P.O.

BOX 53
TEL: 0700873640
E-Mail: benardkimasar@gmail.com

CENTRE NAME: OL’LESSOS TECHNICAL TRAINING

INSTITUTE

PREPARED AND PRESENTED BY: KIMASAR R BENARD

INDEX NUMBER: 5411010366

CENTRE CODE: 307B

PAPER NO.:2306

SUBMITTED TO KENYA NATIONAL EXAMINATION COUNCIL

(K.N.E.C) IN PARTIAL FULFILLMENT FOR AWARD OF DIPLOMA IN
QUANTITY SURVEYING

SUPERVISOR: MRS RENCY SANGA

EXAMINATION SERIES: NOVEMBER 2018.

iv
TABLE OF CONTENTS

Declaration………………………………………………………………………………………………………………………….i

Dedication…………………………………………………………………………………………………………………………………ii

Acknowledgement……………………………………………………………………………………………………………………..iii

Table of content………………………………………………………………………………………………………………………….1

DECLARATION...........................................................................................................................1

CERTIFICATE OF SUPERVISION...........................................................................................2

DEDICATION...............................................................................................................................3

ACKNOWLEDGEMENT............................................................................................................4

CHAPTER ONE............................................................................................................................5

1.1 BUSINESS DESCRIPTION......................................................................................................................................... 5

Advertising............................................................................................................................................................................ 5
1.2 Business name ( identity)................................................................................................................................. 6
CHAPTER TWO...........................................................................................................................7

2.0 forms of ownership................................................................................................................................................... 7

2.1 Type of business................................................................................................................................................... 7
2.2 Products................................................................................................................................................................... 8
2.3 Justification of the viability of the business............................................................................................... 8
2.4 The industry........................................................................................................................................................... 9
2.5 the business objectives................................................................................................................................... 11
2.6 Entry and growth strategy............................................................................................................................. 11
CHAPTER THREE.....................................................................................................................12

3.0 MARKETING PLAN............................................................................................................................................ 12

3.1 Potential customers.......................................................................................................................................... 12
3.2 MARKET SHARE................................................................................................................................................. 13
3.3 competition.......................................................................................................................................................... 14
SWOT ANALYSIS.............................................................................................................................................................. 15
3.4 Strategies to out competitors....................................................................................................................... 16
3.5.1 Cost plus pricing........................................................................................................................................... 16
3.5 Sales tactics................................................................................................................................................................. 17

v
 3.6 Advertising and promotion........................................................................................................................... 18
3.7 Distribution strategy............................................................................................................................................... 18
3.8 Economic changes............................................................................................................................................. 18
3.9 Changes in fashion and references to customers.................................................................................19
CHAPTER FOUR.......................................................................................................................20

4.0 production ,and operation plan................................................................................................................... 20

4.1 organization structure.................................................................................................................................... 20
4.2 THE MANAGEMENT TEAM........................................................................................................................... 20
4.3 other personnel.................................................................................................................................................. 21
4.4 recruitment and training................................................................................................................................ 21
JOB SPECIFICATION, QUALIFICATIONS AND RESPONSIBILITIES..............................................................23
4.6 support services................................................................................................................................................. 24
4.7 legal requirements................................................................................................................................................ 24
CHAPTER FIVE.........................................................................................................................25

5.0 production and operation plan.................................................................................................................... 25

5.1 production facility and capacity.................................................................................................................. 25
5.2 REPAIRS AND MAINTAINANCE................................................................................................................... 26
5.3 production strategy.......................................................................................................................................... 26
5.4 production design and development......................................................................................................... 26
5.5 production cost.................................................................................................................................................. 26
5.6 production process........................................................................................................................................... 26
5.7 regulations affecting operations................................................................................................................. 27
SITE LAYOUT..................................................................................................................................................................... 27
5.8 material cost per month / year................................................................................................................... 27
5.9 DIRECT LABOUR COST.................................................................................................................................... 27
5.10 operation cost..................................................................................................................................................... 28
CHAPTER SIX............................................................................................................................29

6.0 FINANCIAL PLAN................................................................................................................................................... 29

6.3 PROFORMA CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DEC 2019 (1ST YEAR)......30
6.3.1 PROFORMA CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DEC 2020, (2ND YEAR) 31
6.3.2 PROFORMA CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DEC 2021, (3ND YEAR) 32

vi
 DECLARATION

I declare that this is my original work from my own research and studies and that it has never been
submitted in any institution for any examination purposes.

NAME: KIMASAR R BENARD.

SIGNATURE: __________________________________________

DATE: ________________________________________________

1
 CERTIFICATE OF SUPERVISION

This business plan has been submitted through my approval:

SUPERVISOR:

NAME: MRS RENCY SANGA

SIGNATURE: _________________________________________________

DATE: _____________________________________________________

2
 DEDICATION

I dedicate this work to my family members who have been of moral, financial and material support
throughout my entire education and especially during the time I was carrying out this project, May God
bless you all.

