BUSINESS PLAN

RELIABLE PLUMBING AND FIXING WORKSHOP

P.O. BOX 4199

NAKURU.

Cell no; +254768191507

Email; reliableplumbing38@gmail.com

Website; www.reliableplumbing.org.com

PRESENTED BY; DAVIS ODHIAMBO ONYANGO.

INDEX NO; 1061201096

PRESENTED TO; THE KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL

FULFILMENT OF THE AWARD OF THE DIPLOMA IN BUILDING TECHNOLOGY.

NAME OF INSTITUTION; KENYA COAST NATIONAL POLYTECHNIC.

SUPERVISOR NAME; OHASA AGGREY

NOVEMBER, 2022.

i
 DECLARATION
I hereby declare that the Business Plan is my original work and that it has not been presented for
award of Diploma in Building Technology to any institution.

Name…DAVIS ODHIAMBO ONYANGO……………………………………

Index Number……1061201096………………………………………………………….

Signature………………………. Date…………………….

Supervisor’s Name……………………………………………………

Signature………………………… Date…………………….

ii
 ACKNOWLEDGEMENT
I wish to acknowledge Ohasa Aggrey and Jectone Owenga who assisted me in ensuring that the
Business project report was successfully done.

iii
 DEDICATION
I dedicate this business plan to Jectone Owenga and Beatrice Onyango.

iv
 EXECUTIVE SUMMARY
An overview study of the enterprise includes the future status of the business and the structure.

The Reliable Plumbing and Fixing Workshop will be offering the plumbing materials and
equipment hence offer services to the customers from different places in the country.

Market plan outlines the enterprise, advertising and marketing efforts for the coming years.

The business will target customers from building industries system.

The pricing plan for Reliable Plumbing and Fixing Workshop, shall start with 12%discount for
the first three weeks of the business start.

Reliable Plumbing and Fixing Workshop shall advertise good or products to show customers the
quality products and services being offered, by means of posters, billboards and newspapers
showing names, location and services offered at the workshop.

Marketing plan summarizes the information about the business organization structure, enterprise
duties and expertise as well as other qualifications.

Proprietor of Reliable Plumbing and Fixing Workshop shall be the manager and shall have
managerial duties.

Duties and responsibilities as well as their qualifications are indicated in chapter three of the
business plan.

The manager shall make policies in areas of organization of control and safety of procedure to
facilitate smooth running of the workshop.

Reliable Plumbing and Fixing Workshop shall operate through well estimated suppliers that
trust in them in producing the products.

Financial plan shows how the capital is introduced with business and the owner manages it being
what he/she has contributed six hundred thousand to see the property of his/her business

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TABLE OF CONTENTS
DECLARATION.............................................................................................................................ii
ACKNOWLEDGEMENT..............................................................................................................iii
DEDICATION................................................................................................................................iv
EXECUTIVE SUMMARY.............................................................................................................v
CHAPTER ONE..............................................................................................................................1
1.0 Business description.............................................................................................................1
1.1 Background of the owner...........................................................................................................1
1.2 Business name...........................................................................................................................2
1.3 Business location and physical address.....................................................................................2
1.3.1 Business location....................................................................................................................2
1.3.2 Business address.....................................................................................................................3
1.4 Forms of business ownership.....................................................................................................3
1.5: Type of business.......................................................................................................................3
1.6: Products and services................................................................................................................3
1.6.1: Products.................................................................................................................................3
1.6.2: Services..................................................................................................................................4
1.6.3: Benefits to the customers.......................................................................................................4
1.7: Justification of business opportunity........................................................................................4
1.8: Industry.....................................................................................................................................4
1.9: Goals and objectives.................................................................................................................5
1.9.1: Goals......................................................................................................................................5
1.9.2: Objectives..............................................................................................................................5
1.10: Entry and growth strategy.......................................................................................................5
1.10.1: Entry plan............................................................................................................................5
1.10.2: Growth plan.........................................................................................................................5
CHAPTER TWO.............................................................................................................................6
2.0: Marketing plan..........................................................................................................................6
2.1: Customers.................................................................................................................................6
2.1.1: Domestic customers...............................................................................................................6
2.1.2: Institutional customers...........................................................................................................6

