1

BUSINESS PLAN
BUSINESS NAME: TEGEMEO ELECTRICAL SERVICES ENTERPRIS
E.
BUSINESS ADDRESS: 168-40100,
KISUMU.

PRESENTED BY: OPIYO NICHOLAS.

PAPER CODE 2601/206B.
INDEX NO. 7251020099

SUPERVISOR: Mr. ALEX ODHIAMBO OTIENO.

SERIES: NOVEMBER SERIES 2023

CENTER: UGENYA TECHNICAL AND VOCATION COLLEGE.

CENTER CODE 725102

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PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL<K

NEC>IN PARTIAL FULFILLMEN
T FOR THE REQUIREMENT OF THE AWARD OF DIPLOMA CERTIF
ICATE IN ELECTRICAL AND ELECTRONICS ENGINEERING (POW
ER OPTION)
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I hereby ratify that this business plan is my original document and it is derived f
rom my supervisors’ instruction, my own thoughts, and study and was not copie
d from any other source
Candidate s Name…………………………………
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Signature……………………….. Date………………..
Supervisor Name: Mr. Alex Odhiambo Otieno.
Sign……………………… Date…………………..

DEDICATION.
I would like to dedicate this document to my H.o.d, Mr. George Otieno. My frie
nds and also entire Ugenya Technical and Vocational College fraternity, for thei
r staunch support before and during the course. Truly you are the solid foundati
on for my success.

ACKNOWLEDGEMENT
First I would like to thank myself for having dedicated my full efforts for search
ing, writing and compiling the document.
Secondly I register my profound gratitude to my supervisor Mr. ALEX ODHIA
MBO and to whom I owe so much, for success of this work. He showed so muc
h interest, spent valuable time, gave guidance, encouragement, useful critique, s
upport and pieces of advice as they blindly read and help me organize this word.
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Contents
BUSINESS PLAN..............................................................................................................................1
DECLARATION................................................................................................................................2
DEDICATION...................................................................................................................................2
ACKNOWLEDGEMENT....................................................................................................................2
EXECUTIVE SUMMERY....................................................................................................................4
CHAPTER ONE................................................................................................................................5
1.0 BUSINESS DESCRIPTION...............................................................................................................5
1.1 BUSINESS NAME..........................................................................................................................5
BUSINESS LOGO.................................................................................................................................5
1.2 BUSINESS LOCATION....................................................................................................................5
1.3 FROM OF OWNERSHIP................................................................................................................8
1.4 TYPES OF BUSINESS.....................................................................................................................8
1.5 PRODUCTION AND SERVICES.......................................................................................................8
1.6 JUSTIFICATION OF OPPORTUNITY................................................................................................8
1.7 INDUSTRY....................................................................................................................................9
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1.8 BUSINESS GOALS..................................................................................................................9

1.8.1 SHORT TERM GOALS.........................................................................................................9

1.8.2 LONG TERM GOALS...........................................................................................................9

1.9 ENTRY STRATEGY.........................................................................................................................9
1.9.2 GROWTH STRATEGY...............................................................................................................10
CHAPTER TWO..............................................................................................................................10
2. O MARKETING PLAN....................................................................................................................10
2.1 POTENTIAL CUSTOMERS............................................................................................................11
2.2 MARKET SHARE..........................................................................................................................11
2.3 COMPETITION............................................................................................................................11
2.3.2 ANALYSIS TABLE......................................................................................................................12
2.4.2 ADVERTISEMENT....................................................................................................................13
2.5 PRICE STRATEGY........................................................................................................................13
2.6 SALES TACTICS...........................................................................................................................13
2.7 DISTRIBUTION STRATEGY...........................................................................................................14
CHAPTER THREE...........................................................................................................................14
3.0 ORGANIZATION PLAN/MANAGEMENT......................................................................................14
3.1 KEY MANAGEMENT PERSONNEL..............................................................................................14
3.2 OTHER PERSONNEL, DUTIES AND NUMBERS.............................................................................15
3.3 RECRUITMENT, TRAINING AND PROMOTION............................................................................17
3.4 REMUNERATION AND INCENTIVES....................................................................................18

