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BUSINESS PLAN: KAMA ELECTRONICS
KAMA ELECTRONICS Serve to Endeavour P/O BOX 104 MOMBASAA MOB: 0736239698 EMAIL:firstname.lastname@example.org Ksassim isamael www.kassiment.org
TABLE OF CONTENTS
The executive summary Company description Products and services Marketing plan Leadership management plan Operational plan Financial plan Appendices
The executive summary EXECUTIVE SUMMARY
BUSINESS DESCRIPTIO N The business by the name Kama electronics service is a sole proprietorship business. It is located at member Tayari Street in Mombasa town along Kenyatta Avenue The business intends to offer installations, repair, maintenance and sale services of electronic products and equipments. MARKET PLAN The business will be able to offer electronics products and related services to the market with regard to the market trends like the competitors, suppliers, potential customers and the ways of coping with the changes in the market demand. From this the business shall achieve its goals and profits ORGANISATION AND MARKET This chapter entails the planning and organizing of the business activities and layout protocol. Duties and tasks shall be carried out as per the business directory.The proprietor is the general manager and controller of the business.
OPERATION PLAN This involves regulations like public health act and the taxation act. For the business to achieve its goals, production process and its strategies has to flow smoothly FINANCIAL PLAN This chapter bases on transactions by expenditure and the business goals. It also involves a working capital, cash flows, profit, fixed assets and loss accounts sheet and the break even points
5 COMPANY DESCRIPTION 1.0 BUSSINESS DESCRIPTION The company to be started shall operate under the addresses shown below KAMA ELECTRONICS P/O BOX 104 MOMBASAA MOB: 0736239698 EMAIL:email@example.com www.kassiment.org Personal Background The entrepreneur is still a student at xxx university college taking an electronic and engineering course .in addition to this he also has other skills in fraternity in which will enable him to run the sole proprietorship type of business .he has also done a course in office automation and computer packages which is adequate for the business 1.1 Business Location The entrepreneur has decided to locate the business within Mombasa town at mwebe tayari street along Kenyatta avenue lane .the location provides ready market of the product and the services since its densely populated .with technology in place all the development in the town require and the Kama electronics are there to ensure proper and quality development in the area of electronics ,installation, repair and installation of security system .being close to the Mombasa polytechnic university is an advantage since there business shall get the adequate and skilled manpower from here. This will lead to advance of the business.
The diagram location of the business is shown in figure 1below
BATA Barclays Bank SHOP
FROM MAKU PA
TO MAK UPA
KAMA ELECTROC NICSS ERVICES
1.2 Business Type The business a sole proprietorship which is clearly a self employment way to the individual /owner .a will also create jobs to those who are unemployed but skilled in the faculty of engineering and electronic engineering .the business has got various advantages to both the entrepreneur and potential customer .the business ought to offer under range of services from repair, sales, installation and maintenance of electronic systems, like security alarms and electric fences. It will provide direct communication or relation between the customer and the entrepreneur who will improve the public relation as well as knowing the customers preferences .it will be able to utilize the available resource like skilled manpower from Mombasa polytechnic and also promotion of technology of which shall secure that the residents use the systems effectively. Type of Industry The business shall be retail service oriented .it will be dealing with the sale of electronic accessories and spare parts such as cctv, security alarms ,installation and maintenance of electronic systems .
5. PRODUCTS AND SERVICES . This business will play every great role in society as it will be offering a variety of service and products. These products. The products will include security electronic systems, CCTV, electric fence, material, energizer and spare parts of the electronic systems .the business will be comprised of an electric shop and a workshop which will house the products and the workshop will be there house machinery and also be used as an assembly yard. Apart from the cctv ,alarms ,electric fence energizers and spares the business through its technicians shall be able to repair other electronic equipments like cctv,tv’s,radio .DVDs and all other electronic equipments
like TV’s radios and all other electronic systems that are of the same function and characteristics in the installation section the business shall be in to install alarms ,cctv ,electric fences ,industrial electronic machinery manual security alarms .in sales the business shall offer retail service of products like radios ,energizer cctv door contacts ,sirens ,and transmitters all the jobs done shall be supervised carefully. 7. MARKETING PLAN This is a plan or law that will divert the entrepreneur in how to offer his /her product services. This business shall stargaze on how to reach its potential customer and how to expand and have al grew customers a lot within market trend CUSTOMER AND MARKET From the personal research carried out various observation highlighted and they include information on customers preferences and the status of their systems (electronic )and the security status within the region from there it was clear that the most customers have faulty security systems that cannot be repaired by most of the available local technicians due to their compatibility the cases have increased therefore the need for automated security systems .also most customers like reliable and quality goods and services which business is going to offer once in progress. Potentials Customers The potential customers are the town residents and premises that are within ,in addition is the security companies in the Texas alarms which will purchase our products the alarms or other security systems .on target are firms within the Mombasa town the business customers shall get services ranging from repairs installation maintenance of cctv’s electric fence ,TVs ,radios ,alarms .
