BUSINESS PLAN

RINGO’S SODA BOTTLES

PRESENTED BY: TERESA JEPKORIR

CENTRE : 523002
COURSE : CERTIFICATE IN SUPPLY CHAIN MANAGEMENT.
Course code : 1903
INDEX NO : 5230020018
CENTER NAME: ALDAI TECHNICAL TRAINING INSTITUTE

ADM NO : CSCM/0641/21S

SUPERVISOR : CAROLINE ATETWE

PRESENTED TO: PRESENTED TO KENYA NATIONAL EXAMINATION COUNCIL
FOR PARTIAL FULFILMENT OF CERTIFICATE IN
SUPPLY CHAIN MANAGEMENT

SERIES: JULY SERIES 2022

i
 DECLATION
I declare that this is my original work and has never been presented by any other examination
body for any academic award.
NAME: TERESA JEPKORIR
SIGNATURE:………………
DATE:………………………

SUPERVISION
This work has been presented with the approval of the supervisor
NAME: MADAM CAROLINE ATETWE
SIGNATURE …………………….
DATE …………………………….

ii
DEDICATION

I kindly dedicate to my parents and all the family members for their financial and material
support towards the completion of these business plan .

iii
ACKNOWLEDGEMENT

I also give special thanks to my parents brothers and sisters who provided me all the support I
needed e.g advice, encouragement and also indebted to thank the Almighty God for the
strength and wisdom in producing this work.
A lot of thanks also goes to my supervisor who tirelessly guided and encouraged me to ensure
that I did my best.
May God bless you all.

iv
T0able of Contents
DECLATION..............................................................................................................................................ii
DEDICATION............................................................................................................................................iii
ACKNOWLEDGEMENT.............................................................................................................................iv
1.0EXECUTIVE SUMMARY........................................................................................................................1
1.1Business Description...........................................................................................................................1
1.2Marketing Plan...................................................................................................................................1
1.3Personal Management.......................................................................................................................1
1.4Operational Plan.................................................................................................................................1
1.5Financial Plan......................................................................................................................................1
CHAPTER TWO.........................................................................................................................................2
2.0 BUSINESSDESCRIPTION......................................................................................................................2
2.1BUSINESSNAME..................................................................................................................................2
2.2BUSINESS PHYSICALLOCATION...........................................................................................................2
2.3FORM OFOWNERSHIP........................................................................................................................2
2.5 TYPE OFBUSINESS..............................................................................................................................3
2.6PRODUCTS /SERVICES.........................................................................................................................3
2.7JUSTIFICATION OFOPPORTUNITY.......................................................................................................3
2.8 INDUSTRY..........................................................................................................................................4
2.1.1BUSINESS GOALS.............................................................................................................................4
2.2.2SHORT TERMGOALS.........................................................................................................................4
2.2.3LONG TERM GOALS........................................................................................................................4
2.2.4 ENTRYSTRATEGY.............................................................................................................................5
2.2.5 GROWTHSTRATEGY........................................................................................................................5
CHAPTER THREE.....................................................................................................................................6
3.0 MARKETINGPLAN...............................................................................................................................6
3.1 POTENTIALCUSTOMERS.....................................................................................................................6
3.2MARKET SHARE..................................................................................................................................6
3.3COMPETITION.....................................................................................................................................7
3.3.2 ANALYSIS TABLE..............................................................................................................................8
3.3.3TRADEPROMOTION.........................................................................................................................8
3.4.1ADVERTISEMENT.............................................................................................................................8

