THIKA SCHOOL OF MEDICAL AND HEALTH SCIENCES

BUSINESS NAME: JAYBIE BAKERY

BUSINESS LOGO:

KAREN MEPETU PESHUT

CND/S-0042/THI/19

CERTIFICATE IN NUTRITION AND DIETETICS

SUPERVISOR: BOBBY ALOISE

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL

1
 DECLARATION

I strongly agree openly that this is original work one of my own and has never been presented

elsewhere either in Institution or any place.

Name :

Signature:

Date :

This business plan has been presented with the approval of my supervisor.

Name :

Signature:

Date :

i
 DEDICATION

I dedicate this business plan to my brothers, sisters, parents, friends and lecturers who assisted

me by giving me most of the encouragements up to this end where I enjoy the success of the

business.

ii
 ACKNOWLEDGEMENT

I thank and acknowledge the help of my parent who really helped me to the successful of my

business plan and also my friends and brothers who encouraged in a unique way though there

were challenges and without forgetting my father spiritually who is GOD for the favor and

promises.

iv
 TABLE OF CONTENTS

DECLARATION.....................................................................................................................................i

DEDICATION.........................................................................................................................................ii

ACKNOWLEDGEMENT......................................................................................................................iv

EXECUTIVE SUMMARY......................................................................................................................1

CHAPTER 1:............................................................................................................................................2

1.0 BUSINESS DESCRIPTION............................................................................................................2

1.1 RETAIL............................................................................................................................................2

1.2 WHOLESALE..................................................................................................................................2

1.3 CLASSES.........................................................................................................................................2

CHAPTER 2.............................................................................................................................................3

2.0: BUSINESS NAME..........................................................................................................................3

2.1: BUSINESS LOCATION AND ADDRESS....................................................................................3

2.3: FORM OF BUSINESS OWNERSHIP............................................................................................5

2.4: TYPE OF BUSINESS.....................................................................................................................5

2.5 : PRODUCTS AND SERVICES RETAIL.......................................................................................5

2.5.1WHOLESALE................................................................................................................................6

2.5.2CLASSES.......................................................................................................................................6

2.6 JUSTIFICATION OF THE OPPORTUNITY..................................................................................6

2.7: THE INDUSTRY............................................................................................................................6

2.7.1 WORK PLAN................................................................................................................................7

2.8: OBJECTIVES OF THE BUSINESS...............................................................................................7

v
 2.9: ENTRY STRATEGY......................................................................................................................7

2.10: GROWTH STRATEGY................................................................................................................8

CHAPTER 3.............................................................................................................................................9

MARKETING PLAN...............................................................................................................................9

3.0: MARKETING PLAN......................................................................................................................9

3.1: CLASSIFY CUSTOMERS RETAIL..............................................................................................9

3.2 WHOLESALE..................................................................................................................................9

3.4: MARKET SHARE........................................................................................................................10

3.5: COMPETITION............................................................................................................................10

3.6: METHODS OF SALES PROMOTION AND ADVERTISING..................................................11

3.7: PRICING STRATEGY.................................................................................................................12

3.8: SELLS TACTICS OR STRATEGY.............................................................................................12

3.9: DISTRIBUTION STRATEGY.....................................................................................................12

CHAPTER 4: ORGANIZATIONAL PLAN........................................................................................13

ORGANIZATIONAL STRUCTURE....................................................................................................13

4.0: BUSINESS EMPLOYEES AND QUALIFICATIONS................................................................14

TITLE.....................................................................................................................................................14

QUALIFICATIONS...............................................................................................................................14

4.1: PERSONNEL NUMBER AND THEIR DUTIES........................................................................14

HEAD BAKER.....................................................................................................................................14

4.2: RECRUITMENT, TRAINING AND PROMOTIONS.................................................................16

4.3: RENUMERATION AND INCENTIVES.....................................................................................17

CHAPTER 5...........................................................................................................................................19

PRODUCTION PLAN...........................................................................................................................19

5.1: PRODUCTION FACILITIES AND CAPACITIES.....................................................................19

vi
 5.2: PRODUCTION STRATEGY........................................................................................................21

5.3: REGULATIONS AFFECTING OPERATIONS..........................................................................22

HEALTH..............................................................................................................................................22

