………………….

S-K.R.A- Kenya Revenue Authority……………………………………………………………………...

K.C.B-Kenya Commercial Bank…………………………………………………………………………..

P.A.Y.E-Pay As You Earn…………………………………………………………………………………

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N.H.I.F-National Hospital Insurance Funds……………………………………………………………..

N.S.S.F-National Service Security Fund………………………………………………………………….

K.C.S.E-Kenya Certificate of Secondary Education…………………………………………………….

LIST OF TABLES……………………………………………………………………………………

Table 1-Market share…………………………………………………………………………………….…..12

Table 2-Competition analysis chart…………………………………………………………………….…..13

Table 3-Price listing FANAKA POULTRY FARM…………………………………………………………13

Table 4-Employees’ duties and qualification………………………………………………………………16

Table 5-Project wages bill……………………………………………………………………………..…….17

Table6-Legal requirements……………………………………………………………………………...…..17

Table 7-Production/operational plan……………………………………………………………….………19

Table 8-Materials/production equipments………………………………………………………….……..20

Table 9-Labor and skill requirement……………………………………………………………..………..20

Table 10-Overhead cost indirect expenses…………………………………………………………..…..21

Table 11-total production cost………………………………………………………………………...……21

Table 12-Pre-operational cost estimation…………………………………………………………………23

Table 13-Working capital estimates………………………………………………………………………..23

Table 14-Pro-forma cash flow statement………………………………………………………………….23

Table 15-Proforma income statement……………………………………………………………………..24

Table 16-Proforma balance sheet………………………………………………………………………….25

Table 17-Breakeven point…………………………………………………………………………………..25

Table 18-Profitable rations………………………………………………………………………………….26

Table 19-Desired financing………………………………………………………………………………...27

Table 20-Proposed capitalization………………………………………………………………………….27

List of figures…………………………………………………………………………………………………

Figure 1-locational map………………………………………………………………………………..……..9

Figure 2-organisation structure of FANAKA POULTRY FARM…………………………………………15

Figure 3-premises layout……………………………………………………………………..…………….19

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Figure 4-total production process…………………………………………………………………………22

EXECUTIVE SUMMARY

The business name is Fanaka poultry firm that will be run by the owner Mr. George K.Waithaka as sole proprietor.
The beginning of the business is intended to started and of year 2020 within Ruiru in Kiambu county. Business
address is at 24 Kajiado.The business will be dealing with all poultry products and by-products. Starting of this
business will require 150,000 thousands and 14 workers. Expansion is based on short-term and long term basis.

Marketing plan

Business will be dealing with different services and products and awarding public certain strategies for marketing
services and products distributions like and advertisements will be emphasized. Targeted customers will be hotels,
hospitals and other organization within Ruiru due to competition sale tactics and distribution strategies much
concerned by our enterprise. Pricing, sales promotion and advertisement is controlled by compassion of other farms
enterprises as explained by Armstrong and Kotler, that introducing of a new product in market challenging as well as
market-penetration pricing.

Organizational plan

The key management team shall include farm owner and other workers. All managements of our enterprise will
depend on different define duties, responsibilities and wages allowances will be emphasized.requirements,training
and staff promotion will be done annually to improve remuneration and incentives of workers. Succession of Fanaka,
statutory deduction and all legal requirements will be required for one to be offered ajob.According to Gregory,
Lumpkin and Taylor they say individual divisional structure is organized around products, projects or market. Each
division includes its own functional specialists who are typically organized into department.

Production/organizational plan

This business development facilities will involves production designs processes of production strategies, costs and
overhead used in business by facilitating hired,reparing and maintenance will be emphasized for better production
starategies.on other hand for operational of firm, the regulation affecting operations such as
insurances,taxations,health are checked.H.John on human resource management stated that team performance
becomes increasingly important in our society, gaining sharing it becoming a popular approach to motivate higher
levels of group productivity.

