THIKA SCHOOL OF MEDICAL AND HEALTH

SCIENCES
TITLE : NESTRE LAYERS POULTRY FARM

CANDIDATES NAME : NESTRELDA ATIENO

LOGO :

EMAIL ADDDRESS : nestrelayerspoultryfarm@gmail.com

TEL : 0715878756

COURSE CODE : DIPLOMA INMEDICAL ENGINEERING

SUPERVISOR : MADAM TERRY

PRESENTED TO : KENYA NATIONAL EXAMINATION COUNCIL

FOR PARTIAL FULLFILMENT FOR DIPLOMA IN
MEDICAL ENGINEERIG

SERIES : JULY 2020

DECLARATION
I NESTRELDA ATIENOdeclare that this is my personal and original work and has never

been presented to any examination board whatsoever.

CANDIDATE NAME: NESTRELDA ATIENO

SIGN:……………………………………………………………

DATE: ………………………………………………………….

Presented to Kenya National Examination Council with my permission through my

supervisor

NAME; MADAM TERRY

SIGN: …………………………………………………………………………

DATE: ………………………………………………………………………….

ii
DEDICATION
I dedicate this business plan to my parents for their love, encouragement support and

determination they have offered to me.

iii
ACKNOWLEDGEMENT
I like to acknowledge God first who has favoured me all this time by giving

me knowledge, strength and good times through this business plan and my

entire academic progress. Then my honest gratitude goes to my supervisor

for guiding me through all this time and ensuring the best for me. I also

thank my family and friends for the moment they have spent with me and

support they provided to make me have easily time in my academic

iv
EXECUTIVE SUMMARY
CHAPTER ONE

BUSINESS DESCRIPTION

This chapter contains the details of this business by the name NESTRE Layers

Poultry Farm limited located in WAJIR. The sole proprietor is NESTRELDA

ATIENO. This business will start operating in the year 2020.

CHAPTER TWO

MARKETING PLAN

This chapter contains the details of the marketing plan. The chapter also

contains the pricing strategy showing prices. It also shows the competition and

the strength, weakness, opportunities and threats of the business and other

businesses around.

CHAPTER THREE

ORGANISATION AND MANAGEMENT PLAN

This chapter contains organizational and management of the business. It gives

details such as qualification, responsibility, age, details and responsibilities of

management and personnel

CHAPTER FOUR

OPERATIONAL\PRODUCTION PLAN

This chapter shows the operation and production plan.

v
CHAPTER FIVE

FINANCIAL PLAN

It contains the details of the financial plan of the business.

vi
TABLE OF CONTENTS

DECLARATION.........................................................................................................ii

ACKNOWLEDGEMENT........................................................................................iii

DEDICATION...........................................................................................................iii

EXECUTIVE SUMNESTRE....................................................................................v

TABLE OF CONTENTS...........................................................................................vii

CHAPTER ONE..........................................................................................................1

BUSINESS DESCRIPTION......................................................................................1

1.1 BACKGROUND OF THE OWNER............................................................1

1.2 BUSINESS NAME................................................................................................1

1.3BUSINESS LOCATION AND ADDRESS.........................................................1

1.4FORM OF OWNERSHIP....................................................................................4

1.5TYPE OF BUSINESS...........................................................................................5

1.6PRODUCTS OR SERVICES..................................................................................5

1.7JUSTIFICATION OF THE BUSINESS.............................................................5

1.8 INDUSTRY............................................................................................................6

1.8.GOALS OF THE BUSINESS\OBJECTIVES...................................................6

1.8.1GOALS................................................................................................................6

1.8.2OBJECTIVES.....................................................................................................7

1.9 ENTRY AND GROWTH STRATEGY................................................................7

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

2.0 MARKETING PLAN..........................................................................................8

2.1CUSTOMERS.........................................................................................................8

vii
2.1.1 DOMESTIC CUSTOMERS...............................................................................8

COMMERCIAL CUSTOMERS..................................................................................8

2.2 COMPETITION.....................................................................................................9

2.3 Pricing strategy.....................................................................................................11

2.4 Sales strategy........................................................................................................12

2.5 ADVERTISEMENTS AND PROMOTION STRATEGY..................................11

2.6 DISTRIBUTION STRATEGY............................................................................13

CHAPTER THREE....................................................................................................14

3.0 ORGANISATION AND MANAGEMENT........................................................14

3.1 ORGANISATION................................................................................................14

3.2 KEY MANAGEMENT PERSONNEL................................................................15

3.3 OTHER PERSONNEL........................................................................................16

SUPPORTIVE STAFF AND SERVICES.......................................................................... 18

CHAPTER FOUR......................................................................................................20

OPERATION / PRODUCTION................................................................................20

4.1 PRODUCT DESIGN AND DEVELOPMENT................................................20

PRODUCTION FACILITIES AND CAPCITY......Error! Bookmark not defined.

