Bussiness Plan


CHAPTER ONE

Business Description

The business will be runned by the name “ Najokogelit’. Its intended to be located in Kalokol division in Turkana District along lake road 7kms from Kalokol center. The business will deal with, finger lets, smoked fish, fried fish and sundry fish. The main objective of the business is to create job opportunities for the owner, also for the community members and also to get good profit to uplift the living standard. The business will start on 2nd July 2011.

Marketing Plan

A focused entrepreneur should be able to forecast on demand and hence project on the behavior of the market for the proposed products and services. There is a ready market for the project especially from the community, hotels, schools, hospital and local retailers.

Proper marketing will be done by equal distribution of products and promotion. Customers will get  the products at the  appropriate  time  and for the potential customers will be given the priority to be supplied with product with free transportation and good pricing will attract more customers.

Organizational and Management Plan.

Being the boss, coordinator, there need to employees 10 qualified staff to enhance the good running of the business with experience of 3 years in the same job/field.

Incentives, promotion, motivation are to be given to personnel to increase good productivity of goods and services.

Production and Operational Plan.

The products should be of desired taste and preference of the customers, as the business becomes stable the appropriate technology will be embraced for preservation of products.

Tools and equipment are to be used to enhance good products, repair and maintenance should be observed.

The location of the business should be where there is good communication, good transportation network services. Environment should be spacious and clean.

Permits and license shall be   obtained from Kenya Revenue Authority.

Financial plan

The business will obtain its finance from several sources and these funds will make the sole trader to meet all other costs that she is going to incur in running the business.

The capital required:-

  1. Total Investment                              –           Kshs 200,000
  2. Owners Share                                  –           Kshs 150,000
  3. Contribution From Friends                        –           Kshs 50,000
  4. Contribution From Relative           –           Kshs 200,000

Total Kshs 500,000

__________________________________________________________________________________________________

CHAPTER TWO

Business name

The name of the business will be “Najokegelit” Najokogelit is a Turkana word meaning “better price for everyone”. The business will enable me to get something that will improve my living standard due to creation of self employment.

Better price for everyone because everybody in the community and outside will be able to effort the prices. Creation of job opportunity to the community members that will help them to uplift there living standards.

Business Location and Address

The business will be located at Kalokol division in Turkana District along Lake Road 7kms from Kalokol center.

Products samples

Fresh Fish, Smoked Fish, Fried Fish, Finger Lets And Sundry.

P.O. Box 44

Kalokol

Cell Phone: 0713-250-122

Form of Business Ownership.

The business proposed will be a sole proprietor and “Lolibo N. Christine” will be the proprietor and all the employees will work under her. The owner will be responsible for the provision of capital for the daily operation of the form of a business.

Form of Business Ownership

The business will be a sole proprietorship and “LOLIBO KABLIT CHRISTINE” will be proprietorship and all the employees will be working under her.

Lolibo N. Christine will be responsible for the provision of capital for the daily operation of the form of the business.

The reason as to why the proprietor chooses this business is. She is the owner of the business and shares profit alone. Quick decision making on how to run the business. There, flexibility of all next and outputs.

Types of Ownership

“Najokogelit” will be start it is selling and buying of products

2nd August 2011

The chosen items like Boats, Labour, Knifes, Basins, Frying Pan, oil etc. the products are to be sold to the Local Community, School, hospital, retail customers  and  wholesales those are taking to Kitale, Kisumu, Nairobi etc.

Products and Services

The products will be, fried fish, fresh, sundry, finger lets and smoked fish and they will be of quality standard. The potential customers will be supplied with the products, Namukuse, Secondary, and Retail Customers. The supply will be by vehicle.

Justification of Opportunity.

The intention of coming up with this kind of a business is due to availability of products from the lake and the ready market. For example there is high demand of fish from local community; schools are around like Namukuse secondary and the wholesales who transport them to other places like Kisumu, Kitale, Nairobi.

 

Industry.

The business shall operate as a service under food industry.

Goals of Business

Business overall goal

–       The main goal is to increase  market share by at least 90% and it will be  achieved through  hardworking and giving  circumstances first priorities.

Short term goal

–       Reduce the level of unemployment in the local community.

–       To create permanent source of income to myself and family

Long term

–       To make the local to become self reliable by utilizing the local resources available.

–       Expand and maintain business premise.

Entry and Growth

Najokogelit will be licenses through the Ministry of Health and Fisheries Kalokol branch before it takes off. It is operations thus are will be issued a permit to authorize our operation in the District. The sole proprietor should be careful and dedicated to succeed and this is by posters, billboards,television.

