BUSINESS PLAN

NAME OF THE BUSINESS: SIMBA INVESTORS SUPERMARKET.

ADDRESS: P.O BOX 76 AKALA.

TELEPHONE: 0700883796

EMAIL: info@simbainvestors.com

LOGO:

PRESENTED BY: OLWENY ACHIENG LOREEN.

INDEX NUMBER: 7053010008

CENTRE NAME: SIAYA INSTITUTE OF TECHNOLOGY

PRESENTED TO : THE KENYA NATIONAL EXAMINATION COUNCIL IN

PARTIAL FULFILMENT FOR THE AWARD OF CERTIFICATE IN HUMAN
RESOURCE AND MANAGEMENT.

SUPERVISOR: MADAM EMMA WAMUNGA

DATE PRESENTED: NOVEMBER 2022

Contents
DECLARATION........................................................................................................................................4
DEDICATION..........................................................................................................................................5
ACKNOWLEDGEMENT...........................................................................................................................6
EXECUTIVE SUMMARY...........................................................................................................................7
CHAPTER ONE........................................................................................................................................8
1 BUSINES DESCRIPTION....................................................................................................................8
1.1 BACKGROUND OF THE OWNER...................................................................................................8
1.2.1 BUSINESS NAME.......................................................................................................................9
1.3.1 BUSINESS LOCATION AND ADDRESS.........................................................................................9
1.4 FORM OF OWNERSHIP.................................................................................................................9
1.5 TYPE OF BUSINESS....................................................................................................................10
1.6 PRODUCT AND SERVICES..........................................................................................................10
1.7 JUSTIFICATION OF OPPORTUNITY..............................................................................................11
1.8 THE INDUSTRY...........................................................................................................................11
1.9 GOALS OF BUSINESS AND OBJECTIVES......................................................................................11
1.9.1GOALS......................................................................................................................................11
1.9.2 OBJECTIVES.............................................................................................................................11
1.10 ENTRY AND GROWTH STRATEGY.............................................................................................11
1.10.1 ENTRY PLAN..........................................................................................................................12
1.10.2 GROWTH PLAN.....................................................................................................................12
CHAPTER TWO.....................................................................................................................................12
2.0 MARKETING PLAN......................................................................................................................12
2.1 CUSTOMERS...............................................................................................................................12
2.1.1 WHOLESALERS........................................................................................................................13
2.1.2 RETAILERS...............................................................................................................................13
2.1.3 INSTITUTIONS.........................................................................................................................13
2.1.4 INDIVIDUALS /HOUSEHOLDS..................................................................................................13
2.2 MARKRT SHARE/SIZE.................................................................................................................13
Table 1: Before I penetrate into the market;...................................................................................13
Table 2: After I penetrate into the market;......................................................................................13
2.3 COMPETITION............................................................................................................................14
2.4 METHODS OF PROMOTION AND ADVERTISEMENT...................................................................14
2.5 PRICING STRATEGY....................................................................................................................14
 2.6 SALES TACTICS...........................................................................................................................15
2.7 DISTRIBUTION STRATEGY...........................................................................................................15
CHAPTER THREE...................................................................................................................................15
3.0 ORGANIZATION AND MANAGEMENT PLAN...............................................................................15
3.1MANAGEMENT TEAM.................................................................................................................15
3.1.1HUMAN RESOURCE MANAGER................................................................................................15
3.1.2 STORE MANAGER....................................................................................................................16
3.1.3SUPERVISOR............................................................................................................................16
3.2 OTHER PERSONEL......................................................................................................................16
Figure 2; organization chat..............................................................................................................17
3.3 RECRUITMENT, TRAINING AND PROMOTION............................................................................18
3.3.1 RECRUITMENT........................................................................................................................18
3.3.2 TRAINING................................................................................................................................18
3.3.3 PROMOTION...........................................................................................................................18
3.4 RENUMERATION AND INCENTS.................................................................................................18
3.4.1 REMUNERATION.....................................................................................................................18
Table 5: Remuneration and Incentives..........................................................................................18
3.4.2 INCENTIVES.............................................................................................................................19
3.5 LEGAL REQUIREMENT................................................................................................................19
3.5.1 LICENCES.................................................................................................................................19
3.5.2 PERMITS..................................................................................................................................19
3.5.3 BY –LAWS................................................................................................................................19
3.6 PROFESSIONAL ADVISORS AND SUPPORT SERVICES..................................................................19
3.6.1 BANKING SERVICES.................................................................................................................19
3.6.2 INSURACE SERVICE..................................................................................................................19
3.6.3 CONSULTING SERVICES...........................................................................................................20
3.6.4LEGAL SERVICES.......................................................................................................................20
CHAPTER FOUR................................................................................................................................20
4.0 PRODUCTION AND OPERATION.................................................................................................20
4.1 PRODUCTION FACILITATE AND CAPACITY..................................................................................20
Table 6: Production facilities and capacity.......................................................................................21
4.2 PRODUCTION STRATEGY............................................................................................................21
4.3 PRODUCTION PROCESS..............................................................................................................21
4.4 FACTORS AFFECTING OPERATION/PRODUCTION......................................................................22
 4.4.1 HEALTH REGULATIONS...........................................................................................................22
4.4.2 SAFETY....................................................................................................................................22
4.4.3 ENVIRONMENTAL REGULATIONS...........................................................................................23
CHAPTER FIVE......................................................................................................................................23
5.0 FINANCIAL PLAN........................................................................................................................23
5.1 PRE-OPERATION COST...............................................................................................................23
Table 5.1 – pre-operational cost......................................................................................................23
5.2 OPERATION COST......................................................................................................................24
Table 5.2; Operation cost................................................................................................................24
5.3.1CASH FLOW STATEMENT FOR SIMBA INVESTORS SUPERMARKET FOR YEAR 1.......................25
5.3.2 CASH FLOW FOR SIMBA INVESTORS SUPERMARKET FOR YEAR 2...........................................26
5.3.3 CASH FLOW STATEMENT FOR SIMBA INVESTORS SUPERMARKET FOR YEAR 3......................27
5.4 PROFIT AND LOSS ACCOUNT FOR THREE YEARS........................................................................29
5.5 PROFORMA BALANCE SHEET FOR THREE YEARS........................................................................31
5.6 BREAK EVEN ANALYSIS...............................................................................................................32
5.8 DESIRED FINANCING..................................................................................................................35
5.9 PROPOSED CAPITALIZATION......................................................................................................36
DECLARATION
I hereby declare that the business plan is my original work and that it has not been presented
for the award of a certificate to any institution.

