TABASAMU

RESTAURANT

TITLE OF THE DOCUMENT: BUSINESS PLAN

COURSE NAME: CRAFT IN FOOD AND BEVERAGE PRODUCTION SALES AND

SERVICE

NAME OF THE PRESENTER: CAROLINE CHEPKORIR

INDEX NUMBER: 1061200460

COURSE CODE: 1802/205

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL

NAME OF THE SUPERVISOR: WAMBUA

EXAM SERIES: NOVEMBER 2021

i
 DECLARATION
I declare that this business plan is my original work and had never been submitted to Kenya
National Examination Council or any other examination body for the ward of certificate or
diploma.

NAME: CAROLINE CHEPKORIR

SIGNATURE:..........

DATE:............

APPROVAL BY THE SUPERVISOR

NAME OF SUPERVISOR: WAMBUA

SIGNATURE:.........

DATE:.....

ii
 DEDICATION
I dedicate my work to my beloved parents for the support in order to accomplish my project.

iii
 ACKNOWLEDGEMENT
I acknowledge my supervisor madam Wambua for the guidance and support during the writing
of this business plan may God bless her abundantly also the school for providing support.

TABLE OF CONTENTS
iv
DECLARATION.............................................................................................................................ii
DEDICATION...............................................................................................................................iii
ACKNOWLEDGEMENT..............................................................................................................iv
EXECUTIVE SUMMARY..........................................................................................................viii
CHAPTER ONE...........................................................................................................................viii
1.0. BUSINESS DESCRIPTION.................................................................................................viii
CHAPTER TWO..........................................................................................................................viii
2.0. MARKETING PLAN............................................................................................................viii
CHAPTER THREE......................................................................................................................viii
3.0. ORGANIZATION AND MANAGEMENT PLAN............................................................viii
CHAPTER FOUR........................................................................................................................viii
4.0. OPERATIONAL PLAN........................................................................................................viii
CHAPTER FIVE............................................................................................................................ix
5.0. FINANCIAL PLAN................................................................................................................ix
CHAPTER ONE..............................................................................................................................1
1.0 BUSINESS DESCRIPTION.....................................................................................................1
1.1BUSINESS NAME.....................................................................................................................1
1.2 Business location and address...................................................................................................1
1.3 FORM OF OWNERSHIP..........................................................................................................1
1.4 PRODUCT AND SERVICES...................................................................................................2
1.5 JUSTIFICATION OF THE OPPORTUNITY...........................................................................2
1.7 GOALS OF THE BUSINESS...................................................................................................3
1.8 ENTRY AND GROWTH STRATEGY....................................................................................3
1.8.1 ENTRY STRATEGY.............................................................................................................3
1.8.2 GROWTH STRATEGY.........................................................................................................3
CHAPTER TWO.............................................................................................................................4
2.0MARKETING PLAN.................................................................................................................4
2.1 CUSTOMERS...........................................................................................................................4
2.2 Market share..............................................................................................................................4
2.3 COMPETITION........................................................................................................................5
2.4METHOD OF PROMOTION AND ADVERTISMENT...........................................................6
v
2.5 PRICING STRATEGY.............................................................................................................6
2.6 SALES TACTICS.....................................................................................................................6
2.7 DISTRIBUTION STRATEGY_for the final customer to get products in order to satisfy the
demands the following distribution strategies will be considered.................................................6
3.2 MANAGERS AND QULIFICATIONS....................................................................................9
3.2.1 MANAGERS..........................................................................................................................9
3.3 PERSONNEL............................................................................................................................9
3.3.2 CASHIER...............................................................................................................................9
3.3.3 HEAD WAITER...................................................................................................................10
3.3.4 WAITERS.............................................................................................................................10
3.4 RECRUITMENT, TRAINING AND PROMOTION.............................................................11
3.5 RENUMERATION AND INCENTIVES...............................................................................12
3.6 LICENSES, PERMIT AND BY-LAWS.................................................................................12
3.6.1 LICENCE.............................................................................................................................12
5.6.2 PERMITS _trading license from ministry of trade...............................................................12
5.6.3 BY-LAWS............................................................................................................................13
CHAPTER FOUR.........................................................................................................................14
4.0OPERATIONAL/PRODUCTION PLAN................................................................................14
4.1PRODUCTION/OPERATIONAL FACILITIES AND CAPACITIES...................................14
4.2 PRODUCTION/SERVICE STRATEGY................................................................................15
4.3 PRODUCTION PROCESS.....................................................................................................15
4.4 REGULATIONS AFFECTING THE OPERATION..............................................................15
4.5 MATERIALS USED...............................................................................................................16
CHAPTER FIVE...........................................................................................................................17
5.0 FINANCING PLAN................................................................................................................17
5.1PRE-OPERATIONAL COST..................................................................................................17
5.2 ESTIMATION OF THE WORKING CAPITAL....................................................................17
5.3. PREPARATION OF CASHFLOW PROJECTIONS............................................................19
5.4 PREPARATION PROFORMA INCOME STATEMENT AND BALANCE SHEET..........20
5.4.1PROFORMA BALANCE SHEET........................................................................................21
5.5CALCULATION OF BREAK EVEN POINTS.......................................................................22
vi
5.6CALCULATION OF PROFITABILITY RATIOS..................................................................22
5.7 DESIRED FINANCING........................................................................................................23
5.8 PROPOSED CAPITALIZATION...........................................................................................23

