SAWATAMU GROCERY

Presented By:
SARAH WANJIRU MUNGAI

Index Number:
4060060395

PRESENTED TO: Entrepreneurship Development Department Of Kenya Technical Trainers

College.

Submitted To: Kenya National Examinational Council.

In partial fulfillment of requirement for award of Diploma in Information Communication

Technology.

© = July 2019
TABLE OF CONTENTS
Declaration.................................................................................................................................................iv
Acknowledgement.......................................................................................................................................v
Chapter 1: Executive summary....................................................................................................................1
1.1Business description...........................................................................................................................1
1.2 Marketing plan..................................................................................................................................1
1.3 Organizational plan............................................................................................................................1
1.4 Operational plan................................................................................................................................1
1.5 Financial plan.....................................................................................................................................2
Chapter 2: Business Description..................................................................................................................3
2.1Business name................................................................................................................................3
2.2 Business location and address.......................................................................................................3
2.3 Form of business ownership..........................................................................................................5
2.4 Type of ownership.............................................................................................................................5
2.5 Products.........................................................................................................................................5
2.6 Justification of the business opportunity...........................................................................................6
2.7 The industry.......................................................................................................................................6
2.8.1 Goals...........................................................................................................................................6
2.8.2 Objectives...................................................................................................................................6
2.9 Entry and growth strategy.............................................................................................................6
Chapter 3: Market Share.............................................................................................................................7
3.1 Potential customers.......................................................................................................................7
Market share.......................................................................................................................................7
3.3 Competition...................................................................................................................................7
3.4 Pricing Strategy..............................................................................................................................9
3.5 Sales tactics....................................................................................................................................9
3.6 Advertising and promotional strategy...........................................................................................9
3.7 Distribution strategy....................................................................................................................10
Chapter 4: Organizational Plan..................................................................................................................11
4.1 Business Manager........................................................................................................................11
4.1.1 Organizational structure...........................................................................................................11
4.2 Key management personnel........................................................................................................12
 4.2.1 Store keeper.............................................................................................................................12
4.2.2 Transporter...............................................................................................................................12
4.3 Recruitment, Training and Promotion.........................................................................................13
4.3.1 Recruitment..............................................................................................................................13
4.3.2 Training.....................................................................................................................................13
4.3.3 Promotions...............................................................................................................................13
4.4 Remuneration and Incentives......................................................................................................13
4.5 Licences, Permits and By-laws.....................................................................................................13
4.5.1 Licenses.....................................................................................................................................13
4.5.2 Permits......................................................................................................................................14
4.5.3 By-laws......................................................................................................................................14
4.6 Support service and staff.............................................................................................................14
Chapter5: Operational Plan.......................................................................................................................15
5.1 Product design and development................................................................................................15
5.2 Production facilities and capacity................................................................................................15
5.5 Premise Layout............................................................................................................................16
5.4 Other equipment.........................................................................................................................16
5.5 Production strategy.....................................................................................................................16
5.5.1 Labour requirement..................................................................................................................17
5.5.2 Production expenses.................................................................................................................17
5.6 Production process......................................................................................................................17
5.7 Government Regulations.............................................................................................................17
Chapter 6: Financial Plan...........................................................................................................................18
6.1 Pre- operation cost......................................................................................................................18
6.2 Working capital requirement.......................................................................................................18
6.3 Profoma trading, profit and loss statement.................................................................................19
Balance sheet....................................................................................................................................20
Appendix............................................................................................................................................22
Declaration
I declare that this business plan as my personal work. It is my original and authentic work and it
has not been copied, reproduced or duplicated from any other source.

_____________________ ___________________
Sarah Wanjiru Mungai Date

_____________________ _______________________
Supervisor Date
Acknowledgement
I acknowledge and extend my gratitude to my Lecture Mr. Kambuni, my parents and friends for
their encouragement and assistance towards preparation and completion of this business plan.
I also acknowledge Almighty God for giving me strength to reach this far despite numerous
challenges during the compilation of this business plan.
Chapter 1

Executive summary.

1.1Business description
The sole proprietor of the proposed business is Sarah Wanjiru Mungai. The name of the
proposed business is Sawatamu Grocery. The proposed business will start its operation on 3 rd
January 2021. It will be located in Maua market in Meru county. The proposed business will be
dealing with grain products such as cereals and legumes.
The business will offer high quality products and fresh from the producers. The business will be
serving Maua community and others.

