MUTUMBA SHOP

P.O BOX 571

BUNGOMA

ADM NO. : 2022P00046

COURSE CODE : 1903

PAPER CODE : 107

NAME PRESENTED : SIMIYU FAITH NEKESA

INDEX NO : 5780010369

PRESENTED TO : KENYA NATIONAL EXAMINATION COUNCIL (KNEC)

AS PARTIAL FULFILLMENT FOR THE AWARD OF A

CERTIFICATE IN SUPPLY CHAIN MANAGEMENT

SUPERVISED BY : MRS MAGRET MORAA

PRESENTED DATE : JULY 2022

CENTRE NAME : THE ELDORET NATIONAL POLYTECHNIC

P.O BOX 4461-30100

ELDORET
 DECLARATION

I hereby declare that this is my original work and has not been submitted to any examination
body before award of any certificate

Name : Simiyu Faith Nekesa

Signature:

This work has been submitted for examination purpose with my approval as the supervisor

Name : Mrs. Magret Moraa

Signature:

i
 DEDICATION

This project is dedicated to my family and my close friends.

ii
 ACKNOWLEDGEMENT

Am grateful to anyone who took his/her time to make this work to be complete on time special
thanks go to my family who continued financing and taking care of me .

I also gratuitously thank my supervisor who took her time in supervising this work closely to
make sure the business become successful.

