BRENDA WATER REFILLING COMPANY

PRESENTED BY: WASWA BRENDA OKOTI

INDEX NO: 570102170

SCHOOL CODE: 570102

INSTITUTION: ADVANCED BUILDING SCHOOL NYS GILGIL

COURSE CODE: 1305l316

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL FOR PARTIAL FULFILMENT OF

AWARD OF CRAFT CERTIFICATE IN PLUMBING

SUPERVISOR: TERESIA NJOROGE

SERIES: JUNE/JULY 2023

 DEDICATION
I dedicate this business plan to Advanced Building School, National Youth Service fraternity and to all my family
members for their continued moral, spiritual, emotional and financial support. They all inspired me and
rejuvenated my energy whenever I thought of giving up.

ii
 ACKNOWLEDGMENT
I warmly express my gratitude to my teachers and my colleague students for their great contribution towards the
success of this business plan.

I also thank my entrepreneurship teacher Mrs. Teresia for special his guidance and supervision through the entire
journey.

Special thanks to the National Youth Service, Principle of Advanced Building School Gilgil College. May the
almighty God bless you all.

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 DECLARATION
I Brenda hereby declare that this business plan is my own original work which has not been presented by anyone
from other institution for award of craft certificate in plumbing.

Date: June/July 2023

Sign: ______

Supervisor Name: Teresia Njoroge

Date: ___________________

Sign: _______

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 TABLE OF CONTENTS

DEDICATION............................................................................................................................................................................ ii
ACKNOWLEDGMENT............................................................................................................................................................iii
DECLARATION............................................................................................................................................................................ iv
TABLE OF CONTENTS............................................................................................................................................................v
EXECUTIVE SUMMARY......................................................................................................................................................viii
1.1 Business description.......................................................................................................................................................viii
1.2 Marketing plan...............................................................................................................................................................viii
1.3 Organizational Plan........................................................................................................................................................viii
1.4 Production plan..............................................................................................................................................................viii
1.5 Financial plan................................................................................................................................................................. viii
1.0 CHAPTER ONE: BUSINESS DESCRIPTION....................................................................................................................1
1.1 Background of the owner..................................................................................................................................................1
1.2 Business name.................................................................................................................................................................. 1
1.3 Business location and Address..........................................................................................................................................1
1.3.1 The business will operate under the following address..............................................................................................1
1.3.2 Physical Location of the Business..............................................................................................................................2
1.4 The form of Business ownership.......................................................................................................................................2
1.5 Types of business..............................................................................................................................................................3
1.6 Products and services........................................................................................................................................................3
1.6.1 Products.....................................................................................................................................................................3
1.6.2 Services......................................................................................................................................................................3
1.7 Justification of opportunity...............................................................................................................................................3
1.8 Industry............................................................................................................................................................................. 3
1.9 Goals and objectives.........................................................................................................................................................4
1.9.1 Long term goals.........................................................................................................................................................4
1.9.2 Short term goals.........................................................................................................................................................4
1.9.3 Objectives.................................................................................................................................................................. 4
1.10 Entry and growth strategy...............................................................................................................................................4
1.10.1 Entry........................................................................................................................................................................4
1.10.2 Growth.....................................................................................................................................................................4