Financial plan

The chapter shows the information about the capital on how they have been spending. It shows the plan on basis of
production of the farm mathematically. Operational cost and working capital on made to shows money used for
proposed business. Calculations for pre-operational cost estimating cash flow, break points, profit ratios and desired
financial are carried out here as explained by Jeff by stating that the attempt of covered interest rate currency will
result in an effective financing rate similar to the domestic rate and corporations.

CHAPTER ONE

Business description
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Business name:

The name of the business if Fanaka Poultry Farm. This enterprise falls under all types of chicken production. The
type of birds to be kept will be as follows: layers, broilers and all by-products of this thirds e.g eggs and manure for
farmers. The name of this firm “Fanaka” means prospering as it is expected to start small and expand in future.

Location and address

This firm enterprise shall be located at Kibo shopping center a long Ruiru High way in 44 sub-county,Nembu
location,Kigaa sub-county in Kiambu County in Kenya. The address for this business is P.O BOX 24 Kajiado.

Location map Kibo shopping centre

Key:

Shopping centre -federal roads high way road

Fanaka poultry farm -hospital

A map showing location of Fanaka Poultry Firm

Form of business ownership

Fanaka poultry firm is an enterprise operated by partiners.founders are George .K. Waithaka who both raised cash to
start, I and Mr.Kamau saw that it would be better to collaborate and raise capital to bring an enterprise that will be
giving us earning and create employment for us.
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Types of business

Fanaka poultry farm is an enterprises that will be keeping chicken like broilers,layers.this business will also be selling
eggs, manure and slaughtering chicken for it clients for from Ruiru and within. The business will be start with about
1,000 birds and we are planning to expand it in 3 years time for greater profit margin.

Products and services

Fanaka poultry farm shall be dealing with the following goods as it is mentioned below:

i. Broilers chickens
ii. Layers chicken for laying in farm and selling.
iii. Production of eggs(both fertile and unfertile)
iv. Production of firm poultry manure for sale.

Justification of business opportunity

Due to high population growth in Ruiru, this makes the demand of Fanaka Poultry firm products to be high
demanded. High number of students from few nearby universities, civil servants around the firm and also the firm is
within C.B.D.the farm is expected to thrive well due to lack of competitors, has good transport network as many retail
objective for successful of it as I maintain below:

 Good water supply

 Availability of electricity
 Security
 Conducive environment for poultry keeping

Industry

This enterprise will be operated by minimum of 30 workers per day, collection of at least 1,000 eggs, slaughtering of
100 broilers and selling of farm manure of about 10 bags weekly. The other miner jobs related to farm will be
cleaning it to keep poultry healthy. This industry is also expected to get completion from neighboring farms. We also
expect low education level of laborers’ may fall our enterprise.

The business is expected to raise it workers when it increases profit by 25% monthly for better service and high
production. It is also planning to be offering extension services for poultry farmers in coming future.

Business goals

Short term goals

 To employ at least 20 men workers

 To increase salaries for workers by 10%
 To buy 1 acre land for expansion
 To start giving discount to the new customers.

Long term goals

 To buy new vehicles for transporting its products in 3 years time

 To change business location in 5 years to come.
 To increase the farm in 10 acres of land in 5 years time.
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 To start using the machine in slaughtering and egg packaging.

 To open branches all over the country.

Entry and growth strategy

Entry strategy

Customers shall be aware of business products by use of posters especially ones on entry gate of the enterprise
which will be written Fanaka Poultry Farm with capital latters.Posters on our transportation vehicles will also be used
to promote our enterprises.

Growth strategy

The enterprise shall ensure to take the following to ensure the business is expanding:

 Improving on quality facilities from design.

 Introducing new machines for high production.
 Opening account in bank for the business.
 Advertising its products through radio, news papers and television.
 Employing more skilled personnel.
 Giving loans to workers at low interest.

CHAPTER TWO

Marketing plan

The target customers will be hotels, hospitals, residents, civil workers around, supermarket and any other willing
buyers. The business will majority advertising it goods and services for letting it’s targeted consumers and customers
to create a loop of strong relations between the business and it targeted customers. We also plan to be supplying our
goods to debtors and pay better in a duration not exceeding one month especially to those employed by government.