PRODUCTION STRATEGY....................................................................................21

QUALITY CONTROL............................................................................................22

RECEIPTION OF THE CLIENT..........................................................................23

PRODUCTION PROCESS........................................................................................23

GOVERMENT REGULATION................................................................................24

CHAPTER FIVE........................................................................................................26

5.0 FINANCIAL PLAN.............................................................................................26

viii
5.1 PRE – OPERATIONAL COST........................................................................26

5.2 WORKING CAPITAL/REQUIREMENTS.........................................................27

5.3 PROFORMA INCOME STATEMENT...............Error! Bookmark not defined.

5.3.2 PROFORMA INCOME STATEMENT OF THE YEAR ENDING 2020 Error!

Bookmark not defined.

5. 3.3 INCOME STATEMENT OF THE YEAR ENDING DECEMBER 2020

....................................................................................Error! Bookmark not defined.

NESTRE LAYERS POULTRY FARM LIMITED Error! Bookmark not

defined.

5.4.0 BALANCE SSHEET........................................................................................32

PROFOMA BALANCE SSHEET..........................................................................33

5.5 ROJECTED PROFORMA CASH FLOW STATEMENT FOR THE

YEAR 2015................................................................................................................29

PROJECTED PROFORMA CASH FLOW STATEMENT FOR THE YEAR

2020............................................................................................................................30

PROJECTED PROFORMA CASH FLOW STATEMENT FOR THE YEAR 202031

5.6 BREAK-EVEN ANALYSIS................................................................................32

5.7 DESIRED FINANCING......................................................................................35

5.8 DESIRED CAPITALIZATION...........................................................................35

5.9EXPECTED PROFITABILITY RATIOS........................................................35

ix
CHAPTER ONE

BUSINESS DESCRIPTION

1.1 BUSINESS NAME

The name of the proposed business will be NESTRE Layers Poultry Farm which is simple

and easy to mention, and it is obtained from the short for of the owners name Deborah. The

success of the business is based on large number of customers especially supermarket,

hypermarket, local schools, general hospital and retailers.

1.2 BUSINESS LOCATION AND ADDRESS

My business will be located in rural area at Bute shopping centre located in Bute, 1km away

from Gurar town

She intend to start the business immediately after I complete my certificate course, which

will run under sole proprietorship, where I will be making independent decisions and enjoy

the whole profit. The major activity of my business is the sale of old chicken and eggs to

wholesalers and retailers. The other activities of my business are the sale of chicken manure

to farmers who require it for horticulture and vegetables production. Some of my principal

customers will be the local primary schools like Gurar primary and gurar girls, gurar boys

high school and gurar school, cleanshelf supermarket, jack hyper market and whole seller

and saga bakers

1
she will be operating the business from my own farm, where she will build the employee

quarters, latrines, stores, water tanks and poultry houses. she decided to choose their

location for my business because it is served with good infrastructure, i.e. good tarmac and

murram road for quick transportation of the products and feeds. Power line for light and

heat,clean water for human and chicken consumption, cleaning and bathing, telephone

booths at the shopping centre for communication. The area of specialization of my business

is close to potential market and potential suppliers as it just 1km away from WAJIR town

and it is a meeting point of roads at Bute Shopping Center, employee quarters will be

located within the farm, and a veterinary specialist has an Agro vet investment in the

shopping centre from where she will be buying feeds and consultants, raw materials which

will be obtained from ken chic suppliers located at Gurar town, cleanshelf street Mombasa

house, ground floor room number one. The business is intending to use the following

address;-

NESTRE Layers Poultry Farm

P.O BOX 20

GURAR

TEL; 0715878756

EMAIL; nestrelayerspoultryfarm@gmail.com

2
Bute shopping center

1km Gurar town

1.3 BACKGROUND OF THE OWNER

The owners name is NESTRE MOHAMED . The name of the business NESTRE layers

poultry farm was derived from the Baptismal name initials which are NESTRE. In jan of

year 2019, she joined Thika school of medical and health sciences for a Certificate in

Science laboratory. The owner is intending to employee some experienced employees in

poultry to compensate for the lack of high level experience

3
1.4FORM OF OWNERSHIP
This business will run under sole proprietorship type of bu8siness which I shall own. The

reason for choosing this type of business is because I will be making independent decisions

and enjoy the whole profit. I intend to commence the business with Kshs 250,000 as the

startup capital which will be obtained from personal savings Ksh 50,000, friends and

relative contributions Ksh 150,000, and bank loan. Kshs 50,000 will be obtained from

friends and relative contributions, and Kshs 50,000 from a bank loan.

The owner will contribute a percentage of 50,000 * 100= 20%

250000

Percentage of friends and relative contribution 150,000 x 100=

250,000

= 60%

Percentage of bank loan 50,000 * 100= 20%

250000

4
1.5TYPE OF BUSINESS
This business deals with poultry products. The business deals with both wholesalers and

retailers. While the retailers buy the goods directly from the farm, the wholesalers are

supplied in their in their shop for example at the supermarkets and hypermarkets

1.6 PRODUCTS OR SERVICES

NESTRE Layers Poultry Farm is intended to be dealing with high quality eggs with features

like, good shape i.e. oval in shape, good texture ie smooth, brown in colour and the correct

weight which will be weighted before selling them. Products will be cheap. My products

will be clean, cheap and save from breakages in the case of eggs and free from infestations

in case of chicken.

