MWAITA'S WORKSHOP FABRICATION

MESHACK P. MWAITA

A BUSINESS PLAN SUBMITTED TO THE SCHOOL OF BUSINESS IN PARTIAL

FULLFILLMENT FOR THE AWARD OF BACHELORS DEGREE IN COMMERCE AT
GRETSA UNIVERSITY-THIKA.

JULY, 2019

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 DECLARATION
I declare that this business plan is my original work and has never been submitted in any other
institution for Marking.

Signature…………………………… Date ………………………

Name............................................Reg number.........................

APPROVED BY SUPERVISOR

I confirm that this business planwas carried out by the candidate under my supervision on behalf

of Gretsa University

Signature........................................................ Date.................................

Name................................................................

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 DEDICATION.
I dedicate this work to my mentors all those who advised me vividly to have confidence and
reach where I have managed. I couldn’t have managed this far without the support of my parents
who strengthened me and I adhered to their advice.

My lecturers, relatives and friends, thanks for making me brave and up lifting me to where I am
today.

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 ACKNOWLEDGEMENT.
This goes to all who contributed generously and supported me in coming up with this business
plan. It Is a fact that I couldn’t have manage all this without your sincere support God bless you
abundantly and that all goes well with your businesses as well with your families.

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 TABLE OF CONTENTS
DECLARATION.............................................................................................................................2

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

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

TABLE OF CONTENTS................................................................................................................5

CHAPTER ONE: BUSINESS DESCRIPTION..............................................................................6

1.1 Business owners profile.............................................................................................................6

1.2Business name............................................................................................................................6

1.2.1 Vision statement.....................................................................................................................6

1.2.1 Mission statement...................................................................................................................6

1.3 Core values................................................................................................................................6

1.4 Objectives of the business.........................................................................................................7

1.5 EXECUTIVE SUMMARY.......................................................................................................7

1.5.1 Business description...............................................................................................................7

1.5.2 Marketing plan........................................................................................................................7

1.5.3 Organization plan....................................................................................................................8

1.5.4 Capital invested......................................................................................................................8

1.6 Introductions..............................................................................................................................8

1.7 Name of the business.................................................................................................................8

1.8 Business location and address...................................................................................................9

1.9 Form of ownership.....................................................................................................................9

1.10 Types of business.....................................................................................................................9

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1.11 The product/service.................................................................................................................9

1.12Justification of the opportunity.................................................................................................9

1.13 Industry....................................................................................................................................9

1.14 Business goals........................................................................................................................10

1.14.1 Short term goals..................................................................................................................10

1.14.2 Long term goals..................................................................................................................10

1.15 Entry growth and strategies...................................................................................................10

1.15.1 Entry strategy......................................................................................................................10

1.15.2 Growth strategy..................................................................................................................10

CHAPTER TWO...........................................................................................................................11

MARKETING PLAN....................................................................................................................11

2.1 Customers................................................................................................................................11

2.2 The market size........................................................................................................................11

2.3 The marketing strategy............................................................................................................11

2.3.1 Pricing strategy.....................................................................................................................12

2.3.2 Advertising strategy..............................................................................................................12

2.3.3 Distribution strategy.............................................................................................................12

2.4 Competition.............................................................................................................................13

2.5 S.W.O.T Analysis table...........................................................................................................13

2.6 Market share............................................................................................................................14

2.7 Sales tactics..............................................................................................................................15

2.7.1 Sales men..............................................................................................................................15

2.7.2 after sales services................................................................................................................15

2.7.3 Direct selling from the shop.................................................................................................15

CHAPTER THREE.......................................................................................................................16

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ORGANIZATIONAL PLANS......................................................................................................16

3.0 Organizational/ management plans..........................................................................................16

3.1 Organizational structure...........................................................................................................16

3.2 Other personnel........................................................................................................................17

3.2.1 Receiving/ issuing clerks......................................................................................................17

3.2.2 Supervisors...........................................................................................................................17

3.2.3 Salesman/ distributing staff..................................................................................................17

3.3 Recruitment training and promotion........................................................................................17

3.4 Remuneration and investment incentives................................................................................17

3.5 The licenses and the permits....................................................................................................18

3.6 Support services.......................................................................................................................18

3.6.1Banking services....................................................................................................................18

