TITTLE: MOVERS TAR SUPPY

PRESENTED BY : JANGAMU ANDREW ONGAGA

CENTRE NAME: THE ELDORET NATIONAL POLYTECHNIC

COURSE: DIPLOMA IN WATER ENGINEERING

SUPERVISOR: MS CHIRCHIR

COURSE CODE: 2302

CENTER CODE: 5781021314

PRESENTED TO: THE KENYA NATIONAL EXAMINATION COUNCIL

IN PARTIAL FULFILMENT OF THE AWARD OF A
DIPLOMA IN WATER ENGINEERING

EXAMINATION SERIES: JULY 2024

1
DECLARATION

I declared that this project name is my own work and has not been presented to Kenya National
Examination Council for the award of Diploma in building engineering

STUDENT NAME:

JANGAMU ANDREW ONGAGA

Sign………………………………

Date………………………………

NAME OF SUPERVISOR:

Ms CHIRCHIR

Date………………………………

Sign………………………………

i
DEDICATION

I dedicate this project to my dear parents for their loving kindness and working tirelessly to pay
my fees for whole course without failures. May God bless them in mighty way.

ii
ACKNOWLEDGEMENT

I feel most indebted to express my gratitude to all those individuals who helped me in one way or
another in preparation of this project. I would however like to pass special thanks to the
following people to their tireless effort and whose contribution made the compiling of this
project possible.

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Table of Contents
DECLARATION .......................................................................................................................................... i
DEDICATION ............................................................................................................................................ ii
ACKNOWLEDGEMENT ............................................................................................................................ iii
1.0 EXECUTIVE SUMMARY ..................................................................................................................... vii
1.1 MARKETING PLAN ........................................................................................................................ vii

1.2 BUSINESS DESCRIPTION ................................................................................................................... vii

1.3 ORGANIZATION AND MANAGEMENT PLAN .................................................................................. vii

1.4 OPERATIONAL/PRODUCTION PLAN .............................................................................................. vii

1.5 FINANCIAL PLAN ..........................................................................................................................viii

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

1.0 BUSINESS DESCRIPTION ................................................................................................................. 1

1.2 NAME OF THE BUSINESS ................................................................................................................ 1

1.3 BUSINESS LOCATION ...................................................................................................................... 1

1.4 FORM OF OWNERSHIP ................................................................................................................... 2

1.5 TYPE OF OWNERSHIP ..................................................................................................................... 2

1.6 PRODUCT AND SERVICES................................................................................................................ 3

1.6.1 PRODUCT ................................................................................................................................ 3

1.6.2 SERVICES ................................................................................................................................. 3

1.6.3 JUSTIFICATION OF OPPORTUNITY................................................................................................ 3

1.7 THE INDUSTRY ............................................................................................................................... 3

1.8 GOALS OF THE BUSINESS............................................................................................................... 4

1.9 ENTRY AND GROWTH STRATEGY .................................................................................................... 4

1.9.1 ENTRY STRATEGY .................................................................................................................... 4

1.9.2 GROWTH STRATEGY ................................................................................................................ 4

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

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

2.1 CUSTOMERS .................................................................................................................................. 5

2.1.1 SELLS AND SUPPLY............................................................................................................ 5

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 2.1.2 Commercial Enterprises .......................................................................................................... 6

2.1.3 Individual Customer ................................................................................................................ 6

Market Share ....................................................................................................................................... 6

2.2 COMPETITION ................................................................................................................................ 7

SWOTT ........................................................................................................................................... 7

2.3 ADVERTISING AND PROMOTION STRATEGY ................................................................................... 8

2.3.1 PAID ADVERTISING .................................................................................................................. 8

2.3.2 PROMOTION STRATEGY .......................................................................................................... 8

2.4 PRICING STRATEGY ........................................................................................................................ 8

2.4.1 Supply Tactics ....................................................................................................................... 10

2.5 DISTRIBUTION STRATEGY ............................................................................................................. 10

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

3.0 ORGANIZATION PLAN .................................................................................................................. 11

3.1 ORGANIZATION CHART ................................................................................................................ 11

3.2 MANAGEMENT TEAM .................................................................................................................. 12

3.2.1 PERSONNEL DUTIES............................................................................................................... 12

3.3 REMUNARATION AND INCENTIVES .............................................................................................. 14

3.4 RECRUITMENT, TRAINING AND PROMOTION ............................................................................... 14

3.5 LICENSES PERMIT AND BY LAWS .................................................................................................. 15

3.6.1 BY LAW ................................................................................................................................. 16

3.6.2 SUPPORT SERVICE ................................................................................................................. 16

CHAPTER FOUR ..................................................................................................................................... 17

4.0 PRODUCTION AND OPERATIONAL PLAN....................................................................................... 17

4.1PRODUCTION PROCESS. .............................................................................................................. 17

Scarcity of raw materials ................................................................................................................ 17

4.1 PRODUCTION FACILITIES AND CAPACITY ...................................................................................... 17