NAME: LOREEN ACHIENG OLWENY.

ADMISSION NUMBER: CHRM/0019/J22

SIGNATURE:

DATE: NOVEMBER 2022.

SUPERVISORS NAME: EMMA WAMUNGA

SIGNATURE:

DATE: NOVEMBER 2022

DEDICATION
I dedicate this work to my family and friends for the financial support they offered for me to
run my business.
ACKNOWLEDGEMENT
I wish to acknowledge the following people who assisted me in ensuring that the business
project report was successfully done;

My Supervisor Madam Emma Wamunga who took her time to guide me on how to write the
business plan and correct me on where I didn’t tackle well.

My mother Perez Olweny for the financial support to produce the copy of my business plan
and burning the compact disc.

I also thank God for the gift of life and enabling me to complete the work.
EXECUTIVE SUMMARY
CHAPTER ONE

The title of the business will be SIMBA INVESTORS SUPERMARKET which will be
located at Akala Market. The business will be owned by Loreen Achieng Olweny who was
born on seventh September 2001 and started education at Uranga Primary School and
currently taking a certificate course in Human Resource and Management at Siaya Institute of
Technology. The business will be dealing mainly with household goods and stationary.

CHAPTER TWO

My customers will be wholesalers, retailers, household and institutions. I will be using road
as a means of transport to supply goods. My competitors have weaknesses like selling poor
quality goods, poor relations with their customers inadequate stock and they open their
businesses late hence poor time management.

CHAPTER THREE.

I will be the managing director of my business and also recruit other personnel like
supervisors, store managers and human resource managers. A human resource manager must
have at least a diploma in Human Resource and Management and a ten years’ experience in
the job, a supervisor must have excellent communication skills and a five years’ experience
and a store manager must have a degree in Business Administration.

CHAPTER FOUR

The business will be using facilities such as pick-ups, office, store, fridge, proper handling of
machines and equipment’s to minimize the costs of damages and for durability.

CHAPTER FIVE

The business will need a total of sh. 4,000,000. Sh. 1,000,000 will come from parents
account, sh. 2,000,000 from personal savings, sh. 600,000 from friends contributions and sh.
400,000 will be borrowed from the Bank.
 CHAPTER ONE

1 BUSINES DESCRIPTION
The title of the business will be SIMBA INVESTORS SUPERMARKERT which will be
located at Akala Market Siaya County along Bondo Kisumu road opposite shell petrol station
.The business will be mainly dealing with household goods and stationery

1.1 BACKGROUND OF THE OWNER

Loreen Achieng Olweny will be owning the proposed business .She was born on seventh
September 2OO1, started education uranga primary school and proceeded to kambare
secondary school and her KCSE in 2O17 and also currently taking a certificate course in
Human Resource and Management at Siaya Institute of Technology.

1.2.1 BUSINESS NAME

The name of the proposed will be SIMBA INVESTORS SUPERMARKET .The name up
after arapid increase and performance in the entire supermarket .After good relations with
the customers and high demands, l decided to increase the stock and name the business as
SIMBA INVESTORS SUPERMARKET .The logo below will be representing the
business
1.3. BUSINESS LOCATION AND ADDRESS
The business will be located at Akala Market along Bondo Kisumu road opposite shell
petrol station near Akala police line .The business address will be,
SIMBA INVESTORS SUPERMARKET
P.O.BOX 76, AKALA
Email;info@simbainvestors.com.
Website: www.simbainvestors.com

The figure below will represent the business location map

KEY.
1 – Kisumu Airport
2 – Shell petrol station
3 – Simba Investors
Luanda road

kisumu

akala police line 3

1

bondo
ndori road

fig 1.1
1.4 FORM OF OWNERSHIP
Sole proprietorship will be the owner of the business unit. This type of unit is easy to start
and operate since it does not require a lot of procedure .Its operation is simple as it can
get help from friends, relatives or family who may want to offer free labour

Advantages of sole proprietorship;

i. It is easy to start and operate
ii. Decision making and implementation is fast because the proprietor does not have
to consult anybody
iii. The trader has close and personal contact with a customer who helps them in
knowing exactly what the customers need and hence satisfying the needs.
iv. A sole trader is able to keep the top secrets of the business operation.
v. A sole trader enjoys all the profits.
Disadvantages of sole proprietorship;

i. Has unlimited liability .This means that if the assets available in business are not
enough to all the business debts ,the personal property of the owner such as house
will be sold to meet the debts.
ii. The sole proprietor is overworked and has no time for recreation.
iii. There is lack of continuity in the sole proprietorship, the is affected by sickness or
death of the owner
iv. Expansion of the business may be limited by scarcity of capital .The business will
need a total capital of sh.4,000,000 to start ,which will amount as follows ;
 Ksh2,000,000 from personal savings
 Ksh600,000 from friend’s contributions.
 Ksh400,000 will be borrowed from the bank.
 Ksh1,000,000 from parents account