vii
 EXECUTIVE SUMMARY

CHAPTER ONE

1.0. BUSINESS DESCRIPTION

The name of the business will be known as Tabasamu restaurant which mean smiling. The
reason for choosing the name Tabasamu is that enable customer to feel happy and comfortable
when entering restaurant and going out. It is located in Bomet town adjacent to total filling
station plot number 120 along the busy Bomet to Narok road.

CHAPTER TWO

2.0. MARKETING PLAN

The business will serve domestic and institutional customers within Bomet County. It target a
market share of 15% of the Sub county population, a Target market share of 8785 customers.
These customers will buy because of the enterprise quality product, its strategy location and
uniqueness of the enterprise.

Nearness to the market will be a competitive advantage in that low distribution cost will be
incured. Conspicuous display of the product and good public relationship with the customers,
suppliers and employees will be part of the sales tactics.

CHAPTER THREE

3.0. ORGANIZATION AND MANAGEMENT PLAN

The manager of the restaurant is a holder of a diploma certificate course, in catering
accommodation management. He will be assistant by assistant manager, Head Cook, Head
waiter and cashier who be playing the role of purchasing officer in storekeeper and controller.

CHAPTER FOUR

4.0. OPERATIONAL PLAN

For the business to succeed accordingly in the manager will purchase strong, durable and reliable
Equipment which are long lasting. This will increase effective in production and service. At start
of the business will be on small scale basis but due to anticipated high demand in sales, it will
expand to satisfy its potential customers.

viii
CHAPTER FIVE

5.0. FINANCIAL PLAN

The manager intend to invest a total of ksh. 1,087,100 to cater for pre- operational cost, working
capital and purchase of equipment. The partners is to invest ksh.500,000 from his own saving,
ksh.300,000 from friends and ksh.287,100 from Bank loan.

The business target a gross profit of 40% sales of ksh 8022800 per year and a break even point of
ksh 18715.61.

ix
 CHAPTER ONE

1.0 BUSINESS DESCRIPTION

1.1BUSINESS NAME
The name of the business will be known as Tabasamu restaurant which is derived from Swahili
word which means it’s simple and easy to pronounce.

1.2 Business location and address

This business is located in Bomet town adjacent to total filling station, plot no. 134 along the
busy Bomet- Narok road.

The business address will be;

P.O BOX 89,

BOMET, KENYA

TEL NO. 0799521173

Police station.
Bomet
town

Bomet Narok road

Tabasamu restaurant
Petrol
station

1.3 FORM OF OWNERSHIP

Tabasamu is the partnership and of a business owned by group known as vision group.