3.6.2 Security.................................................................................................................................18

3.6.3 Insurance...............................................................................................................................19

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

PRODUCTION/OPERATIONS PLAN........................................................................................20

4.0 Production................................................................................................................................20

4.1 Production/operational strategy...............................................................................................20

4.2 Production in-put facilities......................................................................................................20

4.3 The quality assurance..............................................................................................................21

4.4 Product packaging...................................................................................................................21

4.5 Premises layout........................................................................................................................22

4.6 Government regulations...........................................................................................................23

4.6.1 Taxes from the government..................................................................................................23

4.6.2 Licenses................................................................................................................................23

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CHAPTER FIVE...........................................................................................................................24

FINANCIAL STATEMENTS.......................................................................................................24

5.0 Financial plan...........................................................................................................................24

5.1 Preliminary costs.....................................................................................................................24

5.2 Working capital requirements..................................................................................................24

5.3 Profoma income statement......................................................................................................25

5.4 Profoma balance sheet.............................................................................................................25

5.5 Projected cash flow statement.................................................................................................27

5.6 Break-even analysis.................................................................................................................28

Fixed costs.....................................................................................................................................28

5.7 Desired financing.....................................................................................................................30

5.8 Proposed capitalization............................................................................................................30

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 CHAPTER ONE: BUSINESS DESCRIPTION.

1.1 Business owners profile.

The sponser or owner of the business shall be Samue Muthui .The individual is a graduate holder
in degree school of business in Gretsa university-The owner of the business also is an alumni of
ziwani boys high school in nyahururu whereby he was able to attain a B plain in his Kenya
certificate of secondary education(K.C.S.E) and also persuaded his primary level education in
Fountain Junior Academy whereby he was able to attain an average performance of 350 marks in
the Kenya certificate of primary education.

1.2Business name.

The approved business name is soma because it consists of two names of the business owner and
also because it is simple and much easier to understand by most of the traders who would wish to
transact any business activity within the vicinity of the business. The business will be located
near Kasmatt supermarket. The address of the business will be P.O Box 421 Nairobi.

1.2.1 Vision statement

To be the market leader in the provision of wholesale products and services within and around
the regions of Nairobi & central Kenya region.

1.2.1 Mission statement

To create efficiency by the provision of both wholesale and retail commodities to both the local
and the longer logistical distributers and issue of products and services of quality and quantity
standards.

To be a market leader by following cost leadership strategy, environmental friendly capacity

expansion and following the business core values.

1.3 Core values

1. Affordability

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 2. Professionalism
3. Market innovation
4. Qualified staff members

1.4 Objectives of the business

The objectives of the business shall be as follows:

a. Achieve financial stability and sustainability

b. Achieve a larger market share.

c. Provision of quality customer relationship service.

1.5 EXECUTIVE SUMMARY.

1.5.1 Business description

Soma wholesalers will be a business venture under which its main objective is to venture into the
wholesale business with its core principle philosophy of issuing out of affordable and precise
products to its respect target customers. The business will in turn facilitate most of its clients
with products of both retail and wholesale and also facilitate them with transportation services
towards various transactional activities conducted between the business and the individual.

1.5.2Marketing plan.
Market: Despite the logistical considerations of the business start up the business may face a
quite challenging face in the fact that there are other market oriented and experienced
wholesalers who are able to progressively venture the market and dominate a large market share.
Alternatively the business shall therefore enter a promotional pricing strategy of charging
products less expensively as compared to other wholesalers in the aspect of creating out a market
gap for various clients to get attracted towards the business. The other aspect of customer

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relationship management shall also be of substance significance towards the organization in
retaining its respective customers.

Target market: The customers of the business shall mainly be drawn out from the logistical
estates that are mainly located near the respective business.

1.5.3 Organization plan.

Manager

The manager will mainly oversee the various organizational managerial functions which will be
the aspect of planning, organizing, staffing, directing & controlling of the business

Salespersons

The sales persons within the business will be in charge of ensuring that the products and services
within the wholesale business are administered correctively to the right clients in the business.

1.5.4 Capital invested

The business is a partnership business and the required amount to be contributed shall be
250,000 whereby each partner shall contribute partially half of the capital that is necessary for
the business.

