BUSINESS PLAN

SPARKLE GREEN GROCERY STORE.

P. O BOX 84 -80100

TAVETA

TEL: 0716027517

EMAIL: syukaugabriel@gmail.com

NAME: MARIA SYUKAU GABRIEL.

INDEX: 115010357
INSTITUTION: COAST INSTITUTE OF TECHNOOGY.
SUPERVISOR: MR KIMUNAI.
SUBMITTED: KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL
FULLFILMENT FOR THE AWARD OF DIPLOMA IN CATERING
AND ACCOMMODATION MANAGEMENT.
DATE: JULY SERIES, 2023
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 : Maria Gabriel.

Signature : ………………………………………..

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

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

Name : Mr. Kimunai

Signature: …………………………………………..

Date : ………………………………………………..

i
DEDICATION
I dedicate this business plan to my family members:

Dad, Gabriel Njami, mum Francisca Ngie brothers Allan and Alfred and colleague veronica
chepkemboi

You gave me a reason to work hard.

ii
ACKNOWLEDGEMENT
I am very grateful to the almighty God for giving me good health, guidance, and the strength to
do my business plan work. My sincere thanks also go to my parents Gabriel and Francisca and
my cousin Brayan for their moral, social and financial support during writing of the business
plan.
I also appreciate my friends Veronica and Agostino for their correction and support.
Thanks to my business plan supervisor, for guidance and support during the business plan.

May God Bless you all.

iii
Table of Contents
DECLARATION............................................................................................................................ i
DEDICATION...............................................................................................................................ii
ACKNOWLEDGEMENT............................................................................................................ iii
EXECUTIVE SUMMARY............................................................................................................v
MARKETING PLAN................................................................................................................... vi
MANAGEMENT PLAN.............................................................................................................. vi
PRODUCTION.............................................................................................................................vi
FINACIAL PLAN.........................................................................................................................vi
CHAPTER ONE............................................................................................................................1
1.0BUSINESS DISCRIPTION..................................................................................................1
1.1BUSINESS NAME............................................................................................................... 1
1.2 BUSINESS LOCATION AND ADDRESS.........................................................................1
1.3FORM OF BUSINESS OWNERSHIP..................................................................................2
1.4. TYPE OF BUSINESS.........................................................................................................3
1.5. PRODUCTS AND SERVICE.............................................................................................3
1.6. JUSTIFICATION OF THE BUSINESS.............................................................................3
1.7. INDUSTRY ANALYSIS....................................................................................................3
1.8.GOALS OF THE BUSINESS..............................................................................................3
1.9.ENTRY AND GROWTH STRATEGY...............................................................................4
CHAPTER TWO........................................................................................................................... 5
2.0MARKETING PLAN........................................................................................................... 5
2.1.CUSTOMERS......................................................................................................................5
2.2. MARKETING SHARE.......................................................................................................5
2.3.COMPETITION ANALYSIS..............................................................................................7
2.4.ADVERTISING AND SALES PROMOTION....................................................................8
2.5 PRICING STRATEGY........................................................................................................9
2.6 SALES TACTICS................................................................................................................9
2.7.DISTRIBUTION STRATEGY............................................................................................9
CHAPTER THREE..................................................................................................................... 11
3.0ORGANIZATION AND MANAGEMENT PLAN............................................................11

iv
 3.1.BUSINESS MANAGER AND QUALIFICATIONS.........................................................12
3.2.KEY PERSONNEL AND OTHERS..................................................................................12
3.3.RECRUITMENT, TRAINING AND PROMOTIONAL PROGRAM...............................13
3.4.REMUNERATION AND INCENTIVES:.........................................................................14
3.5.LICENSES, PERMITS AND BI-LAWS...........................................................................15
3.6.SUPPORT SERVICES...................................................................................................... 16
CHAPTER FOUR....................................................................................................................... 17
4.0PRODUCTION AND OPERATIONAL PLAN..................................................................17
4.1PRODUCTION FACILITIES AND CAPACITIES............................................................17
4.2PRODUCTION STRATEGY............................................................................................. 22
4.3 PRODUCTION\ OPERATIONAL PROCESS..................................................................23
4.4 GOVERNMENT REGULATIONS AFFECTING OPERATIONS...................................24
CHAPTER FIVE......................................................................................................................... 25
5.0 FINANCIAL PLAN...........................................................................................................25
5.1 PRE-OPERATIONAL COSTS..........................................................................................25
5.2 WORKING CAPITAL.......................................................................................................26
5.3 PROJECTED CASH FLOW STATEMENT YEAR 2023.................................................27
5.3.2 PROJECTED CASH FLOW STATEMENT YEAR 2024..............................................28
5.3.3 PROJECTED CASH FLOW STATEMENT YEAR 2025..............................................29
5.4 PRO-FORMA INCOME STATEMENT...........................................................................30
5.5 PRO-FORMA BALANCE SHEET....................................................................................31
5.6 BREAK EVEN ANALYSIS..............................................................................................31
5.7 EXPECTED PROFITABILITY RATIO............................................................................32
5.8 DESIRED FINANCIAL CAPITAL...................................................................................33
5.9 PROPOSED CAPITALIZATION......................................................................................33

v
EXECUTIVE SUMMARY
This business will operate under the name Sparkle Green Grocery store and will be situated
in Taita Taveta county, Taveta town. It will operate as a sole proprietor by Maria Gabriel as the
proprietor.

