BUSINESS PLAN

PROJECT: THE CYBER

PAPER CODE: 107

COURSE CODE:1901/1

PRESENTER: JAPHET KERUBO HELLEN

INDEX NUMBER: 5171070085

CENTRE CODE: 517107

CENTRE: BARINGO TECHNICAL COLLEGE

SUPERVISOR: MS. FRANCISCA KIBET

EXAM SERIES: JULY, 2020

SUBMITTED TO: KENYA NATIONAL EXAMINATION COUNCIL FOR

PARTIAL FULFILMENT FOR THE AWARD OF CERTIFICATE IN
COMPUTARIZED SECRETARIAL
 DECLARATION
Declaration by Student:
I certify to the best of my knowledge and belief this project is my own work and does not
incorporate without acknowledgement any material previously submitted for a degree or
certificate in any institution/research center or published or written by another person.

JAPHET KERUBO HELLEN

SIGN______________ Date________________

Declaration by the Supervisor

This business plan has been submitted for examination with my approval as the
supervisor.

MS. FRANCISCA KIBET

SIGN _______________ Date __________________
 DEDICATION
This business plan is dedicated to my family members whose contributions made this
publication possible. May God Bless them Abundantly.
 ACKNOWLEDGMENT
I also want to thank my lecturer for his assistance to make up this write up meaningful
and comprehensive.
 LIST OF TABLE

Table 1-----------------------------------------------Swot analysis

Table 2-----------------------------------------------Market share analysis

Table 3-----------------------------------------------Renumeration

Table 4-----------------------------------------------Production facilities and capacity

Table 5-----------------------------------------------Firm Layout

Table 6-----------------------------------------------Pre-operational cost

Table 7-----------------------------------------------working capital estimate

Table 8-----------------------------------------------Projected cash flow for year 2020

Table 9----------------------------------------------- Projected cash flow

Table 10-----------------------------------------------Profoma income statement for 1 st year

Table 11-----------------------------------------------Profoma balance sheet for the 1 st year

Table 12-----------------------------------------------Break-even analysis

 TABLE OF CONTENTS
DECLARATION.............................................................................................................................i

DEDICATION...............................................................................................................................ii

ACKNOWLEDGMENT..............................................................................................................iii

TABLE OF CONTENTS...............................................................................................................v

EXECUTIVE SUMMARY...........................................................................................................1

2.0 Marketing Plan...........................................................................................................1

3.0 Organization Plan.......................................................................................................1

4.0 Operation Plan............................................................................................................2

5.0 Financial Plan.............................................................................................................3

CHAPTER ONE............................................................................................................................4

1.0 Business Description..................................................................................................4

1.1 Business Name...........................................................................................................4

1.2 Business Location.......................................................................................................5

1.4 Business Ownership...................................................................................................5

1.5 Type of Business........................................................................................................6

1.6 Product / Services.......................................................................................................6

1.7 Industry.......................................................................................................................6
 1.8 Business Goals............................................................................................................7

1.9 Entry and Growth Strategy.........................................................................................7

CHAPTER TWO...........................................................................................................................8

2.0 Marketing Plan...........................................................................................................8

2.1 Market Objectives.......................................................................................................8

2.2 Potential Customers....................................................................................................8

2.3 Competition................................................................................................................9

2.4 Market Share Analysis..............................................................................................10

2.5 Methods of Promotion and Advertising...................................................................10

2.6 Pricing Strategy........................................................................................................10

2.7 Sales Tactics.............................................................................................................11

CHAPTER THREE.....................................................................................................................12

3.0 Organization/Management Plan...............................................................................12

3.1 Organizational Structure...........................................................................................12

3.2 The Venture Team....................................................................................................12

3.3 Employee Recruitment.............................................................................................13

3.4 Training....................................................................................................................14

3.5 Promotion.................................................................................................................14

3.6 Remuneration............................................................................................................14
 3.7 Incentives and Benefits.............................................................................................15

3.8 Support Services.......................................................................................................15

3.9 License, Permits and By-Laws.................................................................................15

CHAPTER FOUR.......................................................................................................................16

4.0 Operational Plan....................................................................................................................16

4.1productional Facilities And Capacity....................................................................................16

4.1.1 Firm Layout...........................................................................................................16

4.2 Production Strategy...............................................................................................................17

4.2.1 Services Offered....................................................................................................17

4.3 Production Process...................................................................................................18

4.4 Production Affecting Operations..............................................................................18

CHAPTER FIVE.........................................................................................................................20

5.0 Financial Plan...........................................................................................................20

5.1 Pre-Operational Cost................................................................................................20

5.2 Proposed Capitalization............................................................................................21

5.3 Working Capital.......................................................................................................21

5.4 Projected Cash Flow Statement for The Year 2020.................................................22

5.5 Proforma Income Statement for First Three Years..................................................25

5.6 Proforma Balance Sheet for The First Three Years.................................................26

 5.7 Break Even Analysis................................................................................................27

5.8 Capitalization…………………………………………………………………………28

5.9 Profitability Ratios………………………………………………………………….28

REFERENCE…………………………………………………………………………..29

APPENDIX……………………………………………....................................................30
 EXECUTIVE SUMMARY
The executive summary summarizes the business plan, it will comprise of business
description, marketing plan, organization plan, operation plan and financial plan. In
chapter one consist of business description, background of the owner, business
name ,business location and address.

