ENTREPRENEURSHIP AND SMALL BUSINESS

MANAGEMENT

MESHACK NYENZE(14/02496)

BUSINESS PLAN
FOR
HOPE POULTRY FIRM

ASSIGNMENT 2

ii
Table of content

Contents
Table of content .......................................................................................................................... iii

Executive summary .................................................................................................................... vi

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

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

1.2 FORM OF OWNERSHIP ..................................................................................................... 1

1.3 LOCATION AND ADDRESS.............................................................................................. 2

1.4 TYPE OF BUSINESS ........................................................................................................... 3

1.5 OBJECTIVE OF THE BUSINESS AND GOALS ............................................................... 3

1.6 PRODUCTS AND SERVICES ............................................................................................ 3

1.7 INDUSTRY........................................................................................................................... 3

1.8 JUSTIFICATION OF THE BUSINESS ............................................................................... 4

2.0 MARKETING PLAN ........................................................................................................... 5

2.1 CUSTOMERS ....................................................................................................................... 5

2.2 MARKET SHARE ................................................................................................................ 6

2.3 THE COMPETITORS .......................................................................................................... 7

2.4 PRICING STRATEGY ......................................................................................................... 9

iii
 2.5 SALES TACTICS ................................................................................................................. 9

2.6 METHOD OF PROMOTION AND ADVERTISING ....................................................... 10

2.7 DISTRIBUTION STRATEGY ........................................................................................... 11

CHAPTER THREE ................................................................................................................... 13

3.0 ORGANIZATION AND MANAGEMENT ....................................................................... 13

3.1 ORGANIZATION STRUCTURE ...................................................................................... 13

3.2 STAFFING AND THEIR QUALIFICATION ................................................................... 14

3.3REMERATION SALARIES AND ALLOWANCES ......................................................... 16

3.4TRAINING AND PROMOTION ........................................................................................ 16

3.5 LICENCE/PERMITS, BY – LAWS AND LEGAL REQUIRMENTS .............................. 17

CHAPTER FOUR ..................................................................................................................... 19

4.0 OPERATIONAL PLAN ..................................................................................................... 19

4.1 PRODUCTION DESIGN AND DEVELOPMENT ........................................................... 19

4.2 PRODUCTION FACILITY AND CAPACITY (Tools and equipment required) ............. 20

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

4.4. PRODUCTIN PROCESS................................................................................................... 24

CHAPTER FIVE .......................................................................................................................... 25

5.0 FINANCIAL PLAN ............................................................................................................ 25

5.1RE _OPERATIONAL COST ............................................................................................. 25

5.2 WORKING CAPITAL ........................................................................................................ 26

iv
5.3Cash flow statement for the year 2024 ................................................................................. 27

5.3.1Cash flow statement for the year 2025 .............................................................................. 28

5.3.2Cash flow statement for the year 2026 .......................................................................... 29

5.4 Proforma income statmente ............................................................................................. 30

5.5 Proforma balance sheet ....................................................................................................... 31

5.6 Expected profitability ratio.................................................................................................. 32

5.6.1 Gross profit ratio .............................................................................................................. 32

5.6.2 Net profit ration ................................................................................................................ 32

5.6.3 Assets turnover ratio......................................................................................................... 33

5.6.4 Return of capital employed .............................................................................................. 34

5.6.5 Return on investment ....................................................................................................... 34

5.7 Breakeven point................................................................................................................... 35

5.7.1 contribution ...................................................................................................................... 35

5.7.2 contribution margin .......................................................................................................... 36

5.7.3 breakeven point ................................................................................................................ 36

5.8 desired financing ................................................................................................................. 37

5.9 proposed capitalization ........................................................................................................ 37

appendix .................................................................................................................................... 38

v
Executive summary

Business description

The owner of the business will be Ezakiel Lukobani 21 years old. Completed form four in the

year 2015 now pursing a Diploma in supply chain management at the Sigalagala national

polytechnic. The business will be called Hope poultry firm and will be located in Kakamega

town. The business will start in the year 2022 after I have completed my Diploma course. The

major business activity will include poultry products like eggs and chicken. My products will

have unique features like yellow York, Kienyegji and grade eggs, hens with heavy weight

healthy

THE OPERATIONAL PLAN AND ENTRY STRATEGY

The business will start in the year 2022 because I would have got capital required. I have put in

place the following plans to expect the business opportunity

- The business is strategically located

- The business is advertised frequently

I also have the following plans in order to penetrate into the market

- I have acquired the business licence

- I have found the place where I would locate the business

THE TARGET MARKET

The business will target on commercial markets and it will consist of potential customers who

will have the following characteristics

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 - Most of the are working and thus earn salary