The Proposed Business’ address will be P.O Box 84 Taveta and will use owner’s phone number
0716027517 for communication. It will commence on 1st January, 2025.The main activity of the
business will be selling of various types of groceries like vegetables, fruits etc.

MARKETING PLAN
The business potential customers will include the residents of Taveta Town, various cafes and
food kiosk owners. The business is also going to face two competitors namely; Maggie’s
Groceries Stores and Sherrie’s groceries stores.

MANAGEMENT PLAN
The business will be managed by various personnel, in their various sections. The owner will be
the overall boss assisted by the deputy manager who will also check on the shortcomings of the
enterprise and give solutions in absence of the general manager. All the accounts will be under
the cashier who will control credits, keep books of accounts and receive payments and
information on behalf of the business.

PRODUCTION
This business will need production equipment’s to aid in its operation like weighing balances,
masks aprons, shelves etc. It will also require stock from Vuria Farm which also provides the
transport services. The store will be rented at a cost of Ksh. 3000 per month. The business will
follow government regulation’s to help in its production like getting business license and the
payment of taxes as imposed.

FINACIAL PLAN.
The business requires a capital of forty five hundred thousand Shillings [450,000].The
entrepreneur will raise one hundred and fifty thousand Shillings [150,000], in form of owners’
equity. The remaining three hundred thousand Shillings [300,000] will be borrowed from equity
bank

vi
CHAPTER ONE

1.0BUSINESS DISCRIPTION
The business will be operated and managed by Maria Gabriel who is currently taking
Diploma course in catering and Accommodation management. The business will commence
its operations in the year 2025 January 1st. This will be possible because the owner will have
accumulated enough capital, will have acquired enough entrepreneur skills and also will have
discovered there is unemployment in Kenya, hence creating employment. The Sparkle Green
Grocery will involve in selling groceries of different varieties and prices according to quality
of product. These will include fresh vegetables, fruits etc.

1.1BUSINESS NAME
The business will operate under the name of Sparkle Green Grocery .At the start up stage it
shall have only one branch but more branches will be opened two years later due to
availability of capital from the existing business. Sparkle Green Grocery will be opened in
Taveta Town due to;
 Increased demand for groceries in the area.
 High rate of growth of food industry which rely on groceries.

1.1.1 VISION, MISSION STATEMENT.

To be model company and reference in distribution sector.

1.2 BUSINESS LOCATION AND ADDRESS

a) Location
Sparkle Green Grocery will be located in Bahati a few kilometers from the matatu stage, in the
tallest flat painted blue business store in the ground floor, the first room on your right as shown
in the map below.

1
SPARKLE GREEN GROCERY STORE MAP IN TAVETA TOWN

Mutate stage

SPARKLE
GREEN
Voi taveta highway GROCERY
STORE

Taveta
prison
Hospital

b, Address
The business will operate under the following address.
SPARKLE GREEN GROCERY,
P.O BOX 84_80100,
TAVETA
Tel. 0716027517

1.3FORM OF BUSINESS OWNERSHIP

The business will operate under Sole Proprietorship at the start up stage because of the
following:

 It is easy to raise capital from personal savings

 Decision making is easy
 Easy to control and manage the business

2
  The secrets of business are kept
 The owner enjoys all the benefits alone
 The owner becomes the boss of the business, and an employee
 The owner has direct contact with customers and gets their views about the business
1.4. TYPE OF BUSINESS
The business Is Sparkle Green Grocery Store that will dealing with selling of Groceries such as
vegetables [cabbages, kales etc.] and fruits [pineapples, apples, pawpaw etc.] The business will
provide employment to the neighboring people especially youths who are idle in the region.

1.5. PRODUCTS AND SERVICE

Sparkle Green Grocery Store will offer all types of groceries like kales, apples, garlic, tomatoes,
spinach, etc. This will be of the best quality and quantity which will be of favorable price to all
customers. There will provision of different qualities and quantities. The business will provide
transport to the customer’s premises when they make orders for the product or they buy in bulk.
In addition the entire business staff will ensure that their customers get the best products and
services at the most affordable prices; and that they will be offering individual attention to
customers.

1.6. JUSTIFICATION OF THE BUSINESS

The researches carried on the area justify the suitability of the area for the intended type of the
business. This is due to the following reasons;
i. Market: There is customer and industrial market in the area
ii. Demand: There is increased demand in the area because of high population of the
middle class people
iii. Availability of social amenities e.g. hospital, school etc.
iv. Good transport and communication network

1.7. INDUSTRY ANALYSIS

Sparkle Green Grocery Store falls under foods’ products industry which is rapidly growing up
according to the information got by research from Ministry of Agriculture and Environment
conservation.