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2.0 CHAPTER TWO: MARKETING PLAN.............................................................................................................................5
2.1 Customers......................................................................................................................................................................... 5
2.2 Market shares....................................................................................................................................................................5
2.3 Competitors...................................................................................................................................................................... 6
2.4 Method of promotion and advertisement..........................................................................................................................8
2.5 Pricing strategy.................................................................................................................................................................9
Payment options.....................................................................................................................................................................9
2.6 Sales tactics....................................................................................................................................................................... 9
2.7 Distribution strategy.........................................................................................................................................................9
3.0 CHAPTER THREE: ORGANIZATION AND MANAGEMENT PLAN..........................................................................11
3.1 Management team...........................................................................................................................................................11
3.2 Organization structure chart............................................................................................................................................11
3.3 Business managers and qualifications.............................................................................................................................11
3.5 Recruitment, training and promotion..............................................................................................................................13
3.5.1 Recruitment..............................................................................................................................................................13
3.5.2 Training................................................................................................................................................................... 13
3.5.3 Promotion................................................................................................................................................................ 13
3.6 Remunerations and incentives........................................................................................................................................13
3.7 Licenses, permits and by laws.........................................................................................................................................14
3.7.1Licenses........................................................................................................................................................................14
3.7.2 Permits.....................................................................................................................................................................14
3.7.3 By – laws................................................................................................................................................................. 14
3.8 Support services..............................................................................................................................................................14
3.8.1 Banking services......................................................................................................................................................14
3.8.2 Insurance services....................................................................................................................................................14
4.0 CHAPTER FOUR: PRODUCTION PLAN........................................................................................................................15
4.1 Production facilities and capacity...................................................................................................................................15
4.2 Production strategy.........................................................................................................................................................16
4.3 Production Expenses.......................................................................................................................................................17
4.4 Production process..........................................................................................................................................................18
4.5 Regulations affecting operations.....................................................................................................................................18
4.5.1 Government regulations...........................................................................................................................................18
5.0 CHAPTER FIVE: FINANCIAL PLAN..............................................................................................................................19
5.1 Pre operation cost...........................................................................................................................................................19

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5.2 Working capital..............................................................................................................................................................19
5.3 Brenda water refilling company Cash flow in 1st year 2024............................................................................................20
5.3.2 Brenda water refilling company Cash flow in 1st year 2025.....................................................................................20
5.3.3 Brenda water refilling company Cash flow in 1st year 2026....................................................................................21
5.4 Pro forma income statement...........................................................................................................................................22
5.5 PRO FORMA BALANCE SHEET...........................................................................................................................23
5.6 Break even points...........................................................................................................................................................24
5.6.1 Contribution margin.................................................................................................................................................24
5.6.2 Contribution margin percentage...............................................................................................................................24
5.7 Profitability ratios...........................................................................................................................................................25
5.8 Desired financing............................................................................................................................................................26
5.9 Proposed Capitalization..................................................................................................................................................27

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 EXECUTIVE SUMMARY

1.1 Business description

Brenda water refilling company is located in kakamega town, 30 KM north of the equator in Western region of
Kenya. The town has an approximate population of 186,759 people according to the Kenya Bureau of Statistics.

Brenda water refilling company is a public limited company dealing with water treatment and refilling. An intense
survey revealed a great and expansive market in water treatment and refilling business.

The goals of the business are to provide adequate clean and safe drinking water to the customers thus maximization
of profits as well as faster growth and expansion of the company. To actualize the goal, the company is dedicated
in minimizing expenses and in turn maximizes profits.

1.2 Marketing plan.

Brenda water refilling company will be keen in positively identifying their potential customers with a great focus
on institutional, industrial as well as domestic customers. Market survey reveals the three competitors do not
adequately satisfy the expansive market thus a great opportunity to venture into the market. Our competitors are
greatly disadvantaged by their business location, inefficient management and poor entrepreneurship skills. We
take advantage of this by adopting a more friendly marketing strategy like aggressive advertising, sales promotions
and use of simple but effective distribution channels in order to serve the entire market.

1.3 Organizational Plan

The organization will be in the hands of a very efficient team headed by the manager. Only the right personnel will
be absorbed in the company in order to effectively boost production. The vacancies shall be competitive based on
the qualification and experience workers. The business shall comply with all legislations that affect human
resources like support services from pronoun service providers within easy reach.

1.4 Production plan

The proposed company will sale treated and refilled water ton its customers. The business will operate under high
hygiene levels and will acquire a permit from public health office and license from the government.

1.5 Financial plan

The business will require KS 13M to start operations. The money will ensure smooth running of the operation
activities as well as catering for all business requirements. The capital will be raised from personal savings of KS
5M, donations of KS 3.5M and bank loan of KS 4.5M from co-operative bank.

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 1.0 CHAPTER ONE: BUSINESS DESCRIPTION

1.1 Background of the owner

The business will be owned by Brenda Waswa from Mumias east Sub County, kakamega county. The entrepreneur
graduated from high school in 2018 and joined the National youth service in 2019 for paramilitary training. She
then joined Vocational training for a craft certificate in plumbing at Gilgil Advanced School. Brenda has a great
interest in starting and growing her own business brand in water treatment and refilling industry.

