BUSINESS PLAN

OL’LESOS TECHNICAL TRAINING INSTITUTE

BUSINESS NAME: MANIA DAIRY FARM

PRESENTER: BRENDA CHELIMO

INDEX NO:

COURSE CODE: 2905

PAPER CODE:

PRESENTED TO: THE KENYA NATIONAL EXAMINATION COUNCIL IN

PARTIAL FULFILMENT FOR THE AWARD
OF CERTIFICATE INNUTRITION AND
DIETETICS

SUPERVISOR: MRS EDNA

DATE OF PRESENTATION: NOVEMBER 2021

 DECLARATION
I hereby sincerely declare that, this business plan and its entire content is my original work done
to the best of my knowledge and it has never been submitted for the award of Certificate/
Diploma/ Degree in any other Academic Institution.

NAME: Brenda Chelimo

SIGNATURE: _____________________

DATE : _____________________

This business plan has been submitted with my consent to the supervisor.

SUPERVISORS NAME: Mrs Tero

SIGNATURE: ____________________

DATE: ____________________
 DEDICATION
My special dedication goes to my beloved parents, Sisters and friends for giving me full support
through the whole process.
 ACKNOWLEDGEMENT
Its my pleasure to express my heartful gratitudes to everyone who gave me the morale of writing
down this elemental eminent business plan

I wish to say thanks to my supervisor for her prudent guidance and correction while I was on
research
DECLARATION............................................................................................................................i
DEDICATION...............................................................................................................................ii
ACKNOWLEDGEMENT...........................................................................................................iii
CHAPTER ONE............................................................................................................................1
1.0 BUSINESS LOCATION..........................................................................................................................1

1.1 BUSINESS NAME................................................................................................................................1

1.2 BUSINESS LOCATION..........................................................................................................................1

1.4 TYPE OF BUSINESS.............................................................................................................................2

1.5 INDUSTRY..........................................................................................................................................2

1.6 BUSINESS GOALS...............................................................................................................................2

1.7 PRODUCT SERVICES...........................................................................................................................3

1.8 JUSTIFICATION OF OPPORTUNITY......................................................................................................3

1.9 ENTRY AND GROWTH STRATEGY.......................................................................................................3

CHAPTER TWO...........................................................................................................................4
2.0 MARKET PLAN....................................................................................................................................4

2.1 CUSTOMERS.......................................................................................................................................4

2.2 MARKET SHARE..................................................................................................................................4

2.3 COMPETITIONS..................................................................................................................................4

2.4 PRICING STRATEGY............................................................................................................................5

2.5 ADVERTISEMENT AND PROMOTION..................................................................................................5

2.6 DISTRIBUTION STRATEGY..................................................................................................................7

CHAPTER THREE.......................................................................................................................8
3.0 ORGANIZATIONAL AND MANAGEMENT PLAN...................................................................................8

3.1 INTRODUCTION.................................................................................................................................8

3.2 ORGANIZATION CHARTS....................................................................................................................8

3.3 PERSONNEL AND THEIR DUTIES.........................................................................................................8

 3.4 REMUNERATION AND INCENTIVES..................................................................................................10

3.5 TRAINING AND PROMOTION...........................................................................................................11

3.6 LICENSE, PERMIT AND BY-LAWS......................................................................................................11

3.7 SUPPORTING STAFF AND SERVICES.................................................................................................11

CHAPTER FOUR.......................................................................................................................13
4.0 OPERATIONAL/PRODUCTION PLAN.................................................................................................13

4.1 PRODUCTION FACILITY AND CAPACITY............................................................................................14

4.2 PRODUCTION PROCESS....................................................................................................................16

4.3 PRODUCTION STRATEGY..................................................................................................................17

4.4 REGULATIONS AFFECTING OPERATIONS.........................................................................................17

4.5 ENVIRONMENT................................................................................................................................18

CHAPTER FIVE.........................................................................................................................19
5.0 INTRODUCTION...............................................................................................................................19

5.1 PRE-OPERATIONAL COSTS...............................................................................................................19

5.2 ESTIMATION OF WORKING CAPITAL................................................................................................20

5.3 PROJECTED CASH FLOW FOR YEAR ONE..........................................................................................21

5.3.1 PROJECTED CASH FLOW FOR YEAR TWO......................................................................................22

