MILELE RESTAURANT

ADDRESS P.O BOX 3070-20100, NAKURU

EMAILmilelerestaurant@gmail.com

WEBSITE www.milelerestaurant.co.ke

TELEPHONE NUMBER +25492-817-764

TITLE : BUSINESS PLAN

NAME OF CANDIDATE : NG’ANG’A DEBORAH WANJIKU

INDEX NUMBER : 511115069

CENTER CODE : 511115

CENTER NAME : RIFTVALLEY INSTITUTE OF BUSINESS

STUDIESCOURSE CODE : 1819

COURSE NAME : CERTIFICATE IN CATERING AND

ACCOMMODATION

PAPERE NUMBER : 205

PRESENTED TO : THE KENYA NATIONAL EXAMINATION

COUNCIL IN PARTIAL FULFILLMENT FOR THE

AWARD OF CERTIFICATE IN CATERING AND
ACCOMODATION

SUPERVISOR : MR J OBWANA

EXAMINATION SERIES : JULY 2023

 Table of Contents
DECLARATION ......................................................................................................................................... i
ACKNOWLEDGMENT ............................................................................................................................. ii
DEDICATION ........................................................................................................................................... iii
EXECUTIVE SUMMARY ........................................................................................................................ iv
2.0 MARKETING PLAN ........................................................................................................................... iv
3.0 ORGANIZATIONAL STRUCTURE .................................................................................................... iv
4.0 PRODUCTION PLAN ......................................................................................................................... iv
5.0 FINANCIAL PLAN ............................................................................................................................. iv
CHAPTER ONE ......................................................................................................................................... 1
1.0 BUSINESS DESCRIPTION .............................................................................................................. 1
1.1 BACKGROUND INFORMATION ................................................................................................... 1
1.2 BUSINESS NAME AND LOGO ....................................................................................................... 1
1.3 BUSINESS ADDRESS ...................................................................................................................... 1
1.4 OWNERSHIP OF THE BUSINESS ................................................................................................... 2
1.5 METHODS OF RAISING CAPITAL ................................................................................................ 2
1.6 BUSINESS LOCATION.................................................................................................................... 2
1.7 TYPE OF BUSINESS ........................................................................................................................ 3
1.7.1 Quick decision making ................................................................................................................ 3
1.7.2 Direct contact with the customer.................................................................................................. 3
1.7.3 The business is flexibility ............................................................................................................ 3
1.7.4 Easy formation and closure ......................................................................................................... 3
1.7.5 Few Government rules and laws .................................................................................................. 4
1.7.6 Secrecy of information ................................................................................................................ 4
1.7.7 Easy to start and manage ............................................................................................................. 4
1.7.8 Asses the credit ........................................................................................................................... 4
1.7.9 Straight forward banking ............................................................................................................. 5
1.8 JUSTIFICATION OF OPPORTUNITY ............................................................................................. 5
1.8.1 Creation of job opportunity .......................................................................................................... 5
1.8.2 Favorable location ....................................................................................................................... 5
1.8.3 Favorable government policy ...................................................................................................... 5
1.8.4 To Promote growth to the community .......................................................................................... 6
1.8.5 Maximization of profit ................................................................................................................ 6
1.8.6 Alignment to national goals ......................................................................................................... 6
1.8.7 Existence of a gap in the provision of good .................................................................................. 6
1.9 PRODUCT AND SERVICE .............................................................................................................. 7
1.9.1 Size of the product....................................................................................................................... 7
1.9.2 Different favor of the product ...................................................................................................... 7
 1.9.3 Product packaging ....................................................................................................................... 7
1.9.4 Product prices ............................................................................................................................. 7
CHAPTER TWO ......................................................................................................................................... 8
2.0 MARKETING PLAN ........................................................................................................................ 8
2.1 The Customer .................................................................................................................................... 8
2.1.1 Active customer .......................................................................................................................... 8
2.1.2 Loyal customer ............................................................................................................................ 8
2.1.3 Referring customer ...................................................................................................................... 8
2.1.4 Advocate customer ...................................................................................................................... 9
2.1.4 New customer ............................................................................................................................. 9
2.1.5 Discount customer ....................................................................................................................... 9
2.2 MARKET SHARE ANALYSIS ......................................................................................................... 9
2.3 PRICING STRATEGIES ................................................................................................................. 11
2.3.1 Penetration pricing .................................................................................................................... 11
2.3.2 Skimming pricing ...................................................................................................................... 11
2.3.3 Psychological pricing ................................................................................................................ 11
2.3.4 Competitive pricing ................................................................................................................... 11
2.3.5 Cost plus pricing ....................................................................................................................... 12
2.3.6 Dynamic pricing ........................................................................................................................ 12
2.4 PRODUCT STRATEGY ................................................................................................................. 12
2.4.1 Highest quality .......................................................................................................................... 12
2.4.2 Affordable ................................................................................................................................. 12
2.4.3 Satisfy the customer need .......................................................................................................... 13
2.5 PROMOTION STRATEGY ............................................................................................................ 13
2.5.1 Salesmanship ............................................................................................................................ 13
2.5.2 Advertisement ........................................................................................................................... 13
2.6 SETTING SALES TARGET ............................................................................................................ 14
2.7 DISTRIBUTION STRATEGY ........................................................................................................ 14
2.8 CONSUMER STRATEGY .............................................................................................................. 15
2.8.1 Offering high quality product .................................................................................................... 15
2.8.2 Giving free gifts and promotions ............................................................................................... 15
2.8.3 Establish customer care unit ...................................................................................................... 15
2.8.4 Giving warranty to customer ..................................................................................................... 15
CHAPTER THREE ................................................................................................................................... 17
3.0 ORGANISATION AND MANAGEMENT PLAN ........................................................................... 17
3.1 ORGANISATION STRUCTURE .................................................................................................... 17
3.2 MANAGEMENT TEAM ................................................................................................................. 17
3.3 OTHER BUSINESS PERSONNEL ............................................................................................ 18
3.3.1 Cleaner...................................................................................................................................... 18
 3.3.2 Cooks ........................................................................................................................................ 18
3.3.3 Waiter Responsibilities ............................................................................................................... 19
3.4 RECRUITMENT TRAINING AND PROMOTION OF PERSONNEL ............................................ 20
3.4.1 Recruitment .............................................................................................................................. 20
3.4.2 Training .................................................................................................................................... 20
3.4.3 Remuneration and incentives ..................................................................................................... 21
3.5 LICENCES AND PERMIT .............................................................................................................. 21
3.5.1 licenses ..................................................................................................................................... 21
3.5.2 Permit ....................................................................................................................................... 21
3.6 SUPPORTING SERVICES.............................................................................................................. 21
3.6.1 Banking services ....................................................................................................................... 21
3.6.2 Insurance................................................................................................................................... 23
3.6.3 Security services ....................................................................................................................... 24
3.6.4 Postal and telecommunication services ...................................................................................... 25
CHAPTER FOUR ..................................................................................................................................... 26
4.0 PRODUCTION PLAN ..................................................................................................................... 26
4.1 PHYSICAL FACILITIES ................................................................................................................ 26
4.2 OTHER FACILITIES (MATERIAL FACILITIES) ......................................................................... 27
4.2.1 Fridges and freezers................................................................................................................... 27
4.2.2 Microwave ................................................................................................................................ 27
4.2.3 Ice maker .................................................................................................................................. 27
4.2.4 Ovens ........................................................................................................................................ 27
4.2.5 Slicers ....................................................................................................................................... 27
4.2.6 Griddle ...................................................................................................................................... 27
4.2.7 Washing Equipment .................................................................................................................. 28
4.2.8 Gas or Electric Grill .................................................................................................................. 28
4.2.9 Prep counters and cutting boards ............................................................................................... 28
4.3 PRODUCTION PROCESS .............................................................................................................. 28
4.4 PRODUCTION SCHEDULE ........................................................................................................... 30
4.5 REGULATION GOVERNING PRODUCTION .............................................................................. 31
4.5.1 Public health and safety regulation ............................................................................................ 31
4.5.2 Occupation area safety .............................................................................................................. 31
4.5.3 Business permit .......................................................................................................................... 32
4.5.4 National government regulation ................................................................................................. 32
4.5.5 Health certificates...................................................................................................................... 32
4.5.6 National environment management act (NEMA)........................................................................ 32
4.5.7 Fire inspection compliance certificate ........................................................................................ 32
4.5.8 Taxation laws ............................................................................................................................ 33
CHAPTER FIVE ....................................................................................................................................... 34
 5.0 FINANCIAL PLAN ......................................................................................................................... 34
5.1 PRE- OPERATIONAL COST.......................................................................................................... 34
5.1.1 Cost of manufactured materials ................................................................................................. 34
5.1.1 Overheads ................................................................................................................................. 35
5.2 WORKING CAPITAL ..................................................................................................................... 35
5.2.1 Current assets ............................................................................................................................ 35
5.2.3 Current liabilities ....................................................................................................................... 36
5.3 BUSINESS CAPITAL ..................................................................................................................... 36
5.4 FINANCIAL STATEMENTS FOR THE BUSINESS ...................................................................... 37
5.4.1 Trading account ........................................................................................................................ 37
5.4.2 Profit and loss account ............................................................................................................... 38
5.4.3 Balance sheet ............................................................................................................................ 39
5.4.4 Projected cash flow statement for Milele Restaurant 2024 ......................................................... 40
5.4.5 Projected cash flow statement for Milele Restaurant 2025 ......................................................... 41
5.4.6 Projected cash flow statement for Milele Restaurant 2026 ......................................................... 42
5.4.5 Ratio analysis ............................................................................................................................ 43
Appendices ................................................................................................................................................ 45
 DECLARATION