4.2 LAYOUT OF PREMISES .................................................................................................................. 18

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 4.3 PRODUCTION SAFETY................................................................................................................... 19

4.4 MONTHLY LABOUR REQUIREMENT .............................................................................................. 19

4.5 MONTHLY PRODUCTION EXPENSE ............................................................................................... 19

4.6 REGULATION EFFECTS .................................................................................................................. 20

CHAPTER FIVE........................................................................................................................................ 20
5.0 FINANCIAL PLAN .......................................................................................................................... 20

5.1 PRE-OPERATIONAL COST STATEMENT .......................................................................................... 20

5.2 WORKING CAPITAL ...................................................................................................................... 21

5.3 TABLE SHOWING THE MODE OF LOAN REPAYMENT ...................................................... 21

5.4 PROJECTED CASH FLOW STATEMENT FOR MOVERSTAR SUPPLY FOR THE YEAR 0F OPERATION
2019 .................................................................................................................................................. 23

5.5 PROJECTED CASH FLOW STATEMENT FOR MOVERSTAR SUPPLY FOR THE YEAR 0F OPERATION
2020 .................................................................................................................................................. 24

5.6 PROJECTED CASH FLOW STATEMENT FOR MOVERSTAR SUPPLY FOR THE YEAR 0F OPERATION
2021 .................................................................................................................................................. 25

5.9 BREAK EVEN LEVEL ......................................................................................................................... 2

5.1.0 CALCULATE THE CONTRIBUTION MARGIN .................................................................................. 3

5.1.1 Contribution margin percentage ............................................................................................. 3

5.1.2 Breakeven level of sales .......................................................................................................... 3

5.1.3 Profitability Ratios ...................................................................................................................... 3

5.1.4 Return on Equity ..................................................................................................................... 3

5.1.5 DESIRED FINANCE ...................................................................................................................... 4

5.1.6 PROPOSED CAPITALIZATION........................................................................................................ 4

APPENDIX II ............................................................................................................................................. 6

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1.0 EXECUTIVE SUMMARY

1.1 MARKETING PLAN

After carrying out market research, the owner who is the manager identifies the following
customer’s , commercial enterprises, small scale builders and individual clients, the firm also has
competitors like Titman constructors, Tai constructors. The business will try to get as many
customers as possible by capitalizing on such factors as price and quality appearance timing.

1.2 BUSINESS DESCRIPTION

The proposed business will be operated under the name MOVER STAR SUPPLY It will be
located in Rift valley Province, Uasin Gishu Count Kesses Division Eldoret town. The business
intends to solve the problem of inadequacy of Tar Also the business will fall under supply
industry which will create employment for the local people..

1.3 ORGANIZATION AND MANAGEMENT PLAN

This business will have organization and management plan simple and drawn to the line of its
profession and administration aspect. The customers will have owner managers as he manager
and it intends to employ other employees will be operators, accountant, Sales representatives and
watchmen. The firm will be made of qualified staff from management position to subordinate
staff recruitment will be through interview conducted by owner manager.

1.4 OPERATIONAL/PRODUCTION PLAN

The operation and production of the proposed business intends to open its doors as from 2024.
The process of supply will involve human labour, machinery, tools and equipment as the method
used to arrive. The firm will adhere to all by laws from the local authority.

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1.5 FINANCIAL PLAN

The approximate amount required to start the business is kshs. 350000. This will be raised
inform of loan from Kenya Commercial Bank kshs. 200000 and kshs. 150000 from owners
savings. The Kenya Commercial Bank will be approached and submitted with the project
statement of cash flow and profit of the intended business. The family plot shall act as a security

viii
CHAPTER ONE

1.0 BUSINESS DESCRIPTION

The proposed business will be operated under the name MOVERS TAR SUPPLY It will be
located in Rift valley Province, Uasin Gishu Count Kesses Division Eldoret town. The business
intends to solve the problem of inadequacy of Tar,. Also the business will fall under supply
industry which will create employment for the local people..

1.2 NAME OF THE BUSINESS

The business will be registered under the name MOVERS TAR SUPPLY The second name itself
is a marketing tool since it indicates activity and materials or the product being produced. The
first name movers which is well known in Kesses division of Uasin Gishu County.

1.3 BUSINESS LOCATION

The location of the business will be situated in Rift Valley Province Eldoret South Constituency
in Uasin Gishu County Kesses Division. It is located along Moi University main campus
highway opposite Kesses dispensary 1 km to Asururiet waterfall. The town is currently growing
rapidly, it is an administration, Educational and Agricultural town. The town is well served with
in terms of transport and communication networks , telephone networks and water availability.
The address of the proposed business will be as follows;

MOVERS TAR SUPPLY,

P.O BOX 30100,
ELDORET.

