OLIVIA’S TOP QUALITY BAKERY

PRESENTED BY: OLIVIA ATIENO

INDEX NUMBER:

COURSE: DIPLOMA IN SECRETARIAL STUDIES

INSTITUTE: STRIVE AND EXCEL COLLEGE

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL

FULFILLMENT TO REQUIREMENT OF DIPLOMA AWARD IN SECRETARIAL STUDIES.

SERIES: JULY/AUGUST

SUPERVISOR: MADAM ABIJAH

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DECLARATION

I hereby declare that the business plan is my original work and it has never been presented in any
institution.

NAME: OLIVIA ATIENO HONGO

SIGNATURE: ________________________________DATE:______________________

SUPERVISOR NAME: MADAM ABIJAH

SIGNATURE: _________________________________DATE:______________________

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DEDICATION

This work is dedicated to my family and especially my father for supporting me and giving me a way to
propel on my success. Secondly am not forgetting my friends and classmates for helping me and giving
me courage to continue with the school work. Not forgetting my teachers for guiding me in writing the
business plan. Also am not forgetting God because without him I wouldn’t have gone this far.

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ACKNOWLEDGEMENT

I want to take this chance to thank the Almighty God for the far he has brought me. I am hereby
acknowledging my parents for the support they have given me and guiding me towards my success, for
paying my school fees. Am not also forgetting my supervisor and my lecturers for helping me with
ideas and showing me the true definition of studies. Lastly I am not forgetting my friends for been with
me through this journey.

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Table of Contents
CHAPTER ONE..........................................................................................................................................................1
Executive summary.............................................................................................................................................1
Business description............................................................................................................................................1
Marketing plan....................................................................................................................................................1
Organizational and Management plan................................................................................................................1
Operation and Production plan...........................................................................................................................1
Financial Report...................................................................................................................................................2
CHAPTER TWO: BUSINESS DESCRIPTION.................................................................................................................3
2.1: BACKGROUND OF THE OWNER...................................................................................................................3
2.2: BUSINESS NAME..........................................................................................................................................3
2.3: BUSINESS LOCATION AND ADDRESS............................................................................................................3
2.4: FORM OF OWNERSHIP.................................................................................................................................3
2.5: TYPE OF BUSINESS.......................................................................................................................................3
2.6: PRODUCTS AND SERVICES...........................................................................................................................4
2.6.1: Products................................................................................................................................................4
2.6.2: Services.................................................................................................................................................4
2.7: JUSTIFICATION OPPORTUNITY.....................................................................................................................4
2.8: INDUSTRY....................................................................................................................................................4
2.9: GOALS AND OBJECTIVES OF THE BUSINESS.................................................................................................4
2.9.1: Goals.....................................................................................................................................................4
2.9.2: Objectives.............................................................................................................................................4
2.10: ENTRY AND GROTH STRATEGY..................................................................................................................4
2.10.1: Entry...................................................................................................................................................4
2.10.2: Growth Strategy.................................................................................................................................5
CHAPTER THREE: MARKETING PLAN.......................................................................................................................7
3.1: CUSTOMERS................................................................................................................................................7
3.2: MARKET SHARE OR SIZE..............................................................................................................................7
3.3: COMPETITION..............................................................................................................................................7
3.4: METHODS OF PROMOTION AND ADVERTISEMENT.....................................................................................8
3.4.1: Methods of Promotion.........................................................................................................................8
3.4.2: Advertisement......................................................................................................................................8
3.5: PRICING STRATEGY......................................................................................................................................9
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 3.6: SALES TACTICS.............................................................................................................................................9
3.7: DISTRIBUTION STRATEGY............................................................................................................................9
CHAPTER FOUR: ORGANIZATION AND MANAGEMENT.........................................................................................10
4.1: MANAGEMENT TEAM.................................................................................................................................10
4.1.1: Managing Director...............................................................................................................................10
4.1.2: Human Resource Manager..................................................................................................................10
4.1.3: Marketing Manager.............................................................................................................................10
4.1.4: Finance manager.................................................................................................................................10
4.1.5: Sales Manager.....................................................................................................................................10
4.2: OTHER PERSONNEL....................................................................................................................................10
4.3: RECRUITMENT. TRAINING AND PROMOTIONS...........................................................................................12
4.3.1: Requirement Plan................................................................................................................................12
4.3.2: Training................................................................................................................................................14
4.3.3: Promotion............................................................................................................................................14
4.4: REMUNERATION AND INCENTIVES.............................................................................................................14
4.4.1: Remuneration......................................................................................................................................14
4.4.2: Incentives............................................................................................................................................14
4.5: LICENSES, PERMITS AND BY LAWS..............................................................................................................14
4.5.1: Licenses...............................................................................................................................................14
4.5.2: Permits................................................................................................................................................14
4.5.3: By laws.................................................................................................................................................15
4.6: Support Services.........................................................................................................................................15
4.6.1: Banking Services..................................................................................................................................15
4.6.2: Insurance Services...............................................................................................................................15
4.6.3: Legal Services......................................................................................................................................15
CHAPTER FIVE: PRODUCTION AND OPERATIONAL PLAN.......................................................................................16
5.1: PRODUCTION FACILITIES AND CAPACITY....................................................................................................16
5.1.1: Firm Layout..........................................................................................................................................16
5.2: PRODUCTION STRATEGY............................................................................................................................16
5.3: PRODUCTION PROCESS..............................................................................................................................17
5.4: PRODUCTION AFFECTING OPERATIONS.....................................................................................................17
5.4.1: Safety Regulations...............................................................................................................................17
5.4.2: Health Regulations..............................................................................................................................17
5.4.3: Environmental Regulations..................................................................................................................17
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 5.4.4: Trade Marks and Copyright.................................................................................................................17
CHAPTER SIX: FINANCIAL PLAN.............................................................................................................................18
6.1: PRE-OPERATIONAL COST............................................................................................................................18
6.2: PROFORMA BALANCE SHEET......................................................................................................................18
6.3: WORKING CAPITAL.....................................................................................................................................19
6.4: CASH FLOW STATEMENT............................................................................................................................20
6.5: PROFORMA INVOICE STATEMENT..............................................................................................................21
6.6: BREAK EVEN ANALYSIS...............................................................................................................................22
6.7: DESIRED FINANCING...................................................................................................................................22
6.8: CAPITALIZATION.........................................................................................................................................23
6.9: PROFITABLE RATIO.....................................................................................................................................24
7.0: RISKS MANAGEMENT.....................................................................................................................................25

