MORNING STAR BAKERY

P.O. BOX 001

ELDORET TOWN

TITLE OF DOCUMENT: BUSINESS PLAN

PRESENTED BY: CHEPKEMOI AGNES

INDEX NO. 265341046

COURSE CODE: 1402

PAPER NO.: 1

ADM: 7524

SUPERVISOR: HOANGA

PRESENTED TO: THE KENYA NATIONAL

EXAMINATION COUNCIL IN
PARTIAL FULFILLMENT FOR THE
AWARD IN FOOD AND BEVERAGE
IN CERTIFICATE

DATE OF PRESENTATION: JUNE/JULY 2017

CENTRE: NEHEMA INSTITUTE OF SCIENCE

AND TECHNOLGY
 DECLARATION

I hereby declare that this is my own original work. It has not been presented to any examining
body before in partial fulfillment for requirement of the award of certificate, diploma or
otherwise. The work has been presented for examination purposes.

Name of candidate:

Index No.:

Signature: ………………………….

Date:

This project has been submitted to the Kenya National Examination Council with the
approval of my supervisor.

Name of Supervisor:

Signature: ……………………

Date:

i
ACKNOWLEDGEMENT

I would like to express my gratitude to MR. Hoanga who is my lecturer for taking

time to guide, direct and correct my work.

I also like to express my heartfelt gratitude to my beloved parents for their moral

and financial support.

Special thanks also t my brothers and sisters for their encouragement and support

and fan for their exercise.

ii
 CONTENTS

DECLARATION…………………………………………………………………………I

ACKNOWLAGEMENT ………………………………………………………………..ii

TABLE OF CONTENTS………………………………………………………………..iii

CHAPTER ONE

1.1 BUSINESS DESCRIPTION………………………………………………………

1.2 NAME AND ADRESS OF THE BUSINESS……………………………………

1.3 FORM OF OWNERSHIP…………………………………………………………

1.4 TYPE OF PRODUCTS……………………………………………………………

1.5 INDUSTRY ………………………………………………………………………..

1.6 TECHNOLOGY…………………………………………………………………...

1.7 BUSINESS LOCATION…………………………………………………………..

1.8 GOALS OF THE BUSINESS……………………………………………………..

1.9 ENTRY AND GROWTH STRATEGY. …………………………………………

CHAPTER TWO

2.0 MARKET PLAN………………………………………………………………………

2.1 POTENTIAL CUTOMERS. ………………………………………………………….

2.2 MARKET SHARE…………………………………………………………………….

2.3 COMPETION ………………………………………………………………………..

2.4 ADVETISMENT AND PROMOTION STRATEGY. ……………………………...

2.5 DISTRIBUTION STRATEGY. ……………………………………………………….

2.6 PRICING STRATEGY. ……………………………………………………………….

2.7 SALES TACTICS……………………………………………………………………...

CHAPTER THREE

3.0 ORGANIZATIONAL PLAN………………………………………………………...

3.1 ORGANIZATION…………………………………………………………………….

iii
3.2 ORGANIZATION STRUCTURE……………………………………………………

3.3 RECRUITMENT, TRAINING AND PROMOTION OF PERSSONEL………….

3.4 RENUMERATION AND INCENTIVES. …………………………………………

3.5 LICENCE, PERMITS AND BY-LAWS……………………………………………...

CHAPTER FOUR

4.0 OPERATIONAL AND PRODUCTION PLAN…………………………………….

4.1 PRODUCTION STRATEGY…………………………………………………………

4.2 RESTOCKING………………………………………………………………………

CHAPTER FIVE

5.0 FINANCIAL PLAN…………………………………………………………………..

5.1 PRE-OPERATIONAL COST. ……………………………………………………….

5.2 ESTIMATION OF WORKING CAPITAL………………………………………….

5.3 DESIRED FINANCING……………………………………………………………...

5.4 PROJECTED CAPITALIZATION …………………………………………………..

5.5 PROJECTED CASH FLOW………………………………………………………….

iv
CHAPTER ONE

1.0 EXECUTIVE SUMMARY

1.1 BUSINESS DESCRIPTION
The proposed business will be named MORNING STAR BAKERY. It will
be located ELDORET. The business will be a bakery specializing in
making a variety of baked food products. The business will be a sole proprietorship
sponsored by Friends ,Relatives and a bank loan raising the required 300,000/=. The
business will be strategically located so as to make it easy for the esteemed customers
to access it. The management of resources will be excellent and this coupled with up
to date production, sales and marketing strategies will propel it to decreed in success.

1.2 MARKETING PLAN

MORNING STAR BAKERY. envisages being the leading bakery in Eldoret with
over 65% market share by the fifth year of operation.