MARKET SHARE From personal survey and comparison of the 2009 national census record the town population to be between 150,000 and 160,000 people. It is from this population that the business hoping to get its customers which will boost the business population introduction of new electronic systems in the market and improved services will boost the business. COMPETITION Competition there are competitors in town of Mombasa that offer similar services as the business and they include:1. Mombasa electronic services 2. Bahamas electric and electronic shop 3. Winners electrical and electronic services 4. Sony electronics. These competitors can’t be ignored since they make it competitive to run this business which almost similar to them. Competitor’s strength. • • Their competitors have great strength in that :They have been in the business for several years thus they have experience and more customers. • Some of them premises all over the time and have captured great number of customers • They have experienced technicians with several years in the field
Despite these competitors have some strength and weakness have been noted and this has to be capitalized to as to beat them at their own game and this include.
They do not install equipment or electric fences of which the business shall venture most.
They charge exhibit prices for their own commodities which discourage some customers.
They have fewer hours of business operations they are fond of opening late and closing their premises early in the evening.
Opportunities to overcome competitors The business shall capitalize on its competitor’s weaknesses by putting the following measures in Place:• Creating good public relation which will be able to custom to the customer’s preferences and inform them of any changes in the commodities and services. • Time management. This shall include the early of the business and closing at the right time in the Evening and security personnel thus to be put in place in case of late closing of the business. • Offering of the discounts .this will be applicable to those customers who buy goods to offer goods at affordable price and of the technology standards and reliable services to its custom. SUPPLIERS AND DISTRIBUTORS Deeping on the function of this business goods quality products and systems shall be purchased from:-
Texas instrument suppliers From South Africa Tel:0800-794102 P.a00-10 South Africa Email address: http/www.texe.com These tows are the best suppliers and are a position to offer goods in large quantity and at a reliable discount. Depending on conditions that will be agreed by the suppliers and the business will enable thus goods to be supplied on cash payment and at the credit. They have effective products and their conditions are reliable since they provide a warranty about six months of their products. The main chain of distribution of products and services between the distribution, the business and the customers is shown below.
Suppliers Taxes instrument or alarm intex alarms Kama electronic services Customer
The target customers are the forms within Mombasa town. Residents and other willing customers as or outside the region MARKETING STRATEGY PRODUCT /SERVICES
For quality service provision the business shall employed skilled experienced and quality personnel especially gradates from Mombasa polytechnic university college .the business shall also accept skilled graduates from any university within Africa Nice and smart job especially installation shall be encouraged and required and they will carry out the jobs and shall be supervised by experts in the business company. PRICE POLICY Pricing and sale of products and services shall be done by special proprietor depending on the income per capital which will predetermine the profit and loss of the business. A few factors will determine the products and vices charge are as follows:• • • Purchase of cost of products Government policy ;like taxation Demand of the product and services
SALES PROMOTION The business shall inform its potential customers of its existence through various methods like. Advertising This shall be done by expertise personnel via printed posted, stickers at leaf lets .they will include ,the business name and address ,products ,services and its advantages sign posters will be erected at strategic pub desired the customers to the exact location of the business. Banners shall be installed at strategic areas this will have all the business details and this information about the products services are how is important to link with it...
Customers will be given some offers for certain products bought i.e. small electronic equipments like solar charging systems they will boost the customers morale boast to buy more of the goods .discounts will also be available for more goods bought .