iii
 TABLE OF CONTENT

DECLARATION………………………………………………………………………………....i

DEDICATION………………………………………………………………………………...…ii

ACKNOWLEDGEMENT………………………………………………………………...……iii

EXERCUTIVE SUMMARY………………………………………………………………......vii

CHAPTER ONE…………………………………………………………………………………1

1.0 BUSINESS DESCPTION…………………………………………………………………….1

1.1 THE SPONSOR……………………………………………………………………………….1

1.2 NATURE OF THE BUSINESS……………………...……………………………………….1

1.3 THE INDUSTRY………………………………………………………………………….….2

1.4 PRODUCT AND SERVICES………………………………………………………………..2

1.5BUSINESS GOALS AND OBJECTIVES………………………………………….………..3

1.6 JUSTIFICATION OF BUSINESS OPPORTUNITY……………………….……………….3

1.7 ENTRY AND GROWTH STRATEGY………………………………………………………4

CHAPER TWO…………………………………………………………………………………..5

2.0 MARKETING PLAN…………………………………………………………………………5

2.1 POTENTIAL CUSTOMER…………………………………………………………..……….5

2.2COMPETITION………………………………………………………………………….……5

2.3 MARKETING SIZE…………………………………………………………………..………7

2.4 PRICING STRATEGY…………………………….…………………………………………8

2.5 SALES TACTICS…………………………………………………………………………….8

2.6 ADVERTISING PROMOTION STRATEGY………………………………………….……9

2.6 ADVERTISING PROGRAM………………………………………………………..……….9

2.7 DISTIBUTION STATEGY………………………………………………………...…………9

iv
2.8 CUSTOMER SERVICE………………………………………………………………...…….9

CHAPTER THREE…………………………………………………………………………….10

3.0 ORGANISATION AND MANAGEMENT………………………….………………………6

3.1 ORGANISATION STRUCTURE……………………………………..……………….……10

3.2 KEY MANAGEMENT PERSONELS…………………………………..…………….…….10

3.3 OTHER PERSONNEL………………………………………………………………………12

3.4 RECRUITMENT, TRAINNING AND PROMOTION……………………………………..14

3.4.1 RECRUITMENT POLICY………………………………………………..……………….14

3.4.2 TRAINNING POLICY…………………………………………………………….………14

3.4.3 PROMOTION POLICY…………………………………………………………..……….14

3.5 REMUNERATION………………………………………………….……………………….14

3.6 LEGAL REQUIREMENT…………………………………………………………...………16

3.7 SUPPORT SERVICE………………………………………………………………..……....18

CHAPTER FOUR………………………………………………………………………………19

4.0 OPERATION/PRODUCTION PLAN……………………………………………...……….19

4.1.1 MACHINERY, TOOLS AND CAPACITIES…………….……………………………….19

4.1.2. REPAIR AND MANTAINANCE…………………………………….…………..............19

4.1.3 LAYOUT OF THE PREMISES……………………………….…………………………..19

4.1.4 OTHER EQUIPMENT………………………………………………………………….....19

4.2 PRODUCTION /SERVICES: DESIGN AND DEVELOPMENT………………………….21

4.2 .1 QUALITY CONTROL……………………………………………………………………21

4.3 PRODUCTION STRATEGY /OPERATION STRATEGY……….……………………..…21

4.3.1 MATERIAL REQUIREMENT……………………………………………………………22

4.3.2 LABOR REQUIREMENT……………………………………………………………..….22

v
4.3.3 PRODUCTION COST…………………………………………………..………………..22

4.4 PRODUCTION PROCESS…………………………………………………………………22

4.5 REQULATION AFFECTING PRODUCTION……………………………….……………23

CHAPTER FIVE……………………………………………………………………………….24

5.0 FINANCIAL PLAN…………………………………………………………………..…......24

5.1 PRE-OPERATIONAL COST………………………………………………………………..24

5.2 WORKING CAPITAL………………………………………………………………………25

5.3.1 CASH FLOW STATEMENT 2021………………………………………………………..26

5.3.2 CASH FLOW STATEMENT 2022…………………………………………..……………27

5.3.3 CASH FLOW STATEMENT 2023…………………………………………..……………28

5.4 INCOME STATEMENT ………………………………………………………………..…..29

5.5 PROJECTED BALANCE SHEET…………………………………………………………..30

5.6 PROFIT ABILITY RATIO……………………………………………………….………….32

5.7DESIRED FINANCING……………………………………………………………….…….34

5.8PROPOSED CAPITALISATION…………………………………………………………....34

5.9 POTENTIAL RISKS…………………………………………………………………….…..34

vi
EXECUTIVE SUMMARY

Business description

The proposed Mutumba shop is a sole proprietorship and will be located in Kibabii
along Bungoma Chwele road. The research done by proprietor shows that there is high demand
for the clothes to be sold since the already existing businesses doesn't provide goods of
high quality. The business will aim at maximizing the profit plough back and this will
help to finance the features aims and the goals of the business.

Market plan

The major potential customers for the proposed business will be University students and
the public among others that may be interested in the product to be offered by the
business. The proposed business will also use different advertisement and promotion strategies
and prices for the customers who purchase the products.

Organization plan

The proposed business will be managed by the manager assisted by his or her assistant.
The manager will be the owner and he will be assisted other workers who will be employed for
the business to run smoothly. It will also provide allowances to the determine workers and
promotion.

Production plan

The proposed business will improve and good working facilities and equipment to boost
the worker's moral, make work easier and faster. The business will purchase the product from the
companies and avail them to the customers. To achieve the production efficiency the business
will different strategies e.g human resource , utilization of assets, utilization of materials and the
production overhead.

vii
Financial plan

For the business to run smoothly it will require financial capital like initial stock,
purchase premises, acquisition of human resources, initial advertisements, preliminary
experiences for the operations of the proposed Mutumba shop enterprise. The proposed business
plan will have it's Cash flow projections for the first one year of operation .The business
will also show the profoma income statement, profoma balance sheet and the profitability ratio
which will helped to create good management of the proposed business.

viii
 CHAPTER 1

1.0 BUSINESS DESCRIPTION

The business description is Simiyu’s shop, a sole proprietor ship type of business owned by Faith
its physical location is at Kibabii area. The business will offer production and distribution of
clothes.

1.1 SPONSOR

It will be sponsored by Edwin Rona and Maxwell Swello who will ensure the business is running
well.

1.2 NATURE OF THE BUSINESS

1.2.1 Business name and address

The name of the business will be Mutumba shop I choose this name because it is a family name
and famous.

The business will be located at Kibabii area (part of Bungoma town) this is due to enough
expansion of my business and easily accessed through

P.O BOX,

BUNGOMA

MOBILE NO; 0726467652

EMAIL: neshfaith4@gmail.com

1.2.2 BUSINESS PURPOSE

The business will be for clothing and main activity will buying and selling of clothes since
customers will be both internal and external.