1.5 TYPE OF BUSINESS

The business will be a start –up business which will be coming up with various levels of
management and operations. It will be having various activities taking place daily from
eight am in the morning to nine thirty p.m in the evening including planning and
controlling the business .Other activities that will be taking place will include;
i. Free delivery of goods.
ii. Loading and offloading of goods for further supply.
iii. Supplying of goods to different wholesalers.
iv. Receiving of goods from different distributors.
1.6 PRODUCT AND SERVICES
The business will be mainly dealing with household goods and stationery like books, pencils,
pens, rubbers, rulers and sets which are used to improve on education. The household goods
will include bar soap toilet paper, hand wash bathing soap sufurias, utensils and vegetables
which are mainly used in maintenance of the house and personal hygiene. Products that will
be sold will be of high quality for better sales and to attract more customers. The products
will be approved by the KEBS while the services that will be offered will include free gift,
fair discount, and free delivery of goods for customers who will be buying in bulk and free
training on use of new commodities in the market.

1.7 JUSTIFICATION OF OPPORTUNITY

The main purpose of choosing this kind of business will be to bring job opportunities at
Akala market since a lot of youths are unemployed. The other reasons will to fill gaps such as
an affordable prices and poor relations with customers. There is improved infrastructure like
availability of electricity, water and goo roads, this will help to bridge the gap between the
distributors and the business. The climate is also favourable that will allow smooth and easy
distribution and supply of goods

1.

1.8 THE INDUSTRY

Simba investors will be falling under retail industry. This industry has a huge number of
competitors and grows rapidly due to high demands of household good stationary and higher
competition from people who own the same business .the industry competes through methods
like advertising and giving some offers to customers

1.9 GOALS OF BUSINESS AND OBJECTIVES

Goals are what the business wants to achieve in the long term like for example to become a
quality leader. Objectives are what the business want to achieve in the short term e.g. to
increase sales.

1.9.1GOALS
Some of the business goal will be;

i. Increasing sales and profit.

ii. Training al employees on customer service.
iii. Having enough products for customer
iv. To remain the leader of the market all the way.
v. To always be the first choice of customers

1.9.2 OBJECTIVES
The business objectives will be;
 i. Increasing the total income of the business by15%over the next one year.
ii. Increasing overall brand awareness.
iii. Increasing business’s share in its market
iv. Reducing production expenses by 5%.

1.10 ENTRY AND GROWTH STRATEGY

This means how the business will penetrate and gain acceptance in the market

1.10.1 ENTRY PLAN

The business will enter into the market by collecting trade license from the government. The
business will be finding any local retail partner to sale its product in new market. The
business will also be exporting its goods to wholesalers in new market as well as attracting
customers in various ways such as window display, free gift and good discounts.

1.10.2 GROWTH PLAN

The following signs will be showing that the business is growing.

i. After following proper survey on the location of the supermarket at Akala market. A
market penetration strategy will be used to increase market share. The methods will
be lowering prices and using techniques like direct marketing
ii. There will be availability of security due to Akala police line, good infrastructure due
to electricity and good road for customer to access the super market easily and easy
supply of goods
CHAPTER TWO

2.0 MARKETING PLAN

Marketing plan refers to how business will take its goods and services to the market and sell
them to consumers to achieve business objective and goals.

2.1 CUSTOMERS
A number of business customers will be wholesalers , retailers, household and institutions
like schools hospitals and churches .my good will be received from different suppliers and I
will be selling the goods to retailers, wholesalers, institutions and churches . Consumers will
also be buying households goods from my super market. I will be selling high quality good
and products at a pocket friendly price and I will also be bulk breaking goods into smaller
quantities that all the customers can afford

2.1.1 WHOLESALERS
These are people or companies who buy products in bulk from manufactures and sell them to
retailers. My wholesalers will be Mega wholesalers, Siaya wholesalers and Mahitaji
wholesalers.

2.1.2 RETAILERS
These are people or business that sells goods in those relatively small quantities for use or
consumption. My retailers will be Shirlet, Esther, Akinyi and Owino.

2.1.3 INSTITUTIONS.
They are organizations founded for religious educational, professional or social purpose. The
business will be dealing with both schools, churches, hospitals and collages. These
institutions will be buying good from the supermarket for consumption.

2.1.4 INDIVIDUALS /HOUSEHOLDS

These businesses will be selling goods to the consumer like households good. My individual
or households will be people around who will be buying from the supermarket.
2.2 MARKRT SHARE/SIZE
Simba investors supermarket will be expected to make a sales volume of ksh 200,000 per
month. On the currently there are a lot of competitors dealing with mostly household goods
and stationary in the area. The table below shows the market share;

Table 1: Before I penetrate into the market;

SHIVLING SUPERMARKET OMSAI SUPEMARKET TOTAL
Sales 250,000 300,000 550,000
Market share 45.5% 54.5% 100%

Table 2: After I penetrate into the market;

SHIVLING OMSAI SIMBA TOTAL
SUPERMARKET SUPEMARKET INVESTORS
SUPERMARKET
Sales 250,000 300,000 400,000 950,000

Market 26.3% 31.6% 42.1% 100%

share

2.3 COMPETITION
A number of many competitors deal with poor quality goods, inadequate stock, they may
relate poorly with customers and they don’t manage their time well hence they open their
business late. I will be relating with my customers well, I will be selling the best quality
goods to my customers, I will be adding my stock at least twice a week and lastly I will also
be opening my business one hour earlier than my competitors. Some of my competitors have
pick-ups while others have tuk tuks which helps them in supply their goods .In case of
blackouts or shortage of electric power I will be using solar panels or generators.
2.4 METHODS OF PROMOTION AND ADVERTISEMENT
I will be promoting my business through free gifts to my customers, reward points and credit
to the regular customers who will be buying in bulk. I will be advertising my products and
services every Tuesday and Saturday through electronic media which will be around ksh
3,000 per month. I will also be educating my customers on the use of new product in the
market.

