BUSINESSPLAN

TITTLE:ALALELECTRONICSANDACCESSORIES

INSTITUTION:OMUGATECHNICALANDVOCATIONALCOLLEGE
COURSE:CRAFTINELECTRICALANDELECTRONICS

CODE;743101
INDEXNO;7431010117
COUSECODE:2601/2
PRESENTER:RONALDALAL

SUPERVISOR: MADAMKELCYOCHIENG

PRESENTEDTO:KENYANATIONALEXAMINATIONCOUNCILFOR
PARTIALFULFILMENTOFCERTIFICATE
ELECTRICALANDELECTRONICS

EXAMINATIONSERIES:JULY2023

DECLARATION

i
Iherebydeclarethattheinformationinthiscontenthasbeendonetothebestofmyownindustrialworkbase
onmyknowledgeandresearchIacquiredduringmystudyatOTVC.

STUDENT`S
NAME………RONALDALAL………
SIGNATURE…………………………………

SUPERVISOR`S
NAME………………………………………………………
SIGNATURE……………………………………………………

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 DEDICATION
Idedicatethisbusinessplantomydearparentsfortheirgoodadviceandfinancialsupportthatsawmethrou
ghthisbusinessplan.

ACKNOLEDGEMENT
IwouldliketoacknowledgetheassistancegiventomebyanumberofteachingstaffsofOTVCfortheirhar
dworkandnecessaryinformationtheyhavegiventome.

iii
MygratefulthanksgoestomyentrepreneurshipsupervisorMr.continuedguidanceandideastoensureth
atthisbusinessplanisreadyontimeforpresentation.
MayGodblessyou.

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EXECUTIVESUMMARY
1.1BusinessDescription
Inthischapterarethebusinessname,locationandaddress.Theformofownershipandthetypeofbusinessi
salsocontainedherein.Thischapterdescribestheproductsandjustificationofopportunities.Describest
heindustryinwhichthebusinessbelongs,thegoals,andalsoexplainstheentryandgrowthstrategy.

1.2MarketingPlan
Inthischapterthemarketingplan,thelocationofthebusiness,typesofcustomerstobeservedaredescribed
.

Italsohighlightsthenumberofcompetitorsintheareatheirstrengthsandweaknesses.

Promotionandadvertisingmethodsarealsoincluded.

1.3OrganizationalPlan
Inthischapteristhebusinessandpersonnelinvolvedintheoperation,theirqualification,dutiesSpecializa
tion,recruitment,andremunerationandincentivesstrategies.Italsoshowstheorganizationstructureand
varioussupportpeopleandprofessionalswhowillbenefitthebusiness.

1.4ProductionandOperationPlan
Inthischapteristheproductionandoperationofthebusinessandhowitwillbeconducted.Itincludesthetra
nsactionsandvariouspoliciesandregulationstoachievetheobjectivesandgoals.

1.5FinancialPlan
Itdescribesthefacilitiesandcapacitiesneededintermsoffinance.

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Pre-operationalcosts.Workingcapitalrequirement,Projectedcashflowstatement,Pro-
formaincomestatement,‘Pro-formabalancesheet,Break-
evenlevel,Expectedprofitabilitylevel,DesiredfinancingandProposedcapitalization.

TABLEOFCONTENTS
BUSINESSPLA
N.......................................................................................................................................................i

DECLARATION.............................................................................................................................ii

DEDICATION...............................................................................................................................iii

ACKNOLEDGEMENT..................................................................................................................iv

1.0BUSINESSDESCRIPTION...................................................................................................1

1.1BUSINESSNAME..................................................................................................................1

1.2BUSINESSLOCATIONANDADDRESS..............................................................................1

1.3FORMOFOWNERSHIP.........................................................................................................1

1.4TYPEOFBUSINESS..............................................................................................................2

1.5PRODUCT/SERVICE............................................................................................................2

1.6JUSTIFICATIONOFOPPORTUNITY..................................................................................3

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

1.8GOALSOFTHEBUSINESS...................................................................................................3

SHORTTERMGOALS................................................................................................................4

LONGTERMGOALS..................................................................................................................4

1.9ENTRYANDGROWTHSTRATEGY....................................................................................4

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 1.PricePenetration....................................................................................................................4

2.FreeSamples..........................................................................................................................4

3.PriceCut................................................................................................................................4

4.Advertising...........................................................................................................................5

CHAPTERTWO..............................................................................................................................6

2.0MARKETINGPLAN..............................................................................................................6

2.1MarketingAnalysis..................................................................................................................6

2.2TargetMarket..........................................................................................................................6

2.2SalesPotential..........................................................................................................................7

2.3PromotionalMethods...............................................................................................................7

2.4MarketSegmentation...............................................................................................................8

2.6MarketResearch....................................................................................................................10

2.6.1DemandAnalysis............................................................................................................10

2.6.2MarketStrategy..............................................................................................................10

Fig2.2showingMarketStrategy...................................................................................................10

3.7PricingPolicy.........................................................................................................................11

CHAPTERTHREE........................................................................................................................12

3.0ORGANIZATIONANDMANAGEMENT..........................................................................12

3.1OrganizationStructure...........................................................................................................12

3.1.1OrganizationalChart...............................................................................................................12

4.................................................................................................................................................12

3.2.1DutiesandResponsibilitiesforthePersons................................................................................12

3.2.2Training..................................................................................................................................14

3.2.3Promotion..............................................................................................................................14

3.3Remuneration........................................................................................................................14

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 3.4Licenseandpermits................................................................................................................15

3.6OtherServices........................................................................................................................15

CHAPTERFOUR..........................................................................................................................16

4.0OPERATIONALPLAN........................................................................................................16