3.5 LICENSE, PERMITS AND BY-LAWS......................................................................................18

3.6 SUPPORT SERVICE......................................................................................................................19
CHAPTER FOUR.............................................................................................................................20
4.0 PRODUCTION/OPERATION PLAN...............................................................................................20
4.1PRODUCTION DESIGN.................................................................................................................20
4.2PRODUCTION FACILITIES AND CAPACITY....................................................................................20
4.12 ENTERPRISE LAYOUT................................................................................................................20
4.13 REPAIR AND MAINTENANCE....................................................................................................20
4.2 PRODUCTION DESIGN AND DEVELOPMENT..............................................................................21
4.2.2 MONTHLY MATERIAL REQUIREMENT.....................................................................................21
4.23 MONTHLY LABOUR REQUIREMENT.........................................................................................21
4.2.4 MONTHLY PRODUCTION COST...............................................................................................22
4.3.0 PRODUCTION PROCESS.........................................................................................................22
4.4 REGULATION AFFECTING OPERATIONS........................................................................24
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5.0 FINANCIAL PLAN........................................................................................................................24

5.1 PRE-OPERATION COSTS....................................................................................................25
5.2 START CAPITAL.........................................................................................................................25
5.3 ESTIMATION OF WORKING CAPITAL..........................................................................................26
5.4 PERFORMA INCOME STATEMENT..............................................................................................28
5.6 BREAK EVEN ANALYSIS...............................................................................................................29
5.7 PROFITABILITY RATION..............................................................................................................30

EXECUTIVE SUMMERY
This business will operate as a sole proprietorship where single person decided t
o start a wholesale for electrical equipment after brainstorming market research
from the entire field. The business name will be TEGEMEO ELECTRICAL SE
RVICES ENTERPRISE, to be located at mambo Leo Kisumu where customers
will obtain high quality and affordable goods and services.
The business targets domestic’s consumer, institution of higher learning, factori
es and industries within and outside the town. The business will also have bran
ches across the country to make business establish its roots and fume to attain t
he business aim of providing goods more closely to the people. The advertiseme
nts will be done using posters, billboards and using local radio station, newspap
er and direct e-mail.
Sales and promotions will be done to enable our customers appreciate our work.
The proposed business will use a number of sale tactics to increase its sales volu
me and maximize its profit output. The sale tactics is also aimed at challenging t
he competitors in the business.
The business shall have support staff which include the general manager, the su
pervisor, secretary, two technicians, driver and security officer. The qualificatio
n and experience of the staff have to be considered mostly during the processes
of recruitment per easy duty to perform. The recruitment, training and staff pro
motions will be done in an orderly manner to suit all members involved .salaries
of employees will be determined by nature of work.
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For the electric and electrics to star and be able to run with stability it required r
oughly 850,000 to build the shop and workshop and bring up the goals in it to ru
n smoothly. The amount will be from saving and loans from the banks. The tabl
e below shows the proposed sources of capital.
Saving 350,000/=
Loan from banks 300,000/=

CHAPTER ONE
1.0 BUSINESS DESCRIPTION
The proposed business that is TEGEMEO ELECTRICAL SERVICES ENTERPRISE will be
dealing specifically with the sale of electrical materials, tools and equipment and also will be
offering electrical services such as repair of electrical equipment, tools or gadget, winding of
motors etc.

1.1 BUSINESS NAME

TEGEMEO ELECTRICAL SERVICES ENTERPRISE is the preferred name for the propose
d business.
TEGEMEO is a Swahili word meaning dependence. TEGEMEO is not only unique but also o
riginal and concrete that can attract all and sundry. It acts as an advertisement as it can sell its
elf galore.

BUSINESS LOGO
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1.2 BUSINESS LOCATION

The business will be located at mambo Leo market cente which is in Kisumu east 2km away f
rom Kisumu town. The place is preferred because it is along the road enhancing easy transpir
ation of goods and service and again the market center will attract many people as customers.
Security is also guaranteed since police post is near the refereed location of the business

The business address is

TEGEMEO ELECTRICAL SERVICES ENTERPRISE
P.O. BOX 168-40100,
KISUMU.
Telephone No. 0707757556
E-mail: tegemeo@yahoo.co.ke
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TO WIGON GARDENS

T0 KAKAMEGA

MAMBBOLEO
TEGEMEO
MARKET
ELECTRICAL

SERVICES

ENTERPRISE

SHOW

GROUND

NYS

FROM KISUMU TOWN CAMP

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1.3 FROM OF OWNERSHIP

This business will be a sole proprietorship kind of business as it will be runned by an individu
al. This will be so due to the following reasons:-
• He will be the book of his own thus run the business without any interference.
• Easy decision making.
• He will enjoy all the profit as he will be the chief controller of the business.