1.8. GOALS OF THE BUSINESS

a) Maximize profit and satisfy customers
b) Cope with market demand after the six months on starting
c) Win customers
d) Provide the best and quality products and service to customers

3
 e) To be self-reliant
To expand market share by 30% through opening other branches.

1.9. ENTRY AND GROWTH STRATEGY

The business will enter the market through the following strategies;

i. Collecting all legal documents like licenses

ii. Pay the initial rent and furnishing the rooms as well as writing the name of the
business and what it offers on the doors.
iii. Creating awareness; this will be made possible by putting posters in some strategic
areas indicating the location and variety of products offered.
iv. Pricing; the business shall offer low prices than its competitors to attract more
customers
v. Attraction market; this will be achieved through promotional techniques e.g. free
samples.

Growth will be developed on demand on grocery products. A customer being the base line of
every successful business, he will determine the growth of the business. Growth will also
depend on entrepreneur’ public relations and the following professional ethics:

i. Cleanliness (personal hygiene and the working area)

ii. Punctuality. Opening at the right time without delay
iii. Interest and efforts Ability to keep on trying something upon a point of success.
iv. Self-organization of the working place
v. Co-operation and team-work spirit. Have interest with others, assist and don’t be
selfish.
vi. Self-control. Control your temper, use diplomatic way of approach and know
how to solve the problem
vii. Responsibility. Take duties seriously. All this will contribute to growth
and diversification of the business to even other forms of business

4
CHAPTER TWO

2.0MARKETING PLAN
Marketing is creating awareness of a good or service that already exists in the market, or being
hoped to be put in the market soon that the customer may be made aware of it.
Marketing creates direct flow of the product from the entrepreneur to customers in order to
achieve business objectives and targeting areas.

2.1.CUSTOMERS
The targeted customers will be grouped according to their potentiality of buying. This grouping
will depend on various factors like income, social class, economic activity in the area and
traditional belief and practices. These groups include:

2.1.1.INDUSTRY CUSTOMERS
These are customers who buy goods to go and produce others. They include those customers in
Taveta Town owing hotels, because most of the residents prefer eating from hotels as compared
to cooking for themselves which is a bit cheaper.

The hotel owners will buy in large quantities all the variety of grocery that they are in need of
creating more profit to the Grocery.

2.1.2.COMMERCIAL CUSTOMERS
These customers buy products for sale at a profit. This will be possible because when there are
good rains in the country, food is cheaply sold therefore the groceries will buy in high qualities
and stock for sale when food is scare at a whole sale price to the nearby groceries shop around.

2.1.3.FINAL CUSTOMERS
Most of Taveta Residents if not taking food from hotels, make their own food in the house
especially fried vegetable.

2.2. MARKETING SHARE

According to research done, the competitors take 50% of rate in the total market area. Sparkle
Green Grocery Store will occupy 40% at the start up with a vision of increasing its market share
up to 60%. This will be achieved through proper marketing mix, which includes;
 Proper pricing
 Efficient and reliable channel of distribution

5
  Providing high quality products

This will be done with an aim of maintaining and improving market share, meeting competition,
maximizing profits, achieving targets return on investment and for survival.

sparkle green grocery store

maggies green grocery store
sherries green grocery stores

2.3.COMPETITION ANALYSIS.
There are two main competitors who are really active and take 40% of the market share and are
located in Taveta Town, but since they opened (after four years of operation) they have never
improved/opened other branches.

The main competitors are

(a)MAGGIES GREEN GROCERY STORE

i. Strength
• Offer sales services e.g. transport
• Provide all types of groceries to their customers
• They have established good customer relations

6
 ii. Weakness
• Lack packing facilities
• Dirty and disorganized workers e.g. dirty aprons.
• Little stock
.
(b) SHERRIES GREEN GROCERY STORE
i. Strengths
• It is highly stocked
• Use direct channel of distribution
• Has a personal car for personal selling
ii. Weaknesses
• Have no specific working hours. It may be opened or closed any time.
• Offer substandard customer services
• Sell dirty products

To stabilize competition out of market, Sparkle Green Grocery Store will have the following
strategies:

1. Offering of competitive prices which shall match with quality of the product
2. Maintaining customer relationship
3. Distribution goods to customers once an order has been made at the right time
and in the right quality and quantity

2.4.ADVERTISING AND SALES PROMOTION.

This will be done purposely to create awareness to the customers of the new food stores in the
areas. It will include:

• Giving free samples

• Reducing prices
• Packaging in good paper bags
• Education on those who have no ideas on the product

This will be achieved through:

(a)Personal selling

7
This will be done by being directly in contact with customers and concaving them that our
products are only the best in terms of quality, tests and preferences. The customer will give
views.
(b)Advertising
This will be done through sign posts placed in different places showing the price list of our
products and the variety of goods offered. It will also show location of the business.
(c)Public relations
Sparkle Green Grocery Store will contribute in sponsoring Bahati children’s day care through
supplying them with fruits and vegetables.
It will also provide;
 Good customer relations
 Always be positive and enthusiastic
 Treat each customer as Loyalty
 Have open, honest and prompt communication

2.5 PRICING STRATEGY

The time of the pricing the services Sparkle Green Grocery Store will consider the ongoing
prices of competitors such as that if they are charging prices are high the business will lower its.
Its type of customers will be considered for example if it is a retailer his price will be lower than
the customer who would wish to eat at the spot. During pricing the business will value the cost of
production so that it can be able to maximize the profit and also legal obligation such as
government policies towards such services on how they should be priced. Finally the business
will consider the economic status, if there is inflation or there is not so the prices may be set
fairly for every customer.

