BUSINESS PLAN

OLL PORTBLE TYRE CHANGER TOOLS

NAME:

EMAIL ADDRESS: oliveredins@gmil.com

MOBILE: 0701806333

NME OF THE PRESENTER: OLIVER LUVASI LIBMIR

INDEX NUMBER: 1061200502

COURSE: CRAFT IN UTOMOTIVE ENGINEERING

CENTRE: KENY COAST NTIONL POLYCHNIC

CENTRE CODE:

PRESENTED TO: KENYA NTIONL EXMINTION COUNCIL

SUPERVISOR: MDAM CHRITY KATHURE

SERIES: NOVEMBER 2021

1
 DECLARTION
NAME OF THE PROJECT: OLL PORTBLE TYRE CHANGER

I declare that;

The project named above was proved by Kenya Coast National Polytechnic and supervised by
Madam Charity Kathure

I. I carried out the project whose report follows this project.

ii. I received no help from unauthorized person other than the name guidance from the
supervisor.

iii. I wrote the report unaided.

iv. The report submitted to the council is original work.

SIGNATURE OF

CANDIDATE…………………………………………………DATE …………………………….

SUPERVISOR

I………………………………. TSC NO…………………………………. declare that I

supervised the above work.

THE CANDIDATES PROJECT AND THE REPORT CONTAINED THERE IS GENUINE

WORK OF THE CANDIDTE.

SIGNATURE OF

SUPERVISOR………………………..……………… DATE……………………………….

i
 DEDICATION
This project is a dedication to my mother, a strong and soul who taught me to trust in Allah
believe in hard work and that so much could be done with little. My father also for caring an
honest living for us and for supporting and encouraging me to believe in myself.

My dedication also goes through my uncle for my guardian during my educational career. Not
leaving out my supervisor Madam charity Kathure who aided me in the drafting of this project.

ii
 ACKNOWLEDGEMENT
Gratefully I acknowledge permissions granted to me by my lecturer Madam Charity Kathure s
well as my principal who gave me the golden opportunity to represent my KNEC project s my
business plan on the topic OLL PORTABLE TYRE CHANGER EQUIPMENT, which made
me do a lot of research my cruise field.

I would like to attend my deep gratitude to the whole department of automotive engineering in
the institute for the great assistance you availed to me during the time I was collecting data

iii
Table of Contents
DECLARTION.................................................................................................................................................i
DEDICATION.................................................................................................................................................ii
ACKNOWLEDGEMENT.................................................................................................................................iii
EXECUTIVE SUMMARY...............................................................................................................................vii
1.0 BUSINESS DESCRIPTION.......................................................................................................................vii
2.0MARKETING PLAN.................................................................................................................................vii
3.0 ORGARNIZATION PLAN........................................................................................................................vii
4.0 PRODUCTION AND OPERATIONAL PLAN..............................................................................................vii
5.0 FINANCIAL PLAN...................................................................................................................................vii
CHAPTER ONE..............................................................................................................................................1
1.0. THE BUSINESS DESCRIPTION.................................................................................................................1
1.1. THE BUSINESS LOCATION AND ADDRESS..............................................................................................1
1.2. FORM OF OWNERSHIP..........................................................................................................................2
1.3. TYPES OF BUSINESS..............................................................................................................................2
1.4. PRODUCTS AND SERVICE......................................................................................................................2
1.5. JUSTIFICATION AND OPPORTUNITY......................................................................................................3
1.6. INDUSTRY.............................................................................................................................................3
1.7. GOALS OF THE BUSINESS AND OBJECTIVES..........................................................................................3
1.7.1. Goals..................................................................................................................................................3
1.7.2. Objectives..........................................................................................................................................4
1.8. ENTRY AND GROWTH STRATEGY..........................................................................................................4
1.8.1. Entry Strategy....................................................................................................................................4
1.8.2. Growth Strategy................................................................................................................................4
CHAPTER TWO.............................................................................................................................................5
2.0. MARKETING PLAN.................................................................................................................................5
2.1. THE CUSTOMER....................................................................................................................................5
2.2. MARKET SHARE.....................................................................................................................................5
2.3. COMPETITION.......................................................................................................................................9