1.4 TYPES OF BUSINESS

This business is to engage much in the following;
• Selling of electrical materials like cables, switches, insulators,lighting system etc. Ele
ctrical tools like phase raster’s, electrical tools and other electrical related tools or equ
ipment.
• Motor winding, rewinding, dismantling, repair and sell of the rewinded motors.
• Repairing of faulty electrical gadgets in different capacities, leasing out services like l
ighting system, music stereotype microphone etc. in special occasion like weddings a
nd political meetings.

1.5 PRODUCTION AND SERVICES

The production produced will be of high quality, convenient and affordable to customers. Suf
ficient motor rewinding and affordable services to all people will be the key mantra of the pro
posed business. With skillful personnel and enough stock to kick start the business all these w
ill be achieved.
The products and services will be readily available because of its location, is situated in a mar
ket Centre along the road.

1.6 JUSTIFICATION OF OPPORTUNITY

The assurance that the success of the business will be profound is because of the following;
• Availability of knowledge and skills required to run any business which was got though t
hree years in college, also from the experience got during attachment and lastly the entrep
reneurial skills.
• Research will be done and more consultation on how to grow in business.
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• The business will be situated in an area reachable to many people enhancing the business
to grow. Also transportation of materials and workers will be easy as the business will be
near the road

1.7 INDUSTRY
The business will be both commercial and services industry as it will be on purchasing m
aterials, tools equipment etc. to sell them to customers as well as doing services like repai
ring, rewinding motor etc. the industry is suitable because transportation of these material
s will be easy due to the access of road, there is market as the business will be located in a
n area where there is less competition, availability of skilled personnel and tools /equipme
nt’s required hence quality productions and services offered.

1.8 BUSINESS GOALS

In this changing world, the business will be very resourceful to many people as
It will have the following goals.

1.8.1 SHORT TERM GOALS

• The business will create job opportunity to self and others
• To establish every successful business which can win customers interest at large within a
very short period of time possible.
• To employ qualified personnel to assist in running the business thus efficient production o
f work.
• To provide the best and quality products and services.

1.8.2 LONG TERM GOALS

• To venture into other small business beside this one e.g. opening cable cafe, video show e
tc.
• To make sure all the personnel involved in the business get knowledge and skills with tim
e i.e. as the world change, technology changes also so they need to be updated.
• To maximize profit
• To open other branches that is 2-3 branches elsewhere so as to reach many people with ou
r services and products hence steady growth.
• To expand into bigger business dealing with large quantity of stock hence increasing the c
apacity of sales and services and workers.
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1.9 ENTRY STRATEGY

The business will employ many tactics and ways of penetrating the market e.g.
•
• Buying electronics devices like computer or laptop to help in staring information and
other necessary work.
• Motivating all the workers
Offering services like giving discounts and incentives
• Marketing more advertisement through posters, radio, TVs, road shows etc.
• By offering low price to some production and services.

1.9.2 GROWTH STRATEGY

For the business to growth into a large enterprise, the following are required:
• Training the untrained staff so as to improve their production hence reducing cost of
transportation and also time wastage
• Employing duplicated and qualified personnel who can manage the business well
• Steady carrying out of advertisement and frequent promotions
• Creating more space for expansion of the business e.g. buying land or plots
Buying a vehicle which can be used in transporting materials hence reducing cost of transpo
rtation and also time wastage

CHAPTER TWO
2. O MARKETING PLAN
TEGEMEO ELECTRICAL SERVICES ENTERPRISE has many strategic plan to achieve its objectiv
e and to reach the market demands. These are like expanding its operation and space and al
so employing skillful person to help in management. The business will be located in a central
place which can be reached by many thus capturing many customers. The business will do t
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hroughout advertisement of its services and products, offer promotion, descent etc. To win
the interest of people. The pricing of items and services will be relatively chapter as to win t
he interest of competitors. These products and services will always be readily available.

2.1 POTENTIAL CUSTOMERS

The business target to win both domestic and commercial customers. The domestics custom
ers will be general public especially people around Mamboleo market who are most targete
d as they will buy as well bring their items for services. The commercial customers will be th
e middle men and hawkers who will buy goods from the business and sell them to the mark
et.