2.6 SALES TACTICS

Sales tactics are the activities involved in selling goods or services that enables the company to
achieve the objectives set by strategy. Technique to be used include: The business will use sales
persons to markets the services of the stores in different areas so that the store can be at a
position to increase its sales. It will also use commission agent such as the taxis and bodaboda
people to sell the Groceries of the store. Since this commission agent will be targeting high
commission in their services they work hard to sell more services hence increasing sales of the
store and profit maximization

2.7. DISTRIBUTION STRATEGY

Since vegetables and fruits are perishable, appropriate channel of distribution can be used to
distribute goods. The business shall use a direct channel of distribution which will be very short
and no middle men shall be involved.

8
From the farmer or cereals and produce board, which will be the supplier, the cereals will be
transported to the business premises for sale to customers or to other retailer who will also sell to
customers as shown below.

Producer Retail/whole seller

FARMER SPARKLE

GROCERY STORE RETAILERS

CUSTOMERS

9
CHAPTER THREE

3.0ORGANIZATION AND MANAGEMENT PLAN

In the organization of a business, several individuals with certain qualifications that suit the
business shall be employed to take responsibilities in the hiera manner. Those in the top position
will guide and control those below them in operating the business.

A.Organization Chart
At the start up, the business will take the organization structure style as shown in the chart
below:

Managing Director/
General Manager

Deputy General Manager

Marketing Manager

CASHIER Cleaners & Watchman

Massagers

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b.Management Technology
The business managers shall perform the following duties

i. Making decisions
ii. Making policies
iii. Planning
iv. Directing and controlling business operations

3.1.BUSINESS MANAGER AND QUALIFICATIONS

The business managers shall be controlling all business operations and activities.

Qualifications:

 Has a diploma in human resource management

 Have leadership and communication skills
 .Shall be having a working experience of two years in a recognized institution

3.2.KEY PERSONNEL AND OTHERS.

The business at startup will have eight personnel though it expects to employ more as the
business grows to diversity. The qualifications of these personnel are as shown in the
organization chart below:
S/n Personnel Number Qualification Duties and responsibility
1 Managing 1 Diploma in human Job description
Director Resource Employing new employee
Management Decision making
2 Deputy 1 Has managerial Evaluating and
General skills interviewing employees
Manager Check on the business shortcomings
Give solutions in Director’s absence
3 Marketing 1 Diploma in sales & Promotional tools
Manager marketing Coordinating
Research program

11
4 Cashier 1 K.A.T.C holder Receiving payment on behalf of the
business
Controlling credit
Keep business documents
5 Massagers 2 Certificate in sales Taking orders from customers
Cleaning the products
Distributing goods with bicycles
Weigh products

6 Cleaner 1 Std 8 leaver Cleaning business

faithful premises

7 Watch 1 Maasai by tribe Protecting business

man Faithful premises both at day & night
energetic

3.3.RECRUITMENT, TRAINING AND PROMOTIONAL PROGRAM

a)Training

Training will familiarize the workers with the job and give them all the basic skills like
communication, public relations, and technical skills in order to have the knowledge of the
product and how to maintain the facilities available. It will also enable them to:

• Have confidence and enthusiasm when dealing with customers.

• Learn from the competitors mistakes in order to help in correcting our mistakes.
• Borrow ideas from others especially sales representatives, distributors, customers
suppliers and competitors
• Use competitors as their lever

The business managers will do this training within business premises. The employees will also
be allowed to attend seminars for more skills outside the business premises

b)Recruitment
This will be done to identify the right and qualified workforce for the business. It will be done in
different ways like:

12
 i Interviewing both oral and written
ii Looking at the certificate on application to know the level of education
iii Age
This is also aimed at evaluating the performance of the employee resulting to promotion of the
best and demotion of some who did not do well.
This process is also aimed at improving the productivity of the business.
c)Promotion
Workers and any other employee in the business who will work hard towards the success of the
business shall be rewarded, promoted and given other priorities depending on how much the
work was done; and to promote encouragement to the rest who are not rewarded. An end of year
party shall be held in the premises. The best potential customer shall also be invited to the party

3.4.REMUNERATION AND INCENTIVES:

The business shall use the following remunerations:
(a) Allowances

All employees will enjoy transport and medical allowances depending on her/his position at
work and this will cater for their transport back home as well as their medical status.