CHAPTER 6...........................................................................................................................................23

FINANCIAL PLAN...............................................................................................................................23

6.0: OPERATIONAL COST................................................................................................................23

6.1: CAPITAL REQUIREMENT.........................................................................................................24

6.2: TRADING PROFIT AND LOSS ACCOUNT..............................................................................24

6.3: PERFORMER BALANCE SHEET..............................................................................................25

APPENDIX............................................................................................................................................28

vii
viii
 EXECUTIVE SUMMARY

The business has been involved with the production for the past five years. The organization

started as a small shop thereby because of the good quality products many of the items has been

praised and have attained a special notoriety for the desserts. After years of requests for our

flavored whipped creamed toppings, we have decided to pursue marketing these products from

restaurants to the bakery level.

The flavored toppings have been used in most products produced in large quantities whereby the

estimated shelf life of the products is 21 days at refrigeration temperatures and up to six months

when frozen. Special attention has been given to developing an attractive label that will stress

the gourmet nature of the products.

Distribution of the products to the customers is done on a daily basis depending on the

customers’ order and need by use of the vehicles purchased in the business.

Financial analysis shows that the organization will have both a positive cash flow and profit in

the first year being 10.88%. The business is projected to expand to greater level whereby

leading to accompany level because the products being produced are so unique and of good

quality attracting more customers.

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 CHAPTER 1:
1.0 BUSINESS DESCRIPTION

Jaybie bakery is a confectionery organization in Kitengela town; that sells high-end baked goods

to retail and wholesale customers. The company also offers cake decorating classes from

Monteil, the leading food crafting company in the industry. The organization rests on experience,

business skills, relationships and enthusiasm.

1.1 RETAIL

The retail portion of the business services walk-in customers Monday through Saturday from

10am to 6pm. The products offered at the retail location includes: cakes, cupcakes, cookies, pies

and beverages the-at either pre-made or made to order. In addition to providing high quality

products, our retail location will also serve as the venue for decorating classes.

1.2 WHOLESALE

Our wholesale customer consists of cafes and coffee shops, restraints and hotels and local street

market. We are preferred channel providing cakes, cupcakes, cookies and pies for the county clubs,

wedding planners, caterers and other channels to take advantage of seasonal demands for confections.

1.3 CLASSES

We offer more than just a cake decorating class – Jaybie bakery represents an “experience.” The

students are provided with the instructor, hands-on experience, basic understanding of the basis

in baking and decorating and design know-how.

2
 CHAPTER 2
2.0: BUSINESS NAME

The name of the business is “JAYBIE BAKERY” derived from my first and second name as they
appear because most of my friends used to call me that name that why I decided to be that way
and it’s so unique among all other bakeries that I have ever heard of.

2.1: BUSINESS LOCATION AND ADDRESS

It’s located along Namanga Road, opposite Eastmatt Supermarket. The raw materials are easily
reachable because its only five kilometer from the bakery in addition to that, the site is furnished
with the large second hand equipment needed for the operation thus unnecessary to purchase
large and expensive machinery.

The postal address is:

P.O. BOX 69-20406,

KITENGELA.
+254797177622
jaybiebakery@yahoo.com

3
KITENGELA TOWN ARIEL
VIEW

4
2.3: FORM OF BUSINESS OWNERSHIP

Jaybie bakery is a limited liability company in order to blend characteristics of a corporation and
sole proprietorship and take advantage of flow through income taxation.

2.4: TYPE OF BUSINESS

The business belongs to me because I was the founder that is the Manager. The initial capital was
one hundred thousand (Ksh.100,000) where I started as a small bakery supplying the products to
the mere retail shops, hotels, cafes and supermarkets but as time went by, it has expanded
reaching to an extent where I only contribute 20% from my basic salary to finance the business.

2.5 : PRODUCTS AND SERVICES RETAIL

Jaybie bakery sells a wide range of high-quality cakes, cupcakes, cookies and treats whereby each
item is made from scratch using all natural ingredients sourced from largely local suppliers. These
supplies involve no preservatives to provide for high-end and divine flavor and taste. It’s
important that our items not only taste delicious but also look appealing and attractive to the eye
because we add the extra little touch to every product, whether it is a sparkling sugar daisy on a
chocolate cupcake or a buttery harvest leaf on a thanksgiving pumpkin pie. Our location is
designed in a way that customers are able to enjoy a setting that is a pleasant as the product they
are consuming.