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CHAPTER ONE
Executive summary
This is the overall summary of what it entails in each and every chapter of the business plan.

Business description
This chapter introduces by showing the background of the owner, giving all the important details, the
business name and where it came from. There is also a map at the very last page that indicates the
location of the business. It gives the addresses of the business and tells the people about the form of
ownership. It also goes ahead and gives the type of products offered and how the services will be
carried out and also the goals and objectives and growth strategies.

Marketing plan
For this chapter the customers are shown. There strengths and weaknesses are also mentioned. It
entails the market share and size, competition and the weaknesses and strengths of the competitors.
It also shows the promotion and advertising levels and how they will be doing it. Shows the sales
tactics that will be used pricing strategy and distribution strategy.

Organizational and Management plan

In this chapter we see the team that the business will be working with, also its managers and other
staffs. Also the operations will be carried out and how members will be recruited and also other staffs.
Here we also see on how members will be promoted in there working departments and also how
licenses, permits and by laws will be acquired.

Operation and Production plan

Here we are shown the production facilities and the capacity needed. Also the cost of those items that
will be needed. The firm layout is also looked at in this chapter. How the production will be done thus
the production strategy is discussed also the production process and also production affecting operations
like safety, health, environmental, trademarks and copyright.

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Financial Report
In this chapter the financial requirements for developing a stable financial plan are analyzed. This helps
the business to have an effective accounting system. It shows pre-operational cost, pro-forma balance
sheet, working capital, cash flow statement, pro-forma invoice, break even analysis. The balance sheet
is shown to help in getting the working capital.
A cash flow is prepared to give a mirror of the flow of finances in and out of the enterprise. We are also
shown the financing capitalization and also profitability ratios.