1.0 BUSINESS DESCRIPTION

The proposed business will be referred to Cyber Cafe Enterprise. The business will be
located at Iten-Eldoret Road. The business will be owned by Japhet Kerubo Hellen hence
sole proprietorship. The business will provide printing, CD writing, photocopying, typing,
binding, scanning, lamination, stationery, and internet services to its customers.

2.0 Marketing Plan

The proposed business is designed in such a manner that it will secure a large number of
customers within the market and its environs. The business aims to ensure that customers
are satisfied and treated well in order to ensure that we gain confidence in them. Good
public relations will be ensured as a marketing tool as well as other promotion techniques.

3.0 Organization Plan

The organization structure will comprise of the Manager, the cybercafé supervisor, copy
typist and the photocopier. The manager will be the sole proprietor while the rest will be
qualified in their respective responsibilities. The staff shall be required to be creative and
innovativeness and therefore no experience will be required we shall need those fresh
form the colleges. Remuneration and incentives shall be carried out on monthly basis as
per employment agreement in accordance with the employment act provisions.
4.0 Operation Plan

The proposed business will operate from Monday to Saturday from 7.30 a.m. to 8.00 p.m.
the employees will organize themselves in cases where one has to be away on leave or
off.
5.0 Financial Plan

The business is designed to start with Kshs. 100,000. The source of capital will be as
follows:

Source Amount

Savings 50,000

Friends and Relatives 30,000

Loan from Bank 20,000

Total 100,000

The financial plan shall comprise of the income cash flow for three years, projected cash
flow and break-even analysis
 CHAPTER ONE

1.0 Business Description

The proposed business will be referred to as Cyber Cafe Enterprise. The business will be
located in Eldoret along Eldoret-Iten roadin Subaru estate. The business will be owned by
one person hence it will be a sole proprietorship ownership. The business will provide
printing, photocopying, typing, binding, scanning, lamination, stationery, and internet
services to its customers. The business aims at satisfying the customers’ needs at
affordable prices.

1.1 Business Name

The business name will be Cyber Cafe Enterprise. The name is derived from the English
word meaning quality and that is what our customers will actually expect and get from
our services. The address and logo will be as follows:

Cyber Cafe Enterprise

P. O. BOX 3711-30100

ELDORET

BUSINESS LOGO:
1.2 Business Location

Cyber Cafe Enterprise will be located in Eldoret town, Eldoret-Iten road in Subaru estate
Posta
ELD-
pplazaplaz
ITEN

UUUUUEldoret-Iten road

Many learning institutions are situated around Eldoret town such as Eldoret AIC Training
College,University of Eldoret and East Africa Institute Of certified Studies - ICS College -
Eldoret Branch. The area is densely populated but there are very few such business offering
computer services and stationeries under a single business within the area. The nearest place is
Eldoret AIC Training College but restricted to students and residents alone. This means that the
only place where the students can get photocopying services or other computer services is in
Eldoret town where they need to spend over forty shillings on transport to get such services.
Cyber Cafe Enterprise therefore aims to providing convenient services to its customers and
bridge this gap.

The town has more than six learning institutions around which need photocopying and computer
services.

1.4 Business Ownership

The business will be owned by Japheth Kerubo Hellen who will be the general manager. She is a
holder of certificate in secretarial and therefore well trained in the ICT and business-field where
the business falls into.

The business ownership will be of sole proprietorship owned by the general manager. The reason
for the choice of this kind is because of my capabilities and also to ensure faster decision
making.
Registration of the business

Cyber Cafe Enterprise will be registered under the registration of business names act of laws of
Kenya. The business will be licensed by the county government.

Equity contribution

The business will require a capital amounting to Ksh. 100,000. The sources of the capital will
include personal savings Ksh.50,000, friends and relatives Ksh. 30, 000 and Ksh. 20,000 bank
loan to be repaid in five years.

1.5 Type of Business

The business will be independent offering computers services and sell stationery to all its
customers. The business aims to gain confidence in the customers so as to establish itself in the
area and to expand in future to offer computer training and open other sub-branches.

1.6 Product / Services

The business will provide printing, photocopying, typing, binding, scanning, lamination,
stationery, and internet services to its customers. The business aims at satisfying the customers’
needs at affordable prices and offering quality services.