5
2.5.1WHOLESALE

The products that our wholesale customers order are of very high quality. Just as with the retail
portion of the business, the products are the wholesale are made with quality ingredients and
properly prepared. While a few of the products will be the same at the retail and wholesale
locations, certain items will be specifically made for particular wholesalers depending on
customer orders. The bakery also manages delivery to wholesale customers.

2.5.2CLASSES

The students that take the decorating courses are provided with the engaging, exciting and
authentic experiences. Our trainers teach students the very basics of how to frost a cake in
Discover Cake Decorating to make edible yet delicate carnations. As the business grows, unique
specialized classes are offered covering baking techniques and more advanced sugar and pastry
classes.

2.6 JUSTIFICATION OF THE OPPORTUNITY

This business originated because people in the surrounding region in the olden days used to
enjoy the cake from one of the companies but due to bad organization it failed an idea came to
my mind and I started the business in order the peoples demand and fulfillment of their needs. I
stood in order to fill the left gap in order to satisfy the local demand thus it has really brought
impact to the whole county and bordering places by form of employment opportunities and also
the economy to rise.

2.7: THE INDUSTRY

The bakery covers a total area of about 3 hectares of land whereby comparing of offices and
other buildings. We have improvised our business whereby almost all the work was done
manually but now there is use of computer for easy access of information and communication
with the supplier and customer and also the machines are being used to reduce the workload.

6
2.7.1 WORK PLAN

4:00AM-Start baking

8:00AM-Bakery opens

Leave for farmers

market 6:00PM-Bakery

closes

2.8: OBJECTIVES OF THE BUSINESS

Our aim is to bring and create employment opportunities, to improve the people’s living standards of
the community and the entire county in general. We provide confection products and services by
retailing and wholesaling tasty treats and hosting treats design classes. The bakery is dedicated to
providing high quality deserts to a variety of customers and we are also concentrating on the high end
market of products as we maintain the focused differentiation strategic position in the food and
education industries. We are also intending to generate profit to provide a fare return to our investors
and to expand to the business into other surrounding communities.

2.9: ENTRY STRATEGY

Our committee decided to lower down the prices of our products so that we could attract more
customers through open day and special event offers that really motivate and attract more customers.
We have been using the word of mouth and public perception which has been immensely important in
both aspects. Customers must first understand that our products are made with quality ingredients and
thus taste better than many of our competitors. The former students spread word of mouth in two
ways; experiencing the enjoyment of the class and encouraging others to take the class and
encouraging others to take the class and also developing a trust and relationship with Jaybie Bakery
and therefore recommending the business to others. The bakery will advertise in cooperating with
other businesses thereby recommending our partnering businesses to customers for example wedding
planners and photographers. Our wholesale customers will be promoting and advertising our product
branding order to develop further business for themselves through their menu, display case, Jaybie
Bakery logo among others.

7
2.10: GROWTH STRATEGY

For our bakery to be the way it’s today it required much reinforcement in different departments
whereby we recruited and employed new qualified personnel who had a lot of experience.
Created more space for expansion where the building was enlarged and extra resources put in place
because had raised so high and also more vehicles were increased in the stock to enhance faster
delivery and distribution of products to customers’ shortest time possible. The untrained staff was all
taken to be trained on most concepts and operating the new purchased computerized instruments and
equipment. In the past time there were no activities such as the workers being motivated but we had to
introduce them in order to increase their morale of working and their salaries boosted that really
encouraged and motivated them.

8
 CHAPTER 3

MARKETING PLAN
3.0: MARKETING PLAN
The company expects to use a variety of marketing tools including web advertising, affiliate programs,
public relations and key strategic alliances to drive traffic. The company believes that it is extremely
important to use word of mouth marketing campaigns especially in the early phases of the launch. The
company has also been placing banners ads with major portal sites to increase awareness whereby it
automatically serves when someone any keyword during a web search. This effort will focus on both
online as well as print media in many towns. We have been offering new viewers debates and free
subscriptions as an added advantage to purchase from the site www.jaybiebakery.ac.ke.