1
LOCATION OF THE BUSINESS

ELDORET
TOWN

MOVERS TAR SUPPLIES

Nairobi highway

1.4 FORM OF OWNERSHIP

The business will be a sole proprietorship kind of business. The proprietor will be its manager
and employees will be recruited according to their qualification as required by their respective
works. Being a sole proprietor the owner will be her own boss and decision making. The owner
will also be the source of all the operation in satisfaction funded growth of the business at the
long run and enjoy all the profit. The business will be raised inform of loan from Kenya
Commercial Bank at Eldoret Branch and from the owner savings.

1.5 TYPE OF OWNERSHIP

The business will be supplying TAR materials at the industry. It is approximately 1km from
Kesses shopping centre. The materials which are sold to the customers are superior in quality.

2
1.6 PRODUCT AND SERVICES

1.6.1 PRODUCT

As the name suggest, the product will be tar materials for construction of roads and other
services . The pricing and product will be within the customer’s income.

1.6.2 SERVICES

Services on the other hand will include the general advice and constitution on the building
designs to the client and construction and giving approximate costing.

1.6.3 JUSTIFICATION OF OPPORTUNITY

MOVERS TAR SUPPLY works will be located in a very busy place the research carried out by
its proprietors established that Kesses division in particular center in Uasin Gishu county is
undergoing massive expansions for construction and therefore the business will have opportunity
to have its initial customers as soon as possible. The kind of firm which the owner is intending to
adopt will be a simple, efficient, available, flexible, durable and cost effective to the clients.

1.7 THE INDUSTRY

The business is under construction industry which is mainly concerned in tar and roads
maintenance. The increase in living standards of people and increase in literacy has made up the
industry as important to the county. The number of employees depends on the size of particular
business but highly skilled persons. The higher personnel required less capital to invest since
fewer employees with competence can perform fully in shorter times and output is greater. Right
now the industry is experiencing an upward trend since new government has tried to eliminate
corruption in industry. Also government to provider some money every year in Kenya which will
boost the industry sector. The future of industry is very bright and promising since industry is
getting assistance from the government profit is expected as industry grows and technology
grows every year.

3
1.8 GOALS OF THE BUSINESS

For business to change, its required to set and evaluate the goal from time to time, the major
goals in business opportunity is to make profits and remain in business with its aspect of growth
in every year.

The business should ensure to meet the demand of it’s customers by providing good quality
goods and services. It also strives to make the following goals;

 Expanding the business by opening many branches so as to reach a wider proportion of

society to people in the society
 Providing high quality products and services to the clients
 Acquiring the new technology
 Boosting the living standards of the employee by giving them wages and salaries
according to the work they do and duration they have stayed in the business.

1.9 ENTRY AND GROWTH STRATEGY

1.9.1 ENTRY STRATEGY

The firm will start production having acquired the important materials and equipment. Business
will get known by use of posters, signpost being created in strategic positions such as highways
and public ground. Its use of media will be inevitable such as advertising in local radio,
broadcasting local and local newspapers and organizing of a free exhibition day.

1.9.2 GROWTH STRATEGY

Growth in terms of volume of production and services will be brought about by their quality to
client and affordable prices of goods and services offered to them.

4
CHAPTER TWO

2.0 MARKETING PLAN

Marketing is total system of business activities to plan price promote and distribute want
satisfying and services to the customers at a given profit. In economic point view a market is a
place where buyers and sellers meet to exchange those two parties have the dim of obtaining
product or service and making profit. A market can also exist where there is need for a
commodity ability to pay and willingness to buy.

2.1 CUSTOMERS

MOVERS TAR SUPPLY producer a product targets the entire Eldoret south in general and
specifically Kesses Division for its market. The fir intends to base on customers demand
response and behavior in it product and supply of its product. It will do so through producing and
supplying quantity product to the customers will be classified as follows;

2.1.1 SELLS AND SUPPLY

The movers tar and supply are the firm that operates in large scale and perform heavy and large
task e.g supply of tar to road construction and store houses building materials. They meet the
agreement with the manager by taking material of different types of high quality every month
with kshs.1800 profit since they purchase the firm product in bulk hence increase sales.

Name of Customer Quantity Frequency Amount kshs

Brown Tar supply 1 trailer 1 month 180000.00

Total amount 1800.00

5
2.1.2 Commercial Enterprises

They are individual enterprises who purchase the firm products and pro later sell to their
customer

Name Quantity Frequency Amount kshs

KeRRA CO 1000 materials 1 Month 9000.00

P.O Box 232 ELD

Total 9000.00

2.1.3 Individual Customer

They are individual who purchase few products for their own use and fitting

Quantity Frequency Amount kshs

Mr. Koech 120 materials Weekly 10800.00

Mr. Sawe 100 materials Weekly 9000.00

Mrs. Salina 100 materials weekly 13500.00

Total 133300.00

Pie chat

Market Share
Mr. Koech

Mr. Sawe

Mrs.
Salina

6
Market Share

The proprietor carried out an approximate value of market basing on the conducted research in
Kesses centre.

2.2 COMPETITION

From the market competitor carried out in the proposed location firm offices competitive were
identified as in the table below.