PREMISES AND LOCATION The business location shall be situated along mwebe tayari in Mombasa town along the Kenyatta avenue road near Fayez bakery This premises and location was chosen due to the following reasons:I. II. III. It is close to potential customers (town residents ) The site is open and can be easily accessibly any one. It is close to public service vehicle station (matatu) which will offer reliable transport to customers and their goods. IV. The location provides good view of the business as the logo of the business is easily seen Other Reasons Include • • good infrastructure (good road) to customers to access the business reliable society personnel from Texas security company which will ensure that idlers and thieves have no room exercise their characters .there are also alarms to alarm the response team in case of criminal activities • the area is well late by street lights which enhance the business activities at late hours and provide security COPING WITH THE MARKET CHARGES
The following charges may affect business Government policy like the high taxation by in Kenya revenue authority this will have an impact on the price of commodities as they will increase in price .changes in technology i.e. the improved or atomized electronic system. Which are due to the upgrade of the previous system? To cope up with such changes the business through the sales and marketing department will have the following, to put in place. Shall inform the customers in how to use the new products and systems. This will involve from to operate and we safely. Shall ensure that all the technicians are worse of the new products and systems and how to use and operate them shall be done through seminars and extra trainings. 8. LEADERSHIP AND MARKETING PLAN The business shall have the following sections or departments • • • technical department sales and marketing department finance and accounts departments
Each section of the department will be assigned specific duties depending on their area of specialization by the proprietor
Technical Section This division shall specialize in the following activities and are installation of electric fences ,cctv,alarms,indoor contacts
Repair of alarms systems, CCTV’s radios, and receiver, transmit satellite and faulty electric fences. maintenance of industrial electric system like to meter gauge electric fans cctv and other associated deters Assets and trouble shooters new electronic products before they are sold to the customer’s .this will include testing of equipment. supervise and asses any installation and repair carried out by the technicians Sales and Marketing Department This department shall to ensure that the following activities are in place and are as follows:Advertise the business products and services offered and services offered it will be a position to design and print posters leaflets and sign posters stickers to sell the business name .it will also inform the customer & receive grievance from them in advance it will also inform the customer of any change in the market trend It will be able to sell the products to the cust0mers and provide receipts for the cash paid. It will also be able to collect the monthly pay of the maintenance and repair of equipments from attached customers. It will also be able to collect the cash and the cheques from those firms /customers that have been installed with our systems. it will also have the personnel to serve customers like packing of the equipments and advise the client on how to operate the sold products
Accounts and Finance Department As a great associate of the sale and marketing department accounts and finance section will have to venture the following areas:Prepare IPO’S (local purchase orders) and pay all the suppliers for the products supplied in time. It will keep all the finance records of the business like that transaction and bank information. Pay employees salaries and allowance and receive all cheque and cash from marketing & sales department
GENERAL MANAGER Setting any debts as have in time
SALES &MARKETING SUPERVSIOR
TECHNICIAN SALES REPRESENTATIVES
The business will employ a total of eight qualified and skilled personnel who will asset in the daily running of the business activities .all the named offices shall be permanently employed on the basis of the required qualifications. GENERAL MANAGER. The business proprietors who is the owner of the business will general meager in the category .since he would have acquired his diploma in electronic and automation engineering from the XXX university, will have all it takes to run his business in better ways. Since he also has certificates in office automation and business management is the favorite candidate to undertake responsibility. STAFFING Technical Supervisor Qualification A candidate should have diploma in electronics and automation engineering or electric and electronic engineering from any recognized institution. Must be aged between 25-35 years .should also be computer literate. Must have good communication skills both oral &writer. Should have an experience of at least 2 years. Duties Carry out supervision to any installation job done repair or maintenance Troubleshoot and repair any faulty system
Assign duties to technician’s .ensures the supply of material and tools to any site under jobs have to be done. Submit report about work Technician Qualifications A candidate should have at least a certificate in electronic engineering or a diploma in electronic engineering. Should at least w working experience of one year. Should be computer literate. Should be between 22 and above. Duties Install any electronic system as instructed by the supervisor. Carryout repairs and any other related job as assigned. Prepare reports about work down. Accountant Qualifications
A candidate should have a diploma or, CPA CERTIFED FROM THE RECORGNSED INSTITUION.
Aged 23yeras and above should have done all packages in computer. Should have an experience of not less than two years. Duties.
