JADAMA ENTERPRISES LIMITED COMPANY.

P.O. BOX 4153-40105

KISUMU.

DOCUMENT NAME : BUSINESS PLAN

COURSE CODE : 1704/2

NAME OF PRESENTER : DAVID OUMA OTIENO

INDEX : 7411050841

PRESENTED TO: THE KENYA NATIONAL EXAMINATION COUNCIL (KNEC)

IN PARTIAL FULFILMENT FOR THE AWARD CERTIFICATE IN BUILDING

TECHNOLOGY

SUPERVISED BY : MADAM MARGARET.

DATE OF PRESENTATION : 28TH NOVEMBER 2021.

CENTRE NAME : THE KISUMU NATIONAL POLYTECHNIC

P.O. BOX 143-40100

KISUMU

i
ACKNOWLEDGEMENT
This project urged me to give thanks to Almighty God for His care and protection that He
showed me upon to have strength to complete my project work effectively.

ii
DEDICATION
This project is dedicated to my beloved parents, friends and lecturer for their full
encouragement during my study period and entire work of research which have managed to
do.

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DECLARATION
Am declaring that this is my own original knowledge and has not been presented to any other
examination council before and no part of this research should be produced to any other
person or institution for award or fulfillment without my concern

NAME: DAVID OUMA OTIENO

SIGN. :..........….........................
DATE: ......................................

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EXECUTIVE SUMMARY (ABSTRACT)
The name of the business will be JADAMA ENTERPRISES LIMITED COMPANY, having
address P.O. BOX 40103 KISUMU. Besides that the business will be located opposite
Kisumu Boys High school next to National oil .The business is sole-proprietorship dealing
with production and supply of building blocks in different sizes.
Business is aiming at ensuring that the clients and customers who are buying our products are
fully satisfied with our products and services to enhance development and motivation to the
workers.
The establishment of this business is motivated particularly by construction from different
places especially in town there is a lot construction thus creating ready market to the
business. The organisation is managed by qualified specific personnel’s in charged .

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TABLE OF CONTENTS
Dedication
Acknowledgments
Declaration
Abstract
CHAPTER ONE:
Business description
Nature of the busines
The industry
Business goals/Objectives
Justification of business opportunity
Entry and growth strategy

CHAPTER TWO:
Market plan
Potential customers
Competition
Market size
Pricing strategy and policy
Sales tactics
Advertising and promotion strategy
Customer services

CHAPTER THREE:
Organisation and management plan
Organisation Structure
Key management personnel
Other personnel (support staff)

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Recruitment, training and promotion
Remuneration and Incentives
Lincensing or permit requirement support services

CHAPTER FOUR:
Production/operation plan
Production facilities and capacity
Production/services design and development
Production/operation strategy
Production process
Quality control
Regulation affecting production/operation

CHAPTER FIVE:
Financial plan
Pre-operation costs
Working capital
Cash-flow statement
Income statement
Balance sheet
Break even level
Profitability ratio
Desired Financing
Proposed capitalization
Potential risks

vii
CHAPTER ONE:
BUSINESS DESCRIPTION
1.1 NATURE OF THE BUSINESS.

The name of the business will be JADAMA ENTERPRISES LIMITED COMPANY having
address P.O. BOX 4153-40105 KISUMU. Besides that it’s located opposite Kisumu Boys
High school next to National oil. The business is based on production and supply of building
blocks in required sizes.

1:2 THE INDUSTRY

The industry name is similar to the business name as it is written above. It offers good
services the potential customers whereby there is a specific capacity of our products that if
you manage to purchase therefore the after sales service is offered like free and transport cost
at 100% rate as well as damages during transportation.
1:3 PRODUCT/SERVICES
The kind of products we sell to our customers we ensure are of high quality since we value
our customers and we also expect positive response, this is also enhanced by changes we
always make in case of changes in the new arrivals in the market as well as customer
preferences .
1:4 BUSINESS GOAL/OBJECTIVES
Business is aiming at ensuring that the clients and customers who are buying our products get
quality products at affordable prices to enhance good attitude of the customer towards our
products, this is also having essence of legality from the authorities involve in particular field
of construction.
1:5 JUSTIFICATION OF BUSINESS OPPORTUNITY
The establishment of this business is motivated specifically by construction that is taking
place in various places especially in town, cities and other urban centres.
1:6 ENTRY AND GROWTH STRATEGY
The improvement in the business is brought by the environmental factor of infrastructure
development which enhances different attraction to the investors and other business traders
who might be interested in given geographical area.