SWOTT

Competitors Strength Weakness Opportunity Threats

Titman  Has been in  Offer  Providing  Many people
construction operation for 7 low high quality attracted to this
years quality  Offering business as
 Acquired many product discount and demand is high
customers  Poor credit
 Establish good pricing  Better pricing
relationship  Don’t
with bank and offer
public discount
institutions
Tai  Are situated in  Too  Change of  Competition
construction convenient seasonal enterprise to  Low supply of
place where  Small be of long product
transport is scale season
available operation  Providing
 Offer credit  Lack of enough funds
facilities enough to manage
 There price are funds their firms
usually low  Low  Employ

7
 quality qualified
products personnel

2.3 ADVERTISING AND PROMOTION STRATEGY

MOVERS TAR SUPPLY will use appropriate method in advertising that will both be
informative and persuasive with the aim of penetrating the market and development the service
for the customers.

2.3.1 PAID ADVERTISING

TYPE OF ADVERTISING NUMBER COST KSHS

Trade Journals 6 100
Radio 1 1500
Calender Design 10 300
Poster 10 200
Total amount 6600

2.3.2 PROMOTION STRATEGY

Promotion is a marketing strategy done by creating awareness of a business product or service to

the people in the community and then give people a chance to test or see the effectiveness and
suitability of movers tar suppliers products will be to do this by;

(i) Giving free samples and gift e.g T-shirts and calendars
(ii) Promotion from one level to the next level
(iii) Taking for trips and tours
(iv) Providing free for Terrazzo materials for construction
(v) By taking for further education in order to gain more skills from different places

2.4 PRICING STRATEGY

The manager of the firm will see to it the price of product or service offered to the customers are
lower than those of competitors. The price should not be too low that there will be no profit

8
realized. Profit should be realized for use in maintenance and expansion. The selling price of the
product in the firm will be variable this will depend on the climated change for example during
rainy season. Hence this particular moment the manager will change the price of those
commodities. It will be determined by the following factors;

(i) Government Price Control

If the government will raise the price of raw material used by the firm then selling price of the
product could be high and vice versa

(ii) Competition

Competitors pricing strategy will be different from pricing strategy of MOVERS TAR SUPPLY
producers. This is because different competitors purchased raw materials from different places
with different prices. The manager of the firm will be considering the following objectives

 To achieve necessary return on investment

 To achieve maximum possible profit
 Improving business relations

The firm will be offering discount and credit facilities to its customers

(iii)Discount Allowed

Cash discount will be offered to customers who purchase in large quantities and ones who
normally pay on time

Credit Facilities

Credit facilities are offered to those regular customers of the Tar materials especially post office
employees they will paid at the end of the week or month depending on agreed time.

9
2.4.1 Supply Tactics

These are methods to be employed by the management in relation to both scale volume and
maximization of profit.

(a) Offer discount – These will be both cash and trade discounts and thy will be offered for
those customers who buy commodities or services whose price exceed in a given limit.
(b) Installment buying – This is a situation where a buyer buys a commodity and attain
ownership of the commodity after payment of a down payment and paying the rest of the
money in equal monthly installments.
(c) After Sales Service – This include transportation to the buyer premises offered for free at
subsidized cost for customers who by a commodity that is bulky.
(d) Offering Quality Product and services – to the customers to their satisfaction.

2.5 DISTRIBUTION STRATEGY

Distribution is the process of ensuring that product and service gets to its customers. The stages
is through various qualified personnel in the firm who analyze and approves the product. It starts
from the client requirement to the contractor.

Client Site Architect

Consultant

Contractor Client

The distribution strategy of MOVERS TAR SUPPLY product will be of good standard
strengthened by the presence of distribution locomotion under the ownership of the business. The
business owner will purchase a lorry and carriage van for business to use in undertaking its
distribution activities. The business shall use road transportation means. This follows a number
of factors that goes with the use of road transport, cheap, flexible and safe. The cost of
transportation per month will be kshs.250 x 30 = 7500.00

10
CHAPTER THREE

3.0 ORGANIZATION PLAN

The organization of the business is arranged according to the level of individual starting from the
manager operations, sales representatives, financial done production officer, driver operation and
watchman. The team shall be able to have skills and training on how to run the business
smoothly. There shall be good coordination from the manager to employees for efficient
production of Bright star Terrazzo supply.