vi
2.1.3: Commercial customers..........................................................................................................6
2.2: Market share.............................................................................................................................6
2.3: Competition..............................................................................................................................8
2.4: Methods of promotion and advertisement................................................................................8
2.4.1 Promotion...............................................................................................................................8
2.4.2 Advertisement.........................................................................................................................9
2.5: Pricing Strategy........................................................................................................................9
2.6: Sales tactics...............................................................................................................................9
2.7: Distribution strategy...............................................................................................................10
CHAPTER THREE.......................................................................................................................11
3.0: Organization and management plan.......................................................................................11
3.1: Management team...................................................................................................................11
3.2: Purchasing manager................................................................................................................11
3.3 Other personnel........................................................................................................................12
3.4 Recruitment, training and production......................................................................................12
3.4.1 Recruitment...........................................................................................................................12
3.4.2 Training.................................................................................................................................13
3.4.3 3.4.3 Promotion....................................................................................................................13
3.4.4 Remunerations and incentives..............................................................................................13
3.4.5 Incentives..............................................................................................................................13
3.4.6 Remuneration........................................................................................................................14
3.5 Legal and Statutory..................................................................................................................14
3.5.1 License..................................................................................................................................14
3.5.2 Permit....................................................................................................................................14
3.5.3 By-laws.................................................................................................................................14
3.6 Support services.......................................................................................................................15
CHAPTER FOUR.........................................................................................................................16
4.0 PRODUCTION PLAN............................................................................................................16
4.1 Production facilities and Capacity...........................................................................................16
4.1.1 Firm layout............................................................................................................................17
4.2 Production strategy..................................................................................................................18

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4.3 Production process...................................................................................................................18
4.4 Regulation governing operation..............................................................................................18
4.4.1 Safety regulations.................................................................................................................18
4.5.2 Environmental regulations....................................................................................................18
4.5.3 Healthy regulations...............................................................................................................19
CHAPTER FIVE...........................................................................................................................20
5.0 FINANCIAL PLAN................................................................................................................20
5.1 Pre-operational cost.................................................................................................................20
5.2 Pro-forma Balance Sheet.........................................................................................................20
Financed by;...................................................................................................................................21
5.3 Working capital.......................................................................................................................21
Current Assets................................................................................................................................21
5.4 CASHFLOW PROJECTION..................................................................................................22
5.4.1 Cash flow projection for the year 2022................................................................................22
5.4.2 Cash projection for the year 2023.........................................................................................23
5.4.3 Cash flow projection for the year 2024................................................................................24
5.5 Pro-forma income statement....................................................................................................25
5.6 break even points.....................................................................................................................26
5.6.1calculating BEP.....................................................................................................................26
5.6.2 Total contribution.................................................................................................................27
5.7 DESIRED FINANCING.........................................................................................................27
5.8 CAPITALIZATION................................................................................................................27
5.8 PROFITABILITY RATIO......................................................................................................27

viii
 CHAPTER ONE

1.0 Business description

1.1 Background of the owner

Name; DAVIS ODHIAMBO ONYANGO

AGE; 21

Sex; MALE

Marital status; SINGLE

Cell phone; +254768191507

Religion; CHRISTIAN

Languages; ENGLISH, KISWAHILI

Nationality; KENYAN

Summary of qualification

Able to solve multiple tasks, accepts challenges that faces me, highly motivated in creativity and
innovation, goal oriented and problem solver.

Objectives

To fully utilize my skills effectively and efficiently in an environment that rewards honesty as I
pursue my visions.

Academic background

2019-to date; KENYA COAST NATIONAL POLYTECHNIC

Course; DIPLOMA IN BUILDING TECHNOLOGY

2015-2018; OBER BOYS SECONDARY SCHOOL

Examination; KENYA CERTIFICATE OF SECONDARY EDUCATION. Mean grade C

{plain}

2007-2014; UMOJA PRIMARY SCHOOL

Examination; KENYA CERTIFICATE OF PRIMARY EDUCATION. Marks 286 out of 500.