1.3 MANAGEMENT AND ORGANIZATION PLAN

MORNING STAR BAKERY. will apply equal opportunity in its human resource
management and only qualified and experienced persons will be engaged. The
business will have a single and clearly defined chain of authority. The top-level
management at commencement of operations will comprise of the manager,
supervisor and finance officer. Once hired, all staff will be given introduction training
to enable them set well in their positions. Staffs who show excellence in their work
will be given extra incentives. The staff will however be given good remuneration as
the manager intends to develop a sound reward policy that will endeavor to create
integration between the aims of the business and the expectation of its staff.
MORNING STAR BAKERY. will as a principle comply and adhere to all the
mandatory legal prerequisites of business operations. The business will require
support services so as to operate efficiently. These services will include banking,
security management consultancy and others

5
1.4 FINANCIAL PLAN.
MORNING STAR BAKERY. plans to start up the venture and operate on a sound
financial base for sustainability and profitability.
For this purpose the proprietor intends to acquire money from her own savings, family
and friends as well as a loan from Barclays Bank will be given at a fixed interest rate
of 18% per annum payable over a period of 10 years. The breakdown of raised capital
is as follows: -

Source Amount (Kshs)

Proprietors own Savings 100,000
Family & friends contribution 100,000
Bank Loan 100,000
Total 300,000

The money acquired from family and friends will friends will be paid in lump sum
without interest at the end of the fourth year of operation when the business is
expected to have stabilized well.
Pre-operational costs of the business will virtually constitute more than 80% of the
capital but the proprietor is confident that handsome sales will be realized immediately
the business starts operating. The business is expected to break-even at Kshs.
16,334,763.

1.5 POTENTIAL RISKS

MORNING STAR BAKERY. will be faced with a number of risks and challenges
common to all businesses. These will include: -
a) Staffing problems, which may arise as a result of inability to get the right caliber
of staff or loss of staff acquired to other operators. There is also the threat of
Acquired Immune Syndrome (AIDS), which is a concern to everybody. The
proprietor will only hope that no staff will be affected since the medical and other
related costs are beyond what many firms can cope with.
b) The ailing economy makes it difficult for many households to afford bread and
other products the firm intends to produce for sale. The proprietor prays that the
economy grows generally so as to enable consumers to have the purchasing power.

6
c) New entrants into the market will squeeze out the firm especially if the new
businesses a have more firm financial base. The proprietor will however plan
ahead and bring in a lot of creativity to out-do the competitors.

7
 CHAPTER TWO

2.0. BUSINESS DESCRIPTION

A detailed description of the intended business venture is of great importance to the
entrepreneur as it guides the investor in the process of setting up the business. The
purpose of this chapter is to give a detailed description of the proposed business so as
to enable the interested parties have sufficient information to enable them make
important decisions concerning the investment.

2.1. MISSION STATEMENT.

The mission statement of the proposed business will be:
“MORNING STAR BAKERY. anticipates to be the number one bakery shop
engaged in the production of a wide variety of baked products that will bring
satisfaction and contentment to the customer on a continuous basis”
MORNING STAR BAKERY. will have an aim of supporting the development of an
efficient and equitable nutritive system by providing affordable, accessible and
sustainable range of products for all groups of customers and in all seasons.

2.2 BUSINESS NAME

The proposed name for the business will be MORNING STAR BAKERY. The
name is significant as it associates the business with the new brighter future. The
bakery is intended to be a source of prestigious products and services in that
creativity as well as innovation will be put into good use. This augurs well with the
many occasions that will require morning star bakery ’s products especially
weddings and birthdays.

2.3 BUSINESS LOCATION AND ADDRESS

Morning star bakery will be strategically located at Hawaii center in Eldoret Town.
Reasons leading to the choice of this location for the business are many but the most
important are: -
(i) The infrastructure supports the establishment of this kind of business. There is
electricity, clean water and enough supportive services including banks as well
as medical facilities. The roads are good and there is direct link to major towns
in the region.

8
 (ii) Acquisition of raw materials will be easy since Eldoret is directly linked to the
major wheat growing centers in Rift Valley. Wheat can be delivered by lorries
or railway line, which is close by.

(iii) The site has enough space for future expansion of the business

The business will operate from the following address: -

MORNING STAR BAKERY
P.O. BOX 001
ELDORET.
TEL: 0700 121212

2.4 BUSINESS OWNERSHIP

Morning star bakery will be a sole proprietorship business owned and managed by
AGNES CHEPKEMOI. Janet is an industrious lady whose hobby is baking. She is a
STUDENT at Nehema Institute of Science and Technology. Her favorite subject is
baking and she intends to combine her skill and talent into a prestigious baking
venture.

2.4.1 CAPITAL REQUIREMENTS

The intended business venture will require capital for it to start off and run
effectively. The proprietor will raise part of the money from her own savings with
some assistance coming from friends and relatives. The remaining amount will be
acquired from Barclays Bank as an unsecured loan payable over a period of 10 years
at an interest rate of 18% per annum. The bank will give a generous grace period of 4
months. Summary of capital required is as follows: -
Source Amount (Kshs)
Proprietors own Savings 100,000
Family & friends contribution 100,000
Bank Loan 100,000
Total 300,000

9
2.5 PRODUCTS AND SERVICES
2.5.1 PRODUCTS
Morning star bakery will manufacture a wide variety of products, which will
include: -
 Ordinary bread in both white and brown variety. The bread may be sliced,
enriched and in various weights;
 Wedding cakes, prepared especially as per customer requirements;
 Block cakes;
 Biscuits;
 Variety of burns;
 Birthday cakes, prepared especially as per customer requirements;
 Pies (meat, chicken, fish);
 Peanut cakes; and
 Banana cakes.
The products will be baked under clean and hygienic conditions. Government
regulations will be compiled with including date of expiry so as to enable customers
know at a glance that the items are wholesome. The business will continuously offer
to customers’ products that are fresh and tasty.