1.7 Industry

Cyber Cafe Enterprise will fall under the information and communication technology industry.
The industry is developing due to the faster growing rate in the ICT industry and the landing of
fibre optic cable in Kenya and every other aspect is moving towards computer age. The area has
few services around and it’s still a new area which many people have not realized to venture into,
mainly because of the insufficient skills and knowledge.
1.8 Business Goals

Cyber Cafe Enterprise is targeting to archive both short term and long-term goals in its span of
operation. The goals are based on SMART analysis i.e. specific, measurable, achievable, realistic
and timely.
Short term goals
The following will be achieved within the first one year.
 To gain confidence of customers within the area by providing quality services.
 To market the services within the area and the surrounding area so as to increase sales
from the beginning.
 To ensure that the customers are well satisfied with the services offered.
 To ensure that the staff are working towards the achievement of the business goals.
Long term goals
The following goals will be achieved within 5 years
 To supply stationaries and computers to institutions.
 To offer computer training to customers.
 To expand the internet bureau.
 To have cleared the bank loan.
 To become a leading printing firm in the area.

1.9 Entry and Growth Strategy

The entry strategy will be based on public relations, advertisement and pricing tactics. The
business will publicize itself through posters, cards and offer discounts to ensure that all potential
customers are aware of its existence. The first services will be offered at discounted prices and
this is to win more customers but the prices will be more affordable than those offered around
Eldoret town. Customer care will be emphasized in the business and even after sale services will
be offered, refreshments and entertainment to customers as they wait to be served.
 CHAPTER TWO

2.0 Marketing Plan

Cyber Cafe Enterprise design outlines clearly on how it intends to offer services, identifying
customers, pricing, selling, advertising, promotion and distribution strategies depending on
standard ruling market situation.

2.1 Market Objectives

The business will be led by both short term and long-term market objectives in planning market
for its products.

Short term market objectives

 To advertise the business through posters and business cards so as to win more
customers.
 To ensure that customers are provided with quality and efficient services.
 To ensure that customer care is the order of the day.
 To ensure that all customers are satisfied.

Long term market objectives

 To attain at least 50% returns on investment

 To secure a large marketing zone.
 To introduce brand names on packaging.
 To market through media-television

2.2 Potential Customers

Mugun Cyber Cafe Enterprise target a large number of customers which include students in the
colleges within the area and the students of the neighboring schools. This makes the business
more viable bearing in mind that it will be the only business of that kind in that area.
Primary customers

The primary customers will include the students and those around Eldoret Town.

Secondary customers

The secondary customers will include the nursery school teachers, primary and secondary
schools’teachers and offices around the area.

2.3 Competition

There are competitors within the area; Eldoret town has a variety of such businesses and
therefore no doubt they will be minor competitors because they do not major in purely stationery
and computer services.

SWOT analysis

Company Name S t r e n g t h s Weaknesses O p p o r t u n i t y T h r e a t s

’ C y b e r Good modern services No potential Customers Has employedexperience and good personnel Stiff competition
Experience Poor Customer
personnel relation
Mreti Traders Well stocked and experienced Lack experienced personnel Well stock and upgrading of services. Has less of customers due to stiff competition

K o k w e t Has established Customers Poor Customer relation  Good business Lack of enough capital and loss of customer focus
location
2.4 Market Share Analysis

70
60
50
40
30
20
10
0

This analysis shows that Cyber Cafe Enterprise has a bigger percentage, 65% in terms of the
market share compared to the other competitors mainly because the other competitors are far
away from the location of Cyber Cafe Enterprise. This therefore shows how viable the business
is although the excellence of the business may prompt other upcoming entrepreneurs to start the
same business within the area. To ensure continuity of get a bigger market share the services will
be of quality, efficient, effective and affordable to all customers. The business will take
advantage of the other competitors’ weaknesses mainly being readily available to the local
residents and ensuring good public relations.

2.5 Methods of Promotion and Advertising

Cyber Cafe Enterprise intend to advertise through posters and brand names on its products as
well as distribution of business cards to students and all potential customers. Public relations and
sales promotion will also be applied in order to get more customers within and without the area.

2.6 Pricing Strategy

Cyber Cafe Enterprise will adopt a pricing strategy that will accommodate high medium and
low-income earners. The prices will be competitive and very much affordable. The formula for
the pricing will be the variable cost + fixed cost + profit. Discounts will be given to customers
who print or photocopy bulky work and those who browse for long hours and this is the only
factor that may affect the pricing strategy. However, the fact that my competitors are far away
the pricing may not be very much affected by them, but we shall consider their pricing so that we
maintain customers who may intend to go for their services.

2.7 Sales Tactics

Cyber Cafe Enterprise will print samples of its products and distribute them to potential
customers who include learning institutions, offices and churches within the area. This way we
shall be gaining confidence from our customers and for the first batch of print outs from any of
them there will be a 10% discount. For customers who will be having bulky work as they wait
for the print run, they will be given refreshments and entertainment this will make them feel
important and make them come again. Samples of our products will also be displayed on the wall
to inform customers of what we can do for them apart from maybe what they know; this will
increase the sales because customers will be having various needs which can be offered by our
business.
 CHAPTER THREE

3.0 Organization/Management Plan

Cyber Cafe Enterprise will apply the modern management style where there will be flow of
work and harmony in the work place. The hierarchy of authority will be very clear right from the
manager to the lowest in the rank.