Declaration by the student

I declare that this business plan is my own original work and has never been presented to the Kenya National
Examination Council or any other examination body for an award of Certificate in Catering and
accommodation

NAME OF THE CANDIDATE: NG’ANG’AWANJIKU DEBORAH

INDEX NUMBER:

SIGNATURE:

DATE:

Declaration by supervisor

I declare that the business plan is the original work of the candidate and she did not receive any due
assistance from unauthorized person except from the supervisor.

NAME OF THE SUPERVISOR:

SIGNATURE

DATE:

i
 ACKNOWLEDGMENT

I acknowledge the immense contribution of my supervisor Mr. J. Obwana for his support and
encouragement that enabled me to write the business plan, may God bless him abundantly. I also
acknowledge the support I received from my classmates Lucy and Solomon in writing the businessplan may
god bless them too.
 DEDICATION

I dedicate this business plan to my family and especially Mum, Mary Wangui and Dad, Joseph Muriuki for
the support they have given to me on my entire academic journey. I also acknowledge the advice concerning
my career from my elder brother, John Mutin, may God bless them all.
 EXECUTIVE SUMMARY

1.0 BUSINESS DESCRIPTION

The Business would be a restaurant, owned by Ng’ang’a Deborah Wanjiku. the business would be located
in Nakuru County along Nakuru - Gilgil highway. The business objectives would include creation ofjob
opportunities bringing material nearer for ease of access by customers and making profit. The business
would likely be producing high quality of products.

2.0 MARKETING PLAN

According to market share analysis, Bismillahi commands 800 customers. Tumanini commands 400
customers, Baraba commands 600 customers and silver commands 200. However, the entrepreneur would
employ competitive market strategy to increase her market share within a period of two years and eventually
working towards becoming the market leader.

3.0 ORGANIZATIONAL STRUCTURE

The business would be managed by the owner Ng’ang’a Deborah Wanjiku . Milele restaurant would
require employees to start the entrepreneur would ensure that employees are competitive and offering
quality services and the business could require supporting services of the business to grow and require the
licenses and permit in order to comply with statutory regulations governing business.

4.0 PRODUCTION PLAN

This gives overview of how the business shall be running, it displays strategies relevant to the smooth
running of the organization for a suitable and effective performance in conjunction with eventual growth of
the business besides financial resources Milele restaurant needs effective sufficient and adequate
facilities and equipment to propel its function operationally.

5.0 FINANCIAL PLAN

The business will have to show all the pre operation cost. The business should prepare trading account,
profit and loss accounts, balance sheet and cash flow statements at the ending of every year. This will help
in calculating net profit business also should prepare desired financing. The business should file all balanced
sheets and cash flows for better growth detecting and help the business plan and predict future occurrences.
 CHAPTER ONE

1.0 BUSINESS DESCRIPTION

1.1 BACKGROUND INFORMATION

The owner of the business is Ng’ang’a Deborah Wanjiku, aged 21 years she was born in 2002. She
went to Alright Primary School she then joined Daystar secondary school in the year 2017, where she
studied up to the year 2021. She is currently in the institution pursuing a Certificate in Catering and
Accommodation.
Before joining college, the entrepreneur worked at Baraka restaurant, where she gained the experience of
running a restaurant.

1.2 BUSINESS NAME AND LOGO

The Name of the business is Milele Restaurant. The word milele is a Kiswahili word that means forever. I
decided on the name Milele because I am expecting my business to be the best and live for a long and for
retaining a powerful impression on the customer. Milele word would be unique and memorable to my
customer, the main reason for the business is to meet the needs of the community and ensure that I offer
the best food quality ambiance and good service to my customer and to purported to be healthy food and
selling.

The logo of the business represents a restaurant since the business would majorly deal with foodservice.
The entrepreneur therefore chose the logo because it grabs attention and makes a strong first impression is
the foundation of your brand identity is memorable as expected by customers.

1.3 BUSINESS ADDRESS

The address of Milele Restaurant would be:P.O

BOX 3090 – 20100

NAKURU

E-MAIL: milelerestaurant@gmail.com

Website: www.milelerestaurant.co.ke

Telephone: +254792817764

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1.4 OWNERSHIP OF THE BUSINESS

The owner of the business would be Ng’ang’a Deborah Wanjiku because she is the main contributor of
capital to the business.

1.5 METHODS OF RAISING CAPITAL

The entrepreneur will raise Capital as outlined below:

Source of Capital Amount

The owner (Ng’ang’a Deborah Wanjiku) 700,000

Contribution from Friends 100,000

Donations from family & Relatives 100,000

Loan from Bank 100,000

Total 1,000,000

1.6 BUSINESS LOCATION

Milele restaurant would be located in Nakuru County, Nakuru East Constituency. The businesswould
be located along the Gilgil-Nakuru highway 250 meters off Utumishi College towards Nakuru, opposite
Mary mount primary school next to co-operative bank.

Mary Mount
Primary School

Utumishi
Nakuru – Gilgil College

Co-operative Milele

College Restaurant

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1.7 TYPE OF BUSINESS

The business would be a sole proprietorship type of business because it would be formed owned and
managed by one person (Ng’ang’a Deborah Wanjiku). The entrepreneur chooses this type of business
for the following reasons:

1.7.1 Quick decision making

The sole proprietorship is in touch with the day-to-day operations of the business. She is the sole decision-
making authority, hence if there is any situation requiring an immediate decision it is possible for the
proprietor to take any decision which she thinks is appropriate the discussion is followed by prompt
action. Provides clear direction they improve productivity; effective decisions can propel work project
forward which increase employee productivity.

