BUSINESS PLAN

NAME OF BUSINESS : FAM SAFARIS KENYA

PRESENTER : BRIAN MWANIKI

SUPERVISOR : MADAM MAKENA

PRESENTED TO : KENYA NATIONAL EXAMINATION COUNCIL

IN FULFILMENT OF THE REQUIRMENT FOR

THE FOR THE AWARD DIPLOMA IN

INFORMATION COMMUNICATION TECHNOLOGY

EXAM CENTRE : THIKA TECHNICALTRAINING INSTITUTE

EXAM SERIES : NOVEMBER 2023

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Declaration
I BRIAN MWANIKI, Sign………….declare that this project is our original work and has never
been Submitted to any other Institution or Examination Council for the award of Diploma in
Information Communication Technology

Name: Brian Mwaniki Sign……………..

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Acknowledgement.
I humbly express our sincere thanks to our lecturer, Madam Makena for her able guidance and
support in completing our business plan.

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Dedication
I humbly dedicate this project to our ever supporting family for their concern, effort and time for
me to successfully finish this work. To our advisor and lecturer who genuinely helped me to
finish this work and above all to our beloved almighty God who blessed me with his Grace and
Wisdom to accomplish this Business Plan that some how in the near future may contribute to
help those who will appreciate and use it.

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Executive Summary
i. Business Summary

“Fam Safaris Kenya” is a new limited company with a sole proprietorship majority in the tourism
industry. It will be located in Mombasa Kenya. Muthaiga market along Ukunda Hamisi Road.
Address 354- 00100. Gam safaris Kenya consists of sustainable tourism services which are
directed for both local and international tourists.

The services we will be offering will be organizing ecological trips including sport activities and
relaxation, offering transport services to our customers from place to place,
booking/accommodating our customers to luxurious hotel e.t.c. these programs will be explained
further in the business plan which consists of the strategies, marketing plan, financial part and all
the important facts and figures.

ii. Marketing Plan

Sustainable tourism is an industry which attempts to make a low impact on the environment and
local culture. While helping to generate new employment and conservation of local ecosystems
FAM Safaris Kenya has innovative services that will change the mind of the customers. Our
potential customers. Will be both local and international tourist, big and small companies coming
for congresses, families and couples on vacations or weekend betaways.

The business owner will be using social media and live video marketing to advertise our
business. The prices will be according to the type of tour and details discussed in the business
plan.

iii. Organization and Management Plan

Although FAM Safaris Kenya is a really small organization, it is structured as a top down
organization where by it consists of a manager at the top and two tour leaders below. The
business owner will be employing based on the level of education, driving experience and
interpersonal skills. Ourself being the manager The business owner will traIn the employees on
good customer service. It being an integral part in this industry. As we begin there will be no
promotions but as the company grows in terms of workload, we will create new slots then
promotions can be considered. The criteria will be using is the level of input and consider those I
began with.
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iv. Production/operation plan

Being a service business. The operations process is as follows.

Once I receive an inquiry. The business owner will make a tentative itinerary and quotation.
Share it with the client and based on an agreement, I’ll make a reservation, receive deposit and
the booking will be confirmed.

On the arrival of the customer, they are required to pay the balance and their trip begins. The
travel arrival to final destinations, tour personalization etc.

After the tour we will be inquiring reviews and ratings from our customers to know areas we
need to work on. This reviews will not only be about their star with us and experiences on tours
but also the customer service and relationship and the management.

Financial plan

Item Amount in (Ksh)

Pre-operational cost 2,760,000
Working capital 600,000
Net profit 3380,000
Desired financing 3,310,000
Proposed capitalization 3,760,000

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Table of Contents
Acknowledgement...........................................................................................................................ii
Dedication.......................................................................................................................................iii
Declaration......................................................................................................................................iv
Executive Summary.........................................................................................................................v
CHAPTER ONE..............................................................................................................................1
INTRODUCTION...........................................................................................................................1
1.0: Business Description................................................................................................................1
1.1. Business Name..........................................................................................................................1
1.2. Business Location.....................................................................................................................2
1.3. Form of Ownership...................................................................................................................2
1.4. Type of Business.......................................................................................................................3
1.5. Project/Services........................................................................................................................3
1.6. Justification of Opportunity......................................................................................................4
1.7. Industry.....................................................................................................................................4
1.8. Business Goals..........................................................................................................................4
1.9. Entry and Growth Strategy.......................................................................................................5
CHAPTER TWO.............................................................................................................................6
2.0. Marketing Plan..........................................................................................................................6
2.1. Potential Customers..................................................................................................................6
2.2. Market Share.............................................................................................................................6
2.3. Competition..............................................................................................................................7
2.4. Methods of Promotion and Advertising....................................................................................8
2.5. Pricing Strategy.........................................................................................................................9
2.6. Sales Tactics...........................................................................................................................10
2.7. Distribution Strategy...............................................................................................................10
CHAPTER THREE.......................................................................................................................11
3.0. Organization and Management Plan.......................................................................................11
3.1. Manager and Qualifications....................................................................................................11
3.2. Other Personnel Numbers and Duties.....................................................................................12
3.3 Recruitment, Training and Promotion.....................................................................................12
3.4 Remunerations and Incentives.................................................................................................14
3.5 Licenses, Permits, Laws..........................................................................................................14