iv
2.4. METHODS OF PROMOTION AND ADVERTISEMENT............................................................................11
2.5. PRICING STRATEGY.............................................................................................................................11
2.6. SALE TACTICS......................................................................................................................................13
2.7. DISTRIBUTION STRATEGY...................................................................................................................13
CHAPTER THREE........................................................................................................................................13
3.0 ORGANIZATION AND MANAGEMENT PLAN.........................................................................................13
3.1 MANAGEMENT TEAM..........................................................................................................................13
3.2 OTHER PERSONNEL..............................................................................................................................16
3.3 RECRUITMENT, TRAINING AND PROMOTION......................................................................................19
3.3.1 Recruitment......................................................................................................................................19
3.3.2 Training.............................................................................................................................................19
3.3.3 Promotion.........................................................................................................................................19
3.4 RENUMERATION AND INCENTIVES......................................................................................................19
3.4.1 Remuneration...................................................................................................................................19
3.4.2 Incentives.........................................................................................................................................20
3.5 LICENSE, PERMITS AND BY-LAWS........................................................................................................20
3.5.2 Permits.............................................................................................................................................20
3.5.3 By-Laws.............................................................................................................................................21
3.6 SUPPORT SERVICES..............................................................................................................................21
3.6.1 Banking Services...............................................................................................................................21
3.6.2 Insurance service..............................................................................................................................21
3.6.3 Consulting services...........................................................................................................................21
3.6.4 Legal service.....................................................................................................................................21
CHAPTET FOUR..........................................................................................................................................22
4.0. PRODUCTION AND OPERATIONAL PLAN.............................................................................................22
4.1. PRODUCTION FACILITY AND CAPACITY...............................................................................................22
4.1.1. Repair and Maintenance.................................................................................................................23
4.1.2. Expansion........................................................................................................................................23
4.1.3. Factory layout..................................................................................................................................23
.................................................................................................................................................................. 23
4.1.4. Level of production..........................................................................................................................24
v
4.2. PRODUCTION STRATEGY.....................................................................................................................24
4.3. PRODUCTION PROCESS.......................................................................................................................24
4.4. PRODUCTION AFFECTING OPERATION...............................................................................................24
4.4.1. HEALTH REGULATIONS....................................................................................................................24
4.4.2. ENVIRONMENTAL REGULATIONS....................................................................................................25
4.4.3. SAFETY.............................................................................................................................................25
CHAPTER FIVE............................................................................................................................................26
5.0: FINANCIAL PLAN.................................................................................................................................26
5.1:PRE-OPERATIONAL COST.....................................................................................................................26
5.2: PRO-FORMA BALANCE SHEET.............................................................................................................26
5.3: WORKING CAPITAL.............................................................................................................................28
5.4. CASHFLOW PROJECTION.....................................................................................................................29
CASH PROJECTION FOR THE YER 2021.......................................................................................................29
CASHFLOW PROJECTION FOR THE YEAR 2023...........................................................................................30
CASHFLOW PROJECTION FOR THE YEAR 2024...........................................................................................31
5.5. PRO-FORMA INCOME STATEMENT.....................................................................................................32
5.6. BREAK EVEN ANALYSIS........................................................................................................................32
5.8. CAPITALIZATION.................................................................................................................................34
5.9. PROFITABILITY RATIO.........................................................................................................................34

vi
 EXECUTIVE SUMMARY

1.0 BUSINESS DESCRIPTION.

Give a brief explanation of how the business is. Give the business name and how it was selected
and also a logo to identify the business.

Give the business location and address. Here products and services offered are required to be
outlined. Also goals and objectives of the business are outlined.

2.0MARKETING PLAN
Here comparison of market share is drafted and calculated to show the chance the business has to
its competitors. Methods of promotion and advertisement are shown.

Pricing strategy and prices of services and products offered are shown. Sale tactics are also
outlined.

3.0 ORGARNIZATION PLAN.

Here the business is required to outline the management team of the tire retail and outline each of
their duties and responsibilities, also give the qualification for each personnel is listed. Also a list
of other personnel is listed. Methods of recruitment training and promotion are outlined.

Also remuneration of each personnel is listed together with their allowances. Acquire of license,
permits and by laws is required.

Banking services, insurance services and legal services is listed and how they shall be acquired.

4.0 PRODUCTION AND OPERATIONAL PLAN.

Here the production process is outlined, together with the methods of production. Material used
for production are listed. Factory layout is also given.

5.0 FINANCIAL PLAN.

Is a projection on how you would use the money you receive. Funds acquired will be required to
be accounted for and a plan is given to show how the funds are used for.

vii
Projection of how an entity will be trading with regards to the expected profits and expenses over
a certain period of time

viii
 CHAPTER ONE

1.0. THE BUSINESS DESCRIPTION

The business name will ne OLL PORTABLE TYRE changer. The name was carefully chosen by
the owner to make it unique identity in the business fraternity as "OLL" Which originated from
my original name Oliver Luvasi Libamira.

1.1. THE BUSINESS LOCATION AND ADDRESS.

The business will be located in one of the busiest streets of Mombasa- Docks express .We will be
able to lease facility that is big enough to fit into the design of the kind of the tyre retail shop.

Oll portable tyre changer

Mombasa, docks

P.O BOX 80100

MOMBASA

OLL
PORTABLE
CHANGER K.C.B BANK

SAFARICOM KUMHU TYRES

SHOP
1
EMAIL:oll254@gmail.com

1.2. FORM OF OWNERSHIP.

The business will run under the partnership type of ownership this is because the business will be
worked upon by the partnership because I saw it best ownership of business.

Reasons for choosing ownership business;-

1. To run the business effectively.

2. To prevent future costs.

3. For easy finance.

Advantages of ownership business.

1. Financing will be easier.

2. Continuity need it be an issue because partner can agree legally to allow the partnership to
survive if one or more partners dies.

3. It brings together diverse group of talented individuals who share responsibility for running
business.

1.3. TYPES OF BUSINESS.

With mainly the tire changer equipment as our main area of experience, we will be also be
dealing with a wide range of tyre brands among our display tyre products. This is a bid to cater
for the specific needs of our diverse clients who will be having different tyre brands preference.

1.4. PRODUCTS AND SERVICE

Products and service to be offered in OLL PORTABLE TYRES CHANGER CENTER include;-

1. Motor vehicle tyre and tube retailing.

2. Tyre fitting and wheel alignment and balancing.

2
 3. Minor tyres and tube repairs.