2.2 MARKET SHARE

Through research done thoroughly on the market in Mamboleo area, the business is expect
ed to reach and serve 4,800 (four thousand eight hundred) who are potential.
There will be competition from other business like Banco Electricals, Anyiko Electronics and
others

NAME OF BUSINESS PERCENTAGE SHARE (%) TOTAL NUMBER OF CUSTO

MERS
Benco electricity 23 650
Anyiko electrical engineering 19 600
Geff electrical services 21 520
Others 11 300
TEGEMEO ELECTRICAL SERVI 26 730
CES ENTERPRISE
Total 100 2800

2.3 COMPETITION
TEGEMEO ELECTRICAL SERVICE ENTERPRISE will face stiff completion from other business lik
e BENCO, ANYIKO, GEFF, BUYA and others who were established 5 years ago. The business
will base on completion weakness to conquer the business scene. Despite these competition,
the enterprise will have measures to cope and analysis competition i.e.
• Develop Excellency in production and services provision.
• Increase the size for the business by expanding its operations and shop floor.
• Persuading more customers through promotions
• Improving the quality of goods and services each day
• Choosing the right and low cost technology with high volume
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SWOT ANALYSIS TABLE

BUSINESS NAME STRENGTH WEAKNESS

BENCO ELECTRICAL • It is centrally located • Poor relation
• Long term experience • High prices
ANYIKO ELECTRICAL • Readily available personal No promotion offered
ENGINEERING • Quicker and better services
GEFF ELECTRICAL SE • Many employment • Lazy personnel who
RVICES are not always availa
ble
TEGEMEO ELECTRIC • Low prices • Little capital
AL SERVICES ENTER • Quality goods and services
PRISE
OTHERS • Technical expertise • Few workers
• Promotion
• Famous in the market
2.3.2 ANALYSIS TABLE

BUSINESS SERVICES PR PRICIN PROMOTIO PERSONNE LOCATIO SIZ tota

ODUCTION G N L N E l
NAME
BENCO ELEC 2 3 2 4 5 2 18
TRICAL
ANYIKO ENGI 3 2 1 3 2 1 12
NEERING
GEFF ELECT. 2 2 1 3 4 3 15
SERVICES
TEGEMEO EL 4 5 4 5 3 3 24
ECTRICAL SE
RVICES ENTE
R PRICE
OTHERS 1 1 2 3 3 2 12
TOTAL 6 6 6 6 6 6 36

2.4.1 TRADE PROMOTION

This will be done by the business through
• Employing good character and well behaved employees who can attend to all custo
mers without favor or fear.
• Offering discount on goods and services bought from the business.
• Purchasing enough stock of materials or items required to make sure that customers
don’t miss anything.
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• Marking the services and production through business exhibition and shows.
• Offering free example on goods bought hence attracting more people.

2.4.2 ADVERTISEMENT
The business will employ the following advertisement methods.
• Use of sigh post to show where TEGEMEO ELECTRICAL SERVICES ENTERPRISE can be f
ound.
• Through local from radio e.g. Mayienga FM, west FM, MULEMBE FM who can pass in
formation in local language to many people.
• Through posters where all the activities and location of the business will be written o
n the posters and special all over the mambo Leo market.
• Through the newspapers like Kambi fairy Asubuhi Nizikize etc. which are locally writt
en and do reach many people around.
• Through direct email to the middlemen who can be potential customers.
• All these methods will ensure that customers are, well informed about the direction,
location, operating time and kind services provided.

2.5 PRICE STRATEGY

The business will adopt different pricing strategies like:
• Competitive pricing where competitors’ prices will be analyzed and compared the come
up with a suitable price which is relatively cheap for the products and services.
• Psychological pricing where goods and services and blended to capture the customers ps
ychology.
• Cost plus where prices will be determined through the cost of material used or involved.
• Discriminating pricing where the enterprise will be selling a commodity at two different i
n cost e.g. time pricing where by during the day charges can be different from that of ev
enings.

2.6 SALES TACTICS

There are many sales tactics that business is going to use e.g.:
• Opening its doors for long hours make sure that customers get want they want at an
y time.
• Having enough stock and offering the best quality products and services.
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• Adopting an attractive way of pricing where goods or services wants be priced so hig
h hence affordable everyone.
• Advertise frequently goods and services of the business through the radio, posters, n
ewspapers etc.
• Employing very polite, humble, friendly, net and education workers who will attend t
o customers and others persons correctly.