2.5 JUSTIFICATION OF OPPORTUNITY.

A survey carried out by the proprietor of Morning star bakery revealed that while
ordinary bread is in sufficient supply to cope with demand, other products especially
cakes are not being made in varieties that satisfy the market. Indeed functional cake
making is almost non-existent.

2.8.0 GOALS AND OBJECTIVES OF THE BUSINESS.

Goals and objectives give the owner targets to aim for and provide a basis for
evaluating company performance. Without goals and objectives, Morning star
bakery will not know where the bakery will be going or how it will be performing.

2.8.1 GOALS.
The main goal for Morning star bakery will be to be the best bakery engaged in the
manufacture of a wide variety of baked products within the region. The business will

10
 have along term goal of turning the bakery into a multimillion baking industry at
maturity.

3.8.2 OBJECTIVES.
The main objective of Morning star bakery will be to source for high quality
resources as a pre-requisite for high quality products. The business will strive to
satisfy virtually every category of customers on a continuous basis. In addition,
Morning star bakery will target having good return on the investment by ensuring
that production and sales are well coordinated.

2.9.0 ENTRY AND GROWTH STRATEGY

Morning star bakery will be a newly starting business in a market that has well
established bakeries existing. For the business to succeed therefore, it will be
important for it to do well right from the beginning.

2.9.2 GROWTH STRATEGY

Morning star bakery will spend the first two years establishing it at the premises
where it will start operating from. The space and equipment will sufficiently cope
with demands expected.
Outlets of Morning star bakery products will be through supermarkets and direct
sales from the business premise.
Distributors will be contracted to distribute products at the initial stages. However,
the bakery intends to gradually build up its own fleet of vehicles to distribute
products to the potential customers as the business grows.
In the first five years of operation, most of the expansions will be at the initial
business premise. This will include purchase of additional baking oven and dough
mixer.

11
 CHAPTER THREE

3.0 MARKETING PLAN

Marketing will provide the match between Morning star bakery’s human, financial
and physical resources and the wants of the customers .She marketing function will be
responsible for bringing the right goods and cervices to the customers in the most
efficient and profitable way. The marketing objectives will be: -

- To consider the needs of the customers and continuously produce products that
satisfies the needs.
- To use the competitions as a tool to enable Morning star bakery get better
equipped and set to emerge as the best bakery in the entire region.
- To manufacture and distribute at a cost and price that is reasonable and acceptable
so as to be able to make good profits.
3.1 POTENTIAL CUSTOMERS
Morning star bakery will depend on developing Millennium a strong market `
position. This will be very important especially at the commencement of operations
when the business name and logo will be subjected to a test that will make or break the
business.
Morning star bakery targets a wide range of customers within the area earmarked as
the market. The customers will include: -
(i) Supermarkets
Morning star bakery anticipates selling its products through supermarkets in
Kisumu city and the nearby towns; Supermarkets are quite common places where
many customers do their shopping. The bakery will have its products displayed
prominently so as to capture the eyes of the shoppers. Identified Supermarkets in
Eldoret nclude:
 Nakumatt Supermarket
 Ukwala Supermarket
 Naivas Supermarket
 Raiya Supermarket, and
 Tuskies Supermarket.

12
 Other smaller supermarkets exist within Eldoret Town and the surrounding towns.
These will altogether add up as potential distribution points for the bakery.

(ii) Churches
Churches within Eldoret as well as the Rift Valley region are many. The research
carried by the proprietor of Morning star bakery in Eldoret alone indicated that
there were 150 Churches that are well established in the area. These Churches form
a major outlet of Morning star bakery products in the form of wedding cakes and
anniversary cakes for those already wedded.
The Churches also have other functions such as conferences, seminars, youth camps,
children camps, women group meetings and challenges. These functions will
avenues through which Morning star bakery will sell items like bread, queen cakes,
ordinary cakes and other baked products.
In addition to wedding cakes, Morning star bakery will be ready to do the
decoration and setting the table for the functions. Cake stands; water cake fountain
and flowers to match the table and bridal party will be available at affordable cost.

(iii) Hotels and Restaurants

Eldoret is currently one of the fastest growing urban centers in terms of population
and related developments. This has led to the establishment of hotels and busy
restaurants within the city. The hotels and restaurants provide good prospects for
millenniums prestige bakery sales of baked products that include bread, assorted
cakes and cookies. Consumption will rise considerably when many functions are
talking places within the city as well as during festive periods when many families go
for treats in hotels and restaurants.

