TITLE: BUSINESS PLAN

BUSINESS NAME: D.KIOKO ENGINEERINGS

PRESENTED BY: KILONZO DANIEL KIOKO
INDEX NO:2071015357
INSTITUTION: THIKA TECHNICAL TRAINING INSTITUTE
PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL
FULFILMENT FOR THE AWARD OF DIPLOMA IN MECHANICAL ENGINEERING
(PLANT OPTION)
SUPERVISOR: MADAM T. KEMUNTO
EXAM SERIES: JULY 2024

DECLARATION
I declare that this is my original work and has never been submitted to any
institution for examination.
Name: ………………………………………………………………………………………………………….
Sign…………………………………………………… Date…………………………………………………
SUPERVISOR
This business plan has been submitted for examination under my approval.
Name: …………………………………………………………………………………………………………
Sign ……………………………………………………. Date………………………………………………

ACKNOWLEDGMENT
I would like to acknowledge my Almighty God for such immense strength and
spiritual guidance during the time of coming up with my business plan. I would
like also to acknowledge those whom I worked with in my success to this business
plan.
Secondly to parents for the financial and moral support which they offered to me,
my friends and classmates for their encouragement. I also acknowledge my
supervisor for his guidance and assistance when preparing this business plan.

DEDICATION
I would like to dedicate this business plan to my parents who have been providing
me with their financial resources to make sure that I completed my business plan.
Secondly, it goes to my lecture who had full time opportunity to help me learn the
basic skills and helping me learn the important to hard work in life.

TABLE OF CONTENT
Declaration
Acknowledgement
Dedication
Executive summary
CHAPTER ONE
1.0 Business description.
1.1 Business name.
1.2 Business location.
1.3 Form of business ownership.
1.4 Type of business.
1.5 Product and services.
1.6 Justification.
1.7 Industry.
1.8 Business goals and objectives.
1.9 Entry and growth strategy.

CHAPTER TWO
2.0 Marketing plan.
2.1 Customers.
2.2 Market share/size.
2.3 Competition.
2.4 Method of production and advertisement.
2.4.1 Promotion methods.
2.4.2 Methods of advertisement.
2.5 Pricing strategy.
2.6 Sales tactics.
2.7 Distribution policy.

CHAPTER THREE
3.0 Organization and management plan.
3.1 Organization structure.
3.2 Key management personnel.
 3.3 Other personnel.
3.4 Recruitment training and promotion.
3.4.1 Recruitment.
3.4.2 Training.
3.4.3 Promotions.
3.5 Remuneration and incentives.
3.6 License, permits and by laws.
3.6.1 License
3.6.2 and permits.
3.6.3 By laws.
3.7 Other support service.
3.7.1 Banking services.
3.7.2 Insurance services.
3.7.3 Legal services.

CHAPTER FOUR
4.0 Production.
4.1 Product design and development.
4.2 Production facilities and capacities.
4.2.1 Production facilities and capacities.
4.2.2 Business premises.
4.3 Production strategy.
4.3.1 Monthly materials requirements.
4.3.2 Monthly labour requirements.
4.3.3 Monthly expenses.
4.4 production and operation process.
4.5 Government regulation affecting operation

CHAPTER FIVE
5.0 Financial plan.
5.1 Pre operational cost.
5.2 Working capital.
5.3 Cash flow.
5.4 Pro forma income statement.
5.5 Pro forma balance sheets.
5.6 Break analysis.
5.7 Desired financing.
5.8 Proposed capitalization

EXECUTIVE SUMMARY
1.0 BUSINESS DESCRIPTION
This chapter summarizes the business description and its ownership. The
proposed business name will be D. Kioko Engineering which will be a sole
proprietor business. It will be located in Nairobi, off Lusaka road 45 Pemba street.
The proposed business capital will be ksh 1206000. The proposed business shows
how it can cope with the services at an affordable price to the customers. The
customers can locate the proposed business by using the google maps which
indicate the exact place where the business is located