3.1 ORGANIZATION CHART

MANAGER

SUPERVISOR

PRODUCTION OFFICER Supply ACCOUNTANT

REPRESENTATIVE

OPERATORS WATCHMAN

11
3.2 MANAGEMENT TEAM

3.2.1 PERSONNEL DUTIES

MANAGER
QUALIFCATION
 Holder of a diploma from recognized institution
 Have entrepreneurship skill and computer skills
 Be able to communicate well
DUTIES
Decision maker
A planner

SUPERVISOR
QUALIFCATION
 Holder of diploma in sales and marketing on business
 Be computer literate
 Hardworking
Be able to communicate well
DUTIES
He is the deputy of the owner manager
He keeps the manager informed at all the firm

PRODUCTION SUPERVISOR
QUALIFCATION
 Be able to communicate well
 Computer literate
A certificate holder in
DUTIES
Mobilize the subordinate to produce materials
To supervise directly operation

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ACCOUNT
QUALIFCATION
 Should at least have a C+ in KCSE Level
 Be polite and fluent in English and Kiswahili

DUTIES
Keeps creditors and debtors file and record
Analyze the financial position

SUPPLY REPRESENTATIVE
QUALIFCATION
 Diploma or certificate holder in Sales and marketing
Be hardworking
DUTIES
Market the firm product and also the customers
WATCHMAN
QUALIFCATION
 Should be aged 30-40 years old
 Should have at least 3 years
 Should be active
DUTIES
Guard the business from inside and outside

OPERATORS
QUALIFCATION
Should be aged 30-40 years old
Should have at least 3 years
Should be active
DUTIES
Preparation of raw material

13
Loading and offloading

3.3 REMUNARATION AND INCENTIVES

Remuneration is the compensation of work output of the worker to their work output the
business example includes allowances, commission and rewards.

PERSONNEL NO SALARY HOUSING MEDICAL SUB

ALLOWANCE ALLOWANCE TOTAL
Manager 1 12000.00 2500.00 2500.00 16500.00
Supervisor 1 8000.00 1000.00 1000.00 10500.00
Accountant 1 6000.00 500.00 700.00 7500.00
supply officer 1 4000.00 500.00 5250.00
Watchman 2 3000.00 500.00 750.00 4750.00
Operator 5 6000.00 500.00 500.00 8000.00
39,000 4500 167000 524,000
TOTAL

3.4 RECRUITMENT, TRAINING AND PROMOTION

Step 1: Advertisement

The various vacancies of personnel will be advertised through the use of poster which will be
distributed in town and its vicinity key personnel will advertise through written media i.e
newspaper.

Step 2: Recruiting of Key Personnel

Most appropriate means of advertise for key personnel is through written medial i.e newspaper.
The selected newspapers have high potential of recruiting more competent personnel official
recruitment is through application which is then corresponded by the interview.

Step 3: Interview

14
After application the qualified person shall be able to get the invitation letter calling him/her for
interview when the selection panel had selected by the supervisor.

Step 4: Training

A new employee will be given short term training before he/she fully joins the employees in the
day to day activity. This will be able to familiarize new employees in boosting his/her working
experience.

TITLE MONTH TRAINNING DURATION VENUE COST

Supervisor April Managerial Acc 2 weeks Eldoret 5000.00

Poly
Accountant April Accountance 2 weeks Kims 5000.00
Eldoret
Operator December Industrial 3 weeks Eldoret 2500.00
Kims
Supply December Supply and 3 weeks Eldoret 2500.00
Representative marketing Poly
Total 15000.00

Step 5: Promotion

Promotion will be done in accordance with an employee academic qualification on his/her

dedicates at work hard working employees shall be given first class hand preferences.

3.5 LICENSES PERMIT AND BY LAWS

MOVERS TAR SUPPLY will be regarding as a manipulating plan for suppling Gutters
materials. This will be done through the Kenya registration bureau under the manufacturing act
of Kenya. The firm shall secure license at cost of kshs. 3500 so as to be allowed to operate
within the region trade.

15
3.6.1 BY LAW
HEALTH AND SAFETY REGULATION ACT
This is to ensure the maximum cleanliness which should be maintained in firm of business this
includes;

(i) Cleanliness: This involves the removal of all vegetation that have been cut down and
any polythene bags which are all around the firm.
(ii) Sanitation: Sufficient and suitable sanitary convinces separate for each set must be
provided subjected to conformity with and standard prescribed by rules.

SAFETY REGULATIONS
Drinking water: An adequate supply of whole sum drinking water must provide and should be
treated well for human consumption.
Fencing: Every part of the work place should be formed.

3.6.2 SUPPORT SERVICE

These are services that a business need for daily running operations other than by staff. They
include;
(i) Banking Services

This service will be offered by local Kenya Commercial bank which will be required for banking
deposits and withdrawal of money. The firm is Kenya Commercial Bank Eldoret Branch.

(ii) Insurance

This will be obtained from Amaco Insurance Company which will cost kshs.1500.00.

(iii) Telephone and Postal Services

Telephone services will be required by the business. A line will be sourced from Telcom Kenya
local branch which will cost.

16
 (iv) Postal Services

This will be offered by the local post office at a cost of Kshs.2500 per year.

CHAPTER FOUR

4.0 PRODUCTION AND OPERATIONAL PLAN

The materials will be kept in Kiln to ensure that the product are supplied to customers are of
good quality. The receipt given to consumers after buying will have the name of the business, the
address and telephone numbers so that at any consultation the customers will be able to express
their concern better about the product.

4.1PRODUCTION PROCESS.