3
 ACKNOWLEDGEMENT

I would like to acknowledge my supervisor, madan rency who guided me throughout this project. I
would also like to acknowledge my entire family for their love of me and lastly the entire OL’LESSOS
TECHNICAL TRAINING INSTITUTE administration and students body for all the support needed for the
success of my studies.

Above all I would like to acknowledge God Almighty for the gift of life and sustainability without which I
would have not made it. Glory be to His name.

4
CHAPTER ONE

1.1 BUSINESS DESCRIPTION

The business shall be named as BENA contractors. it shall be located at Kabarnet town
along Kabarnet -Kisumu road. The business shall be a sole proprietorship and sponsored
by the owner and willing friends.

The business is a processing and manufacturing industry that deals with molding of
materials and production of desired products e.g. culverts, roofing tiles, building blocks
among others. The following are essential for the start of the business;

 Insurance policy

 Banking services

 Legal bingle

 Auditing

 Post office and telephone services.

 Security.

The products which will be offered by BENA Contractor ,are as follows.

 Molding of Culverts

 Molding of bricks

 Molding of tiles

 Molding and processing slabs

 Selling of timber

BENA constructions is to ensure that products are known to public and those who live
within Kabarnet and its outskirts. It can be done by broadcasting through Radio T.V and
putting posters at the strategic places, in order to be known by the surrounding, produce
high quality of products.

Advertising
i. Assisting the needy

The sponsor shall have to acquire entrepreneur skills. This may assist him to expand his
business by opening new branches where a customer have problems of communication.

5
The following may ,make BENA contractor to be known and attract more customers are:-

 Offer transportation services.

 By attending District agricultural show for exhibition.

 Able to access to both remote and urban areas.

1.2 Business name ( identity).

The business name shall be Bena Contractor should be well equipped and have proper
management to attract more customers / clients and produce high quality products.

BENA CONTRACTORS shall acquire funds / capital as follows;-

i. Personal savings: - Each month I shall make sure Kshs. 10 000 is saved as share in one
of the banks like teacher’s Sacco society, I ,shall do business as well as farming and
ensure that each business earns a profit of not less that Kshs. 10 000 for at least one
year which will make a total of Kshs. 120 000 shares.

ii. It shall have many go ;rounds which I will invite all my friends during my turn which
shall contribute ,not less that kshs. 100 000.

iii. Bank Loans: - It shall borrow loans of Kshs. 300 000 according to my share after
investing in one of my shares of Kshs. 120 000

The business shall be located at Kabarnet town at Kabarnet Nakuru road within
Kabarnet ;town in Kabarnet County. The business shall be next to Kobil Petrol station;
opposite Kabarnet high school.

Business address.

BENA CONTRACTOR

P.O BOX 115, KABARNET.

Tel: 0725 049 074

6
CHAPTER TWO

2.0 forms of ownership.

The owner of BENA CONTRACTOR . came up as a sole proprietor ship after he discovered
the type of business which has not been ventured by many competitors.

The following are the observations.

 Survey of Business.

 Quick decisions

 Direct access of business location

 Consideration of services such as:- availability of electricity, water.

The business shall be managed by BENA CONTRACTOR. The sponsor undertakes various
seminars ,and training, he attends all level of education from lower level to middle i.e from
primary education, secondary education and attained to entrepreneurship at Ol’lessos
technical training institute where he pursued a diploma in Building and construction.

2.1 Type of business.

The business will be operated under the construction industry. BENA CONTRACTOR will be
basically in transformation of raw materials into finishing products which will be
processed by BENA CONTRACTORS. The following activities will be undertaken:-

i. Processing of sheaving and testing materials.

ii. Producing of bricks

iii. Timber processing.

iv. Moulding of culverts in various sizes.

v. Moulding of tiles

vi. Making and processing of slabs.

The service will be offered by BENA CONTRACTORS are as follows:-

i. Selling bricks.

ii. Selling of natural sand and hard core

iii. Selling of culverts

iv. Selling of slabs.

7
 v. Selling of timber.

vi. Hard ware materials

The business potential comprises of industry and also institution customers. The individual
customer shall be the resident of Kabarnet town and other parts of of Kabarnet division
and its surrounding e.g Kabarnet High school, Kabarnet youth polytechnic, Kenya School of
Gorverment(KSG), Baringo technical institute(KAI) , and National irrigation board(NIB)
and in the Government sectors.

BENA CONTRACTORS will offer services from Monday to Saturday, and working hours
from 7:30am to 6: 00pm.

2.2 Products.
The main products of BENA CONTRACTORS will be selling of the following items:-

 Bricks

 Timber of all sizes.

 culverts both open and closed .

 Tiles

 Moulding of ridges.

Other subsidiary are heap sand hardcore, blinding of highest quality.

BENA CONTRACTORS are aiming at selling products for construction they are selling
cement .of all types, iron bars, paint and steel for reinforcement and all building items.

BENA CONTRACTORS will be offering transportation to customers to stage points where

customers can be enabled to transport. Also can afford transportation within the town.

BENA CONTRACTORS will colour the products during the processing stage, all products
shall have a maroon colour and a pink colour according to construction.