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CHAPTER TWO: BUSINESS DESCRIPTION

2.1: BACKGROUND OF THE OWNER

I have a work experience in serving customers in the front office. I reside in Githurai 44, Rurii village
in Nairobi County. My name is Olivia Atieno Hongo and I am 19 years of age. I am currently pursuing
diploma in secretarial studies. I do I chose the course because it is my passion to serve people.

2.2: BUSINESS NAME

My business name in Olivia’s Top Quality Bakery. The name originated from how I love baking and
serving customers. My business has values that I follow in order to care for the customer.

2.3: BUSINESS LOCATION AND ADDRESS

My business is located around KCA University. The address is 2564-0020. In order to get there one
will board a car and get dropped at drive in and walk to KCA University and you will find the place.
Only 100 meters from the landmark. It is on KCA towers, ground floor. I chose the location because
the business to attract youths because of cakes, snacks, coffee and so on and around the area you find a
lot of students. The business is available at Facebook, Twitter, Instagram, Tiktok, Google and
WhatsApp.

2.4: FORM OF OWNERSHIP

My business will be under sole proprietorship form of ownership. Its benefits is I get to keep the
profits, I’ll be my own boss, there is maximum privacy and it is easy to change legal structure and the
disadvantage is the capacity to raise capital is limited, there is unlimited liability, less legal protection
and no partners allowed.

2.5: TYPE OF BUSINESS

I am starting my own business. It will be starting immediately when am done with my studies in 2024.
I have decided to start the business to bring something different into the market, something unique. I
will also carry out activities like packaging, organizing, branding.

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2.6: PRODUCTS AND SERVICES
2.6.1: Products
According to my business I will be doing both selling and distributing. In terms of the business ill order
as much as I will need in order to manage the business. The kind I’ll order will be milk, eggs, coffee
machine, and blender.

2.6.2: Services
The business will be operating full time and there will also be free deliveries. I will also be servicing
my machines from time to time. I will also be catering for damaged goods that will be given to the
customer. Offer discounts and warranties of a period of time. I will deal with any emergencies that will
occur appropriately. For the transport I will be using my own personal van.

2.7: JUSTIFICATION OPPORTUNITY

I took the opportunity because I have the experience and skills with front office. I think the business is
the best opportunity because people love snacks and beverages so it will be a good business. The
advantage is that it captures the youth more and our population is filled with youths. The business is an
opportunity because it will have a fair competition, according to the technology and how it has
improved it will be easier and the customers will really appreciate.

2.8: INDUSTRY
The business is under both product and service industry. The reason as to use the front office industry
is because I know how to take care of the customers. The industry is emerging as it is a new and
unique thing. The business is a thriving business because am smart and I know how to run the business.

2.9: GOALS AND OBJECTIVES OF THE BUSINESS

2.9.1: Goals
In future I would like to open more branches in different places and counties and to even go worldwide.
My business will be going far as I won’t close it down. I see my business grow big with time as with
all the advertising I will be doing will help with that.

2.9.2: Objectives
The main objective of the business is to provide products with quality and quantity. Give the customers
best services. I will attain the objectives by having backups where necessary. Also provide discounts
and take up any damages that may be done.

2.10: ENTRY AND GROTH STRATEGY

2.10.1: Entry
According to the research I have done and carried out it has made me come up with a very unique
idea. I have studied really well and how to deal with customers. The areas I will use is I’ll make
the threats to be opportunities and weakness to strength. The advantage I have is that I am making
something that is not easily found in the market. I have friends who help me with advertising my
business. I will advertise through a lot of social media. I will allow discounts, warranties, I will
also have exhibitions and roadshows to show case my business plan.