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CHAPTER TWO:
2.1 POTENTIAL CUSTOMERS.
The business itself is having specific customers depending on the field where the business
oriented or connected to for instance the above business is targeted by engineer who build
houses, road which require materials stated for their work to prosper according to their .The
customers who are homogeneous in this case are people like quantity surveyor who did the
quotation and also identified the best material to be used together with the engineer who does
the work.

2.2 COMPETITION
The stiff competitors are just other adjacent concrete companies that are within the place
where my business is located for instance we have several of them like Ndugu, Kisumu
concrete and county concrete. These are the competitors.
2.3 MARKET SIZE/SHARE
The size of the market that I would like to control and serve should be maximum depending
on my business capacity and market planning of the product available hence facilitating
offering of good services.
2.4 PRICING STRATEGY AND POLICY.
The method of pricing product is based on the quality and size of our products since they are
of different sizes and they have to vary in prices which enhance capability of potential
customers to cope up with the prices of products.
2.5 SALES TACTICS.
The tactics of sales is always negotiable by the technician available in the site where products
are sold to facilitate even the convincing of customers towards buying our products. On the
other hand the receipt is also written to the customers indicating products purchased.
2:6 ADVERTISING AND PROMOTION STRATEGY
The method that can be used to promote our products and advertising is by the use of social
media and also by printing products pictures on the products that are sold.
2:7 DISTRIBUTION STRATEGIES
On our products distribution we employ some specific individual who are qualified for
driving Lorries and trailers which are in capability to transport our products to deliver them
either to the site of the clients or to the shop from the production site .The transport costs is
also offered to customers depending on the products purchased.
2:8 CUSTOMERS SERVICES
There are several services offered to customers since it is what facilitates the business to take
place i.e. the after sales services is very essential to customers who has managed to create
business legal and contribution towards the business success e.g. loading off-loading, even
incurred losses during transport hence motivating cost

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 CHAPTER THREE:
ORGANIZATION STRUCTURE:
In my organisation structure for the business I have subordinate staff as shown below.

Board of Directors

C.E.O

Sales Marketing Production Human Resource Finance Research & Purchasing

Development

Field sale force Component

Manufacture Management
Accounting

E – Commerce Product Assembly

Direct Sales Financial
Accounting
Customer services Quality control

3.2 KEY MANAGEMENT PERSONNEL

In my organization I have a team of qualified personnel who are assisting in management of
the business. Here we have, Human Resource Manager, Finance Manager in assistance of
financial accounting manager who are working in co-ordination with sales agent and e-
commerce and director of sales.
3.3 RECRUITMENT, TRAINING AND PROMOTION
During recruitment and selection of employers and other manual workers I always prefer to
interview them and also checking at their curriculum vitae which can help in showing the
truth of the experience in each individual to be employed. On the other hand there is also
orientation after appointment immediately after qualifying from interview thereafter new
promotion is based on perfection.
3.4 OTHER PERSONNEL (SUPPORT STAFF
The support staff I would wish to employs messengers and other personal assistance members
e.g. cleaners.
3.5 REMUNERATION AND INCENTIVES

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 The method of adaption for employees will just be controlled by the level of class where each
and every individual is employed and salary variation as well as progression percentage as
indicated.
Salary structure
Salary (Grade) Works Subordinate staffs Managers Progression (%)
A 15000-25000 18000-30000 25000-40000 5%
B 25000-30000 27000-40000 40000-70000 7%
C 32000-40000 42000-50000 72000-80000 9%
D Directors C.E.O
E 95000-100000 100000-120000

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3.6 LICENSING / PERMIT REQUIREMENTS
The business will have to be issued with license from NCA, KEBs and also county
Government depending on our products, their work and government restriction. Since the
products are used in construction, the National Construction Authority has to proof our
product together in coordination with the Kenya Bureau of Standards (NCA) and (KEBs).
3.7 SUPPORT SERVICES
In this business for effectiveness the support which is much essential is good infrastructure
which is required to facilitate smooth movement in the site while bringing raw – materials
and out for supply of products after production to the potential customers.