To keep all the financial records of the business. To prepare employees pay slip and all ask statements. To receive vehicles from the market of the jobs done. Prepare LPO’S. Sales and Marketing Supervisor. A candidate should have a diploma in sales and marketing. Aged between 25 years and above should have an experience of at least two years. Must be computer literate and be able to communicate fluently. Duties. To assign the marketers of the duties to be carried out. Direct the staffs and his section on how to market the business proprietor. Collect cheques and advantages of the business. Sales representatives. Qualifications Candidate should have a diploma as certified in sales and marketing. Aged between 25-35 years should have at least a working experience of one year must be able to communicate fluently in English &Kiswahili Should be computer literate.
Duties Carrying out advertisement. Prepare posters, stickers and other advertisement materials. Collect the payment voucher and checks from clients. Talk to customers and convince them to buy products from the business former shop. Keep records of goods sold receive cash and offer receipts of sale. Security Officer Qualifications A candidate should have at least a c- in KCSE exams and have a valid KCSE certificates. Should be physical fit and healthy with medical certificate .report. Good conduct. Should have served in the same filed for at least two years. Duties To maintain security within the premises and the customer vehicle during the day and night. To ensure the security system installed in the premises are working normally and use them in case of an emergency. RECEPTION Qualifications Should have at least a certificate in computer information technology.
Should have done all computer packages should be able to speak fluent Kiswahili or English. Should have good conduct. Duties To keep records of all the letters and information. To received visitors before they are allowed any staff above. To prepare memos for all the employees. To communicate to clients. The proprietor will be able adequate the position of the named personnel on news paper, posters and leaflets the will be pinned at strategic places where people can access them. Those with valid qualification shall be recollected after the interview. The recruited employees shall be trained by experts on the area of specialization, other like the security officers shall be trained in specialized security companies like kk group of companies taxes alarms security 3.2.3 LEADING AND CONTROLLING The supervisor will ensure that all assigned duties are carried out as required. The supervisor shall get duty description from proprietor.
Proprietor (General Manager)
Other staff The business shall have its own rules and regulations of which every employer shall read and understand. its I from the regulations and rules that will guide employee in performing he/she duties as assigned by his/her supervisor. The rules are as follows. All staffs /employee will be accepted to report to their workplace at 7.45 am in the morning and leave at 4.15 pm in the evening. All staff work as from Monday to sorted and have a Sunday as resting day unless infor4med to report to work which shall be paid as overtime. Any staff that will not be available for the daily deity shall be required to inform his /her supervisor before process that day. Every employee is required to have good customer relation to encourage the will customer to come in large numbers. Every employee shall be required to prepare a report of the duties carried out. Every staff shall be required to be disciplined and respect his /her employees. The business proprietorship shall have mechanisms of boosting the employee’s morale. This meant to motivate the employee to perform his /her duties according and neatly.
All employees’ salaries and allowance shall be paid in time and from the bank of selection choice. every staff shall get allowance including the house allowance and travel allowance e.thu ensuring that every employee report to duty early ,the bus will but later purchase a staff bus to collect the staff in the morning within the Buxton .area The proprietor will also ensuring that every evening staff is working in good and encouraging conditions. FINANCIAL MANAGEMENT. The proprietor of the business of which the secretary will be there to perform duties related to the controller’s office and he is decision mater all be supervisor will assist the juniors in planning their daily works that will boost this business. LEGAL REQUIREMENTS. This will be a sole proprietor type of business and the management and control of an individual. The business under the business corporation. the business under the business corporation act will be licensed and permitted of its operation by the Mombasa municipal and permitted of the operation by Mombasa municipal council .it therefore required to have a license and certificate of operation (permit).this will be done before the before the operation commence and required permits will be obtained in every year of operation the business shall be ensured by Amaco insurance company and blue shield company. This two companies shall be able to cover up the business in case of theft and burglar ensure while the blue shield will be there to take cover incase 0of a fire reach out and the employees. SUPPORT SERVICE
The business will depend mostly on support services of which shall encourage to provide quality goods and services and also to expand this business within the town and other region. This support services are as follows:Insurance This will provide covers to the employees and premises of the business incase of an accident like fire breaks out or theft case. In relation to the emergency incident, Amaco insurance company shall be there to cover the business.