5.3.2 PROJECTED CASH FLOW FOR YEAR THREE....................................................................................23

5.4 PROFORMA INCOME STATEMENT...................................................................................................24

5.5 PROFORMA BALANCE SHEET...........................................................................................................25

5.6 BREAK EVEN ANALYSIS FOR THE YEAR 2020....................................................................................26

5.7 CALCULATIONS OF PROFITABILITY RATIOS......................................................................................28

Appendix 1 Business Plan......................................................................................................................29

EXECUTIVE SUMMARY

BUSINESS DESCRIPTION

The business to be established is known as Mania Dairy Farm. This would be a sole
proprietorship kind of business. The business would be located at Nandi Hills market beside
two crossing roads near water guard enterprise. The business will be selling dairy products
like farm inputs like milk, cheese and yogurt . The business is aimed and serving local
people.

MARKETING PLAN

The potential customers of Mania Dairy Farms dairy will include lelan farmers, keringet
farm, nasokol farm siyo farm and kaprech farm. Advertisement and promotion methods
would include posters, leaflets and signboards. The products would be sold direct to the
customers.

ORGANIZATION AND MANAGEMENT PLAN

A manager will be in charge of farmers choice enterprise and would be assisted by the sales
and marketing managers, accountant, secretary and security man.. Recruitment an would be
based on qualification.

PRODUCTION AND ORGANIZATION PLAN

Cento Dairy Farms Dairy enterprise intends to offer a variety of milk products such as
cheese, yoghurt and fresh milk.

The business will provide high quality products to its customers of which it is meant to
satisfy their needs and its maximization satisfaction from the product sold to the farmers.
Mania Dairy Farms dairy enterprise will acquire products from producers transport to the
premise sort, pack and brand, store the product, evaluate and then sale to farmers.
FINANCIAL PLAN

The desired finance would be Kshs. 708, 000 which include the owner’s equity of Kshs.
158,000 long term loan of Kshs. 400,000 and contribution from friends and relatives
outstanding to Kshs. 150,000
 CHAPTER ONE

1.0 BUSINESS LOCATION.

The business is to produce the best dairy products (milk) of highest quality.

1.1 BUSINESS NAME.

The name of the proposed business will be MANIA DAIRY FARMS

The name of the proposed business to be:-

MANIA DAIRY FARMS DAIRIES
P.O BOX 11,
NANDI HILLS.

1.2 BUSINESS LOCATION

The business will be located at Nandi Hills division, 2km from Nandi Hills Junnction town
which is also district headquarters of Nandi East.
The choice of locations was because of good infrastructure, nearness to potential customers,
availability of land and security. Also population density is high as a result of many factors in the
region. The following is the business contact
MANIA DAIRY FARMS DAIRIES
P.O BOX 11,
NANDI HILLS

The business intends to kick off operation in January 2020 after the proprietor has completed her
studies and secured all the required materials. The business will operate as a sole proprietorship.
The potential market will be the least of the town and its environment. The business is situated in
good environment. This is due to improved transport and communication system.
Auxiliary services like banking, security, insurance, water, electricity, telephone and legal
services also are available.
Being in the headquarters of the District, the business will get an easy access to raw materials
and also close to potential markets. The good transport and communication network also plays a
major role in boosting the business performance.
1.3 FORM OF OWNERSHIP.
The business will be structured as a sole proprietorship and will be managed by myself.
The reason for choosing this kind of business is that the owner will enjoy all benefits alone.
The capital required will be 630,000/= (six hundred and thirty thousand shillings.) to start and
run the proposed business.
The owner of the business intends to source capital as:-
Sources Amount (Ksh)
Contributions 330,000
Borrowed loan from Bank 100,000
Gifts from family and friends 200,000
Total 630,000

1.4 TYPE OF BUSINESS

The business is a production industry thus it looks forward to producing large quantities and
quality products and will employ management functions in its daily running.

1.5 INDUSTRY
The owners business is production industry with the aim of producing dairy products of highest
quality.
Technology
The sponsor intends to start with medium exotic breeds animals which customers less but high
production and then upgrade to high yielding breeds with high production by use of artificial
insemination technology.