MOVERS TAR SUPPLY will be dealing with provision of services and supply ,

Scarcity of raw materials

(a) The premises will face the scarcity of resources which will push up the cost of
acquiring them and delays in production
(b) Steady rise in prices
(c) Rise in electricity expenses which will lower the profit margin
(d) Dishonest employees will result in losses of equipment of the premises

4.1 PRODUCTION FACILITIES AND CAPACITY

The production operation facilities required by MOVERS TAR SUPPLY will include:

17
Item Quantity Date of Acquisition Supplier Capacity Total kshs.

Tar 2 1st Jan 2023 Eldoret Industrial 2500 material 60000.00

2 1st Jan 2023 10000.00
1 1st Jan 2023 1000.00
5 1st Jan 2023 1000.00
3 1st Jan 2023 10000.00
2 1st Jan 2023 1500.00
1 1st Jan 2023 10000.00
Total 95500.00

4.2 LAYOUT OF PREMISES

ACCOUNTANT RM
WWTCHMANSTORE
WATCHMAN STORE

OUT
OPERATION

CAR PARK TOILETS

MAIN ROAD
18
4.3 PRODUCTION SAFETY

This is generally the outline of the production cost and costing will be considered when camping
up with the production costing will be used to determine the price of the materials

4.4 MONTHLY LABOUR REQUIREMENT

To fully maximize the profit of MOVERS TAR SUPPLY will employ effective management
skills and techniques

Position No Salary Total cost (kshs)

Manager 1 16500.00 16500.00

Supervisor 1 10000.00 10500.00
Accountant 1 7500.00 7500.00
Watchman 2 2375.00 4750.00
Operator 5 7000.00 3500.00
Total 39750.00

4.5 MONTHLY PRODUCTION EXPENSE

Expenses Cost per month kshs

Electricity 2275.00
Water bill 2275.00
Advertisement 6600.00
Telephone 2450.00
Permit and license 3500.00
Stationary 1500.00
Transport 2000.00
Total 20600.00

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4.6 REGULATION EFFECTS

(i) Government Regulation

The government has roles and regulations that all business in the country should have a
certificate or registration and the trade licenses and permit obtained from District commissioner
office.

(ii) Registration of Business Name

There will be a name of the business type of operation and should be issued at the firm offices.

(iii) Trade License Act

Trade license is obtained from the county council at kshs.3500.00 this license should be renewed
annually and is requirement of any business.

(iv) Safe Regulation

These manuals touch the staff aspect of work and machinery. All labour shall be provided with
overall helmet and safety boots.

CHAPTER FIVE

5.0 FINANCIAL PLAN

5.1 PRE-OPERATIONAL COST STATEMENT

ITEM COST
Machinery and Equipment 29400.00
Telephone 20500.00
Advertising 27300.00
Electricity 15000.00

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 Stationery 3500.00
Insurance 3500.00
License and permit 95500.00
Total 194700.00

5.2 WORKING CAPITAL

ITEM AMOUNT (kshs.)

Stock 49300.00
Cash at Bank 40000.00
Cash at Hand 19,000.00
Salary and Wages 47,000.00
Total 155,300.00

5.3 TABLE SHOWING THE MODE OF LOAN REPAYMENT

MONTH PRINCIPLE MONTHLY INTEREST BALANCE
AMOUNT INSTALMENT PAID
May 2023 200,000 11110 1920 188890
June 188890 11110 1920 177780
July 177780 11110 1920 166670
August 166670 11110 1920 155560
September 155560 11110 1920 144450
October 144450 11110 1920 133340
November 133340 11110 1920 122230

21
December 122230 11110 1920 111120
January 2023 111120 11110 1920 100010
February 100010 11110 1920 88900
March 88900 11110 1920 77970
April 77970 11110 1920 66680
My 66680 11110 1920 55570
June 55570 11110 1920 44460
July 44460 11110 1920 33350
August 33350 11110 1920 22240
September 22240 11110 1920 11130
October 11130 11110 1920 10020
November 10020 11110 1920 20
December 20 11110 1920 NIL
Total 120000 38400

22
 5.4 PROJECTED CASH FLOW STATEMENT FOR MOVERS TAR SUPPLY FOR THE YEAR 0F OPERATION 2023

RECEIPT JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
Cash Sales 40,700 53,400 64.350 70,800 73,000 81,000 79,000 84,500 87,850 89,400 80,200 82,000 906,200
Credit Sales 18,500 19,200 21,000 2,5000 23,200 23,000 24,300 25,000 27,000 28,000 33,000 19,800 284,1000
Capital introduced 751,37 - - - - - - - - - - - 751,375
5
Total Receipts 810, 72,600 84,150 91,800 95,500 704,200 102,000 108,800 112,850 116,400 118,200 125,000 1,941,575
575
Payments - - - - - - - - - - - - -