2.7 DISTRIBUTION STRATEGY

The enterprise will employ both direct and indirect channel of distributing its goods a
nd services to customers. Goods and services will be sold to customers directly from
the shop four or sensing experts to them to services or repair their items. Also goods
may reach the customers indirectly from the business through agents, distributions o
r hawkers.

CHAPTER THREE
3.0 ORGANIZATION PLAN/MANAGEMENT

3.1 KEY MANAGEMENT PERSONNEL

• Manager
Qualifications
• Should have diploma in electrical engineering
• Should be computer literate
• should have 27 years and above
• should be eloquent
• Should have 3 years’ experience in the electrical field.

Duties and responsibility

• To supervise business transactions and operations
• Buying salaries to employment
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• To recruit staffs
• To carry out short term and long term planning of the business
• He will be the custodians of the business that is to say he is the owner and head of the b
usiness.

b) Supervisor

Qualification
• Must have diplomas in electrical and electronics engineering and vast experience in elect
rical field
• Must have 25 years.

Duties and responsibilities

• To supervise all the operation of the business
• Generating news and brilliant ideas on how to run the business
• Serving customers
• Analysis and report sales performance resumes duties of the manager in his absence

3.2 OTHER PERSONNEL, DUTIES AND NUMBERS

SECRETARY

Qualification
• Should be at least a bearer of module ll with basic knowledge in book keeping and office
practice
• Must be computer literate
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Duties and responsivity

• Responsible for office records and bookkeeping
• Receive and make calls on behalf of the business organization
• He/she is the receptionist.

TECHNICIAN (2)

Qualification
• Must be computer literate
• Must be a craft certificate holder or above in electrical engineering.

Duties and responsibility

• Design and cooperate all electrical project
• Look for customers

ARTISANS
The proposed business will have five artisans

Qualifications
• Must be in a position to express him/herself in English and Kiswahili
• Must have competent skill in electrical field

Duties and Responsibility

• Detecting faults in electrical equipment and servicing them.
• Carry out duties assigned to them by the supervisor.

SECURITY OFFICER
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• The business will have at least form 4 level of education

• Must have 3 years’ experience in security firm

Duties and responsibility

• Keeping vigilant security at all times (24hrs)

3.3 RECRUITMENT, TRAINING AND PROMOTION

RECRUITMENT
• The business shall advertise available vacancies through local FM Radio like Mayienga F
M, local newspaper etc.
• Interviews shall be asked to affirm their level of competency. Besides, individual dignity
and honor will be a pre-requisite so as to meet the intended customer satisfaction.

Training
• New employment will be taken through workshop safety measures, their roles in the bus
iness to reduce chance of injuries involving electricity
• Training shall be conducted to new employment according to their qualifications to impr
ove efficiency knowledge and to promote team work as well.
• Seminar or workshop shall be organized to all employees such that their all can learn ne
w invention ,ideas and hence promote their productivity in the business

PROMOTION
• Promotion to employment will depend on the performance in the business.
The following shall be considered when promoting employment:

• Punctuality and accountability

• Level of performance
• Diligence
• Good public relation
• Trust worthiness
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• Good public relation

• Loyalty to the business

3.4 REMUNERATION AND INCENTIVES

Employment earning will include salaries and allowances monthly, this has to be done in rel
ation to their experience and level of education

INCENTIVES
i) Financial incentives
Employment will be paid money according to their production and hours worked for. Also th
ey can earn overtime, hours and interest.

Non –financial incentives

There will be safety at work place, facility, sick pays, transportation to and from work, free t
ea, safety clothing etc.

REMUNERATION AND INCENTIVES TABLE

JOB TITLE NUMBER OF P SALARIES (Ks MEDICAL ALLO OTHER SP TOTAL (Ks
ERSONNEL hs) P.M. WANCE ECIFY hs)
Manager 1 30,000 3000 2000 35,000
supervisor 1 15,000 2800 1000 18,800
Technician 3 12,000 2500 500 15,000
Secretary 1 9000 1500 10,000
Artisans 5 7000 1000 8000
Security 2 5000 1000 6000
Officer
Total 93,300

3.5 LICENSE, PERMITS AND BY-LAWS

TEGEMEO ELECTRICAL SERVICES ENTERPRISE shall require legal procedures for it to start its
operations.
This will include clearances, permission, license etc. from the government ministries and oth
er agencies .Some of these legal documents are:
• Certificate of ownership from ministry of trade which is chargeable
• Trading license from Ministry of trade.
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• Labor Laws governing employees insurance where by employees will be insured by t

he business.
• Public Health Act that deals with sanitation, drainage, ventilation, hygiene.