4.1ProductionFacilities..............................................................................................................16

4.2ProductionPreliminaryCost...................................................................................................16

4.3MonthlyOperationalOverheads.............................................................................................16

4.4ProductionStrategy...............................................................................................................17

4.5ProductionProcess.................................................................................................................17

RawMaterials.........................................................................................................................17

InspectionandTesting.............................................................................................................17

Distribution............................................................................................................................17

Payment.................................................................................................................................17

4.6Regulationsaffectingthebusiness...........................................................................................17

5.0FINACIALPLAN.................................................................................................................19

5.1OBJECTIVESOFTHEFINACIALPLAN.............................................................................19

5.2PRE-OPERATIONALCOST...............................................................................................19

5.3WORKINGCAPITAL/OPERATIONALCOST...................................................................20

5.4INCOMEBALANCESHEET...............................................................................................26

5.6BREAKEVENANALYSIS..................................................................................................28

5.8PROFITABILITYRATIO....................................................................................................29

5.7PROPOSEDCAPITALIZATION.........................................................................................30

APPENDIX1..................................................................................................................................31

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EXECUTIVESUMMARY
1.1BusinessDescription
Inthischapterarethebusinessname,locationandaddress.Theformofownershipandthetypeofbusinessi
salsocontainedherein.Thischapterdescribestheproductsandjustificationofopportunities.Describest
heindustryinwhichthebusinessbelongs,thegoals,andalsoexplainstheentryandgrowthstrategy.

1.2MarketingPlan
Inthischapterthemarketingplan,thelocationofthebusiness,typesofcustomerstobeservedaredescribed
.

Italsohighlightsthenumberofcompetitorsintheareatheirstrengthsandweaknesses.

Promotionandadvertisingmethodsarealsoincluded.

1.3OrganizationalPlan
Inthischapteristhebusinessandpersonnelinvolvedintheoperation,theirqualification,dutiesSpecializa
tion,recruitment,andremunerationandincentivesstrategies.Italsoshowstheorganizationstructureand
varioussupportpeopleandprofessionalswhowillbenefitthebusiness.

1.4ProductionandOperationPlan
Inthischapteristheproductionandoperationofthebusinessandhowitwillbeconducted.Itincludesthetra
nsactionsandvariouspoliciesandregulationstoachievetheobjectivesandgoals.

1.5FinancialPlan
Itdescribesthefacilitiesandcapacitiesneededintermsoffinance.

Pre-operationalcosts.Workingcapitalrequirement,Projectedcashflowstatement,Pro-
formaincomestatement,‘Pro-formabalancesheet,Break-
evenlevel,Expectedprofitabilitylevel,DesiredfinancingandProposedcapitalization.

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x
 CHAPTERONE

1.0BUSINESSDESCRIPTION

1.1BUSINESSNAME
ThenameofthebusinesswillbeALALELECTRONICSandACCESSORIES.Thenameisacombinatio
noftheproprietorsnameandthekindoftheproductthattheownerwillbedealingwith.Thebusinesswillbe
arthisnamebecausethenameisuniqueforthecustomerstonoticeitfastsincetheneighboringframesareru
inedbyarmenterstheownerwillstandabetterchanceofofferingqualityproductsprofessionally.

1.2BUSINESSLOCATIONANDADDRESS
ThebusinesswillbelocatedinKisiiTownoppositeKisiiUniversity.Thefirmwillbelocated

AlongKisumuroad.Thebusinesswillbelocatedtherebecauseofgoodtransportandcommunication.It’s
notinterior;thereisreadymarket,favorable,securityduetoChief’scampandalsoavailabilityofrawmate
rialsi.e.sparepartsfrommajorlimitedinKisiitown.Theaddressofthefirmwillbe;

ALALELECTRONICSandACCESSORIES,

P.OBOX24-30100,

KISII.

EMAIL:alalronald65@gmail.com

1.3FORMOFOWNERSHIP
Thebusinesswillbesoleproprietorshipi.e.Itwillbeownedbyasingleperson.Thefirmwillbeownedbyan
dontheotherhand,thebusinesswillhavesomeadvantageslike;

1. Therewillbeeasydecisionmaking
2. Theproprietorwillbethemanagerofthebusiness.
3. Itwillbeeasiertostart,asitrequireslittlecapitaltostart.
4. Itwillbesecretivei.e.theweaknessorstrengthofthebusinesswillremainprivate.
5. Theproprietorwillbeabletocontactcustomerseasilyandrecognizetheirwantsbetter.

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1.4TYPEOFBUSINESS
Theproposedventurewillbeabusinessdealingwithsellingofelectronicequipmentscomputer.Thefirm
willbesellingmicrowave,televisions,computerandmanyotherelectronicappliancessothattheymaym
eetthecustomer’spreference.Electronicapplianceswillbesoldtothecustomersaccordingtothequality
oftheneed.

1.5PRODUCT/SERVICE
ALALELECTRONICSandACCESSORIESfirmwillbeentitledinsellingvarietyofqualityelectronicdevi
cesliketelevisions,CPUs,microwave,washingmachinesandotherassistances.

Theywillbesoldinlargenumbersinschools,hospitals,hotels,andtoindividualcustomersforcollections.

Theproductsofferedwillbeofmoreadvantagetobothyoungandoldfortheirusageinaccessingtheinterne
tandmendingtheirgadgets.Alsolargepercentagesofpeopleareadvisedtocomeandenjoyourfasterinter
netserviceinthecybercaféwithin.

Iamlookingforwardtoplayaroleinencouraginghealthybrowsinghabitsforhealthybehaviorsinsociety.