4. Selling of light passenger vehicle tyres.

5. Light commercial vehicle tyres.

6. Selling of our tyre tool changer to all our customer.

1.5. JUSTIFICATION AND OPPORTUNITY.

The business will ensure its customers are attended to and their catered for, since the business
will be located a few kilometers out of the town this allows reach by customers.

According to the research and findings most of the car sales and garage are located nearby which
offer services are fully loaded with all tyre of vehicle, this means that the demand for purchasing
tyres and our portable tyre tool changer will be high.

1.6. INDUSTRY.
This business belongs in the Automotive industry in this industry tyre retail market for
automobile tyre has stabilized following the aftermath of recession .with low single digit growth
in each of the past three years the demand as picked-up across the country.

The drivers and the tyre technicians across the county and other developing and under
developing counties will have much benefits on the tyre changing equipment which is portable
which they can use to manage their tyre when they are out of town, in places where there is no
tyre service center nearby.

1.7. GOALS OF THE BUSINESS AND OBJECTIVES.

1.7.1. Goals.
In long term, the business wants to be able to open branches in other towns and cities in the
country. Also wants to attract more and more customers not only locally but also regionally and
internationally. Increase in sales is also among long term goals at automobile industry, this will
be achieved through constant hard work and also consistent work. The business will also want to
be able to penetrate into other market through the service offered.

3
1.7.2. Objectives.
In short term, the business wants to achieve maximization in profit of the services provided also,
to be able to attract more customers. The business wants to be able to provide high quality
services to its customers and meet their satisfaction.

The business wants to achieve marketing product and service to all.

1.8. ENTRY AND GROWTH STRATEGY.

1.8.1. Entry Strategy.

The business will start bit by bit and slowly gain customers through frequent and disciplined and
advertisements.

The competitive market will be considered greatly before any action taken to start the
business.Pricing of the service offered will be favorable and affordable to all, this is to attract
more customers. Competition from other retails offering the same service will be considered and
service offered will be of quality compared to other competitors.

1.8.2. Growth Strategy.

We conduct a thorough market survey and feasibility studies in order for us to be able to
penetrate the available market and become preferred choice for our customer. We have detailed
information and data that we will be able to utilize to structure our business to attract the number
of customers we want to attract per time.

Will adopt the following growth strategy approach to win customers over;-

1. Open out tyre shop in a good style with a party for all.

2. Ensure that we have a wide range of tyres from different brands at all times.

3. Make use of attractive hand bills to create awareness and also to give direction to our tyre
store.

4. Create a loyalty plan that will enable us reward our regular customers.

5. Engage on road shows within our neighborhood to create awareness for our tyre shop.
4
 CHAPTER TWO.

2.0. MARKETING PLAN.

2.1. THE CUSTOMER.

The business will cater for high income earners, medium and mow income earners support to
enable our customers to contact us quickly if they have a problem or questions about our
products.

In order for customers to understand our products and services we, will be;-

1. Creating a suite of online training materials to help our customers as much value as
possible from our products.
2. Use in-app messaging and notification to alert users to product improvement.
3. Schedule In-person training or on boarding.
4. Offer 24/7 Customer support.
5. Email and In-product cross-selling and promotion based on user behavior to target
specific customers with relevant offers.
6. Creating educational content such as webinars, tutorials, black spots, and an email series
to help our customer’s learn more about our products.

2.2. MARKET SHARE.

OLL PORTABLE TYRE CHANGER will target a market share of around 25%during its first
year.

5
FIRST YEAR

SALES SHARE
Kumho tyres 4000 400/10,000X100=40%
Abdallah tyres and Limited 2000 2000/10,000X100=20%
Bridgestone tyres 15,00 1500/10,000X100=15%
Oll Portable Tyre Changer 2,500 2,500/10,000X100=25%
Total 10,000

Pie chart.

Sales

25% KUMHU TYRES

ABDALLAH TYRE AND RIMS
40% BIRDGESTONE TYRES
OLL PORTABLE TYRES

15%

20%

6
SECOND YEAR

In its second year Oll Portable Tyres will get a market share of 35%

SALES SHARE
Kumho tyres 4,800 4800/12,000X100=40%
Abdallar tyres and rims 1,800 1,800/12,000X100=15%
Bridgestone tyres 1,200 1200/12,000X100=10%
Oll Portable Tyres 4,200 4,200/12,000X100=35%
Total 12,000

Pie chart

Sales

KUMHU TYRES
35% ABDALLAH TYRE AND RIMS
40% BRIDGESTONE TYRES
OLL PORTABLE TYRES

10%
15%

7
THIRD YEAR

In its third year, Oll Portables tyres will target a market share around 50%

SALES SHARES
Kumho tyres 3,900 3,900/13,000X100=30%
Abdallar tyres and Rims 1300 1300/13,000X100=10%
Bridgestone tyres 1300 13,00/13,000X100=10%
Oll Portable Tyres 6500 6500/13,000X100=50%
Total 13,000

Pie chart

Sales

KUMHU TYRES
30% ABDALLAH TYRES AND RIMS
BRIDGESTONE TYRES
50% OLL PORTABLE TYRE CHANGER

10%
10%

8
2.3. COMPETITION.
We are aware of the stiffer competition and we will be well prepared to compete favorable with
other leading tyre retail shops throughout Mombasa express area and throughout the Kenya.