1
1.2.3 FORMS OF BUSINESS OWNERSHIP

The business will base on sole-proprietorship because capital is from family and inheritance.

1.2.4 BUSINESS LOCATION

The business will be located at kibabi centre near Bungoma town and Uganda where we export
other things.

Advantages of location

Road network; it is located near the roads which makes it easier to offload and upload of goods
in the logistics

Security; is in secure position near urban municipal offices which has greater security,

Availability of market; faster growth of the market has potential customers such as road works,
selling of clothes and tailoring

Availability of labor; both skilled and unskilled labor in the area where the business is located in
present thus it boost the company

1.2 THE INDUSTRY

The business will be of selling clothes and it will operate thought the year in order to satisfy
much customer demand.

In future the business will expand to create job opportunity which will improve standard of
living among people.

1.3 PRODUCT AND SERVICES

The product shall deal with importing and exporting the product of clothes within and outside the
country .Several types of clothes will be sold for kids and adults.

2
1.4 BUSINESS GOALS AND OBJECTIVES

For many businesses to expand there must be profits and working hard to get profit.

1.5.1Short term

The business will provide training to members in respect their roles.

For increase in sales and minimize the cost of its product to attract as many.

1.5.2Longterm

For expand the business by opening other branches beyond Bungoma in three years.

To have more vehicles to improve transport of product to the customers.

Employee more staff and expand the organization structure for effective and efficiency of the
operation.

Introduce new clothes of Mutumbas depending on customers demand and increase in market.

1.6 JUSTIFICATION OF BUSINESS

The business has been set aside there because there are few competitors. It will not hinder much
business from being the best. If shall offer affordable price .The following were made

Availability of technology

Improve infrastructure

Environmental factor

Good communication network

3
1.7 ENTRY AND GROWTH STATEGY

Advertising and promotion will be conducted by use of posters and radio stations.

This would help to ensure the prosperity of the business.

1.7.1 Growth Strategy

We are hopeful that the demand for the products would be high for expansion of the business and
for acquisitions of more customers.

Our first year profit will be invested for purchases of more sewing machines for us to be able to
supply more products to the customers

The business intends to open up a branch at Chwele, Bungoma.

4
 CHAPTER 2

2.0 MARKETING PLAN

Marketing plan is a set of activities aim at satisfying customer need and wants and to identify
potential customers to buyer and how the product will reach them.

2.1 POTENTIAL CUSTOMERS

Customers are the potential buyer of the product my customers will be getting service and goods
since the business will working with professional and skilled person .There would be fair price
and discount to regular customers to create a more flexible and conducive environment for the
business.

The following are characteristics of customers

Hardworking

Decision making

Honest

Good oriented

NEIGHBOURS

High competition

INDUSTRIES

LINDAS SHOP

2.2 COMPETITION

Is the ability of the business to sell effectively among similar firms .They compete for the
customers and sell product which are closely related

5
LUCIANO BOUTIQUE,

P.O BOX,

BUNGOMA.

2. BRENDAS CLOTHING CENTRE,

P.O BOX,

BUNGOMA.

Analysis table

ITEM COMPETITOR MY COMPANY

Sale 4 2
Product 3 5
Price 2 4
Service 1 5

Copying with competition

Technology-Will adopt to use modern and appropriate techno to ensure production of quality
product to our customer that is going to effectively satisfy their needs.

Training-Ensure the employees are trained so as to get skills hence leading to effective
production of quality that meet the demand of the customers

Advertising-The business will advertise its product to the customer using media such as social
media that can be accessed by everyone through their phone announcing on the radio which is
the easiest media to access

6
Promotion-The company will promote employees who work hard tirelessly to see the company
grow this will motivate them in one way or another

Discount-The Company will offer 10% discount on goods bought by the customers in addition
with free transportation

2.3 MARKET SIZE

The business will serve a number of customers including domestic and international charts where
the business will be located and covers the following percentage

Sales

1st Qtr
2nd Qtr
3rd Qtr
4th Qtr

Method of determining market shares

Observation method-It will help me learn more about the people in the area and their source of
income. I will be able to identify the suitable modern technology the customer who will be my
clients hence will help me determine the kind of profit to make.