1.2 Business name

The proposed name of the business is Brenda Water Refilling Company. The first part of the business name is the
owner of the business. The owner decided to choose this name because it is common and easy to the locals to
understand. The second part is what the business will be dealing with.

Reasons for starting a water refilling company

 To reduce the amount of plastic generated by water bottles

 The entrepreneur realized that refilled water is better than tap water
 Treated refilled water is cheaper than bottled water
 To promote environmentally friendly

1.3 Business location and Address

Brenda water refilling company will be located in Kakamega town opposite kakamega high school along
Kakamega - Mumias highway.

1.3.1 The business will operate under the following address

Brenda water refilling company

P.O BOX 1101,

Kakamega

Phone: 0797632626

Email: brendaokot@gmail.com

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1.3.2 Physical Location of the Business

Brenda water Refilling

Company Kakamega water
and sanitation

Kakamega – Mumias Road

Kakamega
High school

1.4 The form of Business ownership

The business will be operated under public limited company form of ownership. The main product will be treated
water. The owner settled on the business because of the following advantages

i) Wide range of sources of capital. The business can access loans from varied reliable financial
institutions with better repayment terms.
ii) Qualified and experienced management. The company will be able to hire efficient work force.
iii) Share of loss. Large membership and the fact that the capital is divided into different classes.
iv) Shareholders are safeguarded. The publicity of the company safeguards against fraud.

Disadvantages
i) Decision making. Important decision making is only done by the directors and shareholders.
ii) High initial capital. The process of starting and registering a company is expensive and lengthy. Legal
costs, registration costs and taxes are unfriendly to investors.

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1.5 Types of business
The proposed business will be under commercial and services business because it involves selling and refilling
of treated drinking water to customers. The selling of goods and provision of services will be managed by the
proprietor.

1.6 Products and services.

1.6.1 Products
The business is going to operate under standard and license from the county government of Kakamega to sale
and refill treated water as the main product to households, government officials, event planners and industrial
plants via hygienic water tankers in strict conformity to the law.

1.6.2 Services
Some of after sale services that shall be offered to our customers include free delivery to goods above 10 liters.
The company will accept cash payment, pay bill or bank deposit.

1.7 Justification of opportunity

The research was carried out in the county and justify the place is suitable for the proposed business due to the
following reasons;

i) Market. There is an expansive market for the product. There are many customers and industrial
activities that need clean water.
ii) Availability of social amenities like hospitals, schools and hotels that require clean water dense
population. There is a high population who make up a good market for our product.

1.8 Industry
Brenda water refilling company will be focusing on selling treated drinking water. It is under wholesale and
retail services which are rapidly growing as per the research conducted by the ministry of health and sanitation.
This has been fostered by increased demand for clean water attributed to growing population in Kakamega
town due to increased rural urban migration.

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1.9 Goals and objectives

1.9.1 Long term goals

i) To enhance various steps in purifying water in order to maintain the highest standards of water
purification
ii) To ensure proper enforcement and implementation of drinking water regulations
iii) To carry out public sensitization in order to educate people on importance of drinking clean water.

1.9.2 Short term goals

i) To create job opportunities among youths
ii) To sensitize the public on importance of drinking clean water
iii) To reaffirm and promote the right to access to clean and safe water.
iv) To maintain clean environment

1.9.3 Objectives
i) To acquire the necessary equipment for the operation of water refilling company as well as acquisition
of vehicles to deliver water to our customers.
ii) To enhance various steps in purifying water in order to maintain the highest quality of water
purification.
iii) To maintain customer loyalty and attract other market segment.
iv) To sustain the profitability of the business and open more branches.
v) To satisfy our customers’ needs through an efficient system and quick response on customers’ needs.

1.10 Entry and growth strategy

1.10.1 Entry.
The business enter the market through the following strategies

Collecting all legal documents like licenses putting posters in strategic areas including the location and it will be
done by John cyber who will be responsible for printing out posters and advertisement messages.

The company also intends to develop promotional strategies and free delivery of goods to customers who buy in
bulk.