I will interact with many poultry keepers and sellers to know what they don’t provide, so

that I will try and provide the services to satisfy the unsatisfied customers’ demands, I will

also seek advice from the suppliers so has to be well equipped in case of competition being

tough. Routine buyers and large scale buyers will be gifted with free T-shirts and calendar

all bearing the name and the legal of the business.

1.7JUSTIFICATION OF THE BUSINESS

The NESTRE Layers Poultry Farm stand chance to start and run the proposed business

because eggs and chicken are in high demand in hospitals, bakeries, schools, homes and

hotels. Eggs are ingredients in foods like breads, cakes, and chapattis and also consumed as

medicinal food for colds, and it is also recommended for patients as it serves as whole diet.

5
1.7.1 INDUSTRY
NESTRE Layers Poultry Farm will fall under poultry industry, and as law enacted by the

poultry board of Kenya ( PBK) required cleanness of the employees and paper usage of

latrines, clean water, clean fetching and drinking equipment’s and transport equipment to

ensure clean water to ensure clean products. Well ventilated and medium lighted and

spacious poultry houses are required. No corners should be existing in the poultry houses to

avoid congestion of chicken resulting to death. The size of the business will be medium

scale but will be expected to expand according to its performance, and with change in

technology. It will be updated on modern technology for efficiency, I will also need more

effort to win more and maintain my principal customers.

1.8.GOALS OF THE BUSINESS\OBJECTIVES

1.8.1GOALS
The business will aim at:

 It will provide employment to people around the business.

 Providing poultry products suchlike eggs to the nearest bakeries, schools,

supermarkets and hypermarkets.

It will improve living standards since people employed in the business since they

will depend for themselves.

6
1.8.2OBJECTIVES
 To open more branches in WAJIR town and other towns.

 To open a school whereby small and upcoming farmers will be learning on

how to rear poultry at a very affordable fee

 Start supplying chicks to other farmers in small and large scale

1.9 ENTRY AND GROWTH STRATEGY

The proposed business is intended to start on January 2020. I will gain acceptance in the

market by using techniques of attracting many customers by offering free calendars and T-

shirts, and offering free products upon purchase of goods not less than 5,000. The

competition is not stiff so I will gain as there is high demand of the eggs and the chicken. I

will provide services which other competitors do not provide ignored to satisfy the needs of

the customers. I will also distribute advertising posters, and advertising through the media to

be well known.

As his business is the only one that I have a positive attitude towards it, and as I suggest, it

will well and become successful, hence I will expand it to large scale and become a supplier

of chicks while I will name it as Deborah Chick Suppliers;

7
CHAPTER TWO

2.0 MARKETING PLAN

2.1CUSTOMERS

For the success of the business, it will target its potential customers at different levels and

areas, as they are the boss of every successful business;-

2.1.1 DOMESTIC CUSTOMERS

These are customers who live around the business location who will be expected to buy in

small quantities and medium quantities. The business must retain them by establishing a

good relationship with them offering credit facilities, giving gift T-shirts with the companies

label for more advertising and ensuring constant supply of goods and services.

2.1.2 COMMERCIAL CUSTOMERS

These are customers from around the business or from any other place within the country

who will buy in a wholesale basis and sell them retailers or customers direct. They will be

retained to stick the business by being offered discounts.

She except both cylinder to be my customers who are Christian in different occupations

such as teachers, farmers, doctors and wholesalers and retailers whose income is medium.

Clean and health products from damages, broken rotten products and the firmness of

delivery date will be adhered to customers will be free to buy and place their orders as from

Monday 8:00am to 6:00pm and on Saturday from 8:00am to 4:00pm.

8
They will be placing their orders 7 days before the delivery date and pay in full amount

through cash 2 days before the delivery date.

2.2 Market Share

The total number of the potential customers approximately in the market is about 10,000.

NESTRE Layers Poultry Farm in Bute shopping center has a larger total number of about

6,000customers,2500customers in Bute where there will be another branch, that is 14

kilometers from Bute shopping center and 1,500 customers. Biafra where there will be

another branch that is 16kilometres from Bute shopping center

The expected total sale per month are shown in the table below;

LOCATION APPROXIMATED MONTHLY SALES

MONTLY QUALITY
Bute shopping center 90 creates 6000 x 190 = 1,140,000

100 birds
Bute shopping center 50 creates 2500 x 90 = 225,000

40 creates
Bute shopping center 20creates 1500 x 50 = 75,000

30creates

2.2.1 COMPETITORS
NESTRE poultry layers with a competitor at the market showing the percentage of
population of the customer in the area the business is located

9
2.2 COMPETITION

Business name Population Market share

NESTRE layer poultry 1340, 000x100= 67%

2,000,000

Mwaniki layer poultry 400,000 x 100= 20%

2,000,000

Lucy layer poultry 260,000 x 100 13%

2,000,000

debbie
mwaniki
lucy

2.3 Competition
Like any other business, it will face competition due to enlarged poultry farming around in

the district. The firm located in Bute shopping center will face stiff competition due to other

two firms. Reduction of prices. if a create of eggs cost at kshs 180 will be sold at kshs 175.

