BUSINESS PLAN

TITTLE : PURE`S DESIGNERS

PRESENTED BY : BOKE PURITY CHACHA

INDEX NO : 703101/3819

PRESENTED TO : KENYA NATIONAL EXAMINATION COUNCIL IN

PARTIAL FULFILLMENT OF AWARD OF
CERTIFICATE IN FASHION DESIGN AND GARMENT
MAKING.

PAPER NO : 206A

SUPERVISOR : MADAM BEATRICE MOGENI

EXAMINATION SERIES : JULY

YEAR : 2023

1
DECLARATION
I hereby declare that all information in this document is obtained and presented in
accordance with academic rules and ethical and it has never been submitted to the college
for award. I therefore declare that this business plan is my personal work presented to the
Kenya National Examination Council in partial Fulfillment of award of certificate in fashion
design and garment making.

Student Name: BOKE PURITY CHACHA

Signature:…………………………………….

Date :…………………………………………..

Supervisor:MADAM BEATRICE MOGENI

Signature:…………………………………….

Date :…………………………………………

2
DEDICATION
I dedicate this business plan to my family for the material and financial support which
enabled me to write this business plan. I also declare my sincere gratitude to my classmates
for their input while making the business plan. May the almighty bless you all.

3
ACKNOWLEDGEMENT
The development of the business plan took the effort, support and guidance of my
supervisor madam Beatrice Mogeni. Am grateful for her guidance and support enabled me
to come up with the business plan. I wish to acknowledge the almighty God for enabling me
through the business plan

4
Contents
DECLARATION................................................................................................ii
DEDICATION...................................................................................................iii
ACKNOWLEDGEMENT.................................................................................iv
EXECUTIVE SUMMARY.............................................................................viii
CHAPTER ONE.................................................................................................1
1.0 BUSINESS DESCRIPTIPON.......................................................................1
1.1 BUSINESS NAME AND LOGO...........................................................1
1.2 BUSINESS LOCATION AND ADDRESS.................................................2
1.3 FORM OF OWNERSHIP............................................................................3
1.4 TYPE OF BUSINESS..................................................................................3
1.5 PRODUCTS AND SERVICES....................................................................4
1.6 JUSTIFICATION OF OPPORTUNITY.......................................................4
1.7 INDUSTRY................................................................................................4
1.8 GOALS OF THE BUSINESS......................................................................4
1.9 ENTRY AND GROWTH STRATEGY.......................................................5
CHAPTER TWO................................................................................................6
2.0 MARKETINGPLAN....................................................................................6
2.1 CUSTOMERS...............................................................................................6
2.2 MARKET SHARE........................................................................................6
2.3 COMPETITORS...........................................................................................7
2.4 PROMOTION AND ADVERTISMENT STRATEGY..............................7
2.5 PRICING.......................................................................................................8
2.6 SALES TACTICTS.....................................................................................8
2.7 DISTRIBUTION STRATEGY.....................................................................8
2.8 MARKETING SWOT ANALYSIS..............................................................9

5
CHAPTER THREE...........................................................................................10
3.0 ORGANISATION PLAN..........................................................................10
3.1 BUSINESS MANAGER.............................................................................10
3.2PERSONNEL NUMBER AND DUTIES....................................................11
3.2 JOB DESCRIPTION...................................................................................14
3.3 ORGANIZATION CHART........................................................................17
3.4 RECRUTMENT TRAINING AND PROMOTION...................................17
3.5RENUMERATION AND INCETIVES......................................................18
3.6 LEGAL REQUIREMENTS........................................................................18
3.7 SUPPORT SERVICES...............................................................................18
CHAPTER FOUR.............................................................................................20
4.0 OPERATION AND PRODUCTION PLAN..............................................20
4.1 FACILITIES AND CAPACITY.................................................................20
4.2 SET UP LAYOUT OF PURE`S DESIGNER............................................21
4.4 PRODUCTION PROCESS.........................................................................22
4.5 REGULATIONS AFFECTING OPERATION.......................................23
CHAPTER FIVE...............................................................................................24
5.0 FINANCIAL PLAN....................................................................................24
5.1 PRE-OPERATION PLAN..........................................................................24
5.2FINANCIAL REQUIREMENT..................................................................25
5.3 WORKING CAPITAL FOR ONE YEAR..................................................25
5.4 PROFORMA INCOME STATEMENT.....................................................26
5.5 PROFORMA BALANCE SHEET.............................................................27
LIABILITIES....................................................................................................27
5.6 PROJECT CASH FLOW STATEMENT...................................................28
5.7 BREAK EVEN LEVEL CALCULATION.............................................................29
5.8 DESIRED FINANCE......................................................................................29