1.6 BUSINESS GOALS.

This short goal of business is to make profit which shows the viability of the business.
The main goal of the business is to create employment to various supporting staff in the business
and be self-employed as the owner of the business.
1.7 PRODUCT SERVICES
The production of dairy products will be sold to local consumers, institutions within Nandi Hills
Division and hotels within Nandi Hills town. In due time, the business will expand to even
provide more by-products from animals in the region to satisfy the market need regularly.

1.8 JUSTIFICATION OF OPPORTUNITY

This business is justified by the fact that there are more people who concentrate on tea plantation
where less concern is given to dairy animals.
The locality of my business is a region with good infrastructure, nearness to potential customers
from high density population from neighboring tea factories estates and hotels in Nandi Hills
town.
Furthermore there are few farmers who have embraced the new method and breeds of keeping
dairy cows. Which is the enterprise is to embrace. In addition to this the entrepreneurial
knowledge acquired from this institution gives me a step ahead of them.
The product (milk) is of high quality product is clean and health animals, which is a pre-
requisition of this type of enterprise.

1.9 ENTRY AND GROWTH STRATEGY.

To win customers and gain their confidence their needs has to be met by producing high quality
products and also supplying it in due time.
Posters: the management of the business should put posters at various strategic points to create
awareness to public, business name and print calendars with business name and logo to create
awareness to public. Posters should be placed in strategic places like office, market areas, bust
stops and churches.
 CHAPTER TWO

2.0 MARKET PLAN

2.1 CUSTOMERS
From the research I found out that most people do not get milk from their beverages preparation
due to few producers and irregular suppliers who are few in the region and few external suppliers
from other regions.
Also several schools, institutions are available and do not have enough milk to gather for their
needs. This includes High view academy, Miracle Academy, Nandi Hills Girls High School,
Nandi Hills district hospital. Included also are teachers who teach in these schools and other
private institutions. Those who work in district headquarters offices inclusive of police force in
their residing camps.

2.2 MARKET SHARE

This is a situation whereby businessmen in common production have to show customers
available in the market.
Research and survey carried in the market is really untapped with most customers running
unattended to thus CENTO DAIRY FARMS dairies looks forward to capitalizing is over 50% of
the market share while the rest of substituent farmers take the remaining 50% and for this to
achieved:

i. The product should in the market in due time i.e. very early in the morning and in the
evening.
ii. High quality products i.e. clean milk.
iii. Moderate prices.

2.3 COMPETITIONS.
MANIA DAIRY FARMS dairies expect competition from the following firms

1. Heri dairies farm

2. Meja dairies
3. Rita dairies.

CENTO DAIRY FARMS expects to overcome this problem by ensuring high quality products is
made available in due time.
The competitors constitutes on production of “maziwa lala” that they sell outside the region as
far as Western region and North rift region hence low milk left to be used for domestic use for
beverages in neighboring areas is few.
My business will concentrate on satisfying this surrounding neighbor with products of high
quality (milk) then later we expand to produce more by-products like milk powder, yoghurt that
is affordable to surrounding customers that our competitors put less concern on.
Still strategizing on an educational campaign to customers on the importance of using fresh milk
and working in collaboration with District Agricultural Officers to provide seminars on how to
use the upgraded new breeds for mass production. By accepting to host field demonstrations and
by so doing I will have to create awareness to public how I run my business to improve dairy
farming in the region.

2.4 PRICING STRATEGY

My pricing will be moderate to suit products and costs of production. The costs of transport will
not be high since the farm is not so far from the market places and Nandi Hills town restaurants.

2.5 ADVERTISEMENT AND PROMOTION

Advertisement is to help sell the existence of MANIA DAIRY FARMS Dairies. This is the way
of making awareness to the public. Putting signposts to all strategic positions where customers
can be found within the locality will do it. This sign posts has to display some of the products
produced.
Other forms of advertising include: posters, circulars, making calendars with the business name,
logo and also the products sold.
 MANIA DAIRIES
P.O BOX 11
NANDI HILLS

(a)signpost

MANIA DAIRIES

Fresh milk available

Welcome ALL!
(b) Circular

2.6 DISTRIBUTION STRATEGY

MANIA DAIRY FARMS Dairies is a product industry dealing with production process. The
distribution channel to be adapted is producer-consumer channel. The business will categorize its
customers into major groups namely;

1. Individual or private consumers.

2. Organizational consumers.

Organizational consumers are to be taken care of by marketing representatives (salesman) and

individual consumers are served directly at the premises.
The means of transport to be used is road. As the builds is roots, we will start by using bicycles
and as we prosper we will buy pick up for transportation. The costs incurred for transportation
will be for the maintenance of the bicycles inclusive.
 CHAPTER THREE

3.0 ORGANIZATIONAL AND MANAGEMENT PLAN

3.1 INTRODUCTION
MANIA DAIRY FARMS dairies will be managed by the manager who is sole proprietor of the
business. She will be assisted by sales person, milk men. Accounts clerk, storekeeper and milk
supplier.