The products of BENA CONTRACTORS shall be issued with a receipt containing the logo
and name of the company.

2.3 Justification of the viability of the business.

The BENA company as proposed has been the ‘owners hobby ever since. It is due to the
skilled and also the interest that made the manager to choose this business opportunity
the choice was also made an initial capital of kshs. 620 000 which is affordable and
adequate availability of facilities at fair prices. The feasibility study carried out to ensure

8
market of products to be offered was convinced beyond any reasonable doubt that
business will not leak ,market and so it justified because of high demand

BENA CONTRACTORS will be benefiting the community by offering and promoting the
customer by offering free seminars concerning preservation of environment. BENA
CONTRACTORS will be participating during tree planting day and clearing of the town and
also they will be attending fund raising for the community they will be offering food and
wheel chairs to needy people, disabled and books to schools.

BENA CONTRACTORS will be dealing with construction they will be owning construction
from institution and environmental sectors the firm of its own. All other personnel will be
engaged in building and construction in order to promote and support the company.

2.4 The industry

BENA contractors will operate under manufacturing industry where it will basically
transform of raw materials in the finished products the business owner intends to expand
in future depending on the customers profit made.

The business has been their but due to task management and skilled personnel whereby it
collapses.

BENA CONTRACTORS will use the new technology and modern machine and recruit skilled
personnel to meet the standard of the products.

Following feasibility study carried out in the area there are two competitors who have
made more experience in running the contractor’s firm despite the method used. This
competitors are:-

i. Bonis Builders

ii. Omomdi Builders.

1. Omomdi Builders. Their strengths.

a. Long term experience

b. Established in terms of resources

c. Capital outlay is huge

d. They have secured orders from institution and many customers.

2. Weakness.

9
 a. Poor relationship

b. Have poor design of product

c. Have unqualified personnel

d. Poor managerial

e. Poor location of the business.

BENA CONTRACTORS – will aim at, manufacturing of high quality products to the
customer.

 Lowering of prices based on quality of products

 Central location of the business to serve many customers.

 Use of modern technology and equipment.

 The owner of the intend to have good public relation.

BENA CONTRACTORS face the following weaknesses.

 Inadequate experience on market demand.

 Business is not well known in the market.

To ensure order from customers.

How to company who capitalize on the competitors’ weakness: BENA CONTRACTORS is

ready to face challenges from competitors strength and capitalizes on their weakness by:-

 Being punctual i.e the business will be opening at 7.30am and will be closing at 6.30
pm

 Employ high quality personnel.

 The business will observe good public relation between the business employee and
the customers.

 Business will observe high standard cleanliness and safety in its premises.

2.5 the business objectives.

10
 Short term Goals

BENA CONTRACTORS will ensure that by the mend of the year the business
will have

Achieved a profit of Kshs. 82 000 the business will also increase stock from Ksh.
135 000 to Kshs. 162 000 within the first one year the business will aim at
capturing a market share of 45% for the year in operation.

Long term Goals

The business will purchase a center lorry to distribute the products to open up branches in
the next three years about three branches will be opened up at Marigat town, Kabartonjo
and Iten town.

2.6 Entry and growth strategy.

Entry strategy.

BENA CONTRACTORS intends to enter the market strongly through the use of
advertising through media before the business commences.

Various posters will be placed at the strategic places in town where everybody will’
see it and also by advertising the business through sales men radio station and local
newspapers.

Growth strategy.

the owner intends to make business in places where the population growth is high
the business hence will grow and thus employ more skilled personnel and increase
its stock plan for .growth and expansion of the business will be through the
following strategies.

 Offering high quality finished products.

 Motivation of workers by offering good package to them.

 Good customers relation.

11
CHAPTER THREE

3.0 MARKETING PLAN.

According to a research done, by the sponsor at BENA CONTRACTORS shows that its
locational area has both ready market availability of raw materials of craft products.

The key feature of marketing plan.

1. Potential customers

2. Market share

3. Distribution a strategy.

4. Sales tactics.

5. Advertising and promotion.

3.1 Potential customers.

The market for proposed business will be for all people who are within the geographical
area of Kabarnet district county who will need the products the potential customers are
divided under the following categories:-

a. Government sectors are:- Departments , parastatals NGOs.

b. Institutions:- e.g Schools Youth polytechnics, College and universities.

c. Parastatal sector are:-

i. KARI – Kenya Agricultural institute

ii. NIB – National irrigation Board

iii. NGOs – World Vision etc.

Local customers includes the individuals who buy for repairing and maintaining their
houses. This customer will purchase directly from our company with reasonable prices.

Commercial customers are those people who purchase molded products for purpose of
making profit. BENA CONTRACTORS will deal with all types of people from old age,
medium age and small age groups and will also be relating with all characters rich and
poor.

12
The table below shows the categories and age sets of customers of BENA CONTRACTORS

Type of Age Income Occupation Education Gender

customer

Civil servants Over 21 yrs 11 000 and From Support Primary , Both Male and
and teachers above 5 000 staff - College and female.
Teachers university

District
commissioner
s

Company and Over 21 yrs 20 000 and Technical staff Secondary , Both male
institutions above 70 000 to managers college and and female.
and directors Universities.