(iv) Small business, Kiosks and Shops.

Eldooret Town and the surrounding towns are rich in small business, kiosks and
shops through which Morning star bakery will sell products. The majority of these
are around the bus parks and the estate. Travelers as well as residents will have an
opportunity to enjoy high quality baked items from the bakery.
Some of the centers around the city, which will be targeted, include
Chepkoilel,Kapsoya,Langas,Mwanzo and Huruma.
The bakery will also directly serve nearby towns like Iten,Tambach,
Schools Colleges and other Institutions

13
 Most boarding institutions do require baked products especially bread on a
continuous basis or during functions. Targeted institutions include Eldoret
University, RVTTI, Eldoret Polytechnic Moi Girls High School etc

3.2 COMPETITION
The most important managerial task for Morning star bakery will be that of
Understanding the needs and wants of customers in the market and adapting to the
operations of the business to deliver the right goods and services effectively and
efficiently than the competitors.

The potential competitors of Morning star bakery will be: -

- United Millers
- Pauls Bakery
- Sahara Bakers
- Supa loaf
Although most of the competitors have been in the market for a long period, Millennium
Prestige Bakery tends to beat them through coming up with high quality products of a wide
variety. The Bakery will especially perform quite well in the area of special functional cakes
as most of the other Bakeries are engaged in the making of bread.

3.4 PRICING STRATEGY

Price is a value at which a commodity is sold. It can have side effects on the products
since a cross-section of potential customers still believe that low prices are best. They
hardly think of quality or the content including weight. Morning star bakery intends
to start off by offering average market prices but with high quality. Most of the
intended customers will buy the Bakery’s products mainly due to consistency in
0offering quality products. When setting up prices for the products, the proprietor will
put in consideration of the following: -
i) Price set by competitors for similar products for their businesses
ii) Cost of raw materials
iii) Cost of production or changing raw materials into baked products and
iv) Amount of profit targeted

14
 Functional cakes will priced flexibly depending on expected long-term effects. The
bakery will therefore have introductory prices at the start of operations gradually
revising them upwards. The cakes may also vary in prices as per the decorations
required and the content as well as whether the customer desires that the cake be
delivered at the venue. Further adjustments on the price may be based on the
customer’s need for a cake stand or table decoration.

3.5.0 ADVERTISING AND PROMOTION STRATEGY

Morning star bakery will have an advertising and promotion strategy as a basis of
guarantee the acquisition of a good bank of customers.

3.5.1 ADVERTISING
Advertising is any sales presentation that is non-personal in nature and design to
stimulate responses by encouraging customers to purchase a particular product. It
further seeks to build name recognition among potential customers and the general
public.
Through well thought out advertising, Morning star bakery will create good will by
keeping the firm’s name in the public memory so that the customers will recall the
bakery’s name when they decide to purchase baked products. To achieve this,
Morning star bakery will use a number of methods, which will include: -
i) Signboard
The signboard will announce to potential the existence of the bakery. The
signboards will be set up at strategic points at the center of town and Hawaii.

ii) Decoration of Bakery Premises

The Morning star bakery will be well painted using the Bakery’s official
colours. The business name and logo will be well presented so as to be easily
seen and read from a far off.

iii) Posters and Bill boards

Morning star bakery will make use of posters to advertise the business. This
will be very important especially at the starting up stage of the business. When
there will be heavy campaigns to bring potential customers to the awareness of
the existence of Morning star bakery

15
iv) Newspapers and Magazines
Traditionally, many businesses use newspapers as the media to reach their
customers. Morning star bakery intends to use the local dailies such as
Nation and the Standard to advertise. Advertising will be done especially to
create awareness to the potential customer that read newspaper. In addition
magazines such as Eve, Woman’s Mirror, Parents and True love will be used
for advertising. The proprietor is aware of the fact that women play a major
role in making decisions on what is required in the form of baked items for
domestic use. The magazines targeted have women, as the main readers for
them hence will be easily reached.

v) Radio and Television

There are a number of popular FM radio stations that will play a major role in
advertising of Morning star bakery products. These include: -
 Chamgee FM which covers the Uasin Gishu region and beyond. It is rich
in music and other programs.
 Kiss 100, which is quite popular throughout the country.
 Nation and Citizen, which are also having a national coverage.
 KBC especially the western broadcasting station based in Eldoret
 Sayare broadcasting from Eldoret and others

Television stations targeted includeCMTV,KTN, Nation and Sayare. Most of

the advertising will be done during prime time so as to reach as many potential
customers as possible. These accompanied with pictured posters at the
premises will create an attractive site to the customers.

vi) There will be a well designed glass display counter at the Bakery premise as
well as spacious shelve where some of the items will be displayed and sold.

vii) The proprietor will also advertise her products in Church functions. This will
mainly cover wedding cakes and anniversary cakes.
In addition to advertising, maintenance of high quality standards will cause
customers to choose Morning star bakery.