CHAPTER FOUR:
PRODUCTION/OPERATION PLAN
4.1 PRODUCTION FACILITIES AND CAPACITY
We have different types of tools which help in speeding up of the production process and they
are operated by qualified personnel who are well conversant with the shape and sizes of our
block products e.g. block nine and six. These machines are; mixers, stumping machine,
loader and many others necessary.
4.2 PRODUCT / SERVICES DESIGN AND DEVELOPMENT
Designs of our products are basically in two required shapes and sizes e.g. block 6 and 9 and
even their weight varies.
4:3 PRODUCTION/OPERATION STRATEGY

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In our business production site we need a specific number of blocks to produce per month e.g.
50000 blocks monthly and the delivery rate is just depending on the demand of the customers
who are being supplied because a times even the 50,000 bricks are less in month when
delivery rate is high.
4.4 PRODUCTION PROCESS
The production processes of our products are in steps as follows;
i. Availing raw materials to the site e.g. chips, dust, cement.
ii. Mixing the three materials uniformly to form a mixture.
iii. Mixing them application of enough water for bonding.
iv. Transferring the mixture of materials and water into the moulding boxes in desired
size.
v. Drying them to form the shape required.
vi. Arranging them in the yard for delivery process to customers.
4.5 QUALITY CONTROL
The quality products are maintained in various aspects like proper servicing of the machines
used for production and also using quality products in production of the products to enhance
effective services to the potential customers. The production itself should be more accurate.
On the other hand the production standards should be monitored to increase the accuracy in
production of the desired product to the customers who intend to have quality product to a
better structures.
4.5 REGULATIONS AFFECTING PRODUCTION / OPERATIONS
On the government rules and regulation there are compliances and approval to sum document
that we are required to be issued with before to regulate our production on the sites and also
to approve our products which may be a security even to our self. These documents are
licenses, business permit and also certificate from The National Environmental Management
Authority which allow us to use our machines for production.

CHAPTER 5
5.0 FINANCIAL PLAN
5.1 PRE-OPERATIONAL COSTS

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ITEM COST (KES)
Machinery, tools & equipment 50000
Renovation of business premises 20000
Market research 35000
Licensing requirements 2700
Installations 22300
Legal fees 2000
TOTAL COST 150000

5.2 WORKING CAPITAL

PARTICULARS YEAR – I YEAR – II YEAR - III
Current Assets (KES) (KES) (KES)
Stock 150000 200000 310000
Cash-in-hand 87000 85,000 75,000
Cash-at-bank 100000 220000 300000
Debtors 50,000 32,000 90,000
Pre-paid rent 40000 40000 40000
Pre-paid insurance 4000 4000 4000
Total Current Assets 431000 581,000 819,000

Current Liabilities
Loans 150,000 180,000 120,000
Bank-overdraft 30,000 40,000 80,000
Creditors 100,000 180,000 210,000
Bills-payable 72,000 72,000 60,000
Total Current Liabilities 352000 472000 470000

Working Capital Requirement 79,000 109,000 349000

(Total C.A – Total C.L)

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 5.3 CASHFLOW STATEMENTS
JADAMA ENTERPRISES COMPANY LIMITED
PROJECTED CASHFLOW STATEMENT