2.0 MARKETING PLAN

This chapter the business type of customers and how they will purchase the
services. It also describes the market size in the industry and the total sales in the
business to the goals and also how the services will cost the customers. The
methods of the advertisement through radio and the posters .it also shows the
sales tactics that will be used to sell the services of the proposed business. The
distribution strategy where field agent will be posted all over the Nairobi town
3.0 ORGANIZATION AND MANAGEMENT PLAN
In this chapter the business employees are introduced and also their
qualifications. The employees’ salaries are introduced. There are some support
services like of the lawyer. The workers will be given some intensive which they
will enjoy in their business. The employees will undergo immense training so that
they will be up to date with the current technology, there will be interviewing of
employees to see who best suits the proposed business requirement and help
achieve the proposed business goals.
4.0 OPERATIONAL /PRODUCTION PLAN
In this chapter the business layout is illustrates .The east of the monthly labour
and material required respectively .The production process and features offering
the proposed business services and the factor affect the production process,
there are regulations affecting operation of the proposed business health
regulation ,license and permit which gives room for business operation and also
their cost are explained ,the regulation are provided by the county government
which every year security business must have.
5.0 FINANCIAL PLAN
This chapter the business shows in depth of how the business incurs in profit and
losses and also the expenses. The business assets are explained. There will be an
electronics calculation system which will put together and calculate the business
accounts.
The proposed business capital will be contributed as follows;
Items Amount
Saving 850000
Friends 20000
Family 80000
Bank loans 120000
Total 1070000
CHAPTER ONE
1.0 BUSSINESS DECRIPTION
1.1BUSINESS NAME
The name of the business will be D. KIOKO ENGINEERINGS. This is derived from my name Daniel
Kioko and the other name Engineering’s symbolizes the services that the business will be
offering. It will be dealing with fluid handling equipment’s, prime movers, power transmission,
energy solar grind inverters and pumping inverters
The vision of the business is to sell and offer the quantity products to the customers and also
giving both the workers and customers good working conditions and services.
The business philosophy is reliable, transparent and customer centric where we will be giving
consistently good quantity product and putting customers first at the core of my business in
order to provide positive experience and build long term relationship.
1.2 BUSINESS LOCATION
D.Kioko Engineering will be located at Nairobi, off Lusaka road ,45 Pemba street.
The reasons for the location are;
i) Availability of ready market > there is availability of ready market because along that area
there a lot of industries which need such services
ii) Good infrastructure > the area has good infrastructure where our customers will be able
to reach us without any problem
iii) Availability of security> the area has high security as it is located near a police post hence
insecurity cases are minimal.
iv) The place is opening visible to people as it is located along a highway people will see it from
far.

You can reach us through

TEL:0707712136

EMAIL:kilonzodanielgmail.com

Afritech Building
P.O Box 1782 14600

Nairobi, Kenya

1.3 FORM OF OWNERSHIP

The business will be a sole proprietorship. The business will be registered to the authorized
board and own an operation license.

I will be the chief executive officer in overseeing activities of my business and keep the business
running to achieve its objectives and take the responsibility of solving emerging issues in the
business to maintain loyalty to customers and ensure they get the right quality of products for
them to feel happy and us also to be trusted

1.4 TYPE OF BUSINESS

The main activity of business is dealing with secondary engineering products. We will be selling
engineering products to customers and maintaining of already installed machines, repair and
installation of new ones to desired places.

We will be selling and offering our services to industries, repairing and maintaining already
installed machines.

1.5 PRODUCTS AND SERVICE

I will be operating in wholesale and retail terms. The engineering products are

fluid handling equipment: Borehole submersible pumps, drainage pumps,

domestic pumps, pool pumps.

Prime movers which are electric motor, geared motor and intelligent pump
controller.
Power transmission which are pilot bore pulley, sprockets, chains, gear box, taper
and bush pulley.

Energy which are solar grid inverter, solar hybrid inverter, solar pumping inverter.
we will be assembling the products for testing and ensure they are of good
condition before they are forwarded to customers. we will do the machine
installations to our customers. We will do repair and also maintenance. Our
products will not have warrant but they are of good quality as the had been
examined by the board as they were being imported.

1.6 JUSTIFATION OF OPPORTUNITY

My business will be time observative where it will be opened at 5:00pm to ensure

customers are served and fast. Our working days will be from Monday to Friday
and Saturday up to 1:00pm. We will ensure customers get required services
immediately they acquire. Due to high demand there will be highly skilled
personnel with adequate skilled labor

There will be four technicians to handle the equipment’s and machines

assembling to meet customers’ specifications and demands. Our business will be
improved as products will be first tested before they are forwarded to customers
to ensure they are working efficiently

1.7 INDUSTRY

This proposed business falls under general engineering. The business grows at a
very high rate which makes it profitable to have many customers venturing into
our industry which makes it able to compete with other business and industries in
upcoming days.
The business requires high capital to grow because all the parts to make products
will be imported which will require a lot of finance. Modern technology will be
used to operate the business and it will be capital intensive. The current trend
notice is that the business is growing and will make huge profits.