3.2 ORGANIZATION CHARTS

The business is to operate under the following organization structures;-

MANAGER

ACCOUNTS CLERK

SALESMAN

STOREKEEPER MILK SUPPLIER MILKMAN

3.3 PERSONNEL AND THEIR DUTIES

MANAGER
Qualification
Diploma in business management
He is the head of the business
Duties and responsibilities

 She will be handling all works in smooth running of the business.

 Coordinates all the firms operation including workers salary and supplied products

Remuneration
The manager to get a salary of Ksh.5,000/= for a start.

ACCOUNTS CLERK
Qualification
Certificate in computational mathematics
DUTIES AND RESPONSIBILITIES

1. To be in charge of monthly financial statements.

RENUMERATION
The accounts clerk to draw salary of shs. 7000 /= per months for a start.

SALESMAN
Qualification
A certificate holder in sales management with good communication skills
Must be honest
Duties and responsibilities
(i)Responsible for daily sales by issuing of receipts to customer and marketing strategies
RENUMARATION
The salesman to draw a salary of ksh.5000/= per month for a start.

STORE KEEPER
Qualifications
He/she must have experience in store keeping, good communication skills and must be honest
and punctual.

i) He/she is in charge of store

ii) He/she keeps the records of feeds, concentrations used in the farm
iii) Adequate supply of dairy feeds

Remuneration
Salary of ksh 4500 per month
Milk supplier
Qualification
A certificate in sales
Duties and responsibilities
To be in c charge of supplying the farm dairy products (milk)
Remuneration
A salary of ksh. 4000 to be paid to milk supplier
Milkman
Qualifications
He/she should be physically and mentally fit and should be discipline.
Duties and responsibilities

i) General cleanliness of the premises and packaging of customers goods.

ii) Feeding of dairies animals and responsible in drawing the dairies feeding programme.

Remuneration
The salary in this category is 2500 per month.

3.4 REMUNERATION AND INCENTIVES

These are rewards or benefits given to employees to motivate them to work harder.
Salary increment is after a period of time, when the business has become self-sustainable.
The benefits will be included overtime, medical and house allowances.
3.5 TRAINING AND PROMOTION
The method of recruitment is through advertisement and job posting through posters when
interested person will apply followed by interviews. Remuneration will be fair in accordance to
the work to be done.
Training new skills is expected for success of an enterprise this will be done through seminars
and attending field days in dairy production.

3.6 LICENSE AND PERMITS

Government regulations
Before one starts a business, the law requires that one must have a government trade license from
the ministry of trade and commerce office. The license will be acquired annually because they
expire after 12 months. The business will acquire a license from county town council of Uasin
gishu to be allowed to operate within the region.
When the business prospers, it will wish to register all employees with NSSF which is required
by the ministry of labour.

3.7 SUPPORTING STAFF AND SERVICES

These are services which help in business operate in this located area for it to achieve the set
goals. MANIA DAIRY FARMS dairy intends to acquire these services.
BANKING SERVICES
For banking services, equity is an attraction due to its rouge to clock services, ATM and low
interest rate.
Family bank
Eldoret branch
P.O Box 1150-50100
Eldoret
Tel: 675432
LEGAL SERVICES
MANIA DAIRY FARM dairies legal matters go to Mania and company advocates.
Contact:0713797777
MANIA AND COMPANY ADVOCATES
P.O Box 797
NAIROBI
Tel: 0726981271
CONSULTATIONS
Co-operative bank
Eldoret Branch
P.O Box 1150-50100,
Eldoret
Tel: 053643229
LIGHTENING AND POWER
Kenya power and lightening company
P.O Box 3025
Eldoret
Tel: 053643219
INSURANCE SERVICES
MANIA DAIRY FARM secure its property of its business and dairies of any loss and
unpredictable calamities.MARICH insurance company take care of that contact
MARICH insurance company
P.O Box 209
Eldoret
Tel: 053