1.10.2 Growth
The company will be keen on its reputation to the public especially its relation to the customers as well as business
conduct.

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 2.0 CHAPTER TWO: MARKETING PLAN
Before choosing on the business location, the company conducted thorough survey. The location is essential in
helping the company penetrate to the market. The company similarly has invested in detailed information and data
that are essential in structuring the business in order to attract customers.

2.1 Customers
When it comes to setting treated water company there is a wide range of customers. In essence, our target market
cannot be restricted to a small group of people but also those who reside in our target market locations. In view of
that, we have conducted our market research and come up with a lot of ideas

We are highly targeting the following groups as our potential customers;

 Households
 Schools
 Hotels and restaurants
 Government offices
 Event planners

2.2 Market shares

According to Kenya Bureau of Statistics data, Kakamega town has an approximate population of 1867579 people.
Our company is planning to override the competitors in this massive market. Our recent market survey highlights
the weaknesses of our competitors such as disorganized workers, poor hygiene, lack of packing facilities and we
are planning to capitalize on that. Our company therefore will take advantage of the weaknesses portrayed by our
competitors in order to fully conquer the market.

Market share = Target Population X100%

Total population
=933789 X 100 = 50%

1867579

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The pie chart below shows the competitors of Brenda water and refilling company and market share

Sales

Brenda Water Refilling Company

Horizon Aqua Water Company
Uzalendo water company
Upendo water refilling company

2.3 Competitors
We are aware of the stiff competition and we are well prepared to compete favorably with other water companies
within Kakamega town where we intent to open our outlets of water company

Competitor A: Uzando water Bottlers Company

Strength

i) Has many working machines

ii) Has customers as they are rendered
iii) Located far from town Centre hence inquires less expenses on rent

Weaknesses

i) Usually open their business irregularly

ii) Poor quality services
iii) Unfriendly prices to low class customers

Competitor B: Horizon aqua water refill station

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Strength

i) Fair prices
ii) Well trained personnel
iii) Proper hygiene

Weaknesses

i) Don’t offer free transport to reliable customers

ii) Do not create awareness
iii) Poor means of transport

Competitor C: Upendo water refilling station

Strength

i. Offer training to staff hence highly qualified staff

ii. Has been in business for over 10 years
iii. Offers free transportation to customers
iv. Offers a wide range of products

Weaknesses

Their price does not favor low class customers

Poor quality services

Unhygienic and disorganized staff

Little stock

Have no specific working hours, may open and close at any time.

Brenda water refilling company

Strength

Strategic location on busy roads in town Centre

Large distribution network and excellent customer service

Strong welfare package to our employees

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Good working conditions and commissions to sales agents

Strong customer relations

Weaknesses

Stiff competition

Price difference

Entry of new competitors

Opportunities

Strong financial base

Great room for expansion

Availability of transportation

Coping up with competition

The company will overcome the competitors by taking advantage of their weaknesses in order to bridge the gap
and fully satisfy the ever increasing demand of the customers.

2.4 Method of promotion and advertisement

Promotion

Offering discount to customers upon purchase of our products. A team of the staff will be sensitizing the people on
our product hence boosting our reach.

Advertisement

As a matter of fact, our publicity and marketing strategy is not solemnly for selling our products but also
effectively communicate our brand. We have more than enough platforms and strategies intended to advertise our
business as follows

i) Place adverts on both print and electronic media such as community based newspapers and magazines.
ii) All staff members to wear company branded clothes. Branding will also be done on all the company
cars, water tankers and water storage facilities.
iii) Engage in road shows from time to time majorly in target areas

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 iv) Internet and social media marketing will also add weight in our marketing efforts for instance
Facebook, what Sapp among other social media platforms.
v) Bill boards to be installed in various strategic locations around Kakamega town.

2.5 Pricing strategy

Pricing of our product majorly drinking water involves two side4s of the coin. Being aware of the pricing trend
in the water refilling company, we have decided to have various sizes of gallons and water tankers. In view of
that our prices will conform to what is obtainable in the company but we will ensure that within the first six
months our treated water are sold a little bit below the average price of our competitors but still ensure that the
company runs on some profit during this period. This pricing strategy will help us get more customers as we
build our brand and customer loyalty.