Market share
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There is low market share with other enterprises due to no enterprises nearly located to ours. The nearest farms are
Kasoka Farm and Kenbird which are 5 kilometers and 7 kilometers respectively from ours.

Below are farms around Ruiru

Table 1 market share

Firm Sales in ksh.

Kendira poultry 600,000
Mwengi kuku’s farm 400,000
Kasoka enterprises 350,000
Wakungu kuku products 400,000
Fanaka poultry farm 800,000
Total 1,550,000
Market share is as shown below:-

800,000 x 100% =50%

1,550,000

Target customers

The target customers are as follows:

o All supermarkets around Ruiru town.

o Students from nearby colleges and universities.
o Wholesalers’ shops and retailers shops.
o Hotels and restaurants within Ruiru town.
o All civil servants in the area.

Competitors

The farm is expected to experience problems; this is because it has only one transportation vehicle compared to
other farms around e.g Kasoka farm having four transportation trucks. The other burning its issues may be number of
skilled workers, competitors’ e.g Wakungu farm having powerful modern hatcheries which our farm has not yet
bought.

Competitor’s analysis chart

Table 2

Item cretaries Wakungu Kasoka Kenbira Mwengi Fanaka p.farm

Product quality 4 2 3 4 5
Pricing 3 3 4 4 4
Credit faulty 0 1 1 1 3
Packaging 3 4 2 2 3
Location 3 3 3 3 4
Security 4 2 4 4 4
Customer 3 4 3 2 4
Care 2 3 4 3 4
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warrant 1 1 1 0 2
Cleaners 3 4 3 2 5
Size facility 4 2 2 1 4
Total 3.5 3 3 3.2 4.5

Key Average score for farms

0-5 possible score Wakungu Ruku product-fair excellent
O nil Kasoka enterprise-fair good
5 maximum Kenbird poultry –good
Mwengi enterprise good
Fanaka poultry farm-excellent

Advertisement and sales promotions

Sole promotion and enterprises aims at increasing sales on any business enterprise. In our enterprise we are
planning to be using the following methods for creating awareness.

Use of displays
Shows and exhibition during farmers’ day on our farm.
Destructing on how to form poultry especially chicken on small and large scales.

Pricing strategy

The farm manager shall consider the competition and quality of products and services so as to come up with a
profitable market price. By this, the business price is to be slightly low/cheaper than competitors price.

Table 3

A table showing price list of Fanaka Poultry Farm

Item Products Quality Quantity Competitors price Fanaka farm

1. Broilers Kenbrow 3 kgs 450 430
2. Layers Enstern.k 2 kgs 300 280
3. Eggs in trays Brown/white 2 1/2kgs 280 250
4. Cocks Kienyeji Tray 200 170
5. Manure (I bag) Fine 90 kgs 600 590
6. Ex-layers Kenbrow 2 kgs 250 200

N/B:

The enterprise can also give its customers it’s products on credit but not exceeding 40,100 ksh on monthly basis.

Sale tactics

For involvement on sales, the enterprise will be giving discount to customers who will be buying products of more
than twenty thousands(ksh.20,000).the other sales tactics is if you buy products by order for three continuous months
purchase.
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Distribution strategy

When you buy poultry and poultry products from our farm, free transportation is a guarantor for products to be
brought to your place you should pay first then it will be brought after 2-3 hours. Ordering is also on accepted one
day earlier before after delivering. You can also request your orders on any social media if you have being a custom
for last 2 months for delivery.

According to Armstrong and Kotler, 2013, principles of marketing, person education limited.14th edition states that
pricing strategies usually change as product passes through its cycle. The industry is experiencing challenging
companies bringing out a new product for first time. They can choose between two broad strategies. Marketing
skimming and market-penetration pricing.

CHAPTER 3

Organization and management plan

This is human resource plan that allocate in their offices being basing in skills and academic level together with
working expenses. This enables working to increase production through production quality products which fetch
higher prices.