In Bute, there is no much competition, the business also will be located at a strategic

location in urban center. In Biafra the premises are also located in urban center where the

rest of the competitors qualification the rural/ rural areas. The potential customer are of

medium size in relation to my business size. The size of the business will be on the

10
advantages size to the potential customers. The competitors have strength on the awards

they offer to their potential customers but weak in paper advertisement methods.

2.4 ADVERTISEMENTS AND PROMOTION STRATEGY

The proposed business will offer after sales services to customers as a method of promotion.

It will also provide free gifts its potential customers. Likewise, the business will employ

different made of advertisement to create awareness to customers within and without she

organization

These means are:-

1. Radio & TV’s - These are the fastest means of conveying information. They will

portray a positive image of the business its location and products offered.

2. Calendars – At the beginning of the year, it will printing its products and distributing

the calendar to its customers

3. Poster – The business will distribute printed posters all over the town and create

awareness to all customers and non- customers. They will be placed at strategic areas

such as Matatu terminals, hotels restaurant and lodges and market areas.

4. Signboards – There will be enough to portray the name of the enterprises, its location

and some of the produce offered.

The business will also display its products in the market by participating in exhibition and

trade fairs, there might cost about 3,000 per event: whose effectiveness will be measured by

evaluating the number of customers whether additional constant or reduction.

11
2.5 Pricing strategy
The enterprise pricing of products will adjust its prices to be relatively lower than the prices

charged by its competitors. The firm will also be offering discounts to the purchaser who

will be purchasing in bulk or exceeding the desired number of products.

The prices will be determined by market forces to attain an equilibrium price that guarantee

a mutually profitable relationship to both customers and the company. Also in order to attain

competitive edge, the NESTRE Layers Poultry Farm will adopt flexible and profitable

pricing strategy so as to attract and retain customers while attaining the profit. The following

factors will influence prices:-

 The cost of feeds will be influencing the prices of the product. There is due to the

NESTRE objective of the poultry i.e. maximizing profit.

 The competitors’ process charged to customers will also influence prices. There is

where the owner of the business will be comparing her prices from those of the

competitors.

The majority of the customers are middle income earners therefore while pricing the

proprietor will take their income into consideration.

2.6 Sales Tactics

NESTRE Layers Poultry Farm limited intend to use the following sales tactics in order to

reach potential customers.

i. Sales staff will have to provide competent services and seek customers view on the

acceptability of the products.

ii. Ensure early deliveries before competitors arrive in the market. There will motivate

customers and gain good will i.e. buyer – seller relations

12
 iii. Poultry products and chicks is intended to be smart and attractive to the customer’s

eye-appeal.

iv. Free samples and gifts will be offered to regular customers like egg sample

v. Sales commission would be extended to agents with a purpose to motivate them

vi. NESTRE Layers Poultry Farm will also offer products at discussed prices to bulk

buyers and quick sellers would be used.

The above strategies will lead to increased volume of sales hence increase in profit.

The NESTRE Layers Poultry Farm intend to serve the whole of the newly created WAJIR

central district and later will be supplying to the neighboring districts.

2.7 DISTRIBUTION STRATEGY

Distribution of goods will occur in channels. In direct channels, goods will be sold to the

customer directly, especially to the final- users and those who buy in small quantities.

Following indirect channels, sales representatives in the respective areas location and who

sales will sell to retailers, and lack to the final customers .

The transportation of goods will be by means of road by using a pick-up that will be

consuming about 8litres of petrol per day. In a month to number of liters consumer will be 8

x 30 that is equal to 240 liters costing 240 x6 =1440.

The most likely problems that I might encounter in the business is the breakage of eggs that

can be rectified by using the correct and the best creates, and driving carefully without over

spreading that might cause accidents .

13
 CHAPTER THREE

3.0 ORGANISATION AND MANAGEMENT

3.1 ORGANISATION
NESTRE Layers Poultry Farm will be owned by a managing director who is currently a

trainee at Thika school of medical and health sciences in Certificate in Science laboratory.

Directing and advising the personnel

i. Dictating salaries and wages of the staff.

ii. Hiring of advisory unit , workers and

iii. Setting appropriate goals. policies and strategies

iv. Counter check all financial records.

v. Employee, and worker training and promotion of workers will all be done through

her office.

The title of managing director will be:

DIRECTING MANAGER

AGE: 20 YEARS

SALARY: KSH 30,000

There is a line organization where the authority moves from top to the lower level. Its

structure is that of the business as follows:

14
 Manager

Supervisor/charge hand

Driver Salesmen

Operational subordinate

3.2 KEY MANAGEMENT PERSONNEL

Other management personnel / teams which will help me include:

a) 2 supervisors- both having a certificate in Agri-poultry

b) 2 change hands - having a certificate in business administration.

c) 4 technicians – 2 having a certificate in electrical and mechanical engineering

-And 2 other having a graduate certificate in both electrical

and electronics and mechanical science engineering.

d) 3 salesmen – deal with sales of eggs and chicken as well as carrying out

market research.

d) 1 receptionist – will be dealing with public relation.