Auditors. Experts in auditors shall be hired to check the business financial records every six months period, government auctions shall also be allowed to check the business financial record and give out the feedback on the promotion. Lawyers. The business Will have its own lawyers who will represent the business in case of any court case and the lawyer are fro0m the company name below:JAFAR AND COMPANY ADVACOCATE P.O BOX 7773 MOMBASA TEL:NO 0731453317
9. OPERATIONAL PLAN The business will provide retail of finished products which will be obtained from the suppliers named earlier the business will be deadly with sales, repair, installation and maniac of electronic products and systems .it is expected to open many branches the region. 4.1 FACILITIES AND CAPACITY The business set up of the premises and buildings will be subdivided into various positions as a shown below. Counter area reception –this is where the sales of the electronic products shall be carried out and writing of receipts .there will be pack or shelves for displaying of commodities being sold and patterns of services offered . Workshop
This area will house machinery for installation repairs and maintenance of the electronic systems .it will also be used for troubleshooting and repairing of the electronic equipments and products. It will be used as store for extra products from the suppliers. Store data This room area. This room will be used to house both the important all supplied products from the suppliers before they are sold. OFFICE This room will house the record and it is from have that documentary filling will be carried out and all other business record shall be kept.
Washing rooms Store Office Reception area
Equipment Shelves Computer
Quantity 10 3
Suppliers Rehema furniture Com-tech
Purchase price 2000 15,000
Total cost 20,000 45,000
Tables Chairs Printer Total cost
6 10 1
electronic Habib furniture Habib furniture Com tech
1000 800 5000
6000 8000 5000 Ksh84,000
The equipment listed above shall be bought from local dealer and will remain to the business proprietor of the proprietor. 4.2 OPERATION. PRODUCTION PROCESS The operation process of the business shall involve various aspects like purchase of products, stocking of equipments sales of products and issuing of receipts.
A). Purchase of products /equipments. All the electronic equipment and products and their spare parts will be purchased from the suppliers named earlier. They will deliver the products to the premises Stocking of products Once the equipments are delivered to the premises, they shall be stored properly in the business stores before they are sampled up shelved in the reception area .This will be placed in shelves for displaying and ready for sale. Sale of Products.
Products shall be sampled up those for installation and sale .Those for sale shall be sold to customers at convenient price compared to her competitors in the electronic .this products shall be sold cash basement. ISSUE OF RECEIPTS. On any products sold to customers a receipts will be issued which will include the price, quantity and type of the product sold .it will also have the business logo to encourage customer to buy more of the products. The supplier are expected to supply the right quality are quantity of products ordered after which the payment shall be done and receipt prepare for it. 4.3 EXPENSES ANALYSIS All the cost of expense shall be accounted for inform of calculator as shown below A).Monthly Equipment/Products Requirement. The business will enquire the following equipment and materials to be delivered to the business by the suppliers. PRODUCTS CCTV(CAMER A) Coaxial cable DVR multimedia Extension cable Energizer Siren Power packs QUANTITY 10 30 5 10 10 5 20 10 SUPPLIERS INTEX ARMS Texas instruments Intex alarms Texas instrument Texas instruments Intex alarms Intex alarms Texas BUYING PRICE 5000 500 10,000 300 200 2000 400 900 TOTAL COST 50,000 15000 50,000 3000 2000 40,000 8000 9000
Alarms sensor Total
instruments Intex alarms Texas instrument
17000 12000 206,000
Monthly labour requirement Every staff employer of this business shall be paid his/her salary or allowance according to shown below:Employer Manger Sales supervisor Technical supervisor Technician Accountant Sales representatives Security officer Total amount Total in no 1 1 1 2 1 1 2 Monthly salary 18,500 16000 16000 15000 15000 12000 7,500 Total amount 18500 16000 16000 30,000 15000 12000 7,500 120,000
Monthly Production Expenses. Expenses Rent (business ) Electricity License Motivating employee Transport Business promotion Others (stationary) TOTAL AMOUNT
20,000 3000 3000 3000 7000 10,000 2,000 53,000