Organizational structure of Fanaka Poultry Farm

Figure 2

Manager

Sales Technician Clerk

representativ
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Security Workers

The manager

The manager shall be overall person/boss of the farm Mr. Francis and George Kungu are the managers and funders
of this farm.

Duties of the managers

 Hiring of the workers

 Supervision of workers
 Payment of the workers
 Issuing of loans
 Creating and designing the market of the farm enterprise.

Qualifications and qualities of a farm manager

 Must possess diploma in any course related to agriculture.

 Must be 25 years and above.
 Faster critical thinker and decision maker.

Employees’ duties and qualifications

Below is a chart showing duties and qualifications of the employees of Fanaka Poultry Farm.

Item Position No Qualification Duties

1. Manager 1 Certificate in G.A, work experience  Hiring of the workers
of I year  Supervision of workers
 Payment of the workers
 Issuing of loans
 Creating and designing the market of
the farm enterprise.

2. Sales 4 K.C.S.E (D+),working experience  Always making products.

representative of 6 months  Looking for new market.
 Paying other marketing officers.
 In charge of marketing processes.
3. Technicians/clerks 3 Certificate in related jobs  Repair and maintaining
hatcheries.
 Doing mathematics in farm.
 Working in the office of farm
manager.
4. Security 4 Above class 8 o Maintaining security in the farm.
5. Workers 30 Physical fit  Slaughtering of broilers.
 Collecting eggs/manure.
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 Cleaning poultry houses.

 Other casual duties assigned by
the in charge.

Recruitment, training and staff promotion

This are strategies of employing new workers, providing them with skills and financial promoting/ awarding those who
are hardworking.

Recruitment

New workers will be getting employed after every year in case of retirement, death and promotion of other workers.
Those with high experiences will be given the first priority to get promoted.

Training

Our firm is giving tours for staff members to explore in different farms to gather information concerning poultry
keeping for them to improve standards of the farm expansion.

Staff promotion

Hardworking personnel will be awarded after performance appraisals in every 6 months time. This is by giving them
promotion to higher level of the job. Those they were before. In terms of workers, they will be increment of their
salaries.

Remuneration and incentives

Salaries and payment of any personnel working at Fanaka Poultry Farm will be determined by work output per head
by comparison with other farms our farm will be at least higher for motivation of workers. Profits will be enjoyed by
owners a lone after payments of bills and licenses for government.

Table 5

Project wage bill

Item Rank Salary No Sub-total(ksh)

1. Assistant manager 30,000 1 30,000
2. Sales representative 22,000 4 88,000
3 Technician 19,000 3 57,000
4. Security 10,000 4 40,000
5. Casual workers 9,000 30 270,000
485,000
Total

Statuary deductions

The staff, workers and any other person in the farm may be charged statuary as mentioned below;
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 N.S.S.F-6% of workers pay and similar amount provided by the management in favor of the workers.
 N.H.I.F-10% of the worker pays about 2% for farm to cater health care when any individual working there is sick.
 P.A.Y.E-this will be done for saving purposes of workers. It will be 15% annually on monthly basic salaries.

Incentives

 Allowances for transportation will be added up 1% on day salary.

 150 increment of money after 3 years overtime.
 Staff tours every year on December.
 Provision for houses in farm for free.

Legal requirements

Table 6

Item Support service Firm/organization Particulars

Address No Email address
1. Legal services K2 Advocate 24-Kajiado 0712225694 K2@gmail.com
2. Management training Kungus 00-11 Meru 0705704011 kungus@gmail.com
3. Banking K.C.B 1 0-200 Kitui 222-440011 kcb@yahoo.com
4. Transport services Rikine sacco 144 Ruiru 380032841 media@yahoo.com
5. Advertisement Local media 108 NRB 0722554429 service@gmail.com
6 Communication Saricacon 220-01 KST 0708421012 saricacon@gmail.com
7. Taxation KRA 401 Meru 0712111021 kra@gmail.com
8. Security service G4S 11 Kiambu 0721066080 g4s@gmail.com