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 3.5 PRICINGSTRATEGY.............................................................................................................................9
3.5 SALESTACTICS....................................................................................................................................9
3.5DISTRIBUTIONSTRATEGY....................................................................................................................9
CHAPTER FOUR.....................................................................................................................................10
4.0ORGANIZATION PLAN /MANAGEMENT............................................................................................10
4.1KEY MANAGEMENTPERSONNEL.......................................................................................................10
4.3OTHER PERSONNEL, DUTIES ANDNUMBER......................................................................................10
4.4ARTISANS..........................................................................................................................................11
4.5RECRUITMENT, TRAINING................................................................................................................12
4.6REMUNERATION ANDINCENTIVES....................................................................................................12
4.7LICENSES, PERMITS AND BY –LAWS..................................................................................................13
4.8SUPPORTSERVICE.............................................................................................................................13
CHAPTER FIVE.......................................................................................................................................15
5.0PRODUCTION / OPERATIONPLAN.....................................................................................................15
5.1PRODUCTION FACILITIES ANDCAPACITY...........................................................................................15
5.0.1ENTERPRISE LAYOUT......................................................................................................................15
5.1.2REPAIR ANDMAINTENANCE...........................................................................................................16
5.1.3PRODUCTION.................................................................................................................................16
5.1.4PRODUCTION DESIGN ANDDEVELOPMENT...................................................................................16
5.1.6MONTHLY LABOUR REQUIREMENT...............................................................................................17
5.1.6MONTHLY PRODUCTIONCOST.......................................................................................................17
5.3.0 Production process....................................................................................................................18
5.4 REGULATION AFFECTING OPERATIONS...........................................................................................19
CHAPTER SIX.........................................................................................................................................21
6.0FINANCIALPLAN................................................................................................................................21
6.1PRE – OPERATIONCOSTS...................................................................................................................21
6.2. STARTING CASH..............................................................................................................................22
6.3ESTIMATION OF WORKINGCAPITAL..................................................................................................22
6.4CASH FLOWPROJECTION..................................................................................................................23
6.6PROFORMA INCOME STATEMENT..............................................................................................24
6.7PROFORMA BALANCESHEET.............................................................................................................25
6.8BREAK EVENANALYSIS......................................................................................................................26

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 6.8DESIRED FINANCE.............................................................................................................................29
APPENDIX 1............................................................................................................................................30

vii
CHAPTER ONE
1.0EXECUTIVE SUMMARY
1.1Business Description

The name of the business Ringo’s soda bottles. This business will be owned by Teresa Jepkorir.
The business is designed to start in the year 2023 upon the completion of my certificate course.
It will aim at making profit.

1.2Marketing Plan

The customers will come from Luanda market and any other parts of Vihiga person county
persons who will want to buy from my shop. It will offer good services to the customers and
ensure that variety of sodas are sold at fare prices

1.3Personal Management
The business will employ qualified personnel who will know and be able to deal with the
customers in a correct way. The business will require other supportive services like business
permit from Vihiga county Government., insurance etc.

1.4Operational Plan
The business will officially start in June 2022 after my completion of certificate and all other
basic needs of the business. The business will open from Monday to Saturday at 6.00 am and
close at 9.00 p.m.

1.5Financial Plan
The business will be determined by the performance of every year, if the business is making
profits or losses. The initial capital will be from my own savings, friends, family and loans from
banks

KSH
My own savings 100,000
Family and friends 10,000
Loans from banks 450,000
Total amount 540,000

1
 CHAPTER TWO

2.0 BUSINESSDESCRIPTION

The proposed business 'Ringo Soda Bottles' that i will be dealing specifically
with the sale of different kinds of soda drinks and also will be offering different
services.

2.1BUSINESSNAME
Ringo soda bottles will be the preferable name for the proposed business. RINGO will be a
term artistically twisted from real name, which will be very unique or original name. Thus, the
business name will be a concrete word that can attract many people. It acts as an
advertisement.

2.2BUSINESS PHYSICALLOCATION

The business will be located at Luanda which is in vihiga County. This place will
be highly preferred because it will be along the road enhancing easy
transportation of goods and services. It will be also at a market place hence it
will attract many people as customers. There will be full security as there will
be a police post.

The business address will be:-

RINGO SODA BOTTLES
P.O BOX 234,
BUNYORE
Cell: 0720865843
E-mail vivianmengich2019@gmail.com

2.3FORM OFOWNERSHIP

This business will be a sole proprietorship kind of business as it will be

managed by one person. This will be so because of the following reasons:-

(a) He will be the boss of his own thus run the business without any interruption

(b) Easy to make decisions

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 (c) He will enjoy all the profits as he will be the chief controller of the business.

2.5 TYPE OFBUSINESS

This business will be to engage much in the following

(a) Selling of soda bottles

(b) different varieties of soda drinks

(c) Distribution and delivery services

2.6PRODUCTS /SERVICES

The products produced will be of high qualities, convenient and cheap for
customers to afford. Also the services will be affordable to all people sufficient
motor rewinding will be done. All these will be achieved by having skillful
personnel and having a large stock to begin with. The products and services
will be readily available because of its location in situated in a market Center
along the road.

2.7JUSTIFICATION OFOPPORTUNITY

The assurance that the success of this business will be profound because of the following,

(a) Availability of knowledge and skills required to run any business

which was got through in college, also from the experience got hustling
and lastly the entrepreneurial skills.