The 2 supervisors will be to supervise the employees records and compete very quite

reports.

15
The two change hands will be physical supervising the marketing process and reporting

any problem to the supervisor if any.

Salary to be paid to the management team will be has follows.

TITLE SALARY

(i). Manager Ksh 30,000 per month

(ii). 2 supervisor Ksh 25,000 per month

(iii). 4 technicians Certificatet Ksh 15,000 per month

Certificate graduate Ksh 10,000 per month

(iv). 2 charge hands ksh 8,000per month

(v). 8 salesmen Ksh 12,000 per month

(vi). Receptionist Ksh 10,000 per month

3.3 OTHER BUSINESS PERSONNEL

Marline poultries limited will also have other personal , other than the named above ; they

are:

Account clerk

A graduate of CPA IV with 1 year experiencing

She will be dealing with financial matter and preparing financial records. I will pay him her

23,000 per month.

16
6 security guards

All from straight security service. 2 will be in charge of the premises in Bute shopping

center, 2 in charge of the premises in Bute and the rest in Biafra. I will pay them. Ksh

7,000 per month.

2 Drivers

These will be graduates of any of the recognized driving schools with 3 year experience. 1

driver for a pick up that will be transporting the chicken and the eggs and another for

the lorry that will be transporting feeds and any other bulky materials.

3.4 Recruitment, Training and Promotion of Personnel

3.4.1 Recruitment

There will be done by first advertisement, the vacant position by sue of posters posted on

the gate and the notice boards around the towns where the premises are located. The

recruitment is intended to be carried out by panel of supervisors and I as the manager.

3.4.2 Training

The supervisors and the charge hands will be offered annual seminars to be refreshed

on the poultry management and production and to be informed of the new upcoming

technologies.

3.4.3 PROMOTION OF PERSONNEL

After 5years of layering poultry the owner of the business will promote the worker

according to their position. After achieving a lot, taking them to the tour to various places of

17
the country thus will promote their working morale. The business will achieve its goals and

objectives

3.5 REMUNERATION AND INCENTIVE FOR PERSONNEL

3.5.1 Remuneration

The employees are intended to be working 8 hours per day.

The employees’ salaries will be directly proportional to the profits

The higher the profit the additional the salary.

3.5.2 Incentives

The firm will be providing housing and medical covers employees. It will also be

providing Ksh 100 to the drivers and the transport men during transportation.

3.6 LICENSES PERMITS AND BYLAWS

(i) Licenses

The firm will be paying ksh 20,000 per year to review its licenses.

There rule is set u with local authorities.

(ii) Permits

The business will also be paying Ksh 15,000 to allow it to be selling its products to the

customers.

3.7 OTHER SUPPORT SERVICES

The firm will be provided with other support services which include:

3.7.1 Medical services

The firm will be offered medical services to its employees by Kariene general hospital.

18
3.7.2 Legal matters

The firm will be having a lawyer to deal with legal matter from Dr. Gathinji and joint.

3.7.3 Lighting services

The power will be supplied by the Kenya power and lighting company and all

breakdowns to be repaired which have defeated our technicians repair will be done by the

K.P.L C technician

3.7.4 Postal services

Postal services will be offered by Telecom Kenya and Posta.

3.7.5 Banks

The company will open for banking services with co-operative bank branched in

WAJIR , Kenyatta highway , co-operative house.

And equity branch in gurar, huduma highway plaza.

19
CHAPTER FOUR: OPERATION / PRODUCTION

4.1 PLANT FACILITIES AND EQUIPMENT

For smooth and effective running of the business, suitable and adequate resources are
necessary they includes
Housing
Incubator
Feeder
Water pot
Heater
Laying nest
Egg handling nest
Fencing

Item Cost per Item Quantity Total

1. Incubator 600 5 30,000
2. Feeder 10,000 4 40,000
3. Water pot 500 60 30,000
4. Heater 50,000 2 100,000
5. Layer nest 10,000 3 30,000
6. Egg handling nest 5000 4 20,000
7. Fencing 5000 1 50,000

4.1.1 PRODUCT DESIGN AND DEVELOPMENT

The business will offer goods, that is the chicken and the products, that the eggs. First in

first method will be used in the selling of the chicken to ensure old birds are sold first ,

that sold approximately be weighing 4 to 5 kilograms for he cocks and 2 to 3

kilograms for the hens.

20
 Eggs will be checked to ensure that they are of the correct size, shape and weight. The yolk

will be checked to ensure that it is centered, by a means of check box.

OFFICE LAYOUT
MANAGER OFFICE FIRE EXTIDGUISHER

SUPERVISOR
STORE RECEIPTION

TECHNICIAN

ENTRANCE
WATER TANK

DRIVER

WASHROOM
EXIT
WORKERS
QUATER

(i) Lighting i.e electricity.