3.1: CLASSIFY CUSTOMERS RETAIL

The market segmentation for the retail is divided into two physiological groups: celebrators and soccer
moms. The group represents people sharing similar behavioral patterns and reasons for supporting
Jaybie Bakery. These groups purchase either pre-made or made-to-order products. Celebrators are
people that have reasons to do just that, celebrate: Birthday, anniversaries, graduation, valentine’s day
and Christmas among the most occasions of many holidays or special occasions that family and loved
ones celebrate encompassing a variety of people including the young, middle aged, old and both men
and women. Soccer moms encompass not just moms but all family members and it serves as a place
where family feels both welcome and comfortable.

3.2 WHOLESALE

Our wholesale customers will be successful businesses in the food industry and we are focusing our
attention in the following customers and expand to a broader list as the company grows.

9
 CAFES AND RESTRAUNTS MARKET
COFFEE AND HOTELS
SHOPS
Broadway cafe
Acoma Front street

Hummingbird café War bonnet 64 Junction

Jupiter coffee house Derby Bus stage

Park street Land of favor Street 004

café
Jailhouse coffee shop Glory centre 96 Highway

Season cafe Joy king mansion Middle centre

In addition we also focus on seasonal wholesale customers for example summer weddings,
holidays and other photographers, caterers.

3.4: MARKET SHARE

Our organization has some of the projects that are income generating that is through leasing of
our equipments and our qualified person being requested by other companies for motivational
talks and workshops.

3.5: COMPETITION
Nationwide, supermarket chains dominate the baked goods market in Kitengela town. These grocery
stores are locally owned, operated and their products are of poor quality often mass produced at an
outside location and simply baked in the actual store. The ingredients are processed thus lowering the
quality and taste of the product in order to sell the item at a lower cost. Town Talk Bakery is a locally
owned bakery specializing in donuts, cakes and other treats are also sold at this location but are not
made with high quality ingredients.

10
 The cake choices are very limited and icing is made with shortening and low quality for a low
cost. Jaybie Bakery is set apart from the competition in four main ways:

➢ Each of our products contains extra detail to set it apart from the competition. We
ensure that our products appeal to the eye as well as to the stomach.
➢ The sky is the limit when developing a pastry design and we cater to the wants
and needs of our customers in every way possible.
➢ Customers’ service is our number one priority where we ensure that each customer
is treated with kindness, respect and warm welcome on each visit.
➢ In an era where food is becoming chemistry, we focus on raw, natural and
sometimes organic and local ingredients to create its product. Thus our products
taste better and better for you.

3.6: METHODS OF SALES PROMOTION AND ADVERTISING

Word of mouth and public perception are immensely important in both aspects of the business.
Customers must understand that our products are made with high quality ingredients and thus taste
better than many of our competitors. The word of mouth will be created when someone experiences
for example a cake at a party. The cake will be enjoyed by many and thus the word of mouth seed for
the bakery aspect of the portion will be created. The students who had passed in our company earlier
on will spread word of mouth in two ways: experiencing the enjoyment of the class and encouraging
others to take the class and also developing a trust and relationship with Jaybie Bakery and therefore
recommending the business to others. We branded our vehicles and designed posters in different
forms, adverts on television or the electronic and print media that is Facebook, Google+, and OLX
among others. We designed also business cards that we have been distributing in different occasions
that we have really seen the impact on our business and brochures has been a helpful tool and also on
newspapers.

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3.7: PRICING STRATEGY

Due to high quality of ingredients made from scratch products carefully and at times customized
decorated goods, the pricing will be slightly higher than that of the typical grocery store bakery.
The table below illustrates the initial mark-up of the bakery products based on the cost of goods
sold. Depending on the detail of special orders, the margin may increase for that specific item.

ITEM MARGIN
Cookies Cakes Cupcakes Pies 3X
Wedding cakes Beverages 4X
4X
4X
5X
5X
3.8: SELLS TACTICS OR STRATEGY

The company has entered into many strategic relationships in order to quickly build credibility as
well as traffic to its brand web site. This includes partnerships with major search engines, magazine
publishers, high retailers and international community Web sites. Our layout and design is user
friendly and cutting edge in the eyes of our audience to attract repeat users. We have a strong
branding message that will extend to all aspects of the site and truly provide the best experience for
our customers. Since we started marketing, we have employed a number of selling methods for
example personal selling whereby nearer customers come on the bakery and in the whole town there
are agents who help us in the marketing the products and we have been motivating them by giving
them allowances and commissions among others.