(b) The business will be situated in an area reachable many people

enhancing the business to grow. Also transportation of materials and
workers will be easy as the business will be near the road.

(c) Research will be done and more consultations on how to grow in business.

3
2.8 INDUSTRY

This business will be both a commercial and service industry as it will base on
purchasing and selling of sodas. This industry will be suitable because
transportation of these materials will be easy due to the access of road, there
will be market as the business will be located in an area where there will be
less competition, availability of skilled personnel and tools / equipment
required hence quality products and services offered

2.1.1BUSINESS GOALS

In this changing world, the business will be very resourceful to many people
as it will have the following goals.

2.2.2SHORT TERMGOALS

(a) The business will create job opportunity to self and to others
(b) To establish a very successful business which can win customers’
interest at large within a very short period of time possible?
(c) To provide the best and quality products and services.
(d) To employ qualified personnel to assist in running the business thus
efficient production of work.

2.2.3LONG TERM GOALS

(a) To maximize profit

(b) To expand into a bigger business dealing with large quantity of stock
hence increasing the capacity of sales and services and workers.
(c) To open other branches brunches elsewhere so as to reach many people
with our services and products hence grow bigger in business.
(d) To venture into other small business beside this one e.g. opening a
cyber café, video show etc.
(e) To make sure all the personnel involved in the business get knowledge and skills with time
i.e. as the world changes, technology changes also so they need to be updated.

4
2.2.4 ENTRYSTRATEGY

The business will employ many tactics and ways of penetrating the market e.g.

(a) By offering low prices to some products and services

(b) Offering promotions like giving discounts and incentives

(c) Making more advertisement through posters radio, TVs, Road shows etc.

2.2.5 GROWTHSTRATEGY

For the business to grow into a large enterprise, the following will be required

(a) Employing dedicated and qualified personnel who can manage the business well

(b) Creating more space for expansion of the business e.g. buying land or plots.

(c) Buying a vehicle which can be used in transporting materials

hence reducing cost of transportation and also time wastage.

(d) Training the untrained staff so as to improve their production hence effective work

(e) Steady carrying out of advertisement and frequent promotions

(f) Buying electronics devices like computer or laptop to help in storing

information and other necessary work.

(g) Motivating all the workers

5
 CHAPTER THREE

3.0 MARKETINGPLAN
Ringo's Soda Bottles will have many strategic plans to achieve its objectives and
to reach the market demands. These will be like expanding its operation and
space and also employing skillful personnel to help in management. The
business will be located in a central place which can be reached by many thus
capturing many customers. The business will do throughout advertisement of its
services and products, offer promotions, discount etc to win the interest of
people. The pricing of items and services will be relatively cheaper as compared
to other competitors. These products and services will always be readily
available

3.1 POTENTIALCUSTOMERS
The business targets to win both domestic and commercial customers. The
domestic customers will be general public especially people around Luanda
who are most targeted as they will buy as well bring their items for service.
The commercial customers will be the middlemen and hawkers who will buy
goods from the business and sell them to the market.

3.2MARKET SHARE
Through research done thoroughly on the market in Luanda area, the
business will be expected to reach and serve 5,000 (Five thousands)
customers who are potential.
There will be competition from other businesses like Kipchem Shop, kimeto
workshop (electrons) Kiplagat shop and others

NAME OF Business PERCENTAGE SHARE TOTAL NUMBER OF

(%) CUSTOMERS
 Kimeto shop 23 1,150

Kipruto kipchem 21 1,050

shop 19 950

 Ringo's Soda Bottles 26 1,300

 Others 11 550

Totals 100 5,000

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3.3COMPETITION
The business will face stiff competition from other business like Kipchem,
KImeto, KIPlagat shop and others who were established 4 years ago. The
business will base on the competitors weakness to conquer the business
scene. Despite these competitions, the enterprise will have measures to cope
and analyze competition i.e.

(a) Developing Excellency in product and services provision

(b) Increase the size of the business by expanding its operations and shop size.
(c) Persuading more customers through promotions
(d) Improving the quality of goods and services each day
(e) Choosing the right and low cost technology with high volume.