Cash Purchases 75.000 23,000 19,000 15,000 21,000 20,000 21,400 20,100 22,150 21,000 21,100 21,800 300,950
Cash Purchases 5,200 6,000 5,900 7,000 7,200 5,700 5,6000 5,500 6,400 5,200 5,300 5,000 70,000
Salaries 28,000 28.000 28,000 28,00 28000 28,000 28,000 28,000 28,000 28,000 28,000 28,000 336,000
Rent 1,000 1.000 1,000 1,000 1000 1,000 1,000 1000 1000 1000 1000 1000 12,000
Telephone 200 110 150 200 350 400 200 180 290 300 270 300 2,910
Advertisements 400 200 180 160 200 180 20 210 280 160 220 240 2,650
Water 110 130 100 140 160 130 110 10 110 120 130 110 1,470
Electricity 200 120 190 200 239 210 290 200 100 200 270 290 2,550
Postages 100 120 190 140 160 180 195 210 215 258 230 260 62,210
Insurance - - - 6,900 - - - - - - - - 6,900
Bank Charges 4,000 - - - - - - - 4,000 - - - 8,000
Maintenance& - - 3000 3,000 - 1000 2,000 - - - - 3,000 12,000
Repairs
Stationary 120 100 150 150 140 150 170 180 200 240 270 90 2,160
Interests and Loans - - - - - - - - - - - 4,000 4,000
Total Payments 110,33 58,780 57,780 51,990 58.440 89,450 57,145 53,100 61,785 56,520 55,890 55,700 76,300
0
Net cash flows 700,24 13,820 26,370 39,810 37,060 14,750 44,855 930,010 51,065 59,880 69,110 53,100 1,106,705
5
Bal.BF - 714.065 740,435 780,245 817,305 832,206 876,910 930,010 981,075 1,207,595 1,106,705 1,106,70 1,106,705
5
Net Balance 714,06 740,439 780,245 817,305 832,055 876,910 930,010 981,075 1,036,70 1,116,705 1,116,703 1,106,70 1,106,803
5 5 5

23
 5.5 PROJECTED CASH FLOW STATEMENT FOR MOVERS TAR SUPPLY FOR THE YEAR 0F OPERATION 2024

RECEIPT JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
Cash Sales 52000 55600 59200 61000 63250 66950 68000 72000 72800 75980 77308 81450 123336
Credit Sales 21000 19000 21200 20000 30000 28020 31000 28000 35000 37000 28500 40000
Capital 830000 - - - - - - - - - - - 830000
introduced
Total Receipts 73000 74600 80400 81000 93250 94950 99000 100000 101800 112980 105808 121450 981200
Payments - - - - - - - - - - - - -

Cash Purchases 80000 73000 26000 31000 40000 38,000 55000 49000 49600 50000 53300 60000 680300
Credit 6000 5200 4000 3400 1200 400 1000 3200 3500 2000 4000 3000 5800
Purchases
Salaries 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000 336000
Rent 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
Telephone 205 205 205 205 205 110 110 100 80 100 120 90 1735
Advertisements 500 250 - - 400 300 500 500 500 500 500 500 4450
Water 130 120 110 100 130 100 100 150 150 100 100 120 1010
Electricity 300 300 300 300 300 300 300 300 300 300 300 300 3900
Postages 120 110 100 120 100 100 100 105 130 100 100 100 1200
Insurance - - - - - 5400 - - 2000 - - - 7400
Bank Charges 1000 - - 2500 2000 - - - - 1500 - - 7000
Maintenance& 1500 - 1500 1500 - - - - - 1500 - 1500 7500
Repairs
Stationary 3000 - - 1000 1000 1000 - - - - 1500 500 8000
Interests and 1000 1000 1000 - - - 3000 - 1500 1500 - - 9000
Loans
Total Payments 118000 23000 76000 90000 56000 58000 73000 69000 70000 53000 49000 75000 190800
Net cash flows 820000 28000 19000 35000 41000 40900 52000 45000 57000 58000 44000 56000 98900
Bal.BF - 823000 827080 856200 910000 921000 926500 937000 939820 941400 943000 957000 1108000
Net Balance 823000 830000 856200 910000 921000 926000 027000 039820 041400 943000 951000 1108000 1120900

24
 5.6 PROJECTED CASH FLOW STATEMENT FOR MOVERS TAR SUPPLY FOR THE YEAR 0F OPERATION 2025

JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
RECEIPT
Cash Sales 52000 55600 59200 61000 63250 66950 68000 72000 72800 75980 77308 81450 123336
Credit Sales 21000 19000 21200 20000 30000 28020 31000 28000 35000 37000 28500 40000
Capital 830000 - - - - - - - - - - - 830000
introduced
Total Receipts 73000 74600 80400 81000 93250 94950 99000 100000 101800 112980 105808 121450 981200
Payments - - - - - - - - - - - - -