Payment options
The payment policy adopted by the company is all inclusive because we are aware that different customers
prefer different payment options. The company is determined to ensure that they abide by the financial
regulations for the customers. The company intends to make the following payment options available to our
customer;

 Bank transfers
 Mobile money transfers
 Credit card/point of sales machines
 Cash payment
 Cheque deposit

In view of the above we have chosen we have chosen banking platforms that will enable our clients conveniently
make payments upon purchasing our products.

2.6 Sales tactics

The company is determined to ensure that water is well treated and water tankers are clean and centrally positioned
to easily offer services to our esteemed customers. This will help us attract more customers and make more sales.

In addition advertisements, sales promotions, after sale services, quick response to customer needs, and price
consciousness among many others are ways that will help us attract more customers and make more sales.

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2.7 Distribution strategy
The company intends to explore both direct and indirect channels of distribution. Middlemen shall also be
involved. Suppliers will help in transportation of our commodities to our customers, wholesalers and retailers.

Producers

Wholesalers

Retailers

Customers

xviii
 3.0 CHAPTER THREE: ORGANIZATION AND MANAGEMENT PLAN

3.1 Management team

There will be qualified individuals at the managerial positions, hired to undertake special responsibilities to ensure
smooth running of the company operations.

3.2 Organization structure chart.

At the start the business will be made available to all the management staff and will be based on performance for a
couple of years. The following is the management structure that the company will adopt.

Chief Executive officer

Company Manager
Assistant Manager

Sales and marketing manager

Accountant

Pump Oparater

Drivers

Cleaners

Security

3.3 Business managers and qualifications

The company will be headed by the board of directors who will oversee all the operations, financial position as
well as making crucial decisions to steer the company forward

Managers

Will manage different departments of the company such as Production department, Finance department and
marketing department.

Qualifications

 Must be 30 years and above

 Must have good public image
xix
  Be qualified in the respective fields.
 Good leadership and management skills

Duties

 Oversee the smooth running of the company

 Training, evaluating and assessing workers
 Carry out staff induction to new members
 Maintain public networks

Assistant manager

Will work hand in hand with the m

Manager in the day to day company activities.

Qualifications

 At least 25 years and above

 At least a pass in any water engineering field
 Good public image

Duties

 Balancing the books of accounts

 Responding to customers’ needs
 Supervision of day to day company operations

Sales and marketing manager

Will be in charge of sales and marketing team to ensure that the company makes admirable sales.

Qualifications

 At least 23 years of age

 A graduate with at least a credit in sales and marketing
 Eloquent in both English and Kiswahili

Duties

 Documentation of customers contacts and information

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  Represent the company in strategic marketing meetings
 Boost sales of company products
 Manage external research and co-ordinate all internal sources of information for back up

3.5 Recruitment, training and promotion

3.5.1 Recruitment
Is the process of employing new members into an organization through recommended procedure

a) Advertisement

The company will use posters, radio and television adverts to make vacancies known to the general public.

b) Receiving applications

The application will be received through our official post office number, email address of hand delivered to our
main office.

3.5.2 Training
The selected staff will be subjected to orientation after which they will have to attend a short seminar. In addition
the company will subject workers to refresher trainings on regular basis.

3.5.3 Promotion.
The best performing employees will be subject to promotion to higher positions. Promotion will be based on hard
work, discipline and honesty of employees.

3.6 Remunerations and incentives

Transport and medical allowances will be offered to our employees. Other benefits are as shown in the table below
in accordance to categories.

S/N PERSONEL NUMBER MONTHLY ALLOWANCES GROSS

SALARY(KSH) PAY
(KSH)
1 Manager 1 15000 1000 16000
2 Pump 2 11000 1000 24000
operator
3 Accountant 1 9000 1000 10000
4 Driver 1 7000 1000 8000
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5 Security 2 5000 1000 12000
Total 7 70000

3.7 Licenses, permits and by laws

3.7.1Licenses
The business will be dully registered and licensed by the county government to legally carry out operations

3.7.2 Permits
The business will acquire a permit from public health and sanitation in Kakamega County and will be renewed on
yearly basis.