3.9: DISTRIBUTION STRATEGY

We have developed a number of ways of distributing our products that is retail products may be
picked up at the retail location by the customers or delivered for a nominal fee depending on the
distance. Wholesale products are delivered to the wholesale locations with the fee included in the
product pricing and the customers will come to the retail location for the classes.

12
 CHAPTER 4: ORGANIZATIONAL PLAN

ORGANIZATIONAL STRUCTURE

BOARD OF DIRECTORS

MMAANNAA

BAKE

SUPPLI

TECHNICI

RETAIL

DDEECCOORRA

MESSANGER

CLEANING

The organization developed policies for the staff development in order to achieve efficient
production of good and efficient performance of services. I am the manager of the business that
is the eye of organization. The organization has by now employed thirty one employees in
different departments, Head baker and four assistants, Head supplier and four deputies, head
technician with two assistants, one messenger, head cleaning officer assisted by four assistants
and four drivers.

13
4.0: BUSINESS EMPLOYEES AND QUALIFICATIONS

TITLE AGE QUALIFICATIONS

{Years}
BAKER 25-35 Diploma/Certificate in catering
SUPPLIER 28-40 Diploma/Certificate in Supply Chain Management
TECHNICIAN 30-51 Diploma/Certificate in Electrical Engineering
RETAILER 18-30 Certificate in business Management
DECORATOR 30-50 Degree/Diploma in Catering
MESSANGER 26-38 Diploma/Certificate in Human
CLEANING 18-35 Resource Diploma/Certificate in Health
OFFICER
DRIVER 20-40 Certificate and Driving License

4.1: PERSONNEL NUMBER AND THEIR DUTIES

HEAD BAKER

One head and four deputies.

ROLES

✓ Keep records of all the bakers.

✓ Organize all the equipment needed in the bakery.
✓ Request required essentials.
✓ Raise issues concerning other bakers to the board governors.
✓ Follow recipes and produce quality products.

HEAD SUPPLIER

✓ Keep records of all the products sold and the amount collected.
✓ In charge of all the suppliers.
✓ Prepares duty roster of the suppliers who had and when to supply the already processed
products.
✓ Assign all the tenders received and organization.

14
 TECHNICIAN

✓ Ensures all equipment and machines used are functioning.

✓ Repair all the damaged machines.
✓ Orders required equipment in the bakery.

RETAILER

• Sells the already processed products at the bakery shop.

• Serves all the casual customers.

DECORATOR

o Teach students on cake decorating basics and essentials.

o Orders the required essentials in class.
o Organize class timetable, duty roster and workshops for the students.

MESSANGER

▪ Collects information concerning the organization.

▪ Delivers information from the bakery to other organizations.
▪ In charge of the business permits and licenses.
▪ Updates the organization on the new equipment and technology on market.

DRIVER

• Deliver products to other stations.

• Distribute products to the wholesalers.
• Transport products and ingredients needed in the bakery.
• Transport staff members to and from the bakery.

CLEANING OFFICER

❖ Ensures all the offices are clean.

❖ Clean all pit latrines.

15
4.2: RECRUITMENT, TRAINING AND PROMOTIONS
When we were starting our business, we had just few workers but due to time we have and forced to
employ other workers. Over time and again we have been offered support some of the advisory team
members from other older bakeries who come and advise our staff members. All staff takes one day
safe food handling course and other food safety programs. Our wholesale customers are promoting and
do advertising of our product brand in order to develop further business for themselves. We have
offers of specific offer days that is during holidays where we reduce our prices and the staff members
get some chances whereby they end up getting promotions.