Cash Purchases 80000 73000 26000 31000 40000 38,000 55000 49000 49600 50000 53300 60000 680300
Credit 6000 5200 4000 3400 1200 400 1000 3200 3500 2000 4000 3000 5800
Purchases
Salaries 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000 28000 336000
Rent 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
Telephone 205 205 205 205 205 110 110 100 80 100 120 90 1735
Advertisements 500 250 - - 400 300 500 500 500 500 500 500 4450
Water 130 120 110 100 130 100 100 150 150 100 100 120 1010
Electricity 300 300 300 300 300 300 300 300 300 300 300 300 3900
Postages 120 110 100 120 100 100 100 105 130 100 100 100 1200
Insurance - - - - - 5400 - - 2000 - - - 7400
Bank Charges 1000 - - 2500 2000 - - - - 1500 - - 7000
Maintenance& 1500 - 1500 1500 - - - - - 1500 - 1500 7500
Repairs
Stationary 3000 - - 1000 1000 1000 - - - - 1500 500 8000
Interests and 1000 1000 1000 - - - 3000 - 1500 1500 - - 9000
Loans
Total Payments 118000 23000 76000 90000 56000 58000 73000 69000 70000 53000 49000 75000 190800
Net cash flows 820000 28000 19000 35000 41000 40900 52000 45000 57000 58000 44000 56000 98900
Bal.BF - 823000 827080 856200 910000 921000 926500 937000 939820 941400 943000 957000 1108000
Net Balance 823000 830000 856200 910000 921000 926000 027000 039820 041400 943000 951000 1108000 1120900

25
5.7 MOVERS TAR SUPPLY FORMA INCOME STATEMENT FOR THE YEAR ENDING 2023

ITEMS COST
Sales 1895000.00
Credit sales 160000.00
Total cost sales 2055000.00
Expenses
Advertising 20500.00
Rent 4800.00
Salary and wages 144000.00
License and permit 3500.00
Telephone bills 27300.00
Electricity and water 29400.00
Transport 1200.00
Total cost expenses 230700.00
Net profit Before tax 1824300.00
Provision for tax 20% 364860.00
Net profit after tax 1690140.00

1
5.8 BALANCE SHEET OF MOVERS TAR SUPPLY AS AT 30TH APRIL 2023

FIXED ASSETS 30TH APRIL 30TH APRIL 30TH APRIL

Machinery and Equipment 95000.00 95000.00 95000.00
Furniture and fittings 17000.00 17000.00 17000.00
Total fixed assets 112500.00 112500.00 112500.00
Current assets
Cash in hand 103000.00 103000.00 183000.00
Cash at bank 303200.00 303200.00 303200.00
Debt
Total current assets 406200.00 406200.00 486200.00
LIABILITIES
Current liabilities 12710.00 24300.00 27400.00
Total current liabilities
Long term liabilities
Loan from bank 200000.00 200000.00 200000.00
Total long term
Liability 200000.00 200000.00 200000.00

5.9 BREAK EVEN LEVEL

FIXED COST AMOUNT KSHS

Rent 48000.00
Loan 20000.00
Salary and Wages 144000.00
License and permit 3500.00
Total cost 395500.00
Variable cost
Telephone 27300.00
Advertisement 20500.00
Transport 12000.00
Electricity 29400.00
Total 89200.00

2
5.1.0 CALCULATE THE CONTRIBUTION MARGIN

Contribution Margin = Total Sales – Total variables cost

= 2550000 – 89200
=1965300
= kshs.1965800.00

5.1.1 Contribution margin percentage

Margin percentage
𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑚𝑎𝑟𝑔𝑖𝑛
= × 100
𝑇𝑜𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠
1965300
= × 100
259200

=96%

5.1.2 Breakeven level of sales

𝐹𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡
=𝑐𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛 𝑚𝑎𝑟𝑔𝑖𝑛 × 100
1395500
= 1965500 × 100
=2011.90

5.1.3 Profitability Ratios

𝐺𝑟𝑜𝑠𝑠 𝑝𝑟𝑜𝑓𝑖𝑡𝑠
= × 100
𝑇𝑜𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠

5.1.4 Return on Equity

𝑁𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡 𝑏𝑒𝑓𝑜𝑟𝑒 𝑡𝑎𝑥
= 𝑂𝑤𝑛𝑒𝑟 𝑒𝑞𝑢𝑖𝑡𝑦
1824300
= × 100
194700

=936.9
Return on Investment
𝑁𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡 𝑡𝑎𝑥
= 𝑇𝑜𝑡𝑎𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
1610
= 230700 × 100

=7.8%

3
5.1.5 DESIRED FINANCE

Item Amount
Pre operational cost 194700.00
Working capital 815200.00
Fixed assets 112500.00
Total 1122400.00

5.1.6 PROPOSED CAPITALIZATION

ITEM AMOUNT
Owners savings 150,000.00
Bank loan 200,000.00
Total 350,000.00

4
LOCATION OF THE BUSINESS

ELDORET
TOWN

MOVERS TAR SUPPLIES

Nairobi highway

5
APPENDIX II

WWTCHMANWASTORE
WATCHMAN
WATCHM WKATC AN STORE

SALES REP

OUT
OPERATION

CAR PARK TOILET

MAIN ROAD