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CHAPTER THREE

Market Plan

A market is whereby willing buyers and sellers meet to exchange goods and services to satisfy one’s needs:- it entails of

–       Buyers

–       Sellers

–       Services/Goods

Customers

Marketing in every business is very crucial thing. The majority of our potential customers will be wholesalers, retails, Namukuse secondary, hospital, Nawoi primary and local community.

Competitors

In every business venture must be there and this will encourage the entrepreneur to produce products of high quality.

–       The competitors that are there are ngikolia supplies, it’s located 5km away from lake and ng’achubule supplies 3km away from kalokol centre along lake road.

Due o poor infrastructure the business is faci a lot of problems iin transporting the products.

Addres of the business.

Ngachubule suppliers,

P.O. Box 77,

Kalokol.

3km along lake way.

Ngikolea supplies,

P.O. Box 44,Kalokol.

5 km away from the centre.

Both Ngikolia supplies and ngachubule supplies they supply the quality and standard products at an affordable price the business need to mitigate in ways of being overthrown from the business venture and this will be done by analyzing the swos analysis so that we know its strength weakness, opportunities and threats of the competitors.

No Competitors Strength Weakness Opportunities Threats
Ngikolia Suppliers More experience than  Najokogelit No incentives A business of competitive personnel In idea
Ngachubule Supplies –     Good transportation of products

–     Financially stable

Unliked  personnel A business of good public  relation Not exposure  in the business

Inadequate capital

Competitors Production Equip Quality Locals Personnel
Ngikolia Suppliers 150 20 15 10 15
Ngachubule Supplies 180 25 20 11 10
Najokogelit 100 30 35 20 12

Methods of Promotion and Advertisement.

For the business to be kwon, advertisement will be done to create awareness of the available products that are being  offered to the interested people and will be T.4.,bill boards and posters. Symptoms arrows to indicate the location and direction of the firm.

For long term strategy adverting and promotion strategy, we shall be replacing notices informing on customers on any charge in prices, how products, services or withdrawals of the same in the market.

Pricing Strategy

This is a critical part of any business venture since it is an aspect that may either attract or scare customers prices are always determined by the  a type , quality and quantity of good and  services  to be demanded by customers to encourage and  encourage our customers  we need to   give  prices according to the sizes of  the product offered.

 Selling Price in Kshs

Products Competitors Normal Najokogelit
Finger lets 50 40
Smoked 30 25
Fresh 20 18
fried 60 55
Sundry 15 13

Pricing Strategy (Competitive)

The reaction will influence the price policies and a result   the business will have to charge a little of lower compared to its competitors for the few month in order to establish recognition  from customers and for improvement of the prices in case of stiff competition.

Demand Oriented Pricing

The products will be sold at reasonable and affordable prices to all customers and products should be attractive to the customers and this will lead to retain them.

Packaging

For the business to be attractive  and retain more customers , many ways are used to make sure quality products are produced and good  of packaging  are employed to attract  customers  to buy products  in large quantities . The business intends to make sure good procedures and cleanliness and sanitation should be maintained.

Also the personnel are expected to make public relationship with customers.

Sales Tactics

Since this a manufacturing   industry baked products are produced daily. The business employees should show good customers care services for the strong maintaining  of customers and attracting more and thus increasing sales cash discount of a normal 5% will be provided  for those  customers buying large quantities  of the  products.

For effective and efficient  outcome  management has  to accept  payment  using payment cheques,credit card and cash. The sales  strategies are expected to cost kshs 5000 per month. The method to be used to attract customers are:-

a)    Accepting deposits

Customers  who buy in large quantity deport will be allowed for them and them agreement will be accepted  for the clearance of remaining  amount.

b)   Allowing credit cards

Potential and regular customers are the one’s  to be given  the credit facilities  also customers who buy the products in bulk will be offered to allow them pay upon  the agreed time.

Distribution Strategies

The distribution of goods will be by the means of vehicles from the lake to the firm. The transportation cost will be kshs 5000 per week.

Transport services

Later when  the business becomes financially  stable and hailing  upon many customers a policy will be self, to offer transport services to customers who buy products in large quantities.

_____________________________________________________________

CHAPTER FOUR

Organizational and Marketing Plan

Operational plan in any organization is a critical thing and organization as a factor of production for example labour, finance, land, assets and a conducive environment for the business.