- Most of them have desire for my goods

- Most of them are teachers and students

I have also put in place the following plans in order to reach my customer

- Use of the fastest means of transport to delivery products

- Make sure I advertise my firm so that it is known all over in the market

THE COMPETITIVE ADVANTAGES

The business will out do the other business because

- It is the only business around the area

- It uses modern technology

- The products are readily available to the customers

THE MANAGEMENT TEAM

The business will have the management which will have the following strength

- Have experience in poultry rearing

- The team to be highly educated

- They are people of good integrity

- They have skill that they apply in produce form

- They have good moral

vii
CHAPTER ONE

1.0 BUSINESS DESCRIPTION

Hope poultry farm will be owned by Ezakiel Lukoban. He was born in kakamega county, Ivihiga

location Likusi sub location. He attended St Joseph Primary school from 2004 to 2011 where he

finished his primary school level and attained 333 marks in KCPE. He joined Ingotse high school

where he completed his KCSE in 2015 and attained a mean grade of C. Currently is pursuing

Di0ploma in supply chain management at Sigalagala nation polytechnic with the knowledge he

acquired in high school in business studies.

1.1 BUSINESS NAME

The proposed name of the business will be Hope poultry farm. Hope which means expecting

good in future. Due to the nature of business locality it will favor each and everyone in the

society

1.2 FORM OF OWNERSHIP

The business will be a sole proprietorship type of usiness

The owner decides on this kind of ownership because

(i) The owner enjoys profit alone

(ii) Less capital is required

(iii) It is easy to operate and start

(iv) Decision making is first

(v) One becomes his own boss

1
Money to start the business will be acquired from various source

SOURCE AMOUNT(shs)

Personal savings 200,000

Bank loans 300,000

Sponsors 150,000

Friends 200,000

Contribution from family 150,000

Total 1,000,000

1.3 LOCATION AND ADDRESS

The business will be located in kakamega town along kakamega – Kisumu road adjacent to KCB

bank opposite Soweto market behind Kakamega police station

The place is ideal for business due to high population of around 700,000 people. The place has

enough security and ready market for goods and services

My business address will be

Hope Poultry farm

P.O. Box 276

Kakamega

Email:ezakieltisa@gmail.com

Tel 0702538853/ 0745177076

2
1.4 TYPE OF BUSINESS

The business will be a start up type of business it will be based on

i. Manufacturing of poultry products

ii. Distribution of poultry products

iii. Selling of poultry products to customers

1.5 OBJECTIVE OF THE BUSINESS AND GOALS

The main objective of the business will be

i. making profit

ii. utilizing local resources

1.6 PRODUCTS AND SERVICES

Hope poultry farm will provide goods of high quality which will help to meet customers demand

It will involve in the production of layers mash, broilers mash, eggs and feeders at large scale
customers buying in bulk will get interest and after sale services such as

i. transportation facilities
ii. packaging of their products

Skilled employees will be employed to render professional skill and crate good relationship with
the customers hence to encourage the business to grow

1.7 INDUSTRY

The business will operate under manufacturing industry. It will manufacture poultry products for
the people. With time more people will be employed because the industry is still growing

- the technology used will be use of CCTVs to show all operations in the industry which
will cost 10,000/-
- use of Mpesa for customers who have no cash in hand

3
 - computers for issuing receipts of goods sold

1.8 JUSTIFICATION OF THE BUSINESS

Hope poultry farm will be located in a densely populated area where the demand for goods and
services will be more. It will be able to employ youth in the community to avoid issues of theft
and laziness

Availability of quality products will encourage more customers to purchase and enhance the
outlook of the business

CHAPTER TWO

4
2.0 MARKETING PLAN

2.1 CUSTOMERS

My potential customers will be

Domestic

This will be people who will want to buy goods for personal use, they will include children youth

and elders

Characteristics of my potential customers

1. paying in cash

2. buy for personal use

3. most of them are working class

COMMERCIAL

This is people who will want to buy in large quantities and sell to other small businesses

Characteristics

This people will want to sell

Discount will be allowed

They will be both male and female or any age who will be attracted in getting the product