1
 Skills and competence

College level

1.2 Business name

The name of the proposed business will be Reliable Plumbing and Fixing Workshop. The name
of the business is used to assure customers of availability of our services according to their
demand. The name is unique and specific in the listing of group of companies and service
industry across the country and county of jurisdiction, Nakuru county . The logo of the business
will be a pipe wrench used for fixing pipes.

1.3 Business location and physical address

1.3.1 Business location

The business will be located at the west of the Nakuru-Nairobi highway, two kilometers from
Nakuru town.

BREEZY
BONTANA TOTAL SUPERMARKET
HOTEL STATION

NAKURU COUNTY NAKURU-NAIROBI HIGHWAY

RELIABLE PLUMBING
AND FIXING WORKSHOP

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1.3.2 Business address
RELIABLE PLUMBING AND FIXING WORKSHOP,

P.O BOX 4199,

NAKURU.

Email: reliableplumbing38@gmail.com

Website: www.reliableplumbing.org.com

1.4 Forms of business ownership

The business will be a sole proprietorship and this is because a sole proprietor kind of business
has more advantages when starting and running a business. The proposed business shall be sole
proprietorship due to the following advantages;

1. The capital required to start and run the business is low.

2. It is easy to make decisions since the owner does not have to consult.

3. The owner derives much of the incentives from the business since there is no sharing of the
business.

4. Few legal formalities are required to start the business.

There are also disadvantages and they are as follows;

1. Owners capital may not be enough to expand the business.

2. Unlimited liability of the owner, that id business can fail in it’s operation should the owner
fails to be available.

3. The owner might make bad decisions since there is no one to consult from.

4. The lifecycle of the proprietor is undecided since anything can happen leading to closure of
the business.

1.5: Type of business

The proposed business shall be a start-up business. It shall be dealing with plumbing services and
fittings.

1.6: Products and services

1.6.1: Products
The products offered by Reliable Plumbing and Fixing workshop are;

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1. Quality plumbing services that cannot be accessed by customers ie kitchen sinks, water tanks
taps.

2. Plumbing services and fittings.

1.6.2: Services
The services offered by Reliable Plumbing and Fixing Workshop is strictly to the customers and
dealers include;

1. Education: The enterprise shall educate the buyers on how to use the products in case the
customers may not have the knowledge on how to use.

2 .The enterprise shall offer parking ground to their customers where they get to park their
vehicles while loading.

3. Transport: Customers shall be offered with transport services after buying to ferry products to
their places.

1.6.3: Benefits to the customers

1. Products offered at the workshop are durable and flexible

2. Products are convenient and reliable

1.7: Justification of business opportunity

The proposed business shall be a start-up business

The business shall be started in the identified place due to the following reasons;

1. The market availability is good, since the area is under development.

2. The accessibility of the place is good since the place shall be located along the road.

3. The building of the area is still under development and the construction materials are highly in
demand.

4. The area is well secured such that the enterprise will work.

5. The infrastructure of the area like the road is well maintained facilitating easy access to the
workshop.

1.8: Industry
The Reliable Plumbing and Fixing Workshop falls under construction industry.

This makes it to trend in the market.

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The research has been done and found that the business is under construction industries.

It trends well in the market since the nation is under construction.

1.9: Goals and objectives

1.9.1: Goals
The Reliable Plumbing and Fixing Workshop would wish to develop into a big company within
10 years from start up. This will only depend on the business profits and savings.

The workshop is determined to make sure that within the years stated, the goals shall have been
achieved.

1.9.2: Objectives
1 .Increase sales and supply of products to the customers.

2. Familiarize the business to both domestic and international customers.

3. Maintain profits and provide affordable services

1.10: Entry and growth strategy

1.10.1: Entry plan

There will be use of billboards, newspapers, televisions, radios and also in media like Facebook
to advertise our products and services.