Farmers and Over 21yrs 5000 and Farmers and Primary , Both male and
below above30 000 cattle keepers Secondary female.
and colleges

3.2 MARKET SHARE.

This is the weight of BENA CONTRACTORS comp[any which will hold the comparison to the
other competitors the business is extended to capture at least 30% in the first one year
which will increase up to 35 – 40 % in the second year at the end of the fourth year it will
range between 40% - 50%.

slobs; 4 This will be achieved by application of

various activities and improvement of
blocks; 10 services ion order to meet the requirements
bricks; 15 of the competitors. The pie cart below are
rough and approximation represented tilesFirst
asbricks year
tiles; 4 culverts35%.00
per the first three years.
calverts; 2
block

35%

slab

13
 slobs; 4

tiles
blocks; 10 bricks
slabculverts
bricks; 15 2nd year
block
tiles; 4
calverts; 2
40%

slab
slobs; 4

Tiles
Bricks blocks; 10
slabCulverts
bricks; 15
block
tiles; 4 3rd year
calverts; 2
slab 50%

BENA CONTRACTORS have done a feasibility study that Kabarnet town is growing very
rapidly, new buildings are constructed and migration of people from ,rural into the town
approximately there are 15 000 residents living within the town.

3.3 competition.
Due to government support towards the building industry and increased demand of
building products the rate of population growth it has raised of .competitors to
establishing of BENA CONTRACTORS.

The following are some of the challenging competitors are:-

1. Bonis Builders

P.o Box

Kabarnet

14
 2. Dalmas okwang Builders and construction company.

P.o Box 125

Kabarnet

SWOT ANALYSIS
Strength and weaknesses opportunity analysis table.

Competitors Strengths Weakness Opportunity Threat

Bonis Builders Have well Advertising Accessibility to Insecurity in the

equipment and promotion rural areas and area.
machines at also the market.
technical and Poor Relation
experienced
employees.

Dalmas Okwauro Transportation of No supervision. Change type of Limited

Builders product, produce and get expansion of the
company machines of new Poor acess to remote company.
modern, well management areas co –
equipped with all operate with Poor relationship
Lack of materials. with customers.
kinds of machines NGOs and
and technical Government
staff. affairs.

As to observation of the competitors their strength weakness opportunity and threat.

BENA CONTRACTORS shall .come up with .new technologies on how to produce the
standard size and quality of molding by using comprehensive machine and the following
should offer by the company to compete. BENA CONTRACTORS should employ the
technical staff with at least the experience of 3 years experience.

Selling products of high quality which is satisfying to the customer.

After free transportation to the customer who normally transport within the town and also
to the stage.

15
Use of modern facilities.

Use of heavy and compressive machinery to finish the shop and also colour the products.

3.4 Strategies to out competitors

Pricing strategy.

Price is the value on good or service of customers at the same time for any products to gain
power to make it well, most to be well priced with current libration of the economy the
management shall take initiative of pricing of its various products.

1. The main goal are:-

 To stabilize prices

 To prevent competition and maximize the profit

3.5.1 Cost plus pricing.

In the pricing – BENA contractors shall use a very simple format to arrive at the selling
price.

The factors to be considered when pricing include:-

 Storage

 Production cost

 Quality of the products

 Economy.

Quality of products.

The company shall produce quality products which shall be used in various parts of the
building structure, the selling price shall range 50 – 1500 per product in away that the
roofing tiles shall be water proof and also molded curve shall be also of water proof
material.

Production cost.

One of the factors to be considered by BENA contractors are:-

 The cost of the products

 The profit made by the products.

16
  Cost of labour.

 The selling price.

Demand of the product.

The factors to be considered from the construction purchasing power in that if there shall
be high demand lof products the construction shall increase by 5%.

Economic factors.

BENA contractors shall enhance selling of the products and also it shall discourage
discrimination.

Profitability factors.

Factors that are vital for any business must have continuity therefore the management
must price the products with the aim of making profit of 30%.

3.5 Sales tactics.

The survival of the business depends on its ability to offer products of the highest quality.
BENA contractors will therefore employ the staff who are skilled and also capable to:-

 Set target for customers

 Time management

 Assessment of cordial customer relation.

 Increase promotion

 And also the business will increase sales representatives who will venture in to
developing sales interactive so as to make the company aware of the product offered,
the product shall be produced according to customer need the product shall be
identified by each ,and every customer. According to production. The company shall be
rate its customers in percentage as in:-

o Institution -50%

o Farmers and civil servants – 30%

o Community – 20%

o Outsiders – 10%

17
This is done after survey has been carried out.

3.6 Advertising and promotion.

This is done to motivate the customers in order to increase the buying and also create
awareness to customers the method to use are:-

 Advertising by newspapers through media – Radio, televisions.

 Placing of posters and signboard at strategic points and should be written BENA
contractors.