The main purpose of organization structure is to attain a successful co-ordination of organization plan, which will cater for general activities of the firm e.g. decision making, credit control business   promotion and cost control. The organization will set all this to achieve it’s set goal and objectives every person in an organization given responsibilities  and duties to perform in the area of his/her specialization.

The performance of any work in any organization depends on good working condition to it’s personnel for smooth operation of the business.

Organization Structure

The organization will employ few qualified personnel. The organizational structure will comprise of Director, Manager, Accountant, Salesman, Supervisor and 5 cleaners  and 3 security officers, 4 bakers.

The director is the overall boss of the business to be undertaken and risk taker in the business.

The manager is directly answerable to the owner/director and the sales person, security officer and cashier and answerable to the manager and the cleaners, bakers are answerable to the supervisor.

Management Team

The management team is required to work together as one person for the   betterment and better out. The director will be responsible for any risks and problem that is being forwarded by the manager that may occur in the firm and to get solution on them. Also has to look for the ways of getting the capital to sustain the firm/business.

The rest of the activities are under the care of manager and in case of any issues beyond her/his capability will be forwarded to the owner/director for the betterment of the firm/business.

Qualification Requirement

Post Qualification/Experience Duties/Responsibilities Approximate Salaries
Manager
  • Must  have diploma in  business management
  • With  3 year experience in the field
  • Planning, monitoring controlling and evaluation work in the firm.
  • Make range forecast for the business
  • Carrying out judgment concerning recruitment and training of personnel.
  • Dealing  with all kinds of structured discussion.
Kshs 15,000 allowance of kshs 3000 total kshs 18,000 per month.
Cashier Experience  of not less than 2 years
  • Will  be responsible of book keeping and filling.
  • Takes  care of all financial control of the enterprise
Kshs 11,000 allowance of kshs 2000

Total  kshs 13,000 per month

Salesman
  • Must be have certificate in sales and marketing and management with good public relations
  • Must be self esteemed for the job
  • Fluent in Kiswahili and English
    • Advertisement  and promotion of business activities.
    • Be responsible  for delivery of the products to customers
Kshs 10,000

Allowace 1,500

Total kshs 11,500 per month

Supervisor
  • Must have certificate in food science
  • Experience 2 years
    • Will be in charge of bakers
    • Responsible of ordering baking products  and equipment
Kshs 10,000

Allowance 1000

Total 11,000 per month

Bakers
  • Must have done certificate  in catering
  • Should have 2 years experience
  • Responsible  to bake qualities  products
  • Pack properly baked products
Kshs 7,000

Allowance 500

Total kshs 7,500 per month.

Security officers
  • Must have KCSE certificate
  • Experience  of guarding for not less than 1 year
  • Takes  care of all material good and assets of business during day and night
Kshs 5,000

Allowance  500

Total 5,500 per month.

Recruitment, Training and Promotion.

Recruitment

All operation management post will be advertised interested candidates seeking any of the advertised jobs are required to send their application for the short listing and later to appear for the interview panel conducted by the director of the business for selection self motivation, competency and merits of each candidate will be assessed on its own and the most suitable candidate will taken.

After selection a letter of appointment will be issued describing the kind of duties each person will be performing.

Training

It’s the process of changing the behaviour, knowledge and skills of the employees. After the selection and placement, new staff undergoes induction course and training to familiarize them with enterprise and other staff to unit together  so that they can create good raffort.

Both of the job training and off the job training methods will be used employees workshop   and serious will be  conducted sponsored by the directors.employees wishing to advance their course will be considered and awarded a training  and training projection made for them. The estimated cost for the training is kshs 200,000 for all employees.

Promotion

Promotion of workers (Employees) will largely depend on the management performance of the firm when they expand more job opportunities arises and therefore promotion of any kind will be based on merits.

For employees to be promoted he/she should have the following merits:-

–       Hardworking and responsible employee

–       Must have good working experience in the firm.

–       Better education and professional  qualification

–       Competence and innovative skills.

Remuneration and Incentives

Rewarding employees will be on different from other organization. All the workers will be paid by cash or cheque according to their own wishes and will be done by the sole trader himself. The employee will be receiving salaries and wages at the end of every month. Other will be receiving mid-month advances to help them enhance their daily activities.

The wages for the 1st month will be as shown below:-

  1. Manager                                –           Kshs 30,000
  2. Accountant                           –           Kshs 25,000
  3. Cleaners                                –           Kshs 10,000
  4. Supervisor                             –           Kshs 20,000
  5. Salesman                              –           Kshs 15,000
  6. Bakers                                    –           Kshs 13,000(5)
  7. Security Guards (3)             –           Kshs 11,000

The increment of wages and incentives are expected to rise as the enterprise continues to stabilize on the market. There shall be bonuses during holidays off duties. Protective clothes will be provided to all workers at least once a year.