My customers will be looking for

1. comfort goods to make them satisfied

2. durability to cost long

5
 3. safety not to destroy their ability

The customer will purchase the products mostly on daily basis, weekly, monthly and morning

and evening. The purchasing pattern of my products will be

PURCHASING PATTERN

DAY PRODUCT DAILY TOTAL

SALES

MON 5 Trays of eggs 300 1500

TUE 10 hens 500 1500

WED 10 trays of eggs 300 3000

THUR 20 chicks 100 2000

FRIDAY 10 feeders 150 1500

SAT 5 hens 500 2500

TOTAL 12000

2.2 MARKET SHARE

The market will be approximately 200km2 with a population of one million people. This will be

obtained from the district commission according to the 2007 census.

The expected chair will be

Domestic 40%

Commercial 60%

Market share
6
FIRM OUTPUT SELLING SALES PER % SHARE

PRICE MONTH

Mazuri 10trays of eggs 300 3000 10

Neema 40trays of eggs 300 12000 17

Malimali 70trays of eggs 300 21000 13

Bidii 60trays of eggs 300 18000 20

Hope 80trays of eggs 300 24000 40

100

2.3 THE COMPETITORS

My potential customers will be competitors from both sides who will want to get the best from

the business. They will be both direct and indirect. The size of my firm will be advantageous to

others because of

1. price

2. will be in charge quantity

3. warrant

The weaknesses and strength of my competitors will include

7
BUSINESS NAME STRENGTH WEAKNESSES

Mazuri large capital little experience

good location little period of operation

Neema long period of working hours little period of operation

adequate capital poor sanitation

poor transport

Malimali long period of operation lack of manpower

good location

Bidii good location little experience

good transport

Hope large capital poor network

good management

good transport

good location

Measures to overcome competition

1. to employ trained personnel

2. increasing capital

3. employing enough workers

4. opening other branches

8
2.4 PRICING STRATEGY

The pricing strategy put in place will be determined by the total cost incurred. The selling price

and the total charges will be considered according to profit and selling price

Other factors will include

1. Government price control

2. Competitors selling price

Selling price will be variable since not all people meet the desires and hence should be

considered in any other circumstance. Frequent buyers who buy bulk will be allowed credit

facilities through not immediately but after two to three month after studying the customers

purchasing behavior. Bulk buyer will be allowed 5% discount of cash purchase

2.5 SALES TACTICS

Hope poultry firm will employ both direct and indirect selling methods

This is because direct selling will enable me to talk to customers face to face since

1. some products will need more explanation

2. to minimize theft

3. welcome more customers

4. to know if the demand is high

With indirect tactics will involve picking of products and taking them at the cashiers table for

payment

9
Reasons for

1. some goods are self explanatory

2. some are not sensitive’s

3. tight security

The geographical area will cover 40km2 I will use agents who will help me in distributing

products to other small poultry firms

2.6 METHOD OF PROMOTION AND ADVERTISING

Hopeful poultry firm will gain poplarity to the potential cusotemrs by creating awarenss thorugh

the following methods

Promotion

Free sample

At the start of the business cusoemrw willget disocunt and hence those who buy in bulk as it

progress the percentage will increase

Free itnroductory services

The firm will give free services in trade shows and exhibition

Advertisment

1. use of mouth

Information will be expected to spread to others to publicize awareness at no cost

10
 2. posters and sign posts

Posters will be located and stuck on strategic public boards. There will be change after three

months to avoid boredom at a cost of 20,000

3. newspapers and calenders

Hope will be printing calenders and disturbing at no cost hence newspapers will be advertising

the products and services at cost of 5,000 after every one month

4. radio station

The products will be advertised in local radio station for everybody to understand. Such station

will include radio Maisha, radio Jambo

2.7 DISTRIBUTION STRATEGY

The product will reach potential customers by use of sales representatives after placing an order

The business will offer transport services by use of roads which will highly encourage customers

who want in large sales

The cost per month will be shillings 2,000 for petrol

Problems anticipated in distribution

1. insecurity

2. poor road condition

3. mechanical breakdowns

4. high distribution cost

11
Solution to the anticipated problems

1. one week vehicle maintenance

2. distribution during good weather

3. encourage public transportation to avoid being attacked

12
CHAPTER THREE

3.0 ORGANIZATION AND MANAGEMENT

This is the process of dividing work among individuals into duties for a purpose of

accomplishing the set objectives

It includes the activities of selling strategy of an organization and getting the effects of its

employers

3.1 ORGANIZATION STRUCTURE

The figure shows the organizational structure

MANAGER

ACCOUNTS CLERK STORE KEEPER

SECURITY OFFICER SUPPORT STAFF

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3.2 STAFFING AND THEIR QUALIFICATION