According to George Taylor, 2005, strategic management, Mc Graw-Hill companies, 2nd edition, states that
individual divisional structure is organized around products, projects or markets. Each of the divisions includes its
own functional specialists who are typically organized into departments.
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CHAPTER 4

Production/operational plan

The farm cannot work without facilities for production. Our farm will require the following particulars:

Table 7

Item Description Specialization Quality Unit cost Sub-total(ksh)

1. Hatcheries Kenfec 3 4,000 12,000
2. Broilers Muguku 100 10 1,000
3. Chicks Muguku 250 25 6,250
4. Inclinators Magnetic hero 3 4,500 13,500
5. Trays Tyon 400 10 4,000
6. Sheets Duzaz 100 100 10,000
7. Cut-off Origin 200 10 2000
8. Feeders Kentics 20 10 200
9. Waterier Kentics 20 10 200
10. Tanks Kentanks 4 10,000 40,000
11. Stores Modern 2 10,000 20,000
269,000
Total

Premises layout

The following diagram showing farm premises.

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Premises layout

B
C

KEY:

A-Compound

B-Poultry

C-Stores

D-Workers premise
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Facilities to be hired

Our farm is planning to hire at least two hires especially on days that demand of our products is too high.

Repair and maintenance

Farm will be receiving it broken items every month for efficiency working. This may require skilled personnel for
repairing them which may require cash. So far maintenance cost ksh. 80,000 will be kept aside.

Production strategy

I) Production design and development

 Hens for selling will be packed in cartons from Muthoi market packing them to maximum of 10 hens per
carton.
 Eggs will be sold in trays. Each tray containing 30 eggs.
 Manure will be packed in bags (sacks of 90 kgs).
 All farm products will be packed and designed at customer’s premises.

Ii) Material/inventories

Table 8

Production requirements

Item Description Specific Quality Unit cost Total

1. Trays Tyon 200 pcs 20 2,000
2. Bags(sacks) Tembo 10 pcs 10 1,000
3. Knifes Origin 10 pcs 50 500
4. Cartons Mathai 40 pcs 10 400
5. Spairparts Bearings 4 pcs 400 1,600
6. Vaccines Compact 400 pcs 100 40,000
7. Feeds Tembo 70 pcs 700 49,000
Total 93,600

Labor and skills requirement

Table 9

Item Position Grade No Wage pm Sub-total

1. Assistant manager 2 30,000 60,000
2. Sales man 2 22,000 44,0000
3. Workers 30 9,000 27,000
4. Security 4 10,000 40,000
Total 171,000

Hourly rate for labour =171,000 =5,700 monthly

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30,000 = 190, hourly

Overhead costs (indirect expenses)

Table 10

Item Particular Amount (ksh)

1. Promotion 4,000
2. Management staff sellers 200
3. Electricity 250
4. Water bills 400
5. Telephone 500
6. Advertisement 650
7. Repair 600
8. Transport 420
9. Rents 800
10. Stationeries 200
11. employee benefits 400
Total 8,080

Total production cost

Table 11

Item Particular Amount (ksh)

A Material 93,600
B Labour cost 485,000
C Overhead 8,080
Total 586,680

Total production process

Fanaka poultry farm is an enterprise that deals with poultry production so it has a process of producing its products
e.g the chart below shows how Fanaka produces chicken from eggs.

Total production

Table 4

Egg hatchery Chickens of broilers Layers broilers Slaughtered

layers
layers eggs
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chickens

Manure
production

Regulation affecting operations

Fanaka is however affected by several problems from government of Kenya by business. Bills of other operational
process are required that may require huge amount of cash that may be used to increase production. Some of
regulations are as follows:

a) High water bills charges

b) Payments of insurance monthly/yearly
c) Payment of high taxes to KRA.
d) Insurance for workers.
e) Business permit.
f) High electricity bill charges.

According to H.John Bernardin,2008,human recourse management, Tata Mc Graw-Hill publishing company

limited,4th edition states that the costs can be substantial not because of direct expenses related to legislation, but
also company’s reputation and a team performance becomes increasingly important in our society, gain sharing it
becoming a popular approach to motivate higher levels of group productivity.