1.10.2: Growth plan

To ensure the growth of the enterprise, the enterprise shall give 10% discount to the customers
who will buy goods in bulk.

Transport services shall be provided for the customers who shall buy goods in bulk and need to
be ferried up to his or her place.

5
 CHAPTER TWO

2.0: Marketing plan

2.1: Customers
These are people or organizations that needs good and services from Reliable Plumbing and
Fixing Workshop. These are parties that determines the move and growth of the business.

2.1.1: Domestic customers

These are customers around or those that surrounds Reliable Plumbing and Fixing Workshop
that buys goods and services for domestic purposes.

They play a key role in keeping Reliable Plumbing and Fixing Workshop to grow and expand as
a business.

2.1.2: Institutional customers

The institutions within Nakuru and Nairobi can access the workshop in case they want to build or
do renovation to their rooms or classes. This makes Reliable Plumbing Workshop to grow and
expand.

2.1.3: Commercial customers

These are non-governmental organization customers that buy goods in bulk and they require
taxes to be included in bid price

2.2: Market share

The approximation of Reliable Plumbing and Fixing Workshop and the other two competitors;

ROYAL PLUMBING ENTERPRISE and UZIWA PLUMBERS ENTERPRISE were as follows;

I. Before penetrating the market

ROYAL UZIWA TOTAL

Sales 40000 60000 100000

Market share 40% 60% 100%

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 40%
ROYAL
60% UZIWA

II. After penetration to the market

ROYAL UZIWA RELIABLE TOTAL

Sales 40000 40000 30000 110000

Market share 40% 40% 20% 100%

20%

40%
ROYAL
UZIWA
RELIABLE
40%

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2.3: Competition
Reliable Plumbing and Fixing Workshop is expected to face competition from the existing
developed firms stated above.

The business will major on current weaknesses and challenges facing the existing companies and
work on them to be strengths. This will improve the popularity and acquisition of larger market
share.

Stated below are the strengths and weaknesses of the existing companies.

ENTERPRISE Strengths Weaknesses

Royal plumbing enterprise • Large production rate. • Sells its products on

• Advanced modern wholesale only. Local
concreting plants. customers cannot
make purchases of
single items in the
company.
• Only accepts cheques
as mode of payment,
no cash.
Uziwa plumbers enterprise • Strategic location along • Has a limited storage
the highway capacity.

 Good infrastructure.

2.4: Methods of promotion and advertisement

2.4.1 Promotion
Promotions shall be done in various ways in Reliable Plumbing and Fixing Workshop, the
promotion shall be:

1. Giving discounts to regular customers who shall be in need of bulky goods and services.

2. Transportation of workmen skilled in plumbing to the site.

3. Maintaining infrastructure around Reliable Plumbing and Fixing Workshop.

The cost of promotion shall be expensive but the enterprise shall use other method to recover the
discounts given to customers.

2.4.2 Advertisement
The enterprise shall use various types of adverts as media, billboards, posters, radio, newspapers
and magazines to create public awareness
8
This will inform customers on the location, products and services offered at the workshop.

The company will design an attractive and detailed business bronchus showing all the products
and services offered

2.5: Pricing Strategy

This is the variation of prices of different business enterprise. Reliable Plumbing Workshop shall
consider the following ways in pricing its products;

1. Knowing what the customers want from the products and services offered.

2. The cost involved in running the business.

3. Identifying product pricing goals which is to make profits.

4. Pricing will involve thorough analysis of the competition threats government policies.

5. The customers living standards so that the set prices may not be high beyond their reach and as
well it does not render the company run losses and lose the existing competition in the
construction industry.

6. Discounts will be offered for buyer whose purchases are in bulk.

7. Transportation will be offered free for a bulk purchase.

2.6: Sales tactics

The location of Reliable Plumbing and Fixing Workshop along the highway enables customers
to access easily.

The workshop shall use direct approach in selling its products, where there shall be direct contact
with the customers.

Reliable Plumbing Workshop shall give discount to the loyal customers and also those
purchasing goods in bulk.