1.7.2 Direct contact with the customer

The sole proprietor is always in direct contact with his customers, she is therefore able to understand
their changing needs better. She can ascertain their tastes, attitudes, and habits and understand their
difficulties, she is also able to react faster to the changing situations to trade. Communicating directly
with customers in order to promote products and services where it can be conducted in various ways like
email and text messages.

1.7.3 The business is flexibility

Sole proprietorship is a highly flexible form of business organization as a business organization may start
and close without any legal formality or permission of anyone this is possible because the sole proprietor
has full control and authority. Business flexibility has to do with the ability of a company to adapt to
changing circumstances and thus remain a profitable enterprise. It translates into higher productivity
levels, loyalty and engaged employees.

1.7.4 Easy formation and closure

Formation and closure of sole proprietorship is quite easy. An individual with a small amount of
moneycan start the business as there is no legal formality in forming firm. However, a sole
proprietorship is required to complete special legal formalities while doing some type of

3
business. Since the proprietor is not answerable to the public or the government he can easily shut down a
business if the need arises.

1.7.5 Few Government rules and laws

There are few government rules and regulations that are specific to proprietors. Sole proprietors must keep
proper records, file and pay taxes on the business income and other personal income sources. Record
keeping and tax filing obligations are generally no more complicated than maintaining records for
individual tax filing.

1.7.6 Secrecy of information

There is very high secrecy of information in sole proprietors and is not bound to share business
information with others, in many cases secrecy of information is quite helpful for business operations,
for example, keeping secret profit margins of an entirely new type of business to restrain the entry of
possible competition. The main purposes for intelligence agencies the protection of sources and method
and responsible approach to protecting the Information is the foundation of their work, it can also
enable a more national policy process and contribute to international stability.

1.7.7 Easy to start and manage

Though the business varies depending on the jurisdiction establishing a sole proprietorship is generally
an easy and inexpensive process unlike forming a partnership or a corporation there is very little
paperwork a proprietor needs to file with their local authorities as a result proprietors do not have to
work long before they have permission to carry on a business.

1.7.8 Asses the credit

A sole proprietor is able to assess the credit worthiness of his/her customers because of close
personal relationship extending credit to a few carefully selected customers which reduces the
probability of bad debts.

4
1.7.9 Straight forward banking

One significant advantage of a sole proprietorship is simplified banking as they are the only type of
business that does not require a business checking account in order for it to operate. The sole proprietor
will make and accept business payments straight from his/her own personal bank account the sole
proprietor does not have to go through the process of finding a business checking account ultimately in
terms of banking all you need is your own checking account to get started being sure to maintain
organized and clear records to distinguish your business and personal spending.

1.8 JUSTIFICATION OF OPPORTUNITY

The entrepreneur chose to start a Restaurant because of the following reasons:

1.8.1 Creation of job opportunity

The business would create job opportunities for many people in the community. The entrepreneur
would be hiring people from different places to clean inside the business and offload goods from the
means of transport and also pack them, this will reduce idleness in the community. The job creation is
necessary because the more people work the more the economy becomes stable and the economic
stability in themselves and their children.

1.8.2 Favorable location

Where the business is located is available for domestic use roads are near for easy transportation of
goods the area is flat so the customer will not be struggling while walking, electricity is available there is
also a police station which is near for reporting criminal cases that may occur in the area. The restaurant
at the front of the building has maximum visibility and generates the highest footfalls compared to other
areas. Customers usually choose the restaurant that is right in front of them

1.8.3 Favorable government policy

The government favors the entrepreneur by lowering the tax which leads to an increase in profits for the
business the government also ensures that the consumers are secured from being exploited by private
sectors. The government also gives loans to support the entrepreneur to add

5
stock to the business. It also provides for national defense address environmental concerns define and
protect property night and attempt to make markets more competitive and they also redistribute income.
1.8.4 To Promote growth to the community

By opening the business, the entrepreneur helps the community to move to another level by improving
infrastructure development and also helps members of the community to save the cash that they have been
using for transport while going to a restaurant that is far away from their area. entice them with treasure
about your community visions and goals so they know what to expect ad aren’t disappointed when they
arrive.

1.8.5 Maximization of profit

Making a profit is essential for a business that desires to expand its operations, making a profit allows
you to open other business locations, acquire another business, target other markets, and expand
operations into foreign territories the optimum output at which your business is the most profitable firm.
Find cheaper raw materials than those currently used, the supplier that offers better rates of inventory
purchases and also find product sources with lower shipping fees.

1.8.6 Alignment to national goals

Create a family atmosphere where everyone works together and understands their role when the
restaurant has wide goals set steps must be taken to ensure that employees are informed about what they
should be working on and why the employee feel more connected increasing the work satisfaction. All
members of an organization work collaboratively towards a common goal efficiency productivity and
consistency may improve.

1.8.7 Existence of a gap in the provision of good

It is when you have identified something that customers need but isn’t currently available this could be
something that is completely unique, an improvement on an existing idea or a way to introduce something
to a different market and were markets gaps don’t have to be sizable. You could also do some research
into current customer gripes by simply going over the worst reviews of the competitors

6
1.9 PRODUCT AND SERVICE

1.9.1 size of the product

The product basically consists of tangible and intangible, tangible includes the quality of food and
beverages produced and served, produced and served the restaurant décor, menu design and portion size.
Intangible products are those that satisfy the feelings of the customer the image it wishes to portray and
the attitude of the wait staff, the product is all of the features and benefits that they can enjoy from
buying your goods and services. Great packaging appeals to the emotions of the customers which is like
an advertisement.

Design is incredibly important when it comes to color, fonts, images and information. The brands are no
longer packaged only to provide protection and for convenient storage but also to entice the consumer and
create brand recognition of supply and demand and also on pricing.

1.9.2 Different favor of the product

The product holds that consumers will favor those products that offer the most quality, performance or
innovative features the product concept proposes that consumers will prefer products that have better
quality taste buds’ sensitive to sweetness are concentrated on the tips of the tongue the aroma and taste but
also completed by responses to texture the warmth of spices such as pepper and cooling of menthol.
Normally taste is considered to be limited to salts, sweet, sour, bitter and perhaps metallic responses.

1.9.3 Product packaging

A tale adds the brand and finishes of the package for the final look. Labels can be created economically
in small quantities too which is our point here put the right label on a simple craft colored box and
you’ve got a package to rival many products the food product can be package dusing stock plastic
containers with a label to wrap and seal it where the priorities are safety and quality followed by
sustainability which can help boost diner’s satisfaction in the order.

1.9.4 Product prices

The process of determining the quantitative value of a product based on internal and external product
pricing has a direct impact on the overall success of your business from cash flow to profit margins to
customer demand the prices depend on the packaging of the product and by choosing the right pricing
strategy.Price sensitivity is one of the key factors surrounding companies pricing choices customers are
well-informed about their purchases now and they are sensitive to the price because they want the
maximum benefit of their money and time. The entrepreneur can get it by launching and testing with real
customers, Prices need to be based on what your customers are actually willing to pay.
7
 CHAPTER TWO

2.0 MARKETING PLAN

2.1 The Customer

For successful marketing of products, the entrepreneur would target a group of customer available in the
market

2.1.1 Active customer

Active customer are the ones who are actively using your products or services but there not your loyal
customer yet the entrepreneur could be offering a better deal b your competitors, active customers are likely
to switch and by focusing on customer success. It is crucial to nurture them the right way, instead of ignoring
them because they are already using your product. Continues engagement and interaction will let your new
customer attach to your brand more.

2.1.2 Loyal customer

These are customers who would keep coming back to you for different products and services and they
seem to be impressed with your brand the entrepreneur would use this kind of customer to use their
experiences and try to replicate the same for all your other customers and feature your loyal customers on
your case studies loyal customers are likely to recommend the company’s products to other people. It is
important to solicit their input and feedback and involve them in a company’s decision making process.