(b) Salary schedule:

The salaries shall vary with one’s position and responsibilities as shown in the table below:
s/n personnel Monthly pay Allowance[Ksh] Net pay [Ksh]
without
allowance[Ksh]

1 M/Director 17,500 2,000 19500

2 G/Manager 14,000 1,000 15000
3 Mkt. Manager 8,000 1,000 9000
4 Cashier 6,000 1,000 6000
5 Massager-2 5,000 1,000 5000
6 Cleaner 5,000 1,000 6000
watchman 4,000 1,000 5000
TOTAL 65500

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Incentives
The employee shall enjoy the following incentives in the business as a way of motivating
them.

(c) Off duties and leave

Each employee except the watchman and cleaner shall be given off duties every two weeks a
day (once in two weeks) one person at a time. In case of sickness one shall get sick-off. Each
person will go a two weeks paid leave in a year. They will also not work on holidays.

(d) Parties

There shall be an annual party for the employees and the best customer at the end of the year
will be awarded and even the most frequent potential customer.

3.5. LICENSES, PERMITS AND BI-LAWS

(a) License

I will obtain my business license from Taita Taveta county at a cost of six thousands Kenyan

shillings to be renewed yearly

Permit will obtain from Taita Taveta County at food handlers office to be renewed after six

months at a cost of five hundred shillings

This is by county municipalit

(b) Bi-laws

The business will use the following bi-laws during its operations:

Install alarms for security especially against theft.

Ensure good ventilation and drainage of the store.

Preserve products with authorized chemicals.

Sorting to remove rotten ones to sell clean products

14
Install at least a fire extinguisher to cater for any fire outbreak.

3.6. SUPPORT SERVICES

The business shall rely on the following supportive services for its successful operations: i.

Banking

The business shall bank its money with Equity bank of Kenya at Taveta Town in Taita Taveta
County. This will provide security of the business money and it earns some interest.

ii. Advertising

At the start up the business will not afford to advertise using radios and television but will use
sign posts for advertisement. As the business grows, it will use KCB because it is the cheapest
and reaches a wide area.

iii. Insurance

When the business will have grown a bit, it will insure its premises and assets, storks and other
equipment against fire and theft risk. This will give the business security and hope of continuity
in case of break of this risk. The business will insure with Madison Insurance Company, PO Box
33467 Taveta next to the Donholm Trading Center Taveta.
.iv.Electricity
Electricity will be supplied and managed by the Kenya Power and lighting Company. The bill is
paid according to the amount of electricity used. The bill will be paid through the branches of
Kenya Power and Lighting Company. Then business shall pay its bills at the Stima Plaza, PO
Box 30099 Taveta; Tel. 32 015359.

v. Water

The Taveta County Council shall cater for water supply in the premises. This shall be paid also
according to the water used. Then bill shall be paid through Taveta County Council, P.O Box
30656 Taveta

15
16
 CHAPTER FOUR

4.0PRODUCTION AND OPERATIONAL PLAN

4.1PRODUCTION FACILITIES AND CAPACITIES

At the start up, the business shall operate with the locally available machine and technologies.
These technologies will be cheap to purchase, easy to maintain and use effectively.

This will be the bases for advanced technology. The following equipment and stationeries shall
be used for running the business.
s/n Equipment and Qty Supplier Cost (Ksh) Use
1 tools
Balance 3 Jumbo supp. 9,000 weighing
Bicycles 1 Lays /Refublish 17600 Transport

Apron wear 4 Jumia 1500

Creats 3 Kamau traders 2400 Carriage

TOTAL 30500

3 Furniture
Tables 2 Sam entep 10,000 Placing weighing
balances

Chairs 2 ;; 2500 For cashier

Cabinets 2 ;; 60,000 Office documents
Wooden bars 6 ;; 500 Placing bags
Shelves ;; 18000 Placing packed
cereals
TOTAL 91 000

4 Stationary
Files 4 Uchumi supp. 800 Keeping records
Receipts books 2 ;; 500 Showing
purchases

17
 Calculators 2 ;; 3000 Doing calculations

Biro pens 1pkt ;; 500 writing

Paper bags [big] 5pkt ;; 1000 packaging
Paper punch 1 ;; 1000 Punching file
papers
Stapler 1 Jumia 1500
Counter books 3 Jumia 2700 Record keeping
TOTAL 11000

Machine Jumia 30000 Preservation

Fridge

STOCK
s/n Item Qty Supplier Cost [Ksh] Use
1 Kales 10 bags Vuria farm 2,500 sale
2 Fruits ;; ;;
Watermelon 5bags ;; 3,000 ;;
Oranges 5bags ;; 3,000 ;;
Pineapple 2 Bags ;; 3000 ;;
Bananas 2 Bags ;; 2,500 ;;
Apple 2 Bags ;; 2,500 ;;
Mangoes 1 Bag ;; 2,500 ;;
Lemon 3Bags ;; 2,000 ;;
Passion 3,500 Chumi farm 2370 ;;

Avocado 1 Bag Holla farm 3,330 ;;

Tomatoes 2 creates ;; 14,400 ;;
Potatoes 2 Bags ;; 6,400 ;;
Spinach 4 Bags Kitty w/sellers 5000 ;;
Onions 4 Bags ;; 3500 ;;