6
5.9 PROPOSED CAPITATION.............................................................................30
APPENDICIES ONE...........................................................................................31
APPENDICIES TWO..........................................................................................32
LOGO............................................................................................................... 32

7
 EXECUTIVE SUMMARY

1.0 BUSINESS DESCRIPTION

The business name will be PURE`S DESIGNERS. The business will be located along
Migori to Sirare highway near Moi photo shoot studio at Mabera market.

Address of the business will be;

PURE` DESIGNERS
P.O BOX 89-4100
MIGORI
TELL NO:0792368202
EMAIL: bokepurity325@gmail.com

The business will be a sole proprietorship. The business will be dealing with ladies
straight skirt e.g. A-line skirt ,Denim A-line skirt, Godey skirt, Tulip skirt, Trumpet skirt,
Bias cut skirt, Box pleated skirt, Mullet skirt, Asymmetrical skirt . The business will be
selling accessories zips, seam, rippers, Bobbin and Bobbin cases, Ribbons, Threads,
Buttons, needles and tape measures. The business will start operating as from the year
2030.
2.0 MARKETING PLAN
The business will be operating 15% of the population as it`s potential customers. The
business will be competing with ISABELLA DESIGNERS

3.0 ORGANISATION PLAN

The management team will be: Manager, supervisor, security, cleaners, Technician, Tailors,
sales men and quality assurance

4.0 OPERATIONAL AND PRODUCTION PLAN

The business facilities includes ;mirror, machine, chair, table, design chart, clock watch,
war drab, demy ,hanger, shelf, tailor`s chalk , needles, scissors, pins, tape measure,
seam rippers, trimmers, rulers, presser feets, thimbles. All these will cost ksh 106210.
The business production process will be as follow:
 Inspection of material
 Measurement

8
  Designing
 Drafting of patterns
 Development of patterns
 Laying/cutting
 Fussing
 Stitching
 Pressing/Inspection
 Packing
 Dispatch
5.0FINANCIAL PLAN
The business will cost a total of ksh 476.210

ITEM AMOUNT
Pre- operational Cost Ksh. 106,210
Working Capital Ksh,370,000
TOTAL Ksh. 476,210

9
 CHAPTER ONE

1.0 BUSINESS DESCRIPTIPON

The business will be located along Migori to sirare highway near Moi photo shoot studios
at Mabera market.

The proposed business will be dealing with ladies straight skirts and accessories.

1.1 BUSINESS NAME AND LOGO

The business name will be PURE`S DESIGNER

The name PURE will originate from Purity the first name four names.

The proposed business logo will be as follows:

PURE`S
DESIGNERS

1
 1.2 BUSINESS LOCATION AND ADDRESS
The business will be located in Mabera Market

N SHOPS

PURE`S
DESIGNERS

MABERA BARISH
MIGORI TOWN
D.O`S OFFICE

FROM TO

MIGORI SIRARE

SLOUGHER
HOUSE
KARAMU DAM
SDA CHURCH

SHOPS
SHIVLING
SUPERMARKET

2
The business address will be:

PURE`S DESIGNER

P.O BOX 89-4100

MIGORI

TELL NO:0792368202

EMAIL:bokepurity325@gmail.com

1.3 FORM OF OWNERSHIP

The business will be a sole proprietorship

The owner will be responsible for all responsibilities and all business activities

Advantages of the sole proprietorship

I. Easy to control business secrets

II. Proprietorship enjoys all profits
III. Easy to start since legally only the license is required
IV. Flexibility in operation
V. Self employment
VI. No legal restriction

Disadvantages of the proprietorship

I. Lack of essential skills

II. Owner suffers all the loss by himself
III. Fatigue business owners gets tired due to long working hours
IV. Unlimited liability
V. More risks involved

1.4 TYPE OF BUSINESS

The proposed business will be dealing with ladies straight skirts e.g A-line skirt, Denim A –
line skirt , Godet skirt, Tulip skirt, Trumpet skirt, Bias cut skirt, Box pleated skirt, Mullet
skirt, Asymmetrical skirt.