3.6 SUPPORT SERVICE

The most vital services include:
• Banking services that the business will open an account with KCB Bank in Kisumu Bra
nch.
• Auditing book of account; auditors will be hired and paid upon delivering an auditing
report.
• Water will be provided by the pipe water project from River Nyando
• .
• Portal services
• Medical services will be provided by the local dispensary at Mamboleo Market.
• Legal services shall provide by

SOKLAW ADVOCATES
P.O. BOX 840-40100
KISUMU.
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CHAPTER FOUR
4.0 PRODUCTION/OPERATION PLAN
4.1PRODUCTION DESIGN
4.2PRODUCTION FACILITIES AND CAPACITY
TEGEMEO electrical services enterprise will require a premise to operate from. The premise
will be situated at Mamboleo market in Kajulu area. The enterprise will require offices for ot
her manager, supervisor and accountant (for this case the secretary)
Other facilities that will be required are as tabulated below.

ITEMS QUANTITY UNITY COST TOTAL

Electrical toolbox 1 6000 6000
Cash box 1 600 600
Electrics tool box 1 6000 6000
Firm Ture cabinet 2 2400 2400
Telephone 1 3000 3000
Computer system 3 16,000 48,000
Chair/table 6 1000 6000

Total 15 33,800 72,000

4.12 ENTERPRISE LAYOUT

All business operation shall take place in the main workshop where rewinding of motors and
other electricals gadget will be handled appropriately.
Storage of stock and how purchase will be done at the store room.
Book keeping and recording will be done in the accounts officer (secretary).

4.13 REPAIR AND MAINTENANCE

Below are maintenance measures that shall be taken care of by TEGEMEO ELECTRICAL SERVI
CES ENTERPRISE;
• Regular maintenance where tools and equipment will be checked for maintenance t
o make sure they work effectively
• Keeping tools and equipment clean to prevent them from the effect of rusting and co
rrosion.
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• Corrective maintenance whereby tools and equipment shall be attended to when ne

ed arise so as to correct the prevailing situation e.g. sharpening of blunt parts and gr
easing of Marable parts of machines, tools and equipment’s.

These maintenance will be done because of the following reasons:

• To upgrade durability of tools and equipment
• To reduce costs that may occur frequently when buying new tools.
• To improve accuracy of the tools and equipment
• To improve the efficiency of the tools or equipment’s
• To improve safety when working with tools.

4.2 PRODUCTION DESIGN AND DEVELOPMENT

4.2.2 MONTHLY MATERIAL REQUIREMENT

MATERIAL ITEMS Cost

Solder wire 500
Insulation tap 800
Receipt book 8,000
Super glue 400
News paper 300

Total 10,000

4.23 MONTHLY LABOUR REQUIREMENT

PERSONNEL AMOUNT
Manager 35,000
Supervisor 18,800
Technician 15,000
Secretary 10,500
Artisan 8000
Security officer 6000

Total 93,300
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4.2.4 MONTHLY PRODUCTION COST

ITEMS AMOUNT
Rent 3000
Transport 6000
Telephone 1000
Labor 93,300
Insurance 3000
Material 1000
Stationary 1000
Water 500
Electricity 1500
Repair and maintainer 6000
Entertainment 2000
Advertisement 3000
Miscellaneous 2000

Total 132,300

4.3.0 PRODUCTION PROCESS

TEGEMEO ELECTRICAL SERVICES ENTERPRISE is a business entity that will deal with
offering services like motor rewinding, selling of electrical equipment, material, tools
repair of electrical accessories and installation of electricity in building.
STEP ONE

Purchasing of the stock i.e. material, tools and equipment to be sold and used in the
business.

STEP TWO
Transportation of goods purchased to the location area of the business.

STEP THREE
Unloading of goods and storing them in the store. Some to be arranged in the shelve
s ready for sale.

STEP FOUR
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Warm welcoming of new and potential customers to make their choice on purchase.