1.6 Introductions.
Soma wholesalers shall be a business venture which shall be considerably a wholesale business
which is able to offer various products in wholesale towards its respective clients.

1.7 Name of the business

The approved business name is soma because it consists of two names of the business owner and
also because it is simple and much easier to understand by most of the traders who would wish to
transact any business activity within the vicinity of the business. The business will be located
near Kasmatt supermarket. The address of the business will be P.O Box 421 Nairobi..

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1.8 Business location and address.
The business is located at kasarani, 2 kilometers away from kasarani police station opposite
malvers supermarket. The address of the business is P.O box 142 Nairobi.

1.9 Form of ownership

The form of the business will mainly be a partnership form of a business. The main reason why I
chose the partnership form of business is due to the fact that the starting capital shall be shared
between the respective business holders.

1.10 Types of business

The business will mainly be a general wholesale which issues the provision of rice, sugar & flour
products to its respective customers.

1.11 The product/service.

One of the products produced to be sold in large quantity e.gMumias sugar, shape is regular,
parked in a white sack and weighing 50 kg and very long lasting. It’s the best Quality and every
product bought at a wholesale price of sugar thus attracting more of its customers. Its uniqueness
is that prices will be standard not so high than the other shops. The benefits are that there is 10%
discount for each and every product sold.

1.12Justification of the opportunity

The opportunity in the business is that more customers avail themselves in the business thus the
wholesale are earning a lot of profit and making it possible to produce good quality of goods.

1.13 Industry.
The type of industry will be to offer services to its consumers in large quantity of goods and then
later they break the goods into smaller quantities. The size of the business is medium because it
got its goods from other manufacturing industries. The business is competitive because there
other small and medium scale industries that are located in the areas.

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1.14 Business goals.

1.14.1 Short term goals

Its anticipated within months the business would have attracted customers from neighboring
estates and thus the business will curb the issue of competition with other wholesalers in the
region.

1.14.2 Long term goals

Within one year the business would have opened new branches across the estates.
Advertisements will be done through road shows, marketing and the media e.g. radio, TV and
social media. It will provide employment to people thus rising their living standard.

1.15 Entry growth and strategies.

1.15.1 Entry strategy

The price of the product offered will be fairly to both the middle class and the high class. The
product offered will be of high quality thus making it possible to market the products around the
towns.

1.15.2 Growth strategy.

This will make it possible to open other new branches across the country thus increasing
transportation. New trucks to transport goods from one place to another also expanding the
whole sale.

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 CHAPTER TWO.
MARKETING PLAN.

2.1 Customers.
The business is located 5kilometres from kasarani sports stadium. Most of the customers are
retailers because they purchase goods in large quantity and break them into bulk in order for
them to begin selling the commodities at hand.

The highest percentage that comes to buy the goods are men while others who also frequently
purchase the goods are women. In market intelligence survey most of the people who often
purchase these commodities are Christians and are able to pay the goods purchased on time. The
goods purchased are mostly purchased in the morning.

2.2 The market size

The people who require the products are many because the products does not have a longer
period of time to stay before they are frequently purchased. The people/customers are e.g. the
small retailers and the other people who use them for personal use.

2.3 The marketing strategy

The marketing strategies to use are producing brochures that mainly have the various printed and
visible colors’ of brochures that are recorded in each and every product offered and assigning
marketers to execute the marketing force of the new products of the business. Introduction of
new variety of products will also be an essential factor in the establishment of new products in
the business.

The product quantity is high, the price is low and the delivery is quick. The products will also be
established regionally before anticipating undertaking the promotion of new products nationally
and internationally.

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2.3.1 Pricing strategy.
Prices will be slightly much lower than that of the competitors thus reducing the number of
competitors in the market industry at large.
A 5% discount shall be offered to each and every product thus determining the final phase of
price.
The cost of the product will also be used to determine the prices of the customers at large.

2.3.2 Advertising strategy.

The different advertising strategies will include the following:
1. Promotions
2. Magazines
3. Flyers
4. Marketers.
This will be regularly conducted through the media as well as trade shows so as to reach more
customers.

2.3.3 Distribution strategy.

The channel of distribution in the business shall mainly constitute from the following starting
point of view to the following aspect at hand respectively.
1. Producers
2. Wholesalers
3. Retailers
4. Customers.
The services offered in the business shall mainly constitute of the following transportation and
logistical services such as motorbike transportation services for free.