MANAGER

The business manager will be the owner of the business

Qualification

- holder of Diploma in supply chain management

- supervisor of employers

- directing the business

- monitoring business activities

ACCOUNTS CLERK

Qualification

- must have a diploma in accountancy

- computer literate

- must have experience of at least two years

Duties

- to sign cheques and payments

- to check payrolls

- preparation of bank statement

14
STORE KEEPER

Qualification

- must have a diploma in sales and marketing

- must be 25 years and above

Duties

- keeps store records

- ensure proper stock taking

- marketing of the product

SECURITY

Qualification

- Should be a from four leavers

- Willing to work under supervision

- Should be physically fit and strong

Duties

- Recording incoming and outgoing customers

- Patrol where necessary

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3.3REMERATION SALARIES AND ALLOWANCES

The table below shows the amount to be given to the employees

ESTABLISHMENT NO OF BASIC MEDICAL GROSS PAY

EMPLOYEES SALARY ALLOWANCES PER MONTH

(KSHS) (KSHS) (KSHS)

Manager 1 8000 2000 6000

Account clerk 1 5000 1000 4000

Store keeper 1 4000 700 33000

Security guard 1 3000 400 2600

Support staff 2 400 200 3500

6 20400 4300 16700

3.4TRAINING AND PROMOTION

Training and promotion will be done to boost the skills of the member’s inorder to improve in

their working places

Such training will include

1. Seminars training

This will be organized by the manger within the organization as part time. Staff will be taken to

the farm for training to gain knowledge about the business

2. Promotion

16
It will be according to how they perform their duties and responsibility for one to be promoted

one should satisfy the manager or his working areas as excellent. The qualification and

experience will also cater for his or her promotion

The table shows the training period

PERSONNEL TRAINING PERIOD DURATION

Manager august vacation 4 weeks

Account clerk December Vacation 4 weeks

Store keeper April vacation 2 weeks

Security guard weekend (Saturday)

Support staff Daily (free time)

3.5 LICENCE/PERMITS, BY – LAWS AND LEGAL REQUIRMENTS

Hope poultry firm will require license to enable the business to run smoothly. It will be obtained

from the county government of kakamega

The cost of the license will be 2,500 per month. The other legal documents that will make Hope

poultry firm to run efficiently will be

1. Waste disposals

2. Environmental population

3. Health and safety act

Business control

17
 a) Financial management

Financial management of the business will be under the account clerk. He will ensure all the

financial statement of the business are kept for future references

b) Insurance

The business will ensure all the assets against theft and fire, at a cost of 5,600 per month. It

will obtain insurance cover from Blue shield insurance company

c) Support and services

The following support staff and services will help the business to run smoothly

d) Banking services

The accounts clerk will ensure all funds are kept in the bank for security purposes and books of

accounts are properly kept

e) Management advices

The management loan will be responsible to ensure all the enterprise activity runs smoothly and

will cooperate to seek any problems affecting the business

18
CHAPTER FOUR

4.0 OPERATIONAL PLAN

The operation plan will be a guide on how Hope poultry firm will be operating on day to day

basis. The general objectives being the achievement of goals of the business in order to satisfy

customer

4.1 PRODUCTION DESIGN AND DEVELOPMENT

The Hope poultry firm will tend to produce two types of eggs that are kienyeji eggs and grade

eggs, customer’s wills specify which they want and they will be given, this will go hand in hand

with the satisfaction and needs of the customers. It will produce different types of hens, broilers

which are for meat, layers which are for laying eggs and also chicks which will be hatched from

the layed eggs. The firm will be developed since it will be using technology to hatch the eggs

into chicks; incubators are machines that it will be used to hatch the chicks. This will reduce the