3.1 Organizational Structure

Manager

Copy typist Cyber café supervisor Photocopier

3.2 The Venture Team

The business will have three employees and the manager as the owner. The following will be
their qualifications.

Title: Manager

Qualifications: Certificate in secretariat

Age: 26 years old

Duties: General supervision of the business, marketing, budgeting, purchases raw materials and
pays the employees.
Title: Cybercafé supervisor

Qualifications:Certificate in computer science or information technology with good public

relations.

Age: Above 23 years of age

Duties: Supervise the use of the cybercafé, log in and out users of the computers and
maintenance of the computers and the printers. Keeping records of all the business transactions
and assisting the manager in budgeting.

Title:Photocopier

Qualifications: Certificate in informationCommunication Technology with good public relations

Age: 20 years old

Duties: Offer photocopying, scanning, and printing services, maintenance of the photocopying
machine and selling the stationery

Title: Copy typist

Qualifications: Certificate in secretarial with typing speed of 50 w.p.m

Age: Below 25 years of age

Duties: Typing, editing, printing, binding and laminating,

3.3 Employee Recruitment

Recruitment of the employees will be done immediately the applications are received and when
the deadline for the advertisement is over. Interviews will be carried out based on the
qualifications and the expression made during the interview the smartest candidate will then be
picked for each position. Good public relations will be an added advantage. We will not consider
experience because our business needs to target new talented youths who will bring new ideas to
the business.

3.4 Training

All the employees will undergo an in-house training in order to understand the way of operation
and to orient themselves with the computers and other machines used in the business as well as
know what they are expected of them, the vision, mission and the objectives of the business.
However, employees will be encouraged to undergo training on their own on part time basis so
as to gain new skills and knowledge. Loans to pay training fees will be availed to any employee
upon request.

3.5 Promotion

Promotion will be carried out on the basis of performance, creativity and innovation as well as
newly acquired knowledge and skills. This is aimed at motivating staff to be innovative as well
as improve on their work performance. Promotion will be based on given added responsibility
with a good salary package.

3.6 Remuneration

P o s i t i o n Salary per month S a l a r y p e r y e a r

M a n a g e r 1 0 , 0 0 0 1 2 0 , 0 0 0
Cyber café supervisor 7 , 0 0 0 8 4 , 0 0 0
C o p y t y p i s t 5 , 0 0 0 6 0 , 0 0 0
P h o t o c o p i e r 4 , 0 0 0 4 8 , 0 0 0
T o t a l 2 6 , 0 0 0 3 1 2 , 0 0 0
3.7 Incentives and Benefits

The employees of Cyber Cafe Enterprise will be promoted depending on their performance, they
will also get ten and four o’clock tea, travelling allowances and financial support in case of loss
of close relatives. Loans will also be provided for staffs who will want to advance their careers.

3.8 Support Services

Support services that will be required will include; legal auditing, banking services,
advertisement, postal and communication services. Banking services will be provided by Equity
bank. Postal and communication services will be provided by Telkom Kenya Eldoret branch.
Legal and auditing services will be provided by Mwangi Petro legal and auditing agency.
Advertisement services will be provided by MU fm.

3.9 License, Permits and By-Laws

Cyber Cafe Enterprise will be registered with the ministry of commerce and industry and obtain
relevant permits to ease its operations. The business will acquire trading and operations license
from Uasin Gishu County at a total cost of Kshs. 3,500.
 CHAPTER FOUR

4.0 OPERATIONAL PLAN

4.1PRODUCTIONAL FACILITIES AND CAPACITY

This chapter deals with designed facilities and capacity production facilities production strategy
process and regulation affecting the business operation.

I T E M S QUANTITY DESCRIPTION METHOD OF ACQUISITION SOURCE C O S T

P r e m i s e s 5mX10m Permanent R e n t i n g Payment 2 , 0 0 0
1 Photocopier machine 1 Kyocera Mita P u r c h a s e MFI computer solutions 6 0 , 0 0 0
2 Computers 4 HP-compaq branded desktop computers
P u r c h a s e MFI computer solutions 1 0 0 , 0 0 0
3 Computer chairs 6 P V C P u r c h a s e Victor furniture’s 1 2 , 0 0 0
4 Computer tables 4 W o o d e n P u r c h a s e Victor furniture’s 8 , 0 0 0
5 C o u n t e r 1 W o o d e n P u r c h a s e Victor furniture’s 5 , 0 0 0
6 S h e l v e s 2 W o o d e n P u r c h a s e Victor furniture’s 2 , 0 0 0
7 Binding machine 1 P u r c h a s e Colorsonic stationers 7 , 0 0 0
8 Laminating machine 1 Desktop pouch P u r c h a s e Colorsonic stationers 7 , 0 0 0
9 Giant stapler 1 Staedler P u r c h a s e Colorsonic stationers 1 , 5 0 0
10 Color printer 1 HP D2300 P u r c h a s e Colorsonic stationers 3 , 0 0 0
11 Subwoofer speakers 1 Ampex 2.1 P u r c h a s e MFI computer solutions 2 , 0 0 0
12 Stationery Assorted Exercise books, pens, files etc P u r c h a s e Colorsonic stationers 1 5 , 0 0 0
13 Paper cutter 1 A 4 s i z e 1 , 0 0 0