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3.6 Support Staff and Services.......................................................................................................15
4.0. Production/Operation Plan......................................................................................................18
4.1. Production Facilities and Capacity.........................................................................................18
4.2 Production Strategy..................................................................................................................20
4.3 Production/Operation Process..................................................................................................21
4.4 Government Regulations.........................................................................................................22
CHAPTER FIVE...........................................................................................................................23
5.0. Financial Plan.........................................................................................................................23
5.1 Pre-Operational Cost................................................................................................................23
5.2. Working Capital......................................................................................................................24
5.3. Cash Flow Statement for the Year..........................................................................................25
5.4. Projected Income Statement...................................................................................................26
5.5 Proforma Balance Sheet...........................................................................................................27
5.6 Break Even Analysis................................................................................................................28
5.7 Probability Ratios....................................................................................................................30
5.8 Desired Finance.......................................................................................................................31
5.9 Proposed Capitalization...........................................................................................................31

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 CHAPTER ONE

INTRODUCTION

1.0: Business Description

1.1. Business Name

The proposed business name will be FAM Safaris Kenya (FSK). FAM means a group of friends
whereas safaris is a Swahili word used to refer to a journey, trip or tour. The business owner will
be using the words FAM and safaris not only to describe our services to our target audience but
also to highlight an experience or memory the people could form by opting for our services. The
name “fam” conveys sense of community in a way that one would feel welcomed and
appreciated which is very important to the tourists. The name “safaris” is more like a sense of
adventure and desire to explore therefore creating a chance to form memories. Moreover the
name “fam safaris Kenya” is memorable and easy to speak out loud.

I have researched on successful business with the same idea of a tour firm and I broke down how
and why they have chosen to name them and equally how and why it works for them.

From our findings, because the nature of our service is dear right from the start, the name will
benefit our company by attracting a targeted audience to the message which is the main aim.

The owner to start the business in 2030 that is eight years from now that is after I have attained
our degree and probably raised enough capital by then.

Our name is BRIAN MWANIKI, am twenty one years old. Currently I am a student at Nairobi
institute of technology pursuing a diploma in ICT under the (KNEC) program. I am In the second
year and hoping to do our bachelors after. I am ambitious and am always looking for an
opportunity to do better.

This business will be a sole proprietorship. The required will be 5,000,000 Kenyan shillings.

No. Source Amount

1. Savings 2,000,000
2. Family 2,000,000
3. Bank loan 1,000,000

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1.2. Business Location
FAM Safaris Kenya will be located in Mombasa, Kenya, Muthaiga market along Ukunda Hamisi
road. Address-354-00100. The reason for this location is the good social state, the weather and
the vicinity. Most tourists come to Kenya during winter in their countries therefore the climate in
the cost region is the place for them. Equally the location is close to Diani Beach therefore,
clients in the known surrounding. The location is also good for arranging trips to near beautiful
places. Also there are many bog hotels in the area so we will immediately have a big group of
potential clients in the area.

1.3. Form of Ownership

The business will be a registered sole proprietorship. This can empower each other, complement
and criticize each other’s strengths and weaknesses equally there are a lot of advantages for a
sole proprietorship, mainly coming up with the capital and sharing the burden among many
others.

Being a very small organization, the form is later going to co-operate with other business like
hotels, airports, game reserves, parks to share a huge success in the tourism and service market.
The business is looking forward to work with this other companies/business because they almost
have the same philosophy as the firm.

The firm wants to share its vision with our clients. It promises clients that guided tours want
destroy nature and the rates at hotels are lower when you book through us. The firm wants to
bring people close to nature and provide a comfortable and memorable stay here in Kenya.

The owner to start the business mid-January in 2030 after it is available for trademark and
domain name registration.

1.4. Type of Business

In this case, FAM safaris Kenya consists of sustainable tourism services which is directed for
both local and international tourists/travelers. The company is in the services section and we
offer the best at a very affordable price: the services will also be very luxurious, comfortable and
even private if so.

The major activities of the company will be offering touring services around the country,
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offering transport services to our customers from place to place, booking/accommodating our
customers to luxurious Hotels around Kenya whereby the rates are lower when you book through
us. We will also offer relaxing moments to our customers after tiring activities.

Other activities will be offering entertainment at hotels at night to their guests for a pay and also
send some of our staff to engage the visitors in activities i.e. water volleyball during the day.
This will be done at various hotels that we will be working with by our staff for extra pay.