2.5 PRICING STRATEGY

I will lower my prices for a period of time to attract more customers than my competitors and
after an increase in sale volume; I will increase the prices slowly to avoid losing the already
earned customers. I will set my prices according to the demands of the goods i will be dealing
and also according to the prices set by competitors will be offering both weekly credits which
will be paid after maximally one week and monthly credits which will be paid after exactly
one month .I will also be offering discounts to customers who will be paying credit promptly.
Lastly i will be offering after sales services like free delivery of goods to customers who will
be buying in bulks

2.6 SALES TACTICS

I will be selling directly to customers, build good relation with them and I will advertise any
job vacancy available through magazines and television. I will be telling the amount of salary
they will be earning and other promotion available to motivate then to keep them working
hard to the business to gain more sales.

2.7 DISTRIBUTION STRATEGY

I will be using road as means of transport to supply goods to different parts of Akala Market
and through this means my distributor will be able to reach me on time. This means of
transport will be using petrol which will be roughly costing ksh3, 500 per week.
CHAPTER THREE

3.0 ORGANIZATION AND MANAGEMENT PLAN

An organization is a group of people running different types of departments with an aim of
making a profit.

Management plan refers to how an organization is set controls and direct various activities
with an aim of making a profit

3.1MANAGEMENT TEAM
Members of management team of my proposed business will be supervisors, store managers
and human resource managers

3.1.1HUMAN RESOURCE MANAGER

This person will be doing the following duties and responsibilities;

a) Will be handling compensation and benefits like medical benefits or house allowance
and annual leave
b) Will be advertising for new workers, interview them and appoints or hire them
c) Will be keeping records of all staff particulars and how they are performing among
others

The human resource manager must have at least a diploma in human resource management
and must have a ten years experience in the job

3.1.2 STORE MANAGER

He/ she will be performing the following duties;

a) Delivering excellent service to ensure high level of customers satisfaction

b) Motivating the sales team to meet sales objective by training and monitoring staff
c) Training of new staff

This manager must have a degree in business administration and must have proven successful
experience as a retail store manager.
3.1.3SUPERVISOR
Will be responsible for the following;

a) Ensures work flow or the task required to complete a job and also monitoring team
performance.
b) Training new hires. The supervisor will be helping new employees to understand their
roles and explaining the job policies and duties
c) Creating and managing team schedules .the supervisor must have five years
experience in previous job and excellent communication skills

3.2 OTHER PERSONEL

My proposed business will need security officer, drivers, cleaners and cashier.

TITLE NUMBER QUALIFICATIONS DUTIES

Cashiers 5 Computer literacy and -scanning goods and
strong score in ensuring pricing is
mathematic accurate.
-issue receipts,
refunds, balances or
ticket
Drivers 2 At least D(plain) in -Distribution and
KCSE shipment of goods.
Security officer 2 At least D(plus) in -Premise securities
KCSE and ensure no
dangerous weapon
enters the premise
Cleaners 4 At least a KCPE -Ensuring the
premise is clean and
goods are dust free.
Figure 2; organization chat

HUMAN RESOURCE MANAGER

SUPERVISOR

STORE MANAGER

CASHIERS DRIVERS SECURITY OFFICERS CLEANERS

3.3 RECRUITMENT, TRAINING AND PROMOTION

Recruitment is the process of acquiring or employing of workers and manager, Training is the
act of developing skills of employees and helping them understand their roles and duties in
the job and promotion is the act of moving from lower level to the upper level

3.3.1 RECRUITMENT
Acquisition and employment of managers and other employees will be done through
advertisement in magazines and through face book.

3.3.2 TRAINING
Induction training will be given to the newly employed workers and staff and also for the
staff or employees who will be promoted.

3.3.3 PROMOTION
After job evaluation and training the employee and staffs who will have attained job
qualification and experience will be promoted.
3.4 RENUMERATION AND INCENTS
Remuneration is the money paid for a work done or a service offered.

Incentives is a thing that motivates or encourages someone to do a thing

3.4.1 REMUNERATION
I will be offering attractive salaries to my employees so as to motivate and retain them to
keep working for me.

Table 5: Remuneration and Incentives.

TITLE NUMBER MONTHLY PAY ALLOWANCE TOTAL
CASHIERS 5 12,000 3,000 15,000
DRIVERS 2 15,000 5,000 20,000

SECURITY 2 8,000 2,000 10,000

OFFICERS
CLEANERS 4 6,000 2,000 8,000

3.4.2 INCENTIVES
I will be offering free lunch, house allowance, medical allowance bonuses and over time
allowance to my employees.

3.5 LEGAL REQUIREMENT

These are the law or regulations or government approval of any authority.

3.5.1 LICENCES
I will register a trading licence to start my business. The licence will be offered by the county
government of Siaya which will cost ksh1000. The purpose of the licence will be to get
permission from the government to carry out the business.

3.5.2 PERMITS
For household goods and goods and stationary, I will need permits from Kenyan bureau
standards (KEBS).
3.5.3 BY –LAWS
I will be ensuring that my business complies with the by –laws because it is a legal demand in
the country.

3.6 PROFESSIONAL ADVISORS AND SUPPORT SERVICES

The business will require support services to enable it carry out its operations effectively.
These services will include;

3.6.1 BANKING SERVICES

I will open a fixed despite account with the cooperative bank Siaya branch .The purpose of
the account will be to save money for the employees salaries and maintenance of the
business.