The business faces three main competitors which are;-

1. Kumhu tyres.

2. Adallar tyres and Rims.

3. Bridgestone tyres.

No Area of Oll Kumhu Abdallar Bridgestone

Comparison Portables Tyres Tyres And Tyres.
Tyres Rims
1 Location 6 6 5 5
2 Pricing 7 9 6 6
3 Promotion 8 6 4 5
4 Sales 7 6 5 5
5 Advertising 9 6 6 4
6 Service 10 10 6 9
Total 47 37 32 34

In the table above, it shows that Oll Portable tyre changer products has a better chance on its
competitors.

The table below shows strength and weakness analysis.

Name Strength Weakness

Oll Portable Tyres 1. Good site. Great competition from other

9
 2. Good working space. competitors.
3. Service are cheap.
4. Experienced and adequate
personnel.
5.The business model will be
operating on both (Physical store
and online store)

Kumhu Tyres 1.Good site 1. Adequate funds to run the

2. Good parking space. business.
3.Experienced personnel 2. Great competition from
competitors.
Abdallar Tyres and Rims 1. Close to customers within the 1. Lack of modern equipment.
area. 2. Poor public relation.
Bridgestone Tyres 1. Great site. 1. Services offered are very
2. Availability of modern working expensive.
equipment.

2.4. METHODS OF PROMOTION AND ADVERTISEMENT.

Despite the fact that our store is well, located, we will still go ahead to intensify publicity for the
business .We are going to explore all available means to promote our store.

Oll Portable tyres products store has a long term plan of opening outlets in various locations all
around Mombasa and key cities in Kenya which why we will deliberately build our brand to be
well accepted in Mombasa before venturing out.

As a matter of fact, our promotion and advertisement strategy is not surely for winning
customers over but to effectively communicate our brand. Here are the platforms we intend
leveraging on to promote and advertise Oll Portable Tyre Changer product store;-

a) Place adverts on community based newspapers, radio station and TVs stations.
b) Leverage on the internet and social media platforms like; YouTube, Facebook, twitter,
Instagram and other platform to promote our business.

10
 c) Ensure that our we position our banners and billboards in strategic position all around
Mombasa.
d) Contact corporate organization household, landlord association and schools by call8ng
them up and informing them of Oll Portable Tyre Changer product that we sell.
e) Advertise our store business in our official website and employ strategies that will help us
pull traffic of the site.

2.5. PRICING STRATEGY.

A side from quality, pricing is keen of the key factor that gives leverage to retailing business
such s tyre retailing business, Its normal for consumer to go to places(Tyre retail outlets) where
they can get tyre at a cheaper prove which is why big player in the auto tyre retail shops industry
like discount tyre

We know we don’t have the capacity to compete with discount tyres, but we will ensure that the
prices and quality of all the tyre product that are available in our shop are competitive with what
is obtained in our tyre retail store within our level.

When the demand of the product is high, its pricing will also be high to cater for tje cost of the
purchase of materials. Production varies will depend on demand and competition pricing.

Due to the economic status of the area, prices will be balanced and set as more affordable and
suitable for all customers.

The following table below shows the pricing foe the products services.

PRODUCTS PRICE
1.Portable Tyre changer machine Ksh.12,750
2.Compressor Tyre inflator (Portable) Ksh.3,100
3.Tire repair kit Ksh.700
4.Tyre shine foam Ksh.500
5. Tyre caps. Ksh.600
6. Tyre pressure gauge. Ksh.700
7. Tyre paints jacks and lifting Acc Ksh.2800 - 4500

11
 essecories/jack stands.
8.Tyre from different Brand(Mitchelin,good Ksh.2600 to Ksh.40,000
years ,yokohama,bridgestone and general
tyres)from Rim size 6in - 26 in.
9.Rims from different Ksh.2,500 - Ksh 20,000
brands(Touren,Dorman,Mc Guard, Turning
pros and Rocktrix)

SERVICE PRICE
1.Allignment and suspension Ksh.5000
2. Wheel balancing and changing. Ksh.1500 per tyre.
3.Tire inspection Ksh.1000
Air service Ksh.15,000 to Ksh.18,000 depending on the
size of tyre and design.
Free

2.6. SALE TACTICS.

Sales of services will be direct to the customer;, payment will be done after the services has been
carried out in order to meet the customers satisfaction employees are encouraged to the use of
courteous language towards the customer to portray a good picture of the business hospitality of
the highest older will be maintained at all times in our store.

2.7. DISTRIBUTION STRATEGY.

We will want our product sold at as many locations as possible is reach consumer so it will select
intensive distribution through both direct and indirect out lets. We will also sell online via a
website and ship directly to customer.

12
 CHAPTER THREE

3.0 ORGANIZATION AND MANAGEMENT PLAN

3.1 MANAGEMENT TEAM

We will ensure that we hire people that are qualified, honest, and ready to work to help us build a
prosperous business that will benefit all the stake holders. (The owners, work force band
customers).As matter of fact profit sharing arrangement will be made available to all our senior
management staff and it will be based on their performance for a period of ten years or more.

In view of that, we will decide to hire qualified and competent hands to occupy the following
positions.