 Publish the company in calendars ,and printed on t – shirts.

 Participating in district agricultural shows to display of exhibition.

Promotion method.

The company shall present products in the market:-

 Demonstration

 Displays

 Exhibitions

 shows

Display.

BENA contractors shall display its products in field in which customers shall be accessed
to the products.

Shows.

All products shall provide with a shade and room enough space for customers to view the
products.

3.7 Distribution strategy.

Due to the good infrastructure the location of the business distribution for the products to
the customers will be very easy.

Since the business is easily accessed to the main road at Kabarnet Nakuru Raod.

3.8 Economic changes.

18
Due to crisis of economic the customers shall have items which shall be reduced to a
reasonable price and also some service like transportation shall be offered.

3.9 Changes in fashion and references to customers.

Due to changes in fashion the products of the company shall change according to the
fashion by taking the personnel to a short training to gain knowledge and skill for proper
management and expansion of the business.

19
CHAPTER FOUR.

4.0 production ,and operation plan

These chapter describes how the products of the company will be manufactured, it shows
the breakdown of the equipment, materials and other necessary required equipments. It
shows how the owner will coordinate in order to accomplish its objectives. It shows the
organization structure of the business and identified by management personnel. It also
indicates the expected compensation plan of the employees.

4.1 organization structure.

The organization structure of the proposed business will comprise of the manager
supervisor, a builder, an accountant and one clerk, two sale s officers, two masonry and a
security officer, as part from builders and masonry the security officer and other four
casual workers will be answerable to the supervisor.

MANAGER

ACCOUNTANT SALES MANAGER SUPERVISOR

BUILDER SECURITY OFFICER OTHER

OPERATIVES

4.2 THE MANAGEMENT TEAM.

20
The management team will compose of the manager, a designer/ builder, accounts clerk,
supervisor and two sales clerks.

The owner will be the manager taking control of all the activities occurring in the business,
being the owner manager, he will manage the workshop and the entire transaction made
into the business will be finalized in his office.

He will be structuring and staffing the firm so that people fit to the position well enough to
achieve the organization’s goals.

The other managing personnel will be working hand in hand to ensure smooth running of
the business.

4.3 other personnel.

The other personnel that are required are the builder’s mechanism, a security officer and
four casual workers, the builders will assist the quantity surveyor in designing and
moulding of bricks and block production. The watchman will be responsible for general
security of the firm and daytime. The business will hire the service of four casual laborers
who will be responsible for the cleaning of the firm, mixing the concrete/mortar and
transportation of materials to the site .

4.4 recruitment and training.

Recruitment.

Recruit of employees will be done by the manager and the supervisor, the manager will be
responsible for recruitment of the supervisor and an accounts clerkand builder and sales
officer, the supervisor is responsible for recruitment of security officer, builders and casual
workers.

Training.

The successful applicants will be oriented to the working field for a week before the day,
there will be an on job on training, which will start immediately after recruitment, the
business will not sponsor any employee for further studies but will give the them a chance
for their own advancement though will sponsor them for seminars and workshops and
exhibitions this will help them adjust with the changing technology.

Promotion.

The promotion will be done on merit, the management team will be entitled to the success
of an employee, there will be a gift and a reward for hard working employee these will be
done annually as to the business end its financial year on 31 st June.

Remuneration and incentives.

21
The business will remunerate its employees by their salaries and wages according to their
posts and qualifications.

The business will also meet the part of material bills for the employees.

The salaries allowance and fringe benefits offered to the employees have been tabulated.

REMUNERATION.