Theproprietoralsowillemphasizeonbelievedhealthyissuesofusingcomputermachineriestoreduceris
ksofdiseaselikeeyeproblemsthereforeIwillinstallthesecondtintedscreen,backstrainswillbesolvedby
theuseofspecialseatsdesignedfortheuseoftheoperationofthecomputerthatmakestheusercomfortable
.

Theownerwillalsooffersomeadvicetootherfirmswhowouldliketoconveysuchcomputerservicesinso
ciety.TheproductswillbeofhighqualitybecausetheywillbequalitypartsandmachineriesfromKenyaC
omputerHardwareCompaniesandothermajorlimitedunderthemoderntechnologylikesoftwarecomp
aniese.g.AppleandMicrosoft.

1.6JUSTIFICATIONOFOPPORTUNITY
ThebusinesswilloperatesmoothlyduetoitslocationwhichisjustnearKisiiTownandalsoduetoneighbor
ingschoolslikeKisiiUniversity,KisiiPolytecnic,CatholicChurchandmanyothersmallenterprises.Ina
ddition,technologybeingthestablerequirementforthepeopleintheregion,thisgivesthebusinesshighch
anceforprosperityformorepeoplewillneedinternetservicesandcomputergadgetsinplenty.

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Theentrepreneurhavingpursuedanentrepreneurshipeducationstudy,willbeinpositiontogivehighqual
ityandprofessionallyservicesbothinternallyandexternallythusgivinghimanopportunitytosucceedin
hisbusiness.

1.7INDUSTRY
ThebusinessfallsunderICTsectorbecauseitdealswithtechnologyproducts.Theentrepreneurventured
tothiskindofabusinessbecauseherealizedthatmanypeoplearesufferingfrominvestorexplorationssect
orandgoingtodeeperendslookingforappropriateinternetprovidersleavingfewpeopleeligibleonthisse
ctorcurrentworldismovinginamillenniawheretechnologyisadvancedwhereIfeelit’smytasktodriveth
epeopletherehenceincreasingbusinesssuccess.

Alsoduetomanypeoplelackinginterestonsuchareas,theownerwillhaveanaddedadvantageduetofewe
rcompetitorshencemorecustomerswhowillincreaseprofit.

Theownerwillhelptoraisethelivingstandardsofthepeopleneighboringthefirmbyprovidingjobopport
unities.

Theentrepreneurhavingtheskillsofentrepreneurshiphewillbeabletouseopportunitygiventoutilizeallt
heresourceslikelandandtrytomaximizeprofitandreducecost.

Hewillalsohelpthesocietytominimizethecostofbuyingalternativeslikenewgadgets,whicharemoreco
stlyduetotheirscarcityintheregionbysellingtheproductstothematlowprice.

1.8GOALSOFTHEBUSINESS
Thegoalofthebusinesswillbedividedintotwothatis-

(ii)Shorttermgoals

(ii)Longtermgoals

SHORTTERMGOALS
Theentrepreneurhavingdoneresearchonthatareaonwhatthesocietyneed,theproprietorwillbeabletoc
omeupwiththefollowingshort-termgoals.

(i) Meetingthemarketdemand
(ii) Creatingjobopportunity
(iii) Offeringcustomerssatisfactionthroughqualityproducts
(iv) Offeringsubstituteproducts

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LONGTERMGOALS
Afterentrepreneuroperatingonthatbusiness,hewillbeabletocomeupwiththefollowinglong-
termgoals

 Improvingthepeople’slivingstandardbycreatingemploymenttothem.
 Expandingthebusinesscountrywideandbecomeamarketleader.
 Profitmaximizationfromthefirstproposedbusinesstoexpandedones.

1.9ENTRYANDGROWTHSTRATEGY
Theentrepreneurwillusevariousmarketentrystrategieslike.

1.PricePenetration
Theownerwillreducepricetohavelargemarketshareandmarketgrowththiswillmaketheprodu
ctstopenetratemoreinthemarket

2.FreeSamples
Theproprietorwhoisthemanagerwillofferfreeadviceatnopricetogainconsumeracceptancean
dpopularizetheproductsoffered.

3.PriceCut
Theownerwillbereducingpricestothosewhowillpurchaseinlargequantitiesandusetheinternet
forlongandfrequentcustomersforrepairandpurchaseofproducts.

4.Advertising
Theproposedbusinesswillbeadvertisedthroughpostersaroundschoolgates&marketplace,rad
ios,socialMediasandgivingbrochurestocustomerstoinformothers.

Theentrepreneurwilluseshowsandexhibitiontodisplaytheproducti.e.hewilldoitinKisiitown,
neighboringtownslikeKisumu,HomabayandBomet

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CHAPTERTWO

2.0MARKETINGPLAN
Thetargetcustomersareindividualcustomerswhobuyinsmallquantitiesfortheyarethemajorityandco
mefrequently.Themajorcompetitiveadvantageisinlocationqualityoftheproductsandpromotion.Also
thebusinesshasagoodadvertisingandpromotionmethodsandithopestocompetewithitscompetitorssu
ccessfully.

2.1MarketingAnalysis
Thebusinessintendstoserveitscustomerswithavariedsupplyofitsgeneralproducts.Thecustomersinge
neralcompriseof:
i)CommercialCustomers.
Thiswillincludeschools,hospitalswhohasfaultsintheirelectricalitems
ii)IndividualCustomers
Thisgroupcompriseofstudents,individualsandotherindividualmiddleclassearners.