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 2.10.2: Growth Strategy
Growth strategy is a plan or action to increase a business market share, overcome the current and the
future challenges to realize goods for expansion. Some of the strategies include;

a) Offering after sales services – to my customers if you purchase large volumes of trays you’ll
receive free transport services and if you purchase the second time your goods will be freely
designed and one more try free.
b) Product development – we are launching a carrot flavored cake. This new product has not been
existing in the market we have improved our daily sales and increase our stock. Try our stock.
c) Offering discount – at our shop discounts, quality discounts, bonuses, warranties, trade discount
are available. We offer direct customer relations and training, be one of us.

I will use the machines that are advanced to make my work easier. My business will take a good route
and grow big through advertisement, good respond, and also go to an extend of using bill boards. Few
years to come I will launch the business internationally.

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CHAPTER THREE: MARKETING PLAN
3.1: CUSTOMERS
The kind of customers I will be dealing with will be of a bracket age 9-60 and any amount of wealth
they have as it caters for any class and status of people. I will also deal with different organizations.
There are other companies involved who help me and also promote me. My products are affordable.
My resources such as water, electricity, are available and good. My services are easily accessible they
are also gotten online. There is a new industrial area but it is developing. There are some installations
to be done like solar installations in case of emergencies, which will be done before the customers start
coming. The customers will be taken care of and also their needs will be catered for. The customers
who are far they can order and their orders will be taken to them as we are very flexible in terms of
transport. I am close to wholesalers and retailers who are really reliable and supportive.

3.2: MARKET SHARE OR SIZE

My business will evaluate itself semi-annually so as to keep track of the shares we hold. We will
evaluate all this in terms of sales, profits, products and services. According to the previous expectations
we were at 10% and target 15%.

Sales

3.3:
olivera
olvialito
olives
olivia's

COMPETITION
The business is creative as it is easy to change and grow with advance in technology. According to my
research my competition are around me and they have been in the market for long. My competitors
have a lot of customers and tenders, and the offer discounts from time to time. The competitors have
forgotten on how to give customers good services. They are connected with the external environment.

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Comparison Table Showing and Weaknesses of companies

Company Strength Weaknesses

Olivia Top Quality  Good customer care  I am new in the market
services  Small in size
 We are flexible  Inadequate experience
 Value customer safety and coverage
and satisfaction
 Affordable products
and sales
 Free after sales
services
Olives House  They are recognized in  They sale at very high
the market prices
 They have a lot of  They do not give any
connections discount
Olivera Bakery  Big in size  Treats their employee
 Offer many services poorly
 Have many branches  No discounts
 They have been in the  Very costly
market for long
Olivialito Café  Offer good warranties  No discounts
 They are well known  Has many scandals
 Affordable deliveries  Treat customers poorly
 Has branches outside
the country

3.4: METHODS OF PROMOTION AND ADVERTISEMENT

3.4.1: Methods of Promotion
Promotion are ways of informing my clients about the way we offer our services in quality and
quantity. My business target is to be able to surpass all my competitors. I will create client satisfaction
by producing a unique product to the customers. My top priorities are my customers and to be able to
satisfy them.

3.4.2: Advertisement
Advertising is creating awareness of our products to the people. On social media you can find me as
Oliv296 in each platform. I will be advertising for an approximate of six months. I have common
platforms like Facebook, Twitter. I will also be posting videos. I will use attractive campaign like bill
boards, e-commerce, cards, posters and online selling. In my social platforms I will be posting different
products, ideas and videos. I will be going on air more often. My take on youths is that this business is
mostly targeting them and I hope they will help me promote my business. My take on women is that I
hope they will help and support me in growing my business. The market share I would like to capture
is getting different organizations around and all over the country.

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3.5: PRICING STRATEGY
Price is any amount of a certain commodity while pricing is the amount of which you decide to sell the
product. The value of my goods will be of goods will be of good quality and quantity. My company’s
major goal is to offer what the customer wants and needs. I will also provide and offer high quality
services. I also have good human relations. I will also have a lawyer who will help in location of the
business premises and license.

3.6: SALES TACTICS

For any enquiries from the customers they can come and talk face to face with us. I will majorly focus
on attracting customers and taking care of them so that I could be able to grow big. The type of
profession my company will have will be of good and high standards. We will offer qualities like
loyalty, trustworthy, integrity, good customer skills and discipline. For starters we will do fixed salaries
but do bonuses offered to employees who work hard. I will also speak of my new strategies to source
many customers.