JAFAR AND COMPANY ADVACOCATE
P.O BOX 7773 MOMBASA TEL:NO 0731453317 EMAIL ADRESS:firstname.lastname@example.org. BANKING A bank will play a major role as all its financial resources shall be kept safe in the bank. It will also offer the business the services of storage and payment of the employees’ salaries PRODCUTION LAYOUT
Customer Reception customer
is received The production process of the business shall range from customer
receiving at the reception he/she is then whether to buy products or needs services like installation maintenance or repairs of the products .process is shown in fig 2
Sales Or Technical
Sales of products receiving of cash Technical manager
Repairs Repairing of faulty systems Or installation
Installation of system (Service) Customer leaves
Report forwarded to the reception
If she/he needs repairs trouble services are advised to meet technical manager who inquires on his/her technicians assigns technicians to perform duties. The sales are made sale representative and report process to give full details of what happened the proprietor is to control all fiancé with the business and she remains to be the owner. REGULATION AFFECTING OPERATION The business depends on various regulations The business depends on various regulations for it to function effectively and it includes: a) License And Permits Any business that has to operate within the town has to have a permit from the municipal council. This license permits the business owner to transact business according to what is entitled in the business act B) Income Tax
This is the amount of money paid to the government for an income tax department .it is usually paid at the end each financial year. C) Health Regulations Before the business operation begins the business is required to obtain an inspection certified from the local public health prior to the location carried out by a health officer. d) Labour law From the employment act and workman compensation act the eight of
example are explained and employer should read and understand form this the law will bridge the gap between the employee and the employer of which fairness will be assured between the parties E) Insurance Cover The business is required to have an insurance policy this insures the business against risk like fire and theft. 10. FINACIAL PLAN Involves proper management of business when it starts .this contains the list of the items bought and the expenses incurred before the business starts .this include the fixed assets cost preliminary expenses, the capital employed to start a business and cash in and out .it involves the business budget for the whole period of time being calculated or the business financial position . 5.1FINANCIAL REQUIREMENTS The financial staring capital of the business sis 600,000 shillings the main sources of the finance for the business is shown below. Personal savings 250,000
Family and friends contribution Loan from bank TOTAL
The borrowed loan from the bank shall be paid the period of one year (12months) at the rate of 6.25 % of the loan (10,000)per month as per the agreement signed by the proprietor and the bank .the obtained contribute from friends and family members shall be repaired as agreed ,the capital shown above shall be utilized effectively enable expanding of the business The sole proprietor shall use his entrepreneur skills acquired while at Mombasa polytechnic university college to manage and run this business effectively so as to make much profit and the business in the coming future.
5.2 OPERATE EXPENSES Pre-operational cost expenses This is the cost of the items or expenses Incurred before the business starts and it includes the uses fixed assets and the prelim expense .They are as shown in the table below . Equipmen ts Shelves Computers Quantity 10 5 Buying price @ 2000 15,000 Total costs 20,000 45,000
Tables Chairs Printer Total cost
6 10 1
1000 800 5000
6000 8000 5000 sh84,000
5.3 ESTIMATED WORKING CAPITAL (1ST MONTH) EXPENSES PURCHASE SALRIES AND WAGES LICENSE RENT(BUSSINESS PREMISES ) BUSSINESS PROMOTION ELECTRICITY OTHER (STATIONARY ) TOTAL COST TOTAL COST 206,000 120,000 3000 20,000 10,000 3000 2000 364,000
Trading Profit And Loss Account For the year ended in the 31st Dec 2010 Credit purchase Cash purchase Total 1360000 1786000 3146000 Sale Cash sale Credit sale Total Less closing stock Cost of goods sold Gross profit c/f 2786,000 539,000 Gross profit b/d 539000 260,000
348500 40000 3525000
Total Less expense Salaries Rent License Business promotion Transport Electricity bill Motivating employees Stationary Depreciation Total expenses Net profit Total