POSTAL SERVICES
MANIA DAIRY FARM postal matters are handled by Kenya postal and Telecommunications
Company attracting monthly costs of Ksh.250 per month
Contact 0721962321
ELDORET post office
P.O Box 11
Nandi Hills
Tel: 053643011
AUDITORS
Book keeping, financial statements of the business are annually admitted by Felix and James
Company.
Contact
Felix and James
P.O Box 24
Nandi Hills
Tel: 053643160

CHAPTER FOUR

4.0 OPERATIONAL/PRODUCTION PLAN

MANIA DAIRY FARMS dairies will mainly produce high quality and quantity products by use
of new technology of dairy products to ensure it meets customer’s needs. In addition to this,
pricing and distribution, which will enhance effective and efficient operation for flow of the
business, will be enhanced.
The owner owns the land thus the production of feed folders and pastures are grown in the field.
Furthermore, equipment’s required in the enterprise are bought to ease task and improve the
quality of products in the firm.
The dairies will carry out the following operations

i) Fresh milk
Fresh milk made available in liters for large organizations or ceremonies
ii) Yoghurt made available by being packaged to affordable prices by many consumers.
iii) Maziwa lala
Sour milk will be available for ceremonies.
iv) Artificial insemination service dairies are mainly the dairy productions with zero Grazed

4.1 PRODUCTION FACILITY AND CAPACITY

Before starting a firm it is necessary to have the right tool and equipments, Machinery for
operational activities is also necessary.
Chaff cutter

 Chops the dried Napier, grass, folder in small sizes /pieces.

 It is useful, it crush the step cuttings of large folders, like Napier grass that could have
been wasted by animals not feeding on it
 Chaff cutters will cost 20,000/=

Computers

 Use design the circulars, milk packet labels

 Carry out major transactions
 Stores details and information of employees
 Calculate salary to be paid to the employees
 Stores details of all assets of the business
 Two in number reach costing 20,000/=

Milking can
Lactometer
  Used for milking
 Four in number each costing 3000

 Used for testing of mastitis in dairies animals

 Two in number at a cost of 1000/=

Milking churn

 Used for transporting milking

 Two in number costing 14,000

Drenching gun

 Used administering drugs

 Its costs 780

Dehorning iron

 Used for burning the short small horn for calves

 It costs 1500/=

Panga

 It is used for cutting folders and Napier grass

 It is two in number and costs shs.600

Slashers

 It is used for cutting Kikuyu grass, demodium and bomas rods in the field
 It is two in number and costs 1500/=
4.2 PRODUCTION PROCESS

Milking in the farm

Sewing, weighing and recording of the milk

Transporting to the market

Selling to the consumer

The external factors likely to affect the production process in the business is climatic conditions
which keeps on changing every how and then. This is minimized by planning either for dry
season by making silages or hay out of the pastures and fodder crops. This will enable the
business to carry incase of the drought.
4.3 PRODUCTION STRATEGY
Types of Freque Sources Qty Costs/units Total
materials ncy
Dairy meals twice Cash 4 1700 5100
Purchase
Milking salve Once Cash 1 750 750
purchase
Maclik( supe Once Cash 1 2000 2000
r) purchase
Vitaphos Once Cash 2 450 900
purchase
Total 8750

The goods required by the business should be ready available throughout and can be acquired at
any particular time of the months. Also the mode of transportation is convenient and cheap.
Monthly production overheads

Items Amount (kshs)

Salary 32000
Electricity 1500
Advertisement 3000
Transport 2000
Total 38000

4.4 REGULATIONS AFFECTING OPERATIONS

This stage legal areas are examined and analyzed

These areas involves

Regulation affecting retail mix such as pricing, promotion and distribution of products
Laws governing the start of a business
Restraint and trade
Regulations governing the continuity of the business
It costs the business kshs 2500 to pay the Town council who will issue a receipt to authorize
legal commencement of the business.
Regulations governing growth of the business and restriction which declare practices which are
illegal.