STEP FIVE
Legal transaction will made should customers to willing to buy purchase items. Recei
pt will be issued upon sale of any items from the business. The receipt shall contain t
he following:
• Name of the business
• Name of the customers
• Items bought
• Date to which transaction was made
• Signature of the salesperson

STEP SIX
Packing of purchased goods into cartons, if there is need for transaction then special arrang
ements to be made between the enterprise and the customers.

STEP SEVEN
Customer’s leaves at their own will

STEP EIGHT
Replacing and purchasing of the other items
When offering the serving of repairs then the following steps shall be taken production.
• Welcoming the customers to enjoy the services offered
• Fault diagnose the electronic gadget or equipment brought foe services then advice
accordingly
• Initiate payment over the work and agree on how to be paid
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• Customers to collect his/her gadget in good and working condition

4.4 REGULATION AFFECTING OPERATIONS

FOR TEGEMEO ELECTRICAL SERVICES ENTERPRISE to run smooth as it is dealing with alread
y made goods, it will have to adhere to regulation measures below:

• PROTECTION GARMENTS
The business shall have protection gears for every employment in the promise. This include
a dust coast, helmets, boots, gloves etc. Security officer shall be provide with raincoats.

• FIRST AND KIT

The will be first aid kit in every room to ensure workers are attended to immediately there is
an accident before farther medication.

• ENVIRONMENT
JAMII Electrical services enterprise shall participate fully in cleaning and conserving the envir
onment. The business will always ensure that it minimize chance of environment pollution

FIVE EXTINGUISHER.
Fire extinguisher shall be provided in every room to help in the case of an outbreak of fire d
ue to sparking especially in the worker shop.
Trade license
To ensure legal operations, TEGEMEO business will obtain a trade license.

5.0 FINANCIAL PLAN

Financial plan will be carried out by the qualified personnel as it is very important all transac
tion done be shown in there specified records.
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5.1 PRE-OPERATION COSTS

The pre-operation cost is the amount required to cater for the materials and equipment bef
ore the business operates.
The pre-operation cost for TEGEMEO enterprise will be tabulated as follows.

Description Cost
Registration 5000
Machine tools and equipment 100,000
Stock 100,000
Banking 15,000
Transport 6000
Advertisement 3000
Elect. Installation 20,000
Salaries and wages 93,300
Miscellaneous 2000
Insurance 3000
Stationary 1000
Furniture and fitting 1000
Water installation 15,000

Total 373,300

5.2 START CAPITAL

Source Kshs
Personal saving 350,000
Bank loan 300.000
Contribution 200,000
Total 850,000

Starting capital=pre-operation cost

850,000-373,300
=476,700
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5.3 ESTIMATION OF WORKING CAPITAL

ITEMS YEAR ONE YEAR TWO YEAR THREE
Current asserts Kshs Kshs Kshs
Opening stock 100,000 120,000 140,000
Cash at bank 130,000 2180,000 2580,000
Cash at hand 346700 496,700 646700
Debtors 30,000 35,000 40,000
Closing stock 20,000 40,000 60,000

Total 526,700 287,1700 3466700

ITEMS YEAR ONE YEAR TWO YEAR THREE

Current liability Kshs Kshs Kshs
Creditors 38,000 40,000 60,000
Rent 18,000 18,000 18,000
Insurance 15,000 13,000 170,000

Total 71,000 71,000 95,000

Working capital =current assert –current liabilities

Working capital for one year=
526, 71000-71000
=455,700
Working capital for 2nd year=
287170-71000
216,170
Working capital for 3rd year=
3466700-95,000
=3371700