3.7: DISTRIBUTION STRATEGY

I have people who will help in distribution. I have people who will help in indirect selling and transport
in delivering the products. Transport will be done by road. I have two distribution vans for starting. I
will hire people and maybe a van if all are been used. Challenges like traffic I will be leaving early to
avoid it. In case of breakdown it will be fixed and in case of damages it will be catered for.

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CHAPTER FOUR: ORGANIZATION AND MANAGEMENT
4.1: MANAGEMENT TEAM
My company will have other people helping me to run it. There will be other managers who I will
appoint who will also work under me. There will be other staffs who will help in cleaning, driving and
other things. I will be the managing director of the company.

Managing Director

Finance Manager Marketing Manager Human Resource Sales Manager

4.1.1: Managing Director

The managing director is the sole founder of the business. The duties of the manager helps in funding
the business, running the business, keep the business standing. The skill that the manager needs is
listening, communication and interpersonal skills, strategic thinking, decision making and
trustworthiness and respect.

4.1.2: Human Resource Manager

The duties is hiring and interviewing staff, administering pay, enforcing company policies and
practices. The requirements are good leadership skills, organizational skills, the ability to build
relationships with staff at all levels and confidence with numbers.

4.1.3: Marketing Manager

The marketing manager should be with excellent communication skills, understanding of traditional and
emerging marketing channels, ability to think creatively and innovatively and budget management skills
and proficiency.

4.1.4: Finance manager

The duties of the finance manager is budgeting, managing credit, projecting profit and developing cash
flow statements. The requirement is two years’ experience and is good with numbers.

4.1.5: Sales Manager

The duties of the sale manager is hiring, training and providing professional development for their
teams and setting goals. The sales manager should be of good leadership ability, excellent
communication, interpersonal and organizational skills.

4.2: OTHER PERSONNEL

The company will also consist of the secretary and other support staffs like the drivers, cleaners and
security.

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4.3: RECRUITMENT. TRAINING AND PROMOTIONS
Recruitment is the action of enlisting new people in a company, training is the action of teaching people
a particular skill while promotion is the activity that supports or encourages a cause or aim.

Title Number Required Qualification Duties

Secretary 2  Diploma in  Good at book
Secretarial keeping
Studies  Typing
 2years’  Filing
experience  Managing
database
Assistant 1  Certificate in  Budget
secretarial  Financial
studies Analysis
 Prepare
Payroll
Security 2  KCSE  Offer
Certificate protection
 2years  Guard the gate
experience
Driver 2  Trustworthy  Flexible with
 Drivers license time
 1year  Transport
experience products

4.3.1: Requirement Plan

4.3.1.1: Human Resource Manager

It is a key position in my business it will require great experience and practical skills. The person must
attain the abilities in advice, counseling, offering services. They are important in the organization as
they help in recruitment of staff. He will be the first to be recruited so that he can help in recruitment of
other members of staff. The human resource manager will be working with the managing director to
recruit staff.

4.3.1.2: Marketing Manager

I will put ads on the internet so that we can conduct an interview to higher the marketing manager. We
have an enterprise website which will help in marketing. There are forms to be filled to get some
details. There will be written interviews for accuracy. After the recruitment the marketing manager
will help in recruiting others.

4.3.1.3: Finance Manager

The post will be advertised in a magazine. The process will be repeated in hiring the finance manager.
He will join in the recruitment of other staff.

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 4.3.1.4: Sales Manager
The sales manager will be in charge of the distribution. The logistics will be organized in terms of
management of products and materials, as well as storage and packaging. Deliveries will be done 24/7.

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4.3.2: Training
The management team is excluded from training as it will help in training other staff. Other staff will
go for training. They will go for three months and it will be through seminars, workshop, coaching and
team building. The training will be on job.