18
 Cabbage 4 Bags ;; 4000 ;;

TOTAL COST Ksh 60,000

4.1.1 THE BUSINESS PREMIS LAYOUT

The business will operate in Taveta Town. Business premises measures 10 meters wide and 12
meters as length. The rooms will be divided into 4 rooms as shown below

5m 1m 6m

m 14M OFFICE OFFICE

RECEPTION

1M

TEA ROOM MAIN STORE [GROCERY

STORE]
5M

4M 1M 7M

VI. Technology
At start up the business will use the cheapest and most available technology; i.e. calculator for
making work easier other than use of pen and paper. As business grows, a computer will be
bought so that all transactions are entered for references. Also for further storage of information
and for efficiency hence reducing human errors

4.2 OPERATIONAL/PRODUCTION STRATEGY

4.2.1 Monthly cost of raw materials

Items Amount (Kshs.)

Fruits 50000

Vegetable 4000

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Brown sachet 1000

Climfilm. 2000

Cleaning Agent 3000

Pastics Gloves 1000

Total 61000

4.2.2 Monthly Cost of Labour

Item Amount (Kshs)

Water 500

Electricity 1000

Telephone 2000

Internet 1000

Transportation 5000

Rent. 5000

Total 19000

4.2.3 Monthly Cost of Labor

Item Amount (Kshs.)

M/Director 19500

G/Manager 15000

Mkt.Manager 9000

Cashier 6000

Messenger 5000

Cleaner 6000

Watchman 5000

20
Total 65500

4.2.4 Total Cost of Production Per Months

Items Amount

Cost of raw materials. 61,000

Cost of overhead 19,000

Cost of labour 65500

Total cost of production/operation 145,500

4.3 PRODUCTION\ OPERATIONAL PROCESS

Receiving and Storage and Packaging and Product

inspection inventory labeling preparation
management

Display and
merchandisi
ng
4.4 GOVERNMENT REGULATIONS AFFECTING OPERATIONS
External regulations (Government)
 The business must have a trading license
 The business must have a required permits
 Each employee must have an identification card to show that he/she is an
employee with your business

Internal regulations:
 All the employees must report at seven (7:00 am) in the morning as the business
opens. Any employee must have permission from the manager wherever not at work.
 Any problem or proposal facing workers must be reported and handled
immediately by the personal manager.
 Any misconduct should be punishable e.g. stealing from customer; the employee
will be given a compulsory leave without pay and later on sacked. For minor cases like
breakages, one should be cautioned

21
5.0 FINANCIAL PLAN

5.1 PRE OPERATIONAL COST

Item Amount (Kshs)

Stock 60000

Rent deposits 5000

Advertisement 3000

Furniture and fitting 91000

Research 5000

Design 10000

License and legal aspects 20000

Total (Kshs.) 189 000

5.2 WORKING CAPITAL ESTIMATION

Item Current First month Second month Third month
assets amount (Ksh) amount (Ksh) Amount (Ksh)

Debtors 3000 20000 2500

Stock 60000 65000 50000

Cash in hand 30000 50000 35000

Cash in bank 80000 82000 70000

Total current assets 173000 199000 157000

Current liabilities

Bank overdraft 10000 15000 9000

Creditors 20000 25000 15000

Total current 30000 40000 24000

22
liabilities

Total working 143 000 159009 133500

capital

23
 5.3 CASH FLOW STATEMENT
5.3.1 Projected Cash Flow 2025
RECEIPT
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTALS
S
Cash in flow
Opening
- 241,467 94,703 590 47,140 33,465 128,893 5,192 9,101 24,038 7,494 6,913 598,896
Balance
150,00
Owner’s 150,000
0
300,00
Bank loan 300,000
0
100,00
Cash sales 90,000 80,000 250,000 90,000 250,000 70,000 150,000 160,000 130,000 120,000 150,000 3,640,000
0
Debtors 4,000 3,000 2,000 15,000 3,000 3,000 5,000 40,000 50,000 60,000 70,000 90,000 350,000
Total
Contribute 55,400 334,467 176,603 265,590 140,140 286,465 203,893 195,192 219,101 214,038 197,494 246,913 2,603,725
d
CASH
OUT
FLOW
Pre-
189,00
operational - - - - - - - - - - -
0
cost
Purchases 30,000 20,000 10,000 20,000 10,000 30,000 20,000 10,000 20,000 30,000 10,000 10,000 220,000
Payment to
10,000 15,000 10,000 20,000 20,000 15,000 20,000 20,000 10,000 15,000 20,000 15,000 190,000
creditors
Salaries & 65,500 65,500 65,500 65,500 65,500 65,500 65,500 65,500 65,500 65,500 65,500 65,500 780,000