7
Interview method-I will randomly pick customers around the area together with their people and
interview them concerning the product they have been getting before.

This will help me identify the ways of producing quality product to satisfy the needs of my
customers.

Questionnaire method-I will issue and pick later the questionnaire that are printed to people will
fit hence helping me get the feedback from clients customer.

Market share=Returns/Total number of customers

2.4 PRICING STRATEGY AND POLICY

This is the determining of product selling and they shall be done as reference to the cost of
product, profit and economy of the people in the area as well as in relation to the competitors.

Cost of production=VAT= profit+ margin

Factor to consider in pricing

1. Cost of production-This will help us know the cost at which we can change selling the product
hence increasing the profit margin

2.5 SALES TACTICS

These are method used to offer service and includes

Personal selling-This entails personal appearance, behaviors and presentation

This will ensure quality service to the clients.

2. Discount facilities-Will offer discount to our customers to retain them and sell

3. Credit facilities-This is selling product to customers on credit to ensure retaining of customers

and motivating them to purchase product from the company.

8
4. Indirect selling-This is using retail to sell product in the shops and hardware near the
customers.

2.6 ADVERTISING PROGRAM

The table below shows the budget for advertisement and sale promotion

Item Quantity Cost Total

Posters 100 30 300
Uniform 25 300 7500
Business name 50 100 500
TOTAL 175 425 8300

2.7 DISTRIBUTING ATRATEGY

This includes direct and indirect conversation with clients hence customers finally posses it’s
good and may deliver upon request. Distributing of goods may will be done in the following
method.

At the shop floor: the customer will be free to obtain from the premises

Transportation: My business will purchase a car for delivery of goods to customers

who do request.

2.8 CUSTOMER SERVICE

There would be gifts and reduced price to bulk traders and regular customers. Letters will be
written to special customers to recognize them .Provision of goods will highly quality and
automatically will capture the attention of customers.

9
 CHAPTER 3

3.0 ORGANISATION PLAN /MANAGEMENT PLAN

It is a list of worker force in an organization under man power required to implement the
objectives by position, the workers will be holding and dealing on this help business achieve its
target and run the business.

3.1 ORGANIZATION STRUCTURE

Managing Director

Accountant

Secretary

Salesman

Security

3.2KEY MANAGEMENT PERSONNEL

Managing director

The managing director should have an entrepreneur skills and managerial skills to help in
executing all activities that will be going into the business

10
Qualification

Be able to make decision effectively

Be a Kenyan citizen

Be able to plan or policies necessary for owning a business

Should have good interpersonal skills

Duties and responsibilities

Will make decision regarding success of the business

Planning-cause of action to guide an organization in achieving its goal

Organizing-Mobilizing resources to put plan in action

Commanding-providing direction to employees

Decision making-coming up with sound decision smooth flows

Leadership-Ability to persuade others e.g. Higher and fire employees

Assistant manager

Minimum qualification

Worked at least three years in any successful boutiques

Duties

Supervise the other staff

Help the manager in decision making

Answerable to the manager

11
Accountant

Minimum qualification

At least a diploma in accountant

At least one year experienced

Computer literate certificate of a good contact

Duties

Preparing financial reports

Controlling the flow of business

Salesman

Minimum qualification

Should be sound minded

Have certificate in sales and marketing

One year experienced

Certificate of good contact

3.3OTHER PERSONNEL

Other personnel include cashier and cleaner

Cashier

Qualification

Should be a Kenyan citizen

Above 25years

12
Should be a computer literate

Should maintain the highest level of discipline

Duties

Keep all financial records

Make bill of cheques

To submit all the daily financial records to the managers

Cleaner

Qualification

Should be a Kenyan citizen

Should be35 year and above

Must be of good health

Duties

Clean of shelves

Ensure that the entire environment is clean

Security guard

The business will employ two security guard who will be working in shift
Qualification

K.C.S.E certificate folder

Two years experience

Have a good physical health

13
Must be a certificate of a good contact

Duties

Ensure the safety of the staff

Taking records of the customer of the business

Taking records of the parking centre

3.4 RECRUITMENT TRAINING AND PROMOTION

Recruitment

The recruitment will be carried out through the advertisement to the public and any
interested .person for the position shall apply so long as he/she started qualification. They should
be in through application and apply in through application and apply the shortlisted will go
through an interview to choose the most qualified will received acknowledgement at job.