4.3.3: Promotion
There will be promotions to the people who work hard. They will be evaluated through internal
assessment and also I’ll use supervisors to evaluate them. I will gauge their performance through
graphic rating scales and Self-Evaluation. I will do the presauce every month. The most efficient
employees will be promoted. The staff with further abilities like behavior and personality will receive a
raise. Those will be factors of production.

4.4: REMUNERATION AND INCENTIVES

4.4.1: Remuneration
Apart from salaries there will be allowances and also bonuses. They will be provided according to how
they perform. House allowances will be given to those who do not stay in the servant quarter. Medical
allowances will also be provided.

Title Number Monthly Salary Allowances Total Pay

Managing director 1 100,000 30,000 130,000
Human resources 1 90,000 20,000 110,000
Finance manager 1 80,000 20,000 100,000
Marketing manager 1 70,000 20,000 90,000
Secretary 1 60,000 10,000 70,000
Sales representative 2 70,000 20,000 90,000
Drivers 2 40,000 10,000 50,000
Security 2 40,000 10,000 50,000

4.4.2: Incentives
Incentive is a thing that motivates or encourages someone to do something. The percentages of basic
salary are around 40% to 50%. There will be services provided overtime. There will be tea and lunch
breaks provided. There will be retreats and trips sponsored by the company. There will be annual
vouchers and parties once a year.

4.5: LICENSES, PERMITS AND BY LAWS

4.5.1: Licenses
A license is a permit from an authority to own or use something, do a particular thing or carry on a
trade. A license helps the people in selling their products and services. A license is gotten by applying
for the PDL which is done through Kenya’s Government Service Portal E-citizen Application. I will
require other licenses in future when I open other branches.

4.5.2: Permits
A permit officially allows someone to do something. I am operating with dangerous things like
electricity. High voltage requires a permit in order to use. The permit will help in case of accidents.
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 4.5.3: By laws
By law is a regulation made by a local authority or corporation. They are enforced by enforcement
officers. My business will comply with by laws. I will also have a letter of compliers.

4.6: Support Services

They supplement the main inputs such a labor and they act as a back up for the company. I have a
support service which is the bank.

4.6.1: Banking Services

My bank cooperative bank. I operate a business account. The bank services will help me in acquiring
loans when in need. The bank has agents that are near the company. The bank offers good interest.

4.6.2: Insurance Services

I insured my business when it was starting. I have policy renewals and they are followed by my
lawyers. I have insured with a couple of companies.

4.6.3: Legal Services

Legal services come in when signing contracts. We have a couple of lawyers who help us. The lawyers
help in interpretation of laws to us. We have lawyers who operate in business laws. I have a friend
who is a lawyer and she introduced me to the lawyer I have.

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 CHAPTER FIVE: PRODUCTION AND OPERATIONAL PLAN

5.1: PRODUCTION FACILITIES AND CAPACITY

The proposed venture will be involved with various bakery activities therefore a variety of facilities will
be used. The facilities should be enough and spacious for maximum efficiency. The table below shows
essential facilities, quantity and cost.

Item Quantity Cost Capacity/Size

Office 5 rooms 20,000 per month 5 people
Kitchen 1 room 10,000 per month 2 people
Store 1 room 5,000 per month 2 people
Computer 6 pieces 40,000 6 people
Water 5.000
Electricity 6,000
Printers 2 pieces 20,000
Photocopier 1 piece 40,000

The above mentioned are the essentials to keep on the business smoothly other things will include
weighing machines, WI-FI, cutlery and trays. WI-FI will also be installed to enable research and easy
communication especially via the e-mail and passing the documents between officer and use of online
platforms for business purposes.

5.1.1: Firm Layout

Reception Manager’s Office

Accounting office
Parking
Kitchen

Waiting Bay Store

5.2: PRODUCTION STRATEGY

The business will be producing a hundred trays for starters. All of them will be made from my kitchen.
The finished good will be repackaged in a different room. My services will be offered in the shop and
also if one has requested a door to door delivery. Services offered will incur according to the demand
of the client. I will be having napkins, coffee machine and blender. Training is required. I will be
offering products of quality and quantity that will make the customers to come back again.
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5.3: PRODUCTION PROCESS
Every middle of the month I will be meeting the customers to understand their wants, and it will be
through examining the customers and also opening the suggestion box. We will also make a visit to the
client side where we will provide out services.