1. Chief executive officer (owner)

2. Shop manager
3. Human resources and admin manager
4. Sales and marketing manager
5. Information technologist
6. Accountants/ cashiers
7. Sales agent /customer service executive
8. Vulcanizes
9. Cleaners

1. Chief executive officer

Duties

a) Increase management effectiveness by recruiting, selecting ,orienting, training, coaching,

counseling and disciplining managers; communication values ,strategies and objectives,
assisting accountabilities, planning, monitoring and appraising job results ,developing
incentives, providing educational opportunities.
b) Responsible for fixing prices and signing business

13
c) Evaluate the success of the organization
d) Create ,communicate and implement the organization vision ,mission and overall directions
e) Responsible for signing checks and document an behalf of the company

Qualifications

1. Should have at least masters in any management course

2. Should have a work experience of over five years
3. Should have at least practiced management in any one of the firms.

2. Admin and Human Resources Manager

Duties

1. Maintain office supplies by checking stocks ;placing and expediting orders ;evaluating new
products
2. Oversees the smooth running of the daily office activities
3. Responsible for training ,evaluating and assessment of employees
4. Ensures operator of equipment by completing preventive maintenance requirements; calling
for repairs.
5. Update job knowledge by participating in educational opportunities ;reading professional
publication; maintaining personal networks, participating in professional organization

Qualifications

a) Should have work experience of over five years

b) Should have practiced Human resource in any of the firm
c) Should have at least masters in Human resource Management course.

3. Sales and Marketing manager

Duties

1. Develops executes and evaluate new plans for expanding

2. Increase sales
3. Documents all customers contact and information
14
 4. Helps to increase sales and growth of the company
5. Responsible for supervising implementation, advocate for the customers’ needs and
communicate with clients
6. Manages extension research and coordinate all the internal sources of information to
retain organization's best customers and attract new ones.
7. Identifies, prioritizes, and reaches out to new partners and business opportunities at all.

Qualifications

1. Should have at least master’s in business course

2. Should have at least practiced marketing in any firm
3. Should have a working experience of over five years

4. Shop Manager

a) Responsible for managing the daily activities in the shop

b) Ensures that proper records of tires, rims sand portable tyre change machines are kept and
warehouse does not run out products.
c) Ensure that the store facility is in tip top shape and are properly arranged and easy to
locate.
d) Supervises the workforce in the tire sales floor
e) Interfaces with third-party supplier (vendors)
f) Controls shoes distribution and supply distribution and supply inventory.

Qualifications

 Should have a bachelor degree in business related field

 Should have a retail experience of over five years.

3.2 OTHER PERSONNEL

TITLE NO.OF QUALIFICATIO DUTIES
EMPLOYEE NS
S
Information 5  Google  Manages the organization
15
technologist certified website
professional  Handles e-commerce
s cloud aspect of the business
architect  Manages the
organization's CCTV's
 Handles any other
technological and IT
related duties

Accountant 3 B.com (CPA-K)  Responsible for

reports administering payroll
 Handles all financial
transactions
 Serves as internal
auditors for the
organizations
 Ensures compliance with
taxation legislation
Client service 5 Diploma in  Provide information
communication about warranties,
skills  Manufacturing
specifications and
maintenance
 Make suggestions and
encourage purchase of
products
 Finds out the customer’s
needs ,recommend, select
and help locate the right
merchandise, describe a
16
 product features and
benefit

Cleaners 3 KCSE  Handles any other duties

assigned by the store
manager
 Responsible for cleaning
all the tires and other
products at the store
facility at all time
 Cleans both interior and
exterior of the store
facility
Vulcanizes 5 Diploma in Auto  Covers rapture on outside
motive engineering of the tires with tied
rubber into holt with hand
roller
 Places tire in tire mold of
vulcanizing machine
Security officer 4 KCSE  Watch over security in
the premises

ORGANIZATIONAL CHART

CHIEF EXECUTIVE OFFICER

17
HUMAN REASOURCE MANAGER SHOP MANAGER MARKETING DIRECTOR

3.3 RECRUITMENT, TRAINING AND PROMOTION

3.3.1 Recruitment
Applicants who will have applied according to the advertisement in new papers also in TV and
radio stations will underground an interview to ascertain their qualifications. Also the rules and
regulations of the organization will be made available and personnel should confirm that they
will be followed and adhered to.

3.3.2 Training
Main aim for training will be to improve individual skills and knowledge .This will offer a
chance to improve on the quality of production .Training will be done just within our store
premises; afterwards they will be tested and will be given a chance to practice what they have
learned.

3.3.3 Promotion
Promotion will be based on merit. With promotion of personnel to a new post, his/her previous
post will be looked in to and a new person with right qualification will be employed to fill the
post. This will ensure production quality is high.

3.4 RENUMERATION AND INCENTIVES.

3.4.1 Remuneration
Salary will be based on monthly basis. At the start of the business, salary will be low to balance a
steady the organization financially and as the organization expand, salaries will be increased and
workers will be paid according to their posts.