The business will be selling accessories e.g. Zips, seam ripper, Bobbin and Bobbin case,
Ribbons, Threads, needles and tape measures.

3
The business will be purchasing the materials from ALPHA`S TEXTILE SHOP at Migori town
near the post office. The business will start operating as from the year 2030.

1.5 PRODUCTS AND SERVICES

The business will be dealing with the products like; ladies skirts e.g A- LINE skirt, Denim A-
line skirt, Godet skirt, Tulip skirt, Trumpet skirt, Bias skirt, Box pleated skirt, Mullet skirt
and Asymmetrical skirt.

The business will be offering services like; transportation to potential customers from shop
to bus station.

Packaging using carrier bags bearing a proposed business name and the logo of the
business.

1.6 JUSTIFICATION OF OPPORTUNITY

The proposed business will create job opportunity to the youth and school dropout which
will help reduce crime in the society as whole.

The government will benefit from the tax.

1.7 INDUSTRY
The business falls under Garment Making Industry

It is a small scale business since it is at its starting point.

The business will be using modern technology like electronic machine to produce high
quality products.

1.8 GOALS OF THE BUSINESS

The business goals will be;

SHORT TERM GOALS

I. To improve living standards
II. Making profits
III. Produce quality products
IV. Creating employment opportunities
V. Provide customers service
VI. Increase market share

4
 LONG TERM GOALS
I. Expand the business into large industry
II. Produce goods for export
III. Buying land for business expansion
IV. Purchasing a van for transportation
V. Grow social media following
VI. Host promotional events

1.9 ENTRY AND GROWTH STRATEGY

The business will be advertising products through bill boards,, banners , posters, television
and radio shows. The business will be offering discount and affordable prices to all
customers and those who buy goods in bulk will be given discount.Free delivery of goods
to potential customers from the shop to the bus stop.

5
 CHAPTER TWO

2.0 MARKETING PLAN

2.1 CUSTOMERS
The proposed business will be entirely targeting all classes of ladies with different status
like; high –class earners, middle-class earners and low –class earners.

The product will be available to customers full time to satisfy their needs mainly and move
with their tastes and preferences will also be available to fit all fine occasion at any given
time.

2.2 MARKET SHARE

The business aim will be securing the largest market share in the local market.

The business will expecting 15% of the population as its potential customers.

The approximate population of Migori will be 20,000 people.

A - Line skirt 15% * 20,000 =30,000

100% =30%

Box pleated 15% * 20,000 =3,00

100% =30%

15% * 15,000 = 2250

Godet skirt 100% =22.5%

15% * 10,000 = 1500

Trumpet skirt 100% =15%

15% * 8,000 = 1200

Mullet skirt 100% =12%

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 15% * 6000 = 900
Asymmetrical
100% =9%

market share
Asymetrical
8%

trumpet skirt
13%
Mullet Skirt
10%

A line skirt
godet skirt 25%
19%

Box pleated
25%

2.3 COMPETITORS
The business will be competing with ISABELLAH DESIGNER as its product will be for only
children and of low quality while PURE`S DESIGNER will be selling unique products of high
quality and fair services to the customers.

2.4 PROMOTION AND ADVERTISMENT STRATEGY

The business will be advertising its product and services through posters, billboards and
creating awareness to the public. The business will be promoting employees for whoever
works hard will be upgrading in the business.

7
2.5 PRICING
The business will be pricing its products and placing the pricing list at a strategic point.

The price list of the product will be as follows;

NAME PRICE

A line skirt 3000

Box pleated 3000

Godet skirt 2250

Trumpet skirt 1500

Mullet skirt 1200

Asymmetrical 900

2.6 SALES TACTICTS

The business will be having a sales men and women who will be selling the business
products.

NAME PRICE
A-line skirt 3000
Box pleated 3000
Godet skirt 2250
Trumpet skirt 1500
Mullet skirt 1200
Asymmetrical 900

2.7 DISTRIBUTION STRATEGY

The business will be distributing their products from the business to the market, customers
and the potential customers by transporting the products using the vehicles.

8
2.8 MARKETING SWOT ANALYSIS
STRENGTH
The business will be producing quality products.