CHAPTER 5

Financial plan

Pre-operational cost estimate

Table 12

Item Particular Amount (ksh)

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1. Business planning 2,000

2. Advertisement 1,500
3. Rent 1,000
4. Permit/license 1,000
5. Recruitment 500
6. Miscellaneous 2,500
Total 8,000

Working capital estimates

The farm requires 50,000 thousands only to be stated and same amount is saved while else are to be collected from
bank in terms of loans.

Table 13

Current assets Amount(ksh) Liabilities Amount (ksh)

Pre-payments 10,000 Trade credit 15,000
Cash at bank 20,000 Loans 10,000
Cast at hand 25,000
Stock 5,000
Debtors 15,000
Total 75,000 Total 25,000

Working capital = current assets-current liabilities

75,000-25,000=50,000

Pro-forma cash flow statements

Table 14
Particulars Monthly entries
Jan Feb Mar April May June July Aug Sep Oct Nov Dec Total (ksh)
Beginning cash 50,000 58,750 80,000 68,000 75,000 68,000 57,000 71,000 60,000 71,000 49,000 50,000 1,198,750
balance
Cash flow 20,000 30,000 35,000 42,000 41,000 47,000 52,000 60,000 57,000 60,000 57,000 60,000 453,000
Cash sale

Debt collection 100,000 100,000 100,000 100,000 100,000 100,000 100,000 102,000 95,000 80,000 80,000 80,000 1,714,000

Loans 100,000 50,000 40,000 40,000 40,000 40,000 40,000 42,000 40,000 41,000 41,000 41,000 37,5000
Total cash flow 220,000 135,000 45,000 42,000 43,000 43,000 43,000 41,000 49,000 40,000 44,000 40,000 3,740,750
Cash flow
Out flow
Rent 300 400 500 500 500 500 500 500 500 500 500 500 5,7000
Salaries 104,000 102,400 110,000 100,000 100,000 100,000 100,000 95,000 80,000 79,000 69,000 39,000 1,010,000
Repairs 7000 4500 4500 4500 40,000 40,000 40,000 45,000 39,000 39,000 39,000 41,000 387,000
Maintenance 200 1,500 1,500 1,500 1,500 1,500 1,000 1,000 850 850 940 42,000 54,360
Water bills 2,000 2,000 2,000 2,000 2,000 2,000 1,500 2,000 1,900 1,900 2,000 2,000 23,300
Electricity 1,000 1,000 400 1,000 1,000 1,000 200 1,000 950 950 1,000 1,000 10,520
 Page 24 of 32

Materials 5,000 5,000 2,500 2,500 2,500 2,500 1,500 2,500 2,500 2,500 2,500 2,500 34,000
Inventory 4,000 4,000 4,000 4,000 4,000 4,000 3,000 1,000 1,000 1,000 1,000 1,000 32,000
Loan repaying 20,000 20,000 20,000 20,000 20,000 20,000 1,500 400 400 20,000 20,000 20,000 122,300
Loan interest 2,000 2,000 2,000 2,000 2,000 2,000 1,500 9,000 1,500 1,990 2,000 2,000 29,990
Insurance 2,000 2,000 4,000 4,000 4,000 4,000 4,000 3,500 4,000 4,000 4,000 4,000 28,500
Transport 8,000 8,000 8,000 8,000 8,000 8,000 2,500 7,500 7,500 8,000 8,000 8,000 89,500
Total 161,300 140,000 180,000 178,000 160,000 157,000 140,000 174,000 169,000 147,100 174,200 174,000 178,860

Total cash flow- cash flow out= net cash flow

667,550-178,860=488.690

Pro-forma income statement

Table 15

Particulars Year 1(2020) Year 2(2021) Year 3(2022)