1.5. Project/Services
 FAM safaris Kenya is in the services section which implements the best sustainable
tourism in Kenya.
 We offer touring services whereby we arrange for tours i.e. beach tourism. Wildlife,
adventure, cultural e.t.c.
 We offer transportation to the tourists/travelers whereby we own: taxis, luxury buses, tour
trucks and boats.
 We do bookings to hotels for accommodation of our customers at a reduced rate if done
through us.
 We offer relaxing moments after tiring activities i.e. walking, cycling, bird watching,
mountain bike tennis e.t.c.

FAM Safaris Kenya will have invocative services that will change the mind of the customer.

This company also wants to make people aware of the environmental problems i.e. pollution and
educate society on the importance of such.

Our services will be convenient, affordable and comfortable.

1.6. Justification of Opportunity.

The location of the business being in Mombasa, Kenya. It is an opportunity. Whereby the climate
is warm and most foreigners flying in to Kenya would settle in Mombasa for the warm climate
and the beautiful scenery of the coastal beach.

Another reason I believe the business will do well is because of the nature of the services we will
be providing. Our services will be convenient, affordable comfortable and even private to your
preferable. Our customers will stay in the best sustainable Hotels in Kenya and other countries

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with time.

We also plan on having a very exciting programme for people in the age bracket of 912-400
years old and more relaxing activities for an older public such as wellness or an ecological trip.
This will attract the audience and improve our income.

Our business will also contribute to the community and the national development. It will help in
employment creation for the local citizens thus improving living standards whereas the
government benefits from taxing us. Equally there is use of local resources thus improving
national income.

1.7. Industry
FAM Safaris Kenya is based in the tourism industry. Sustainable tourism is an industry which
attempts to make an impact on the environment and local culture while helping to generate new
employment and the conversation of the local system.

The demand in tourism is dependent on whether the potential traveler has the ability to travel or
desire to travel. Leisure time and disposable income are two of the most important travel
facilitators in tourism.

1.8. Business
Goals Short term
goals

The objective of the company is to make it sustainable by itself. In the first year, our expectations
need to cover all expenses satisfying customer needs.

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Long term goals

FAM safaris Kenya would like to extend its market to other countries in the next 5-10 years. We
plan on having our offices in variety of countries attending to respective customers in each
accordingly to their satisfaction. Our main office will be in Kenya. The company also wants to
provide quality employment to its community residents and a link between local business and
tourism.

1.9. Entry and Growth Strategy

At the beginning we will put a lot of effort into marketing. Through marketing and
advertisements we will try to get potential clients to get to know our strategy and the benefits
they get using them.

The company tries to make its clients understand the importance of the environmental travelling
and show they are socially responsible. Engaging our clients in a variety of activities, giving
them the best services and a memorable stay with us, in no time news will be around of how we
combine fun and the benefits.

Year after year the company reaches more and more clients from different areas. In time it can
also increase its project to several other countries thus more profit.

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 CHAPTER TWO

2.0. Marketing Plan

2.1. Potential Customers

Our customers will be tourists, both local and international. Our customers will be people of all
ages to mean the services are open to anyone. The customers will be seeking tour services,
transportation services from place to place, making bookings to luxurious hotels around the
country for accommodation and relaxing moments after tiring activities.

I plan on receiving local customers throughout the year i.e. institutions organizing
trips/conferences. Couples and families for the holidays more so during the December holidays
and probably weekend getaways.

Internationally, tourists tend to visit Kenya mostly when they are experiencing winter in their
respective countries around June to September fam safaris Kenya plans on good customer
service which will ensure more opportunities for our business whereby if the customer is happy
they will keep on using our services and even referring to others. This helps develop a loyal
customer base and equally improves relationships with our customers. Any mode of payment will
be allowed and done under the right procedure.

2.2. Market Share

The tourism industry contributes 4.4% to the G.D.P. of Kenya. Fam Safaris Kenya has
innovative and satisfactory services increasing its potential in the market. There are numerous
investment opportunities especially in the coast region where tourism is upgrading. Tourism is
becoming a key component in the growth of Kenya. In 2019, the sector contribute 7.9 billion U.S
dollars to Kenya’s G.P.D, by the same year it accounted for 8.5% of the total employment.

Lastly international tourists spent 1.9 billion U.S dollars in Kenya and still counting to this year.
Whereby it is picking up since Covid in 2023restricted the travelling of tourists from country to
country and even locals from place to place.

We plan on using the latest technology in providing our services i.e. online booking. Technology
has always been a supporting factor in the industry. It has become a basic prerequisite to carry
out

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multiple operations immaculately. Our objective is to harness, develop, preserve and promote
Kenya’s cultural and natural heritage besides benefiting from it.

Percentage

12%

38%

25%

25%

DIANI TOURS AND SAFARIS GOLDEN TRAVEL AND TOURS

FAM SAFARIS KENYA MARCO POLLO TOURS AND SAFARIS

2.3. Competition.
Our company’s main competitors are:

1. Kendirita tours and travel limited – the company is located in Nairobi Kenya and is part of
the travel arrangement and reservation services industry it has 15 employees at this location
and generates and 1.93 million sales (U.S.D).
2. Expeditions Maasai safaris – the company was founded in 2014 and the headquarters in
Nairobi it provides wildebeest migration safaris.
3. Almasi tours and safaris – the company is in old Mombasa town, coast province. It offers
safaris and activities for travelers and locals.