3.4.2 Training

The training would be sponsored by the business to improve their skills performance of the
business through seminars or workshops also trade exhibition for exposure of both trade and
technology.

3.4.3 Promotion

The main of promotion employees is to keep them focused towards the set goals of the business
qualification in the succession plan of the business over a certain period in target we will be
promoting employees

The experience will be considered as one can do his or her own work in a short period and
accurately would be awarded.

3.5 REMUNERATION AND INCENTIVES

Employees shall be remunerated based education levels and experienced of employees

14
3.5.1Remuneration policy

Objectives of Remuneration

To motivate employees

For upkeep on their daily records

Position Number Monthly salary Salary annually

Managing director 1 45000 600000
Cashier 1 35000 430000
Seller 2 27000 332500
Cleaner 5 6000 60000
Security 2 4000 60000
Total 11 117000 1482500

3.5.2 Incentives

This is a special way of motivating workers to create a good working attitude of employees the
managing director still be providing

Objective

Provide medical expenses on behalf of employees who are sick and ill paying bills

Ensuring good working condition clean and conducive

Provide free fear in the morning

Employees will be given three week break per year which will be paid

15

Personnel A Medical House Total

 Name number Allowance Allowance Per
month
Managing 1 8000 12000 20500
director
Cashier 1 1500 2000 7,500
Seller 2 500 2000 4500
Cleaner 5 500 2,000 3100
Security 2 500 2000 3100
Total 11 11000 20000 38700

3.6LEGAL REQUIREMENT

3.6.1Licence permits and by law

License

For the operation of business, it should be registered by the local authority under Bungoma
county counsel and payment of cash 500 for the processing of license I will be paying seventy
per month.

Permits

Shall make sure register with

KRA

VAT

NEMA

16

By law
This is obtained in Bungoma County at cost of Cash 1000 per year. Registration of the
organization will be obtained from

Registration of NEMA costing cash 600 annually

Registration of NCA at a set of cash 1000 annually

Registration of companies at cost of cash 800 annually

KRA by getting a pin number for manager of the business

3.6.2 SUPPORTIVE SERVICE

These are professional service that are offered to the firm of the business e.g insurance,
communication and advertisement

Banking

The business has to open an account in a bank in the country to enable it access to loans and
banking service

Security service

The business should have two guards from any training guard company

Transport service

This is a need for transportation of product and material of customers’ .It will be hired for
logistics

Medical service

This is needed when employees are sick or Ill or got injuries during any emergencies; this will be
needed to serve as supportive service in treating them

17

Insurance service
Insurance company against breakage of theft and other calamities e.g. floods should insure
anything owned by company

18

CHAPTER 4
4.0 PRODUCTION PLAN

The activity in the premises of the company will be showing on how it is running or carrying out
by operation plan, the activities done to add value to available resources into the finished product
and service

4.1Machinery tools and Equipments

The business will require some of the material/ machinery involve

Item Date Required Number Cost(Sh) Total

Fun 2 4,000 8,ooo
Computer 3 6,000 18,000
Receipt book 2 600 1,2oo
Fire extinguisher 1 4,500 4,500
Total 8 15,100 31,700

4.1.2 REPAIR AND MAINTAINAN

Machine used in the business will be maintained and repair on the basis this will be done to
enhance proper and good quality service machine such as fun will be prepare to enhance good air
conditions

4.1.3 LAYOUT OF THE BUSINESS

The garments and clothes will be arranged in shelves or in a good place and first clothes be
arranged in shelves or in a good place and first clothes should be arranged in same place for easy
identification. This will enable the customer to easily and freely move to all rooms.

19

DIRECTORS MANAGERS’
OFFICE S OFFICE
 ACCOUNTANT’
S OFFICE

STORE MTUMBA
ROOM DISPLAY AREA

SECURITY DESK

Entry/Exit

4.1.4 Other equipments

The proposed business will have other equipment which will help in the daily rooming of the
business. They include computer CCTV, Cameras

Item Quality Unit Cost Total(Sh)

Desktop 2 30000 60000
Computer 1 25000 25000
CCTV 5 15000 45000
Telephone 3 10000 30000
TOTAL 11 80000

20

4.2PRODUCTION/SERVICE DESIGNMENT AND DEVELOPMENT

The proposed business will dealing with tangible things e.g. clothes, shoes, sandals, etc

These activities include continuous inspections of the product to check on their conditions.