PARTICULARS

JAN FEB MAR APR MAY JUN JULY AUG SEP OCT NOV DEC
Beginning Balance 25,000 191,850 357,190 433,410 592,620 612,670 731,620 850,085 1,100,995 1,200,990 1,374,870
Cash in hand 75,000 79,000 81,000 84,000 86,000 89,000 93,000 95,000 101,000 105,000 115,000 105,000
Accounts receivable 25,000 33,000 40,000 20,000 23,000 29,000 38,000 31,000 35,000 37,000 25,000 34,000
Others 10,000 5,000 12,000 8,000 15,000 7,000 20,000 12,000 22,000 23,000 17,000 11,000
Cash sales 100,000 100,000 118,000 129,000 100,000 80,000 120,000 125,000 130,000 128,000 124,000
Total cash receipts 110,000 242000 424850 587190 814,410 686410 843670 989620 1,133,085 1,395,995 1,485,990 1,648,870

Cash payments
Purchases 20,000 14,000 28,000 60,000 148,000 35,000 56,000 87,000 10,000 120,000 20,000 28,000
Creditors 28,200 19800 20,000 47,000 53,000 19,000 39,000 35,000 8,000 53,000 45,000 28,000
Wages 9,500 3,500 4,300 14,000 3,700 4,700 3,000 3,600 3,800 4,200 18,150 2,900
Rent 3,300 2,300 2,300 5,300 2,300 2,300 2,300 2,300 2,300 2,300 4,300 1,300
Water 300 400 350 450 480 370 360 355 420 440 480 460
Telephone 250 300 360 280 310 540 290 330 320 465 560 315
Electricity 1,500 1,400 1,300 1,600 1,550 1,700 1,650 1,300 1,200 1,450 1,350 1,500
Stationary 9,500 3,000 6,500 19,000 7,000 4,500 3,500 4,300 1,100 8,200 9,300 4,500
Loan interest 850 850 850 850 850 850 850 850 850 850 850 850
Advertisement 4,000 2,000 2,000 3,500 2,500 2,800 2,900 2,400 2,100 2,200 4,300 3,000
Sundries 7,600 2,600 1,700 1,800 2,100 2,400 2,200 2,100 2,000 1,900 7,150 3,050
Total cash payment 85000 50150 67660 153,780 221,790 73740 112,050 139535 32090 195005 111120 73,875
Ending cash balance 25000 191,850 357,190 433,410 592,620 612,670 731,620 850,085 1,100,995 1,200,990 1,374,870 1,574,995
5.4 INCOME STATEMENTS
JADAMA ENTERPRISES COMPANY LIMITED
PRO-FORMA INCOME STATEMENT .

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PARTICULARS

JAN FEB MAR APR MAY JUN JULY AUG SEP OCT NOV DEC
Beginning Balance 1,574,995 1,699,455 1,858,175 2,005,060 2,158,145 2,303,615 2,478,505 2,669,430 2,840,065 3,021,615 3,191,815 3,361,675
Cash in hand 77,000 80,000 85,500 90,000 92,000 100,000 96,500 102,000 111,500 110,000 125,000 108,000
Accounts receivable 24,000 26,000 27,000 35,500 39,000 41,500 39,500 29,000 44,000 35,000 46,500 54,500
Others 12,000 24,000 25,000 20,500 26,000 24,500 28,000 23,700 21,500 39,000 28,750 31,000
Cash sales 100,000 135,000 120,000 105,000 100,000 125,000 120,000 125,000 122,500 105,000 95,000 122,500
Total cash receipts 1,787,995 1,964,455 2,115,675 2,256,060 2,415,145 2,594,615 2,762,505 2,949,130 3,139,565 3,310,615 3,487,065 3,677,675