3.6.2 INSURACE SERVICE

The will be insured against fire and accident. The business will be registered with jubilee
insurance company for accidents which will roughly cost 50,000 shillings and perils
insurance company against fire which will coast 200,000 shillings per month.

3.6.3 CONSULTING SERVICES

I will be consulting various entrepreneur and business manager on how to keep the business
on the run and how to make large volume of profit since they have a lot of experience in the
same business.

They will also advise me on how to handle challenges faced in doing the business

3.6.4LEGAL SERVICES
I will require legal services when writing contracts, drafting legal letters, interpreting labour
loss and employment.

My business will be registered by Koya and company advocates and the lawyer will be
Munyao and the registered office will be national legal aid and services
CHAPTER FOUR

4.0 PRODUCTION AND OPERATION PLAN

Production is the process of transforming raw materials into successful products to satisfy
human want.

Operation plan is practical document which outlines the activities and target that an
organization will undertake in achieving its aims and objectives.

4.1 PRODUCTION FACILITIES AND CAPACITY

My business will need storage facilities, transport facilities and cleaning facilities. The
equipment needed to run the business will include pick-ups , office ,store, fridge solar panels,
electricity bar code readers, computers and mopes.

The equipment such as story shop will be paid monthly at a cost of 4000 shillings. I will be
ensuring proper handling of machines and equipment’s to minimize the cost of damages and
repairs and also for durability.

I will be doing indirect production where good that i will purchase will be re sold into
smaller quantities, after the success of the business they will start manufacturing different
goods.

Table 6: Production facilities and capacity

ITEM QUANTITY COST CAPICITY
Pick-ups One 600,000 1, 800
Office One room 20,000 7,office personnel
Store 2 rooms 40,000 30 tone of goods
each
Solar panel 1 ream 15,000 400Watts
Electricity 3phase 30,000 800kw
Computers 5 50,000 1000 GB each
 4.1.1 FIRM LAYOUT

Figure 3: firm layout

STORE MATRESSES & DUVETS

HOUSEHOLD COLD DRINKS CLOTHING VEGETABLES

STATINERY
GOODS
OFFICE

TELLER 1 TELLER 2 TELLER 3 TELLER 4 TELLER 5

LUGGAGE ENTRANCE
EXIT
4.2 PRODUCTION STRATEGY
This is the method used to produce the products. My production strategy will start from
importing goods from different companies and store them into my store waiting for purchase
by my customers. I will be offering free transportation to customers who buy in bulk. The
storage space will only cost shilling per month.

My business will need both skilled and unskilled employees. The unskilled employees will be
loading and off-loading and offloading goods and delivering goods from suppliers and also
loading goods and delivering them to various retailers. The skilled ones will be working as
cashiers, store managers and supervisors. They will be getting wages according to job done

4.3 PRODUCTION PROCESS

After receiving different good from suppliers in bulk, I will store them an later sell them to
consumers when demand go high. My business will be likely to be affected by external
factors such as competitions, rise in prices and lack of enough labour. Careless use of
machine and equipment may also cause inefficiency in work.

I will be purchasing goods in bulk so that my business doesn’t get affected by change in
price. I will be employing workers who have knowledge and skills in operation the machines
and also employing workers and giving friendly wages to motivate them to keep working.
Lastly, I will be offering reward points and offer to my customers to gain more customers
than my competitors.

Some of the factors that will be affecting the production process and lack of enough capital,
poor road and lack of enough labour
4.4 FACTORS AFFECTING OPERATION/PRODUCTION
These are factors that the process that hinders the process of handling a business.

4.4.1 HEALTH REGULATIONS

I will be ensuring that my business adheres to the rules and regulations set by the government
or public health in handling the business product. I will ensure that I don’t sell expired goods
to consumers or wrong quantities. I will also ensure that I offer protective clothing like dust
coats, gloves and gumboots to all cleaners. This will be done by seeking advice from heath
workers and government policies like KEBS.

4.4.2 SAFETY
I will be ensuring that the customers or workers keep social distance, they wear their masks
properly and they wash their hands or sanitize to avoid the spread of COVID-19. I will ensure
that they hand the machines and equipment and equipment properly to avoid injuries

4.4.3 ENVIRONMENTAL REGULATIONS

I will be ensuring that my business avoids the use of small plastic bags to prevent on soil
pollution, proper disposal of waste to avoid air pollution and water.

Proper maintenance of machines will also help in reducing air and water pollution.
CHAPTER FIVE

5.0 FINANCIAL PLAN

This chapter help in ascertaining if the business is in the right tract. It is concerned with the
financial management of the business.

5.1 PRE-OPERATION COST

These are expenses incurred before the business starts operating officially. They include
licenses, permits, premise construction, water and electricity installation, transport and
machine installation.

Table 5.1 – pre-operational cost

Item description Amount in ksh
License 1,000
Permits 20,000
Premise construction 300,000
Water installation 50,000
Electricity installation 30,000
Transport 2,000
Machine installation 15,000
TOTAL 418,000

5.2 OPERATION COST

These are expenses incurred by the business when it has started operation officially.

They include, salaries and wages, electricity bill, stationary, transport, telephone charges and
purchase.