Personnel No Salary House Transport Medical Total

18
 Allowance allowance allowance
Managing 1 Sh.30,000 Sh.6,000 Sh.1,000 Sh. 2,000 39,000
director
human 1 Sh.25,000 Sh.5,000 sh.500 Sh.2,000 32,500
resource
manager

Marketing 1 Sh.20,000 Sh.4,000 Sh.500 Sh.2,000 26,500

director
shop 1 Sh.20,000 Sh.3,000 Sh.500 Sh.2,000 25,500
manager
Information 5 Sh. 18,000 Sh.2,000 Sh.500 Sh.2,000 22,500
technologist
Accountant 3 Sh.18,000 Sh.2,000 Sh.500 Sh.2,000 22,500
Sales agent 5 Sh.18,000 Sh.2,000 Sh.500 Sh.2,000 22,500

Vulcanizes 5 Sh.15,000 Sh.2,000 Sh.500 Sh.2,000 19,500

Cleaners 3 Sh.8,000 Sh.2,000 Sh.250 Sh.2,000 12,250
Security 4 Sh.8,000 Sh.2,000 Sh.250 Sh.2,000 12,250
officer
Total 255,000.

3.4.2 Incentives
Will be given as a motivation to the workers encouraging hard work for greater productivity.
Incentives given will either be financially or non-financially. At the end of everything year
hardworking employees will be rewarded with presents and also vouchers will be given.

3.5 LICENSE, PERMITS AND BY-LAWS

The organization will acquire an automotive license which will allow the business to run. The
business will be notified by the ministry of automotive industry to ensure that the business runs
19
according to the ministry's principle. The license will cost sh.10,000 and will be renewed after
every year .The license will show the business is legal to run .it will operate 24/7.

3.5.2 Permits
The business will acquire its working permit from the ministry of automotive industry; this will
be a validation of its existence .The permit will cost sh.25,000 and will run unusual renewal will
be after every year.

3.5.3 By-Laws
The business will make sure it runs in line with the law set by the ministry of automotive
industry its field by operation to avoid being shut down ,the business will set rules in line with
those of the ministry and ensure they are followed and adhered to.

3.6 SUPPORT SERVICES

3.6.1 Banking Services

The business will have to open a number of bank account which will include a saving account
and also a fixed account after careful consideration of the interest gained. Quotation for
investment will be drafted and carefully underground simplification. The saving account will be
KCB bank, Mombasa main branch.

3.6.2 Insurance service

After careful consideration, the business will be insured by Madison insurance company and the
amount paid will be sh.28,000 per month and as the business expands the amount will increase.
The business will be insured against theft, fire and accident. Also the staff will get a health
insurance cover.

3.6.3 Consulting services

The business will get consultation from higher ranks of automotive dealers with vast experience
in the field of automotive. The ministry body audiometry will give advice on how to run the
business so that to give perfect output.

20
3.6.4 Legal service
Gikandi and Company advocate will be the legal firm representing the business in legal matters
and laws, the business lawyer will be Bella Akinyi, Joseph kinuthia and Musa Otieno who will
represent the business in legal matters like disputes with other auto-tire retail shops and the legal
fee will be sh.100,000 per any legal case.

CHAPTET FOUR.

4.0. PRODUCTION AND OPERATIONAL PLAN.

4.1. PRODUCTION FACILITY AND CAPACITY.

LIST OF EQUIPEMENT REQUIRED.

ITEMS QUANTITY UNIT COST TOTAL

Computers 7 16,000 112,000

Cashbook 7 600 600

Telephone 5 3000 15,000

Chair/tables 10 1000 10,000

Sounds systems 1 30,000 30,000

CCTvs 5 5,000 25,000

Inventory

Stock

Rims and other 2,000,000

Accessories

21
 Total 219,2600

4.1.1. Repair and Maintenance.

Concerning repair and maintained, equipment’s in the office will be regularly checked made sure
they are in good conditions. Any item in need of repair will be looked into immediately to avoid
incurring extra cost. Replacements will be made if the equipment is severely damaged beyond
repair. Money will be set aside when drafting the budget to work on repair and maintained.

4.1.2. Expansion.
We will make sure that the right foundation, structure and process are in place to ensure that
our staff welfare are well take our company cooperate culture will design is drive our business
to greater heights and training and re-training of our welfare is at the top burner.

4.1.3. Factory layout

In the main workshop is where all the business operation will take place.

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 where purchase stock to be sold
is done.
ENTRANCE

EXIT

RECEPTION

WORK SHOP

Ladies

Gents
MANAGING

DIRECTORS OFFICE

Store room
22
4.1.4. Level of production.
To achieve being one of the best, the shop will look to produce its service at maximum level
hence high quality of production.

4.2. PRODUCTION STRATEGY.

Technology is fast growing and need to be on the latest gadgets will be essential at the shop, a
team of IT experts will be tasked with ensuring all machines are up to date and are of the latest
technology. Regular updates and upgrader will be conducted. Materials to aid the production
process will be of high quality.

4.3. PRODUCTION PROCESS.

Since the business will be auto tire retail shop, the production will be manufacturing industry
and this division will also provide re-conditioning service to clients using our quality
products from OLL MANUAL TYRE CHANGER product line.

4.4. PRODUCTION AFFECTING OPERATION.

When the production is low operation of the business will go down. This might be because of the
following reasons;

1) Inadequate division of labour,cetain personnel may be given labour according to their

number hence achieve great output as expected but when one is given work not
according to their number quality of production might reduce.
2) Availability of finances, this is to aid in purchase of equipment’s and resources needed in
production process.
3) Quality of equipment’s, in order to achieve great production, a firm is advised to for the
best equipment’s which will last longer and improve quality of products produced.