2.2TargetMarket
Frommarketanalysis,thetargetedcustomerswillbemaintainedinthebusinessaspertheirpreferencesan
dtastesasfollows:-
a) Individualcustomers
a) Students
Thebusinesswillmakesurethattheirselectedpreferencesareavailableandthatthequotedpricesarefrien
dlytothem.
iii)MiddleclassCustomers.
Theycompriseoflowclass/
middleclasscustomerswhosometimesvisitthebusinessforourproductsandservices.
b)Commercialcustomers
Customerstargetedinthiscategoryincludehospitalandschools/universities
c)InstitutionalCustomers.
Asstatedinthemarketanalysis,theycomprisetheentirefraternityofcampany,universities,secondary,c
ollegesandmedicalschools.
Forbusinesstomaintainthemthebusinesswillthusmaintainafirmpublicrelationsinbetweenallparties,
overvarietiesofpastryproducts,increasetheavailableresourcese.g.equipmentandalsoitintendstoobse

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rvethelawofjust-
intimeprogrammei.e.servingwhatitisneededattherighttime,rightplaceandintherightquantity.

2.2SalesPotential
Thebusinessintendstoincreaseitssalessteadily.Inordertoenhancetheincrement,thebusinesswillempl
oycertainmeasureswhichingeneralinclude:
i)Moderntechnology
Thebusinessintendstoenhancetheuseofmoderntechniquesforexampletheuseofsosphicatedtechnolo
gy,useofcomputerinenteringtransactionsandprintingreceiptsandvouchers.
ii)Employingcompetentstaff.
Itinvolveshiringexperiencedstaffandofferingthemtrainingwherenecessary
iii)Applyingjustintimeprogramme
Thebusinesswillmakesurethatwhatisneededbythecustomersisavailedattherighttime,rightplaceandi
ntherightqualityandquality.
iv)Employeemotivation.
Inordertoenhanceemployeeloyalty,co-
operationandhonesty,thebusinessintendstogatherforemployeescomplaintsaspertheirwishesandbew
illingtooffersecurityandinsurancecoverstothemwhichinturnwillmotivatethemtoworkmaximally.
v)PricingPolicy.
Thepricestobechargedontheproductsshouldbepocketfriendlyaffordableandmustalsotallywiththeex
istingmarketprices.

2.3PromotionalMethods.
Inordertoenhanceacomprehensivepromotionalmix,thebusinesshasaplantoachieveitby:
a)Advertising
Thebusinessintendstoadvertiseitsproductsonthenewspapers,Televisions,radioandapplyingtheuseof
road-showsandliveconcertsasoneofitspromotionaltechnique.
b)BusinessCards.
Thisinvolvesissuingsmallcouponstovariouscustomersdepictingthebusinessname,location,addressa
ndotherrelatedtermse.g.servicesofferedinthebusiness.
c)Offeringbusinessinterncards
Theincludepricelistandbillvoucherswillbeissuedtoeasyprocessingofordersandopinions.

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2.4MarketSegmentation
ThebusinessintendstoservemostofuscustomerswhoareresidentsofKisiitown.Theproductsareonhigh
demandsincethebusinessdealsmainlywiththeprovisionofhecompanyspecializesintherepairandsales
ofhomeelectronics,specificallycomputers,homeentertainmentelectronics,includingTV,DVDsVCR
sandCDplayers.Andalsoitoffersmostofthemataffordableprices.Thefollowingisthemarketsegmentat
ioninrelationtothebusinesscustomers.

i)Individualcustomers 200
ii)Commercialcustomers 1000
iii)Institutionalcustomers 1500
TotalMarketSegmentation 2700
2.4.1PercentageMarketsegmentation
i)Individualcustomers
200x100
2700 =7.41%
ii)Commercialcustomers 1000x100
2700
=37.04%

iii)Institutionalcustomers 1500x100
2700
=55.56%
2.5MarketShare
Thebusinessplanstoofferusproductsandservicestocustomersagainstthefollowingcompetitors
a) FocuselectronicsShop
P.O.Box3740
Kisii
b) GetwayelectronicsShop
P.OBox42,
Kisii
c) EverestelectronicsShop

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 P.O.Box1740
Kisii
Thecompetitorswillhavetheirmarketsharesasfollows:
a)FocuselectronicsShop 350
b)GetwayelectronicsShop 750
c)EverestelectronicsShop 900
d)SorineicomputersandelectronicsShop 1150
Total 3150

1.FocuselectronicsShop350x100
3150 =11.11
2.GetwayelectronicsShop
750x100
3150 =23.81
3)EverestelectronicsShop
900x100
3150 =28.57
4)SorineicomputersandelectronicsRepairShop
1150x100
3150
=36.51

Focus electronics Repair

Pie Ngatajose elec- Shop; 11.11
tronics Repair
Shop; 36.51
Get way electronics
Repair Shop; 23.81

Everest electronics Repair

Shop; 28.57

chartshowingMarketSharesofeachBusiness

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2.6MarketResearch

ThebusinesswillprovideElectronicsservicestotheresidentsofKisiitown.Itintendstoconductasystema
ticandcomprehensiveresearchontheneedsoftheresidents.Itwillconductresearchalsoontheproductsre
quiredtothemandbusinesswilldesignvarioussamplesonitsproductsinordertofindtheneedsoftheprod
ucts.Thebusinesswillalsoconductdatacollectioninordertofindtheneedsofthecustomersusingthefollo
wingmethods.

2.6.1DemandAnalysis
Thedemandoftheproductsofferedinthebusinesswillbevaryhighsincetheyarebasicallynecessary.

2.6.2MarketStrategy
Thebusinessisintendingtosourcemostofitsproductscommerciallywithinthelocalityandalsotomulti-
sourcefromtheentireenvironment.Thebusinessintendstoapplythefollowingsupplychaintomeetitsre
quirements.