2.4 Competition.
The business has two competitors which are Husuu wholesalers and Kingpan wholesalers. The
first enterprise has a selected high quality or good products that initiate high prices for each of

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this item. For the business enterprise shall constitute of standard level goods that shall favor both
the less fortunate and the fortunate and also trasportational and logistical services.

2.5 S.W.O.T Analysis table.

Compe
titors Strength Weakness Opportunities Threats.
name
Soma a. High a. Insecurity a. Accessibility Insecurity
wholesa quality challenges of
ler products infrastructural Government
b. Standard developments legislations and
prices policies
b. Accessibility
c. Highly of market Electricity charges
trained infrastructure
staff
King a. High a. Insecurity a. Near Government
pan quality challenges infrastructural
wholesa products development Insecurity
ler b. Poor regions
b. Trained services. Electricity charged
staff b. Improved
transport and infrastructure
communicatio
n systems.
Husuu a. High a. Insecurity a. Near the
wholesa quality challenges developed a. Insecurity
lers products trasportational
b. Poor region b. Government
services policy
b. Improved

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 c. Unstable transportation c. infrastructur
prices. systems. e

2.6 Market share.

THE MARKET SHARE

Husuu
15%

KING PAN
25% SOMA
60%

2.7 Sales tactics.

A 10% discount will be offered for each and every good purchased in the wholesale shops. Also
there will be price reduction and the sales men will be used to make more sales after sales
services offered for free.

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2.7.1 Sales men.
The business will involve sales men to sale the products to the customers. They will be travelling
to meet the customers who will not be able to come to the business location thus ensuring that
more customers are reached.

2.7.2 after sales services.

The customers who they buy in large quantities will be provided with the after sales service and
their goods delivered to their destination.

2.7.3 Direct selling from the shop.

Customers will be attracted directly from the shop counters or other outlets.

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 CHAPTER THREE
ORGANIZATIONAL PLANS.

3.0 Organizational/ management plans.

It’s essentially of significance substance that there should be developed policies for the staff and
Human resource management present the job description of the employee evaluation plans,
training plans and compensation plans for the employees.

3.1 Organizational structure.

The organizational structure of soma wholesalers will be as follows:

Director

Storage manager Production Sales manager

manager

Receivin Issuing Superviso Superviso Sales Distribution

g Clark r r men manager
clerk

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3.2 Other personnel.
The duties of the distributing personnel’s are to freely goods from the store to the
consumer/customer and also he is the one responsible to offer free delivery services to the other
customers.

3.2.1 Receiving/ issuing clerks.

The duties that they undertake are receiving goods in the business recording and issuing of the
receipts.

They also partake in the storage services and offer salaries of 15,000 per month.

3.2.2 Supervisors.
Their duties are to make sure that the employees are working as instructed and common making
sure that the organization is on the track towards its common objectives.

3.2.3 Salesman/ distributing staff.

Their duties are to make sure the salaries are not delayed and given on time to encourage the
employees to continue working.

3.3 Recruitment training and promotion.

The wholesale will recruit its personnel and further take them for a training for them to be more
efficient.

This will be done before issuing them duties .The business will also introduce training camps for
the business employees.

3.4 Remuneration and investment incentives.

Job title Salary Transport Food allowance Sub-total
allowances
Director 100,000 50,000 30,000 180,000
Manager(2) 160,000 20,000 - 20,000
Supervisor 150,000 15,000 - 15,000
Clerks(3) 60,000 - - 60,000

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 Salesman 20,000 10,000 4,000 34,000
Total Ksh.619,000

3.5 The licenses and the permits.

They will mainly include:

a. City council
b. Kenya revenue Authority.
c. Business licensees& permits.
d. Ministry of health certificate.

Soma wholesalers will acquire its licenses from Kasarani and it will pay the taxes to the Kenya
revenue authority.

3.6 Support services.

For the attractive operations of the business, the company will require the following support
services.

3.6.1Banking services.
The company’s bank will be Equity bank number: 03501427482001

The address of the financial institution will be 101-00142466 Nairobi.