23
4.4.1. HEALTH REGULATIONS
The shop will be issued with health certificate which is expected to last for 2 years before
expiring and renewal process is conducted.

The ministry is expected to conduct regular health. Inspection and check-ups to ascertain safety
of customer and staff in the shop.

4.4.2. ENVIRONMENTAL REGULATIONS.

NEMA regulations concerning environmental conservation will be upheld and maintained all
through our store and around the shop premises. Waste disposal measure will be followed to
achieve cleanliness. Regular clean ups will also be conducted twice every month.

4.4.3. SAFETY.
Safety provisions and measures will be upheld in the stores ground ,outside each and every
office a fire extinguisher will be installed to assist in putting out fires in the event of
outbreak. In case of an event of an outbreak each and every person is required to gather at the
fire assembly point.

24
 CHAPTER FIVE

5.0: FINANCIAL PLAN.

5.1:PRE-OPERATIONAL COST.
Requirements needed before the store will be opened.

1. Computers Ksh:112000
2. Cash books Ksh:600
3. Telephone Ksh:15,000
4. Chairs and Tables Ksh.10,000
5. Sound system Ksh.30,000
6. Cleaning accesoriesies Ksh.10,000
7. Electricity Ksh.5000 X 12 Months.
8. Water Ksh.10,000
9. Stock Ksh.250,000
10. Security and CCTVs Ksh.25,000
11. Generator Ksh.100,000
12. Lather Machine Ksh.105,000

Total Ksh.2977600

5.2: PRO-FORMA BALANCE SHEET.

OLL PORTABLE TYRE CHANGER PRODUCTS BALANCE SHEET AS AT 31ST
DECEMBER 2021.

ASSETS LIABILITIES AND CAPITAL

25
Fixed Assets Ksh Long Term
Ksh.

Rent 300,000 Loan

500,000

Plant and Machinery 205,000 Debenture

400,000

Office equipment’s 430,000 Bank overdraft

145,000

Furniture 110,000

Total 1,045,000 Total 1,045,000

CURRENT ASSETS KSH SHORT TERM (Current) Ksh

Debtors 100,000 Creditors 250,000

Stock 1,000,000 Loan 500,000

Cash in hand 500,000 Accruals 350,000

Cash in Bank 1,000,000 Capital (Financial) Ksh

Capital 150,000

Total 260,000 Total 260,000

Total 3645000 Total 3645000

26
5.3: WORKING CAPITAL.
CURRENT ASSETS KSH CURRENT LIABILITIES KSH

Debtors 100,000 Creditors 250,000

Stock 1,000,000 Loans 500,000

Cash in hand 500,000 Accruals 350,000

Cash in book 1,000,000

TOTAL 2600,000 TOTAL 1,100,000

Working Capital = 2,600,000 --1,100,000

= Ksh.1, 500,000

27
5.4. CASHFLOW PROJECTION

CASH PROJECTION FOR THE YER 2021.

RECEIPTS JAN FEB MARC APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC
(RECEIVED) H

LOANS 500,00 - - - - - - - - - - -
0
SALES 100,00 210,00 260,000 250,00 300,00 266,00 240,00 240,00 270,00 250,00 290,00 230,00
0 0 0 0 0 0 0 0 0 0 0
DEBTORS 100,00 300,00 200,000 600,00 500,00 700,00 300,00 30,000 150,00 20,000 50,000 20,000
0 0 0 0 0 0 0
DISCOUNT 70,000 60,000 40,000 60,000 5000 30,000 30,000 40,000 50,000 10,000 50,000 20,000
RECEIVED
PAYMENTS
PURCHASES 100,00 20,000 40,0000 10,000 50,000 50,000 80,000 50,000 25,000 30,000 90,000 15,000
0
SALARIES/ 235,00 235,00 235,000 235,00 235,00 235,00 235,00 235,00 235,00 235,00 235,00 235,00
WAGES 0 0 0 0 0 0 0 0 0 0
CREDITORS 50,000 10,000 290,000 23,000 25,000 35,000 20,000 10,000 10,000 20,000 5000 10,000

DISCOUNT 50,000 22,000 10,000 10,000 10,000 5000 10,000 5000 10,000 10,000 5000 5000
ALLOWED 0
CASHFLOW 245,00 13,000 15,000 92,000 35,000 28,000 25,000 5,000 52,000 15,000 10,000 5000
PROJECTION 0
BAL D/W - 245,00 258,000 273,00 365,00 400,00 428,00 403,00 408,00 460,00 475,00 48500
0 0 0 0 0 0 0 0 0
BAL C/W 245,00 258,00 273,000 365,00 400,00 428,00 403,00 408,00 460,00 475,00 485,00 490,00
28
 0 0 0 0 0 0 0 0 0 0 0