Fig2.2showingMarketStrategy
Producer Wholeseller Retailer Consumeruser

Direct Sourcing

3.7PricingPolicy
Thefollowingarefactorsthatwillgovernthepricingstrategyoftheproductsandservices.itinclude:

i)Competitors

Thebusinesswillcompareandanalysethepriceschargedbyitscompetitorsandinturnusetheexistingpric
eliststoguideinthepricingpolicy.

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ii)Currentprice:Apartfromwhatcompetitorsarechargingfortheirproducts,alsothebusinesswillputint
oconsiderationtheprevailingpricerateinthemarketinordertocomeupwithreasonablepricelists.

iii)CostofProduction:Thebusinesswillcompileitstotalcostsofproductioni.etransportcosts,labourcos
ts,legaltradingcharges,materialcostandoverheadcostsinordertocomeupwithandeffectivepricelist.

iv)SeasonalFactors:ThebusinesswillquoteitspricesrespectivelyformostofitsElectronicsservicesasp
ertheprevailingseasonsuchthatduringtheseasonwithhighlevelsofsupplies,itwilllowerthepricesandi
ncreaseitspriceswhenthesupplydeclines.

CHAPTERTHREE

3.0ORGANIZATIONANDMANAGEMENT

3.1OrganizationStructure
Thisdealswithpeoplewhowilldealwiththerunninganddoingthedaytodayactivitiesinthebusiness.This
includes.
i) TheManager
ii) technician
iii) Salesrepresentatives
iv) Cashier
v) Driver

3.1.1OrganizationalChart

MANAGER

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TECHNICIAN SALES PEOPLE Cashier DRIVER

4.2KeyManagementPersonnel

3.2.1DutiesandResponsibilitiesforthePersons.
Thedutiesandresponsibilitieswillbeallowedtoeachmemberofthebusinessaccordingtothepositionhe
willbeholdinginthebusiness.Thisdutywillbeclearlydefinedtomakesurethateverymemberknowshisr
esponsibilitiestoavoidmisunderstandingandmaintainefficiencyandhighproductivitywhichwillleadt
osmoothoperationsofthebusiness.Thiswillbeasfollows:
1.TheManager
Qualifications
Heorsheleastdiplomainbusinessmanagement,certificateinaccountingwillbeaddanadvantage
-Musthavegoodcommunicationskills
-Heorshe,atleast25-30yearsandabove.
-Heorshemusthaveatleast2yearsexperience
DutiesandResponsibilities
Recruitingandhiringnewstaffinthebusiness,employeeappraisal,decisionmaking,firingemployees,tr
ainingandlayingdownrules,maintaininggoodpublicrelations,receivingallsortsofincomesinthebusin
ess,maintainingfinancetovarioussectionsinthebusiness,payingsalaries,wagestoworkers.
2.TECHNICIAN
Hewilldealwithensuringthatalltheelectronicsinthestockareofgoodqualityandrepairsallfaultsandco
mplainsfromthecustomers
Qualifications
AtleastholdersofDiplomainelectricalengineering
He/sheshouldbeatleast23yearsandabove.

3.CASHIER

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Collectingcashandbalancingbooksofaccounts,receivecashfromdailyoperations.feeldaytodaysalesc
omputerandconductstocktakingoperation
Qualifications
-KATCfinalcertificate,twoyearsexperience-Computerliterate25yearsofageandabove
-issuereceiptsofthegoodsoffered.
4.SalesPeople
Qualifications
 He/sheshouldbeatleastholdersofDiplomainsalesandmarketing.
 Workingexperienceofatleastoneyear,
 He/shebeatleast18yearsandabove.
DutiesandResponsibilities
Advertisingthebusinessproducts,sellingbusinessproducts,cleaningtheirworkingpremisesandfaciliti
es,enteringdataondaytodayfinance,maintaininggoodpublicrelations,decisionmaking,replenishings
tocks,andkeepingstockrecords,transportingtherawmaterialsandfinishedproductstoandoutofthebusi
nesspremises.
5.Driver
Qualifications
Mosthaveacertificateindrivingandadrivinglicense,atleast3yearsdrivingexperienceincludingheavyd
utyvehicles.
DutiesandResponsibilities
Transportingtherawmaterialsandfinishedproductstoandoutofthebusinesspremises.

6.SecurityOfficers
Qualifications
a. Mustbefromarecognizedsecurityservices.
b. He/shemustbeatleast30yearsandabove.
c. He/shemusthaveworkedfor3years.

3.2.2Training
Whenthepersonhasbeenrecruitedthebusiness,he/
shewillbeintroducedtothebusinessenvironmentandaninductionprogram/exerciseisinstituted.

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3.2.3Promotion
Thechancesofpromotionwilldependonefficiency,faithfulnessanddedicationintheperformanceofdut
ies.Promotionwillalsodependonworkingexperienceintheenterpriseplusthelevelofeducation.

3.3Remuneration
Eachpersonwillbeentitledtoremunerationandincentivesaccordingtothepositionheholdsinthebusine
ss.

Thiswillbeasshowninthetablebelow:

Personnel Post/number Salary/Month Salary/year

Manager 1 20,000 20,000
Technician 5 18,000 90,000
Accountants 1 14,000 14,000
Salespeople 4 12,000 576,000
Driver 1 15,000 180,000
Total 13 79,000 880,000

3.4Licenseandpermits
ThebusinesswillacquireatradinglicenseandsinglepermitbusinessfromthecountygovernmentofKisii
whichwillgiveitthelegalmandatetostartandoperatethebusiness.Thiswillalsoenablethebusinesstober
egisteredundertheregistraroperationsection.