3.6.2 Security
Security in charge will be Ivory, Kasarani branch and address 1-042647449

3.6.3 Insurance.
The insurance company that will be in charge of the business enterprise shall be Gateway
insurance company, kasarani branch address number 46-2561 430

CHAPTER FOUR:PRODUCTION/OPERATIONS PLAN.

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4.0 Production.
The business will be located in Nairobi town where raw materials are readily available. The well
serviced good roads will also reduce the cost of transportation and this will make it necessary to
provide labor both to the skilled and semi-skilled workers in the area.

The business will give back to the community by supporting the society members who are needy
as well as building for them social facilities e.g. Toilets, Garbage pits & health centered
facilities.

4.1 Production/operational strategy.

ITEMS/ASSET UNIT COSTS NO. OF UNITS TOTAL SUPPLIER
S
Machines 20,000 2 400,000 Chaina
Moto vehicle 500,000 1 500,000 Toyota
Computer 25,000 4 100,000 Chaina
Buildings 1,500,000 1 1,500,000 Kenya M.C

Total 2,500,000

4.2 Production in-put facilities.

ITEM COST/UNIT QUANTITY TOTAL
Machines 20,000 2kg 40,000
Labor 400 20kg 8,000
Sugar 200 50kg 10,000
Wheat/flour 200 20kg 4,000
Total Ksh 62,000

4.3 The quality assurance.

Since Soma wholesalers is targeting people from all statutes. It will provide high quality and
affordable maize flour at the store. The low materials will be wheat and sugar which will be
obtained directly from the farmer.

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The business will leave with its wholesalers and retailers to inform the customers about the
products both locally and internationally.

4.4 Product packaging.

The product packaging materials will be contained in sacks which will be white in colour and the
brand name will be Soma Wholesalers.

The name of the company will be branded on the product. The company will provide unique
packaging and selling or the goods compared to the competitors.

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 4.5 Premises layout.
Items list room

4.5

Store 1

5
Cash
payments offices 4 3

1 2
reception
Machines
room

Store 2

Parking entry

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4.6 Government regulations.
All the rules and regulations will be adhered to by the business. It will enhance the regularity of
the business and also help the business to interact with international traders. It will be done in the
following ways:

4.6.1 Taxes from the government.

It will pay taxes at a rate of 10% of the profits earned to K.R.A (Kenya revenue authority)

4.6.2 Licenses.
It will pay ksh, to the city council of Nairobi as the licence in order to ensure the business run
smoothly without the interruption of the City council.

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CHAPTER FIVE.

FINANCIAL STATEMENTS.

5.0 Financial plan.

The financial plan includes the following costs:

a. Preliminary costs.
b. Working capital requirements.
c. Premium income statement.
d. Performa balance sheet
e. Projected cash flow statement.
f. Expected profitability ratio
g. Proposed capitalization.
h. Desired financing.

5.1 Preliminary costs.

ITEM COST
Premises Ksh 15,000
licenses Ksh 10,000
electricity Ksh 15,000
Total 40,000

5.2 Working capital requirements.

This includes the capital requirements for the first 3 years of operations:

Item Year 1 Year 2 Year 3

stock 200,000 300,000 200,000
Debtors 100,000 120,000 100,000
Cash in hand 50,000 70,000 200,000
Cash at bank 200,000 110,000 400,000
Total 550,000 600,000 950,000

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5.3 Profoma income statement.
This shows the profit/loss made by the business. It is prepared for 3 years for the comparison
purposes.
Item Year 1 Year 2 Year 3
Sales 2,900,000 3,400,000 3,440,000
Less cost of sales 400,000 430,000 460,000
Gross profit 2500000 2,970,000 2,980,000
Less expenses
Water expenses 200,000 270,000 300,000
Salaries 500,000 700,000 900,000
transport 10,000 20,000 -
telephone 20,000 10,000 -
cleaning 70,000 30,000 -
advertising 500,000 - -
Total expense 1,300,000 1,050,000 1,200,000
Net profit 1,200,000 1,920,000 1,780,000
Less premises of tax 10/100 *1200000