2.1.3 Referring customer

These are type of customers who are happy with your product or service and are willing to refer you to new
customers. The entrepreneur can also provide referring customers with some incentives for referring to some
new customers to you this will again motivate them to refer more people to your brand this is why you should
take the first step by identifying all the willing to refer customers you can do that by asking for feedback from
your customers.

8
2.1.4 Advocate customer

These are the type of customer who are by far the most profitable clients of yours make sure that you
never disappoint your advocate customers with any bugs or customer service issues. Always be there for
them throughout their journey and strive to lead them towards customer success the talk about your
company and your services at every chance they get and there already referred a bunch of customers to
you.

2.1.4 New customer

New customers have just made their first purchase. They are still trying to understand your product and need
guidance this is the stage where you make a lasting first impression, by having a smooth on boarding process
guide them through each step and provide them with comprehensive guidance the entrepreneur makes the
extra effort by providing options such as live chat, video chart and co-browsing by providing such options
your customer will know that you genuinely value them.

2.1.5 Discount customer

There are customer are interested in your product only because you are offering it at a discounted price, the
entrepreneur makes them understand that value you are adding even at the discounted price this will make
the customer feel that they did get a good deal they will value your product more and it will stick around
them, also the discount customer are resilient to upselling are usually the last loyal segment of customers and
generally more on when better mark downs are available elsewhere.

2.2 MARKET SHARE ANALYSIS

After carrying out a feasibility study of the entire market the entrepreneur established that the market has
got a total of 2,000 customers and are shared amongst the far main competitors as outlined below:

Tumaini restaurant 400

400
2000 x 360º = 72º

9
Baraka restaurant 600

600
x 360º = 108º
2000

Silver restaurant 200

200
2000 x 360º = 36º

Bismillahi restaurant 800

800
2000 x 360º = 144º

The above information is statistically represented in a pie chart as shown below.

Sales
Tumaini restaurant
72º Baraka restaurant
144º
Silver

36º 108º restaurant Bismillahi

restaurant

According to the pie chart, Tumaini restaurant commands 72º of the market which is 400 customers. Baraka
restaurant commands 108º of the market which is 600 customers, silver restaurant commands 36º of the
market which is 200 customers, Bismillahi restaurant commands144º of the market which is 800 customers.
However, the entrepreneur would employ competitive market strategy to increase her market share within
a period of two years and eventually working towards becoming the market leader.

10
2.3 PRICING STRATEGIES

Since profit maximization is the aim of every entrepreneur the entrepreneur would change prices that would
help to recover production cost and operational expenses. The price to be charged by the entrepreneur would
be inclusive of the profit as well.

2.3.1 Penetration pricing

It’s difficult for a business to enter a new market and immediately capture market shares but penetration
pricing can help the penetration pricing strategy consists of setting these low prices can draw in new
customers and divert revenue from competitors this strategy is meant to jumpstart sales and won’t be
effective for your long-term growth.

2.3.2 Skimming pricing

Business that charge maximum prices for new products and gradually reduce the price over time follow a
price skimming strategy. In this type of pricing strategy price drop as products end their life cycle and
becomes less relevant business that sell high tech or novelty products typically use price skimming you can
maximise profit of new product and make up for production costs.

2.3.3 Psychological pricing

Psychological pricing strategies play on the psychological of consumers by slightly altering price, product
placements or product packaging some psychological pricing techniques include offering some businesses
also use artificial time constraints to speed customers into stores such as one dayor limited time sales.

2.3.4 Competitive pricing

The competitive pricing strategy sets the price of your product or service at the current market rate, your
pricing is determined by all other products in your industry, which helps you stay competitive if your business is
in a saturated industry you can also decide to price your products above or below the market rate as long as
it’s still within the range of prices set by all competitors in your industry you can maintain market share in a
competitive market and attract customers who are interested in paying slightly less than your
competitors rates.

11
2.3.5 Cost plus pricing

Cost plus pricing involves taking the amount it cost you to make the product and increasing that amount by
a set percentage to determine the final price you can work backwards to determine your mark-up
percentage by first figuring out how much you want to profit from each product sold the profits are more
predictable since you are setting your mark-up price to a fixed percentage.

2.3.6 Dynamic pricing

Dynamic pricing matches the current market demand for a product also known as demand pricing this pricing
strategy most often occurs when the product at hand fluctuates on a daily o even hourly basis. Industries
like hotels, airlines and even event venues set different prices daily and apply this strategy to maximise
profit. You can increase overall revenues by raising prices when demand is on the rise.

2.4 PRODUCT STRATEGY

The product strategy that the entrepreneur would choose from are as follows:

2.4.1 Highest quality

The product satisfies customers’ needs serves its purpose and meets industry standards when evaluating
product quality businesses consider product solves a problem work effectively to research the factor that
can affect the quality of your products so you can determine areas of improvement and identify the elements
that define product quality management by consider concepts to create a strategy for monitoring
performance and success.

2.4.2 Affordable

By start researching to see if you can find a wholesaler that will sell you items that are making your
product cost so much even if you are going through a supplier you might be able to go through a wholesaler
and get the product you need for cheaper once you find a different wholesalers you will trying to figure out
which one can help you need for save money and make your product more affordable by offering
customer a deal when they are combined this will not only help you save money having the cheap products
to the customers.

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2.4.3 Satisfy the customer need

Create product or service that appeal to the customers while meeting their expectations optimise customer
service relative because understanding your customers need will help you better identify how resolve their
problems. It will also help to retain customer the positive word of mouth leads your brand credibility
popularity and helps acquire new customer, this saves brands a lot of money that they would spend on
marketing and promotional.

2.5 PROMOTION STRATEGY

To create awareness of the business and the products that it produces the entrepreneur would use promotion
strategy. This is done to persuade customers to buy the products. The strategy also helps the customers in
making decisions about the product since promotion would highlight key features of the product.
Promotion strategy would be carried out through two broad ways like, salesmanship and advertisement.

2.5.1 Salesmanship

Is a marketing activity that is designed to increase sales, encourage customer loyalty or generate brand
awareness, it involves offering a discount or some other type of incentive for customer to buy you product
or engage with you brand. By stimulate demand for a short term by making product look like a great deal
and stabilize sales volume.

2.5.2 Advertisement

The entrepreneur would use paid advertisement to show an advertisement in a specific place at a specific
time, so you can capture the attention of your target market.

2.5.2.1 Radio station

The entrepreneur would advertise the business through Riri fm radio because the audience of the community
are unique the entrepreneur chooses a radio station because it easily promotes local event successfully,
because it would directly contrite to the community.

13
2.5.2 .2 Television

The entrepreneur would pay of the advertisement of her product the television will be like mbcitv, ktn tv
were the products would be featured prominently the target audience would be aware of the exactly of
the product and service that are available.

2.5.2.3 Social media platform

It will advertise its products in social media platform such as Instagram, Facebook and twitter and were many
of the Kenyans are in the social media platform and especially the youth who have been embraced the
technology well.

2.5.2.4 Bill board and poster

It will advertise if product in bill board and poster which will be located in a good strategic point like round
about and along the highway where everyone can see them and able to read

2.5.2.5 Newspaper

The newspaper carries out their advertisement in the countries newspaper that have already been read are
still mostly in the market for a long time, this is because it will reach many people becauseeverywhere they
are different land of newspaper like the daily nation, taifa Leo are are everywhereand to reach the target
audience within the geographical region.