4.1.1 Firm Layout

Window Window
Entrane Shelves
Counter

Cyber computers

Entrance
Photocopier
Lobby

Display
Computer Binding table

Window
4.2 PRODUCTION STRATEGY
Life electronic shop will require a skilled entrepreneur personnel to implement the business ideas
as this will keep the business stay ahead of its competition also the business will obtained other
ideas from its role model and this will enable the business to achieve its target and also the
business will have to supply computer accessories to all parts of Uasin Gishu county
The market supply strategy would be used by the business by increasing the size of firm
population.

4.2.1 Services Offered

 Photocopying services
 Binding services
 Printing
 Typing
 Scanning
 Lamination
 Stationery
 Internet services
4.3 PRODUCTION PROCESS

The business will operate as follows:

The opening hours will be for 7.30 a.m to 8.00 p.m Monday to Saturday.

The cyber café supervisors will co-ordinate the activities of the business in liaison with the
manager. He will assist the manager in his absence and ensure that all the activities are running
on smoothly. The photocopier will ensure that all the records for the photocopying services are
kept

4.4 PRODUCTION AFFECTING OPERATIONS

The business will be required to meet regulations pertaining to health, trademarks patents and
copyright, safety regulations, environmental regulations, compliances and permits. The working
environment will be clean and safe for the employees and customers. Waste materials will be
disposed properly to avoid pollution of the environment. The copyright law will be strictly
adhered to any customer who wants to photocopy an author’s work which is more than one third
should get permission from the author.

 Taxes – For most businesses, owner’s government regulation always begins with taxes.

The owner’s must know how to pay taxes and when to pay them

 Pattern and trademarks – This will be problems to a business when the owner is

designing a logo that is similar to another business logo

 Health regulations – Will affect the business in such a way that the owner will be

required to take life insurance cover

 Environmental regulations – The owner might need to acquaint with various

environmental protection depending on the business

 Advertising – The owner needs to dive in and make sure they are abiding by the rules and

government regulations

 Licenses – The owner requires licenses and permits to see what else your business might

require
 CHAPTER FIVE

5.0 Financial Plan

Cyber Cafe Enterprise will require a capital of Kshs. 100,000 where Ksh. 50,000 will be from
savings and 20,000 long term loan from Equity bank. The following is the pre-operational cost,
working capital estimates, projected cash flow statement, proforma income statement, proforma
balance sheet, break-even point and profitability ratios.

5.1 Pre-Operational Cost

I T E M A M O U N T
1 A d v e r t i s e m e n t 3 , 0 0 0
2 B a n k i n g s e r v i c e s 2 , 0 0 0
3 B i n d e r 7 , 0 0 0
4 Binding and laminating materials 5 , 0 0 0
5 C o m p u t e r s 1 0 0 , 0 0 0
6 E l e c t r i c i t y 2 , 0 0 0
7 F u r n i t u r e a n d f i t t i n g s 2 7 , 0 0 0
8 G i a n t s t a p l e r 1 , 5 0 0
9 L a m i n a t i n g m a c h i n e 7 , 0 0 0
10 L i c e n s e s a n d p e r m i t s 3 , 0 0 0
11 P a p e r c u t t e r 1 , 5 0 0
12 P h o t o c o p i e r 8 0 , 0 0 0
13 P o s t a l a n d t e l e c o m m u n i c a t i o n c h a r g e s 1 0 , 0 0 0
14 P r i n t e r 3 , 0 0 0
15 S t a t i o n e r y 1 0 , 0 0 0
16 S u b w o o f e r s p e a k e r s 2 , 0 0 0
T o t a l 2 6 4 , 0 0 0
5.2 Proposed Capitalization