2.7: Distribution strategy

Producer

9
 Wholesaler

Retailers

Customer

Reliable Plumbing and Fixing Workshop shall be the producer of products.

Wholesalers shall be purchasing their products from the producer.

Retailers shall be purchasing their products from the wholesalers.

Customers shall also get their products from the retailers or direct access to Reliable Plumbing
Workshop, where they shall purchase for their domestic purposes.

10
 CHAPTER THREE

3.0: Organization and management plan

Human resource management is related to management team working in a business.

GENERAL MANAGER

PROCUREMENT PURCHASING MANAGER ACCOUNTANT

OFFICER

SUPERVISOR

3.1: Management team

1. Manager -Owner of the business, manages the business, he/she is concerned with the growth
of the business and talks with the customers.

2. Accountant -Deals with the financials issues, calculates the profits and loses made by the
business, calculates the purchases and selling of products from the business.

3. Supervisor-Ensures smooth running of activities and organization of workers in the workshop.

4. Procurement officer-Takes account of products. Keeps all the operation records, meeting
minutes and reports of the business in the company.

3.2: Purchasing manager

Purchase Manager In charge of all buying Holder of Diploma 2 year work
and approval for in Procurement. experience.
acquisition of good and
services in the company.

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3.3 Other personnel
Title No Qualifications Duties

Manager 1 Should have Manage and

bachelor in supervise the
business business
management and Delegate duties to
also 3 year supervisor.
experience in
business
management

Marketing manager 1 Should have Conduct sales and

bachelors in sales marketing of the
and marketing and business, purchase
also have 2 year and order goods or
experience in the products.
field of marketing.

Finance director 2 Should have Deals with

bachelors in financial issues.
accounting and also
3 year experience in
the field.

Production director 2 Should have Deal with the production

diploma in of products.
production
management and
also 2 year
experience.

3.4 Recruitment, training and production

3.4.1 Recruitment
Reliable Plumbing and Fixing Workshop shall carry out recruitment once in every three years.
During recruitment of new employees in different department, Reliable Plumbing Workshop
shall observe different qualifications in different department.

In managing team, the manager must have academic qualification of bachelor in business
management with three year experience.

12
It also applies to the procurement and marketing team and finance managers where they must
have bachelors in marketing and procurement management and also some years of experience.

However, in recruitment of security, Reliable Plumbing and Fixing Workshop shall observe the
following,

Must have with him /her KCSE certificate

Must have certificate of good conduct
Must have good healthy, letter from hospital with stamp.
All these shall make you qualify to be one of the recruits of the workshop.

3.4.2 Training
Reliable Plumbing and Fixing Workshop shall carry out training to the recruits to join the
enterprise.

To the managing team, the training shall be offered to them by experts in the department of
management for two months after which they are being employed officially to join work.

However, in the department of security for, training is also offered to them by experts of security
for 3 months, after which they also join the workshop.

3.4.3 3.4.3 Promotion

Reliable Plumbing and Fixing Workshop shall carry out promotion to the employees and also
customers in different ways.

Employees who will have performed well to impress the enterprise shall be promoted to the next
level of work depending on the effort he shall have put in his/her work. Reliable Plumbing
Workshop shall increase the salaries to the promoted employee.

Loyal customers shall be given promotions by the workshop. There shall be discount to the
customers and also delivery of goods to them.

3.4.4 Remunerations and incentives

3.4.5 Incentives
Bonus shall be given to any employee who shall be working hard and any other extra work done
by the employees.

Reliable Plumbing and Fixing Workshop shall pay for any extra time worked by the employees.
This is done due to the specific time for working which is 8:00am to 5:00pm. It is also done to
motivate employees and give them moral.

All workers are restricted to their work.

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3.4.6 Remuneration
Title Number Monthly pay House Gross pay
allowance

Manager 1 25000 3000 28000

Asst. manager 1 15000 - 15000

Accountant 2 32000 - 32000

Employees 5 50000 - 50000

Security 2 16000 - 16000

3.5 Legal and Statutory

3.5.1 License
Reliable Plumbing and Fixing Workshop shall get its licenses from county government of
Nakuru to carry out its business. The license shall cost ksh. 10000 to be allowed as a legal
business within the country.