POST SALARIES / ALLOWANCE PER MONTH FRINGE BENEFITS

MONTH

Manager/ 16500 House allowance – 2000 - tea twice a day

quantity surveyor
Transport – 1200 - leave once a year

Medical fee – 300

Supervisor 13200 House allowance – 2000 - tea twice a day

Transport – 1200 - leave once a year

Medical fee - 350

Builder 11400 House allowance -1750 - tea twice a day

Transport – 600 - leave once a year

Medical fee – 350

Accounts clerk 12400 House allowance -1800 - tea twice a day

Transport – 800 - leave once a year

Medical fee – 350

Sales officer 12400 House allowance – 1800 - tea twice a day

Transport – 900 - leave once a year

Medical fee - 350

Masonry 9000 House allowance -1000 - tea twice a day

Transport – 600 - leave once a year

Medical fee – 350

watchman 6000 House allowance -1200 - tea twice a day

Transport – 400 - leave once a year

22
 Medical fee – 350
JOB SPECIFICATION, QUALIFICATIONS AND RESPONSIBILITIES
Post Qualification
Manager/ quality - Diploma in building & civil engineering.
surveyor
- Should treat all employees equally.
- Have management skills.
Supervisor - Should have a craft certificate in building and
construction
- Three year experience in relevant field.
Builder - Should have a craft in building and
construction.
- Experience of two years in relevant field.
Accounts clerk - Posses a KATC final certificate.
- Work under minimum super vision.
- Two year experience in relevant field.
Sales officer - Sales and marketing certificate.
- Fluent in English and Swahili.
- Two year work experience in relevant field.
Security - Form four leaver with an experience.
personnel
- Should be over 25 yrs of age not involved in
any criminal activities.
- Should speak English and Swahili.
Masonry - Posses certificate in masonry grade II
- At least four year experience
23
Duties and responsibilities
 In charge of recruitment
 Ensure smooth running of daily activities.
 Striving and staffing to achieve the goal &
objectives of the organization.
 Supervision of daily activities.
Training and recruitment of casual workers
builders and security
In charge of all production and processing
materials.
 Control of all financial transactions of the
business.
 Handling of cash and issuing of receipts
 Book keeping.
 Preparation of payroll records.
 In charge of stores.
 Selling of the firms products.
 Responsible for advertising & promotion.
 Sales proportion.
Responsible for the general security of the firm.
Responsible for production of bricks , blocks
and molding tiles.
4.6 support services.
The business and employees will be insured against any accidents it will insure with the
African Insurance accompany on accidents and assets. The business will also hire other
services from established individuals, organizations or institutions. These include banking
services ., book keeping, business ,management, consultancy services, book keeping and
accounting services and postal services.

a. The banking services are most required in the business. All the cash will be kept in the
bank and teachers Sacco societies limited in Kabarnet town where business
transactions will take place.

b. Legal services: - the business will hire the service of Kiplenge and Advocates company
to represent the firm in any legal activity.

c. Consultation services:-these services ill include editorial and will be provided by Tarus
and Advocates company

d. Postal services – letters of inquiry will be send to the supplying business men via the
post office, these will be provided by Kabarnet post office which will include the
telephone and delivery of mails.

4.7 legal requirements.

4.7.1 license

License for the business running will be obtained from the Kabarnet county council the
migration form, free the form will be indicated the nature of the owner. These license will
be renewed annually.

4.7.2 permits

Permits and bylaws are as governed by the local district trade office in conjunction with
the ministry of local government and the ministry if trade and industry.

24
 CHAPTER FIVE.

5.0 production and operation plan.

These chapter describe how the production will be manufactured during the production
process.

The pertinent feature of operation/ ;production are:-

 Production facility and capacity.

 Production strategy

 Production process

 Regulations affecting operation.

5.1 production facility and capacity.

The physical facilities that BENA constrictions intends to purchase include :- the molding
machine equipment for molding tiles and the mixing machine.

Item Quantity Cost/unit Total cost supplier

Molding machine 1 30000 30000 Nakuru Stores and supply

Mixing machine 1 60000 60000 Eldoret store and supply

Wheel barrow 3 2000 6000 Eldoret store and supply

Spade 4 250 1000 Baibai hardware

Moulders steel 10 5000 50000 Saisai hardware

Moulder boxes 25 150000 3750 Nakuru general stores

Mixer 1 200000 200000 Nakuru general stores

Jembes 4 200000 800000 Saisai hardware

Trowels 4 120000 480000 Saisai hardware

Vibrator 2 40000 89000 Saisai hardware

Totals 451030

5.2 REPAIRS AND MAINTAINANCE.

25
All tools and molders should be washed clean and creased parts after which the machines
are serviced after every two weeks in a month and also wearing out parts should be
replaced.

FUTURE PLAN.

The BENA contractors headed by the owner intends to purchase a weekly machine with
high capacity of produce quality and quantity of moulding bricks and blocks and cutting
and sawing machine for timber.

5.3 production strategy

Throughout the year the production strategy will be offered effectively based on monthly
and yearly requirements

5.4 production design and development.

The manager intends to design and develop its products to satisfy each and every
customer needs.

5.5 production cost.

The cost of operation in the business is the material cost used in the workshop and the
labour cost. All the materials cost will be controlled in places of site by the manager.

Service charges in kshs.

Electricity 2000
Telephone 1500
Postage 1500
Rent 3500
Transport 2000
Advertisement 4000
Water bill 3800
Total

5.6 production process.

The production process will be as follows:-

Bulk Sieving Mixing Molding Curing Delivery to site

5.7 regulations affecting operations.

The business will be controlled by the public health and safety act, which ensures for
maximum safety health and protection to any business requires pattern which gives a sole
right to offer services to clients.

26
SITE LAYOUT

Accounts Ass. Supervisor Manager Chipping site

Office quality survey

Bulk site Workshop Stone supply

Sand office

5.8 material cost per month / year.

DESCRIPTION TONES QUANTITY COST PER MONTH COST PER YEAR

Chipping sand 78750 78750 262000 3150000

Cement 36000 36000 120000 1440000

Red oxide 90 180000

Fiber

Sisal 1800 1800 5400 64000

Totals

5.9 DIRECT LABOUR COST

The business will have right permanent workers and four casual workers, the permanent
workers will have paid monthly salaries while casuals will be paid on weekly basis or after
every two weeks and also permanent are included in two weeks paid allowance.

5.10 operation cost

27
To ensure proper running of the business and quick service there will be such services as
electricity, telephone postage, rent , transport, advertisement and water the charges are to
be made at the end of the month.