2.6 SETTING SALES TARGET

In the early weeks of operations, the entrepreneur would target to sell one thousand pieces of the products
every day and after one year the entrepreneur would target to sell three thousand pieces of the product every
day this would be achieved through an aggressive marketing campaign and making quality products that
satisfy the customer.

2.7 DISTRIBUTION STRATEGY

Milele restaurant would adopt the following distribution channel

Milele restaurant Consumer

14
 The entrepreneur would produce in large scale and sell them directly to the final consumer. The
entrepreneur would ensure that the distribution channel is always short so that the profit margin is not always
undercut

2.8 CONSUMER STRATEGY

Milele restaurant will adopt the following strategies in serving the customer

2.8.1 Offering high quality product

Product is one that provides performance at an acceptable price or conformance at an acceptable cost with
superior performance or a large number of features it will generally be more expensive and will sell in
smaller volumes but if quality is defined as fitness for use superior aesthetics or improved conformance
high quality need not be accompanied by premium prices the successful markets keep customers with repeat
sales of quality products.

2.8.2 Giving free gifts and promotions

Handing out free stuff may not seem like the most logical business plan for a small business especially
when you’re starting to on a lean budget giving away free or discounted products can bring customers
through your doors for example you can offer a discount for first time customers may be they get 10% off
on their first purchase you can also offer incentives for your current customers to refer new customers.

2.8.3 Establish customer care unit

It is a goal where customer can describe how people are treated when they interact with the brandit is
important aspect of customer service because it fosters an emotional connection with the brands community.
Customer care unit measured in the same way as customer loyalty or success that’s because things like
loyalty and success are a by-product of caring for your customer.

2.8.4 Giving warranty to customer

Warranties provide definite value to the consumer, you can help your customer take advantage ofthis
offering by helping them understand what that value is and how to get it, before they make the purchases a
warranty is a promise to your customer that you won’t take a long-time relationship

15
with them. It is an assurance that you can stand behind your products quality and wanted the product to
be used for a long time.

16
 CHAPTER THREE

3.0 ORGANISATION AND MANAGEMENT PLAN

3.1 ORGANISATION STRUCTURE

The organization structure of Milele restaurant would be shown below:

DIRECTOR

MARKETING
MARKETING
ACCOUNTANT
MANAGER
MANAGER
GENERAL
GENERAL
MANAGER ASSISTANT
MANAGER
ASSISTANT

ACCOUNTANT

ASSISTANT

Milele restaurant would employ a director in the top position. The business would also employ the
accountant, general manager and marketing manager who would be answerable to the director. Below every
manager every managerial position there would be corresponding supervisors.

3.2 MANAGEMENT TEAM

To ensure that Milele restaurant functions successfully, the entrepreneur would look for a strong,competent
and skilled Management team. The management team would comprise of the top manager, that is the
director, middle-level managers which would include; general manager.

17
3.3 OTHER BUSINESS PERSONNEL

3.3.1 Cleaner

a) For all basic cleaning in and around residences or office buildings.

b) Clean floors and room.
c) Wishing and drying windows
d) Emptying trash cans
e) Reporting any breakages that occur during the cleaning process
f) Informing the line manager of repairs that need to be done.
g) Ability to work cohesively as part of a team
h) Liaising with the line manager to ensure that you have sufficient cleaning products at all
times
i) Scrubbing and sanitizing toilets, sinks and Kitchen fixtures
j) Dusting ceilings, Light fittings, Countertops and loose furniture.

Qualifications

a) Able to use a variety of cleaning products and equipment.

b) Proven experience in a similar role.
c) Excellent organizational skills.
d) Able to complete tasks on time with minimal supervision.
e) High school diploma or equivalent is advantageous.
f) Able to stand for extended periods of time.
g) Available to work mornings and evenings, plus weekends as needed.

Remuneration

The expected salary would be Ksh 10,000

3.3.2 Cooks
Responsibilities

a) Organizing staffing rosters for kitchen staff

b) Ensuring kitchen security at all times

18
 c) Maintaining a clean and tidy kitchen
d) Ensuring the correct storage and disposal of food stuff.
e) Participating in any training offered to the kitchen staff.
f) Handling any additional duties delegated to you.
g) Adhering to all policies of health and safety at work.
h) Ensuing the maintenance of kitchen equipment and report any breakdown.
i) Preparation of menus.

Qualifications

a) You are a strong team player with excellent interpersonal skills.

b) You have exposure to any related chef training.
c) You have excellent communication skills both oral and written.
d) Must have 1 to 3 years of experience in a busy organization.
e) You have a diploma in food and beverage production
f) You are energetic and passionate about cooking.
g) You are a graduate in Hotel and hospitality management from a recognized institution of
higher learning.
h) Yu are able to work well and meet strict deadlines with minimum supervision.

Remuneration

The expected salary would be Ksh 19,000

3.3.3 Waiter

Responsibilities

a) To serve customers in an accommodating manner

b) Must know all foods, liquor, beer, wine and retail offered
c) Apply positive sales approach to guide guests
d) Must be of legal age to serve alcoholic beverages
e) Must have all legal certificates as required by Health department and alcoholic beverage
commission statues
f) Must have clear written and verbal communication skills

19
 g) Must have the physical abilities to carry out the functions of the job description.
h) Provide responsible service of alcoholic beverages.

Qualifications

a) Customer service skills

b) The ability to work well with others
c) Ability to accept criticism and work well under pressure
d) Excellent verbal communication skills.
e) To be thorough and pay attention to detail

Remuneration

The expected salary would be Ksh 15,000

3.4 RECRUITMENT TRAINING AND PROMOTION OF PERSONNEL

For successful operation, Milele restaurant would recruit a team of competent qualified and skilled
personnel to help in carrying out the business functions.

3.4.1 Recruitment

The entrepreneur will communicate a notice to whoever is willing, through advertising the job so to
attract employees for a job vacancy in different places the entrepreneur will search for prospective
employers and stimulate and encourage them to apply for job in an organization. It will be free and fair,
this will start with the employee’s reaction to the question that will nature the attentions where the
successful candidates will be employed and placed in their respective job areas.

3.4.2 Training

The entrepreneur will teach the employees and help them to acquire and apply the knowledge training
allowing them to feel more comfortable as they keep adjusting to new responsibilities or an entirely new
role at a company and the skills they develop can help them succeed in the role and providing additional
training plans to long term employees is also a great way to improve employee retention, you can train them
through the following types receptive, directive and guided

20
3.4.3 Remuneration and incentives

The entrepreneur can pay the employees by paying them monthly or weekly basis some workers also receive
bonuses, commission payments, retirement savings contributions or other fringe benefits of financial value
many sales positions offer a commission on the sales made by an employee or a percentage of the amount
sold some of these commissioned positions after a base salary while others are solely dependent on
commissions.

3.5 LICENCES AND PERMIT

In order to comply with statutory regulations governing business the entrepreneur would obtain the
following legal requirement from the required office

3.5.1 licenses

Milele restaurant would obtain a trading license from Nakuru County Municipality office after paying a
stipulated license fee with the government regulations.

3.5.2 Permit

It is the permission to take the job in foreign country when you factor in the need to get a short term permit
as well, plus all the rigors of submitting applications and supporting documents. It deals make sense to use a
local expert to assist you.

3.6 SUPPORTING SERVICES

For the successful operation of the business, Milele restaurant would seek business supporting services
from different service providers to provide relevant business services.