Service Design and Development

Service design payment will depend on the customers since they are the ultimate users and
employees experiences. There would be material of high quality, low price in our sales and wide
variety of services. There would be qualified staff and it would be a culture of training the
employees on the customers’ needs and expectations, since the customers may not come clearly
on their expectations.

4.2.1 Quality control

In order to control the quality of product and services in the proposed business I will do the
following:

Use of quality of quality raw material such as good boutiques

Effective service and maintenance of clothes

Having inspection procedure in place

Implement –in room technology such as WIFI

Offer multiple communication channels such as texting ,voice,facebook ,messenger and emailing

Setting up production standard

4.3 PRODUCTION/OPERATION STRETEGY

It is producing a new product and it entails the cost of materials labor and overheads pattern used
by company to produce products and services

21

4.3.1 Material/Requirements
Item Frequency Source Quantity Unit Cost Total
Cotton Mamba stores
Button Mamba stores
Thread Mamba stores
Mamba stores

4.3.2 Labor requirements

The proposed business will require labor for it to be effectively achieved the long-term and short
term goals or the business by the business management. The managing director will be in charge
of the activities that will be carried in the business will be carried in the business premises. There
will be one cashier who will be in charge of the finance. After business there will be five sellers
who will interact with customers directly and explaining for them on flow to handle different
product. The following should be considered:

Work is done professionally

Workers are assigned duties as per their professionally

The business is opened at 6a.m to 12p.m. daily

Workers work in shift to enable them to rest

4.4 PRODUCTION PROCESS

The proposed business Mutumba Shop will deal with products which are already made. This
means there will be no production taking place the product will be clothes, shoes and other
clothes. These products will be produced and transported from different companies and thus will
be sold to the final consumers.

22

4.5 REGULATION AFFECTING PRODUCTION

The healthy and safety at work act the legislative that cover a variety or health safety
environment regulation which provides the employees with an approved code for maintenance a
safe and secure working environment

23

CHAPTER 5
5.0 FINANCIAL PLAN

This help in managing of the company in order to achieve the objectives and vision goals of the
company during implementation of the financial plan correction is needed in the financial
problem and barriers that arises in each cycle of the business

It involves

Item Amount per year

Power and electricity 90,000
Water 48,000
Transport 150,000
Fuel 96,000
Telephone 59,000
Wages 30,000
Equipment 500,000
Computer 28000
CCTV 30000
Pick ups 320,000
Rent 180,000
Advertisement 96,000
Total 1,627,000
5.1 PRE-OPERATIONAL COST

Particular Amount
Tailor 10,000
Transport 6000
Security 7000
Research 3000
Totals 26000
24

5.2 WORKING CAPITAL

These are funds needed for daily running of the business

They are obtained from subtracting Assets from current liabilities

Working capital=Current Assets-Current liabilities

Particular Year 1 Year2 YEAR3

Current Assets
Inventory 150000 50000 300000
Cash in hand 1500 35000 30000
Cash at bank 40000 60000 6500

Total Current Assets 19500 34500 395000

Current Liabilities
Trade payable 35000 20000 42000
Bank overdraft 55000 48000 40000
Short term loans 30000 15000 10000
Total Current Liabilities 88000 83000 92000
Working Capital 103500 362000 30300

25

CASH FLOW STATEMENT FOR THE YEAR 2021

ITEMS JAN FEB MA APR MAY JUN JUL AGU SEP OCT NOV DEC TOT
R AL
Bal b/f 110000 81430 85703 91214 103496 106761 134896 140451 141756 151264 153238 193751 1493960

CASH
INFLOW

Sales 11341 12500 10000 10950 11000 9900 12000 10990 10500 10919 10000 16000 136100