4.2 PRODUCTION STRATEGY

The activities during the production and the skills required for each activity is given in the

table below.

21
ACTIVITY SKILLS EDUCATION

Supervision Certificate in poultry management Certificate graduate

Driving 3 years experience Driving license from a recognized

School

Receptionist No experience Certificate in front office

Management

Electrical/ 2 years experience Certificate in mechanical, electrical

Electronics/ and electronics Engineering

Mechanic

QUALITY CONTROL

The firm is going to adopt the democracy style or leadership in the business we will be

holding meetings with all employees.

We will set standards and rules that are going to attain our set standards . The penalties will

also be included. The quality set must be available attainable and the managing director

in collaboration with the supervisors will make sure the goals are attained.

22
RECEIPTION OF THE CLIENT

Receiving of the clients will be done by the receptionist who will show and guide by the

receptionist who will show and guide them to the areas of concern according to their

requirements.

SERVICES DELIVERED TO THE CUSTOMERS

The goods and services will be offered to the customers according to the requirements.

4.3 PRODUCTION PROCESS

Equipments, transport materials and means, feeding and watering materials and incubating

machines will be maintained and repaired in good order which will be carried out through

(i) Trained Technicians will be employed

(ii) Correct tools will be provided

(iii) Reception of clients

(iv) Services delivered to the customers

(v) Operating of the business

OPPERATING TIME OF THE BUSINESS

The business work will be starting on Monday as from 8;00 am – 6;00 pm to Saturday from

8;00am – 6;00am.

23
4.4 GOVERMENT REGULATION

Since the business will be operating the municipals councils law it will have some

regulations which will affect in dairy operations

(i) Work permit

There will regard the hours of operating and location of the business. The business will

have such regulation.

(ii) Labor laws

These laws are made to ensure good employer – employee relation. They are contained

in the employment act, showing how the employees are to be treated and their rights in

the organization.

(iii) health regulation

According to health regulation sectors, the business will be issued with a certificate to

ensure it operates in a high hygiene condition and safety of workers, cleanliness will be

expected in new business as much as possible.

(iv) Licensing

24
There will be expected to have its own license load government authority. There will be to

ensure continuity in operation of the business smoothly without disturbance by the

government

(v) Building laws

These are laws which regulate the type of building to be constructed, w here to build it and

what materials to be used in its construction. The laws are usually set by the local authority

and the new business make sure that the bonding customs to all laws and regulations.

(vi) Cost production

The cost of production will be calculated after deducting all the expenses.

The minor factors like competition pull and government pulling will also be taken to the

account.

25
CHAPTER FIVE

5.0 FINANCIAL PLAN

5.1 PRE – OPERATIONAL COST

The business pre –operational cost is intended to be as follows as the business will be
Raised in January 2021
No. Items Ksh
1. Equipment’s and tools 50,000

2. Electrical installation 30,000

3. Water installation 20.000

4. Telephone installation 15,000

5. Fittings and fixtures 20,000

6. Licenses 10,000

7. Permits 5,000

8. Transport 20,000

9. Registration 3,000

10. Total 173,000

26
5.2 WORKING CAPITAL/REQUIREMENTS

The business working capital is intended to be as follows:

Current Assets Year 2020 Year 2021 Year 2022

Cash In Hand KES 500,000 KES 750,000 KES 1,000,000
Cash In Bank KES 3,000,000 KES 4,500,000 KES 5,500,000
Debtors KES 150,000 KES 180,000 KES 200,000
Stock Of good KES 200,000 KES 260,000 KES 300,000
Stock Of Finished Goods KES 300,000 KES 450,000 KES 560,000
Total Current Asset KES 4,150,000 KES 6,140,000 KES 7,560,000

Current Liabilities Year 2020 Year 2021 Year 2022

Creditors KES 500,000 KES 600,000 KES 750,000
Salaries KES 470,000 KES 500,000 KES 550,000
Total Current Liabilities KES 970000 KES 1,100,000 KES 1,300,000

The working capital of the indicated years is as follows:

2020

Working Capital = Current Assets – Current Liabilities

Kshs 4,150,000 – 970,000

=Kshs 3,180,000

2021

Kshs 6140,000 – 1,100,000

= Kshs 5,040,000

2022

27
Kshs 7,560,000 -1,300,000

= Kshs 6, 200,000

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 5.3 ROJECTED PROFORMA CASH FLOW STATEMENT FOR THE YEAR 2020

JAN FEB MAR APR MAY JUNE JULY AUG SEP OCT NOV DEC TOTAL
Cash sales 272,000 4,748,0000 525,560 489,420 491,280 5,508,850 575, 410 486,594 510,970 519,850 499,570 5,791,524 5,191,544
Credit sales
Total sales 372,000 514,800 561,010 524,420 521,280 537,800 730480 820400 705400 771250 875800 1014650 835630
Cost of 5,000 60,000 95500 120000 50500 60700 4400 5600 7000 68000 69000 50500 1286000
goods
Gross profit 322,000 454,800 506010 460420 470780 487220 479910 446594 470970 475850 468570 477150 5522274
Expenses