Vision group is composed of five friends a

Advantages of partnership
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 1. Work is distributed among the partners
2. Sound decision making through consultative process
3. A higher growth rate as a result of combining ambition from different partners
4. Losses and liability are shared among the partners
5. Business can be easily expanded
6. Partnership has goodwill and financial influence enabling it to rise finance easily

Disadvantages of partnership

1. Slow decision making due to long discussion process

2. Partnership business Has limited life in case of retirement or death of one partner
3. Disagreement make partnership vulnerable to dispute among partners
4. Limited managerial skill may lead to mismanagement of the business

1.4 PRODUCT AND SERVICES

Tabasamu restaurant will produce and sale the following items

i. Roast chicken, goat and sheep

ii. Ugali
iii. Kachumbari
iv. Fresh fruit juices
v. French fries

The restaurant will produce this at the best of their quality to outshine the nearby restaurant

1.5 JUSTIFICATION OF THE OPPORTUNITY

The manager of the restaurant will open the enterprise to flourish its knowledge acquired in
diploma course in food and beverage control, production and service as well as entrepreneurship
education which will also affect the enterprises’ chances of excelling and expanding within the
first year of operation. The manager also use exposure within while undertaking his industrial
attachment at merika group of hotels

2
1.6 INDUSTRY

The business will be under the food process industry producing roasted chicken, goat, French
fries, fresh juice, ugali and kachubari.

Other food varieties will be included as the business grows

According to the partners’ statistical survey, he came up with clear evidence at consumption of
fast food due to increasing population, increased day and boarding schools, private and public
hospitals.

1.7 GOALS OF THE BUSINESS

The intended restaurant has the advantage of its locality in that it’s situated in unique background
with easy reach of customers.

The business intends to offer satisfactory services for high demand of fast food in the locality.

Better services continuity of supply, quality product at fair prices will be targeted. The business
also plans to expand to create employment to the growing population of school leavers who are
skilled in food and beverage, control, production and service and are unemployed in the area

1.8 ENTRY AND GROWTH STRATEGY

1.8.1 ENTRY STRATEGY

The enterprise method of sales promotion will be by use of posters, local newspapers and
billboards installed within the town. This will reveal existence of the enterprise and its product.

1.8.2 GROWTH STRATEGY

The business has the potential to expand and grow because it will have qualified and skilled staff
members who will produce quality food and offer quality and quick services to its customers.
The industry aims at buying modern and efficient production and service equipment and
expanding the dining room after one year of operation which will enable to produce much more
product to meet the ever increasing customers demand.

3
 CHAPTER TWO

2.0MARKETING PLAN
The business will target a market share of 15% of the sub-county population, a target market
share of 8785 customers. These customers will buy because of the enterprises quality product

Nearness to the market will be competitive advantage in that low distribution cost will be
incurred

2.1 CUSTOMERS
Tabasamu restaurant will cater for the domestic and institutional customers

a. Domestic customer- they will be composed of local community members who will buy
directly from the enterprise for either consumption at the premise or take away
b. Institutional customers – the enterprise as the potential to attract the students around the
locality as there is a concentration of day and boarding schools and other technical
institution. They include Bomet high school, Lako schools, Emitiot primary and secondary
schools, St. Mary’s primary, Bomet academy and Siwot polytechnic.

The customers will buy because:

i. The enterprise will be located at a convenient site which will enhance volume of sales
because of accessibility
ii. The enterprise will be offering high quality food different from what other restaurant
offer.
iii. The products will always be ready ones.

2.2 Market share

Market share is a comparison with year completion.

The following are the names of competitors as per year.

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 Sales

20%
30%

50%

FERO'S RESTAURANT ENTERPRISE VIOLA RESTAURANT ENTERPRISE

TABASAMU RESTAURANT ENTERPRISE

2.3 COMPETITION
Information from district trad4e office indicates that there are two restaurants within the vicinity.
Tabasamu restaurant may get some pressure byfrom them in that; they operate on a 24hrs basis.
Through these, restaurant will pose some competition, their weakness are permanent thus
unsatisfying service to the rapid increase in demand for fast food product. The following table
shows comparison of the two competitors.