24
wages
Rent 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000
Electricity 1,000 800 700 800 1,000 500 800 800 700 600 500 1,000 44,400
Water 500 400 700 1,000 800 300 500 400 300 400 500 400 6,200
Telephone 2,000 1,000 2,000 1,000 500 2,000 2,000 1,000 3,000 2,000 4,000 3,000 23,500
Mail 3,000 5,000 2,000 4,000 2,000 3,000 2,000 4,000 5,000 2,000 3,000 5,000 40,000
Transport 5,000 7,000 3,000 5,000 7,000 4,000 5,000 7,000 5,000 5,000 7,000 5,000 65,000
Advertising 10,000 9,000 7,000 6,000 5,000 3,000 2,000 3,000 4,000 6,000 5,000 5,000 68,000
Insurance 10,000 10,000
Loan
8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 99,996
Repayment
Interest on
2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 30,000
Loan
166,20
Taxes 100,340 52,980 79,677 42,042 85,939 79,072 58,558 65,730 64,211 59,248 74,074 928,071
0
Total Cash 312,53
239,873 176,013 218,810 106,675 159,572 198,701 186,091 195,063 206,540 190,581 209,807 2,200,462
Out flow 3
Net cash for 241,46
94,603 590 47,140 33,465 128,893 5,192 9,101 24,038 7,494 6,913 37,106 636,002
the month 7

5.3.2 Projected Cash Flow 2026

RECEIPTS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTALS
Cash in flow
Opening 37,10 50,006 130,971 171,547 186,350 115,212 167,070 155,316 135,888 104,899 91,496 71,114 1,322,782

25
Balance 6
Owner’s
Equity
Bank loan
160,0
Cash sales 180,000 150,000 130,000 120,000 121,000 115,000 110,000 100,000 95,000 90,000 85,000 3,456,000
00
100,0
Debtors 120,000 130,000 125,000 120,000 115,000 112,000 100,000 90,000 90,000 85,000 80,000 1,267,000
00
Friends
Total Cash in 266,9
350,006 410,971 426,547 326,350 351,212 394,070 365,316 325,888 289,899 266,496 236,114 3,773,991
Hand 13
CASH OUT
FLOW
Pre-
operational
Cost
10,00
Purchases 10,000 12,000 15,000 10,000 12,000 13,000 15,000 17,000 12,000 12,000 15,000 153,000
0
Payment to 15,00
9,000 9,000 10,000 7,000 11,000 12,000 9,000 8,000 7,000 10,000 10,000 117,000
creditors 0
Salaries & 65,50 65,500 65,500 65,500 65,500 65,500 65,500 65,500 65,500 65,500 65,500 65,500 780,000
wages 0
Rent 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000
Electricity 700 1,000 800 900 700 700 800 1,000 700 500 600 700 73,000
Water 800 700 500 500 900 500 400 500 700 600 1,000 1,000 6,300

26
Telephone 2,000 1,000 1,000 1,500 2,000 3,000 2,000 1,500 1,500 1,000 1,000 2,000 19,500
Mail 2,000 3,000 1,500 2,000 2,000 1,500 3,000 1,500 2,000 2,000 1,500 3,000 25,000
Transport 5,000 3,000 4,000 3,000 3,000 2,000 2,000 3,000 4,000 3,000 4,000 4,000 40,000
10,00
Advertising 8,000 6,000 6,000 7,000 8,000 6,000 7,000 8,000 4,000 4,000 3,000 77,000
0
10,00
Insurance 10,000
0
Loan
8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 99,996
Repayment
Interest on
2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 30,000
Loan
80,07
Taxes 105,002 123,291 127,964 97,905 31,609 118,221 109,594 97,766 86,970 79,948 70,834 1,129,184
4
Total Cash 216,9
219,036 239,424 240,197 211,138 148,142 238,734 229,428 220,999 198,403 195,382 190,867 2,357,809
Out flow 07
Net cash for 50,00
130,971 171,547 186,350 115,212 167,070 155,316 135,998 104,889 91,496 71,114 45,247 1,368,029
the month 6

5.3.3 Projected Cash Flow 2027

RECEIPTS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTALS
Cash in flow
Opening 45,24
13,040 56,295 73,273 65,458 70,688 116,849 74,161 54,480 36,303 12,379s 56,132 674,306
Balance 7

27
Owner’s
Equity
Bank loan
100,0
Cash sales 150,000 120,000 110,000 95,000 115,000 100,000 115,000 95,000 90,000 130,000 120,000 3,028,500
00
90,00
Debtors 90,000 100,000 90,000 80,000 95,000 90,000 80,000 75,000 60,000 115,000 100,000 1,065,000
0
Friends
Total Cash in 235,2
253,040 276,295 273,273 240,458 280,688 306,849 269,161 224,480 186,303 259,379 276,132 2,879,305
Hand 47
CASH OUT
FLOW
Pre-
operational
Cost
30,00
Purchases 15,000 15,000 20,000 10,000 15,000 30,000 20,000 15,000 10,000 15,000 10,000 129,000
0
Payment to 10,00
5,000 10,000 10,000 10,000 12,000 15,000 15,000 10,000 10,000 12,000 5,000
creditors 0
Salaries & 65,50 65,500 65,500 65,500 65,500 65,500 65,500 65,500 65,500 65,500 65,500 65,500 780,000
wages 0
Rent 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000
Electricity 1,000 1,000 800 700 800 800 500 700 1,000 1,000 800 900 10,000
Water 800 500 1,000 700 1,000 1,000 800 900 500 700 900 800 9,600
Telephone 2,000 1,000 1,000 1,000 1,500 1,000 2,000 1,500 1,000 2,000 1,500 1,000 51,500