Contribution - - 40000 - - 30000 - - - - 4000 - 74000

Loans - - - 7000- - - - - - 7000 - - 14000

Savings 1800 800 1400 1500 2000 1500 2700 1300 3000 1500 2000 2500 22000

Debtors 1330 1000 1250 1270 1150 1600 1400 1200 1000 1800 1200 1800 16000

TOTAL 124471 95730 10235 111934 117646 149761 150996 153941 163256 165483 206438 214051 175060
INFLOW 3
CASH
OUTFLOW
Pre operational 26250 - - - - - - - - - - - 26250
cost
Stock 1000 850 1200 650 700 1520 800 560 2000 720 1350 1650 13000

Purchase 3000 2000 1250 1540 3500 2300 3000 4500 3010 3600 3650 3650 35000

Creditors 5600 400 - - - 4560 - - - - - 3440 14000

Salaries 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000

Insurance 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000

Loans to be - - - - - - - - - - - 14000 14000

paid
Transport 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000

Liences - - - - - - - - - - - 1000 1000

Water bills 125 125 125 125 125 125 125 125 125 125 125 125 1500

Electricity 1066 650 2564 123 560 360 620 1000 857 1800 1562 1638 12800

TOTAL 43041 10025 11129 8438 10885 14865 10545 12185 11992 12245 12687 31503 189550
OUTFLOW

NET CASH 81430 85705 91214 103496 106761 134896 140451 141756 151264 153238 193751 182548 1566510

26

CASH FLOW STATEMENT FOR THE YEAR 2022

ITEMS JAN FEB MAR APR MAY JUN JUL AGU SEP OCT NOV DEC TOTA
L
Bal b/f 1566510 1577415 15855665 1595075 1607975 1609295 1625745 162871 1631025 164615 1655495 165534 179305
5 5 60
CASH
INFLOW

Sales 16500 15600 6500 10000 8650 9500 11600 6000 23000 15450 7400 12600 142800

Contribution - - - - - - - 7000 - - 10000- 17000

Loans - - - 11000 - - 16000 - - - - - 27000

Savings 2580 2600 1560 1900 3000 2500 1350 350 2000 1850 2500 5600 31000

Debtors 15000 1200 800 1000 1300 950 1020 1000 2090 2240 1500 3400 18000

TOTAL 1587090 159310 1603020 1605470 1618420 1635740 1637210 164056 1655610 166510 1674390 168444 181663
INFLOW 0 0 0 60
CASH
OUTFLOW
Stock 1750 1350 1000 3100 1800 1700 2000 990 1800 2210 1800 2200 21000

Purchase 3300 3000 2650 3750 2700 3500 1900 4000 3750 2900 3500 5000 40000

Creditors - - - - - - - - - - 3000 6000 9000

Salaries 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000

Insurance 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000

Loans to be - - - - - - - - - - - 27000 27000

paid
Transport 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000

Liences - - - - - - - - - - - 1000 1000

Water bills 100 100 100 100 100 100 100 100 100 100 100 100 1200

Electricity 1930 1-000 700 1330 1030 1200 1000 950 850 900 1100 1200 12400

TOTAL 12180 11150 10450 14280 11630 12500 11000 12040 11900 12110 11550 42500 173290
OUTFLOW

NET CASH 1577415 1585665 15095075 1607975 1609295 1625745 1628715 163102 1646215 165549 1665345 165549 179930
5 5 5 70

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 CASH FLOW STATEMENT FOR THE YEAR 2023
ITEMS JAN FEB MAR APR MAY JUN JUL AGU SEP OCT NOV DEC TOTAL

Bal b/f 1799307 1799100 1798708 1799138 1800369 180231 1802255 1803522 18051399 18055276 1805726 1806119 5417373
0 4 8 2 6 35 9 5 0 4 0
CASH
INFLOW

Sales 12500 13000 11000 9500 14000 12000 11900 9100 13000 11900 11000 21000 150000

Contribution - - - 3000 15000 - - - 18000- - - - 36000

Loans - - - - - 10000 - - - - 8000 - 18000

Savings 1300 1000 500 800 3200 1200 200 700 2000 1100 900 3100 16000

Debtors 1250 950 1300 1500 800 650 2000 550 2000 1200 1300 1500 15000

TOTAL 1800812 1800595 1800288 1801818 1802169 180369 1804665 1806357 18068399 18069476 1807142 1808679 2165001
INFLOW 0 4 8 2 6 85 9 5 0 4 48
CASH
OUTFLOW
Stock 1500 2850 1650 870 520 1500 900 650 1500 28100 1260 2000 18000