Name of Strengths Weakness Opportunities

competitor
Fero's restaurant High quality Do not offer quick Less employers
enterprise products and quality Staff with little
services skills
Viola's restaurant High quality The restaurant are Employees are form
enterprise products situated 1km away level
from Tabasamu
restaurant

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2.4METHOD OF PROMOTION AND ADVERTISMENT
PROMOTION
On Wednesday, Friday and Saturday nights discounts will be offered.
ADVERTISMENT
We used radio announcements to advertise the products and services offered by the enterprise
and the reason why we used radio is because is cheaper and can reach remote areas.
Posters and billboards will be printed and displayed 60km within and out of town to introduce
the restaurant to the market.

2.5 PRICING STRATEGY

The business will have fair pricing by the Kenya consumer association hence the enterprise will
find out a very attractive price schedule through its market survey. The markup method of
pricing will be used by the enterprise to calculate the selling price.
In this case the enterprise expects costs of item to be 60% and get a gross profit percentage 40%.
Therefore the selling price will be; the management will take into consideration prices charged
by the competitors and they will fix prices according to the quality of the product produced and
the buying price of raw materials.

2.6 SALES TACTICS

Mr. Kibet being the manager of the enterprise will use his entrepreneurial skills and knowledge
to let the potential customers know about the existence of the new enterprise and products
offered.
The ready finished goods will be displayed on glass counters whereby the customers will choose
as per their taste and preferences. The waiting staff will inform the customers of the high quality
products, discount offered, competitive prices and attractive services.
On the very first day of operation, the business intends to offer discounts to attract potential
customers and to make its existence known.

2.7 DISTRIBUTION STRATEGY_for the final customer to get products in order to satisfy
the demands the following distribution strategies will be considered
(I)Direct channel distribution _This is producer and direct to the consumer.

6
(ii) Indirect channel distribution _This is where the business will distribute their products the
producer to wholesaler to retailer then to the consumer

(iii) Sales person _these will done with those people who walk around and sell products.

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 CHAPTER THREE

3.0ORGANIZATIONAL PLAN

3.1Organizational structure

Manager

Assistant Manager

Cashier

Head cook

Waiters

Cooks

Stewards

Security personnel

3.2 MANAGERS AND QULIFICATIONS

3.2.1 MANAGERS
Duties and responsibilities;
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  To set the organization objective and goals
 To provide management of the business
 To provide overall coordination
 To recruit, hire and dismiss staff
Qualifications;
 Have knowledge in food and beverage
 Able to supervise all sectors
 At least one year working experience
 Have a certificate from a recognized institution

3.3 PERSONNEL
3.3.1 ASSISTANT MANAGER

Duties and responsibilities;

1. To take overall responsibility in the absence of the manager

2. Carryout general supervision of the restaurant and kitchen
3. Carry out market research
4. Assist manager in the day to day running of the business

Qualifications;

1. Have knowledge in food and beverage

2. Able to supervise all sectors

3.3.2 CASHIER
Duties and responsibilities;

1. In charge of purchasing
2. Control inflow and outflow of cash
3. Does the accounting work

Qualifications

1. Minimum of CPA 1,2 and 3

2. Two years of working experience
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 3. Qualified in record keeping and accounting

3.3.3 HEAD WAITER

Duties and responsibilities

1. Supervision and coordination of services staff

2. Ensure quality services
3. Help in preparing drinks[juices]
Qualifications;
1. Certificate in service from recognized institution
2. Knowledge in food and drinks
3. Good communication skills

3.3.4 WAITERS
Duties and responsibilities
1. Services of food
2. Welcoming guest
3. Billing of customers
4. Promotion of drinks

Qualifications;
1. Over 18 years of age
2. Have knowledge of the area
3. Trustworthy
4. Ready to work for long hours