The trading license helps the enterprise to trade anywhere within the country. It also helps the
enterprise to be recognized as a legal business by the county government.

3.5.2 Permit
Reliable Plumbing and Fixing Workshop shall get its permit from the county government hence
giving permission and authority to carry out its activities within the county without any
interference. The permit shall cost a total of ksh 1000.

3.5.3 By-laws
The laws from the county and the industry will be followed by the firm and all the workers.
Whoever will go against the laws will be fired immediately.

14
3.6 Support services
Business supports are organizations that helps the business to grow and become successful.

The organization gives support to Reliable Plumbing and Fixing Workshop e.g. cover, loans,
insurance.

Title Branch Services

Insurance NAKURU Insurance against theft
and fire
Bank K.C.B treasurer square Depositing and borrowing
loans
Security K.K NAKURU Offering security services

15
 CHAPTER FOUR

4.0 PRODUCTION PLAN

4.1 Production facilities and Capacity

This refers to tools and equipment quantity and cost as required by the business for the
sustenance and performance of the operational activities.

Item Quantity Unit cost Total cost

Jointing machine 2 20000 40000
Computer 3 15000 45000
Calculator 2 1000 2000
Pickup 2 950000 1900000
Tape measure 5 150 750
Pipe wrench 2 4000 8000
Glue 6 200 1200
Harmer 3 250 750
Total 1997700

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4.1.1 Firm layout

17
4.2 Production strategy
Reliable Plumbing and Fixing Workshop aims at giving out quality services to its customers.
Each employee is given responsibilities to carry out the duties. The workshop shall have modern
technological tools and equipment to make efficiency in the working process i.e. use of
computer, transporting machine which are faster.

Also, high products and services shall be of high quality and very high level of technology, as
the business progresses it is expected to develop better goods and services provision techniques.

4.3 Production process

The enterprise shall be offering production such as:

1. Repair on blockages
Repair services price done according to their size of damage e.g. small blockages in toilet lines
are done by 20000 per line

Blockages in kitchen sink serviced by 5000 per line

Blockage in manholes 10000 per line

2. Fittings
Kitchen fittings are done by 25000 per room,

Toilet new fitting 25000 per flat

Manhole fitting are done by 5000 per manhole

3. Water connection piping

Both drinking, domestic and hot water piping done by 30000.

4.4 Regulation governing operation

4.4.1 Safety regulations

Workers shall be expected to wear safety gears e.g. safety boots, overall, and reflectors at all
time since dealing building materials is risky because most of them are metals and can injure the
workers. Dumping of materials should be disposed with a lot of care to avoid injuries.

4.5.2 Environmental regulations

Environmental conditions could be reasonably expected to have adverse effects on the product
quality and also services. Reliable Plumbing and Fixing Workshop shall ensure that the
environmental regulations are observed to avoid unconducive working environment.

18
4.5.3 Healthy regulations
Reliable Plumbing and Fixing Workshop shall ensure that each worker shall undergo check-ups
every morning to ensure that safe and efficient environment at work place. Any worker who shall
have illness shall be made to go through medication to have good health.

19
 CHAPTER FIVE

5.0 FINANCIAL PLAN

5.1 Pre-operational cost

Item Cost in ksh

Designing 180000

Installation 150000

License 15000

Utility bills 10000

Recruitment 10000

Rent deposit 5000

Professional fee 10000

Total 380000

5.2 Pro-forma Balance Sheet

Balance As at 31st December

2022.
Fixed Assets Cost

Building at Cost 300000

Land 280000
Motor Vehicle 107200
Less depreciation (8400)
Furniture and Fittings 6400
Less depreciation (800)
684400
Current Assets
Cash in Hand 1040
Cash at Bank 16400
Pre-Payments 19000

20
Debtors 46500
Stock 34800
288740
Less Current Liabilities
Creditors 24900
Accruals 12600
Bank Overdraft 16000
Working Capital 53500
1026640