120,000 192,000 178,000

Net profit after tax 1,080,000 1,728,000 1,602,000

Net profit after tax=net profit-provisional tax

5.4 Profoma balance sheet.

Item Year 1 Year 2 Year 3
Fixed assets
furniture 120,000 100,000 1,500,000
vehicles 800,000 700,000 900,000
Total fixed assets 450,000 1,500,000 350,000
1,400,000 2,300,000 2,750,000
Current assets
Cash in bank 200,000 100,000 300,000
Cash at bank 50,000 50,000 20,000
Stock 100,000 150,000 80,000
Debtors 250,000 550,000 -
Total current assets 600,000 2,260,000 400,000

Current liabilities

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Bank over draft 100,000 200,000
Creditors 1,400,000 250,000
Total current 450,000
liabilities
1,700,000 1,200,000 2,700,000

Financed by 492,000 1,098,000

Capital 620,000 1,602,000
Net profit 1,080,000 1,728,000 1,602,000

Add net profit

Less drawings 1,700,000 2,220,000 2,700,000

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5.5 Projected cash flow statement.
Item jan feb mar apr may jun jul aug sep oct nov dec total
Cash
in flow
Sales 241 241 250, 241 130 241 260 270, 250, 1691 260, 29,00
,66 666 000 666 00 666 ,00 000 000 670 000 ,0000
6 0

Debto 220 300 350, 200 250, 250, 241 350 200, 100, 197,0
rs ,00 ,00 000 00 000 000 666 ,00 000 000 000
collect 0 0 0
ion
Total 461 541 350, 441 491, 241 350 200, 100, 1,69 487,0
cash in 666 ,66 000 666 666 666 ,00 000 000 1670 000
flow 6 0
cash
outflo
w
Water 15, 20, 10,0 20,0 13,0 25,0 20,0 10, 15,0 20,0 10,0 20,0 200,0
& 000 000 00 00 00 00 00 000 00 00 00 00 00
electri
city
Salary 42, 42, 42,0 42,0 42,0 42,0 42,0 42, 42,0 42,0 42,0 38,0 500,0
& 000 000 00 00 00 00 000 000 000 00 00 00 00
wages
transp 830 900 730 850 950 100 800 700 600 550 750 - 10,00
ort 0 0
Cleani 6,0 5,0 600 730 850 900 700 750 650 550 8000 - 70,00
ng 00 00 0 0 0 0 0 0 0 0 0
teleph 17, 150 140 150 200 200 300 250 200 - - 129 20,00
one 000 0 0 0 0 0 0 0 0 00 0
advert 125 - - 125, - - - 125 - 680 - 125 500,0
isemen ,00 000 ,00 50 00 00

30
t 0 0
Total 93, 694 601 843 690 74,0 728 521 124, 319 22,9 834
outflo 330 00 30 50 00 00 000 00 600 50 50 00
w
Net 368 472 289 357 690 417 168 297 75,4 260 1668 834
cash 336 266 830 316 00 666 866 900 00 395 7020 00
flow 0
Cumul 368 840 113 148 155 107 214 244 259 4292 437
ative 336 ,60 045 776 676 443 330 200 200 670 607
cash 2 2 8 8 4 0 0 0
flow

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5.6 Break-even analysis.

Fixed costs.
ITEM COST
Rent 240,000
Licenses 10,000
Insurance 100,000
Total 350,000

1. Sales=Fixed cost + Variable cost

Variable cost (Contribution margin)

Total contribution margin

2,900,000=350,000+ (V.C)

V.C=2,900,000-350,000

=2,550,000

2. Contribution margin percentage (C.M)/V.C

C.M
/ *100

SALES

2,550,000
*100
2,900,000

=88%
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 3. At break-even point contributed per unit is given by
C.P.U.R = Fixed cost 350,000
/
2,550,000
=0.14 unit
/Contribution margin

4. Gross profit as percentage of sales.

G.P/S*100
2,500,000
*100
2,900,000
=86.2%
5. Net profit as percentage of sales.
N.P/S*100
1,080,000
*100=37%
2,900,000

6. Returns on investments.
.Net profit after tax
*100
Total investments

1,080,000
*100=108%
1,000,000

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5.7 Desired financing.
ITEM AMOUNT KSH
Pre-operational cost 100,000
Working capital 500,000
Fixed costs 400,000
Total 1,000,000

5.8 Proposed capitalization.

Total investment 1,000,000
Owners contributions 300,000
Borrowed 700,000
Bank loan contribution 1000,000

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