3.7.3 By – laws
The application form for membership shall include an undertaking to up hold the by-laws, policies, guidelines,
rules and regulations promulgated by the board of staff proper health and safety standards of consumers are
considered.

3.8 Support services

The business will require support services to enable it carry out its operations effectively. They include;

3.8.1 Banking services

To help the business keep its financial safety status in a safe zone. Saving and credit account shall be opened in
co-operative bank

The bank will offer the following services

i) Saving money acquired from the business

ii) Lending credit funds to the business
iii) Offer financial literacy and advise to the company management

3.8.2 Insurance services

The company will acquire insurance cover from the following insurance company

C.F.C insurance company

P.O Box 1101

Kakamega.

xxii
 4.0 CHAPTER FOUR: PRODUCTION PLAN

4.1 Production facilities and capacity

The operation of this business requires good quality of product and facilities. The business shall operate with
digital technologies and updated equipment and product.

The following machines and equipment will be used in running of the business.

Equipment/machine Quantity Cost per unit Total Cost

(KS)
10,000 L Water 2 30000 60,000
storage tanks
Water Pumps 2 6000 12,000
Computers 1 14000 14,000
Files 2 70 140
Office furniture 4 6000 24000
Shelves 2500
3.5 l Water Bottles 5000 500
Total 113140

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 Business premise layout

Exit Entrance
Cashier Security
check

Washrooms Human
Sales Office Resource
Office

Parking

4.2 Production strategy

The main activities that will be carried out in the business are

a) Transportation of the purchased treated water from the company to other business premises.
b) Selling of goods to the customers
c) Advertisement and sales promotion
d) Entry and recording of daily transactions
e) It will help the company its goals

Monthly labour requirement

Job Title Number of workers Salary (Ks)

Manager 1 16000

Accountant 1 10,000

Pump operator 2 24,000

Driver 1 7000

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 Security guards 2 12000

Total 7 69000

The time set for daily operation is from 8:00am to 5:00pm from Monday to Saturday.

Monthly chemical requirement

Chemicals Quantity Amount (Ks)

Chlorine 0.5 liters 1500
Coagulants 1000
Disinfectants 5100
Algaecides 2000
Biocides 2500
Total 12100

4.3 Production Expenses

Expenses Amount (Ks)
Electricity 2000
Printers 8000
Transport 5000
Machines/Equipment Repair 2500
Total 17500

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Yearly Expenses

Expenses Amount (Ks)

Licenses 8000
Advertisements 13000
Insurance 15000
Total 36000

4.4 Production process

Our product will be sold to the customers after undergoing the following treatment process

Our product will be sold to customer right at the premise on cash basis. The customers will be received and
welcomed by the sales agents. Customers can window shop with assistance from our sales agents who will detail
them about our products.

4.5 Regulations affecting operations

4.5.1 Government regulations

The business will be registered and issued with an operation license. We will be tax compliance.

Health regulations

The company will strictly comply to the proper hygienic standards by ensuring clean operation environment at all
times. This will ensure safety of our customers.

Safety regulations

The company will comply to all safety regulations as required by the law in order to ensured that the environment
is free from hazards and workers are safe by providing safety gears.

xxvi
 5.0 CHAPTER FIVE: FINANCIAL PLAN
The company will have books of finance for effective financial management. They include;

a) Cash books for recording receipts and payments

b) Ledger books for recording all the supplies
c) General ledger for recording other transactions that will not fall under the other books of account

The ultimate objective is attaining efficiency in financial management in order to:

i) Be able to determine the financial position of the business at all times

ii) To ensure proper account records are kept
iii) To invest profit for growth of the business

5.1 Pre operation cost

During the start the company will require some money in order to grow.