Table 5.2; Operation cost

Item Description Amount in ksh monthly Amount in ksh annually
Salaries and wages 167,000 2,004,000
Electricity bill 1,000 12,000
Stationery 500 6,000
Transport 2,000 24,000
Telephone charges 600 72,000
Purchases 50,000 600,000
TOTAL 221100 2,653,200
 5.3.1CASH FLOW STATEMENT FOR SIMBA INVESTORS SUPERMARKET FOR YEAR 1
PARTICULAR JAN FEB MARC APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
S H
CASH FLOW - - - - - - - - - - - - -
Balance bd/bf 0 125,72 103,299 138,20 164,79 221,145 307,754 391,988 463,947 522,631 599,014 687,722 3,726,222
0 3 9
Cash sales 200,00 250,00 300,000 350,00 400,00 450,000 480,000 490,000 500,000 520,000 540,000 550,000 5,030,000
0 0 0 0
Debtors 10,000 10,500 11,000 12,000 12,500 13,000 14,000 14,500 15,000 16,000 16,500 17,000 162,000
Disc. Received 3,000 3,500 4000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 8,500 69,000
commission 2,000 2,500 3,000 3,500 4,000 5,000 5,500 6,000 6,500 7,000 7,500 8,000 60,500
Loan 400,00 - - - - - - - - - - - 400,000
0
Total 665,00 542,22 591,299 688,20 771,29 884,645 1,008,25 1,106,98 1,192,44 1,283,13 1,386014 1,489,22 11,608,72
0 0 3 9 4 8 7 1 2 2
Cash outflow - - - - - - - - - - - - -
Salaries & 167,00 167,00 167,000 167,00 167,00 167,000 167,000 167,000 167,000 167,000 167,000 167,000 2,004,000
wages 0 0 0 0
purchases 150,00 160,00 170,000 180,00 200,00 220,000 250,000 270,000 290,000 300,000 310,000 320,000 2, 820,000
0 0 0 0
Insurance 70,000 - - - - - - - - - - - 70,000
Electricity bill 1,000 1,050 1,100 1,150 1,200 1,250 1,300 1,350 1,400 1,450 1,500 1,550 15,300
Transport 2,000 2,100 2,150 2,250 2,280 2,300 2,350 2,400 2,450 2,500 2,550 2,600 27,930
Stationeries 500 600 650 700 750 800 850 900 950 1,000 1,050 1,100 9, 850
Loan repay - - 44500 44,500 44,500 44,500 44,500 44,500 44,500 44,500 44,500 44,500 400,500
Disc. Allowed 3000 4000 5000 6000 7000 8000 9000 10000 11000 12000 13000 14000 102000
Incentives 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 144,000
Machine 1,500 1,600 1,700 1, 800 1,900 2,000 2,100 2,200 2,300 2,500 2,600 2, 800 25,000
maintenance
Licence /Permit 21,000 - - - - - - - - - - - 21,000
Tax 68,480 55,736 57,536 66,464 69, 861 73,256 78,256 81,656 85,056 86,872 88,672 90,488 902,333
miscellaneous 42,800 34,835 35,960 41,540 43,663 45,785 48,910 51,035 53,160 54,295 55,420 56,555 563958
Total 539,28 438,92 453,096 523,40 550,15 576,891 616,266 643,041 669, 816 684,117 698,292 712,593 7,105.871
0 1 4 4
Net cash 125,72 103,29 138,203 164,79 221,14 307,754 391,988 463,947 522,631 599,014 687,722 776,629 4502851
 0 9 9 5
Cumulative 125,72 229,01 367,222 532,02 753,16 1,060,92 1,452,90 1,916,85 2,439,48 3,038,50 3,726,22 4,502,85 20,144,89
cash 0 9 1 6 0 8 5 6 0 2 1 0

5.3.2 CASH FLOW STATEMENT FOR SIMBA INVESTORS SUPERMARKET FOR YEAR 2

PARTICULARS JAN FEB MARCH APRIL MAY JUNE JULY AUG SEP OCT NOV DEC TOTAL
CASH INFLOW - - - - - - - - - - - - -
Balance bd/bf 776,629 874,694 920,240 943,948 1,007,011 1,099,803 1,223,387 1,342,226 1,448,794 1,543,028 1,650,524 1,780,345 14,610,629
Cash sales 250,000 290,000 305,000 355,000 405,000 455,000 485,000 495,000 505,000 525,000 545,000 555,000 5,170,000
Debtors 12,000 13,000 14,000 15,000 15,500 16,000 17,000 17,500 18,000 19,000 19,500 20,000 196,500
Discount received 4,000 4,500 4,600 5,000 5,500 6,000 7,000 7,500 8,000 8,500 9,000 9,500 79,100
Commission 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 12,500 13,000 100,500
Loan 200,000 - - - - - - - - - - - 200,000
Others 180,000 185,000 185,500 186,000 190,000 195,000 196,000 198,000 200,000 205,000 220,000 225,000 2,365,500
TOTAL 1,425,629 1,371,194 1,434,340 1,510,94 1,630,011 1,779,803 1,937,387 2,070,226 2,190,794 2,312,528 2,456,524 2,602,845 22,722,229
8
CASH OUTFLOW - - - - - - - - - - - - -
Salaries &wages 167,000 167,000 167,000 167,000 167,000 167,000 167,000 167,000 167,000 167,000 167,000 167,000 2,004,000
Purchases 155,000 165,000 175,000 185,000 205,000 225,000 255,000 275,000 295,000 305,000 315,000 325,000 2,880,000
Insurance 70,000 - - - - - - - - - - - 70,000
Electricity bill 1,500 1,550 1,600 1,650 1,700 1,750 1,800 1,850 1,900 1,950 2,000 2,150 21,400
Transport 2,600 2,650 2,700 2,750 2,800 2,900 2,950 3,000 3,100 3,200 3,250 3,400 35,300
Stationery 1,150 1,200 1,300 1,400 1,450 1,500 1,550 1,600 1,650 1,700 1,750 1,800 18,050
Loan repayment - - 20,050 20,050 20,050 20,050 20,050 20,050 20,050 20,050 20,050 20,050 200,500
Discount allowed 5,000 6,000 7,000 7,500 8,000 8,500 9,000 9,500 10,000 11,000 12,000 13,000 106,500
Incentives 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 144,000
Machine 2,000 2,500 2,550 2,600 2,800 2,900 3,000 3,200 3,400 3,500 3,600 3,700 35,750
maintenance
Licence 21,000 - - - - - - - - - - - 21,000
TAX 69,960 57,264 62,272 63,992 67,328 70,656 75,576 78,912 82,256 84,064 85,864 87,696 885,840
MISCELANEOUS 43,725 35,790 38,920 39,995 42,080 44,160 47,235 49,320 51,410 52,540 53,665 54,810 553,650
TOTAL 550,935 450,954 490,392 503,937 530,208 556,416 595,161 621,432 647,766 662,004 676,179 690,606 6,975,990
NET CASH 874,694 920,240 943,948 1,007,01 1,099,803 1,223,387 1,342,226 1,448,794 1,543,028 1,650,524 1,780,345 1,912,239 15,746,239
1
ACCUMULATIVE 874,694 1,794,934 2,738,882 3,745,89 4,845,696 6,069,083 7,411,309 8,860,103 10,403,131 12,053,655 13,834,000 15,746,239 88,377,619
CASH 3