5.4: PRODUCTION AFFECTING OPERATIONS

5.4.1: Safety Regulations
Everyone should obey the safety regulations. In case of any accidents in the premise it will be taken
care of immediately and also be taken care of to avoid the same accident from happening.

5.4.2: Health Regulations

My business will observe all public health regulations to ensure smooth running. All employees will be
required to have a health insurance cover from a trusted insurance company.

5.4.3: Environmental Regulations

The employees are encouraged to be clean and also ensure that the premise is always kept clean.

5.4.4: Trade Marks and Copyright

All our products will be chocked by Kenya Bureau of Standards (KEBS) before we put them in the
market.

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CHAPTER SIX: FINANCIAL PLAN
Here financial requirements will be analyzed and financial plans developed to maintain an efficient
accounts system, health liquidity, control expenses and also realize a steady growth of income.

6.1: PRE-OPERATIONAL COST

The table below shows incurred cost before the proposed venture kicks off.

Item Cost (Ksh)

Business Registration 10,000
Research 15,000
Licenses 5,500
Rent Deposits 30,000
Interior Design 25,000
Advertisement 50,000
Travelling 10,000
Recruitment 35,000
Stocking 500,000
Electricity Deposit 5,000
Water Deposit 2,500
TOTAL 688,000

6.2: PROFORMA BALANCE SHEET

This will show the financial position of the business. It can be proposed annually, semi-annually or
monthly. It aids in identification of business issue and progress and to know where improve for greater
profit margin.

OLIVIA’S TOP QUALITY BAKERY

BALANCE SHEET
AS AT 31ST DECEMBER 2024
Current Assets Capital 1,000,000
Stock 500,000 Creditors 400,000
Cash 3,000,000 Account payable 55,000
Inventory 250,000 Long term loan 90,000
Debtors 50,000 1,545,000
3,800,000 Long Term Liabilities
Fixed Assets Earnings 100,000
Motor vehicle 200,000 Retained earnings 80,000
Equipment 95,000 Paid in capital 2,000,000
Other assets 100,000 Debentures 470,000
395,000 2,650,000
4,195,000 4,195,000

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OLIVIA’S TOP QUALITY BAKERY
BALANCE SHEET
AS AT 31ST DECEMBER 2025
Current Assets Capital 700,000
Stock 1,000,000 Creditors 300,000
Cash 3,500,000 Accounts payable 50,000
Inventory 300,000 Long Term Loan 1,000.000
Debtors 100,000 2,050,000
4,900,000 Long Term Liability
Fixed Assets Earnings 2,000,000
Vehicle 300,000 Retained earnings 300,000
Equipment 100,000 Paid in capital 1,000,000
Other assets 50,000 3,300,000
450,000
5,350,000 5,350,000

6.3: WORKING CAPITAL

Working capital is equal to current asset minus current liability for the year 2024.

W.C= C.A – C.L

1st year 3,800,000-1,545,000 2nd year 4,900,000-2,050,000

= Ksh 2,255,000 = Ksh 2,850,000

20
6.4: CASH FLOW STATEMENT
It is a statement that shows the difference between payments and receipts.

Receipts January February March April May June July August Septembe October Novembe Decembe
r r r
Loans 100,000 200,000 300,000 400,000 500,000 300,000 200,000 600,000 800,000 100,000 450,000 600,00
Sales 1,300,00 1,200,00 1,100,00 1,530,00 1,600,00 1,500,00 1,400,00 1,800,00 1,600,000 2,000,00 1,000,000 1,000,000
0 0 0 0 0 0 0 0 0
Debtor 100,000 50,000 120,000 180,000 10,000 20,000 130,00 270,000 130,000 100,000 90,000 60,000
Discount 40,000 80,000 100,000 10,000 5,000 50,000 15,000 30,000 25,000 25,000 20,000 10,000
received
TOTALS 1,540,00 1,530,00 1,620,00 2,120,00 2,115,00 1,870,00 1,745,00 2,700,00 2,555,000 2,225,00 1,560,000 1,670,000
0 0 0 0 0 0 0 0 0