The business will also employ the qualified personnel who will offer the skilled labour.

WEAKENESS
The business will adhere with rules and regulations of starting the business. The
washrooms will always be clean.

OPPORTUNITY
The business staff will get an opportunity through attending seminars and workshop
training to gain more skills.

THREATS
The business threats include; drought, floods, theft cases and fire outbreaks.

9
 CHAPTER THREE

3.0 ORGANISATION PLAN

3.1 BUSINESS MANAGER

The manager will be the overall person dealing with all the responsibilities in the business.

The management team includes the following ; Manager, Supervisor, Security, Cleaner,
Technician, Tailors, Sales men and Quality Assurance.

Qualifications of each and Duties and Responsibilities

MANAGER
Qualifications

I. Have a degree in fashion and design

II. Have a degree in business management
III. Have at least five years of working experience
IV. Gain of professional qualification while in work
Duties and responsibilities
I. Organizing the business
II. Controlling the business
III. Staffing the business
IV. Manages the workers
V. Employs the workers
VI. Planning the business

SUPERVISOR
Qualifications
I. Leadership skills
II. Diploma in fashion and design
III. Ability to motivate and manage the staff
IV. Have at least four years of experience
Duties and responsibilities
I. Delogates work to the workers
II. Creating and managing team schedules

10
III. Supervises the workers
IV. Monitoring employee productivity
V. Training new hires
VI. Setting goals for performance and deadlines that comply with company`s and vision

3.2PERSONNEL NUMBER AND DUTIES

QUALITY ASSURANCE

Qualification
I. Working knowledge of product and services
II. Diploma in quality control
III. Sharp attention to details
IV. Have at least four years of work experience
Duties and responsibilities
I. Inspect the work done
II. Develop a working flow for product inspection
III. Check the quality of the fabric
IV. Documenting and reporting product
V. Developing and implementing standards for inspection
VI. Communicating with other team members to solve problems
TAILORS

Qualification
I. Outstanding sewing skills
II. Proven experience working as a tailor
III. Work experience of four years
IV. Ability to use a sewing skills
Duties and responsibilities
I. Constructing garments for customers based on their specification
II. Take customers measurements
III. Assist in fabric selection
IV. Repairing garments
V. Modifying garments for customers based on their specifications

11
 SALES REPRESENTATION
Qualifications
I. Relationship management
II. Have the ability to articulate how a product or service works to leads
III. Strong interpersonal
IV. Negotiation skills
Duties and responsibilities
I. Opening new markets opportunities
II. Meeting customers need
III. Selling products
IV. Maintaining the business reputation
V. Learning about the product
VI. Ensuring that customers are satisfied and adequately taken care of while making
purchase.

TECHNICIAN
Qualifications

I. Experience as a technician
II. A relevant degree certification or license
III. Proficiency in Microsoft office
IV. Ability to explain problems simply and clearly

Duties and responsibilities of technician

I. Training the trainees in all pattern making garments to match the current fashion
demand.
II. Inspection ,analyzing and trouble shooting system and equipment
III. Running tests and interpreting results to make effective recommendation.
IV. Reading repair manuals and liaising with other professionals.
V. Writing up reports , safety regulations and presentatives maintain plains.
VI. Training them an operation and maintenance of the machines.

12
 CLEANERS
Qualification
I. Proven experience in a similar role
II. Excellent organization skills
III. Able to stand for extend periods of time
IV. High school diploma or equivalent
Duties and responsibilities
I. Ensuring restrooms are cleaned sanitized and restocked
II. Sweeping the room and around the building
III. Damp mopping
IV. Vacuuming the room
V. Cleaning smudge of window and doors
SECURITY
Qualifications
I. Security guard license
II. Physical fitness
III. Mind on the job
IV. Trained in first aid and self – defense
Duties and responsibilities of security
I. Report any suspicious behavior and happenings
II. Monitor surveillance cameras
III. Authorized entrance of people and vehicles
IV. Monitor property entrance