16
3.5.2 PROMOTION
Morning star bakery will engage in promotions intended to improve the quality of
purchases of baked products from the firm. The promotions will include: -

i) Temporary Reduction of Prices

This will be done especially over festive period like Christmas and Easter. The
huge sales anticipated would cater for the price reduction.

3.7 DISTRIBUTION STRATEGY.

Distribution strategy entails how the potential customers of Morning star bakery will
get the wide range of products to be baked by the business. At the commencement of
operations, the business will mainly sell from the business premise. Business people
who have the capacity of buying in bulk and then distribute in the many centers
around Eldoret will be encouraged through the offer of products at wholesale price.
This will be easy, as the high quality of products will be automatically create a market.
Institutional customer, supermarkets, hotels and such like businesses will be supplied
with their daily requirements of baked products by the bakery. Initially hired vehicles
will be used and later the bakery will acquire its own fleet of distributing vehicles.
Functional cakes, especially wedding cakes will be delivered at the respective venues
upon request. Morning star bakery will in addition offer additional services of
setting up the cake and tale at the venue at an extra minimal cost.

17
 CHAPTER FOUR

4.0 ORGANIZATION AND MANAGEMENT PLAN.

The Organizational and management plan will have a purpose of providing a unified
mechanism in which authority is centralized. This will in turn make it possible for
Morning star bakery to implement its policies through affective planning,
organization, staffing, directing and controlling the business activities. A well laid out
organizational structure will be an asset to the enterprise as it is the executives
dedication-making behaviours channel. The manager will assign activities to
appropriate staff and make provision for authority, delegation and co-ordination such
that there is no conflict Morning star bakery will have the following objectives to
guide its Organization and management
(i) To maintain the functions of the enterprises by effectively to coordinating the
human side of enterprise.
(ii) To recruit and utilize human resource efficiently as well as effectively in order
to realize success.
(iii) To reward staff appropriately in order to cultivate their interest towards the
business and boast their motivation.
4.2.0 KEY PERSONNEL
The management team will comprise of the Manager, Supervisor, Chief baker, and
Accounts Clerk /Cashier. The Management team will be responsible for steering the
enterprise to success through sound management practices.

4.2.1 SUPERVISOR
The supervisor will be second in command after the manager and will be the one in
control in the absence of the manager. The position calls for a well-trained person
both in management and the field of baking. A diploma in management related
displines or higher in addition to a diploma in banking will be ideal. An experience in
baking industry of two years and above will be a necessary requirement.
Duties and responsibilities
 Will be the one in charge in the absence of the manager
 Supervises all staff under him /her
 Assists the manager in formulating policies of the business

18
  Ensures that customer relations are highly maintained.
 The salary will be Kshs. 20,000/- per month.

4.2.2 CHIEF BAKER

The chief Baker will be charged with the following responsibilities: -
 Ensuring that high standards of quality production of all products is achieved
 Organizing and coordinating all baking schedules and activities
 Ensuring that general and specific hygiene standards in all aspects of product
production i.e. cleanliness, safe food handling, equipment condition including
enforcement of employee hygiene and health, stock taking and monitoring raw
material supplies and other bakery supplies.
 Supervising the staff under her /him.

The chief Baker will be expected to have the following qualifications

 A diploma in food production from Utalii College or other recognized institution
 Experience of four years and above in a busy bakery
 Preferably aged between 25-40 years

4.2.3 ACCOUNTS OFFICER/CASHIER

The ideal person for this position will be expected to have the following academic and
professional qualifications: -
 KATC final or CPA II as minimum
 Computer literate
 Aged between 25-40years
 Five years experience in a busy accounting department coupled with at least two
years auditing experience.
 He /she must demonstrate proven honesty and ability to work independently.

19
 The accounts clerk will be charged with the following responsibility of: -
 Maintaining and updating all financial records of the business.
 Responsible for day-to-day petty cash control as authorized by the manager
 Advising the manager on financial issues as well as matters concerning the
business.

4.3.0 OTHER PERSONNEL

In addition to the strong management team, Morning star bakery will require other
personnel in order to meet the business objective. This will include both middle and
low level cadres of staff as follow: -

4.3.1 PASTRY CHEF

Working under the chief baker, the pastry chef will have the following
responsibilities:
 Assisting the chief baker in preparation, baking and packaging the range of
products
 Ensures that all materials required are available and also that the materials are
used well.
 Instructing staff under him on what to do.

The ideal person for this post will be expected to have the following qualifications: -
 Diploma in food production or equivalent
 Four years experience in a busy bakery
 Aged between 20-35 years

4.3.2 SECRETARY /RECEPTIONIST

The duties and responsibilities of the secretary /receptionist at Morning star bakery
will include the following: -
 Handling incoming and outgoing correspondence
 In charge of receiving visitors and directing them to the right offices for attention
 Typing work fro the business
 Keeping files and other important documents for the business.

20
 The secretary will have the following qualifications: -
 Posses O-level certificate of education
 Have a good command of English and Kiswahili languages
 Diploma in Secretarial studies from a recognized institution.
 Three years experience in a busy office
 Preferable a lady aged 25-35 years
 Computer literate and especially conversant with Ms Word 2000 or Ms XP 2000
 Must have pleasant personality.