5.3.3 CASH FLOW STATEMENT FOR SIMBA INVESTORS SUPERMARKET FOR YEAR THREE

PARTICULARS JAN FEB MARCH APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL

CASH INFLOW - - - - - - - - - - - - -
Balance bd/bf 1,912,239 2,247,429 2,565,648 2,903,382 3,243,059 3,608,379 3,987,372 4,353,320 4,719,178 5,136,120 5,557,561 5,966,300 46,199,987
Cash sales 500,000 550,000 600,000 610,000 650,000 655,000 680,000 700,000 750,000 755,000 780,000 790,000 8,020,000
Debtors 15,000 16,000 17,000 18,000 19,000 20,000 21,000 22,000 23,000 24,000 25,000 26,000 246,000
Discount received 5,000 5,500 6,000 6,500 7,000 7,500 8,000 8,500 9,000 9,500 10,000 10,500 93,000
Commission 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 9,000 10,000 10,500 83,500
Loan 180,000 - - - - - - - - - - - 180,000
Others 190,000 195,000 200,000 205,000 210,000 250,000 255,000 260,000 280,000 285,000 286,000 290,000 2,906,000
TOTAL 2,806,239 3,018,429 3,393,648 3,748,382 4,135,059 4,547,379 4,958,372 5,351,320 5,789,178 6,218,620 6,668,561 7,093,300 57,728,487
CASH OUTFLOW - - - - - - - - - - - - -
Salaries &wages 167,000 167,000 167,000 167,000 167,000 167,000 167,000 167,000 167,000 167,000 167,000 167,000 2,004,000
Purchases 160,000 165,000 175,000 185,000 200,000 225,000 260,000 280,000 295,000 300,000 330,000 350,000 2,925,000
Insurance 70,000 - - - - - - - - - - - 70,000
Electricity 2,000 2,800 3,000 3,500 3,800 3,900 4,000 4,500 4,800 4,900 4,950 5,000 47,150
Transport 3,000 3,500 3,800 3,900 4,000 4,500 4,600 4,800 5,000 5,200 5,500 5,800 112,100
Stationery 1,200 1,250 1,300 1,450 1,500 1,550 1,600 1,700 1,800 1,850 1,900 1,950 19,050
Loan repayment - - 18,200 18,200 18,200 18,200 18,200 18,200 18,200 18,200 18,200 18,200 182,000
Discount allowed 5,500 5,800 6,000 7,000 8,000 8,500 8,800 9,000 9,500 10,000 12,000 13,000 103,100
Incentives 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 144,000
Machine 1,800 2,000 2,800 3,000 3,500 3,800 4,000 4,500 5,000 5,500 5,800 6,000 47,700
maintenance
Licence 21,000 - - - - - - - - - - - 21,000
TAX 70,960 57,496 62,256 64,168 66,880 71,112 76,832 80,272 82,928 83,944 89,176 92,632 898,656
MISCELANEOUS 44,350 35,935 38,910 40,105 41,800 44,445 48,020 50,170 51,830 52,465 55,735 57,895 561,660
TOTAL 558,810 452,781 490,266 505,323 526,680 560,007 605,052 632,142 653,058 661,059 702,261 729,477 7,076,916
NET CASH 2,247,429 2,565,648 2,903,382 3,243,059 3,608,379 3,987,372 4,353,320 4,719,178 5.136,120 5,557,561 5,966,300 6,363,823 96,876,571
ACCUMULATIV 2,247,429 4,813,077 7,716459 10,959,518 14,567,89 18,555.,269 22,908,589 27,627,767 32,763,88 38,321,448 44,287,748 50,651,571 275,420,659
E CASH 7 7
 5.4 PROFIT AND LOSS ACCOUNT FOR THREE YEARS

ITEM DESCRIPTION YEAR 1 YEAR 2 YEAR 3

Sales
Cash sales 5,030,000 5,170,000 8,020,000
Credit sales 162,000 196,500 246,000
Others 2,161,000 2,365,500 2,906,000
Discount received 69,000 79,100 93,000
Commission 60,500 100,500 83,500
Loan 400,000 200,000 180,000