3.4 RECRUITMENT, TRAINING AND PROMOTION

A. Recruitment

JOB TITTLE SALARY (Ksh) NO.OF STAFF TOT. SALARY INCENTIVES

Manager 18,000 1 18,000 medical&house
10
 allowance
Assistant 12,000 1 12,000 -Free meals
manager -house allowance

Head waiter 9,000 1 9,000 Medical & house

allowances
Head cook 9,000 1 9,000 Freemeals,medical
allowance
Waiters 5,000 4 20,000 -Free meals
-medical
allowance
Cooks 5,000 4 20,000 -Free meals
-medical
allowance
Security 3,000 2 6,000 -Free meals
-medical
allowance
Stewards 2,500 2 5,000 -Free meals
-medical
allowance
-house allowance
TOTALS 99,000

The recruitment of the required employees will be done on August 2021. Vacancies will be
advertised through posters and local newspapers. The applicants will be interviewed by the
manager and successful candidates will be recalled two weeks later. They will be required to
report on 13th August 2021 for preparations of the grand opening of the restaurant on 14 th
September 2021
B. Training

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The business will train the staff on product and service improvement so as to develop
competence on all staff. They will be sent annually for training at SIWOT YOUTH
POLYTECHNIC.

C. Promotion

Because the business will be growing, promotion will be hard at first but instead the company
will offer employee of the month a token of appreciation. When the business fully expands, pay
rise will be increased

3.5 RENUMERATION AND INCENTIVES

The employees will be subject to one day per week and entitled to twenty one days leave
annually. The government wages guidelines will be followed to ensure that there is fair payments
of wages and salaries to all workers. The enterprise will have to open policy which means that
one will be allowed to air his/her grievances freely.

The table bellow shows the monthly wages and salaries for every member of the proposed
establishment.

3.6 LICENSES, PERMIT AND BY-LAWS

For the proposed business to run smoothly, it will adhere to the following rule and regulations.

3.6.1 LICENCE
The license of the business will be obtained from Bomet county council office.It will be obtained
before the business starts it's operation at cost of six thousand and it will be renewed each year.

5.6.2 PERMITS _trading license from ministry of trade.

The following permit will have to be sort for before commencement of the business.

i. Registration certificate
ii. Trade name permit.

5.6.3 BY-LAWS
The hours of operation have to be defined and specified in this case. The local authority can
council suspends or verify the license.

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 CHAPTER FOUR

4.0OPERATIONAL/PRODUCTION PLAN

4.1PRODUCTION/OPERATIONAL FACILITIES AND CAPACITIES

Tabasamu restaurant will obtain equipment from reliable sources. The equipment will be
purchased at a reasonable price on cash basis by the money borrowed from the loans’

Below is a table illustrating the tools and equipment that will be used in the day-to-day business.

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Equipment/tool Number required Unit cost (Ksh) Total cost (Ksh) Suppliers’ name
Sufuria 10 300 3,000 Pravin stores
Chopping board 2 200 400 Pravin stores
Kitchen knives 5 200 1,000 Pravin stores
Meat knives 5 300 1,500 Pravin stores
Meat forks 5 200 1,000 Pravin stores
Fridge 1 20,000 1,500 Electronics
Blender 2 1,000 1,000 Dots
Oven 1 20,000 20,000 Electronics
Roasting tin 1 500 2,000 Dots
Jikos 2 500 20,000 Electronics
Deep freezer 1 30,000 30,000 Dots
Stainer 2 200 400 Electronics
Glasses 20 30 600 Electronics
Jugs 10 100 1000 Dots
furniture 20 chairs 1,000 20,000 Electronics
5 tables 2,000 10,000 Dots
2 shelves 5,000 10,000 Electronics
Service tray 4 200 800 Electronics
Salt shakes 7 100 700 Pravin stores
Plates 40 200 8,000 Piu furniture

Total 130,000

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4.2 PRODUCTION/SERVICE STRATEGY

4.3 PRODUCTION PROCESS

This a method of using economic input resources like capital equipment or land to provide good
and services to consumers. Business will ensure that the product sold to the customer are of high
quality.