SWOT ANALYSIS TABLE

BUSINESS NAME STRENGTH WEAKNESS
KIPCHEM SHOP  Its centrally located  Poor relation

 Long term experience  High prices

KIMETO SHOP  Readily available  No promotion offered
personnel

KIPLAGAT WHOLESALE SHOP 
Ringo's Soda Bottles
 Quicker and
better services
Many employees  Lazy personnel who are
not always available
 Low prices  Little capital

 Quality goods and

services

 Technical expertise

 Promotion

 Famous in the market

OTHERS  Famous in the market  Few workers

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3.3.2 ANALYSIS TABLE

BUSINESS Product Pricing Promotion Personnel Location Size Total

NAME service
Kipchem 2 3 2 4 5 2 18
Shop
Kimeto 3 2 1 3 2 1 12
shop
Kiplagat 2 2 1 3 4 3 15
shop
Ringo's Soda 4 5 4 5 3 3 24
Bottles
Others 1 1 2 3 3 2 12
Total 6 6 6 6 6 6 36

3.3.3TRADEPROMOTION
This will be done by the business through
(a) Offering discounts on goods and services bought from the business
(b) Employing good character and well behaved employees who can
attend to all Customers without favor or fear.
(c) Purchasing enough stock of materials or items required to make sure
that customers don’t miss anything
(d) Offering free samples on goods bought hence attracting more people
(e) Marketing the services and products through business exhibitions and shows.

3.4.1ADVERTISEMENT
The enterprise will employ the following advertisement methods.
3.4.1.1 Through posters where all the activities and location of the
buiness will be written on the posters and spread all over the
Luanda
3.4.1.2 Through local F.M radio that can pass information in local
language to many people.
3.4.1.3 Use of sign post to show where Ringo's Soda Bottles can be found.
3.4.1.4 Through local newspaper which are locally written and do
reach many people aroun,middle men who can be potential
customers.
3.4.1.5 All these methods will ensure that customers are, well

8
 informed about the direction, location operating time and kind
of services provided.

3.5 PRICINGSTRATEGY
The business will adopt different pricing strategies like:-
(a) Competitive pricing where competitors prices will be analyzed and
compared then come up with a suitable price which will be relatively
cheap for the products and services.
(b) Cost plus where prices will be determined through the cost of materials used or involved
(c) Psychological pricing where goods and services are blended to
capture the customers psychology
(d) Discriminating pricing where the enterprise will be selling a commodity at
two different in cost e.g. time pricing whereby during the day charges can
be different from that of evenings.

3.5 SALESTACTICS
There are many sale tactics that business will be going to use e.g.
(a) Opening its doors for long hours make sure that customers get what they want at
anytime.
(b) Having enough stock and offering the best quality products and services
(c) Adopting an attractive way of pricing where goods or services won’t be
priced so high hence affordable to everyone
(d) Advertise frequently goods and services of the business through the radio,
posters, newspaper etc.
(e) Employing very polite, humble, friendly, net and educated workers
who will attend to customers and any other persons correctly.

3.5DISTRIBUTIONSTRATEGY

The enterprise will employ both direct and indirect channels of distributing its
goods and services to customers. Goods and services will be sold to
customers directly from the shop floor or sensing experts to them to services
or repair their items. Also goods may reach the customers indirectly from the
business through agents, distributions or hawkers.

MANUFACTURER -------------- CONSUMER

9
CHAPTER FOUR
4.0 ORGANIZATION PLAN /MANAGEMENT

4.1KEY MANAGEMENTPERSONNEL

EMPLOYEES SUPERVISOR

QUALIFICATION
 Should have a diploma in Business Management.
 Should have enough experience in sales field
 Should be above 25years

Duties and responsibilities

 To supervise all the operations of the business
 Analyze and report sales performance
 Generate new ideas on how to run the business
 Serving customers
 Takes over responsibilities in absence of the manager.

 Computer literate

4.3OTHER PERSONNEL, DUTIES ANDNUMBER

SECRETARY
The proposed business will have one secretary
Qualification
 Should be at least a stage II module and above with basis knowledge
on Bookkeeping and office practices
 Should also be computer literate

DUTIES AND RESPONSIBILITIES

 Responsible for office records and bookkeeping

 To handle issues relating to customers i.e. acting a receptionist
 Receive and make calls on behalf of the business organization.

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 TECHNICIAN (2)
The business will employ two technicians

QUALIFICATION
 Should be a certificate holder or above in electrical engineering
 Should be computer literate duties and responsibility
 Look for contracts of work
 Design and cooperate all electrical projects.

4.4ARTISANS

 The proposed enterprise will have three Artisans

Qualifications

 They should have skills at least in determining any faults, knowledge

on electrical gadgets etc.
 Should be able to communicate either in Kiswahili or English

Duties and Responsibilities

 Should be able to detect any fault in an equipment and service or diagnose
 Carrying out duties dedicated to them by the seniors.