TOTAL SALES 7, 882,500 8,111,600 11,528,500

Overhead expenses
Salaries and wages 2,004,000 2,004,000 2,004,000
Electricity bill 15,300 21,400 47,150
Stationary 9, 850 18,050 19,050
Machine maintenance 25,000 35,750 47,700
Insurance 70,000 70,000 70,000
Transport 27,930 35,300 112,100
Purchases 2, 820,000 2, 880,000 2,925,000
Discount allowed 102,000 106,500 103,100
Incentive 144,000 144,000 144,000
Licence 21,000 21,000 21,000

TOTAL 5,239,080 5,336,000 5,493,100

Net profit before tax Total sales – Total overhead
expenses
2,643,420 2,775,600 6,035,400
Provision for taxation 16
¿ ₓnet profit before tax
100

422,947 444,096 965,664

Net profit after taxation = Net profit before tax –

taxation
2,220,473 2,331,504 5,069,736
 5.5 PROFORMA BALANCE SHEET FOR THREE YEARS

ITEM DESCRIPTION YEAR 1 YEAR 2 YEAR 3

ASSETS
Fixed assets
Machinery 300,000 270,000 283,500
Furniture 100,000
Premise construction 300,000
Land 200,000 210,000
220,500
TOTAL FIXED ASSETS 900,000 480,000 504,000
CURRENT ASSETS
Cash at hand 500,000 700,000 1,000,000
Cash at bank 500,000 600,000 1,500,00
Stock as at 31st Dec 800,000 900,000 1,000,000
debtors 162,000 196,500 246,000
TOTAL CURRENT 1,962,000 2,396,500 3,746,000
ASSETS
TOTAL GRAND ASSET Fixed assets + current
2, 862,000 2, 876,500 4,250,000
LIABILITIES
Long term liability
Loan 400,000 200,000 180,000

Short term liabilities

Creditors 162,000 196,500 246,000
Bank overdraft 200,000 400,000 600,000
others 500,000 600,000 700,000
TOTAL 1,262,000 1,396,500 1,726,000
LIABILITY
CAPITAL Total grand assets – liabilities
1, 800,000 1,480,000 2,524,000
5.6 BREAK EVEN ANALYSIS
YEAR 1
i. Contribution margin = Total Sale – Variable Cost

Total Sales = Cash Sales + Credit Sales

Variable Cost = Purchase + Electricity Bills + Stationary + Maintenance + Transport

Therefore, contribution margin = 5,192,000 – 2, 898,080

= 2,293,920

contribution margin
ii. Contribution margin percentage = ₓ100
variable cost

2,293,920
¿ ₓ 100
2, 898,080

= 79.15%

¿ cost
iii. Breakeven level = ₓ100
Contribution margin

2, 895,500
= ₓ100
2,293,920
= 1.262

YEAR 2
i. Contribution margin = Total Sale – Variable Cost

Total Sales = Cash Sales + Credit Sales

Therefore, contribution margin = 5,366,500 – 2, 990,500

= 2,376,000

contribution margin
ii. Contribution margin percentage = ₓ100
variable cost

2,376,000
¿ ₓ 100
2,990,500
 = 79.45%

¿ cost
iii. Breakeven level = ₓ100
Contribution margin

2,639,500
= ₓ100
2,376,000
= 1.111

YEAR 3
i. Contribution margin = Total Sale – Variable Cost

Therefore, contribution margin = 8 ,266,000 – 3,151,000

= 5,115,000

contribution margin
ii. Contribution margin percentage = ₓ100
variable cost

5,115,000
¿ ₓ 100
3,151,000

= 162.3%

¿ cost
iii. Breakeven level = ₓ100
Contribution margin

2,601,000
=
5,115,000
= 0.509
 5.7EXPECTED PROFITABILITY RATIO

ITEM FORMULAR YEAR 1 YEAR 2 YEAR 3

Gross profit gross profit 2,643,420 2,775,600 6,035,400
ₓ100 ₓ100 ₓ100 ₓ 100
% total sale 5,192,000 5,366,500 8,266,000

= 50.91 % =51.72 % = 73.01 %

Return on net profit after tax 2,220,473 2,331,504 5,069,736
ₓ100 ₓ100 ₓ100 ₓ100
equity owners equity 2,000,000 2,000,000 2,000,000

=111.02 % =116.6 % = 253.5 %

Return on Net profit after tax 2,220,473 2,331,504 5,069,736
ₓ 100 ₓ100 ₓ100 ₓ100
investment Total investment 4,000,000 4,000,000 4,000,000

=55.51 % =58.29 = 126.74 %

Return on Net profit after tax 2,220,473 2,331,504 5,069,736
ₓ 100 ₓ 100 ₓ100 ₓ100
sales Net sale 4,502,851 15,746,239 96 , 876,571

=49.31 % =14.81 % = 5.233 %

5.8 DESIRED FINANCING

ITEM AMOUNT
Pre operational cost 418,000
Operational cost 2,653,200
Fixed assets 900,000
others 28,800
TOTAL 4,000,000

5.9 PROPOSED CAPITALIZATION

ITEM AMOUNT
Owners equity 2,000,000
Bank loan 400,000
Family donation 1,000,000
Shares 600,000
TOTAL 4,000,000
APPENDIX A:BUSINESS LOGO
APPENDIX B:

BUSINESS LOCATIONAL MAP

kisumu

Akala police line 3 KEY

1 1-Kisumu Airport
2-Shell Petrol Station
3-Simba Investors
2

bondo
ndori road
 APPENDIX C: BUSINESS FIRM LAYOUT

STORE MATRESSES & DUVETS

HOUSE HOLD VEGETABLES

GOODS STATIONERY COLD DRINKS CLOTHING
OFFICE

TELLER 2 TELLER 3 TELLER 4 TELLER 5

TELLER 1

LUGGAGE
EXIT ENTRANCE