cost of production the plans to cope with change in technology

Immediate plans

Offer quality training to employees

Future plan

19
Giving quality training to employees according to new technology employment of more qualified

staff personnel strict supervision and time management

4.2 PRODUCTION FACILITY AND CAPACITY (Tools and equipment required)

Baraka poultry firm will required the following at the start of its operation

FACILITY NO DATA SOURCE COST (KSHS

ACQUIRED

Nippler drinker 2 2/2/2012 Pendo wholesale 2000

Linear feeders 20 2/2/2012 pendo wholesale 4000

Heaters 2 2/2/2012 Jumia enterprise 150000

Infra red bulbs 5 2/2/2012 jumia enterprise 500

Egg incubators 3 2/2/2012 mitra enterprise 100000

Chick box 15 2/2/2012 shirling 25000

Egg trays 20 2/2/2012 enterprise 1000

shirling

enterprise

total 67 282000

Repairs and maintenance

The Jumia enterprise will repair and maintain the machines and equipments the cost of repair

after every 5 months will be shs 25,000

20
The spare parts will be bought from Jumia enterprise because it sells all kinds of machines and

hence it’s a bit cheaper. Other fixed assets will include manual drinkers, circular feeders gas

brooders and reflectors

Ground plan showing the location of materials and other equipment

Security Sales area I Sales Security

area II

Entrance and exit Store area

door

Manager office Customer desk Accounts office

4.3 PRODUCTION STRATEGY

In order to retain and attract customers, the manager will employ the following strategies

Punctuality

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The premises will be opened at 6.00 am during weekdays to 8.00 pm in the evening and

weekends 8.00 am to 2.00 pm in order to carter for customers and also give time to employers to

relax

Table on monthly materials required

MATERIALS QUANTITY PRICE KSHS TOTAL AMOUNT

KSHS

Receipt book 400 400 400

delivery book 150 450 450

bags 300 300 300

total 850 1150 1150

Table on monthly labour expenses

LABOUR NUMBER MONTHLY

PAYMENT KSHS

22
Manager 1 8000

Account clerk 1 6000

Store keeper 2 3000

security officer 2 1500

total 6 18500

Table on monthly production expenses

MONTHLY MONTHLY

PRODUCTION PAYMENT KSHS

EXPENSES

Salaries 23000

Transport 400

Electricity 1850

rent 3000

insurance and license 1000

23
total 29250

4.4. PRODUCTIN PROCESS

The following steps will help in the process of acquiring products an services

Step 1 – placing of orders of new stocks from Jumia suppliers. The materials will be ordered for

them to be delivered in time to allow room for customers in need. Such products will include egg

trays, linear feeders

Step 2 – Receiving and inspection of goods.

Receiving and inspection of goods will be done to ensure that the goods ordered are of good

quality and hence supplied in the quantity needed

Step 3 – Storage and labeling

The labeling of material swill help in knowing what kind of goods is needed at a particular time.

This will also help to know which type is not needed

Step 4 – customers places orders

Customers will place orders for them to pick goods to bring profits in the business

Step 5 – payment of the orders

That customer who will have placed orders will have to pick goods and pay for their orders

Step 6 – issue of deliver of the goods to the customers

24
After payment of the goods ordered, they will be ready for being delivered to their respective

places

CHAPTER FIVE

5.0 FINANCIAL PLAN

This is the formation of financial needs and the expected output of the financial expectation. It

includes records of all financial matters of the business. The records will help in determine the

worthiness of the business

5.1 RE _OPERATIONAL COST

This is amount that the business will required to start its operation. They include all the expenses

incurrence to facilitate the commencement of the business. Some activities to be done are

summarized below

25
Item Amount (Kshs)

Transport 200

License 2500

Electricity 1500

Water available on the firm

Advertisements 1000

Replacements 1200

Rent 2500

Cleaning 2000

Repair 1000

Insurance 500

Total 14200

5.2 WORKING CAPITAL

Is the amount of money that will be required by the owner during the daily operation of the

business. It’s obtained by getting the difference between the current assets and current liabilities

as expressed mathematically

Working capital = current assets – current liabilities

Current assets Amount

Cash at bank 115000

cash in hand 115000

Debtors 13000

26
stock 110000

Total 353000

Current liabilities

Bank loan 22000

creditors 4000

accrued expenses 10000

total 36000

Working capital = 353,000 – 36,000

= kshs 317,000

27
 5.3Cash flow statement for the year 2024

Particulars Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Total

Bal B/f 976000 1295800 1544700 109420 1035700 1207000 1499000 1770100 1941500 2193000 2551000 15725600
capital 800000
Sales 400000 400500 300000 500000 200000 350000 40000 350000 400000 350000 400000 400000 3335500
Debtors 6000 500 4000 7000 8000 4000 5000 4000 5000 43500
Total Cash 1206000 1396500 1646300 1848100 1299200 1221200 1443700 1611000 1904000 2125100 23855000 2648000 39734600
flow
Cash out
Purchase 200000 70000 75000 700000 100000 150000 200000 80000 100000 100000 150000 50000 1875600
Insurance 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 300000