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 4.3: RENUMERATION AND INCENTIVES

Job Numbe Monthl Other Benefits TOTAL

category r y salary (KSH)

Baking Hous Electri Water Trans

e 2,000 city 1,500 port
Head Assistants 1 20,000 2,000 1,500 1,000 500=25,000
4 17,000 1,000 500=22,000*4
=113,000

Supplier
Head Assistants
1 18,000 2,0001,5001,000500 =23,000
4 16,000 2,0001,5001,000500 =21,000*4
=107,000

Technician
Head Deputy
1 21,000 2,0001,5001,000500 =26,000
2 19,000 2,0001,5001,000500 =24,000*2
=74,000

Retailer
Senior Junior 1 14,000 2,0001,5001,000500 =19,000
1 14,000 2,0001,5001,000500 =19,000
=38,000

Decorator
Head Assistants
1 20,000 2,0001,5001,000500 =25,000
5 19,000 2,0001,5001,000500 =24,000*5
=145,000

17
Messenger 1 19,000 2,0001,5001,000500 =20,000
=20,000

Cleaning
Head Deputy
1 16,000 2,0001,5001,000500 =21,000
4 15,000 2,0001,5001,000500 =20,000*4
=101,000

Drivers 4 19,000 2,0001,5001,000500 24,000*4

=96,000

=Ksh.549,000

TOTAL

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 CHAPTER 5

PRODUCTION PLAN
5.1: PRODUCTION FACILITIES AND CAPACITIES

In our bakery we use quality material in order to produce good product at the end using the
advanced technology reliable with no side effects to the customers. As we started the organization
man power was the only technology but due to the time e improved to a modern that reduced
delays in production thus improving the efficiency. As we started using modern machines we used
to lease from other companies but due to the high cost incurred, we were forced to purchase our
own and also we had to employ qualified personnel who are the technicians. The machines we are
using, their spare parts are locally available thus reducing funds that could have been used to
travel distant places. Because the number of customer rose at a higher rate and the demand
increased we had to buy machines that were powerful and experience that were able and efficient
in conducting and performing the task more powerful.

EQUIPMENT NUMBER COST TOTAL

Oven 5 Ksh.26,000 Ksh.130,000

Proofer 4 Ksh.12,000 Ksh.48,000

Refrigerator 5 Ksh.24,000 Ksh.120,000

Mixer 6 Ksh.28,000 Ksh.168,000

Shelves 8 Ksh.2,500 Ksh.20,000

Showcase 10 Ksh.3,000 Ksh.30,000

Furniture 12 Ksh.4,000 Ksh.48,000

Ksh.564,000

19
 FLOOR PLAN

1: SHELVING AREA

2: RACK AREA

3: COOLER

4: CASH REGISTE

20
5.2: PRODUCTION STRATEGY

The bakery can decide whether to use premixed or self mixed ingredients. Special suppliers or
flour companies will provide you with a premix which includes all ingredients needed to make
the products which include flour, yeast, milk, salt, sugar, water, cooking oil.

TYPE OFRAW FREQUENCY SOURCE QUALITY COST TOTAL

MATERIAL

Flour Daily Flour Mill Shop 20 sacks 4,000 Ksh.80,000

Yeast Daily Flour Mill Shop 10 sachets 130 Ksh.1,300
Milk Daily Free Harvest 100 litres 100 Ksh.10,000
Salt Daily Jooiz Supermarket 5 packets 200 Ksh.1,000
Sugar Daily Tek sugar 2 sacks 10,00 Ksh.20,000
company 0
Water Daily Borehole point 200 litres 100 Ksh.20,000
Cooking Oil Daily Zion company 80 litres 100 Ksh.8,000
Food color Daily Flour Mill shop 10 sachets 120 Ksh.1,200
Eggs Daily Dion poultry Farm 5 crates 250 Ksh.750
Ksh.

The raw materials are always available in the whole year. Since we have our own vehicles which
are normally used to transport the materials we do not incur more on transportation cost thus
saving funds. At the end of every month the organization uses approximately Ksh.600, 000 to pay
the workers. By now the organization has a lot of equipment that generate a lot of money through
leasing to other companies and outsourcing some services by our qualified personnel in the
organization.

The production labor cost per month amounts to Ksh. 4.3M that is Ksh. 4,300,000 while the total
money that the organization uses per month is;

OVERHEAD AMOUNT
Rent Ksh.40,000
Security Ksh.60,000
Water Ksh.10,000
Ksh.110,000
TOTAL
21
 The organization also incurs a lot of capital by paying to the government rules and
regulations including permits, taxes and licenses.