Less cost of sales 488,690 438,690 490,000
Gross margin 50,000 67,000 50,000
Net sales -438,690 -371,690 -440,000
Operational expenses 5,000 5,000 4,500
Salaries 200,000 35,000 40,000
Transport 8,000 8,000 8,000
Repair 41,000 40,000 21,000
Insurance 4,500 4,500 4,500
Electricity bills 800 800 1,000
Loan interest 500 480 950
Rents 2,000 1,900 2,000
Phone bills 350 350 350

Pro-forma balance sheet

Table 16

Particular Year 1(2020) Year 2(2021) Year 3(2022)

Fixed assets
Machinery 40,000 40,000 30,000
equipments
Net value 25,000 25,000 15,000
Hatcheries 40,000 40,000 40,000
Trays 12,000 12,000 12,000
Buildings 40,000 15,000 16,000
 Page 25 of 32

Total fixed assets 1,570,000 1,320,000 1,130,000

Current assets
Cash in hand 40,000 44,000 48,000
Cash in bank 100,000 50,000 50,000
stock 25,000 50,000 45,000
Total current assets 165,000 144,000 143,000
Current liabilities
Loans 20,000 18,000 20,000
Capital 10,000 12,000 10,000
Add profit 15,000 10,000 8,000
Total liabilities 45,000 40,000 38,000

Breakeven point (BEP)

Table 17

Particular Year 1(2020) Year 2(2021) Year 3(2022)

Fixed assets
Rent 2,000 2,000 2,000
Licenses 1,000 1,000 1,000
Management salaries 10,000 10,000 10,000
Depreciation(fa) 5,000 5,000 5,000
Total fixed costs 108,000 108,000 108,000
Labour 10,000 10,000 10,000
Electricity bills 5,000 5,000 5,000
Water bills 2,500 2,500 2,500
Internet charges 500 500 500
Advertisement 2,000 2,000 2,000
Sales promotion 1,500 1,500 1,500
Stationeries 1,000 1,000 1,000
Employess benefits 10,000 10,000 10,000
Insurance 1,000 1,000 1,000
Materials 10,000 10,000 10,000
Phone bills 1,000 1,000 1,000
Total variable cost 44,500 44,500 44,500
Total cost 152,500 152,500 152,500
Sales 300,000 950,000 900,000
Contribution margin 800,000- 950,000- 900,000-
152,000=647,500 152,000=798,000 152,500=747,000
Breakeven margin 566,632 10,880,440 1,625,506

BEP= TFC

1-(CM)

Year 1 (2020) Year 2(2021 Year 3(2022)

 Page 26 of 32

108,000 108,000 108,000

1-(647,500) 1-(798,000) 1-(747,000)

800,000 800,000 800,000

=565,632 =10,880,440 =1,625,506

Profitable ratios

Ration Year 1(2020) Year 2(2021) Year 3(2022)

Net profit x 100 647,500 x100 647,500 x100 647,500 x100
sales 800,00 800,000 800,000
=80% =80% =80%
80:100 80:100 80:100
Net profit x100 152,500 x 100 647,500 x100 647,500 x100
T production 152,500 152,500 152,500
=19% =424:100 =424:100
19:100
Net profit x 100 647,500 x100 647,500 x100 647,500 x100
Working capital 800,00 800,00 800,00
=80% =80% =80%
80:100 80:100 80:100
Net profit x 100 647,500x100 647,500x100 647,500x100
Total assets 908,000 908,000 908,000
=71% =71% =71%
71:100 71:100 71:100

Desired financing

Table 19

Particulars Amount (ksh)

Pre-operational cost
Loans 400,000
Capital 40,000
Add loans 20,000
Fixed assets
Machineries 40,000
Buildings 40,000
Working capital
Working cash 50,000
Loans 45,000
Total desired 635,000
 Page 27 of 32

Proposed capitalization

Table 20

Particular Amount (ksh)

Equity financing 40,000
Personal selling 627,000
Disposal of personal properties 40,000
Sub-total 707,000
Debt financing 40,000
Commercial bank loans 50,000
Trade credit 25,000
Hire purchase 20,000
Government grants 15,000
Sub-total 150,000

According to Jeff,(1995),international financial management, west publishing company.4th edition states that if
interest arbitrage parity exists the attempts of covered interest rate currency will result in an effective financing rate.
Similar to the domestic rate and corporations typically use long term source of fund to finance long term project.