Description JAN FEB MAR APR MAY JUNE JULY AUG SEPT
Cash in flo
w
 30

Capital 450,0
00
Loan 300,0
00
Duration fr 200,0
om friends 00
Cash sales 100,0 130,0 12500 120,0 14000 150,00 100,0 150,0 200,0
00 00 0 00 0 00 00 00
Debtors 80,00 40,00 20,00 15000 20,00 120,00 35,00 20,00 50,00
0 0 0 0 0 0 0 0
Total in flo 680,0 170,0 145,0 13500 160,0 16200 135,0 170,0 250,0
w 00 00 00 0 00 00 00 00 00
Cash out flo
w
Rent 3000 3000 3000 3000 3000 3000 3000 3000 3000
Salaries 93,30 93,30 93,30 93,30 93,30 93,300 93,30 93,30 93,30
0 0 0 0 0 0 0 0
Water 500 500 500 500 500 500 500 500 500
Electricity 2000 3000 2500 3500 2200 1500 3000 2000 2000
Interest loa 2000 2000 2000 2000 2000 2000 2000 2000 2000
n
Creditors 3000 3000 5000 3000 1000 1200 1000 1000 2000
Advertisem 20,00 15000 10,00 3000 2000 6000 1000
ent 0 0
Telephone 1000 1000 800 900 600 1200 1000 800 9000
License 10,00
0
Promotion 8000
Loan paym 10,00 10,00 8000 6000 10,00 5000 15,00 10,00 12000
ent 0 0 0 0 0
Insurance 15,00
0
Furniture 10,00
0
Miscellane 3000 3000 3000 3000 3000 3000 3000 3000 3000
ous
Total out fl 180,0 13380 12810 11520 118,6 14420 12180 116,2 127,8
ow surplus 00 0 0 0 00 0 0 00 00
accumulate
d
 31

5.4 PERFORMA INCOME STATEMENT

DESCRIPTION YEARS 1 YEAR 2 YEAR 3

Cash sale 1,800000 2,500,000 3,000,000
Discount received 180,000 180,000 220,000
Debtors 250,000 280,000 300,000

Total 2,230,000 2,960,000 3,520,000

Less cost of sale 200,000 250,000 280,000

Cross profit 203,0000 2,710,000 3240,000
Less expenses
Electricity 27000 34000 35000
License 1000 1200 5000
Telephone 10,000 8000 9000
Insurance 1200 1500 2000
Creditors 30,000 25000 35,000
Travel 7000 5000 10,000
Rent 1500 20000 25,000
Advertisement 70,000 60,000 50,000

Total expenses 161,200 157,700 171,000

Net profit before ta 168,800 2,555,300 3069,000

x

Less provision tax @ 27,008 408,848 491,040

16%
Net profit after tax 141,792 2146,452 2,577,960

PROFORMA BALANCE SHEET

Description Year 1 Year 2 Year 3
Fixed assert
Production 50,000 60,000 70,000
Furniture 15000 10,000 12,000
Vehicle
Computer 20,000 30,000 40,000
Total 85,000 10,000 122,000
Land depreciation
5% production facil 3000 6000 9000
 32

ity
5% furniture fitting 750 500 600
10% vehicle 20,000
10% computers 15,000 10,000 12,000
Totals 18,750 165,00 41,600
Total fixed asserts 80,000 100,000 200,000
Current assert
Cash at hand 300,000 400,000 450,000
Cash at bank 200,000 300,000 500,000
Stock 80,000 100,000 150,000
Debtors 250,000 270,000 300,000
Totals 830,000 10,70,000 1400,000
Totals assert 910,000 1170,000 1600,000
Current liability
Creditors 300,000 400,000 980,000
Bank over draft 200,000 350,000 550,000

Total 500,000 750,000 1030,000

Long term liability Year 1 Year 2 Year 3

Bank loan 300,000 400,000 480,000
Owners’ equity 89,250 350,000 550,000

Totals 389,250 750,000 1030,000

Total liability 889,250 1500,000 2060,000

5.6 BREAK EVEN ANALYSIS

Description Kshs
Sales 1,700,000
Variety
Purchase 400,000
Telephone 900
Advertisement 50,000
Repair and maintenance 25000
Water 4000
 33

Total variety cost 488,000

Contribution=total sales-variable cost

=1,700,000-488,000
=1,212,000
Contribution margin=contribution/sales*100
=71.3%
BREAK EVEN LEVEL OF SALES

Fixed costs Kshs

Salaries 1,300,000
Licenses 5000
Insurance 5000
Loan payment 100,000
Rent 15,000
Interest on loan 10,000

Total fixed cost 1435,000

Break-even level of sale =fixed cost/contribution margin

*100
1,435,000/71.3*100
=2012622

5.7 PROFITABILITY RATION

a) Gross profit margin =gross profit/sales *100
Year 1
2030000/1,700,000*100
=119%
Year 2
270,000/170000*100
159%
 34

Year
3,240,000/170,000*100
=190%

b) Return on equity=net profit after tax*100/equity contribution

Year 1
141792/89250*100
=158.87%

Year 2
2146452/750,000*100
=286.19%

Year 3
2577.960/1,030,000*100
250.29%
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