Licenses and Permits

A sole proprietorship license shall be acquired from the ministry of commerce. The manager will be assisted to get at least a domestic installation license for simple installation. The owner of the business will  posses a valid driving  and domestic installation license whereas the driver will have a driving license for private light vehicles.

____________________________________________________________________

CHAPTER FIVE

Operation Plan

The business has  one aim:- to satisfy  its customers wants, in order to achieve this it  will be necessary to recruit and obtain personnel who will carry out day to day activities of the business.

Operational Facilities

–       Vehicle

–       Office chairs

–       Tables

Premises (place where the business to be situated)

Machinery, Equipment and Tools

These are the vital facilities for the operation of the business. They facilitate effective  provision of the service and may  be obtained through any of  the favouring  ways:-

–       Purchase of new  and second hand equipment

–       Hiring from well established firms.

–       Exchange with other forms for a specific period of time.

  • Whichever way the facilities are obtained must be calculated to give the least expenditure.
  • The facilities most needed in the set up of the business will be bought at a fair from renounced companies which are intended to give higher efficiency services. Those facilities which are vital for running of the enterprise will be purchased first. They, should be of sound condition, good working order and reliable.
  • The equipment will be of modern technology due to changes in technology.
  • It is hoped that the equipment will be delivered in time to allow for checking and training of the employees on how well to use them in the best manner.

Repair and Maintenance

–       Maintenance of facilities in good condition is essential to achieve special level of efficiency. the best equipment will not wok satisfactorily  unless it is cared for and the cost  break down  in the system operation can be very high not only in financial ,terms but also in poor staff morale and bad relations with customers.

–       To avoid the later too; it is the will of the business owner to maintain and repair facilities to enable quality services and customers satisfaction to a cheque through currently adjusted serviced and operated equipment.

–       This will  further  help to maximize the useful; life of  he equipment , keep it safe and prevent  the development  of the safety hazards

–       Repair will be carried out when there is need for renewal replacement and mending of decayed and damaged parts of the equipment in order to eliminate the chances of failure of the equipment which may consequently interrupt operating process.

–       The business will employ a preventive, maintenance policy which will ensure every time the equipments  are  in good condition to maximize their capability.

–       This  will be role of every employee to use the equipment in the  best way possible and take the necessary care in order to reduce the total cost of repair and maintenance  to the minimal.

Government Regulations

The management ensures that the enterprise adheres to the constitution of Kenya as stipulated by the act, the municipal council by laws.

Health Regulations

The business will ensure provision of clean water to the employees, dustbins, clean environment and good sanitation facilities. It will provide medical allowances to its employees.

 Safety

Good layout will ensure safety precautions which are taken in execution of duties. A first aid kit will be fitted at the offices an also fire extinguisher  compartment besides alarm detectors. Good working outfits  like overall and dusts coats will be provided to ensure that the person does not come into contact with machines. Guards  in the later part will be provided.

_____________________________________________________________

CHAPTER SIX

Per-Operational Costs

This business shall require a pre-operational cost of kshs_________ with this amount of money the enterprise shall be able to meet primary costs for its start up.

Working Capital Requirement

The required capital shall be kshs 100,000 in order for full involvement in the business activities e.g.


PROJECT CASH FLOW STATEMENT

ITEMS
1 2 3 4 5 6 7 8 9 10 11 12

 

Cash inflow

Total

Cash sales (services)