Our potential competitors in relation to our proposed business location being along Ukunda
Hamisi road are:

Diani tours and safaris

Golden travel and tours

Marco polo tours and safaris

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 The positive effects of having this competitors so close would be motivation-seeing them
work hard would motivate us to work even harder to get the client.

Another thing is that competition will help us assess our strengths and weaknesses. It will also
spark creativity to find ways to carry out our activities differently from the norm to make the
customer prefer us from the rest. In a way it ends up increasing the effort and quality of work.

On the other hand, there will be disadvantages i.e. there will be decrease in market share which
shrinks our customer base. Competition might lower self-esteem. It can be a stumbling block for
us. Potential competitors from entering the market when dominant firms can use their market
power to change higher prices or even lower.

2.4. Methods of Promotion and Advertising

3.4.1. Advertising Strategy

 Live video marketing

Whereby travelers frequently search for videos of destinations the want to travel to. Live
streaming videos are getting more and more popular. Potential customers would probably love
watching them. FAM Safaris Kenya plans on having 24/7 live streaming inductive of all
activities to show customers the fun they are missing out on.

Use Social Media

This is one of the most effective marketing channels in the tourism industry. We plan on
targeting the right platform where our customers are i.e. Facebook which is crowded with social
network. Other platforms could be Instagram and twitter with all that in mind, we plan on setting
up a strategy for each platform.

 Optimizing our website

This are basically our internet marketing efforts. The company’s website should be optimized
frequently to improve user experience and boost our conversation rates we will ensure it is well
designed and well-functioning.

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 Focus on the mobiles

Basically it is what everyone does. Using google, smartphone users through comfortable
researching online, they plan and book their entire trip on their phones. The mobile experience is
expected to be as good as the website. If not better. The tourists use search engines to search for
destinations, accommodation activities e.t.c therefore we will be working extra hard for our
offers to be on the first page of the search results.

3.4.2. Promotion Strategy

 An effective promotion campaign would be the most important aspect in the successful
development of our business. This campaigns will be inclusive of roads shows.
 The business owner will also be using tourist promo videos whereby ill share videos of our
clients enjoying themselves on our tour and even giving positive testimonials of their
experience. This will demonstrate the value in what I offer and it will inspire people.
 Using business cards – they are extremely useful and cost effective. With help, they can
really improve the reputation of our business thus increasing the likelihood of interest from
travelers and tourists.
 Using postcards – I plan on making postcards which are colorful with a wonderful landscape
of tourists destinations and a small message and send them to our potential customers. This
postcards will also be a great directing tool for our business and they will convince our
potential clients to contact me.
 The business owner will also be giving printed t-shirts to our clients and carrier bags which
will be worn and used out there promoting and marketing our business.

2.5. Pricing Strategy.

 The business owner will be offering touring services so the pricing would be done depending
on the tour type. It is segregated into conferences/meetings, weekend get a ways. Adventure
tours, organized tours and holidays trips.
 The business owner will be considering the uniqueness if our services despite the competitors
prices while coming up with our one prices so that I can also make a profit from it.
 All methods of payment will be accepted including credit cards.

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 The business owner will also be giving services on credit only to repeat customers who are
expected to make the payment in a given period of time.
 Our discount policy will be seasonal In the case during holidays. National holidays and
December holidays. Prices will be 60-65k per person for a whole week including full board
hotel with activities.

2.6. Sales Tactics

The business owner will be using both direct and indirect sales tactics.in terms of direct I plan on
training our personnel on the concept of customer orientation and ways to convince potential
customers to use our services. The business owner will be selecting them in terms of confidence
and eloquence. I plan on motivating them by good wages and even a snack on break.

2.7. Distribution Strategy

 The business owner will be taking our services to our customers this are our cars and buses to
carry them from place to place.
 The main problem I might encounter In the business would be language barrier with the
international tourists.

Others might be traffic jams and the worst case such as accidents therefore I plan on taking
safety measures while I plan on taking safety measures while dealing with each and every one of
our clients.

 As for the language barrier, I plan on organize weekend does for our staff to learn the basic in
different languages and even train on sign and badly a language. This will ease the
interaction between us and the tourists.

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 CHAPTER THREE

3.0. Organization and Management Plan

The tourism industry is a major engine of growth for the country. It is an industry that
encompasses variety of sectors. This industry is all about people and it requires professionals
who have the right set of skills to offer excellent customer services.

Although FAM Safaris Kenya is a really small organization, the organization of the company is
structured as a top down organisation. This business structure will offer the organization
important advantages due to the fact that being organized helps to stay sustainable and
everyone’s work is effective in the end. The top down structure involves less flexibility for
employees as decisions will be made by the head. The business owner will be having three
employees ourself included. I have two departments:

Management, who will also be handling sales/finance and

marketing. Organization and services; (two posts)

Manager

Tour Leader 1 Tour Leader 2

3.1. Manager and Qualifications

(1 POST)- OCCUPIED

Ourself The business owner will be the manager as I have an in-depth understanding of
management concepts and the industry as a whole.