CASHFLOW PROJECTION FOR THE YEAR 2023

RECEIPT(RECEIVED JAN FEB MAR APRI MAY JUN JULY AUG SEPT OCT NOV DEC
)
LOANS 500,00 - - - - - - - - - - -
0
SALES 205,00 300,00 435,00 300,00 400,00 500,000 505,000 50,000 400,000 500,000 505,000 600,000
0 0 0 0 0
DEBTORS 10,000 200,00 20,000 250,00 200,00 200,000 30,000 400,000 20,000 10,000 5,000 15,000
0 0 0
DISCOUNT 5000 10,000 30,000 30,000 20,000 10,000 250,000 30,000 10,000 5,000 5,0000 5,000
RECEIVED
PAYMENTS
PURCHASES 300,00 200,00 100,00 500,00 100,00 200,000 250,000 30,000 90,000 60,000 100,000 20,000
SATARI 0 0 0 0 0
SALARIES/WAGES 235,00 235,00 235,00 235,00 235,00 235,000 235,000 235,000 235,000 235,000 235,000 235,000
0 0 0 0 0
CREDITORS 100,00 10,000 2,000 2,000 10,000 20,000 5,000 10,000 20,000 200,000 40,000 50,000
0
DISCOUNT 5000 5000 10,000 10,000 10,000 15,000 5,000 2,0000 20,000 20,000 40,000 50,000
ALLOWED
CASHFLOW 110,00 60,000 120,00 40 000 85,000 60,000 65,000 6000 65,000 170,000 900,000 35,000
PROJECTION 0 0
BALANCE 490,00 660,00 720,00 840,00 880,00 965,000 1025,00 109,000 1096,00 1161,00 1331,00 1421,00
29
BROUGHT DOWN 0 0 0 0 0 0 0 0 0 0
BALANCE 660,00 720,00 840,00 880,00 965,00 1025,00 109,000 109600 1161,00 1331,00 1421000 1456000
BROUGHT UP 0 0 0 0 0 0 0 0 0

CASHFLOW PROJECTION FOR THE YEAR 2024

RECEIPT JAN FEB MAR APR MAY JUN JULY AUG SEPT OCT NOV DEC
(RECEIVED)
LOANS 300,000

SALES 95,000 60000 620,000 400,000 900,00 150000 800,00 600,000 120,000 150,000 180,000 2100

DEBTORS 10,000 400,000 200,000 100,000 50,000 50,000 200,000 300,000 1000 10,000 50,000 20,000
0
DSCOUNT 5000 200,000 400,000 250,000 200,000 300,000 100,000 200,000 100,000 100,000 20,000 20,000
RECEIVED
PAYMENTS
PURCHASES 100000 250,000 400,000 100,000 500,000 800,000 400,000 200,000 500,000 750,000 100000 120,000

SALARIES 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000
/WAGES
CREDITORS 100,000 5000 10,000 20,000 20,000 30,000 5000 3000 2000 50000 5000 60,000

DISCOUNT 100,000 5000 100,000 200,000 20,000 40,000 100,000 200,000 300,000 40,000 5000 70,000
ALLOWED
CASH FLOW 40,000 150,000 100,00 45,000 170,000 440,000 140,000 160,000 390,000 430,000 610,000 560,000

30
PROJECTION
S
BALANCE B/D 145600 1496,00 1646,00 1656,00 170,000 1871,00 2311,00 2451,000 2611,00 3001,00 3431000 4041,00
0 0 0 0 0 0 0 0 0
BALANCE B/U 149600 1646000 1656,00 1701,00 1871,00 2311,00 245,000 26211,00 3001,00 3431,00 4041,00 4601,00
0 0 0 0 0 0 0 0 0 0

31
5.5. PRO-FORMA INCOME STATEMENT.
YEAR1 YEAR2
YEAR3

Sales 2956000 5151000

12115000

Cost of Sales down 563,000 1950,000 5300,000

Gross profit brought down 2393000 5594000

TOTAL 2393000 5594000

12409000

EXPENSES YEAR 1 YEAR 2 YEAR 3

Salaries/Wages 235,000 235,000

235,000

Rent 300,000 300,000

300,000

Electricity. 60,000 60,000

60,000

Water. 10,000 10,000

10,000

Total Expenses 605,000 605000

605,000

Net profit 1788,000 4989000

11804000

32
Tax 16% 286080 798240
1888640

5.6. BREAK EVEN ANALYSIS.

Break-even point=fixed costs
Contribution per unit.
= 20,000
4
=5000

Break-even point in value= Fixed costs X Selling price.

Contribution per unit
= 20,000X2400
4
=12,000,000

Contribution Ratio = Contribution per unit X 100

Selling price

= 4X100
2400
=0.16

Number of Units=Fixed cost + Target profit.

Contribution per unit
= 20,000+50
4
=5012.5

Sales for target profit = (Fixed cost + Target profit) X10

Selling price
33
 = 20050X10
2400
=83.54

5.7. DESIRED FINANCING.

Items Cost

Pre-Operational cost 2977600

Working capital 1500,000

Fixed Assets 1045,000

TOTAL 5522600

5.8. CAPITALIZATION
Item Cost

Partners contribution 4,000,000

Borrowed 2, 000, 0000

6,000,000

5.9. PROFITABILITY RATIO

Gross profit ratio = Gross profit X 100%
Sales
=12409000X100
12115000
=1024

Net profit ratio = Net profit X 100

34
 Sales
=11804000X100
12,115,000

=97.43.

Return on equity=Net profit x100

Partner’s equity.

= 118040000X100
118040000+150,000,000
=88.72

Asset turnover =Total Sales

Assets
=12115000
3645000
=3.3

Quick ration =Current assets -- Closing stock

Current liabilities
=2,600,000 -- 1,000,000
1,100,000
=1.45

Limidity ratio =Current Assets

Current liabilities
=2,600,000
1,100,000

35
=2.36.

36