3.6.1 Banking services

Milele restaurant would liaise with Equity Bank for provision of a number of services which include:

21
 a) Credit cards

A credit card allows its holder to make purchases of goods and services in exchange for the credit cards
provider immediately paying for the good or service the cardholder promises to payback the purchase
amount to the card provider over some time and with interest.

b) Mobile banking

Mobile banking is used for performing balance checks account transactions, payments, credit applications
and other banking transactions through a mobile device such as a mobile phone or personal Digital Assistant
(PDA)

c) Debit card

Debit cards are used to withdraw funds directly from the cardholder’s accounts electronically. Most debit
cards require a Personal Identification Number (PIN) to be used to verify the transaction.

d) Home banking

Home banking is a process of completing the financial transaction from one’s own home instead of
utilizing a branch of a bank. It includes making account inquiries, transferring money, paying bills,
applying for loans, directing deposits.

e) Online banking

Bank offer online banking that allows account holders to access their account data via the Internet, Online
banking is also known as “Internet banking” or “web banking” Online banking through traditional bank
enables customers to perform all routine transactions such as account transfers, balance inquiries, bill
payments and stop payment requests.

The address of the service provider would be

Equity Bank

Nakuru branch

P.o Box 3070 – 2100, Nakuru

22
 Telephone number +25492817764

3.6.2 Insurance

Milele restaurant would liaise with Pioneer Insurance for provision of a number of financial services which
include:

a) Life insurance

It provides a financial benefit to dependents upon premature death of an insured person, the policy pays a
specified amount called a “death benefit” to the named beneficiary when the insured dies.

b) Fidelity

Many of all of the products featured here are from our partners who compensate us. It now offers a
number of services including retirement services wealth management.

c) Mortgage

You can borrow money from a bank society and you will then pay this money back every month for a set
number of years.

d) Annuities

It is issued by an insurance company and is designed to help protect you from the risk of outlining your
income through annotation your purchase payments are converted into periodic payments that can last for
life.

The address of the service provider will be;

Pioneer Insurance

Nakuru branch

P.o Box 3070-20100 Nakuru Telephone

Number: +254792817764

23
3.6.3 Security services
Milele restaurant would liaise with Falcon Security Services for the provision of a number of financial
services which include;

a) Security guard service

Their work is to prevent a crime from happening by proactively watching for suspicious behaviours,
mitigating risks as they appear and contacting the proper authorities when an incident occurs.

b) Patrolling services

The prime purpose of the patrol is to maintain the security of the area and act as crime deterrent their
presence alone is to secure the Clients site and reduce the risk of vandalism

c) Armed security

Service is needed for locations that need a tougher security service they are popularly used in high-threat
environments where an individual’s life is in danger or if the business or property is located in a high-crime
area.

d) Surveillance operator

The equipment is installed for security purposes. Surveillance cameras are used for the purpose of observing
an area. They are often connected to a surveillance aircraft the operator may collaborate with other
security guards to evaluate camera footage, conduct surveillance and monitor the situation.

e) Patrol guards

They are governed by a security tagging system to log times and dates of when the patrolling guards have
monitored particular areas of the grounds where they hire a permanent security patrol guard.

The address of the service provider will be:

Falcon Security Services

Nakuru branch

24
 P.o Box 3070-20100, Nakuru

Telephone number: +254792817764

3.6.4 Postal and telecommunication services

Milele restaurant would liaise Kenya Postal Service for the provision of a number of financial service which
include:

a) Courier services

Courier services is a premium all-inclusive which collects and delivers shipments in the shortest possible
time frame, they can be booked and paid for online senders have the option to have their parcels collected
by a courier or drop their parcel off at a nearby location to be picked up later by the courier.

b) Postal mail services

Postal mail services are generally used for transporting letters and parcels which can sometimes take some
time to arrive at their final destination make it possible for any person to send letters, packets or parcels to
any addressee in the same country or abroad in the expectation that it will be conveyed according to
certain established standards.

The address of the service provider will be:

Kenya Postal Service

Nakuru branch

P.o Box 3070-20100, Nakuru Telephone

number: +25479281776421

25
 CHAPTER FOUR

4.0 PRODUCTION PLAN

4.1 PHYSICAL FACILITIES

To ensure that operation of the business is carried out with success, this will entail all the necessary facilitated
requirements to run it successful the entrepreneur would need the following physical facilities

i. Gate
ii. Packing zone
iii. Reception
iv. Restaurant
v. Kitchen
vi. Store

PACKAGING RECEPTION
ZONE

RESTAURANT

GATE
KITCHEN

STORE

The entrepreneur would acquire these physical facilities by hiring them, since the financial constraints that
do exist would hinder the entrepreneur to buy the facilities immediately. The entrepreneur would also ensure
to planned repair and maintenance can support brand uptime to reduce the possibility of failure. However,
in scaling responsibility leads to long term success the entrepreneur would acquire his own permanent
premise would make sure that your redirecting any revenues back into the business. It’s vital to invest
early and heavily in order to grow quickly.

26
4.2 OTHER FACILITIES (MATERIAL FACILITIES)

4.2.1 Fridges and freezers

Fridges and freezers they are required to store many food items at a minimum temperature where the
entrepreneur could require ten fridges and freezers.

4.2.2 Microwave

The entrepreneur would require seven microwave. The microwave is used for finishing touches or single
serving which you can reheat be made dishes in no time.

4.2.3 Ice maker

The ice maker is mostly needed in a restaurant especially if you have a wide selection of cocktail offering
the entrepreneur could require ice maker which will able to satisfy your guests carvings whether they prefer
their margarita blended on the racks.

4.2.4 Ovens

The oven is one of the critical pieces of the equipment used in the restaurant. Kitchen run a raw food where
by the entrepreneur would require five ovens.

4.2.5 Slicers

The slicers help to save your staff sometime whereby if you only slice the occasional piece of food a
manual slicer will get the job done for lower cost where the slicer are required like ten in the restaurant.

4.2.6 Griddle

Griddle is a piece of equipment used in a restaurant kitchen has a flat metallic cooking surface that’s
perfect for diner main stays like fried eggs where the entrepreneur needs seven griddle in the restaurant.

27
4.2.7 Washing Equipment

Hand and dish washing station are typically required by local health departments. The entrepreneur could
require ten washing equipment. The handwashing station is vital to help to prevent the spread of food illness
and the bacteria.

4.2.8 Gas or Electric Grill

Gas grill area a favourite in restaurant since gas heating is more reliable fro even cooking. This grills come
in many sizes some even with a flat top conveniently attached. Electric grill isn’t overly popular and don’t
provide the rich flavour you can get with a gas the entrepreneur could require seven gas in the kitchen.

4.2.9 Prep counters and cutting boards

It is important to invest in the proper materials needed for restaurant business to make your food prep as
sanitary as possible so you’ll want to choose a stainless-steel prep table and high density polyethylene
cutting board, where the entrepreneur could require seven cutting boards and of different colour according
to the type of there work.

4.3 PRODUCTION PROCESS

Ordering food

Receiving

Inspection of the

Storage

Pre-preparation

Assembly

Packaging

Distribution

28
Step i: Ordering of food staff

The entrepreneur would ensure that there is high quality accessibility, convenience and the time and delivery
of the foodstuffs from the supplies and ensure that the promotional activities are really helpful in price which
determinant to influence the food to order where they is an interested to save money and hence special offer
and promotional activities are really helpful in price which determinant to influence the food to order.
Where there is an interested to save money and hence special offer and promotional activities.

Step ii: Receiving

In some companies the receipt of good may be based on departmental store which channels all the goods to
respective entries. The issuance of goods may be based on consumption patterns of different users who are
primary beneficiary of such goods. The essence of advocating different personalities to come and check the
goods is purely geared to enhance transparency and accountability in the whole process.

Step iii: Inspection of the food stuff

The entrepreneur could conduct to identify the quality and quantity of raw material received by evaluating
the transport vehicle used checking the invoice determining the weights and quantities, evaluating
the sensory characteristics and measuring the temperature of the foodstuff.