4.5 ENVIRONMENT
Since the business deals with perishable items the environment maintenance is great important.
This includes at most cleanliness in the premise when the products are kept, refrigeration in the
retail outlets and hygienic conditions is looked into since the products is for human consumption.
 CHAPTER FIVE

5.0 INTRODUCTION
This section involves how the money invested in the business is used and allocated to different
section or equipments in the business. It is a section that allows whether the business is
progressing from its running of loss or profit at a particular year.
CENTO DAIRY FARMS dairies require Kshs. 650,000 as starting capital. It represents the
estimations of future operations in quotation terms which help to asses the performance of a
business.

5.1 PRE-OPERATIONAL COSTS

These are the loss which the businesses incur before the actual business operations starts. The
following shows the various items required before the start of the business and their relevant
costs.
Items Amount (ksh)
Business registration 3000
Furniture and machinery 100,000
Rent 11,500
Tax 6000
Electricity bill 30,000
Telephone bill 4000
Transport 18900
License & permit 5000
Initial stock 86000
Total 269400
5.2 ESTIMATION OF WORKING CAPITAL

Items Year 1 Year 2 Year 3 Total

Current Shs Shs Shs Shs
assets
Cash in hand 35000 40000 45500 120500
Cash at hand 48000 50500 55550 154050
Debtors 40000 45250 49250 134500
Stock 80000 86950 90350 257400
203000 222700 240650 666450

Current liabilities
Tax 6000 6500 7250 197500
License 8000 6500 7900 22400
Creditors 10000 9500 11500 31000
Short term loan 73000 75500 70500 219000
97000 98000 97160 292150

Working capital current Assets

586434
292150
Totals 294284
 5.3 PROJECTED CASH FLOW FOR THE FIRST YEAR

Particulars Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals
Bal b/d 34100 119700 221860 222970 327670 387858 478608 567058 665408 755568 8414908
Sales 15000 145000 155000 160500 160000 160500 161800 160900 165000 163000 163890 164500 1910090
Debtors - 85000 84500 85450 81500 84500 84450 80500 84500 84800 84700 87600 934500
Loans 412000 - - - - - - - - - - - 412000
Total 562000 264100 354200 367810 470470 635108 572670 720008 816558 913208 1004158 1007008 6538898
Outflow
Purchases 50000 45000 35000 36500 34300 35450 40000 41500 39000 40500 44500 42600 484350
Creditors 60000 42500 45400 45400 50000 49600 52500 53500 54000 53500 56500 57500 620300
Salaries 44900 44900 44900 44900 44900 44900 44900 44900 44900 44900 44900 44900 538800
Ta x 6000 - - - - - - - - - - - 6000
License & 3000 - - - - - - - - - - - 3000
permit
Interest 7 loan - 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 110000
payment
Transport 1500 200 1500 2500 2550 2200 2300 2150 2000 2240 2400 2350 26690
Electricity 4500 3000 3540 3940 4050 4050 4800 4900 4250 4500 3950 4010 48490
Total 6000 13200 15040 16440 16600 16250 17100 17050 16250 16740 16350 16360
119700 221860 222970 327670 387856 478608 567058 665408 755568 844990 896136
 5.3.1 PROJECTED CASH FLOW FOR SECOND YEAR
Item Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals
Cash inflow
Bal b/d 896136 978436 1073738 1164663 1267100 1363150 1464068 1560288 1659928 1796988 1927663 2025413
Sales 164800 164000 165000 165600 165700 165500 166200 166700 166350 166900 170650 172500 1899900
Debtors 87400 88002 87500 88500 88200 88028 89000 89500 89000 90000 90250 91500 1876880
Loans - - - - - - - - - - - - -
Total 1148336 1230438 1326238 1423753 1521000 1616678 1719268 1816488 1915278 2053888 2188563 2289413 18794351
Outflow
Purchases 42500 43800 42625 43650 43700 43850 44000 44900 45500 46850 46250 46950 493575
Creditors 56500 54500 55600 57000 57200 50800 53500 53500 56000 57000 57250 58000 617450
Insurance - - - - -- - - - -- - - - -
Salaries 44900 44900 44900 44900 44900 44900 44900 44900 44900 44900 44900 44900 538800
Ta x 6000 - - - - - - - - - - - 6000
License & 3000 - - - - - - - - - - - 3000
permit
Transport 1500 2500 3000 2000 1500 1500 2500 3000 2000 2225 2250 1550 25500
Electricity 4500 5000 4450 4050 3950 5560 3080 4260 3890 4550 6500 43180 54870
Total 169900 156700 156575 156663 157850 152610 158980 156560 118290 126225 163150 161780
1073738 1169663 1267100 1363150 1464068 1560288 1659958 1796988 1927663 2025413 2127633