References

1. Gray Armstrong and Philip Katler,(2013).Principles of marketing Pearson Education limited.14th edition.
2. Gregory .G.Dess ,G.T lumpkin and Marilyn .L.Taylor (2005),strategic management ,Mc Graw-Hill
Companies,2nd edition.
3. Jeff Madura.(1995),international finance managements, west publishing company,4th edition.
4. H.John Bernardin,(2008),human resource management, Tata Mc Graw-Hill publishing company limited 4th
edition.

APPENDIX 1

Fanaka poultry farm

APPENDIX 2

Location map Kibo shopping centre

 Page 28 of 32

Key:

Shopping centre -federal roads high way road

Fanaka poultry farm -hospital

APPENDIX 3

Premises layout

B
C

KEY: B-Poultry D-Workers premises

A-Compound C-Stores
 Page 29 of 32

APPENDIX 4

PERSONAL INFORMATION

NAME: GERGOGE K.WAITHAKA

AGE: 27

ID NO: 32271182

RELIGION: CHRISTIAN

MARITAL STATUS: SINGLE

LANGUAGE: ENGILSH, KISWAHILI & KAMBA

TEL NO: 0704093569/0756167435

E-MAIL: gergogekungu32@gmail.com

PERSONAL ASSESSMENT
with leadership skills acquired as a student I’m self-motivated, organized &
capable of working under pressure have a clear, logical mind with a
practical approach to problem solving & drive to see things through to
completion. I’m reliable, trustworthy, hardworking & eager to learn & have
a genuine interest in public relations as an agricultural optimistic officer of
the future.

EDUCATION

 2019-to date CURRENT

DA
 Page 30 of 32

SANG’ALO INSTITUTE OF SCIENCE & TECHNOLOGY

 2016-2018
 CERTIFICATE IN AGRICULTURE FROM SANG’ALO INSTITUTE
OF SCIENCE & TECHNOLOGY
 2009-2012
Paramilitary training and national building at national youth
service (NYS)
 KCSE, GRADE D (PLAIN)
GITARE SECONDARY SCHOOL

 2001-2008
KCPE, MARKS-310
ISENGAPRIMARY SCHOOL

WORK EXPERIENCE

2018-ATTACHMET (3rd January -30th March, 2018)

AT TESO AGRICULTURAL MINISTRY

BUSIA COUNTY

DUTIES:

 Collecting agricultural engineering field data for verification and analysis.

 Conducting survey for engineering works.
 Carrying out preliminary design of agricultural engineering works.
 Carrying out repairs and maintenance of machines and equipment and
 Conducting on-farm trials and demonstrations.
 Collating agriculture information and inputting into the database;
 Collecting and packaging of new and existing agricultural technologies for
dissemination and
 Page 31 of 32

 Preparing draft crop production and national food security reports.

RESPONSIBILITIES- CLASS REPRESENTATIVE

 Coordinating all class related activities.

 Be accountable for all school properties in the class i.e.chairs,text
books etc
 Ensure the cleanliness of the class at all time & encourage students to
keep school campus free of litters.
 Make sure that attendance sheets are signed by the authority after
the class hours.
 Make sure that all lessons are attended by the lecturers’.
 Manage students discipline & instill good behavior.

SKILLS & ABILITIES

 Computer skills- Microsoft Office, Microsoft Word, Outlook, Windows,

Excel,PowerPoint,Page Maker, Internet Explorer.
 Leadership Skills.
 Secretarial skills

HOBBIES

 Reading motivational books & professional articles.

 Listening to Gospel music.
 Traveling
 Socializing.
 Playing football.

REFEREES
 Page 32 of 32

1. MR.CHRISANTUS WANYONYI- Principal administration Sang’alo

institute of science & technology
Tel: 0713786838
2. MR. NOBAT OTIENO-crop officer
Tel: 0723998974