Financed by;
Opening Capital 1200000

Add Net Profit 173360

Less Drawings 79000 Closing Capital

215630

Loans 150000

928730

5.3 Working capital

Current Assets
Cash in Hand 3400
Cash at Bank 54300
Debtors 628400
Stock 50000
736100
Less: Current Liabilities
Creditors 372000
Bank Overdraft 18600
Accruals 10200

Working Capital 335300

21
5.4 CASHFLOW PROJECTION

5.4.1 Cash flow projection for the year 2022

Months/ Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
receipt
Sales 7000 12000 10000 16000 17000 16000 20000 25000 20000 19000 18000 20000 170000
Loan 20000 - - - - - - - - - - - 200000
0
Owners 22000 32000 41000 41800 47000 43500 43000 40000 44000 40800 45000 42800 482900
capital 0 0 0 0 0 0 0 0 0 0 0 0 0
Bank 60000 90000 10000 12000 15000 15200 14500 15000 16800 15800 16100 13500 295900
overdraft 0 0 0 0 0 0 0 0 0 0 0
Total 48700 42200 52000 55400 63700 60800 61500 57500 62800 58500 62900 58300 683800
0 0 0 0 0 0 0 0 0 0 0 0 0
Payment
Installation 15000 10000 11000 9000 12000 13000 10000 9000 9500 10500 10000 12000 131000
0
Salary 14050 14050 14050 14050 14500 14500 14500 14500 14550 14550 14550 14550 172400
0 0 0 0 0 0 0 0 0 0 0 0 0
Purchases 20000 25000 30000 38000 40000 42000 43000 40000 45000 40500 40000 38000 441500
0 0 0 0 0 0 0 0 0 0 0 0
Creditors 60000 - - - - - - - - - - - 60000
License 15000 - - - - - - - - - - - 15000
Permit 10000 - - - - - - - - - - - 10000
Loan - - 50500 - 50500 - 50500 - 50500 - 50500 - 202000
repayment
Total 44050 40050 50200 52900 60750 57800 58500 55400 60500 56100 60600 53700 650600
0 0 0 0 0 0 0 0 0 0 0 0 0
Cash flow 46500 21500 18000 24500 29500 25000 30000 21000 22000 24000 23000 46000
Bal. b/d - 46500 68000 86000 11050 14000 16500 19500 21600 23900 26300 28600
0 0 0 0 0 0 0 0

22
 Bal. c/d 46500 68000 86000 11050 14000 16500 19500 21600 23900 26300 28600 33200
0 0 0 0 0 0 0 0 0

5.4.2 Cash projection for the year 2023

Months/ Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
receipt
Sales 18000 16000 17000 18000 20000 25000 28000 25000 24000 27000 28000 29000 275000
Owners 37800 42000 42900 46000 48000 50000 50100 48500 47500 48100 48500 50000 560300
capital 0 0 0 0 0 0 0 0 0 0 0 0 0
Bank 12000 19800 21200 26000 27000 26500 28000 16050 23000 24000 26000 30000 279550
overdraft 0 0 0 0 0 0 0 0 0 0 0 0 0
Total 51300 43400 65800 73800 77000 79000 80900 67050 72900 74800 77300 82900 846150
0 0 0 0 0 0 0 0 0 0 0 0 0
Payments
Installation 10000 11000 10000 9000 9500 9000 8000 8500 10000 12500 9000 12000 118500
Salary 15000 15000 15000 15000 15500 15500 15500 15500 16000 16000 16000 16000 186000
0 0 0 0 0 0 0 0 0 0 0 0 0
Purchases 30000 45000 48000 56000 58000 60000 62000 45000 52000 55000 58000 62000 631000
0 0 0 0 0 0 0 0 0 0 0 0 0
License 9000 - - - - - - - - -- -- - 9000
Permit 10000 - - - - - - - - - - - 10000
Creditors 20000 - - -- - - - 25000 - - - - 45000
Total 49900 61100 64000 71900 74450 76400 78300 63850 69000 72250 74900 79200 835250
0 0 0 0 0 0 0 0 0 0 0 0 0
Cash flow 14000 23000 18000 19000 25500 26000 26000 32000 39000 25500 24000 37000
Bal. b/d 33200 34600 36900 38700 40600 43150 45750 48350 51550 55450 68000 60400
0 0 0 0 0 0 0 0 0 0 0 0