Salaries & 186,000 186,000 186,000 186,000 186,000 186,000 186,000 186,000 186,000 186,000 186,000 186,000 2232000
wages
Loan 10,000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 1000 1200000
payment
Rent 10,000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 120000
Insurance 1,000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
Electric bill 1,100 1100 3000 4900 2500 2000 2980 4000 3000 2500 3650 3500 36480

Repair and 10000 2000 2500 2500 2500 25002500 2500 2500 27000
maintenance
Other 1,000 1000 2000 2000 1800 1500 1000 1200 1000 1100 1500 1200 16800
expenses
Transport 4,000 3000 5000 3500 3000 4500 2500 2000 2000 3500 4500 3500 41000
Total 235,000 229300 244750 260900 231030 233380 237650 233890 242390 240840 239840 234700 2860170
expenses
Net profit 90,500 225500 261260 199520 239750 243770 251570 246020 204204 230130 236010 233870 266104
Taxation 5% 4,525 11275 13063 9976 1198715 128815 12578.5 12301 10210.2 11506.5 11800.5 11693.5 133105.2

Net profit 85,975 214225 248197 189544 -958965 114955 238971.5 233719 193993.8 218623.5 224209.5 222176.5 252999
after tax

29
PROJECTED PROFORMA CASH FLOW STATEMENT FOR THE YEAR 2021
DETAILS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
Cash sales 300000 40000 450000 450000 300000 250000 300000 400000 350000 450000 400000 450000 4500000
Credit sales 40000 100000 100000 90000 85900 80000 50000 60000 65000 50000 40000 80000 775900
Total Revenue 340000 500000 550000 540000 385900 330000 350000 460000 415000 500000 440000 53000 5275900
Cost of goods sold 100000 200000 250000 90000 160000 110000 115000 200000 150000 250000 200000 300000 2125000
Gross margin 240000 300000 300000 450000 225900 220000 235000 260000 265000 250000 240000 230000 3150900
Expenses
Salaries 178000 178000 178000 178000 178000 178000 178000 178000 178000 178000 178000 178000 2136000
Loan payment 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Transport bills 4000 2000 2500 3000 4500 5000 6000 7000 7200 8000 9500 9000 67700
Electric and water bills 12500 9500 9000 10000 11000 10500 11500 12600 10500 10000 12000 10000 129100
Insurance 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
Advertisement 10000 10000 20000 40000
Maintenance 2000 1000 500 2500 2000 3000 4500 4800 5000 4500 4800 34600
Licenses 8000 8000
Rent 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
Other expenses 6000 5000 2000 3000 6500 6000 6500 7200 8000 7000 9000 7800 72800
Total expenses 224500 210500 218500 200500 208500 202200 211000 215300 214500 214000 217000 215600 2560200
Net profit before tax 15500 89500 81500 249500 17400 17900 24000 44700 50500 36000 23000 14400 590700
Taxation of 16% 2480 14320 13040 39920 2784 2864 3840 7152 8080 5760 3680 2304 94512
net profit after tax 13020 75180 68460 209580 14616 15036 20200 37548 42420 30240 19320 12094 496188
30
 PROJECTED PROFORMA CASH FLOW STATEMENT FOR THE YEAR 2022

DETAILS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL
Cash sales 300000 40000 450000 450000 300000 250000 300000 400000 350000 450000 400000 450000 4500000
Credit sales 40000 100000 100000 90000 85900 80000 50000 60000 65000 50000 40000 80000 775900
Total Revenue 340000 500000 550000 540000 385900 330000 350000 460000 415000 500000 440000 53000 5275900
Cost of goods sold 100000 200000 250000 90000 160000 110000 115000 200000 150000 250000 200000 300000 2125000
Gross margin 240000 300000 300000 450000 225900 220000 235000 260000 265000 250000 240000 230000 3150900
Expenses
Salaries 178000 178000 178000 178000 178000 178000 178000 178000 178000 178000 178000 178000 2136000
Loan payment 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Transport bills 4000 2000 2500 3000 4500 5000 6000 7000 7200 8000 9500 9000 67700
Eletr and water bills 12500 9500 9000 10000 11000 10500 11500 12600 10500 10000 12000 10000 129100
Insurance 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
Advertisement 10000 10000 20000 40000
Mainteinance 2000 1000 500 2500 2000 3000 4500 4800 5000 4500 4800 34600
Licences 8000 8000
Rent 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
Other expenses 6000 5000 2000 3000 6500 6000 6500 7200 8000 7000 9000 7800 72800
Total expenses 224500 210500 218500 200500 208500 202200 211000 215300 214500 214000 217000 215600 2560200
Net profit before tax 15500 89500 81500 249500 17400 17900 24000 44700 50500 36000 23000 14400 590700
Taxation of 16% 2480 14320 13040 39920 2784 2864 3840 7152 8080 5760 3680 2304 94512
net profit after tax 13020 75180 68460 209580 14616 15036 20200 37548 42420 30240 19320 12094 496188

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5.4 BALANCE SSHEET.