Environment regulations

The business has insured that there is a proper way of disposal of water materials and
ensure that they are not harmful to the public there is a proper drainage system.

Safety and health regulations

All safety attire shall be provided to workers the materials will be gloves, booths , aprons
and also there will be a first aid kit well equipped, the running machine will have guards
and danger zones.

28
CHAPTER SIX

6.0 FINANCIAL PLAN

Working capital required.

Working capital = current assets - current liabilities

Current assets Year 1 Year2 Year3

Stock 150000 660000 720000

Debtors 6000 20000 15000

Cash at hand 150000 170000 270000

Cash at bank 167000 417500 1252500

Cash at m- pesa 30000 50000 70000

Less: current liabilities 164900 486200 1279900

Working capital 567900 1703700 3407400

29
 6.3 PROFORMA CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DEC 2019 (1ST YEAR)
PARTICULARS JAN FEB MAR APRIL MAY JUNE JULY AUG SEP OCT NOV DEC
Cash Inflow
Beginning cash 1,800,000 793,683 897116 960779 1011512 1058745 11077638 1135171 1148404 1185737 1212520 1251153
Sales 332,400 350,600 320350 290400 310400 280060 240800 260150 270400 272450 290300 300120
Debtors - 6,000 - 6000 - 7000 - - 9000 - 8000 -
Total cash inflow 2,132,400 1,150,283 1217466 1257179 1321612 1345805 1348438 1395321 1427804 1460187 1510820 1551273
CASH OUT FLOW
Purchases 166,200 152,300 160200 150600 170400 141100 120600 150450 150200 150200 160200 160200
Furniture and fitting 191,500 - - - - - - - - - - -
Tools & Equipment 885,000 - - - - - - - - - - -
Premises / rent 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
Registration - - - - - - - - - - - -
Trade License 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Creditors - 5,000 - 3,000 - 5,500 - 4,500 - 6,000 8,000 -
Advertisement & 500 500 500 500 500 500 500 500 500 500 500 500
Promotions
Water bills 200 200 200 250 300 150 400 250 200 200 200 200
Transport 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Telephone 300 300 300 300 300 300 300 300 300 300 300 300
Electricity bills 450 450 450 500 550 600 450 400 350 450 450 450
Insurance 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Postage 300 300 300 300 300 300 300 300 300 300 300 300
Loan repayment 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667
Salary 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300
Interest on Loan 250 250 250 250 250 250 250 250 250 250 250 250
Miscellaneous 500 1000 1500 1500 2000 2000 2000 1500 1500 1000 1000 1000
Total cash out flow 1,338,717 253167 256667 245667 262867 238167 213267 246917 242067 247667 259667 251667
Balance b/d 793,683 897116 960799 1011512 1058745 1107638 1135171 1148404 1185737 1212520 1251153 1299606

30
 6.3.1 PROFORMA CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DEC 2020, (2ND YEAR)
PARTICULARS JAN FEB MAR APRIL MAY JUNE JULY AUG SEP OCT NOV DEC
CASH INFLOW
Beginning cash 1299606 1693239 2267772 3046605 3457838 3910121 4438604 4914887 5377490 6120073 6641206 7277389
Sales 997200 1120400 1300000 991200 1031200 1061000 990700 1000400 1290600 1080600 1227000 1345950
Debtors - 2000 2000 4000 - - 4000 6000 - 3500 3500 -
Total cash inflow 2296806 2815639 3569772 4041805 4489038 4971121 5433304 5921287 6668090 7204173 7871706 8623339
CASH OUT FLOW
Purchases 498600 450300 420100 480600 480600 430500 420350 440200 450200 460300 490800 498500
Furniture and fitting - - - - - - - - - - - -
Tools & Equipment - - - - - - - - - - - -
Premises / rent 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000
Registration - - - - - - - - - - - -
Trade License 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Creditors 6500 - 4500 2500 - 3500 - 5500 - 5000 4500 -
Advertisement & 500 500 500 500 500 500 500 500 500 500 500 500
Promotions
Water bills 250 250 250 250 250 250 250 250 250 250 250 250
Transport 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Telephone 300 300 300 300 300 300 300 300 300 300 300 300
Electricity bills 400 400 400 450 450 350 350 350 350 500 550 450
Insurance 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Postage 400 400 400 400 400 400 400 400 400 400 400 400
Loan repayment 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667
Salary 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300
Interest on Loan 250 250 250 250 250 250 250 250 250 250 250 250
Miscellaneous 3400 2500 3500 3800 3200 3500 3100 3000 2800 2500 3800 2600
Total cash out flow 603567 547867 523167 583967 578917 532517 518417 543717 548017 562967 5943178 596217
Balance b/d 1693239 2267772 3046605 3457838 3910121 4438604 4914887 5377490 6120073 6641206 7217389 8027122

6.3.2 PROFORMA CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DEC 2021, (3ND YEAR)
PARTICULARS JAN FEB MAR APRIL MAY JUNE JULY AUG SEP OCT NOV DEC
CASH INFLOW
Beginning cash 8027122 9760955 1147858 1316132 1523875 1730683 1965260 21969583 2424864 2661297 29036352 31673185