13
 3.2 JOB DESCRIPTION
TITTLE QUALIFICATION
MANAGER  Have a degree in
fashion design
 Have a degree in
business management
 Have at least five
years of working
experience
 Gain of professional
qualification while in
work.
SUPERVISOR  Leadership skills
 Diploma in fashion
 Ability to motivate
and manage the staff
 Have at least four
years of experience
DUTIES SALARY
 Organizing the business 50,000
 Control the business
 Staffing the business
 Manages the business
 Employs the workers
 Delogates work to the 35,000
workers
 Creating and managing
team schedules
 Supervises the work
 Monitoring employees
productivity

QUALITY  Working knowledge  Inspect the work done 9,000

ASSURANCE of product and  Develop a working
services flow for product
 Diploma in quality inspection
control  Check the quality of the
 Sharp attention to fabric
details  Documenting and
 Have at least four reporting product
years of work
experience
TAILORS  Outstanding sewing  Constructing garments @9000,18000
skills  Take customers
 Proven experience as measurements
a tailor  Assist in fabric
 Work experience of selection
four years  Repair garments for
 Ability to use a their customers
sewing machine  Modify garments for
their customers based
on their specification
SALES  Relationship  Opening new markets @12000
REPRESENTATIVES management  Meeting customers
 Have the ability to need 24000

14
 articulate how
products works to
leads
 Strong interpersonal
skills
 Negotiation skills
CLEANER  Proven experience in
a similar role
 Excellent
organization skills
 Able to stand for
extend periods of
time
 High school diploma
or equivalent
SECURITY  Security guard license
 Physical fitness
 Mind on the job
 Trained in first aid
and self defense
TECHNICIAN  Experience as a
technician
 A relevant degree
certification or license
 Proficiency in
Microsoft office
 Ability to explain
problems simply and
clearly
15
 Selling products
 Maintaining the
business reputation
 Learning about the
product
 Ensuring restroom are @6000
cleaned sanitized and 12000
restocked
 Sweeping the room and
around the building
 Picking up large objects
 Damp mopping
 Vacuuming the room
 Report any suspicious @5000
behavior and happening 10,000
 Monitor surveillance
cameras
 Authorized entrance of
people and vehicles
 Monitor property
entrance
 Secure all exits ,doors
and window
 Training the trainees in
all pattern making
garments to match the
current fashion 8,000
demand.
 Inspection ,analyzing
and trouble shooting
system and equipment
 Running tests and
interpreting results to
make effective
recommendation.
  Reading repair manuals
and liaising with other
professionals.
 Writing up reports ,
safety regulations and
presentatives maintain
plains.
 Training them an
operation and
maintenance of the
machines.

TOTAL 12 Ksh = 148,000

3.3 ORGANIZATION CHART

MANAGER

SUPERVISOR

16
TAILOR SALES REPRESENTATIVE
 QUALITY
ASSURANCE

3.4 RECRUTMENT TRAINING AND PROMOTION

Recruitment

The business will be advertising jobs through posters and banners.

The manager will be receiving application letters conducting of interviews

The supervisor will be conducting practical skills

Training

The supervisor will be training new employees before the actual activities starts.

The management will be paying the supervisor amount of one thousand to one thousand
five hundred shillings for training.

Promotion

The business will be promoting workers through their qualifications, hardwork and
whoever produces and whoever has a high speed during working.

3.5RENUMERATION AND INCETIVES

The business will process of employing new employees and giving them their salaries
according to their qualification .New employees earning salaries at every end month.

Employees will be earning their salaries every month according to their duties and
qualifications.

INCENTIVES
It is a reward whoever gives you a present .

17
The business will be offering incentives like Christmas bonus and overtime to motivate
employees to work hard and produce quality products.

3.6 LEGAL REQUIREMENTS

LICENSE
The business will be required a license to abide by laws and regulations.

The license will be obtained or permitted from municipal council after every month.

3.7 SUPPORT SERVICES

The business will require services that supports the business.

The manager will require support services like;

BANKING SERVICES

Equity Bank

MIGORI TOWN

P.O BOX 456

MIGORI KENYA

TELL: 0792368202

EMAIL: bokepurity325@gmail.com

INSURANCE

APA INSURANCE

P.O BOX 456

MIGORI KENYA

0792368202

EMAIL: bokepurity325@gmail.com

18
POST OFFICE

Migori post office

P.O BOX 456

MIGORI

EMAIL: bokepurity325@gmail.com

0792368202

19
 CHAPTER FOUR

4.0 OPERATION AND PRODUCTION PLAN

4.1 FACILITIES AND CAPACITY

The business will require the following equipment e.g. mirrors, machines, chairs, table,
design chart, clock watch, wardrobe, demy , hangers and shelf.