I have:

 It skills (information technology)

 Good local knowledge
 Excellent interpersonal skills
 Organisational skills
 I am resourceful

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I am confident and an excellent communicator and that’s why I qualify for the position besides it
being our business. Our duties as a manger would be to oversee operations within the company.

The business owner will also be Incharge of identifying different target market in the industry.

Am also Incharge of making presentations on tourism awareness or on new initiatives to the

industry, community or interest groups. The business owner will also be training the tour leaders
on good customer service as it remains an integral part in the tourism industry.

3.2. Other Personnel Numbers and Duties

3.2.1. Tour Leader (1 Post)

The business owner will be having two tour leaders but 1 post is already occupied by our partner
who is equal to the task with excellent hospitality and driving skills. Therefore only one post left
for advertisement. The duties of the tour leader will be:

 Lead tours daily with enthusiasm and energy

 Prepare tour materials
 Schedule private and public tours
 Follow all safety guidelines and ensure that guests remain within designated areas
 Lastly, they’ll be the one driving our guests

Therefore for one to be able to apply for the post he/she should have the following qualifications

 One should have a strong work ethic

 One should be tolerant to be able to handle people from different cultures and backgrounds
 Have high attention to detail
 Have sales and customer service experience
 One should also be confident and have excellent communication skills
 One should be a remarkable driver and have a driver’s license to support it.

3.3 Recruitment, Training and Promotion

3.3.1 Recruitment

The business owner will advertise the post, receive applications: shortlist. Call in the potential
candidates for an interview

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With the help of an interview I’ll be able to evaluate and select a potential candidate, The
business owner will be testing their positivity, enthusiasm, cheerfulness and the generous outlook
on life. Since I believe this will translate into someone who cares about their team, listens to
instructions from leaders and is able to communicate with customers with professionalism

3.3.2 Training

The business owner will be training our staff on three things which are important aspects in the
tourism industry

1. Customer service

This industry is all about providing quality service to customers to satisfy their ever increasing
expectations

2. Cultural awareness

This will help to ensure we understand our customers and their needs

3. Flexibility

Flexibility in the way that you work is a crucial skill in the tourism industry, one needs to be able
to handle the pressure that may come with working in this industry. One needs to be able to
adapt, think on your feet and be prepared to jump from one task to another.

With all this in mind, our staff and The business owner will be able to handle the pressure that
comes with the environment and provide high quality service for the customers to feel
comfortable and enjoy their experience with us. This will encourage them to make use of our
services again in the future and even refer me to others

3.3.3 Promotion

As we begin, we won’t be having any promotions rather everyone maintains their post. Although
years to come as the business grows, the pressure also increases making us create new posts to
help share the workload. With a bigger number, we get different types of personals with different
levels of input and there we can now consider promotions. The criteria The business owner will
use for those promotions would be

1. The business owner will consider the people I began with for a change of title.

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2. The other promotions will be based on levels of experience and input in the work

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3.4 Remunerations and Incentives
Ourself as the manager I won’t be getting much salary until our business picks up.

The tour leaders each will be earning a salary of ksh.25, 000 per month. As time goes by and as
the business grows, the income will also grow. At the beginning I cannot afford to give
allowances or even benefits but with time The business owner will introduce them.

The business owner will be giving incentives in the case of hourly rate bonuses for working
overtime/odd hours. The business owner will also have a referral programme and profit sharing.
The business owner will also be holding company dinners and a snack at break to motivate our
employees

Serial No Post Salary Allowance Benefits Incentives

80001 Manager Ksh 32,000 - - Bonuses
80002 Tour leader Ksh 25,000 - - Referral programmes
80003 Tour leader Ksh 25,000 - - Company programmes

3.5 Licenses, Permits, Laws

To obtain a tourism license The business owner will be contacting the Tourism Regulatory
Authority everything will be done as per the law stated in chapter 381 of the constitution: the
tourist Industry and Licensing Act.

Therefore The business owner will get the required documents

 A lease agreement of the premises

 A certificate of the registration of the company
 Memorandum and articles of tourism Regulatory Authority

Then am expected to pay a fee Ksh 10,000 to the Ministry of Tourism that can be found under
the “fees” section. It is for the tour operator’s license The business owner will also have a
“KRA” to pay taxes back to the government as a business in Kenya.

The business owner will also license our vehicles with copy of the logbooks. License fees of Ksh
8,000 in banker’s cheque payable to the Ministry of Tourism and wildlife. (Motor vehicle hire)
fully filled license application for watersports/boat excursion

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3.6 Support Staff and Services
In the tourism industry the support services refer to tourism infrastructure i.e. resorts,
accommodation industry, transportation industry, tourism sites, banking services. Internet
services and Electricity services & insurance services.