Purchase 3500 700 1750 3100 2900 1750 3610 4500 6000 1900 2100 3890 42000

Creditors 5200 2600 1130 2700 2560 3910 - - - - - - 18100

Salaries 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000

Insurance 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000

Loans to be - - - - - - - - - - - 18000 18000

paid
Transport 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000

Liences - - - - - - - - - - - 1000 1000

Water bills 166 166 166 166 166 166 166 166 166 166 166 166 2000

Electricity 750 250 810 650 265 1100 758 860 957 1350 700 650 9100

TOTAL 17116 18866 11506 14486 12411 14426 11434 12176 13123 12216 10226 31706 179692
OUTFLOW

NET CASH 1799100 1798708 1799138 1800369 1800928 180225 1803522 1800513 18055276 18057260 1806119 1805508 2160014
4 8 2 6 5 59 5 99 4 8 8

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5.4 INCOME SRATEMENT FOR THE YEARS 2021, 2022 AND 2023

Income statement for year 1, 2 and 3

Particular Year 1 Year 2 Year 3
Net sales 30000 35000 42000
Opening stock 132000 176000 193000
Less closing stock 10000 5000 3000
Cost of sales 120000 125000 13500

Gross profit 272000 331000 367000

Expenses 270000 30000 40000

Salary and wages 13000 15000 170000
Postage 22000 28000 35000
Water bills 35000 37000 4000
Transport 137000 157000 182000
Total expenses 409000 488000 549000

Net profit before tax 61350 73200 82350

Net profit after tax 34800 415000 46700

29

5.5. PROJECTED BALANCE SHEET

Mutumba Shop
 Projected Balance Sheet For The Years

Particular 2021 2022 2023

Fixed Assets
80000 90000 95000
Furniture
70000 70000 75000

Building 90000 98000 102000

Total Fixed Assets 240000 258000 272000

Current Assets
Stock 60000 70000 90000

Cash At Hand 27000 40000 47000

Debtor 25000 31000 26000

Cash In Bank 20000 35000 30000

Total Current Assets 132000 176000 193000

Total Assets 372000 434000 465000

Liabilities
Loan 30000 40000 45000

Creditor 10000 35000 40000

Capital 70000 80000 100000

30

Break table point=Fixed Cost/Contribution

Contribution=Sales-variable cost
Year 2021

Contribution=Sales-Variable

409000-31550

377,450

B.T.P=72/377450X100

0.02%

Year 2022

B.T.P=Fixed cost/contribution

Contribution=Sales-Variable

488, 0000-43100

444,900

72/444,000X100

0.02%

Year 2023

B.T.P=Fixed cost/Contribution

31

Contribution=Sales-variable

549,000-6100
488,000

72/488,000X100

0.01%

5.6 Profitability Ratio

Gross profit percentage

2021

Gross profit ratio=G.P/Salesx100

=272,000/30,000x100

900.67

2022

Gross profit ratio=G.P/Salesx100

=331000/35000x100

945.71

2023

Gross profit ratio=G.P/Salesx100

367000/42000x100

873.81

32

Net Profit

2021
Net profit=net profit/salesx100

=348000/30000x100

=1160

2022

Net profit ratio=net profit/salesx100

=1185.71

2023

Net profit ratio=net profit/salesx100

=476000/42000

=1111.90

33

5.7 DESIRED FINANCING

Particular 2021 2022 2023

 Operational cost 200000 29000 35000

Working capital 52000 53000 58000

Fixed cost 30000 39000 47000

5.8 PROPOSED CAPITALIZATION

Particular 2121 2022 2023

Loans 90000 110000 130000
Savings 100000 120000 115000
Contributions from 70000 80000 89000
friends and family

6.0 POTENTIAL RISKS

Nature/type of risk Contingency measures

Theft Have a CCTV
Fire Fire extinguisher must be available all the time

34