Security officer

The business will have one security officer

Qualification
 Should be a form four leaver and above
 Should have 5years experience in

security forces

Duties and Responsibilities

11
  Keeping Vigilant security during the night and daytime

4.5RECRUITMENT, TRAINING

ANDPROMOTION RECRUITMENT

 The business will make advertisement of its job opportunities through local newspaper,
local
F.M radio.
 There will be interviews for the recruits done by the manager questions
will be asked concerning the job ascertained. Individual dignity honor
will be considered so as reach to the satisfaction of the customers.
 Employees will have at least a week to adopt and be familiarized with the business.
Training
 The new employees will be trained according to their
qualifications to improve their efficiency and knowledge
 They will be taught safety measures, their roles etc. in the business.
 They will also be attending seminars or workshop

PROMOTION
 The employees will be promoted according to their performance and ability working
 The following will be considered when promoting employees.
 Their level of performance
 Training and qualification of each individual
 Punctuality and accountability
 Good public relation
 Loyalty to the enterprise
 Trust worthiness
 Diligence
 Creativity

4.6REMUNERATION ANDINCENTIVES
Remuneration will be done so that salaries set for employees can be realistic according to their
experience and level of education Employees’ earnings will include salaries and allowances

MONTHLY INCENTIVES

(i) Financial incentives

Employees will be paid money according to their productivity and hours
worked for. Also they can earn overtime, bonus and interests

(ii) Non – Financial incentives

12
 There will be safety at work place, health facilities, sick pays, transportation
to and from work, free lunch, free tea, safety clotting etc.

REMUNERATION AND INCENTIVES TABLE

JOB TITLE NUMBER SALARIES MEDICAL OTHER TOTAL
OF KSHS P.M ALLOWANCE SPECIFY (KSHS)
PERSONNEL
Manager 1 20,000 4,000 2,000 26,000

Supervisor 1 12,800 3,200 1,000 17,000

Technician 2 9,000 2,500 500 24,000

Secretary 1 7,000 1,300 8,300

Artisans 3 5,500 1,100 19,800

Security officer 1 3,800 1,100 4,900

Total 100,000

4.7LICENSES, PERMITS AND BY –LAWS

The business will require legal procedures for it to start its operations
These will include clearances, permissions, licenses etc from the government
ministries and other agencies. Some of these legal documents are:-
(i) Trading license from Ministry of Trade which will be free of charge
(ii) Certificate of ownership from the register of ownership(chargeable)
(iii) Labour laws governing the employees Insurance whereby employees
will be insured by the business.
(iv) Public health Act which deals with sanitation drainage, ventilation, hygiene.

4.8SUPPORTSERVICE

The most vital services include:-

(i) Banking services where the business will open an account with Equity

13
Bank in Luanda Branch

(ii)Auditing books of account ; auditors will be hired and be paid daily

upon delivering an auditing report medical services which will be
provided by the local dispensary at Luanda.

Water will be provided by the pipe water project from Emuhaya and also from bore holes.

Security will be provided by the officer in charge and also the business will be
located near a police post hence there will be security.

Power will be supplied from K.P.L.C and also there

will be a generator. Postal services will be provided

14
CHAPTER FIVE
5.0PRODUCTION / OPERATIONPLAN

5.1PRODUCTION FACILITIES ANDCAPACITY

Ringo's Soda Bottles will require a premise to operate from. This premise will
be situated at Luanda town in vihiga County. The enterprise will require
offices for other manager,
Supervisor and accountant (for this matte r the Secretary). There are
other facilities that will be required as listed in the table below.
ITEMS QUANTITY UNIT COST TOTAL
Computer 3 16,000 48,000

system Furniture 2 1,200 2,400

cabinet Cash 1 600 600

book Telephone 1 3,000 3,000

Chairs /tables 6 1,000 6,000

Electrical tool box 1 6,000 6,000

Electronics tool box 1 6,000 6,000

Totals 15 33,800 72,000

5.0.1ENTERPRISE LAYOUT

In the main workshop will be where all the business

operations will take place. Motors will be rewarded in the

motor rewinding room by experts .All the purchased stock

will be stored in the store plus other important things

Book keeping and recording is done in the accounts office. This will be where
purchase of stock to be sold will be done

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5.1.2REPAIR ANDMAINTENANCE

The following maintenance measures will be taken by mengich Kiosk in

maintaining the tools and equipment used.