3.6.1 Banking services

The business owner will require banking services for checking and savings account, loan and
mortgage services and wealth management. The business owner will be using /baking with CO-
OPERATIVE bank of Kenya. I choose those bank because of their digital services, their interest
rates, their saving account options and the branch availability being in the area.

3.6.2 Insurance Services

As a tourism company, we will be dealing with risks that face our business and at times with
risks to the industry i.e. fires.

Protecting our business with a specific tour operator insurances will ensure I cover all our bases.
The business owner will be registering for the following after consulting with the Tourism
Organization

1. Asset and revenue insurance; the specifics will vary depending on the nature of the tour or
activity. This refers to things like:
 Breaking and damage of business assets
 Fires and nearby everything destroyed
2. Commercial crime insurance – in the event of theft or misdeeds, commercial crime insurance
will cover any losses
3. Errors and omissions insurance: running the business can be very demanding with dealing
with a variety of customers every day. Making mistakes is inevitable however certain hiccups
can result in severe damages. This insurance will protect our business from claims that may
arise due to mistakes or failure to meet certain criteria of a signed contract
4. Public liability insurance. This applies in a case where tour participants lose their property
while having a time of their life. This insurance will free me and our staff from any
responsibility of paying back stolen/lost items

25
5. Workers compensation insurance – many tours involve a lot of physical activity on a daily
basis. This insurance protects our business from costly compensation claims as a result of
workplace accident/illness.

3.6.3. Internet Services

The internet has become a major support to more complex and critical functions in the tourism
and hospitality industry and it contributes to significant innovation

 The internet has shown to be a profitable medium of tourism promotion and sales where
promotional visualization of tourism products and services through media leaves greater
impression on potential customers
 The internet allows improvement of tour operators by speeding up communication and
providing all necessary information
 Internet allows services bookings, allows booking on demand and avoid overbooking
 The internet offers the possibility expansion, rapid data transfer and flexibility i.e.
websites can change the changes are immediately visible and are not limited to space and
time

Therefore the internet has become an integral part of conducting business in tourism industry

3.6.4 Electricity Services

In terms of providing electricity to power computers to be able to access internet services, we

can say it provides/support the tourism industry

Electricity also powers gadgets for communication and documentation of data

3.6.5 Accommodation Services

This refers to the provision of accommodation typical on a daily or weekly basis, principally for
short stay of tourists.

This accommodation in the tourism industry are: hotels, caravan parks, camp sites, cottages etc.
according to preference

This is equally a major support service to the tourism industry since at the end of the day, they all
need a place to relax and freshen up after the tiring activities

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3.6.6 Transportation Services

Transportation influences international tourism because without transportation there won’t be the
travel and tourism industry. The people will not have means to reach other places they desire to
see. Transportation is the main means to carry passengers, the tourists, to the actual site where
tourism services are performed.

Therefore the development of transportation sector speeds up tourism development.

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 CHAPTER FOUR

4.0. Production/Operation Plan

4.1. Production Facilities and Capacity

In this chapter The business owner will be providing a review of current production facilities
applicable to the tourism industry. While many of the traditional methodologies involve closed
form analytical calculations, newer methods have been developed to address more complex
problems i.e. communication in terms of advertisement and all

The business owner will be considering the full range of methodologies the advantages and
disadvantages and potential applications to both physical and human capacity estimation. The
business owner will highlight ways in which our company can benefit from different approaches
to capacity management with the type of machinery and equipment The business owner will be
reading which include;

S.No Item Source Cost(Ksh) Units

01 Toyota Land Cruises Toyota Kenya 1,600,000 2
safari Vehicle
02 Computer Jumia Kenya 50,000 1
03 Tent Jumia Kenya 2
04 Office table Gojo Kenya 5,000 1
05 chair Gojo Kenya 4,200 1
06 Internet Safaricom 3,000 10mbps
07 Sleeping bag Jumia Kenya 10,000 4

4.1.2 Repair and Maintenance

Besides repair and maintenance, The business owner will insurer our cars to have the legal
requirements mandated by chapter 405 of the Kenya Traffic Act which requires any car being
driven on Kenyan roads to have minimum of a third party cover

The business owner will be getting the comprehensive insurance as it is the most extensive form
of insurance coverage as it offers full protection to both parties in case of an accident.

28
As for repair and maintenance, The business owner will be getting this service from Toyota
Kenya-Mombasa, because they have certified technicians and they will service our vehicles with
Toyota genuine pars and every part will be covered up to at least 6 months service guarantee.

This maintenance involves regular servicing of the cars, routine checks, repair work and the
replacement of worn out or non-functional parts of the cars as the years go by.