8500

9500

12000

15000

15000

15000

20000

20000

30000

30000

30000

30000

235000

Collection from  debtors

30000

20000

20000 20000 20000 20000 30000 30000 10000 10000 10000 10000

230000

clients

40000

55000

55000

50000

50000 50000

60000

60000 60000 60000 60000 60000

660000

Total cash inflow

78500

84500

87000

85000

85000

85000

110000

110000

100000

100000

100000

100000

1125000

Cash outflow

Cash purchases

15000

20000

30000

30000 30000 30000

40000

40000

30000 30000 30000 30000

355000

Payment  of the credit

20000

10000

10000

10000 10000 10000 10000 10000

15000

15000 15000 15000

150000

Rent 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000

120000

Wages and salaries

13500

13500 13500 13500 13500 13500

15000

15000 15000 15000 15000 15000

171000

Telephone

500

500 500 500 500 500 500 500 500 500 500 500

6000

Electricity

500

500 500 500 500 500 500 500 500 500 500 500

6000

Advertising 500 500 500 500 500 500

1000

1000 1000 1000 1000 1000

9000

Taxes

12000

12000

24000

Vehicles maintenance

1000

2000

3000

4000

5000

6000

6000

6000

7000

7000 7000 7000

61000

Stationery 1000 100 100 100 100 100 500 100 100 100 100 100

2500

Total cash flow

74000

57100

68100

69100

70100

71100

95500

83100

79100

79100

79100

79100

904500

Net cash  for month

4500

27400

18900

15900

14900

13900

14900

26900

20900

20900

20900

20900

220900

Cumulative cash

4500

31900

50800

66700

81600

95500

110000

136900

157800

178700

199600

220500


PROFORMA INCOME STATEMENT

ITEM                             YEAR 1               YEAR 2               YEAR 3

Sales                                      1125000                    1181250                    1248260

Gross Profit                             505000                       515100                       520400

620                     666150                   727860

EXPENSES

Wages and salaries

17100

174420

191862

Rent

120000

120000

144000

Water

Telephone

6000

6000

8000

Electricity

6000

8000

10000

Advertising

9000

5000

5000

Stationary

2500

3000

3000

Postage

500

1000

1000

Transport

61000

70000

70000

Depreciation

25000

20000

20000

Interest

20000

25000

30000

Repair and maintenance

10000

15000

20000

Total Expenses

431000

447420

502862

NET PROFIT

Before Tax                             189000                       218730                       224998

Provision for Tax                    24000                         25000                         25000

NET PROFIT

After Tax                                165000                       193730                       199998

PROFRMA BALANE SHEET

ITEM

AS AT

AS AT END

AS A END

Assets      
Current assets
Cash 18500 235000 246190
Debtors 20000 230000 246950
Stock of materials 15000 660000 694110
53500 1125000 1187250
Fixed Assets      
Machinery & equipment 45000
Motor vehicles 100000
Furniture & fittings 19000
Wages & maintenance 23200
  187200    
Balance B/F 333300
Total assets 574000 1125000 1187250
Liabilities      
Current liabilities 20000 632500 824520
Long term liabilities 14000 327500 163000
Bank loan 200000
Owners equity 340000
Profit   165000 193750
Total liabilities and equity 574000 1125000 1181250

BREAK EVEN ANALYSIS

Beak Even Point (BEP)      =                      Fixed Cost

PVR

Where PVR                           =                      1-variable cost

Sales

Fixed Cost

Computer                  –                       kshs 20000

Shelves                     –                       kshs 2000

Office chair               –                       kshs 2000

Office table                –                       kshs 500

Motor vehicle                        –                       kshs 100000

Tool kit                       –                       kshs 20000

Multi meter                –                       kshs 500

Total kshs 164000

Variable Cost

Telephone                             –           500

Electricity                               –           500

Purchases                             –           3500

Advertising                            –           500

Stationary                              –           100

Taxes                                     –           12000

Vehicle  maintenance        –           1000

Salaries and wages             –           13500

Postage                                 –           40

Depreciation                         –           2000

Interests                                 –           1660

Total kshs 76700

Sales for 1= 78500

Thus BEP      =                      1-Variable Cost

Sales

1          =          76700             = 0.977

78500

Therefore 1(BEP) 16400 x 0.977 = 167860

 DESIRED FINANCING

Item                                                                Amount

Pre-operational cost                        –           kshs 200000

Working capital                                –           kshs 100000

Fixed assets                                      –           kshs 164000

Variable assets                                 –           kshs 76700

Total  kshs 540700

Proposed Capitalization

Item                                                                Amount

Proprietor’s contribution                 –           kshs 340000

Borrowed funds                               –           kshs 200000

Total Investments Kshs 540000

Profitability Ratios

Gross Profit Ratio

GPR               =                      Gross Profit X 100

Sale

62000 x 100              = 55.1%

1125000

Net Profit Ratio

NPR               =          Profit + Before Interest And Tax X 100

Sales

158000 x 100            = 14%

1125

Return on capital

RCP               =          Profit + Before Interest And Tax X 100

Net asset value

158000 x 100            = 96.3%

164000

Return on total asset ratio

RTAR             =          Profit + Before Interest And Tax X 100

Fixed and current assets

158000 x 100

24070                         = 65.6%

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Posted on March 2, 2012, in Categorized. Bookmark the permalink. Leave a comment.

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