PERMITS/LICENCES SOURCE COST

Single business permit County Government Ksh.10,000
Value Added tax National Government Ksh. 5,000
Parking fee County Government Ksh. 3,000
Local taxes County Government Ksh. 2,000
TOTAL Ksh. 12,000

5.3: REGULATIONS AFFECTING OPERATIONS

HEALTH
In terms of health, the organization has its own medical centre where if someone has an injury
he or she can be given first aid and if serious referred to the nearby county referral hospital the
organization being in charge of the cost to be incurred.

22
 CHAPTER 6

FINANCIAL PLAN

Deals with the financial aspect of the proposed business.

6.0: OPERATIONAL COST

ITEM COST
Rent Ksh.40,000

Permits Ksh.20,000

Partitions Ksh.10,000

Installations Ksh.15,000

Utensils Ksh.10,000

TOTAL Ksh.95,000

Operational cost = Ksh.95,

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6.1: CAPITAL REQUIREMENT

Capital requirement for the first three years of the business.

YEAR 1 YEAR 2 YEAR 3

1 Overhead Ksh.1, 320, 000 Ksh.1, 500, 000 Ksh.2, 100, 000
.
2 Permits Ksh.240, 000 Ksh.240, 000 Ksh.240, 000
.
3 Product Ksh.4, 267, 500 Ksh.6, 300, 000 Ksh.8, 450, 000
.

6.2: TRADING PROFIT AND LOSS ACCOUNT

2021 2022 2023

Sales 10,200,00 15,500,000 30,000,000
Less cost of sales 7,200,000 12,000,000 25,000,000
Add opening 100,000 6,000,000 10,000,000
stock Gross profit 3,000,000 3,500,000 5,000,000
Less operational or 1,320,000 1,200,000 900,000
overhead expenses
480,000 300,000 200,00
Rent
Water 240,000 200,000 150,000
Electricity 90,000 140,000 200,000
Stationery 50,000 60,000 80,000
Transport 100,000 70,000 45,000
Cleaning 34,000 43,000 50,000
Maintenance 44,000 36,000 27,000
Depreciation 9,000 7,000 6,000
Salaries 694,000 702,000 800,000
12,000 9,000 7,000

24
 Postage 1,680,000 2,300,000 4,100,000
Trading profit(Loss)

6.3: PERFORMER BALANCE SHEET

JAYBIE BAKERY

BALANCE SHEET
AS AT 31ST DECEMBER 2022

Fixed Assets:

Premises -Ksh.125, 000 Plant

and equipment -Ksh.516, 000
Vehicles -Ksh.3, 500,000
Furniture -Ksh.48, 000

Machinery -Ksh.2, 600, 000

TOTAL =Ksh.6, 789,000

Current Assets

Raw materials -Ksh.1, 707,000

Stock -Ksh.900, 000
Debts -Ksh.900, 000

Bank -Ksh.2, 500, 000

Cash -Ksh.6, 500, 000

TOTAL Ksh.12, 507, 000

25
Current Liabilities

Creditors -Ksh.900, 000 Bank

Overdraft -Ksh.700, 000 Bank
Loans -Ksh.2, 400, 000
Net Current Assets -Ksh.4, 000, 000

TOTAL ASSETS Ksh.8, 000, 000

Represented by

Capital -Ksh.12, 507, 000

Profit -Ksh.4, 100, 000

Long Term Liabilities

Bank Loans-Ksh.2, 400, 000

Calculate

Gross Profit Margin = Gross Profit*100

Sales

=3,500,000 *100

15,500,000

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 =22.58%

Net Profit Margin = Net profit * 100

Sales

=2,300,000*100
15,500,000

=14.84%

Break-even Level of sales = Overhead Expenses * 100

Gross Profit Margin

=1,200,000*100 22.58
=Ksh.5, 314, 438

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 APPENDIX

Capital : Money invested in the business.

Cash flow : Amount of cash flowing in and out of a business in

a given period.

Income statement : A document showing the progress; shows the

Weakness or strength of the business.

Market share : This is the amount of shares.

Partnership : A type of business owned and managed by a group

of people.

Remuneration and Incentives : Are the rewards or compensation of workers in form

of Salaries and wages.

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