Source Amount

Personal savings 200,000

Bank loan 200,000

Total 400,000

5.3 Working Capital

I T E M 2 0 2 0 2 0 2 1 2 0 2 2
Current assets
S t o c k 1 5 0 , 0 0 0 3 0 0 , 0 0 0 3 5 0 , 0 0 0
D e b t o r s 1 0 0 , 0 0 0 1 5 0 , 0 0 0 1 7 0 , 0 0 0
Cash at hand 5 0 , 0 0 0 8 0 , 0 0 0 1 0 0 , 0 0 0
Cash in bank 2 0 0 , 0 0 0 2 5 0 , 0 0 0 2 5 0 , 0 0 0
T o t a l 5 0 0 , 0 0 0 7 8 0 , 0 0 0 8 7 0 , 0 0 0
Current liabilities
C r e d i t o r s 1 0 0 , 0 0 0 1 0 0 , 0 0 0 1 2 0 , 0 0 0
Bank overdraft 0 1 5 , 0 0 0 1 7 , 0 0 0
Proposed tax 1 0 , 0 0 0 2 5 , 0 0 0 3 0 , 0 0 0
Accrued interest 4 0 , 0 0 0 4 0 , 0 0 0 4 0 , 0 0 0
T o t a l 1 5 0 , 0 0 0 1 8 0 , 0 0 0 2 0 7 , 0 0 0
Working capital 3 5 0 , 0 0 0 6 0 0 , 0 0 0 6 6 3 , 0 0 0
 5.4 Projected Cash Flow Statement for The Year 2020

O N D
I t e J a F e M A p M J u J u A u Se c o e Tot
m n b ar r ay n l g p t v c als
5 9 1,
Balance 4 5 5 6 3 6 8 7 7 8 3 8 3 90 4 02 11 8,8
B/D 0 8 8 1 4 9 1 9 5 2 9 69 29
4 4 4 4
Receipts in 3 5 4 0 0 4 1 4 2 4 2 4 3 4 3 43 4 4 5 5,0
Kshs 000 0 0 1 5 0 5 0 2 7 2 6 2 50
Personal 1 0 10
savings 0 0 0 0 0 0 0 0 0 0 0 0 0
Bank 3 0 30
loan 0 0 0 0 0 0 0 0 0 0 0 0 0
Debtor's 4 5 3 4 6 2 3 4 8 9 5 55
collection 0 0 0 0 5 0 5 5 0 0 0 5 0
1
4
Total 7 5 9 0 10 1 0 11 12 12 13 13 6 15 16 14,
cashflow 0 0 11 7 6 49 64 86 06 82 4 65 76 829
Cash
outflow 0
3 3 3 3
Cash 2 5 3 0 1 3 2 3 2 3 4 3 4 3 5 35 6 5 6 3,9
purchases 0 0 0 0 5 0 5 0 5 0 5 0 70
Creditors 2 3 5 6 1 4 3 2 26
paid 0 0 5 0 0 0 0 0 0 0 0 0 5
 Wages/ 2 2 2 2 2 2 2 2 2 2 2 2 31
salaries 6 6 6 6 6 6 6 6 6 6 6 6 2
Telecommuni 1 1 1 1 1 1 1 1 1 1 1 1 12
cations 0 0 0 0 0 0 0 0 0 0 0 0 0
R e 2
n t 2 2 2 2 2 2 2 2 2 2 2 2 4
W a t 1
e r 1 1 1 1 1 1 1 1 1 1 1 1 2
Electri 4
city 2 3 4 3 5 4 3 2 4 3 2 5 0
Miscellan 1
eous 1 0 2 0 1 0 0 0 2 3 0 1 0
Interest 5 5
on loan 0 0 0 0 0 0 0 0 0 0 0 0 0
Tax 2 2
paid 0 0 0 0 0 0 0 0 0 0 0 0 0
3 4 3 4
Total cash 2 9 3 4 8 3 9 3 7 4 3 4 4 4 0 44 3 9 9 4,8
outflow 2 2 0 2 0 3 7 1 0 5 6 5 23
6 1, 1, 1,
Net 4 5 5 5 3 6 8 7 7 8 3 8 3 9 0 9 4 02 16 18 10,
cash 8 8 1 4 9 1 9 5 2 9 9 1 006