(a) Regular maintenance where tools and equipment will be checked for
maintenance to make sure they work effectively every tool or equipment
to be checked thoroughly
(b) Corrective maintenance where by tools and equipment shall be
attended to when need a rise so as to correct the prevailing situation
e.g. sharpening of blunt parts greasing moving parts etc.
(c) Preventive maintenance where tools and equipment are kept clean or
maintained in order to prevent them from harm, rust destroy etc.

These maintenance will be done because of the following reasons.

(i) To increase the efficiency of the tools or equipment
(ii) The increase durability of tools or equipment
(iii) To increase the accuracy of the tools
(iv) Maintenance will be done to improve safety when working with tools or equipment
(v) To reduce the cost of buying new one

5.1.3PRODUCTION
5.1.4PRODUCTION DESIGN ANDDEVELOPMENT
5.1.5MONTHLY MATERIALREQUIREMENT

MATERIAL ITEMS COST

Insulating 400

tape Receipt 6,000

book 200

Superglue 300

Solder wire
News paper 300

Pens 100
Totals 7,300

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5.1.6MONTHLY LABOUR REQUIREMENT

PERSONNEL AMOUNT
Manager 26,000

Supervisor 17,0009

Technicians 24,000

Secretary 8,300

Artisans 19,800

Security officer 4,900

Total 100,000

5.1.6MONTHLY PRODUCTIONCOST
ITEMS AMOUNT
Rent 12,000

Transport 6,000

Telephone 1,000

Labour 100,000

Insurance 2,000

Materials 7,300

Stationary 500

Water 400
Electricity 1,200

Repair and maintenance 6,000

Entertainment 1,000

Advertisement 3,000

17
 Miscellaneous 1,000
Total 136,700

5.3.0 Production process

Moses’ future electronics will be a business that will deal with offering
services like repair of electrical accessories or gadgets, motor rewinding etc
and also selling of electrical equipment, materials, tools etc. therefore the
following steps will be used in the production process.

STEP ONE
Purchasing of the stock i.e. materials, tools and equipment to be sold and used in the business.

STEP TWO

Transportation of the purchased goods to the place of business.

STEP THREE

Unloading of the goods from the tracks and storing them in the store. So as
to be arranged in shelves ready for sale.

STEP FOUR
Customers will be welcomed warmly into the premises so as to make their choice on purchase

STEP FIVE

Transactions (legal) will be made if the customer wants to buy items whereby
he / she will be issued with a receipt which consist of
(i) Name of enterprise
(ii) Name of the customer
(ii)The item bought
(iv)The date to which transaction was made Signature of the salesman

STEP SIX
Packing of the purchased goods into cartoons or special bags and if
transportation will be needed, special arrangements to be made between
the enterprise and the customer.

STEP SEVEN
The customer leaves at his / her own will

STEP EIGHT
(I)Replacing and purchasing of other items

18
 (II)When offering the services of repairs then the following steps will be taken for production

5.4 REGULATION AFFECTING OPERATIONS

Ringo's Soda Bottles to run well as it will be dealing with already made
goods, it will have to adhere to regulation measures. The following are
some of the regulations.

(a) Environmental protection

The business will participate fully in cleaning and conserving the environment.
The premises will be kept tidy and all its’ surrounding. The enterprise will
make sure that it does not do anything to contract the environmental. Also all
workers must be clean.

(b) Ventilation
The workshop and all offices will be well ventilated to allow fresh air in. this
will be to create a comfortable working condition for the workers and also to
give better conditions for storage of source tools and equipment.

(c) SANITATION
Ringo Soda Bottles will build well trained sanitations like toilets and bathroom
of standards.

(d) PROTECTIONGARMENTS
The enterprise will purchase protection clothes for every worker in the
premises. This include: apron or dust coat, helmets, boots gloves etc. The
security men will be provided with raincoats etc. these garments will protect
the workers from harm when working within the premises.

(e) First aid kit

There will be a first aid kit in every room to help when there is an injury case
or any other problem. This kit will contain pain killers, bandages, disinfectants
cottons wool etc.

(f) Fire extinguisher

There will be a fire extinguishers in each room to help in over-coming the
menace of fire outbreak. Every worker will be taught how to handle the
situation and use the extinguishers.

(g) Safety protection

The enterprise will ensure that all workers are protected from oppressions
and other harm. They have to put on protective closings.