28
Mail 1,500 2,000 2,000 1,500 3,000 2,000 2,000 1,500 2,000 3,000 1,500 1,500 25,000
Transport 5,000 3,000 4,000 3,000 3,000 2,000 2,000 3,000 4,000 3,000 4,000 4,000 61,000
10,00
Advertising 8,000 6,000 7,000 5,000 6,000 6,000 8,000 5,000 5,000 6,000 7,000 79,000
0
10,00
Insurance 10,000
0
Loan
8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 99,996
Repayment
Interest on
2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 30,000
Loan
70,57
Taxes 75,912 82,888 81,981 72,137 84,206 92,055 80,748 67,344 55,891 77,214 82,840 923,790
4
Total Cash 222,2
196,745 203,022 207,815 167,770 163,839 232,687 214,681 188,177 173,924 201,247 196,840 2,141,301
Out flow 07
Net cash for 13,04
56,295 73,273 65,458 70,688 116,849 74,161 54,480 36,303 12,379 56,132 94,159 769,065
the month 0

29
 5.4 PRO FORMA INCOME STATEMENT
Particulars Year one Year two Year three

2025 2026 2026

Sales 3640 000 3456000 3028500

Less cost of sales 500000 400000 350000

Gross profit 1074833 836020 175614

Expenses

Purchases 220000 153000 129000

Payment to creditors 190000 117000 124000

Salaries and wages 780000 780000 780000

Rent 60000 600000 60000

Electricity 44400 73000 10000

Water 6200 6300 9600

Telephone 23500 19500 511500

Mail 40000 25000 25000

Transport 65000 40000 61000

Advertising 68000 77000 79000

Insurance 10000 10000 10000

Loan repayment 99996 99996 99996

Interest on loan 30000 30000 30000

Taxes 928071 1129184 923790

Total expenses 2565167 2619980 2852886

Net profit before tax 6815957 6182816 5483210

30
Tax (30% of income) 1092000 1036800 908550

Net profit after tax 7780000 7312000 6407000

Assumption

Rent will remain the same for the three years

Advertising increase with increase of sale for the three years

Loan will remain the same for three years

5.5 PRO FORMA STATEMENT OF FINANCIAL POSITION

Assets Start

Current assets

Debtors 25000 35000 40000

Stock 30000 60000 100000

Cash in hand 150000 170000 200000

Cash in bank 300000 350000 400000

Total current assets 505000 615000 740000

Fixed assets

Machine and equipment 70000 90000 110000

Furniture and fitting 91000 100000 120000

Total fixed assets 161000 190000 230000

Total assets 666000 805000 790000

31
Liabilities

Current liabilities

Creditors 10000 190000 200000

Total current liabilities 10000 190000 200000

Long term liabilities

Owners equity 150000 170000 200000

Bank loan 300000 _ _

Total long term liabilities 450000 170000 200000

Total liabilities and equity 460000 360000 400000

5.6 BREAK EVEN POINT CALCULATION

Sales--cost of goods

Year one

3640000-500000 =3140000

Year two

3456000--400000 =3056000

Year three

3028500--350000 =2678500

Gross profit margin =

Gross profit ×100

Sales

32
Year one

1074833 ×100

3640000

=29.5%

Year two

3456000×100

836020

=413.3%

Year three

3028000×100

175614

=1724.2%

Total overheads

Item Year one Year two Year three

2025 2026 2027

Salary 780000 780000 780000

Rent 60000 60000 60000

Electricity 44000 73000 10000

Water 6200 6300 9600

License 7000 7000 70000

Advertising 68000 77000 79000

Telephones 23500 19500 511500

Totals 989100 1022800 1457100

33
Break-even point =total overheads ×100

Gross profit margin

Year one

989100 ×100%

29.5%

=3352.9

Year two

1022800×100%

413.3%

=247471.6.

Year three

1457100×100%

175.614%

=829717.4

5.7 PROFITABILITY RATIO ANALYSIS

Gross profit ratio =gross profit ×100

Sales

Year one

1074833 ×100

3640000. =29.5%

34
Year two

3456000× 100

836020. =413.3%

Year three

3028000 ×100

175614. =1724.2%

Return on equity

Net profit after tax × 100

Owner’s equity

Year one

7780000 ×100

150000. =5186.7

Year two

7312000 × 100

170000. 4301.2

Year three

6407000 ×100

200000. =3203.5

Return on investment

Net profit after tax × 100

total investment

Year one

35
 7780000 × 100

450000. =1728.9

Year two

7312000 × 100

450000

= 1624.9

Year three

6407000 × 100
450000.

=1423.8

5.8 DESIRED FINANCING

Item Amount (Kshs.)

Pre- operational cost 189000

Working capital 143000

Contingency funds 60000

Total desired financing 392000

5.9 PROPOSED CAPITALIZATION

Source Amount (ksh)

36
Owners’ equity 150000

Bank loan 300000

Total investment 450000

APENDIX

37
38