Electricity 2000 2500 2000 1500 2500 3000 1500 500 1000 500 500 1000 18500
Water 500 200 2000 5000 5000 2000 400 500 500 18800
Wages 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 280000

Creditors 500 200 25000 3000 2000 2500 5000 4000 5000 76000
Advertisement 5000 500 400 2000 700 4000 2500 200 37800
Repair 500 200 500 2000 3000 400 500 3000 10100
total cash flow 230000 100700 1022000 7539000 130000 185500 236700 112000 133900 183600 192500 97000 2458000
Cash net 976000 1295800 1544700 109420 1035700 1207000 1499000 1770100 1941500 2193000 2551000 2551000 17110600

27
 5.3.1Cash flow statement for the year 2025

Particulars Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Total

Bal B/f 2551000 2842500 3155500 3206800 3170300 3289800 3360800 342300 194300 95300 205300 498500 22912400
Additionl 100000 150000 100000 50000 100000 50000 50000 30000 20000 20000 50000 200000 1430000
Capital
Sales 4000000 600000 100000 50000 100000 50000 50000 30000 200000 1820000
Debtors 500 20000 1000 50000 50000 7000 1000 39000
Total Cash 305100 329750 3305500 33088000 33803000 3427800 3527800 422800 234300 399300 746300 803500 5557600
flow
Cash out
Water 10000 500 4000 500 2000 1500 2000 2000
Insurance 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 30000
Electricity 2500 2000 2000 1500 1000 2000 1000 1000 15000 500 35000 3000 17000
Wages 2000 2000 2000 2000 2000 3000 3000 3000 3000 3000 3000 3000 32000

Creditors 500 50000 2000 1000 1000 500 5000 3000 21700
Advertisement 5000 200 3000 4000 5000 1500 3000 2900
Repair 2000 5000 1000 3000 2000 4000 5000 6000 2000 298200
total cash flow 208500 142000 98700 138500 90500 23400 185500 228500 139000 194000 2478000 549500 30000
Cash net 2842500 3155500 3206800 3170300 336080 342300 191300 95300 205300 498300 25400 198245 29824543

28
 5.3.2Cash flow statement for the year 2026

Particulars Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec Total
Bal B/f 498500 344000 2295800 229580 214280 28980 182280 443780 725730 960530 1048330 1311630 5942920
Additional 20000 150000 100000 50000 100000 50000 50000 30000 20000 20000 50000 200000 460000
Capital
Sales 300000 600000 100000 50000 100000 50000 50000 30000 200000 2810000
Debtors 5000 2000 10000 2000 4000 4000 5000 18500
Total Cash 574000 409080 361380 299580 464280 288980 604280 817780 1045130 1194530 1473380 1911650 9443980
flow
Cash out
Purchase 200000 150000 100000 50000 40000 70000
Water 2000 500 4000 500 2000 1500 2000 2000 120000
Insurance 25000 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 2500 30000
Electricity 1000 2000 2000 1500 1000 2000 1000 1000 15000 500 35000 3000 75000
Wages 25000 2000 2000 2000 2000 3000 3000 3000 3000 3000 3000 3000 345000
Creditors 500 50000 2000 1000 1000 500 5000 3000 64700
Advertisement 500 200 3000 4000 5000 1500 3000 3150
Repair 500 2000 5000 1000 3000 2000 4000 5000 6000 2000 9400
total cash flow 2300000 179700 131800 85300 435000 106700 92650 84600 146200 161700 161700 244700 2060350
Cash net 344000 2295800 229580 214280 28980 182280 443780 725730 960530 1048330 1311630 344000 19189230