19
 (h) Tradelicense
For legal operations of the business to take, the enterprise will obtain a trade license.

CHAPTER SIX

6.0FINANCIALPLAN
Financial plan will be carried out by qualified personnel as it will be very
important. All business transitions done will be shown in their specific

20
 records.

6.1PRE – OPERATIONCOSTS
The pre –operations cost are the sum of many required to cater for the
materials and the equipment before business operates. The pre –
operational cost for Ringo kiosk will be tabulated as follows.

Description Cost (kshs)

registration and fittings 3,000

Furniture and fittings 15,000

Machine tools and 120,000

equipment Stationary 8,000

Electrical installation 20,000

Water installation 12,000

Salaries and wages 100,000

Transport 10,000

Advertisement 5,000

Stock 50,000

Miscellaneous 4,000

Banking 10,000

Insurance 3,000
Total 360,000

6.2. STARTING CASH

To start the business /= will be required by Mengich Kiosk from personal

savings, family and Friends contribution and bank loan i.e. Equity Bank. This
will be as follows.

21
 Sources Kshs
Personal savings 330,000

Bank loan 450,000

Family and Friends contribution 120,000

Total 900,000

The begging cash will be = proposed capital – Pre – operational cost.

= 900,000 – 360,000 = 540,000 /=

6.3ESTIMATION OF WORKINGCAPITAL

ITEMS YEAR ONE YEAR 2 YEAR 3

Currents assets Kshs Kshs Kshs
Opening stock 80,000 100,000 120,000

Cash at bank 150,000 2,200,000 2,600,000

Cash at hand 300,000 450,000 600,000

Debtors 20,000 25,000 30,000

Closing stock 40,000 60,000 80,000

Totals 590,000 2,835,000 3,430,000

CURRENT LIABILITIES KSHS KSHS KSHS

Creditors 50,000 20,000 40,000

Rent 18,000 18,000 18,000

Insurance 10,000 8,000 12,000

Totals 78,000 46,000 70,000

Working capital = Current Assets –

Current liabilities Working capital

22
 for year 1 = 590,000 – 78,000

= 512,000 /=
Working capital for year 2= 2,835,000 – 46,000

= 2,789,000 /=

Working capital for year 3 = 3,430,000 – 70,000

= 3,360,000 /=

6.4CASH FLOWPROJECTION
DESCRIPTION JAN FEB MAR APR MAY JUN JUL AUG SEP
Cash in flow
Capital 330,000 - - - - - - - -
Loan 450,000 - - - - - - - -
Friends donation 120,000 - - - - - - - -
Cash sales 100,000 125,000 120,000 115,000 150,000 140,000 170,000 125,000 195,000
Debtors 70,000 20,000 15,000 18,000 12,000 20,000 18,000 22,000 15,000
Total inflow 1,270,000 145,000 135,000 133,300 162,000 160,000 188,000 147,000 210,000
Cash out flow

Rent 1,200 1,200 1,200 12,00 1,200 1,200 1,200 12,00 1,200
Salaries 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000
Water 300 300 300 300 300 300 300 300 300
Electricity 2,000 2,500 2,450 2,200 2,000 2,500 2,000 2,200 7,500
Interest Loan 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Creditors 4,000 4,000 5,000 3,000 1,000 1,200 1,800 2,000 2,000
Advertisement 15,000 10,000 8,000 - 2,000 - 6,000 - 10,000
Telephone 1,000 1,000 800 600 500 900 500 1,000 500
Licence 8,000 - - - - - - - -
Promotion 10,000 - - - - - - - -
Loan payment 10,000 10,000 8,000 6,000 10,000 5,000 15,000 10,.000 12,000
Insurance 8,000 - - - - - - - -
Furniture 20,000 - - - - - - - -
Miscellaneous 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Total out flow 181,500 131,000 127,700 115,300 119,000 113,100 138,800 118,700 130,600
Surplus 888,500 14,000 7,300 17,700 43,000 46,900 49,200 28,300 79,400
Accumulated 888,500 902,500 909,800 927,500 970,500 1,017,400 1,066,600 1,094,900 1,174,300

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6.6PROFORMA INCOME STATEMENT

DESCRIPTION YEAR 1 YEAR 2 YEAR 3

Cash sales 1,700,000 2,400,000 3,000,000

Discount received 175,000 180,000 220,000

Debtors 260,000 270,000 300,000

Totals 2,135,000 2,850,000 3,520,000
Less cost of sales 198,000 250,000 300,000
Gross profit 1,937,000 2,600,000 3,220,000
Less expenses