The business owner will be getting our spare parts from Toyota spare part

dealers in Nairobi. The spare parts that must be replaced routinely

1. Engine oil and oil filter

2. Air filter
3. Spark plugs
4. Battery
5. Ac filter
6. Brake pads

4.1.3 Features of the Proposed Premises

Farm safaris Kenya will be located in Mombasa, Kenya in Muthaiga market along Ukunda
Hamisi road address 345-00100. This will be in a rental premises in the plaza, first & floor, our
rental agreement will include:

a) The term of the tenancy and how it ends In the case it will be a month to month rental.
b) The rent and security deposit whereby The business owner will be paying Kshs 30,000
and 8,000 for security per month.
c) What is included in the rental which will be utilities i.e. electricity, water and parking
services

29
Drawing of the proposed ground plan of our business premises

BALCONY WASHROOM

WAITING SPACE
DESK

4.2 Production Strategy

Tourism being a service industry. Our requirements to operate will vary with demand In the case
when the business have clients

Refueling cars when we have errands/going on tours: preparing for itinerary and liaison with
service providers

4.2.2 Direct And Indirect Production Workers Required.

In the business The business owner will be needing three direct workers including ourself The
business owner will be the manager and with two tour leaders.

As a manager, The business owner will be in charge of our staff, coaching and developing them,
dealing with the problems we face as a company and The business owner will be making the
decisions with our in-depth understanding of management. The tour leaders will be in charge
of the tours in terms of preparation and
30
overseeing the whole activity to our client’s satisfaction. Their levels of skills will be top notch
in terms of positivity enthusiasm and cheerfulness.

Basing on the fact that the success or failure of our business depends on the services, The owner
to have the best customers service skills to satisfy the ever increasing customer expectations
therefore our staff will be qualified for the activity

The total cost for operation process for a particular you should be maximum Kes. 20,000 – 2,500
inclusive of itinerates and liaison with service providers for a week – 5 days

4.3 Production/Operation Process

Our operation process will be as follows

 After getting a booking/request from a client, The business owner will begin with the
paperwork in terms of registration
 Immediately after completing the process and submission of application online/physical,
a system generated acknowledgement will be sent to the registered phone number.
 A down payment will then be paid to be sure to start off the procedure
 After that The business owner will be giving the travel information depending on the type of
tour
 The business owner will also be having transportation services incase our client requires
me to be in charge of their arrival and departure procedures
 The next step is to prepare itneries – plan the tour
 The business owner will also have to liaison with service providers that will be involved in
the respective tour
i.e. game parks hotels and in this case get tickets etc.
 On arrival of our clients The business owner will be receiving the payment in completion
and the tour begins since I had prepared for it. We intend to make each travel and holiday
with us great, stress- free and memorable by offering that extra service and affordable
travel and tour solutions to both local and international business and leisure travelers
worldwide. Challenges that I may have to face In the operation process would be: traffic
and accidents.

To overcome this The business owner will be employing qualified members, experienced drivers
with drivers’ licenses and pay for insurances, for the safety of our property and the lives of both
31
our staff and clients.
4.4 Government Regulations
This refers to the laws that control the way that our business can operate

 The government requires our field members to be qualified for the activity or have at least 5
years’ experience
 Our staff should also be qualified in First Aid, CPR or equivalent body certificate course
conducted by the adventure tour operator Association of Kenya.
 The government also requires that I clearly indicate our specialization of activities The
business owner will be pursuing as a business In the case a tour operator business. With this I
can then get validity of recognition whereby I apply for recognition under experienced
category of tourism service providers
 Our company must also sign an undertaking for adherence to sustainable ecological practice
and protection of environment in keeping with guidelines from eco-tourism safety and
security guidelines from eco-tourism safety and security guidelines of the ministry of tourism
 The government equally advocates for the employees’ rights in terms of salaries whereby the
minimum wage in Kenya is 13572 KES/month as of 2021
 Eregulations Kenya also requires for me to apply for a tour operator’s license: pay for it an
estimated cost of KES 9,000, submit the payment of receipt, get an inspection of our
premises and then obtaIn the license.
 The business owner will also be getting insurance cover. Vehicle inspection report, work
permit, professional certificate and the lease agreement/rental agreement.

32
 CHAPTER FIVE

5.0. Financial Plan

5.1 Pre-Operational Cost

ITEMS AMOUNT IN (KSH)
Toyota Land Cruiser 2,400,000
Computer
50,000

Office furniture
30,000

Water dispenser
15,000

Tent + Sleeping
50,000
bags
Internet connectivity
10,000

Power supply
30,000
deposit
Advertisements
20,000

Insurances
25,000

Water Supply
10,000

Permits and licenses

30,000

Rental deposit
60,000

Miscellaneous
30,000
TOTAL
2,760,000

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5.2. Working Capital
CURRENT ASSETS AMOUNTS IN KSH
Cash at hand 100,000

Cash in Bank 500,000

TOTAL 600,000

CURRENT LIABILITIES AMOUNT IN KSH

Tax 50,000
Working capital = Working (Assets – liabilities)