4.3.3 SALESMEN /LADIES

Morning star bakery will employ sales staff who will be answerable to the accounts
officer. They will be carrying out the following duties and responsibilities
 In liaison with the manager, they will be selling the business products both at the
bakery premises and outside
 Making deliveries to the various customers as ordered
 Aggressively promote and expand the market of the business products
 Keeping daily records of their sales

QUALIFICATIONS
 Diploma in sales and marketing from a recognized institution
 Three to four years experience in sales and marketing and should be conversant
with trends of selling fast moving consumer goods.
 Aged between 25-35 years and with a clean driving license.

4.4.0 RECRUITMENT, TRAINING AND PROMOTION

Morning star bakery will be faced with the responsibility of planning its manpower
well with a view of maintaining as well as improving the enterprise’s ability to
achieve corporate objectives. The proprietor will develop strategies, which will be
designed to increase the existing and future contribution of manpower.
The acquisition of staff will be based on a forecast of the future in terms of
technology, economic situation, social environment and the political environment.
The enterprise will strive to have the right number of staff recruited at each level in the
hierarchy.

21
4.4.1 RECRUITMENT
At the start of operations Morning star bakery will acquire its senior staff through
head hunting. The proprietor will identify hard working persons in existing businesses
and lure them by offering more attractive terms than they will be having at the time.
The rest of the staff will be acquired through several ways, which will include: -
 Use of private employment bureau
 Employee recommendations
 Direct from polytechnics and related institutions
 Advertisement in the local papers

In most of the cases, the prospective employee will be required to make a formal
application after which short-listing will be done and interviews conducted. Medical
examination will be essential and appointments will only be made upon successful
fulfillment of all requirements.
Upon offer of appointment formally, the prospective employee will complete
employment forms. The employee will complete employment forms. The employees
will then undergo a probation period upon whose completion the employee becomes a
permanent employee.
All government rules and regulations will be adhered with so as to avoid any
confrontations later. The proprietor will give equal opportunities to potential
employees without any discrimination in accordance with the existing acts.

4.4.2 TRAINING
All new employees will be inducted into the enterprise. The manager and supervisor
will have the responsibility of ensuring that all new staff are well introduced to the
enterprise. As for formal training, most of the staff will be employed having acquired
the necessary technical qualification for the post. However, afterwards, they may
require to be trained especially when promoted to higher levels. Morning star bakery
will lay emphasis on quality production rather than technical qualification. The
training will basically be the mastering of machinery and equipment.
4.4.3 PROMOTION
Promotion will be necessitated by the business itself as it grows and expands. It will
be the prerogative of the manager to promote. A standardized performance appraisal

22
 will be carried out before any promotion at any level. The promotion criteria will be
communicated to all employees at all levels and will be entirely on merit, unbiased
and non-discriminative. Morning star bakery will identify those employees who
perform well and reward them through promotion to senior levels.

4.6 LEGAL REQUIREMENT

Morning star bakery will as a principle comply and adhere to all the mandatory legal
prerequisites of business operations in Kenya.
Since the business will be nearly starting, it will have to obtain all necessary legal
documents in order to start operating. All these documents will be a necessary
procedure so as to avoid any other interruptions from the authorities in future,
violations of set laws and regulations may lead to prosecution, fines or even
imprisonment and possible closure of the business. The requirements will include the
following: -
AREA /DOCUMENT COST
Business registration certificate /permit 14,000
PIN 2,000
VAT 2,000
Health Certificate 1,000
Kenya Bureau of Standards Registration 5,000
Staff hygiene Certificates 10,000

4.7 SUPPORT SERVICES

Morning star bakery will not succeed in its operations without external support.
This will be as follows: -
i) Banking Services
The Barclays Bank will offer the business banking services. The proprietor
will also acquire the Bakery plant through the arrangement of the bank.
Contact: Barclays bank Eldoret Branch
Box 52163
ELDORET.
ii) Security Services
The business will secure security services from KK SecurityEldoret Branch.
This will ensure that the business is well guarded especially during the night

23
 And times when the business is not open over public holidays

iii) Insurance Services

The business will offer Life Insurance for staff in management this will act as a
motivating factor to give them job security and Fire Insurance for the Bakery
incase of fire breakouts.

iv) Transportation Service

This will help serve the staff working on night shift. They will be dropped at
their doorsteps to ensure safety.
v) Legal advice
This will be necessary especially since at times matters may arise that require
representation in court or when drawing legal documents.
Contact: LIMO &Co Advocates,
P.O.Box 9874,
ELDORET.

24
 CHAPTER FIVE

5.0 PRODUCTION AND OPERATIONAL PLAN

Morning star bakery will heavily anchor its operations on its capability to
Produce and market high quality baked products. Since the proprietor intends to hire
qualified and experienced employees, she will couple this with the right equipment
and materials in order to get the desired. The business will base its production and
operational section on the following objectives: -
i) To acquire high quality raw materials at the fairest market rates and converts
the same into high quality products.
ii) To uphold high standards of hygienic and safety at all stages of production.