5.4.1 Projected
Cash Flow
Statement For The
Year 2021
I t e J F M A M J J A u S O c N D Tot
m a e ar pr a y u u l g e t o v ec als
 n b n p
5 5 6 8 9
Balance 1,1 0 9 6 7 1 1 8 6 8 6 3 9 6 1,0 11 10,
B/D 81 3 9 8 9 2 2 8 2 7 29 69 309
5 5 5 5 5 5 5 5
Receipts in 5 5 6 6 5 6 7 5 8 5 8 9 5 9 9 9 6,9
Kshs 000 0 5 0 2 8 2 1 6 0 3 5 8 10
Personal
savings 0 0 0 0 0 0 0 0 0 0 0 0 0
Bank
loan 0 0 0 0 0 0 0 0 0 0 0 0 0
1 6
Debtor's 0 4 5 3 4 6 2 3 4 8 9 5 5
collection 0 0 0 0 5 0 5 5 0 0 0 5 0
6
Total 5 10 12 12 13 14 14 14 15 16 17 18 16,
cashflow 0 98 09 60 32 44 68 89 62 40 14 22 688
Cash
outflow 0
1 3 3 3 3 3 3 3
Cash 0 0 1 2 3 2 4 3 4 3 5 5 3 6 5 6 3,8
purchases 0 0 0 0 5 0 5 0 5 0 5 0 20
2
Creditors 2 3 5 6 1 4 3 2 6
paid 1 0 5 0 0 0 0 0 0 0 0 0 6
3
Wages/ 2 2 2 2 2 2 2 2 2 2 2 2 1
salaries 6 6 6 6 6 6 6 6 6 6 6 6 2
 1
Telecommuni 1 1 1 1 1 1 1 1 1 1 1 1 2
cations 0 0 0 0 0 0 0 0 0 0 0 0 0
R e 3
n t 3 3 3 3 3 3 3 3 3 3 3 3 6
W a t 2
e r 2 2 2 2 2 2 2 2 2 2 2 2 4
Electri 4
city 4 3 4 3 5 4 3 2 4 3 2 5 2
Miscella 1
neous 1 0 2 0 1 0 0 0 2 3 0 1 0
Interest 3 3
on loan 0 0 0 0 0 0 0 0 0 0 0 0 0
Tax 1 1
paid 0 0 0 0 0 0 0 0 0 0 0 5 5
1 3 3 3 4 4 3 4
Total cash 4 4 8 9 3 7 3 4 4 4 0 4 4 3 9 7 4,6
outflow 7 4 2 4 2 5 9 3 2 7 8 2 75
5 7 8 8
Net 0 5 2 6 9 6 1,0 1,0 1,0 1,1 1,2 1,3 1,3 12,
cash 3 4 7 6 0 09 19 86 20 03 16 50 013

5.4.2 PROJECTED
CASH FLOW
STATEMENT FOR
THE YEAR 2022
 J F J N
I t e a e M A M a Ju u A u Se O o D Tot
m n b ar pr y n l g p ct v ec als
5 1,
Balance 1,3 5 8 4 11 1,3 16 83 2 0 2,2 24 2,7 30 21,
B/D 50 8 6 08 41 12 6 1 4 50 53 06 13 087
6 6 6 6 6 6
Receipts in 0 0 6 0 0 6 0 60 1 6 1 6 1 62 2 3 7,3
Kshs 000 0 2 4 7 8 9 2 4 5 0 5 0 46
Personal
savings 0 0 0 0 0 0 0 0 0 0 0 0 0
Bank
loan 0 0 0 0 0 0 0 0 0 0 0 0 0
2 8
Debtor's 5 4 5 3 4 6 2 3 4 8 9 5 0
collection 0 0 0 0 5 0 5 5 0 0 0 5 0
8
Total 5 12 15 17 1 9 22 24 2 6 29 31 34 36 27,
cashflow 0 00 00 45 9 4 81 73 6 3 05 53 21 98 883
Cash
outflow 0
3 3 3 3 3
Cash 3 0 3 1 2 3 2 34 4 3 5 3 5 36 5 0 3,6
purchases 2 0 0 0 5 0 5 0 5 0 5 0 92
2
Creditors 2 3 5 6 1 4 3 2 6
paid 0 0 5 0 0 0 0 0 0 0 0 0 5
Wages/ 3 3 3 3 3 3 3 3 3 3 3 3 4
salaries 5 5 5 5 5 5 5 5 5 5 5 5 2
 0
1
Telecommuni 1 1 1 1 1 1 1 1 1 1 1 1 2
cations 0 0 0 0 0 0 0 0 0 0 0 0 0
R e 4
n t 4 4 4 4 4 4 4 4 4 4 4 4 8
W a t 2
e r 2 2 2 2 2 2 2 2 2 2 2 2 4
Electri 4
city 2 3 4 3 5 4 3 2 4 3 2 5 0
Miscellan 1
eous 1 0 2 0 1 0 0 0 2 3 0 1 0
Interest on 2 2
loan 0 0 0 0 0 0 0 0 0 0 0 0 0
Tax 1 1
paid 0 0 0 0 0 0 0 0 0 0 0 0 0
3 4 4 4 4
Total cash 8 5 3 9 0 3 8 44 5 4 1 4 5 44 0 0 4,6
outflow 6 4 2 4 2 5 9 3 2 7 8 7 49
5 8 2,
Net 5 4 1,1 1,3 1,6 1,8 01 2,2 2,4 2,7 3,0 3,2 23,
cash 8 6 08 41 12 36 4 50 53 06 13 91 234
5.5 Proforma Income Statement for First Three Years