NO ITEMS AMOUNT(Ksh)
1 Electricity 2000
2 Transport 500
3 Machine/Equipment 2500
4 Licenses/ Permits 8000
5 Advertisement 13000
6 Insurance 15000
7 Printer 8000
TOTAL Ksh. 41800

5.2 Working capital

Current assets minus current liabilities

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 5.3 Brenda water refilling company Cash flow in 1st year 2024
CASH INFLOW JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC Total

cash sales 20500 206000 209000 213500 21500 223000 23000 237000 24700 240700 25000 26500 1663900
0

Cash at hand 154000 175000 117000 126000 13700 14500 25000 18000 19500 20900 15000 13000 2097600
0

Cash in bank 260000 2018140 208500 20900 21000 21100 212700 213900 21400 216000 20800 220000 3761500
0 0

Debtors 105000 195000 116000 12000 13000 150000 150000 104000 10300 102000 101000 105000 1373000
0 0

Total Cash inflow 192550 2594140 650500 372400 56870 408600 410700 572900 36120 579600 161800 364500 8970540
0 0 0

Cash outflow

Cash purchase 200000 24000 230000 200000 21000 260000 220000 20000 24000 250000 210000 20000 1868000
0

payment to creditors 0 0 0 0 2000 0 0 0 0 0 0 0 2000

salaries 69000 69000 69000 69000 69000 69000 69000 69000 69000 69000 69000 69000 828000

electricity 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000

printers 800 800 800 800 800 800 800 800 800 800 800 800 9600

advertisement 13000 0 0 0 0 0 0 0 0 0 0 0 13000

license 8000 0 0 0 0 0 0 0 0 0 0 0 8000

transport 500 500 500 500 500 500 500 500 500 500 500 500 6000

insurance 15000 0 0 0 0 0 0 0 0 0 0 0 15000

Total cash outflow 308300 96300 302300 272300 28430 332300 292300 92300 96300 322300 282300 92300 2773600
0

5.3.2 Brenda water refilling company Cash flow in 1st year 2025
CASH JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC Total
INFLOW

cash sales 266000 277000 288000 299000 301000 312000 320000 334000 346000 366000 376000 386000 3871000

Cash at hand 175000 176000 177000 178000 179000 1710000 1750000 171200 1713000 1714000 171500 1815000 13014000
0 0

Cash in bank 275000 2990000 297000 2890000 2840000 300000 3100000 320000 310000 340000 350000 350000 17035000
0

Debtors 1250000 1350000 145000 1550000 1650000 1750000 1710000 195000 1850000 195000 165000 180000 29900000
0 0 0

Total Cash 1966000 4793000 488500 4917000 1982000 4072000 6880000 431600 4219000 2615000 260600 2731000 63820000
inflow 0 0 0 0

Cash outflow

Cash 220000 230000 240000 250000 260000 270000 280000 290000 300000 310000 320000 330000 3300000
xxviii
purchase

payment to 450000 0 0 0 0 0 0 0 0 0 0 0 450000

creditors

salaries 69000 69000 69000 69000 69000 69000 69000 69000 69000 69000 69000 69000 828000

electricity 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000

printers 9000 9000 9000 9000 9000 9000 9000 9000 9000 9000 9000 9000 108000

advertisemen 13000 0 0 0 0 0 0 0 0 0 0 0 13000

t

license 8000 0 0 0 0 0 0 0 0 0 0 0 8000

transport 6500 6600 6500 6000 6000 6000 6000 6000 6500 6500 6500 7000 76100

insurance 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 180000

Total cash 792500 331600 341500 351000 361000 371000 381000 391000 401500 411500 421500 432000 4987100
outflow

5.3.3 Brenda water refilling company Cash flow in 1st year 2026
CASH JAN FEB MAR APR MAY JUNE JULY AUGUS SEP OCT NOV DEC Total
INFL T
OW

cash 25500 24600 23700 24800 25900 261000 271100 281200 291300 201400 211500 221600 1863600
sales

Cash 1640000 1750000 1860000 1970000 1770000 196000 190000 187000 196000 195000 192800 196600 10343400
at
hand

Cash 2870000 276000 2570000 2400000 281000 276000 2640000 2550000 2490000 280000 260000 290000 17183000
in
bank

Debtor 1150000 120000 130000 180000 170000 160000 170000 150000 170000 177000 190000 180000 2947000
s

Total 5685500 2170600 4583700 4574800 2246900 893000 3271100 3168200 3147300 853400 854300 888200 32337000
Cash
inflow