5.1 PRODUCTION STRATEGY

Morning star bakery will have well-qualified and experienced staff under the
proprietor who is a qualified and experienced staff under the proprietor who is a
qualified and experienced baker herself. The production will adhere to Kenya Bureau
of standards requirements as well as any additional controls established by the
government. Raw materials will be acquired from reputable supplies and frequently
tested for wholesomeness.
The cakes section will utilize a lot of creativity in order to come up with admirable
designs befitting the intended occasions. A variety of permitted food colour, flavour
enhances, stabilizers, processing aids, preservatives and antioxidants will be used on
products with a view of achieving certain effects. All products produced will be in
line with customer.
MATERIAL REQUIREMENT
Morning star bakery intends to engage reliable supplier for the purpose of ensuring
that the bakery has right quality and amount of materials at the required times. The
table below shows the basic material requirement at the commencement of operation:

STOCK CONTROL
Morning star bakery will neither overstock nor under stock materials for
Production. Overstocking will tie down too much finances leading to problems in
Cash flow.
Under-stocking on the other hand will cause losses in terms of lost production

25
 arising from stoppage of production due to material shortages.
There is also the danger of materials expiring if kept for too long without being used.
For this reason, the proprietor will use the first in first out (FIFO) system of store
control.

5.2 PRODUCTION PROCESS

The success of Morning star bakery will in a great extent depend on the quality and
variety of products to be manufactured. At commencement of operations, the
proprietor has a number of products, which will be put, in the market. She anticipates
that all the products that the firm will release into the market will become instant
favorite of the customers.
These products include the following: -
a) Queen Cakes (Plain Muffins)
These are soft porous type of cakes made out of thicker drop for better consistency.
Morning star bakery plans to make plain queen cakes at the start but later
productions will include Orange Yogurt queen cakes and glazed cocoa queen
cakes.
Recipe
Ingredients to yield 50 Queen Cakes
2 ½ Kg Baking Flour
1 ½ Kg Sugar
1 Kg margarine
50g Baking Powder
I crate of eggs (30 eggs)
1 litre fresh milk
2 teaspoonfuls salt
2 teaspoonfuls vanilla essence

Method
a. Preheat oven to 4000F. Butter standard muffin tins
b. Blend dry ingredients in a mixture, beat eggs slightly with wire whip
c. Melt margarine and add the cooled margarine to the eggs and blend in milk
d. Dump wet ingredients into flour mixture
e. Mix just enough to moisture dry ingredients. Batter until lumpy
f. Scoop batter into muffin tins with a scoop.

26
 g. Bake 20-25 minutes until golden brown. When done queen cakes spring
back if pressed lightly with a finger
h. Invert into a rack turn right side up and let to cool completely
i. Pack spine to spine in dozens and stack in crates

b) White Bread
Ingredients
485g yeast
20 litres water (400 – 460C)
576g Salt
16Kg wheat flour
795g bakers fat /Margarine
370g Sugar
16Kg Bakers Flour

Method
1. In a bowl combine the yeast water and sugar. Let it stand for 5 minutes or
until foamy, meanwhile grease a loaf tin and set aside
2. In a mixture set on low speed beat together the yeast, salt and milk mixture.
Add baker’s flour and beat the dough into the prepared tin. Cover with
lightly greased plastic food rack and let it rise in proofing chamber for 1hour
until the dough almost reaches the top of the tin.
3. Preheat the oven to 1800C. Bake for 50 – 1hour until the loaf is crusty and
sounds hollow when tapped on the bottom. Cool in a wire rack.

c) Whole Wheat Bread (Brown Bread)

Ingredients
485g yeast
20litres water (400 – 460C)
576g salt
16Kg Whole meal flour
795g Bakers
370g sugars
16Kg baker’s flour.

27
 Method.
1. In a bowl sieve flour and warm in the oven
2. Add yeast
3. Add warm water or milk and put in warm place to rise.
4. Punch back into the original size and take to rise a second time.
5. Grease the tin and shape the dough.
6. Place in the baking tin and grease with egg white.
7. Bake for 10-15 minutes.

d) SCONES.
Ingredients
445 g bakers fat/margarine
445g granulated sugar
445g eggs
28g fine salt
193Kg soft flour
225Kg baking
680g currants (pre-washed and dried)

Method
1. Preheat the oven to 2300 C. In a large bowl stir together the flour, baking powder,
and salt.
2. Using pastry blender cut in the margarine until the mixture resembles coarse
crumbs. With a mixing spoon, make a well in the center of the dry ingredients and
pour in the buttermilk. Stir until combined.
3. Place the dough in a lightly floured surface. Using a lightly floured rolling pin, roll
out the dough until 1.5 cm thick. Using a floured biscuit cutter, cut rounds gently
re-rolling the scraps. Transfer the scones to the prepared baking sheet and bake for
10-15 minutes or until it turns golden brown.

e) BROWNIES.
Brownies are rich and tasty chewy treats taken alone as snacks.
Ingredients Yields 16 brownies.
¼ Kg cocoa

28
1/3 litre warm water
¼ litre cooking oil
1/3Kg firmly packed brown sugar
2 eggs (whites)
1-teaspoon vanilla essence
½ teaspoonful salt
¾ Kg cake flour.