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 Bal. c/d 34600 36900 38700 40600 43150 45750 48350 51550 55450 58000 60400 64100
0 0 0 0 0 0 0 0 0 0 0 0

5.4.3 Cash flow projection for the year 2024

Months/receipt Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Sales 28000 26000 27000 28000 28500 29000 30000 29000 29500 29000 30000 30500 344500
Owners capital 520000 480000 470000 481000 486000 410000 485000 470000 480000 460000 475000 485000 5639000

Bank overdraft 300000 298000 285000 290000 310000 315000 340000 295000 295500 255000 285000 295000 3278500

Total 848000 804000 784000 799000 824500 834000 855000 794000 805000 744000 790000 810500 8857500

Payments
Installation 12000 11000 12000 13000 10000 10000 11000 12000 13000 14000 15000 16000 149000
Purchases 580000 600000 580000 590000 610000 620000 640000 550000 580000 520000 560000 580000 7020000

License 10000 - - - - - - - - - - - 10000

Permit 12000 - - - - - - - - - - - 12000
Salary 162000 162000 162000 162000 165000 165000 165000 165000 167000 167000 167000 167000 1976000

Creditors 35000 - - - - - - 25000 - - - - 600000

Total 811000 773000 754000 765000 785000 795000 816000 752000 760000 701000 742000 763000 9217000

Cash flow 37000 31000 30000 34000 39500 39000 39000 42000 45000 43000 48000 47500
Bal. b/d 641000 678000 309000 739000 773000 812500 851500 890500 932500 977500 1020500 1068500

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Bal. c/d 678000 309000 739000 773000 812500 851500 890500 932500 977500 1020500 1068500 1116000

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5.5 Pro-forma income statement
Items 2021 2022 2023

Sales 170000 275000 344500

Cost of sales 4245000 6035000 6675500

Gross profit 4075000 5760000 6331000

Item 2021 2022 2023

Salaries 1724000 860000 1976000

Bank charges 2000 - -

License 15000 9000 10000

Permit 10000 10000 12000

Installation 131000 118500 149000

Creditors 60000 45000 60000

Total 1927000 2042500 2207000

Net profit before tax 2148000 3717500 4124000

Taxation 30q 64440 11525 123720

Net profit after tax 2083560 3605975 4000280

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5.6 break even points
It´s where the business expenses are sales.

The business is weather at a loss or profit. It helps enterprises to determine the volumes of sale
needed to cover capital used.

B.E. P=FC/CM

5.6.1calculating BEP
Fixed cost in ksh.

Particulars Cost

License 4000

Permit 500

Insurance 10000

Salaries 360000

Total 374500

Variable cost in ksh

Particulars Cost

Transport 20000

Telephone 1000

Electricity 16000

Total 37000

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5.6.2 Total contribution
Total contribution = sales – variable cost

= 955000 – 37000

=918000

5.6.3contribution margin

Contribution margin = total contribution/sales x 100%

=918000/955000x100%

=96.13%

5.7 DESIRED FINANCING

ITEM COST

Preoperational cost 182000

Working capital 100000

Fixed assets 402000

5.8 CAPITALIZATION
ITEM COST

Owning cost 320000

Bank loans 200000

Total investment 520000

5.8 PROFITABILITY RATIO

GROSS PROFIT RATIO=G.P*100/SALES

40750000*100/6,750,000

=77.63%

NET PROFIT RATIO= NET PROFIT*100/SALES

=2083560*100/6,750,000

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 =43.77%

LIQUIDITY RATIO=CURRENT ASSETS*100/CURRENT LIABILITIES

=1,340,000*100/350,000

=382.86%

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