1.2 Marketing plan

The potential customers of the business will be local people and visitors within the market with
demand for the products.
The entrepreneur will use advertising and polite words to reach her customers.
Competitors having poor management and poor location as compared to Sawatamu Grocery,
the entrepreneur will best serve the market.

1.3 Organizational plan.

The sole-proprietor will be the Manager of the business. The business will be served best by
three workers: the manager, store keeper and the transporter.
The owner will remunerate her workers by giving them allowances apart from the basic salary,
payment on time and also yearly bonuses.
The support service for the business will be Equity bank.

1.4 Operational plan

The business will require a weighing balance, counter book, calculator and stock as the basic
facilities required for its operation.
The business will operate on first come first served basis. The owner will acquire license and
permits from the relevant government authorities.
Sawatamu Grocery will be registered on 2nd January 2021.
The main challenges that will face the business will be competition and seasonal changes that
may affect the pricing of products.

1
1.5 Financial plan.
The business will require ksh100, 000 to start and develop. Loan from Equity bank will be paid
at the interest of 10%.
The startup capital will be used to purchase stock and machinery as well as designing and
maintaining the business.
The net profit for 2021 will be ksh 29,920 and 2022 will be ksh30,000
The business will be successful for it has increase of the net profit for the two years.

2
Chapter 2

BUSINESS DESCRIPTION

2.1Business name
The name of the entrepreneur is Sarah Wanjiru Mungai. The name of the proposed business
will be Sawatamu Grocery Store. The business name is considered suitable for it is easy to
pronounce and suggestive on the name of the entrepreneur and the products that will dealt
with.
The entrepreneur of the business lives in Kilemi village, Maua market, in Meru County. The
owner of the business was born on 3 June 1997.
The owner of the business studied Nairu primary school and attained three hundred and sixty
three marks. She later joined Mutitu girls’ secondary school and attained B-(minus) in 2017.
Currently, she is faring her studies in Kenya Technical Trainers College (KTTC), pursuing a
Diploma in Information Communication and Technology (ICT).
In 2018, the entrepreneur had a work experience for she worked in a bigger grocery in Meru
town that provided her with her skills to manage the activities in a grocery. That’s, preservation,
supply and sales.
The proposed business will start its operation on 3rd January 2021.

2.2 Business location and address

The proposed business will be located at Maua Market, in a building located at the center of
the market that is favorable to the products sold.
The following are the factors that the entrepreneur considered for locating the proposed
business;
i. The location nearness to distributors of the raw materials –Sawatamu grocery will be
located near Katana Agriculture center which will reduce transportation cost
ii. Security- the business will be well secured for it is near the police station and the chief’s
camp.
iii. Availability of electricity- the area where the proposed business will be located is well
supplied with electricity which will facilitate to open the business even at late hours.
iv. Nearness to customers- Maua market is a busy town with many people and
administration center; hence the population favors the business with more customers.

3
 v. Infrastructure- The business is located near well constructed road and also
communication is efficient.

The address of the of the business will be;

SAWATAMU GROCERY STORE
P.O BOX 411
89898 MERU.
CONTACT; 0710174764

MERU-MAUA ROAD

POSHOMILL
MAUA STAGE
KATANA AGRICUTURAL

FARM

SAWATAMU
GROCERY
MAUA
MAUA ADMINISTRATION
EDUCATIONAL CENTER
CENTER

Police post chiefs camp

pp

MAUA MEDICAL
CENTER

Way to Kangeta

4
2.3 Form of business ownership

The proposed business will be a sole proprietorship. The owner of the business considered it
suitable because;
i. There is less capital required to start and run the business.
ii. The business will be easy to manage due to quick decision making.
iii. There will be few legal formalities of starting and running a business.
The owner’s source of finance will be;
Personal saving of 20000
Relatives 50000
Friends40000
Loan 40000
The capital will help the owner of the business to properly run and manage the proposed
business.

2.4 Type of ownership

The major activity of the business will deal with both retail and wholesale supply of grain
products from the grocery.

2.5 Products
The proposed business will deal with products such as; legumes and cereals. Examples of search
products are; maize, beans, rice, sorghum, millet, green grams, black beans of various varieties.
The products will be of high quality and quantity standard goods.
Modern methods of storage will be employed in storing and perseveration of the gains that t
will discourage pests and diseases like Aflatoxin.
Sawatamu business will offer free delivery services to only wholesale customers and others
who will buy goods above 20kilograms and should within 10km2 from the location of the
business. Proper packaging will be employed so as to reduce risk from pest side and diseases.