Cash outflow

Cash 210000 20000 230000 240000 50000 260000 270000 80000 20000 300000 310000 320000 2310000
purcha
se

payme 0 0 0 0 2000 0 0 0 0 0 0 0 2000

nt to
credito
rs

Salarie 69000 69000 69000 69000 69000 69000 69000 69000 69000 69000 69000 69000 828000
s

electri 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
city

Printer 9000 9100 9200 9300 9400 9500 9600 9600 9700 9800 9900 10000 114100
xxix
s

adverti 13000 0 0 0 0 0 0 0 0 0 0 0 13000

sement

Licenc 8000 0 0 0 0 0 0 0 0 0 0 0 8000

e

transp 6000 6200 6500 6000 6000 6000 6000 6000 6500 6500 6500 7000 75200
ort

insura 15000 0 0 0 0 0 0 0 0 0 0 0 15000

nce

Total 332000 106300 316700 326300 138400 346500 356600 166600 107200 387300 397400 408000 3389300
cash
outflo
w

Net
Cash

5.4 Pro forma income statement

Items 1st year 2nd year 3rd year

Sales 4054600 1863600 3559600

Purchase 247100 271200 2166000
Gross profit 3807500 1592400 1393600

Expenses
Electricity 2400 2400 2400
Printer 9410 114200 10800
Salaries 628000 828000 828000
Insurance 180000 180000 180000
licenses 8000 8000 8000
Transport 6000 73200 84600
Advertisement 13000 13000 13000
Loan 130000 110000 10000
Total Expenses 1193410 1350400 1298400

Net profit before tax 2614090 242000 145200

xxx
12% rate 313680 29040 17424

Net profit after tax 2300410 212960 12776

5.5 PRO FORMA BALANCE SHEET

The table below shows working capital for three years.

ITEM 1ST YEAR 2ND YEAR 3RD YEAR

Current assets
Cash in hand 154,000 150,000 200,000
Cash in bank 260,000 20,000 210,000
Debtors 105,000 150,000 205,000
Total 419,000 320,000 615,000
Total Assets - - 1,354,000

Current Liabilities
Bank interest 134,000 270,000 280,000
Loan 130,000 110,000 100,000
Sales 16,000 21,000 23,000
Total 280,000 401,000 61,000
Total liabilities - - 742,000

Current Assets – Current liabilities

1,354,000 – 742,000

= KSh. 612,000

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5.6 Break even points

5.6.1 Contribution margin

Total sales variable costs

Contribution items Year 1 Year 2 Year 3

Total Sales 4054600 186300 3559600

Variable Costa 66000 66000 66000

Total 3988600 120300 3493600

5.6.2 Contribution margin percentage

Gross profit Year 1 Year 2 Year 3

Contribution item*100 3988600*100 120300*100 3493600*100

Total Sales 4054600 186300 3559600

98.37% 64.57% 97.15%

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Contribution Item * 100

Total Sales

5.7 Profitability ratios

Year 1

Gross profit∗100 %
Sales

3807500∗1 00
40546 00

=93.91%

Year 2

Gross profit∗100 %
Sales

1592400∗1 00
18636 00

=85.48%

Year 3

Gross profit∗100 %
Sales

1393600∗1 00
35596 00

=39.15%

93.91:85.48:39.18
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Return an equity 21296 0∗1 00
5000 000
Net prfit after tax∗100 %
Owners =4.26%

2300410∗1 00
5000 000
127760 0∗1 00
5000 000

=4.60% =25.56%

Return of Investment

Net prfit after tax∗100 %

Investment

2300410∗1 00
1800 000

=17.78%

127760 0∗1 00
1800 000

=7.09%

21296 0∗1 00
1800 000

=11.83%

5.8 Desired financing

Item Year 1 Amount

Preoperational expenses 500000

Working Capital 419000

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Machine 2500

Total 921500

xxxv
Item Year 2 Amount
Preoperational expenses 51000

Working Capital 320000

Machine 2500

Total 832500

Item Year 3 Amount

Preoperational expenses 520000

Working Capital 6150000

Machine 2500

Total 6672500

5.9 Proposed Capitalization

Sources of capital Amount

Owners contribution 5000000

Loan from co-operative 45000000

Bank

Borrowing from friends 35000000

Total 13000000

xxxvi