The following diagram represents stage in production process

Ordering Transport Wholesaler Retailer

4.4 REGULATIONS AFFECTING THE OPERATION

Regulations that affect operation are the following;

1. Workman compensation Act

Setting out employers’ liabilities for compensation, death or incapacity resulting from accidents
in the course of the employees’ performance, their duties shall be sought.

15
2. Food drug and chemical substances

Food handlers’ certificate will be sought for the restaurant and kitchen staff after every six month

3. Registration of business name

An act of parliament making provisions for registration for the sole proprietor and partnership

4.5 MATERIALS USED

The estimated material cost for the covers daily will be as follows;

Item Quantity Cost per unit(Ksh) Total cost(Ksh)

Irish potatoes 50kg 20 1000
Capons 20kg 180 3600
Lamb chops 12kg 160 1920
Mutton 12kg 180 2160
Maize flour 12kg 20 240
Green pepper 10kg 10 100
Onions 10kg 15 150
Green chili 3kg 20 60
Tomatoes 10kg 30 300
Salt 5kg 22 110
Vinegar 700ml 65 65
Aromat 250gm 245 245
Tomato sauce 750ml 300 300
Garlic 3kg 20 60
Ginger 3kg 20 60
Passion juice 15litres 70 1050
Orange juice 15kitres 70 1050
Mango juice 15litres 70 1050
GRAND TOTAL 13,790

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 CHAPTER FIVE

5.0 FINANCING PLAN

Savings=ksh.1, 087, 100

Friends=Ksh. 300,000

Bank loan=ksh.287, 100

Initial cost= Ksh. 1,674, 200

5.1PRE-OPERATIONAL COST
Item/Expenses Amount (Ksh)
Renovation 15,000
Licenses 5,000
Advertising 10,000
Recruitment funds 10,000
Feasibility funds 5,000
Transport 4,000
Staff uniform 13,200
Insurance 7,000
TOTAL 69,200

5.2 ESTIMATION OF THE WORKING CAPITAL

Item/Expense Amount(Ksh)
Cash at hand 500,000
Stock of raw materials 413,700
Stock of finished goods
debtors
TOTAL 913,700

Working capital=Current Assets-Current Liabilities

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913,700-69200=844,500

=ksh.844, 500

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 5.3. PREPARATION OF CASHFLOW PROJECTIONS
ITEM Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash at hand/bank 500000 528000 590400 651800 706200 757500 699700 675500 729900 791300 852700 94100

Sales 688900 689900 677700 691300 666600 55500 588800 692400 691300 692400 693500 694600
Tot. cash 11888 12181 12681 13431 13728 13130 12885 13699 14212 14837 15462 16087
Inflow “00”
Cash outflow
Purchases 413700 414800 402600 416200 401600 399600 399300 417300 416200 417300 418400 419500
Salaries 65600 65600 65600 65600 65600 65600 65600 65600 65600 65600 65600 65600
Staff meals 4800 4800 4800 4800 4800 4800 4800 4800 4800 4800 4800 4800
Rent 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
Electricity 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000
Licenses 5000 - - - - - - - - - - -
Adverts 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
Stationeries 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000
Renovation 15000 - - - - - - - - - - -
Miscellaneous 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
charcoal 18000 18000 18000 18000 18000 18000 18000 18000 18000 18000 18000 18000
Maintance 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000
Medical allowance 28800 28800 28800 28800 28800 28800 28800 28800 28800 28800 28800 28800

House 21500 21500 21500 21500 21500 21500 21500 21500 21500 21500 21500 21500
allowance
Uniforms 13200 - - - - - - - - - - -
Bank charges 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000
Transport 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000
Total cash flow 660600 627700 613300 636900 615300 613300 61300 638000 629900 631000 632100 640200

surplus 528200 590400 651800 706200 757500 699700 675500 729900 791300 852700 914100 968500