29
5.4 Proforma income statmente

It shows gross profit and net profit it also shows the amount of profit that the proprietor will be

getting from business

Year 2024 2025 2026

Sale 377000 363900 950000

Less cost of sales Add

opening stock 40000 45000

Add purchases 55000 135700 109000

Less return outwards 50000 (1825000) 175700 (15000) 154000

1510500 160000 -20000

Gross profit 134000

Less expenses

Rent 30000 30000 30000

License 630000 34000 7000

Electricity 154000 60000 24100

Maintenance 595000 4550 3600

Labor 10950 20600 3950

Insurance 10000 4000 4000

Total expenses 1129450 374120 346000

Net profit 1129450 374120 346000

Before tax 32325 34600

Net profit after tax 1016505 336408 311940

30
5.5 Proforma balance sheet

It shows the capital assets and liabilities of the business

Baraka Poultry firm

Balance sheet

For the years

Year 2024 2025 2026

Fixed assets

Furniture 250000 270000 290000

Machinery 300000 280000 420000

Building 40000 420000 420000

Motor vehicle 50000 450000 490000

Total fixed asses 14500000 1520000 1620000

Current assets

stock 8000 100000 150000

Cash in hand 400000 450000 46000

Total current assets 88000 480000 490000

Total assets (fixed + current) 2330000 1030000 1100000

1150000 1310000 1805000

Capital 1550000

Long term by capital 90000 1610000

31
Net profit after tax 600000 15000 150000

321300

Current liabilities 50000 40000 10000

Creditors 50000 50000 5000

Accrued expenses 200000 100000 70000

Bank loan 250000 220000 15000

Account payable 460000 400000 410000

Total liabilities 460000 400000 410000

5.6 Expected profitability ratio

5.6.1 Gross profit ratio

Year 1 year 2 year 3

134,000 x 100 174,000 x 100 337000x 100

3750000 110000 250,000

= 35.73% = 42.33% = 52.23%

5.6.2 Net profit ration

Net profit ration x 100

Sales

2024 2025 2026

32
357,000 x 100 215500 x 100 154,0380 x 100

333550 182000 2870000

= 33.7% = 11.8% = 56.6

Asset tune over ratio

sales x 100

capital employed

Capital employed = total assets (fixed + current) – current liabilities

2021 2022 2023

CE = 1550000 – 55000 CE = 1310000 – 260000 CE = 1805000 – 145000

= 1000000 = 1,050,000 = 1,060,000

A turnover ratio

3,335,500 x 100 1,820,000 x 100 2,810,000 x 100

10000000 10500000 1660000

= 33.6% = 173.3% = 169.3%

5.6.3 Assets turnover ratio

Net profit x 100

Sales

2024 2025 2026

33
1123200 x 100 215500 x 100 159,035 x 100

333550 182000 2870000

= 0.3 = 0.1 = 06

5.6.4 Return of capital employed

Net profit before tax x 100

Capital employed

2024 2025 2026

1123200 x 100 215500 x 100 1590350 x 100

100000 1050000 166000

= 112.3% = 205.2%

5.6.5 Return on investment

Net profit after tax x 100

Total

2024 2025 2026

786240 x 100 183175 x 100 1123245 x 100

103000 1430000 166000

= 76.3% = 12.8% 40%

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5.7 Breakeven point

The business will either make profit loss

A table showing fixed costs and variable cost and variable costs

ITEM 2024 2025 2026

Fixed cost

insurance 10000 10000 10000

license 5000 5000 5000

salary 70000 70000 70000

total 85000 85000 85000

Variable cost

Electricity 12000 16000 2000

transport 25000 30000 32000

telephone 800 1000 900

total 27000 100000 34900

5.7.1 Contribution

Contribution = sales – variable

2014 2025 2026

3,750,000 -27,000 4,110,000 – 32,600 2,560,000 – 34,900

= 3,723,000 = 4,077,400 = 2,522,100

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5.7.2 Contribution margin

Contribution x 100

Total sales

2024 2025 2026

3228200 x 100 1712700 x 100 2702700 x 100

3335500 1820000 2810000

= 96.8% = 94.1% = 96.2%

5.7.3 Breakeven point

Fixed cost x 100

contribution

2024 2025 2026

85000 x 100 85000 x 100 85000 x 100

372300 4077400 2525100

= 11.8% = 2.28% = 3.37%

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5.8 Desired financing

Description Amount

Pre – operational cost 495000

Working capital 434000

Fixed cost 500000

Miscellaneous 51000

5.9 Proposed capitalization

Sources Income

Self of own assets 20000

Bank loan 90000

Friends and families 400000

contribution

Personal savings 500000

total 650000

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Appendix

Strength: Portable skills that you take from job to job activities

Services: A process in which no physical are transferred from the seller to the buyer

Weakness: Lack of strength to do something

Poultry: Birds

Broiler: Birds kept for meat

Layer; Birds kept for laying eggs

Location

Soweto Street

Hope Poultry firm

Police station KCB Bank

Kak -Kis

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