NESTRE LAYERS POULTRY FARM LIMITED

PROFOMA BALANCE SSHEET
AS AT 31st DECEMBER 2020
DR CR
Current Assets Current Liabilities
Cash In Hand Kshs 500,000 Salaries And Wages Kshs 1,500,000
Cash At Bank Kshs 3,000,000 Creditors Kshs 500,000
Debtors Kshs 150,000 Total Current Liabilities Kshs 2,000,000
Total Current Assets Kshs 3,650,000

Long Term Assets Long Term Liabilities

Buildings Kshs 3,000,000 Bank Loan Kshs 4,000,000
Machines Kshs 1,500,000 Bank Overdraft Kshs 2,000,000
Motor Vehicles Kshs 1,200,000 Total Term Liabilities Kshs 6,000,000
Furniture And Fittings Kshs 250,000 Total Liabilities Kshs 8,000,000
Total Long Term Liabilities Kshs 5,950,000 Capital Kshs 1,600,000
Total Assets Kshs 9,600,000 Kshs 9,60000

32
 NESTRE LAYERS POULTRY FARM LIMITED

PROFOMA BALANCE SHEET

AS AT 31ST DECEMBER 2021
Dr Cr

Current Assets current liabilities

Cash In Hand Kshs 750,000 Salaries And Wages Kshs 1,750,000

Cash At Bank Kshs 4,500,000 Creditors Kshs 600,000
Debtors Kshs 180,000 Total Current Liabilities Kshs 1,756,00
Total Current Assets Kshs 5,430,000

Long Term Assets Long Term Liabilities

Buildings Kshs 3,000,000. Bank Loan Kshs 5,000,000
Machines Kshs 1,600,000 Bank Overdraft Kshs 1,500,000
Motor Vehicles Kshs 1,200,000 Total Long Liabilities Kshs 6,500,000
Furniture And Fittings Kshs 140,000 Total Liabilities Kshs 8,256,000
Total Long Liabilities Kshs 5,940,000 Capital Kshs 3,114,00
Total Assets KES 11,370,000 Kshs 11,370,000

NESTRE LAYERS POULTRY FARM LIMITED

PROFOMA BALANCE SSHEET
AS AT 31ST DECEMBER 2022
Dr Cr

33
 Current Assets Current Liabilities

Cash In Hand Kshs 1,200,000 Salaries And Wages Kshs 2,000,000

Cash At Bank Kshs 5,500,000 Creditors Kshs 750,000
Debtors Kshs 200,000 Total Current Liabilities Kshs 2,750,000
Total Current Assets Kshs 6,900,000

Long Term Liabilities Long Term Liabilities

Buildings Kshs 3,000,000 Bank Loan Kshs 5,000,000
Machines Kshs 1,500,000 Bank Overdraft Kshs 3,500,000
Motor Vehicles Kshs 1,600,000 Total long liabilities Kshs 8,500,000
Furniture And Fittings Kshs 140,000 Total Liabilities Kshs 11,250,000
Total Liabilities Kshs 6,240,000 capital Kshs 1,890,000
Total Assets Kshs 13,140,000 Kshs

5.5 BREAK-EVEN ANALYSIS

i. Total contribution margin = sales – variable costs

= 3,200,000-27000
=3,093,000
ii. Contribution margin percentage = contribution margin / sales *100

=250,000,/3,200,000x100
=7.8%
iii. Total fixed cost = operating expenses for one year

= total fixed cost = ksh1,068,800

Breakeven level of sales in shillings

Breakeven level cost = total fixed cost/contribution margin%

= 1,068,800/7.8%
=137025.641

5.6 EXPECTED PROFITABILITY RATIOS

Return on Net profit x 100 1881504 x 100 657528.2 x 8724768 x 100

sale = 18.3% = 43.7%
sale ratio 100
1022890 =42.5% 1995950
15481880

Investment Sales equity 1028390 1548180 1995950

= 252 = 1.6 = 1.1
turn over
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ratio 408895.8 995778.8 182057460

Return on Net profit x 100 188150.4 x 100 657528.2 x 100 872476.80 x 100
Gross profit = 23% = =
equity
818080
ration 49.2% 51.01%
1336400 1586100
Return on Net profit x 100 188150.4 x 100 65728.2 x 100 872476.8 x 100
= 29.18% = = 42.7%
assets ratio Total assets
6447354 2044805.4
53.4%
1232175.6
Current Current assets 543540.4 1133240.8 1946130
Current = 69.3 = 41.4 = 54.8
ration
liabilities 7839.6 7839.80 355408

5.7 DESIRED FINANCING

Pre-operational cost 236,510
Working capital 470,000
Fixed assets 185,510
Other assets 307,980
Total 1,200,000

5.8 DESIRED CAPITALIZATION

Own contribution 50,000
Borrowing 200,000
Total investment 250,000

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