5.3.2 PROJECTED CASH FLOW FOR THE THIRD YEAR

Item Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

Bal b/d 2127633 2136385 2059335 2174555 2181411 2393031 2503331 2613661 2730196 2678046 2781096 2905501
Sales 173500 175600 180000 174605 180250 180250 180250 182750 183950 183450 184650 185550 2166805
Debtors 92500 92050 93850 94650 93850 94750 95380 96725 97850 98250 99230 99950 1149035
Loans - - - - - - - - - - - - -
Total 2310385 2219935 2333185 2443810 2555511 2668031 2780961 2893136 2841996 9959746 3072976 129001
Outflow
Purchases 47000 47550 47950 47650 48570 49500 49850 50890 52250 52650 53350 54650 650660
Creditors 5600 55500 54250 53650 55325 55650 54950 55000 55250 55000 55225 56000 661300
Insurance - - - - -- - - - -- - - - -
Salaries 45000 45000 45000 45000 45000 45000 45000 45000 45000 45000 45000 45000 540000
Ta x 6000 - - - - - - - - - - - 6000
License & 3000 - - - - - - - - - - - 3000
permit
Transport 2000 2500 2350 3000 3360 3500 3000 3000 2700 2600 3000 3060 33970
Electricity 4000 4050 3080 2099 4225 5050 3500 3050 3750 3500 4900 4260 46464
Total 174000 160600 158630 162399 162480 164700 167300 162940 163950 170650 167475 168970
2136385 2059335 2174555 2281411 2393030 2503331 2613661 2730196 2678046 2789096 2905501 3022031
5.4 PROFORMA INCOME STATEMENT

Item amount
Sales 791000
Less cost of sales 484350
Gross profit 634650
Expenses
Salaries 55080
Transport 26690
License & permit 3000
Net profit before tax 503582
Less tax 6000
Net profit after tax 497582
5.5 PROFORMA BALANCE SHEET
MANIA DAIRY FARMS dairies proforma balance sheet
For the year 2020 of operation
Assets shs
Fixed assets 180000
Machinery & equipment 350500
Building 350500
Total fixed assets 530500
Current Assets
Debtors 934500
Cash at bank 60000
Cash in hand 20000
Total current assets 1014500
Total assets 154500
Liabilities
Long term liabilities
Five- year bank loan 3240470
Loan from co-operatives 40000
Owners equity 15000
Total long term liabilities 379040
Current liabilities
Creditors 67200
Total liabilities 446240
Net profit 698760
Capital 400000
154500
5.6 BREAK EVEN ANALYSIS FOR THE YEAR 2021
shs
Sales 1910090
Direct cost
Creditors 520300
Transport cost 26690
Utility bills 48490
Advertisement 20000 715480
Contribution margin 1194610
Loss fixed costs 530500
Gross profit 664110
Gross profit margin
Gross profit x 100
Sales

664 x 100
1910090

= 35%
Break even level
Fixed cost
Contribution per unit

Contribution per unit = Contributions

Sales

= 1,194,610
1,910,090

= 0.625

530500 x 100
0.625

= 848800

year Year 2 Year 3

35 34 43
5.7 CALCULATIONS OF PROFITABILITY RATIOS
Gross profit x 100
Sales
Year 2015 1. 664110 x 100 = 35%
1910090
Sales
Year 2016 2. 653920 x 100 = 34%
1899900

Year 2017 3. 920775 x 100 = 43%

2166805

Return on equity

Net profit after tax x 100

Owner equity

698,260 x 100
1500

= 47%
Appendix 1 Business Plan

NANDI HILSS- KAPTUMO ROAD

HIGH VIEW SAMOEI BOYS
ACADEMY

MANIA DIARY
FARM
MIRACLE
ACADEMY RITA DIARIES

TO KISHAUNET

NANDI HILLS
DISTRICT
HOSPITAL HERI DIARIES
MEJA DIARIES