3.6OtherServices
Thebusinesswilladoptvarioussupportingserviceswhichwillenableittomanageandcarryoutitsactiviti
essuccessfully.Thiswillinclude:
i)Insuranceservices
Thiswillbeputfortheentirebusinesstogatherforemergingissuesandtohelpthebusinessincoveringloss
es.
ii)BankingServices
Thisservicewillenablethebusinesstokeepitsfinancessafely,paysalariestothebusinessstaff,helpsinset
tingthebusinesstransactionsandfinallyitwillassistthebusinessmanagerinevaluatingtofindoutwhethe
ritismakingprofitsorloss.

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iii)ElectricityServices
ThebusinesswilladoptandgetElectricityServicesfromKPLCwhichwillassistincarryingoutitsdailyac
tivities.

CHAPTERFOUR

4.0OPERATIONALPLAN

4.1ProductionFacilities
TheKISIIELECTRONICSandACCESSORIESwillacquirethefollowingproductionfacilitiesinplaceino
rdertoprovidegoodsandservicestotheresidentsofKisiitown.
ToolandEquipment Quantity Supplier Cash/Item Total
Stationeryetc 4 Printshop 15000 60000
Facilitiesrefurbishment 7 Accessories 750,000 750,000
Computer 2 China 30000 30,000
Rent 6months Hire 90,000 90,000
Total 539,000 930,000

4.2ProductionPreliminaryCost.
Electricity 10000
Advertising 5000
Insurance 200000
Utilities 15000
Total 230000

4.3MonthlyOperationalOverheads
Thebusinesswillhavethefollowingoperationaloverheadspermonth.
Item AmountKsh.
Registration 8000
Advertisement 10000
Postage 2000
Telephoneservices 5000

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Rent 15000
Electricity 9000
Insurance 12000
Total 61000

4.4ProductionStrategy
Labour Amount(Kshs)
Productionfacilities 768000
MonthlyOperationaloverheads 61000
Marketresearch 50000
Rawmaterials 245000
Total 1,622,000

4.5ProductionProcess
Thisincludesthestepsandproceduresthroughwhichtheproductswillpassthroughuntiltheyreachtheus
er.

RawMaterials
Therawmaterialswillbeavailedtothebusinesspremisestheirrespectivesourcesbythedriver.

InspectionandTesting
Therawmaterialswillbeinspectedbythemanagerinordertoensurethattheyareofthepreferredspecificat
ion.

Distribution
Therawmaterialswillbere-
distributedtovarioussectionsofthebusinesstofacilitateproductionandstorageprocessestotakeplace.

Payment
Thecustomer’sresponsibilityistopayhis/herordersasindicatedinthereceiptstrictlyonthecounter.

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4.6Regulationsaffectingthebusiness
Thebusinesswillputinplaceandadheretothefollowingregulatoryacts.

1.Tradelicenceact

TradelicenceactCAP(497)statesthateverytradermusthaveatradinglicencefromtheministryofcomme
rcepriortooperatingabusinessina“central/
generalbusinesscentre”bytheKenyanlawsfailureofwhichmayleadtodislocation/
removalofthetraderfromthetradingindustry.

Asaresultofthis,thebusinesswillacquireatradinglicencefromtheauthoritativebodyintheareainordert
ooperateitsactivitieseffectively.

2.EmploymentAct(Labourlaw)

Theyincludetheemploymentactcap(236),workman’scompensationactcap(286)andthenationalsecur
ityboard(NSB).Thelawsemphasizemuchonemploymentlawsirrespectiveofwhetherthebusinessism
akingaprofitorloss.Sothebusinesswillhavetostrictlyfollowthesetlawsbymeetingtheemployee’sright
sandtermsandconditionsoftheemploymentact.

3.Factoryindustryact

Industrialactcap(514)byKenyanlawsstatesclearlythedutiesofanemployertousearesultofviolationofs
uchduties.Thustoavoidanyformofinconveniences,thebusinesswillhavetoadheretothesetactsinorder
torunitsoperationswithoutanybottlenecks.

CHAPTERFIVE

5.0FINACIALPLAN

Thischaptercomprisesofanalyzingfinancialrequirementsinabusinessanddevelopingfinancialplans.

5.1OBJECTIVESOFTHEFINACIALPLAN
Themainreasonsforpreparingthefinancialplanareduetothefollow:
16
  ToenablebudgetingforthecapitalathandwhichIwillusetostartupthebusiness
 Todetermineplanning,operationonprojectsales,lossesandevaluatingthecurrentandfixedasse
tsofthebusiness.
 Toexpressalltheentrepreneurialfinancialactivitiesinrelationaltothedetailedinvestedcapital.
 Tomonitortheflowoffinancesintermsofoperationwithinthebusinesssoastoachievethesetobje
ctives.
 Toestablishsourcesoffinanceinthebusiness.

5.2PRE-OPERATIONALCOST

EXPENCES AMOUNT(KSH)
Purchaseofmaterial 387,400.00
Rent 10,000.00
Electricity 2,000.00
Advertisement 5,000.00
Transport 1,000.00
Water 500.00
Telephone 1,000.00
Maintenance 2,500.00
Consultationfee 600.00
Licenses’andpermit 15,000.00
s
Regulations 5,000.00
TOTAL 480,000.00

ASSUMPTION
 Salariesofstaffwillonlyincreaseafterthreeyearsby15%.
 Forthethreeyears,rentwillalsonotincrease.
 Mostoftheitemwillremainconstantforthewholeyear.