Methods
1. Pre-heat the oven to 1800c lightly grease a baking tin. In a large bowl stir together
the cocoa and water and stand for 15minutes. Stir in the oil, white sugar, brown
sugar, egg, whites and vanilla essence. Add the baking powder salt and flour and
stir for 2minutes. Pour the mixture in the prepared tin.
2. Bake for 20minutes or until set. Allow to cool in the tin and then cut into squares.

f) COOKIES
Ingredients yield 161 cookies.
2 kg cake flour
60g baking powder
880g eggs
¼ teaspoon salt
880g groundnut ginger (optional)

Method
1. Pre-heat oven to 1900c. In a medium sized bowl, baking powder and salt.
2. In another bowl using a mixer set on medium speed, cream the margarine, sugar
and ginger if using until smooth and light. Add sugar and eggs and beat until
combined. Stir in the flour mixture until just combined.
3. Using a measuring spoon, drop rounded spoonfuls of butter onto large on greased
baking sheets spacing them 3cm apart.

Bake for 7minutes until crispy at the edges or slightly soft in the centers. Allow to
cool on the sheets for 2minutes and let cool completely on racks.

29
g) ROLLS
Rolls are a common type of baked product made from the same dough as bread but
are at a certain temperature to have either a hard crunchy or crust or a soft crust.
They could be sweetened or plain. Morning star bakery plans to make three types
of rolls namely hard, soft and sweet rolls.

Ingredients
640g skim milk
640g margarine at room temperature
485g dry yeast
415g light brown sugar
580g salts
32kg bakers’ flour
19.2 litres water

Method
1. In a small saucepan, warm the milk and margarine over low heat until the
margarine melts. Transfer to a large bowl and let the mixture cool to
lukewarm. Add the yeast sugar and salt the milk margarine and stand for 5
minutes or until foamy. Stir in bakers flour as needed to make a soft but
manageable dough. Knead until smooth and elastic. (About 4 minutes by
mixer) transfer to a lightly greased large bowl turn to coat with the grease and
cover loosely with a plastic food wrap. Let it rise in a warm place until double
in a bulk.
2. Lightly grease baking tin, punch down the dough and divide it into portions cut
and shape the pieces into balls and arrange in a pan. Cover and let them to rise
for 1 hour until double in bulk.
3. Preheat the oven to 2200c. Melt the remaining margarine and brush the rolls
with it. Remove from tins to cool in wire racks.

h) CAKES

30
Morning star bakery plans to bake a variety of cakes including the following and
according to the orders placed. Date cakes, Apple cakes, pineapples, up side down
cakes ginger cakes, chesses cakes, chocolate angel cakes, chocolate glazed cocoa
cakes, lemon mouse cake, quick butter vanilla cake and others.

Ingredients (Vanilla cake) Serves 6

2kg wheat baking flour
¾ kg plus 2 tablespoons firmly packed brown sugar
Baking powder
1 ½ teaspoons vanilla
2 eggs
½ teaspoons salt
¾ margarine

Method
1. Preheat the oven to 1900 c. Lightly grease and flour a baking tin. In a large bowl
combine the flour, ¾ kg of the sugar, the baking powder and salt.
2. In a small bowl, stir eggs and vanilla essence until blended.
3. Gradually beat in the flour mixture with the egg mixture. Do not over mix.
4. Spoon the butter to a prepared tin and smooth the top. Bake for 25 minutes or
until golden brown and a tooth pick inserted in the center comes out clean. Allow
to cool in the tin then return onto a serving platter. Serve warm.

i) BREAD
Morning star bakery will bake ordinary white bread using sifted wheat flour.
Brown bread using whole wheat flour and enriched bread fortified with cheese, fruits
and vitamins. Orders placed for the following types will also be prepared:
 Butter milk paper maize bread
 Herbal spiral bread
 Orange fennel bread
 Pear and pecan bread
 Sultana and walnut bread

31
 CHAPTER SIX
6.0 FINANCIAL PLAN
Finances form one of the most important pillars upon which businesses stand. If
the proprietor of a business is not able to raise the required and or manage the
finances well, the business is doomed. The proprietor of Morning star bakery
will raise the necessary finances as well as manage it well through observing sound
financial management procedures. The following financial objectives will be
focused on:-
i) To be able to acquire a loan from a financing institution for the purpose
of purchasing an ultra modern mini-bakery;
ii) To build up the business financial position so that it is able to stand on
its own rather than on borrowed resources;
iii) To ensure that the business maintains at least 25% statutory liquidity
ratio:
iv) To give financial incentives to the workers in form of allowances and
tokens so as to motivate them leading to better performance and profits.

32