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5.4 PREPARATION PROFORMA INCOME STATEMENT AND BALANCE SHEET
ITEM YEAR 1 (Ksh) YEAR 2 (Ksh) YEAR 3 (Ksh)
Sales 80 220 000.00 80 468 684.00 82 882 744.52
Less cost of sales 4 536 900.00 4 673 007.00 4 813 197.21
Gross profit 75 691 100.00 75 795 677.00 78 069 547.31
Expenses
Salaries 787200.00 787200.00 787200.00
Staff meals 57600.00 57600.00 57600.00
Rent 180000.00 180000.00 180000.00
Electricity 93000.00 93000.00 93000.00
License 5000.00 5000.00 5000.00
Advertisement 120000.00 120000.00 120000.00
Stationery 120000.00 120000.00 120000.00
Miscellaneous 180000.00 180000.00 180000.00
Renovation 15000.00 10000.00 10000.00
Charcoal 222000.00 222000.00 222000.00
Maintenance 120000.00 120000.00 120000.00
Medical allowance 354600.00 354600.00 354600.00
Uniform 13200.00 13200.00 13200.00
Transport 48000.00 48000.00 48000.00
Bank 54000.00 54000.00 54000.00
TOTAL EXPENSES 2,240,600.00 2,235,600.00 2,235,600.00
NET PROFIT 73,450,500.00 73,560,077.00 75,833,947.31
BEFORE TAX
PROVISION FOR 22,035,150.00 22,068,023.10 22,750,184.19
TAX 30%
NET PROFIT 51,415,350.00 51,492,053.10 53,083,763.12
AFTER TAX

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5.4.1PROFORMA BALANCE SHEET
ITEM YEAR1(KSH) YEAR2(KSH) YEAR3(KSH)
ASSETS
cash at hand/bank 500,000.00 914,100.00 1,328,200.00
Stock of raw materials 4,536,900.00 4,673,007.00 4,813,197.21
Pre-operational cost 69,200.00 - -
TOTAL CURRENT 5,106,100.00 5,587,101.00 6,141,397.00
ASSETS
FIXED ASSETS
Equipment 47,109,250.00 46,524,946.00 47,677,366.12
Less description - 20,000.00 350,000.00
TOTAL FIXED 47,109,250.00 46,504,946.00 47,642,366.12
ASSETS
Total assets 52,215,350.00 52,092,053.90 53,783,763.12
Liabilities
Borrowed loans 300,000.00 - -
Owners equity 500,000.00 600,000.00 700,000.00
Net profit after tax 51,415,350.00 51,492,053.90 53,083,763.12
Total liabilities 52,215,350.00 52,092,053.90 53,783,763.12

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5.5CALCULATION OF BREAK EVEN POINTS
a. Variable cost

ITEM AMOUNT(KSH)
Purchases 4,536,900.00
Electricity 93,000.00
Advertisement 120,000.00
Stationery 120,000.00
Charcoal 222,000.00
Bank charges 54,000.00
TOTAL 5,145,900.00
B .Fixed cost

ITEM AMOUNT(KSH)
Salaries 787,200.00
Staff meal 57,600.00
Rent 180,000.00
License 5,000.00
Renovation 15,000.00
Maintenance 120,000.00
Medical allowance 345,600.00
Uniforms 13,200.00
Transport 48,000.00
Miscellaneous 180,000.00
TOTAL 1,751,600.00

5.6CALCULATION OF PROFITABILITY RATIOS

GPR=GP/SALESx100

75691100/80220000x100=94.4%

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5.7 DESIRED FINANCING
ITEM AMOUNT(KSH)
Working capital 844,500.00
Pre- operational cost 69,200.00
Fixed assets 104,200.00
TOTAL 1,087,100.00

5.8 PROPOSED CAPITALIZATION

ITEM AMOUNT(KSH)
Bank loan 287,100.00
Saving 500,000.00
Friends 300,000.00
TOTAL 1,087,100

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