5.3WORKINGCAPITAL/OPERATIONALCOST
CURRENTASSETSYEAR1 YEAR2 YEAR3

17
 ITEM COST COST COST
Stock 215000 250000 300000
Cashathand 70000 80000 100000
Cashatbank 210000 300000 350000
debtors 5000 10000 200000
TOTAL 500000 640000 770000
CURRENTLIABILITIES
Salariesandages 180000 240000 300000
Loanrepayment 50000 600000 80000
Interest 10000 20000 40000
Taxes 5000 5000 5000
Miscellaneous 10000 10000 10000
Purchases 50000 150000 20000
Advertisement 1000 2000 4000
Telephoneservice 2000 2000 2000
Electricitybill 2000 3000 4000
Waterbill 500 500 500
Postage 200 500 500
Repairandmaintenanc 15000 20000 25000
e
TOTALS 325700 513000 491000

Workingcapital=current-currentliability
=500000-325700
=174300
CASHFLOWPROJECTIONS
YEARONE
ITEM JAN FE MA AP MA JU JUL AU SEP OCT NO DEC TOTA
B R R Y N G V L
Cashinflo
w

18
Cashsales 300 350 400 500 560 580 590 600 650 6600 670 6800 65400
000 000 000 000 000 000 000 000 000 00 000 00 00
Debtorscol 800 870 790 870 800 800 800 800 800 8000 100 1200 10400
lection 0 0 0 0 0 0 0 0 0 00 0 00
TOTALC 308 358 407 508 568 558 598 608 668 6680 668 6920 66440
ASHINFL 000 700 900 700 700 000 000 000 000 00 000 00 00
OW
Cashoutflo
w
Cashpurch 100 900 800 900 800 700 700 600 900 9000 100 1000 10200
ases 000 00 00 000 00 00 00 00 00 0 00 0 0
Rent 500 500 500 500 500 500 500 500 500 5000 500 5000 60000
0 0 0 0 0 0 0 0 0 0
Paymentof 700 700 700 700 700 600 600 600 800 8000 100 1500 85000
creditors 0 0 0 0 0 0 0 0 0 00 0
Advertise 100 _ _ _ _ _ _ _ _ _ _ _ 1000
ment 0
Salariesan 900 900 100 100 100 100 900 900 100 1000 100 1000 11600
dallowanc 00 00 000 000 000 000 00 00 000 00 000 00 00
e
Insurance 300 _ _ _ _ _ _ _ _ _ _ _ 3000
0
Taxes 200 200 200 200 200 200 200 200 200 200 200 200 2400
Loanintere 900 900 900 900 900 900 900 900 900 900 900 900 10800
st
Stationerie 150 150 150 150 150 150 150 150 150 150 150 150 1800
s
Drawings 900 900 900 900 900 900 900 900 900 900 900 900 10800
Electricity 500 500 600 600 600 500 500 500 800 900 900 1000 7800
0
License _ _ _ _ _ _ _ _ _ _ _ _ 2500

19
Water 300 300 300 300 300 300 300 300 300 300 300 300 3600
Telephone 600 600 600 600 600 600 600 600 600 600 600 600 7200
Transport 500 500 500 500 500 500 500 500 500 5000 500 5000 60000
0 0 0 0 0 0 0 0 0 0 0
TOTALC 224 200 200 209 200 189 179 169 211 2119 224 2308 24510
ASHFLO 850 650 750 850 750 650 650 650 950 50 050 50 0
W

Netcash 831 158 207 198 367 398 418 438 446 4560 445 4616 41899
50 050 150 850 950 350 350 350 050 50 950 50 00
Accumulat 831 241 448 747 111 151 193 237 281 3272 372 4189 66440
ivecash 50 200 350 200 515 350 185 020 625 300 825 900 00
0 0 0 0 0 0

YEARTWO
ITEM JA FE MA AP MA JU JUL AU SEP OCT NO DEC TOTA
N B R R Y N G V L
Cashinflo
w
Cashsales 300 350 400 500 560 580 590 600 650 6600 670 6800 65400
000 000 000 000 000 000 000 000 000 00 000 00 00
Debtorscol 800 870 790 870 800 800 800 800 800 8000 100 1200 10400
lection 0 0 0 0 0 0 0 0 0 00 0 00
TOTALC 308 358 407 508 568 558 598 608 668 6680 668 6920 66440
ASHINFL 000 700 900 700 700 000 000 000 000 00 000 00 00
OW
Cashoutflo
w
Cashpurch 100 900 800 900 800 700 700 600 900 9000 100 1000 10200

20
ases 000 00 00 000 00 00 00 00 00 0 00 0 0
Rent 500 500 500 500 500 500 500 500 500 5000 500 5000 60000
0 0 0 0 0 0 0 0 0 0
Paymentof 700 700 700 700 700 600 600 600 800 8000 100 1500 85000
creditors 0 0 0 0 0 0 0 0 0 00 0
Advertise 100 _ _ _ _ _ _ _ _ _ _ _ 1000
ment 0
Salariesan 900 900 100 100 100 100 900 900 100 1000 100 1000 11600
dallowanc 00 00 000 000 000 000 00 00 000 00 000 00 00
e
Insurance 300 _ _ _ _ _ _ _ _ _ _ _ 3000
0
Taxes 200 200 200 200 200 200 200 200 200 200 200 200 2400
Loanintere 900 900 900 900 900 900 900 900 900 900 900 900 10800
st
Stationerie 150 150 150 150 150 150 150 150 150 150 150 150 1800
s
Drawings 900 900 900 900 900 900 900 900 900 900 900 900 10800
Electricity 500 500 600 600 600 500 500 500 800 900 900 1000 7800
0
License _ _ _ _ _ _ _ _ _ _ _ _ 2500
Water 300 300 300 300 300 300 300 300 300 300 300 300 3600
Telephone 600 600 600 600 600 600 600 600 600 600 600 600 7200
Transport 500 500 500 500 500 500 500 500 500 5000 500 5000 60000
0 0 0 0 0 0 0 0 0 0 0
TOTALC 224 200 200 209 200 189 179 169 211 2119 224 2308 24510
ASHFLO 850 650 750 850 750 650 650 650 950 50 050 50 0
W