The business will require the following tools which include ; ruler, tailor`s chalk, scissors,
tape measure, needle, seam ripper, pins, trimmer, presser foot and thimble.

EQUIPMENT QUANTITY COST

1. Machines 5 1500@
75000
2. Tables 3 1500@
4500
3. Chairs 8 600@
4800
4. Mirrors 4 700@
2800
5. Design chart 8 200@
1600
6. Clock watch 3 700@
2100
7. Wardrobe 2 1000@
2000
8. Dummy 6 1200@
7200
9. Hangers 10 40@
400

10. Shelves 4 600@

2400
TOOLS QUANTITY COST
11. Chalk 3 packets 30@
90
12. Needle 5 packets 30@
150

20
 13. Scissors 6 200@
1200
14. Tapemeasure 7 50@
350
15. Seam ripper 5 30@
150
16. Pins 5 packets 50@
250
17. Trimmer 3 70@
210
18. Rulers 4 40@
160
19. Presser foot 5 120@
600
20. thimble 5 50@
250
TOTAL KSH 106,210

4.2 SET UP LAYOUT OF PURE`S DESIGNER

MANAGER
BN
SUPERVISOR` DISPLAY ROOM
S OFFICE
OFFICE

4.3 PRODUCTION STRATEGYSEWING ROOM/ CUTTING ROOM

QUALITY
ASSUARANCE MACHINES
The business will require or will be dealing with the materials that will be available which
include; linen, cotton, viscose, rayon, synthetic fibre and satin.

The material will be transported by van or vehicle by road.

WASHROOMS
STORE
The business will be working at normal hours from 8:00am to 5:00pm.

ENTRANCE

21
4.4 PRODUCTION PROCESS

Inspection of material

Measurement

Designing

Drafting of patterns

Developing of patterns

Laying / cutting

Fusing

stitching

Pressing / inspection

packing

Dispatch

22
 IV.5 REGULATIONS AFFECTING OPERATION
Building regulation
The business will need enough space for arrangement of machines and movement of
workers and materials from one place to another.

Safety measures equipment

The business will have safety measures equipment which will be placed at strategic point
e.g exit doors ,fire extinguisher and they will be put at strategic points.

Labour laws
The business will encourage workers to register National Hospital Insurance Fund{ NHIF},
and National Social Security Fund {NSSF}

Health Regulations
The business will have safety condition e.g clean water, toilet , proper hygiene will be
maintained in the environment.

23
 CHAPTER FIVE

5.0 FINANCIAL PLAN

5.1 PRE-OPERATION PLAN

PURE`S DESIGNER`S
Pre-operation plan 2030

The business will require the following equipment and tools

EQUIPMENT AMOUNT (KSh)

Machines 75,000
Tables 45,000
Chairs 4,800
Mirrors 2,800
Design charts 1,600
Clock watch 2,100
Wardrobe 2,000
Dummy 7,200
Hangers 400
Shelves 2,400
TOOLS
Chalks 90
Needles 150
Tape measures 1200
Scissors 350
Seam ripper 150
Pins 250
Trimmers 210
Presser foot 600
Thimbles 250
Rulers 160

TOTAL KSH 106,210

24
5.2 FINANCIAL REQUIREMENT
The business will require Ninety Five Thousand shillings.

Own savings sh 30,000

Friends and relatives sh 15,000

Bank loan sh 50,000

Total ksh 95,000

5.3 WORKING CAPITAL FOR ONE YEAR

Working capital is the money required to start a business.

WORKING CAPITAL FOR ONE YEAR

ITEMS 1ST YEAR 2030

Raw materials 120,000

Debtors 60,000

Cash at hand 90,000

Cash at bank 100,000

TOTAL COSTS KSH 370,000

25
5.4 PROFORMA INCOME STATEMENT
ITEMS KSH {2030}
Sales 150,000
Cost of sales 10,000
Gross profit 140,000
EXPENSES
Repair and maintenance 5,000
Telephone bills 2,000
Advertisement 4,000
Electricity 1,000
License 3,500
Water 1,500
Rent 3,500
Transport 3,000
Postage 2,000
Salary and wedges 10,000
TOTAL EXPENSES KSH 112,000