5
2.6 Justification of the business opportunity.
Sawatamu grocery will be of greater value for local and to the economy. The following are the
advantages that the proposed business will impact; Creation of self - employment and others,
improving living standards for the workers, economic growth and there will be proper
utilization of raw materials from the local distributers.

2.7 The industry

Sawatamu grocery will be agricultural industry. The grocery store will be well designed for easy
movements of customers with the products as well as the outward appearance that will attract
customers.
2.8 Business goals and objectives

2.8.1 Goals
1. Expansion of the business in terms of sales and structure.
2. To be the leading business compared to competitors.

2.8.2 Objectives
Maximize profits

2.9 Entry and growth strategy

The owner of the business will use the following methods to advertise to customers on the
entry and products of the new business;
i. Use of posters – attracting posters will be kept on open places like junction and busy
roads to inform people of the entry of the new business. The posters will cost ksh500.
ii. Use of friends- the entrepreneur will encourage her friends to tell other friends. This
method will be fast, cheap and effective.
iii. Use of local newspaper- information about the new entry of Sawatamu business will be
advertised in the local newspaper so as to reach other people who cannot be gotten by
other advertising methods. This method will cost ksh2000.
The business will have a good overview so as to easily convince customers.

6
Chapter 3

MARKET SHARE

3.1 Potential customers.

The owners’ potential customers will be all individual people within the Maua area and also
visitors who will be willing to buy products from Sawatamu grocery.
Grain Products are best consumed by all people. Therefore there will be no discrimination of
customers on either level of income, level of education, gender or religion. Sawatamu grocery
will offer high quality grains and of different varieties so as to satisfy customers taste and
preference.
The business will be working as from 7.00am to 10.00 pm.
Customers will purchase goods by use of cash payment and pay bill number will be opened for
customers without cash at hand.

3.2 Market share

Maua market has approximately about 10,000 people. The owner targets about 40% of people
within the market as her potential customers.
The business will be dealing with only one unit by specializing with grain products in the
business.
The business will be expected to make sales ranging between 70,000-100,000 per month.

3.3 Competition
Sawatamu grocery will have two potential customers; Usalama grocery store and Mama njugu
grocery store.
According to market survey, Sawatamu Grocery will be capable of competing well and gaining
more customers from the market at a better rate.

The table below shows some of competitor’s weaknesses as compared to Sawatamu Grocery

7
 Business Name strength Weaknesses
Sawatamu Grocery i. Proper location i. It is a new business
ii. Use of modern not well known
techniques
iii. High quality and
quantity goods
iv. Proper management
Usalama grocery i. Proper location i. Poor management
ii. Well known business ii. Low quality and
quantity goods.
iii. Lack of modern
techniques

Mama Njugu store i. An existing business i. Poor location

well known ii. Poor management
ii. Use of modern iii. Low quality and
techniques quantity goods.

Summary table

Variable Sawatamu Grocery Usalama Grocery Mama Njugu Grocery

Location of the 5 4 2
business
Technology 4 4 5
Management 4 3 3
Security 4 2 3
Quality of the 5 3 2
products
Famines 3 4 5

Key guide
1-2 low
3 -average
4-5 high
From the above tables, Sawatamu grocery will be having more strength than the competitors.
The Business will be more favored by some of its location factors according to the market
survey.

8
3.4 Pricing Strategy.
i. The entrepreneur will consider the following to decide on the price of the products;
ii. The cost price– increase in cost price will lead to increase in selling price.
iii. Legal order- items with fixed prices from the government will not be changed.
iv. Competitors- when the competitors increases the selling prices for their products as a
way of discriminating customers, the owner will create a difference by simply lowering
the selling price for customers.
v. Seasonal changes- floods and drought makes the agricultural products to be expensive
to compensate for loss.
vi. Purchasing power – there will be fair pricing that is affordable to most customers.
The price of the products will be variable depended on some factors.
No credit facilities will be offered to avoid the business from suffering bad debts.

3.5 Sales tactics.

There will be direct sales between the owner and the customers. This method will enhance
good relation between the customers and the business manager, easy retrieval of customers
complains and effective business operation.

3.6 Advertising and promotional strategy

The advertising of the business will be done by:
i. Posters- posters will be printed with attracting features to give impression to customers
to buy products of Sawatamu grocery. The posters will be placed on busy roads and
various market areas so that it can be accessed by many people. The posters will cost
ksh500.
ii. Use of friends- the entrepreneur will encourage her friends to tell other friends. This
method will be fast and effective.
iii. Use of local newspaper- information about the new entry of Sawatamu business will be
advertised in the local newspaper so as to reach other people who cannot be gotten by
other advertising methods.
This method will cost ksh2000.