Payments
Purchase 180,000 200,000 300,000 250,000 20,000 500,000 450,000 450,000 350,000 300,000 200,000 100,000
Salaries 430,000 450,000 500,000 500,000 500,000 460,000 430,000 430,000 430,000 530,000 510,000 500,000
Creditors 50,000 20,000 10,000 60,000 40,000 40,000 50,000 60,000 10,000 20,000 10,000 10,000
Discount
Allowed
TOTALS 660,000 670,000 810,000 810,000 560,000 1,000,00 930,000 940,000 790,000 850,000 720,000 610,000
0
CASH 880,000 860,000 810,000 1,310,00 1,555,00 870,000 815,000 1,760,00 1,765,000 1,375,00 840,000 1,060,000
FLOW 0 0 0 0

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6.5: PROFORMA INVOICE STATEMENT
It is a profit and loss account showing a summary of all income and expenses.

OLIVIA’S TOP QUALITY BAKERY

INCOME STATEMENT
FOR THE PERIOD ENDING DECEMBER 31ST

Sales 13,899,500
Cash sales 3,130,500
Total sales 7,030,000

Opening stock 500,000

Purchases 3,360,000
Total 3,860,000
Less closing stock 220,000
Total 3,640,000
Gross Profit 3,390,000

Expenses
Salaries 400,000
Loans 4,550,000
Electricity and water 50,000
bills
Rent 100,000
Total 5,100,000
Net Profit 1,710,000
Tax 65,000
Net Profit 1,645,000

22
6.6: BREAK EVEN ANALYSIS
It is a way of looking at customer’s satisfaction data to determine when there are shifts or breaks in
satisfaction level. For our business it is where the total revenue of proposed enterprise is equal to the
total cost incurred.

Contribution per unit = selling price – marginal price

= 65,000-40,000

= 25,000

B.E.P (in units) = Fixed Cost

Contribution (units)

= 100,000 =4
25,000

B.E.P (in kshs) = Fixed Cost

Contribution in units

= 100,000*100,000
25,000
= 400,000

Units for target profit = Fixed Cost + Target Profits

Contribution per unit

= 100,000 + 40,000
25,000
= 5.6

Contribution per sale ratio = Contribution per unit * 100%

S.P

= 25,000 * 100%
65,000 = 38.5

Sales per target profit = Fixed price + target profit * S.P

Contribution per unit

= 100,000 + 40,000 * 65,000

25,000 = KS 104,000

6.7: DESIRED FINANCING

ITEM AMOUNT
Pre – operational cost 688,000
Working capital 100,000
23
Fixed Assets 450,000
TOTAL 1,238,000

6.8: CAPITALIZATION

ITEM AMOUNT
Owner’s contribution 3,500,000
Borrowed funds 5,500,000
TOTAL 9,000,000

24
6.9: PROFITABLE RATIO

Gross profit = G.P * 100%

Sales

= 3,390,000 * 100%
7,030,000 =48.2%

Net profit ratio =N.P *100%

Sales

= 1,710,000 * 100%
7,030,000 =24.3%

Return on equity = N.P *100%

D.E

=1,645,000 * 100%
10,169,000 =16.2%

Asset turn over = Total sales

Total assets

= 7,030,000
5,350,000 =1.3

Liquidity Ratio = C.A

C.L

= 3,800,000
1,545,000 =2.5

Quick Ratio = C.A –Stock

C.L

=3,800,000-500,000
1,545,000 = 2.1

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 7.0: RISKS MANAGEMENT

Risks are likely to occur in any business you have to anticipate risk from political, economical, legal,
financial and social cultural lease. Therefore as a company we will work on removing unnecessary
packing from our own products. We will also embrace different ways of working across the
organization and work within the government legal rules.

OLIVIA’S TOP QUALITY

OLIVIA’S
BAKERY TOP QUALITY BAKERY

Stage Pathway

Fly over Foot

Bridge

26 KCA TOWERS