NET PROFIT BEFORE TAX (G.P – E )

140,000 – 112,000

(N.P.BT) = 28,000

PROVISION TAX 10%

10 * 28,000
100
NET PROFIT AFTER TAX

(N.P.B.T) - (P.T)
28,000 – 2,800
( N.P.A.T) = 25,200

26
5.5 PROFORMA BALANCE SHEET
ITEM AS END OF 1ST YEAR
DATE 31ST DEC 2023
ASSETS
CURRENT ASSETS
Stock 120,000
Debtors 90,000
Cash at hand 100,000
Cash at bank 110,000
TOTAL KSH 420,000
FIXED ASSETS
Machinery and equipment 120,000
Furniture /fitting 90,000
TOTAL FIXED ASSETS KSH 210,000
TOTAL ASSETS KSH 630,000

LIABILITIES
CURRENT LIABILITIES

Creditor

LONG TERM LIABILITIES

Owner equality 600,000

Bank loan 30,000

Net profit after tax

27
ITEMS JAN FEB MAR APRIL MAY JUNE JULY AUG SEP OCT NOV DEC TOTA
Debtors 12,000 14,000 13,000 10,000 12,000 9,000 8,000 11,000 7,000 10,000 5,000 15,000 Sh 126
Cash sales 5.6 PROJECT
15,000 CASH FLOW
11,000 13,000 STATEMENT
14,000 13,000 14,000 12,000 15,000 16,000 18,000 14,500 12,000 Sh 168
TOTOAL 27,000 25,000 26,000 23,000 26,000 22,000 22,000 23,000 22,000 26,000 23,000 29,000 Sh 294
RECEIPTS
EXPENCES
Transport 900 810 900 700 900 900 900 800 900 900 700 600
Water 500 450 400 300 200 500 400 350 400 450 700 600
Tools and 1,500 1,000 500 600 400 1,200 300 700 200 300 400 1,500
equipment
Rent 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000
Stock 10,000 7,000 8,000 6,000 9,000 5,000 6,000 8,000 7,000 9,000 8,000 10,000
Advertisemen 500 1000 600 400 300 500 200 400 300 600 700 900
t
Telephone 900 800 700 600 600 700 800 900 700 600 500 9000
bills
License 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500 3,500
Postage 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500
Wedges and 1,800 3,500 4,500 3,000 4,500 3,000 1,500 1,700 1,600 1,600 3,500 4000
salaries
Repair and 500 500 500 500 500 500 500 500 500 500 500 500
maintenance
Electricity 500 500 500 500 450 300 500 500 450 350 500 500
TOTAL 26,100 24,560 25,600 22,100 25,850 21,600 21,100 22,850 21,050 23,300 20,800 28,500 Sh 282
EXPENCES
TOTAL 27,000 25,000 26,000 23,000 26,000 22,000 22,000 23,000 22,000 26,000 23,000 29,500 Sh 294
RECEIPTS
NET CASH 294,500 – 292, 410 =KSh 12,090

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5.7 BREAK EVEN LEVEL CALCULATION
Break-even level =
Fixed Assets
% contribution margin

i. Total contribution margin = Sales – Total Cost of Sales

150,000 – 10,000

= Ksh140,000

ii. Contribution margin

140,000 * 100
150,000 =93.3%

iii. Total fixed cost = operating expenses of 1st year

Total fixed cost = Ksh 106,210
Broken even level = Fixed Assets
% contribution margin

= Ksh 106,210 =31138.370

93.3%

5.8 DESIRED FINANCE

ITEM AMOUNT
Pre- operational Cost Ksh. 106,210
Working Capital Ksh,370,000
TOTAL Ksh. 476,210

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5.9 PROPOSED CAPITALISATION
I. Gross profit * 100%
Gross profit % = sales
140,000 * 100%
150,000 =93.3%
II. Return On Equity = Net profit after tax * 100%
Owners savings

25,200 * 100%
30,000 =84%

III. Return on Investment = Net profit after tax * 100%

Total liabilities

25,500 * 100%
630,000 4%

IV. Net profit margin =

Net profit after tax * 100%
Net profit before tax

25,000 * 100%
28,000 90%

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APPENDICIES ONE
MAP

32
APPENDICIES TWO

LOGO

33