Step iv: Storage

Foodstuffs that do not require refrigeration and other disposable materials are stored in a separate area
within the kitchen for perishable food hair cooling chamber are used one for the fruit and vegetables are
frozen products one for chilled products and one for storing meals that have passed the pre-preparation.

Step v: Pre –preparation

Food pre-preparation occurs in three areas were one is of meats fruit and for the gains were the pre-
preparation of meat is intended to throw and clean the pre-preparation of the vegetable and fruit is to sanitize
them and remove their unused or damaged parts.

29
Step vi: Assembly cooking

For the convenience, this activity is considered a part of the assembly stage along with the assembly of
spices and lunch boxes which are provided for the public servants in certain sectors of the institution.

Step vii: Packaging

In this step food is enclosed to protect it from tampering or contamination from tampering or contamination
from chemicals when packaging system is used there is preservation of food products food is packed in
boxes shippers and sealed foil then this intended for direct consumer purchase packaging is done for
distributor.

Step viii: Distribution

The distribution occurs in the lunch room where the pre-preparation is contained on a thermal counter and
served to the users by food handlers. The meals have a fixed price and although the food handlers determine
the portion size, the consumers can freely serve themselves food distributed and not consumed because the
consumers serve themselves with more food prior to consuming the amount initially portioned.

4.4 PRODUCTION SCHEDULE

The entrepreneur would ensure that the production schedule of Milele restaurant is one that favours the
employees and ensures the maximum production by the employees. The production schedule of Milele
restaurant would be as shown below:

DAY MORNING AFTERNOON EVENING

MONDAY 6:00 AM – 1:00 PM 2:00 AM – 9:00 PM 10:00 PM – 11:00 PM
TUESDAY 6:00 AM – 1:00 PM 2:00 AM – 9:00 PM 10:00 PM – 11:00 PM
WEDNESDAY 6:00 AM – 1:00 PM 2:00 AM – 9:00 PM 10:00 PM – 11:00 PM
THURSDAY 6:00 AM – 1:00 PM 2:00 AM – 9:00 PM 10:00 PM – 11:00 PM
FRIDAY 6:00 AM – 1:00 PM 2:00 AM – 9:00 PM 10:00 PM – 11:00 PM
SATURDAY 6:00 AM – 1:00 PM 2:00 AM – 9:00 PM 10:00 PM – 11:00 PM
SUNDAY CHURCH CLEANING WATCHING

30
 Milele restaurant would engage in production in three main sessions namely

i) Morning session
ii) Afternoon session
iii) Evening session

The Morning production session will start at 6:00 am and end at 1:00 pm. The

afternoon production will start at 2:00 pm and end at 9:00 pm.

The evening production session will start at 10:00 pm and end at 11:00 pm for all days except Sunday
on Sunday there would be no production to allow employees to rest.

4.5 REGULATION GOVERNING PRODUCTION

Milele restaurant would be governed by the following regulation.

4.5.1 Public health and safety regulation

An entrepreneur will consider occupational health and safety tips by using equipment property make use of
mechanical aids report safety concerns and take breaks regularly, deals with cleanliness in terms of
premises, washrooms, food handling, utensils and workers. Our business will ensure to this regulation by
maintaining the high degree of cleanliness and request for medical letters from workers handling the food.

4.5.2 Occupation area safety

The entrepreneur will get the certificate from the directorate of occupational safety within the county. It
deals with all aspects of physical mental and social health in a workplace. It is a business effort to prevent
injuries and hazards in all work environment. Occupation area safety regulations food service and franchises
must follow protocols are many operational functions including having the right type of fire extinguishers
present, ensuring employees have protective clothing and or equipment’s, timely reporting and recording
workplace injuries and illness and appropriately displaying accident prevention signage throughout the
restaurant.

31
4.5.3Business permit

A business permit will be obtained from your host counties where you are operating a hotel for business.
Most counties have their finance bill that determines the charges levied to business permits for various
establishments there is some tax for the National government that will be collected together with the
business permit fee.

4.5.4 National government regulation

Its aim is to ensure sustainable management of the environment through exercising general supervision and
coordination over matters relating to the environment. It will deal with pollution and garbage management
to maintain a clean environment. We will be disposing our garbage in acomposite pit provided by the county
government to ensure environmental cleanliness.

4.5.5 Health certificates

This is mandatory for all food handler’s health certificates for workers and the establishment are obtained
from the nearest government country health facilities or county officer and dispensaries. It indicates a range
of regulations such as how frequently a restaurant or quick serve restaurant must be inspected by local health
agencies or proper storage and handling procedures for different types of food. This course is designed to
make sure all employees are knowledgeable about safe food handling practises thereby minimising the risk
to patrons.

4.5.6 National environment management act (NEMA)

The entrepreneur could obtain the National environment license after carrying out an environmental impact
assessment done by a registered lead expert or company this is done for classes of hotels that mostly involve
not ignore the importance of environmental impact assessmentin development. A registered expert will help
determine whether your restaurant requires a process called screening.

4.5.7 Fire inspection compliance certificate

The entrepreneur could require this certificate issued by the county government. Ensure you have
knowledge of appropriate fire extinguisher types before investing.

32
4.5.8 Taxation laws

This deals with payment of tax to the government. Our business will be tax compliant this will be done by
paying for tourism levy every month of operation. Paying restaurant employees can be extremely
challenging, but taking the pain of restaurant payroll is possible with thorough knowledge and planning.
If agency regulations aren’t your speciality many local small businesses associations offer classes on
payroll and tax codes and they also provide assistance regarding relevant laws and regulations that may
affect the business.

33
 CHAPTER FIVE

5.0 FINANCIAL PLAN

5.1 PRE- OPERATIONAL COST

Milele restaurant would incur the following pre-operational cost; rents, water, labourers, licensefee,
insurance, cost of manufactured materials, transport and electricity.
5.1.1 Cost of manufactured materials

Item Quantity Amount

Cooking oil 3 litres Ksh 1,200

Sugar 3kg Ksh 450

Rice 7kg Ksh 840

Lemon juice 2 litres Ksh 550

Salt 1kg Ksh 70

Egg 2 trays Ksh 700

All-purpose flour 2kg Ksh 190

Total Ksh 4,000

34
5.1.1 Overheads

The enterprise will incur the following overheads

Item Amount

Rent Ksh 15,000

Water Ksh 5,000

Insurance Ksh 10,000

Transport Ksh 1,500

Salaries and wages Ksh 45,000

Legal fee Ksh 10,000

Advertising Ksh 14,000

Total Ksh 100,500

5.2 WORKING CAPITAL

5.2.1 Current assets

Item Amount

Stock Ksh 300,000

Cash at hand Ksh 200,000

Cash in bank Ksh 50,000

Debtors Ksh 15,000

Total Ksh 565,000

35
5.2.3 Current liabilities

Item Amount

Creditors Ksh 40,000

Long term loan Ksh 60,000

Short term loan Ksh 10,000

Bank Overdraft Ksh 8,000

Total Ksh 118,000

Working capital = Current assets – current liabilities

Working capital = 565,000 – 118,000 = 447,000

5.3 BUSINESS CAPITAL

Source of capital Amount

Owner 700,000

Contribution from friends 100,000

Donations from family and relative 100,000

Loan from bank 100,000

Total 1,000,000

36
5.4 FINANCIAL STATEMENTS FOR THE BUSINESS

For successful financial statements of Milele restaurant the business will prepare the following financial
statements
5.4.1 Trading account

Milele restaurant

Trading accounts

For the year ended 31 December 2024

st

Sh Sh

Opening stock 400,000 Sales 350,000

Add purchase 50,000 Less return inwards 30,000

Add carriage inwards 40,000

Net sales 320,000
490,000 Less return

outwards (50,000)