Electricity 27,200 30,000 40,000

License 8,000 8,500 10,000

Telephone 9,600 9,000 9,500

Insurance 8,000 9,000 12,000

Creditors 27,700 30,000 40,000

Travel 6,500 8,000 10,000

Rent 14,400 15,000 20,000

Advertisemen 72,000 65,000 80,000

t Water 3,600 4,500 6,000

Salaries 1,200,000 1,200,000 1,200,000

Total expenses 1,377,000 1,379,000 1,427,500
Net profit before tax 560,000 1,221,000 1,792,500
Less provision of tax @ 16 % 89,600 195,360 286,800
Net profit after tax 470,400 1,025,640 1,505,700

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6.7PROFORMA BALANCESHEET
DESCRIPTION YEAR 1 YEAR 2 YEAR 3
Fixed assets

Production facilities 40,000 50,000 70,000

Furniture 15,000 10,000 12,000

Vehicle - - 200,0000

Computer 30,000 60,000 100,000

Totals 85,000 120,000 382,000
Less depreciation

5% production facilities 2,000 2,500 3,500

5 % furniture fittings 750 500 600

10 % vehicle - - 20,000

10 % computers 3,000 6,000 10,000

Totals 5,750 9,000 24,100
Total fixed assets 79,250 111,000 357,900
Current assets

Cash at hand 300,0000 400,000 500,000

Cash at bank 170,000 255,000 390,000

Stock 80,000 100,000 120,000

Debtors 260,000 270,000 300,000

Totals 810,000 1,025,000 1,310,000
Totals assets 889,250 1,136,000 1,667,900
Current liabilities

Creditors 300,000 400,000 480,000

Bank overdraft 200,000 350,000 550,000

Total 500,000 750,000 1,030,000
Long term liabilities

Bank loan 300,000 400,000 480,000

Owners’ equity 89,250 350,000 550,000

Totals 389,250 386,000 637,900
Total liabilities 889,250 1,136,000 1,667,900

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6.8BREAK EVENANALYSIS
DESCRIPTION KSHS
Sales 1,700,000
Variable cost

Purchases 230,000

Telephone 9,600

Advertisement 72,000

Repair and maintenance 24,800

Water 3,600
Total variable cost 340,000

Contribution = Total sales – variable costs

= 1,700,000 – 340,000

= 1,360,000

(i) Contribution margin =

Contribution x 100 sales

= 1,360,000 x 100

1,700,000

= 80

26
 (ii) Break-even level ofsales
Fixed costs Kshs
Salaries 1,200,000

Licenses 8,000

Insurance 8,000

Loan Payment 113,000

Rent 14,400

Interest On Loan 12,000

Total fixed cost 1,355,400

Break-even level of sales =

Fixed cost x 100

Contribution margin

= 1,355,400 x 100
80

= 1,694,250

4.1 PROFITABILITYRATIO
(a) Gross profit margin =

Gross profit x 100 sales

Year 1 – 1,937,000 x 100

1,700,000
= 113.94 %
Year 2= 2,600,000 x 100
1,700,000
= 152.94 %
Year 3 = 3,220,000 x 100
1,700,000

= 189.41 %

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(b) Return on equity = Net

profit after tax x 100

Equitycontribution

Year 1 = 470,400 x 100

89,250
= 527.06 %
Year 2= 1,025,640 x 100
150,000
= 683.76 %
Year 3 = 1,505,700 x 100
237,900
= 632.91 %
(c) Return on investment = Net

profit after tax x 100 Year 1 =

470,400 x100

889,250
889,250

= 52.9 %

Years = 1,025,640 x 100

1,136,000
= 90.29 %

Year 3 = 1,505,700 x 100

1,667,900

= 90.28 %

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6.8DESIRED FINANCE
DESCRIPTION AMOUNT (KSHS)
Pre – operational cost 360,000

Working capital for year 1 512,000

Desired Financing 872,000

4.2 PROPOSEDCAPITALIZATION

DESCRIPTION KSHS
Bank loan 450,000

Owners’ equity 89,250

Total investment 539,250

29
 APPENDIX 1

LOCATION DIAGRAM/MAP/ROUTE MAP at Luanda Market

Purity grocery Petol Sharon

Shops station grocery

To KISUMU

RINGO'S SODA
BOTTLES

Supermarket

Boutique KC
B
Hardware
Ban
Equity k
bank

30