Cash payments
Purchases 50,000 55,000 57,000 60,000 57,000 60,500 49,000 48,550 57,000 61,000 69,000 67,500
Creditors 20,000 30,000 35,000 25,000 40,000 40,500 29,000 42,500 40,450 38,000 36,500 25,000
Wages 2,500 4,000 4,000 3,250 3,000 2,800 2,850 4,400 4,350 4,470 4,950 5,000
Rent 2,300 2,300 2,300 2500 2500 2500 2500 2500 2500 2500 2500 2500
Water 250 300 250 270 150 160 130 255 290 120 120 200
Telephone 240 330 315 295 310 280 305 320 340 300 290 270
Electricity 1,600 1,300 1,450 1,400 1,200 1,600 1,770 1,650 1,500 1,470 1,550 1,700
Stationary 6,500 7,500 5,500 3,000 3,000 2,500 2,250 3,500 6,500 6,000 5,250 2,300
Loan interest 850 850 850 850 970 970 970 970 970 970 970 970
Advertisement 2,000 2,900 1,850 1,950 1,700 2,200 2,100 2,270 2,000 1,870 1,900 1,600
Sundries 2,300 1,800 2,100 1,900 1,700 2,100 2,200 2,150 2,050 2,100 2,360 2,900
Total cash payment 88,540 106,280 110,615 97,915 111,530 116,110 93,075 109,065 117,950 118800 125,390 109940
Ending cash balance 1,699,455 1,858,175 2,005,060 2,158,145 2,303,615 2,478,505 2,669,430 2,840,065 3,021,615 3,191,815 3,361,675 3,567,735
5.5 BALANCE SHEET
JADAMA ENTERPRISES LIMIMTED COMPANY
PRO-FORMA BALANCE SHEET.

PARTICULARS

JAN FEB MAR APR MAY JUN JULY AUG SEP OCT NOV DEC

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Beginning Balance 3,567,735 3,709,885 3,887,605 4,008,245 4,149,995 4,306,170 4,479,540 4,666,510 4,845,005 5,016,215 5,179,155 5,347,435
Cash in hand 65,000 70,000 74,000 67,000 78,000 80,500 76,000 75,050 71,000 74,000 77,500 74,700
Accounts receivable 35,000 21,000 16,000 19,000 22,000 15,000 19,000 20,500 18,500 14,000 21,000 20,000
Others 22,000 20,000 11,000 13,000 14,000 18,500 23,000 13,750 20,750 15,000 14,570 12,000
Cash sales 89,000 122,000 90,000 97,000 97,000 115,000 132,000 130,000 128,000 127,000 123,500 97,000
Total cash receipts 3,778,735 3,942,885 4,078,605 4,204,245 4,360,995 4,535,170 4,729,540 4,905,810 5,083,255 5,246,215 5,415,725 5,551,135

Cash payments
Purchases 30,000 15,500 18,000 13,000 17,000 15,000 18,000 21,000 18,700 17,500 17,600 10,000
Creditors 23,000 23,000 35,000 23,000 21,000 24,000 29,000 25,000 31,700 32,000 33,500 22,000
Wages 3,300 3,500 2,500 4,000 3,700 3,400 2,600 2,300 3,200 3,600 3,750 2,800
Rent 2,300 2,300 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
Water 200 250 300 320 215 260 270 265 200 210 290 230
Telephone 300 330 310 360 370 250 320 340 290 270 400 380
Electricity 1,100 1,850 1,550 1,570 1,700 1,670 1,300 1,400 1,200 1,880 1,600 1,500
Stationary 3,500 4,000 4,600 4,500 3,850 3,550 3,600 3,300 4,400 4,200 3,650 3,100
Loan interest 850 850 900 900 900 900 900 900 900 900 900 900
Advertisement 2,100 2,200 3,000 2,300 1,990 1,900 2,300 1,700 1,500 1,800 2,200 2,200
Sundries 2,200 1,500 1,700 1800 1,600 2,200 2,300 2,100 2,450 2,200 1,900 1,950
Total cash payment 68,850 55280 70,360 54,250 54,825 55,630 63,030 60,805 67,040 67,060 68,290 47,560
Ending cash balance 3,709,885 3,887,605 4,008,245 4,149,995 4,306,170 4,479,540 4,666,510 4,845,005 5,016,215 5,179,155 5,347,435 5,503,575

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5.6 INCOME STATEMENTS
JADAMA ENTERPRISES LIMITED COMPANY
PRO-FORMA STATEMENT.