3525,000 1440,000 240,000 3,000 16,000 35,000 29,200 22,000 15,400 10,000 1,809,600 1 120,000 1929,600
5.4 J.E BALANCE SHEET FOR 1ST YEAR Balance Sheet As At 31 Dec 2011 Fixed Assets Shelves sl capital 600,000
Computer Table Chairs Printer
45,000 6000 8000 5000
Liabilities Creditors 72,270 160,000
Current assets Stock 180,000
25,000 318270 220,000 Total 832,270
Cash at bank Cash at hand Total
Break Even Point Below is the breakeven point calculated by taking total cost of the whole business to the total amount of the venue being collect within a specific period of time. Fixed cost Product bought Fixed assets Rent Loan payment License Wages of salaries Insurance Total Amount 1785000 84,000 240,000 176040 3000 1440,000 25,000 3979,040
Variable costs Business promotion Motivating employee Electricity bill
Amount 16,000 22,000 29,200
Transport Stationary Total
35,000 15400 117600
The margin contribution Margin contribution = sales –variable Sales 348500 - 117600 3485000 3.367400 34885000 =0.967 Break even profit = 3979040 = 4,114,829.369 0.967 Calculation of profitability ration Gross profit margin = Gross profit x 100% Total sales 539,000 x 100% = 15.47% 3485000
Net profit = net profit x 100% Total sale 120,000x 100% 348500 =3.44%
= current assets
Current liabilities 832,270 232,270 =3.58
Profit And Loss Account for 2nd Year Trading Profit And Loss Account For the year ended in 31st Dec 2012 Sale Credit purchase Cash purchase 1,840000 1,820000 cash sale 3,570000
credit sale 70000
Less closing stock Cost of goods sold Gross profit c/f Total Less Expense Salaries Rent License
120,000 3540000 Gross profit b/d 100,000
1440,000 240,000 3000 14000
Business promotion Transportation Electric bill Stationary
38,700 34400 16000 30,000
Motivating employee Despicable Total expenses Net profit
10,000 1826100 80,000
5.7 BALANCE SHEET FOR 2ND YEAR Balance as at 31st Dec 2012 Fixed assets Shelves 20,000 working capital 400000
Computer Table Chairs Printer
45,000 6000 8000 5000
Add net profit
Liabilities CURRENT ASSETS Stocks Debtors Cash at bank Cash at bank 140,000 76000 156900 155,000 short term creditors 131,000
Calculation Of Break Even Points 2nd Year Break even paid for the second year of the business is calculated below and enables the cost of the whole business to the total amount of the revenue Fixed cost Product bought Fixed assets Rent License Wages of salaries Insurance Amount 182,0000 240,000 3000 1440,000 25,000
Variable costs Business promotion Motivating employee Electricity bill Transport Stationary Total
Amount 14,000 30,000 344,000 38,000 16000 133100
Break even point
The margin contribution Margin contribution = sales –variable Sales 3570000- 133100 3570000 3436900 34370000
=0.9627 Break even profit = 3528000 0.962 =3,667359.667 Calculation Of Profitability Ration Gross profit Margin = Gross profit x 100% Total sales 100,000 x 100% = 2.8% 357, 0000 Net profit = net profit x 100% Total sale 80,000x 100% 3570,000 =2.24% Current Ratio = Current assets
Current liabilities 611000 131000 =4%
Profit And Loss Account for third year For the year ended in the 31st Dec 2013 Sale Credit purchase 1,720000 cash sale 3390000
Cash purchase Total
11670000 3390000 140,000 3250000
Less closing stock Cost of goods sold Gross profit c/f Total Less Expense Salaries Rent License
3450000 Gross profit b/d 200,000
1440,000 240,000 3000 10,000
Business promotion Transportation Electric bill Stationary 24800 28400 121000
Motivating employee Despicable Total expenses Net profit Total
10,000 11789300 140,000 1929300
BALANCE SHEET FOR 3rd YEAR Balance as at 31st Dec 2013 Fixed assets Shelves Amount working capital 350000
Computer 45,000 Table Chairs Printer 5000 6000 8000
Add net profit
Liabilities CURRENT ASSETS Stocks Debtors Cash at bank Cash at bank 140,000 111000 206800 150,000 creditors 117800
Calculation of even break even points-3rd year The calculation of beak points and profits are calculated
Fixed cost Product bought Fixed assets Rent License Wages of salaries Insurance Total Variable costs Business promotion Motivating employee Electricity bill Transport Stationary Total
Amount 167,0000 240,000 3000 1440,000 25,000 3353,000 Amount 10,000 21,000 28,400 248000 121000 96300
Break even point
The margin contribution
Margin contribution = sales –variable Sales 3390000- 963000 3390000 3293700 3390000 =0.972 Break even profit = 33353000 0.972 =3449588.477 Profitability Ration GPM = Gross profit x 100% Total sales 200,000 x 100% = 2.8% 339, 0000 =5.9% Net profit = net profit x 100% Total sale 140,000x 100% 3390,000 =4.9%
= Current assets
Current liabilities 607800 117800 =5.2
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