9
3.7 Distribution strategy.
Free delivery services will be offered to customers buying products above 20 kilograms.
Products will be delivered to their own premises that should not be more than 15km.
The distribution chain will be as follows;

Producer Sawatamu Customers

Grocery

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 Chapter 4

ORGANIZATIONAL PLAN

4.1 Business Manager

The owner of the business will be the sole manager for the business will be sole proprietorship.
The duties of the manager will be;
i. Finance controller- she will be responsible to payment of the products that will be
purchased, expenses, risks, and paying wages and salary to workers.
ii. She will be responsible to hiring and recruiting workers by conducting interviews where
necessary.
iii. She will also supervise and give motivation to workers.
iv. She will be recording activities of the business.
v. Recording the activities carried out in the business.
The business manager will earn ksh35000 per month.

4.1.1 Organizational structure

MANAGER

STORE KEEPER
TRANSPORTER

11
4.2 Key management personnel

4.2.1 Store keeper

Qualifications and experience
i. Average age of 28-40 years.
ii. Have working experience in the same field for about one year or more.
iii. Should be at least a form four leaver.
iv. Flexible and within the business premises.
v. Should be a man.
Duties and responsibility
i. Neat arrangement of products in the grocery.
ii. Preparing reports on goods entering the store.
iii. Cleaning the store.
iv. Offering Security to the entire grocery.
The basic salary of the store keeper will be ksh25000

4.2.2 Transporter
Qualifications and experience.
i. Have B.C.E driving license.
ii. Able to communicate in both Kiswahili and English.
iii. Have driving experience for at least 2 years.
iv. Should have national Identity Card and of age 30-40.

Duties and responsibilities

i. Collecting products from the suppliers to the business premises.
ii. Delivering products to the concerned customers.
iii. Collecting and delivering letters to and from the post office concerning the business.
The basic salary will be 15,000 per month.

12
4.3 Recruitment, Training and Promotion.

4.3.1 Recruitment.
The prospective workers will be gotten by advertising in local newspaper and also posters will
be placed in strategic places near the busy roads. The job vacancies and relevant qualifications
will be indicated. The interviews will be conducted by the manager to come up with complete
workers.

4.3.2 Training
In order for employees to gain more experience, knowledge and skills, the manager will
organize sponsored seminars and educational tours for the related field.

4.3.3 Promotions
Promotions will be done to those employees who adhere to rules and regulations of the
business.
To promote an employee, the owner will consider the following; personal conduct in the
business, loyalty, commitment to work and the duration of which the employee has worked in
the business.
Promotion will also be done by either; free gifts or salary increment

4.4 Remuneration and Incentives

The business will have three workers where the manager will be the sole proprietor of the
business. Wages and salaries will be paid according to employee’s qualification, production and
nature of work done.
Employees will also be given yearly bonuses, overtime levies and also advanced payment.
Increase in Salary will also depend on length of services of the individual to the business.
Etiquette and respect will be improvised among members.

4.5 Licenses, Permits and By-laws.

4.5.1 Licenses
The owner will acquire a trading license from Maua County Government, ministry of trade
before commencing the operation of the business.
The license will cost ksh 9600 per annum.

13
4.5.2 Permits
The owner of Sawatamu Grocery store will acquire a health Permit from Maua ministry of
Health.
The cost of the health permit will be ksh12000 per annum.
Environmental permit worth ksh12000 per year will also be acquired from National
Management Environmental Authority.

4.5.3 By-laws.
The business will be required to follow the bylaws as to parliamentary proceedings of 2021.
Example Value Added tax (VAT), since disobedience can lead to the closure of the business
Labors act will be employed to avoid employee’s discrimination.

4.6 Support service and staff

Sawatamu grocery will create good relations with Equity Bank to facilitate depositing and
withdrawal of money when need arises.
Money will be deposited on daily basis for security purposes.

14
Chapter5

OPERATIONAL PLAN

5.1 Product design and development

Sawatamu Grocery will be dealing with grain products only. The grains will be of different types
and varieties, including legumes and cereals, to fully satisfy potential customers.
The grains will be kept dry to increase durability, well treated to avoid diseases and also well
packaged to prevent them from external factors such as pests.
Designing of the product will cost ksh3000.
The entrepreneur will employ use of modern weighing balance and a roller table that will be
used to make work easier when caring goods in bulk.