I t e m Year 2020 Year 2021 Year 2022

Receipts in Kshs 000 5 0 5 0 6 , 9 1 0 7 3 4 6
Less cost of goods sold 2 6 6 8 2 7 0 0 2 9 0 0
G r o s s p r o f i t 2 3 8 2 4 2 1 0 4 4 4 6
E x p e n s e s
C r e d i t o r s p a i d 2 6 5 2 6 6 2 6 5
Wages/salarie s 3 1 2 3 1 2 3 1 2
Telecommunications 1 2 0 1 2 0 1 2 0
R e n t 2 4 3 6 2 4
W a t e r 1 2 2 4 2 4
E l e c t r i c i t y 4 0 4 2 4 0
M i s c e l l a n e o u s 1 0 1 0 1 0
Interest on loan 5 0 3 0 2 0
T a x p a i d 2 0 1 5 1 0
Total expenses 8 5 3 8 5 5 8 2 5
Net profit before tax 1 5 2 9 3 3 5 5 3 6 2 1
Tax 16% of net before tax 2 4 4 . 6 4 5 3 6 . 8 5 7 9 . 3 6
Net profit after tax 1284.36 2818.2 3041.64
5.6 Proforma Balance Sheet for The First Three Years

I t e m Beginning of business End of year2020 End of year 2021 End of year 2022

Current assets K s h s . K s h s . K s h s . K s h s .
Cash in hand 1 0 0 , 0 0 0 1 5 0 , 0 0 0 2 0 0 , 0 0 0 2 5 0 , 0 0 0
Cash at bank 2 0 0 , 0 0 0 2 2 0 , 0 0 0 2 2 0 , 0 0 0 2 3 0 , 0 0 0
D e b t o r s 1 5 0 , 0 0 0 1 8 0 , 0 0 0 2 0 0 , 0 0 0 2 2 0 , 0 0 0
S t o c k 1 1 0 , 0 0 0 1 5 0 , 0 0 0 1 8 0 , 0 0 0 2 0 0 , 0 0 0
T o t a l 5 6 0 , 0 0 0 7 0 0 , 0 0 0 8 0 0 , 0 0 0 9 0 0 , 0 0 0

Liabilities
C re di t ors 1 0 0 , 0 0 0 2 4 0 , 0 0 0 3 4 0 , 0 0 0 4 4 0 , 0 0 0
Bank overdraft 0 0
Proposed tax 1 0 , 0 0 0 1 0 , 0 0 0 1 0 , 0 0 0 1 0 , 0 0 0
Acrrueed interest 5 0 , 0 0 0 5 0 , 0 0 0 5 0 , 0 0 0 5 0 , 0 0 0
T o t a l 1 6 0 , 0 0 0 3 0 0 , 0 0 0 4 0 0 , 0 0 0 5 0 0 , 0 0 0

Long term liabilities

3 0 0 , 0 0 0 3 0 0 , 0 0 0 3 0 0 , 0 0 0 3 0 0 , 0 0 0
Bank loan
Personal savings 1 0 0 , 0 0 0 1 0 0 , 0 0 0 1 0 0 , 0 0 0 1 0 0 , 0 0 0
Total liabilitie s 4 0 0 , 0 0 0 4 0 0 , 0 0 0 4 0 0 , 0 0 0 4 0 0 , 0 0 0
T o t a l 5 6 0 , 0 0 0 7 0 0 , 0 0 0 8 0 0 , 0 0 0 9 0 0 , 0 0 0
5.7 Break Even Analysis

I t e m A m o u n t
V a r i a b l e e x p e n s e s
P u r c h a s e s 3,970,000
M i s c e l l a n e o u s 1 0 , 0 0 0
T o t a l 3,980,000
F i x e d c o s t s
S a l a r i e s 3 1 2 , 0 0 0
L i c e n s e 3 , 0 0 0
L o a n i n t e r e s t 5 0 , 0 0 0
T o t a l 3 6 5 , 0 0 0
T o t a l e x p e n s e s 4,345,000

5.8 CAPITALIZATION

1. Contribution margin = Total sales – Variable cost

Total sales = Kshs.5, 050,000

Variable cost = Kshs. 3,980,000

Contribution margin = 5,050,000 - 3,980,000 = 1,070,000

2. Contribution margin percentage = Contribution margin X 100

Total sales
= 1,070,000 X 100 = 21.2%
5,050,000
3. Break-even level = Fixed costs
Contribution margin percentage
= 365,000 = 17216.10
21.2
5.9 PROFITABILITY RATIOS

a) Gross profit ratio = Gross profit X 100

Total sales
2,382,000 X 100 = 47.2%
5,050,000
b) Return on investment = Net profit before tax X 100
Equity contribution
= 510,490 X 100 = 127.6%
 REFERENCE

Denton J.Dailey, Electronic devices and circuits, discrete and integrated,1st edition,

Prentice Hall,2000

Jacob Frieden, handbook of computer small business, design and applications, 3rd

edition, Advanced monitors corporation San Diego, California 2003.

K-G Gram, occupancy sensor and computer cyber Electro sense (pty) ltd, Kya sands,

Gauteng S.A
APPENDIX
SUBARU
ESTATE

TO NAKURU TO ELDORET

FILL
CYBER CAFÉ ING
ENTERPRISE STA
TIO
N