PARTICULARS YEAR 1 YEAR2 YEAR 3

Sales 125,000 103,500 85,000
Less purchase 300,000 400,000 350,000
Gross profit 280,000 350,000 200,000
Expenses
Wages 3,800 3,900 2,700
Rent 2,500 2,250 2,300
Water 460 200 250
Telephone 350 270 360
Electricity 1,750 1,600 1,500
Advertisement 2,000 1,800 2,150
Stationary 4,700 2,300 4,100
Postage 1,500 1,700 2,000
Transport 3,000 3,300 3,300
Depreciation 1,500 2,500 2,200
Loan interest 850 850 850
Repairs & maintenance 8,500 15,000 11,900
Sundries 2,050 2,500 2,300
Total expenses 32,960 38,170 35,910
Net profit (before tax) 247,040 311,830 164,090
Provision for taxation (10%) 24,704 31,183 16,409
Net profit (After tax) 222,336 280,647 147,681

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5.7 PRO – FORMA BALANCE SHEET AT THE END OF EACH YEAR

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ITEMS YEAR 1 YEAR 2 YEAR 3
Fixed Assets
Furniture 3,000 3,000 3,000
Laptop 24,000 24,000 24,000
Welding set 9,000 9,000 9,000
Total fixed Assets 36,000 36,000 36,000
Current Assets
Cash in hand 83,000 83,000 70,000
Cash at bank 180,000 350,000 560,000
Debtors 45,000 30,000 73,000
Stock 250,000 355,000 580,000
Total current Assets 558,000 818,000 1,283,000
Total Assets 594,000 854,000 1,319,000

Long term liabilities

Loan 85,000 170,000 150,000
Owner’s Equity 250,000 350,000 400,000
Savings 53,000 53,000 55,000
Relatives 15,000 20,000 25,000
Total Long Term Liabilities 403,000 593000 630,000

Current Liabilities
Creditors 50,000 100,000 200,000
Bank Overdraft 60,000 55,000 85,000
Bills payable 72,000 72,000 65,000
Total Current Liabilities 182,000 227,000 350,000

Total Liabilities 585,000 820,000 980,000

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5.8 BREAK – EVEN LEVEL
Operating Expenses
Fixed Cost Amount (Kshs)
Salaries 9,000
Insurance 2,000
Loan 90,000
TOTAL 101,000

Variable Cost
Water 500
Electricity 1,650
Postage 2,000
Stationary 9,500
Advertisement 1,500
TOTAL 15,150

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Total contribution margin = Sales – Total Variable Cost
= 125,000 – 15,150
= 109,850
Contribution Margin Percentage = Total contribution margin X 100%
Sales

109,850 x 100%
125,000

=87.88%
Total Fixed Cost = 101,000

Break – Even Level of Sales = Fixed Cost ÷ Contribution Margin Percentage

= 101,000 ÷ 87.88%
= 1,149.30/-
Break – Even Level in Units = Contribution Margin ÷ Fixed Cost
= 109,850÷ 101,000
= 1.1 Units
5.9 PROFITABILITY RATIOS
Gross profit percentage = Gross profit ÷ sales x 100%
= 280,000÷ 125,000x100%
= 224%
Return – on – equity = Net Profit ÷ Owner’s Equity x 100%
= 247,040÷ 250,000x 100%
= 98.81%
Return Investment = Net Profit After Tax ÷ Total Investment Capital x 100%
= 222,336÷ 350, 000 x 100%
= 63.52%

5.9.1 DESIRED FINANCING

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ITEM AMOUNT (KES)
Pre-operational costs 105,000
Working-capital 85,000
Non-Current assets 65,000
TOTAL DESIRED FINANCING 265,500

5.9.2 PROPOSED CAPITALIZATION

ITEM AMOUNT (KES)
Owner’s Contribution (Equity) 250,000
Borrowed Funds (Loan) 90,000
TOTAL 340,000

5.9.3 POTENTIAL RISKS.

NATURE/TYPE OF RISK CONSTINGENCY MEASURES

Theft Employing Security officers.

APPENDIX 1
LOCATION AREA MAP

APPENDIX 1
Suna town
KISUMU TOWN

David Ouma

Enterprise

Preproduction

16