5.2 Production facilities and capacity.

specifications Date required quantity Cost per unit Total cost
ksh ksh
Weighing balance 20th December 2021 2 2000 4000
Roller table 20th December 2021 1 2000 2000
Sieving sinks 20th December 2021 2 500 1000
Shelves 20th December 2021 10 400 4000
Chairs 20th December 2021 5 600 3000
calculator 20th December 2021 1 1000 1000
Counter book 20th December 2021 1 500 500
total 15,500

The weighing balance and the roller table will be hired from Utawala enterprises. Others will be
purchased on time including the stock to properly operate the business.
Proper care and maintenance measures will be used to increase the durability and efficiency.
Repair will be done when necessary to reduce expenses.

15
5.5 Premise Layout.

Shelves Packaging area

Display room

Manager’s
office

Exit entrance

5.4 Other equipment

specifications Date required quantity Cost per unit Total cost
ksh ksh
Broom 30 December2021 2 50 100
Carrier bags 30 December2021 100 10 1000
aprons 30 December2021 2 200 400
file 30 December2021 2 50 100
pen 30 December2021 2 10 20
total 1,620

5.5 Production strategy.

Type of Frequency source quantity Cost per unit Total cost
customers ksh ksh
6-12 years Thrice per Surrounding 6 100 600
week population
13-20 years Twice per Surrounding 4 70 280
week population
Above 20 Twice per Surrounding 9 150 1350
week population

16
5.5.1 Labour requirement
Type of labour Labour workforce Salary
Manager Direct Managerial and 35000
Supervisory
Store Keeper Direct Security and 25000
Maintenance
Transporter Direct transportation 15000

5.5.2 Production expenses.

Expenses Amount
Salary 75000
Repair and fittings 3000
Licence and permits 3800
Advertisements 2500
Rent 5000

Total 89,300

5.6 Production process.

Customers will be served on first come first served basis.
The business will be mostly affected by competition but the entrepreneur will improve the
quality of products, use technology and polite language in production process.

5.7 Government Regulations.

The business will be required to comply with government regulations such as trade licence
which is the document used by the council. The licence will be renewed annually and it will cost
ksh35000. Permit will also cost ksh500 per month.
The business will also be obligated to pay income tax that shall vary with the net profit gained.
Value added tax will also be paid.

17
Chapter 6.

FINANCIAL PLAN.

6.1 Pre- operation cost.

Item Value
ksh
Stock 40000
Furniture and fittings 7800
Repair and maintenance 3000
Licence and permits 3800
Phone calls 200
Advertisement 2500
Total 57,300

6.2 Working capital requirement

Current Assets amount (ksh)
Stock 40000
Cash at hand 20000
Cash at bank 90000
150000
Less
Current Liabilities
Loan from bank 40000 40000

110,000

The Working capital is ksh110, 000.

18
6.3 Profoma trading, profit and loss statement.
Sawatamu Grocery
Profoma Trading, Profit and Loss account
For the year ending 31 December 2021
AMOUNT
2021(ksh) 2021(ksh) 2022 (ksh) 2022 (ksh)
Sales 80,000 90,400
Less: cost of sales
Opening stock 40000
Add: purchases 70000
Goods available for sale 110,000
Less: closing stock 18500
Cost of sales 91,500
Gross profit 171,000
Less; expenses 89,300
82,200

Assumption; sales will increase by 3% next year

19
Balance sheet
Sawatamu Grocery
Profoma balance sheet
As at 31 December 2021

dr cr
Ksh ksh ksh ksh
Fixed assets Capital 110,000
Furniture and fittings 7800 net profit 24920
Machinery 17120 24,920
Current assets Current liabilities
Stock 40000 loan from bank 40000
Cash at hand 20000
Cash at bank 90000 150000

174,920 174,920

20
 Cash inflow statement
Jan Feb mar apr may june July aug sep oct nov Dec total

ksh ksh ksh ksh ksh ksh ksh ksh ksh ksh ksh Ksh ksh

purchases 75000 80000 79990 8100 8620 7600 90000 8562 8600 8966 8477 901500 90000
0 0 0 0 0 0 0 0

Salary 75000 75000 75000 7500 7500 7500 75000 7500 7500 7500 7500 75000 75000
0 0 0 0 0 0 0

Fittings 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500

Rent 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000

advertiseme 150 150 100 200 100 100 100 150 100 200 100 300 100
nt

Bills 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000

Licence 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000

21
Appendix

The business logo;

SAWATAMU GROCERY

22