600,000 – 50,000 = Ksh 550,000

34
 5.3. Cash Flow Statement for the Year.
Item Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash Inflows Debtors 490000 496000 450000 480000 490000 500000 490000 480000 490000 450000 400000 744000
60,000 120000 30000 150,000 1000
TOTAL INFLOWS 5,960,000/=
Cash Outflows Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Salaries 75000 75000 75000 75000 75000 75000 75000 75000 75000 75000 75000 75000
Electricity 8000 8100 8000 8000 8200 8100 8400 8000 11600 11600 9100 9000
Purchases 25000 27000 27500 29000 27500 28000 29000 25000 27500 27500 29000 54730
Advertising 5000 5000 6000 3000 5000 8000 3000 1000 4500 4500 4500 4500
Maintenance 5000 8000 9000 18000 10000 9000 8000 13000 10000 5000 12500 12500
Water 4500 4500 4500 7000 4500 3000 8000 5000 3000 6000 5000 5000
Rent 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
Loan repayment 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000
Licenses 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000
Wi-Fi 2830 2830 2830 2830 2830 2830 2830 2830 2830 2830 2830 2870
TOTAL 2,580,000/=

25
5.4. Projected Income Statement.
Trading profit and loss account for the year ending on December 31st 2030
Sales = Ksh 5960000
Expenses Amount (Ksh)
Salaries 9000000
Water 60000
Electricity 106000
Refueling 330000
Advertising 60000
Maintenance 120000
Insurance 10000
Rent 180000
Licenses 120000
Wi-Fi 34000
Loan repayment 600000
Total 2580000/=

NET.
PROFIT = SALE OF THE YEAR-EXPENSES
=5960, 000 – 2580,000
=KSH 3380, 000/=

26
5.5 Proforma Balance Sheet
For The Year Ending On 31st December 2023

FIXED ASSETS AMOUNTS IN KSH

Vehicles 2,400,000
Machinery 75,000
Furniture 30,000
TOTAL 2,505,000

CURRENT ASSETS AMOUNTS IN KSH

Cash at hand 100,000
Cash in Bank 500,000
TOTAL 600,000

TOTAL (FIXED + CURRENT) = 3,105,000

FIXED ASSETS AMOUNTS IN KSH

Capital 2,760,000
Bank loan 1,000,000
TOTAL 3,760,000

FIXED ASSETS AMOUNTS IN KSH

Tax 50,000

TOTAL CAPITAL + CURRENT (LIABILITIES) = Ksh 3,810,000

27
5.6 Break Even Analysis
i. Total Contribution Margin

Sales of the Whole Year – Variable Cost

Sales of the Year = Ksh 5,960,000

VARIABLE COSTS AMOUNTS IN KSH

Electricity 106,000
Water 60,000
Refueling 330,000
Maintenance 120,000
advertising 60,000
TOTAL 676,000
DIFFERENCE = 5,960,000 – 676,000 THUS CONTRIBUTION MARGIN = Ksh 5,284,000

PERCENTAGE CONTRIBUTION MARGIN

𝑇𝑂𝑇𝐴𝐿
𝑆𝐴𝐿𝐸𝑆 𝑋 100

5284000
𝑋 100
5960000

= 88.66%

28
Break Even Level of Sales

Fixed Costs = Total Salaries = Loan Payment Rent + Insurance

Salaries 900,000
Loan repayment 600,000
Rent 180,000
Insurance + Permits 70,000
WIFI 34,000
TOTAL 1,784,000

𝐹𝐼𝑋𝐸𝐷 𝐶𝑂𝑆𝑇𝑆
𝐶𝑂𝑁𝑇𝑅𝐼𝐵𝑈𝑇𝐼𝑂𝑁 𝑋 100
𝑀𝐴𝑅𝐺𝐼𝑁

1,784,000
5,284,000 𝑋 100

= 33.76%

29
5.7 Probability Ratios
GROSS PROFIT TO SALES PERCENTAGE

𝐺𝑟𝑜𝑠𝑠 5,284,000
𝑆𝑎𝑙𝑒𝑠 × 100 5,284,000 × 100

= 100%

Net Profit to Sales Percentage

𝑁𝑒𝑡
𝑆𝑎𝑙𝑒𝑠 3380,000
× 100 5,284,000 × 100

= 63.97

Net Profit to Total Assets

𝑁𝑒𝑡
𝑇.𝐴𝑠𝑠𝑒𝑡𝑠 3380,000
× 100 3105,000 × 100

= 108.86%

Return on Investment

𝑁𝐸𝑇 𝑃𝑅𝑂𝐹𝐼𝑇 3380000

𝑇𝑂𝑇𝐴𝐿
× 100 × 100
3360000
𝐼𝑁𝑉𝐸𝑆𝑇𝑀𝐸𝑁𝑇

= 100.59%

Net Profit to Owners Equity

𝑁𝐸𝑇
𝑂𝑊𝑁𝐸𝑅𝑆 × 100
3380,000 × 100
2760000000

= 122.46%

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5.8 Desired Finance
S/NO ITEM AMOUNT
Preoperational Cost 2,760,000
Working Capital 550,000
TOTAL 3,310,000

5.9 Proposed Capitalization

S/NO ITEM AMOUNT
Owner’s Contribution 1,760
Bank loan
Family & Friends
TOTAL 3,310,000

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