31
 8 1 4 7 6 9
Sales 2742300 2730600 2671500 3046400 3032750 3349240 3271040 3259330 3358500 3428740 3643200 3656200
Debtors 3500 3800 - 4200 - 6500 5500 - 3000 - 3500 -
Total cash inflow 1077292 124955355 1415005 1621192 1827150 2066257 2293180 25228913 2761014 3004171 326833052 35329385
2 8 1 4 7 0 6 9
CASH OUT FLOW 914100 910200 890500 870400 866500 905200 860800 880900 895600 902300 910800 914050
Purchases
Furniture and - - - - - - - - - - - -
fitting
Tools & Equipment - - - - - - - - - - - -
Premises / rent 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000
Registration - - - - - - - - - - - -
Trade License 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Creditors - 8000 - 4000 - 3500 3500 - 3000 5000 - 5000
Advertisement & 650 650 650 650 650 650 650 650 650 650 650 650
Promotions

Water bills 250 250 250 250 250 250 250 250 250 250 250 250
Transport 1,500 1,500 1,500 450 450 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Telephone 400 400 400 400 400 450 450 450 450 450 450 450
Electricity bills 450 450 450 450 350 350 350 400 400 500 500 450
Insurance 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Postage
Loan repayment 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667 16,667
Salary 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300 66,300
Interest on Loan 250 250 250 250 250 250 250 250 250 250 250 250
Miscellaneous 2900 3600 3300 3800 3300 3700 3000 4400 3500 3000 4000 2900
Total cash out flow 1011967 1016767 988767 973167 964667 1007317 962217 980267 997167 1005367 1009867 1017067
Balance b/d 9760955 11478588 1316132 1523875 1730683 1965526 2196958 242486436 2661297 2903635 31673185 34312318
1 4 7 0 3 9 2

32
6.8 PROFORMA INCOME STATEMENT.

ITEM END OF YEAR END OF YEAR TWO END OF YEAR THREE

ONE

Sales 5284000 5346000 6019000

Less: cost of goods 9760000 1040000 1204000

Gross profit 1155000 1500000 1963000

Less expenses 850000 820000 10500000

Salaries and wages 960000 960000 1029600

Rent 96000 120000 150000

Electricity 24680 32450 25000

Transport 10400 13050 21800

Water 7080 9980 9400

Advertisement 11200 5400 7500

License 5000 7000 7500

Telephone postage 10480 9450 10870

Repair and maintenance 2500 4500 9000

Insurance 3500 7500 8000

Intern on loans 230000 230000 160000

Depreciation of fixed assets 992470 1139690 1336780

Total expenditure

Net profit before tax 1647800 1744900 1889820

Provision for 3% tax

Net profit before tax 49434 52323 56994

6.9 PROFORMA BALANCE SHEET.

item Year one End of year two End of year three

33
 Assets
Fixed assets 530000 750000 1600000
Equipment &
machinery
Less: depreciation 5%
Furniture and fittings
20000 25000 25000
less: depreciation 10%
Building Acc
depreciation
Total fixed assets
Current assets
Cash at bank 200000 950000 1050800
Stock working in 450000 380000 615000
progress
Debtors
50000 30000 -
Total current assets
Total assets

Liabilities
Current liabilities
Creditors
Total current liabilities
250000 480000 840000
Long term liabilities
Bank Loan 230000 350000 310000
Owner’s equity 240500 560000 950000
Total long term
liabilities
Total liabilities

BREAK EVEN LEVEL

Contribution margin = total sales – variable cost

34
 = 2131000 – 110500

= 2020500.

conteibution margin
Contribution margin% = x 100
sales

2020500
= x 100
2131000

= 94.82%

6.9.1 Fixed cost

DESCRIPTION AMOUNT

salaries 1029600

rent 1050000

license 7500

insurance 8000

Telephone / postage 10870

total 1205970

Break-even level = fixed cost

= contribution margin %

= 987500 X 100

= 987500

= 94.82% X 9787500 =

6.9.2 DESIRED FINANCING

35
 ITEM AMOUNT

Pre – operational cost 530000

Working capital 987500

Total desired financing 1517500

Proposed capitalization
Item Amount

Owners equity 1750000

Bank loan 890000

Total investment 314000

Profitability ratio.

gross profit
Gross profit ratio = x 100
total sales

1750000
= x 100
2131000

= 82.12%

net profit before tax

Return on equity = x 100
owne r ' s equity

362530
= x 100
750000

= 48.33%

Return on investment = Net profit before tax x interest x 100

Total investment =

80530+20500
= x 100
341000

= 6.24%

36
APPENDIX MAP.

TO NAKURU

KABARNET FARMERS
PETROL STATION

To kabartonjo
OFFICES

SHOPS

BENA
CONTRACTORS
KISUMU NAKURU ROAD

KABARNET HIGH SCHOOL

KIBILO PETROL
STATION

To KSG
SHOPS

37