Less closing stock (200,000)

Cost of sales 240,000

Gross profit 80,000

320,000 320,000

37
5.4.2 Profit and loss account

Milele restaurant

Profit and loss account

For the year ended 31 December 2024

st

Sh Sh
80,000
Rent 15,000 Gross profit
Water 5,000 Discount received 50,000
Insurance 10,000
130,000
Transport 4,500
Salary and wages 45,000
Legal fee 10,000
Advertising 14,000
100,000
Net profit 29,500

130,000 130,000

38
5.4.3 Balance sheet

Tamu restaurant

Balance sheet

For the year ended 31 December 2024

st

FIXED ASSETS Sh Sh CAPITAL Sh Sh

Furniture and fittings 53,000 Owner 700,000
Machinery 150,000 Contribution from 100,000
Land 250,000 Friends
Building premises 100,000 553,000 Family and relatives 100,000
Loan from bank 100,000 1,000,000
CURRENT ASSETS CURRENT LIABILITIES
Stock 300,000 Creditors 40,000
Cash in hand 200,000 Long term loan 60,000
Cash in bank 50,000 Short term loan 10,000
Debtors 15,000 565,000 Bank overdraft 8,000 118,000
1,118,000 1,118,000

39
 5.4.4 Projected cash flow statement for Milele Restaurant 2024

CASH Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct Nov. Dec.

INFLOW
Bal. b/f 0 169,000 254,5000 268,300 251,500 216,800 209,800 189,300 163,800 195,500 351,800 535,80

Sales 250,000 150,000 100,000 90,000 80,000 70,000 60,000 70,000 150,000 250,000 300,000 350,00

Dis. 70,000 50,000 20,000 15,000 15,000 30,000 60,000 15,000 18,000 20,000 25,500 120,00

received

Total 320,000 369,500 374,500 373,300 346,500 316,800 329,800 274,300 331,800 465,500 676,800 1,005,8

CASH
OUTFLOW
Purchases 50,000 20,000 10,000 30,000 40,000 20,000 50,000 20,000 45,000 20,000 45,000 60,000

Salaries 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000

Insurance 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000

Rent 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000

Water 5,000 4,000 3,000 3,000 2,000 1,500 2,000 1,000 1,500 2,500 3,000 5,000

Transport 1,500 1,000 1,200 800 700 500 800 500 800 1,200 1,000 5,000

Legal fee 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000

Advertising 14,000 10,000 12,000 8,000 7,000 5,000 4,000 9,000 9,000 10,000 12,000 15,000

TOTAL 150,500 115,000 106,200 121,800 129,700 107,000 140,500 110,500 136,300 113,700 141,000 175,00

Bal. c/d 169,500 254,500 268,300 251,500 216,800 209,800 189,300 163,800 195,500 351,800 535,800 830,80
4
0
 5.4.5 Projected cash flow statement for Milele Restaurant 2025

CASH Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct Nov. Dec.

INFLOW
Bal. b/f 830,800 1,060,300 1,152,800 1,173,800 1,240,800 1,333,300 1,340,800 1,349,300 1,317,300 1,447,800 1,581,800 1,728,30

Sales 302,000 150,000 100,000 150,000 200,000 90,000 100,000 100,000 150,000 200,000 200,000 250,000

Dis. received 80,000 70,000 60,000 50,000 20,000 30,000 25,000 40,000 40,000 50,000 60,000 90,000

Total 1,210,800 1,280,300 1,312,800 1,373,800 1,460,800 1,433,300 1,465,800 1,489,300 1,567,300 1,697,800 1,847,800 2,068,30

CASH
OUTFLOW
Purchases 50,000 80,000 45,000 40,000 35,000 20,000 25,000 20,000 30,000 15,000 20,000 30,000

Salaries 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000

Insurance 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000

Rent 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000

Water 5,000 4,000 3,000 2,000 1,000 1,500 2,000 2,500 1,500 2,000 6,000 6,500

Transport 1,500 500 1,000 1,000 500 1,500 500 1,500 1,000 1,000 1,500 3,000

Legal fee 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000

Advertising 14,000 13,000 10,000 10,000 11,000 9,500 9,000 8,000 7,000 11,000 12,000 15,000

TOTAL 130,500 127,500 139,000 133,000 127,500 112,500 116,500 112,000 119,500 110,000 119,500 133,500

Bal. c/d 1,060,300 1,152,800 1,173,800 1,240,800 1,333,300 1,340,800 1,349,300 1,377,300 1,447,800 1,589,800 1,728,300 1,934,80
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 5.4.6 Projected cash flow statement for Milele Restaurant 2026

CASH Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct Nov. Dec.

INFLOW
Bal. b/f 1,934,800 2,109,300 2,275,800 2,536,300 2,785,600 2,970,000 3,080,000 3,117,000 3,202,000 3,282,000 3,408,500 3,576,5

Sales 300,000 250,000 310,000 320,000 270,000 285,000 150,000 200,000 170,000 210,000 250,000 350,000

Dis. 60,000 45,000 50,000 40,000 30,000 15,000 10,000 15,000 20,000 25,000 35,000 40,000

received

Total 2,259,000 2,404,300 2,635,800 2,896,300 3,085,600 3,265,000 3,240,000 3,117,000 3,390,000 3,517,000 6,693,500 3,966,5

CASH
OUTFLOW
Purchases 50,000 30,000 45,000 15,000 20,000 25,000 30,000 35,000 20,000 15,000 20,000 30,000

Salaries 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000

Insurance 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000

Rent 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000

Water 5,000 4,500 4,000 4,200 4,600 2,000 2,500 3,000 500 5,500 6,000 6,500

Transport 1,500 1,000 1,000 500 1,000 1,500 1,000 1,000 1,500 1,000 2,000 2,500

Legal fee 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000

Advertising 14,000 13,000 10,000 11,000 10,000 9,000 9,500 11,000 8,000 7,000 9,000 10,000

TOTAL 150,500 128,500 99,500 110,700 115,600 185,000 123,500 130,000 110,000 108,500 117,000 129,000

Bal. c/d 2,109,300 2,275,800 2,536,300 2,785,600 2,970,000 3,089,000 3,117,000 3,202,000 3,282,000 3,408,500 3,516,500 3,837,5
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5.4.5 Ratio analysis

5.4.5.1 Mark up
gross profit
Mark up = X 100% cost of sales
80000
= 240000 X 100%

= 33%

5.4.5.2 Margin percentage

gross profit
Margin percentage = x 100%
net sales
80000
= 320000 x 100%

= 25%

5.4.5.3 Rate of return on investment

net profit
Rate of return on Investment capital investment x 100%
=
29500
= 1000000 x 100%

= 2.95%

5.4.5.4 Liquidity ratio

current assets
Liquidity ratio = current liabilities

565000 = 118000

= 4.79

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5.4.5.5 Break even analysis chart

Total revenue

Revenue Total cost

Variable

cost

Fixed cost

Break-even unit Unit of production

44
Appendices
a) Logo

b) Map location of business

Mary Mount
Primary School

Utumishi
Nakuru – Gilgil
College

Co-operative Milele

College Restaurant

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 c) Map of physical structure

PACKAGING RECEPTION
ZONE

RESTAURANT

GATE
KITCHEN

STORE

d) Pie Chart

Sales
Tumaini
restaurant
72º Baraka
144º restaurant
Silver restaurant
36º 108º
Bismillahi restaurant

46
e) Organizational structure

DIRECTOR

MARKETING
MARKETING
ACCOUNTANT MANAGER
MANAGER
GENERAL ASSISTANT
MANAGER

ACCOUNTANT

ASSISTANT GENERAL
MANAGER
ASSISTANT

47