Netcash 831 158 207 198 367 398 418 438 446 4560 445 4616 41899
50 050 150 850 950 350 350 350 050 50 950 50 00

21
Accumulat 831 241 448 747 111 151 193 237 281 3272 372 4189 66440
ivecash 50 200 350 200 515 350 185 020 625 300 825 900 00
0 0 0 0 0 0

YEARTHREE
ITEM JA FE MA AP MA JU JUL AU SEP OCT NO DEC TOTA
N B R R Y N G V L
Cashinflo
w
Cashsales 300 350 400 500 560 580 590 600 650 6600 670 6800 65400
000 000 000 000 000 000 000 000 000 00 000 00 00
Debtorscol 800 870 790 870 800 800 800 800 800 8000 100 1200 10400
lection 0 0 0 0 0 0 0 0 0 00 0 00
TOTALC 308 358 407 508 568 558 598 608 668 6680 668 6920 66440
ASHINFL 000 700 900 700 700 000 000 000 000 00 000 00 00
OW
Cashoutflo
w
Cashpurch 100 900 800 900 800 700 700 600 900 9000 100 1000 10200
ases 000 00 00 000 00 00 00 00 00 0 00 0 0
Rent 500 500 500 500 500 500 500 500 500 5000 500 5000 60000
0 0 0 0 0 0 0 0 0 0
Paymentof 700 700 700 700 700 600 600 600 800 8000 100 1500 85000
creditors 0 0 0 0 0 0 0 0 0 00 0
Advertise 100 _ _ _ _ _ _ _ _ _ _ _ 1000
ment 0
Salariesan 900 900 100 100 100 100 900 900 100 1000 100 1000 11600
dallowanc 00 00 000 000 000 000 00 00 000 00 000 00 00
e
Insurance 300 _ _ _ _ _ _ _ _ _ _ _ 3000

22
 0
Taxes 200 200 200 200 200 200 200 200 200 200 200 200 2400
Loanintere 900 900 900 900 900 900 900 900 900 900 900 900 10800
st
Stationerie 150 150 150 150 150 150 150 150 150 150 150 150 1800
s
Drawings 900 900 900 900 900 900 900 900 900 900 900 900 10800
Electricity 500 500 600 600 600 500 500 500 800 900 900 1000 7800
0
License _ _ _ _ _ _ _ _ _ _ _ _ 2500
Water 300 300 300 300 300 300 300 300 300 300 300 300 3600

Telephon 600 600 600 600 600 600 600 600 600 600 600 600 7200
e

Transport 500 500 500 500 500 500 500 500 500 5000 500 500 60000
0 0 0 0 0 0 0 0 0 0 00

TOTALC 224 200 200 209 200 189 179 169 211 2119 224 230 24510
ASHFLO 850 650 750 850 750 650 650 650 950 50 050 850 0
W

Netcash 831 158 207 198 367 398 418 438 446 4560 445 461 41899
50 050 150 850 950 350 350 350 050 50 950 650 00

Accumula 831 241 448 747 111 151 193 237 281 3272 372 418 66440
tivecash 50 200 350 200 515 350 185 020 625 300 825 990 00
0 0 0 0 0 0 0

23
5.4INCOMEBALANCESHEET

24
DESCRIPTION YEAR1 YEAR2 YEAR3

Sales 321570 600000 800000

Debtors 1570 20000 30000

320000 580000 770000

Additionalexpenses

Salariesandwages 180000 240000 300000

Taxes 5000 5000 5000

Miscellaneous 10000 10000 10000

Advertisement 1000 2000 4000

Telephoneservices 2000 2000 2000

Electricbill 2000 3000 4000

Waterbill 500 500 500

Postage 200 500 500

Repairandmaintenance 15000 20000 28000

215700 283000 315000

Grossprofit 104300 297000 419000

LessVAT 16688 16688 16688

25
Grossprofit 104300 297000 419000

-16688 -16688 -16788

87612 280312 402312

Netprofit 87612 280312 402312

26
5.6BREAKEVENANALYSIS

VARIABLECOST YEARONE

Advertisement 15000

Postage 1000

Wagesandsalaries 180000

Repairandmaintenance 15000

Stationery 10000

Telephoneservices 25000

Purchases 150000

Miscellaneous 50000

Totals 284000

27
Contributionmargin=totalsales-variablecost

321570-28400

=28570

Percentagecontributionmargin=contributionmargin*100/totalsales

=28570*100/312570

=9.14%

BREAKEVENPOINT

Salary 180000

Rent 50000

License 20000

Total 880000

28
Breakevenpoint=fixedcost

Percentagecontribution=total*100

880000*100/9.14=9628008.753

5.8PROFITABILITYRATIO

Grossprofitratio Year1 Year2 Year3

Grossprofit*100/ 104300*100/321570 297000*100/600000 419000*100/800000

sales
=32.4% =49.5% =52.5%

Returnonequity 87612*100/460000 280312*100/46000 280312*100/46000

=netprfaftertax*100/ =19% =60.9% =60.9%

Ownerequity

Returnoninterest 100000*100/200000 200000*100/250000 300000*100/35000

=netprofitbeforetax =50% =80% =85.71%

Interest*100/capital

Employed

5.7PROPOSEDCAPITALIZATION

Ownersequity 460000

Loan 500000

Total 960000

29
APPENDIX1

Kisii-KisumuRoad

CATHOLIC

ALAL
ELECTRONICS
KISII
UNIVERSITY

30