1.8 BUSINESS GOALS AND OBJECTIVES

The business goals are to do optimum good by satisfying customers desire and
make the business recognized in others parts of the country. The business
objectives are to make huge profits which estimated to almost 33% of the profit
which will be approximately 75% at the end of three years. The aim is to ensure
we conquer our competitors and be the top and leading industry in that area and
also other parts of the country.

1.9 ENTRY AND GROWTH STRATEGIES

The business will ensure that its products are marketed by making a few
promotions such as free delivery of products, free installations of machines to
customers which will make the business known and what the customers really
want and ensure the production of quality products which keeps good relations
with customers. We will also advertise our business in televisions and newspapers
which will make people aware of the business and products it offers.

On growth strategy I will ensure that my business penetrates to the market and
expand through what I will offer to my customers through acquisition and ensure
I win a large market share to maximize profits.
CHAPTER TWO

2.O MARKETING PLAN

I will be targeting industries that are located within industrial area and others around Nairobi as
our business is located along the road hence its visible to the road users and its open to the
customers. Customers will be reached through advertisement, local radio stations, and erecting
boards. Quality services offered by the business will enable efficient competition with the
existing business.

2.1 CUSTOMERS

Potential customers will be from industries, company’s wholesalers, retailer’s

hospitals, households and also individual customers. Therefore, the business will
offer all services and equipment’s regarding on the customer’s order and request.

We will ensure that we offer credit facilities to ensure potential customers,

advertising our products through media channels such as radios, magazines,
journals, and even televisions to ensure that customers are aware of the products
and services we offer. We will also visit on various open extravaganzas to
advertise and promote our products.

The employee’s capability to handle both customers and products will be of very
high level and classy as they will have adequate knowledge. The customers will
purchase the products any time of the day from Monday to Friday as from 8:00am
to 5:00pm and also Saturday from 8:00am to 1:00pm.

2.2 MARKET SHARE.

Since the business will deal with people and companies from different parts of the
country in terms of products and services delivery it will cover the whole nation.
As the business is growing very fast due to attraction of many customers it will

attained the highest percentage in the market than any other business. The
proposed business will satisfy compete the exit in the business in order to attract
retained customers from them for instance the business will be located
600metres from technical training engineering’s, 1km from Afritech Engineering’s
and 700 meters from Msamaria mwema engineering’s. This location will help the
business to divide the market share with the already existing business upon its
entry to the market.

D. Kioko Engineering 40%

Technical Training Engineering 29%
Afritech Engineering 17%
Msamaria Mwema Engineering 8%
Others 10%

The market percentage share is shown as in the pie chart below

The target of the business is to occupy more percentage than the one it was
before. This will be achieved by advertising the business by use of posters,
magazines and also through televisions and radios. We will also have to expand
the business by bringing new equipment’s and products which customers are in
need of them.

2.3 COMPETITION

The business has many competitors who are selling the same products and
services as ours. It will face competition under different categories such as:

i. Service delivery competition.

This competition will include any business that offers maintenance services

ii. Product delivery competition.

The competition will include any business that offers installation of new
products.

The competitors include the following:

a) Technical Training Engineering,

P.O BOX 306 0264,
City Stadium.

b) Afritech Engineering,

P.O BOX 106 0234,

Industrial area, Nairobi.

c) Msamaria mwema Engineering,

P.O BOX 334 0681,

East Leigh.
As the proposed business will deal in similar products and services as the already
existing business. But they have weakness which is lack of equipped services, they
do not offer delivery services to their customers and their location is not in open
places so is not easy to access them. This makes our business to operate because
is located along a high way so it will be easy and easily visible to the customers.

It will therefore employ standardized marketing strategies to market their

products and services. The strategy will include imposition of fair and adjustable
prices that are affordable to customers. Employ qualified personnel with qualified
and required skills, knowledge and adequate experience to ensure quality work
output that attracts and maintain customers, offer delivery services to customers
and also products will be of good quality.

The business will ensure good relationship between the workers and employers,
employers and customers and workers. The business will ensure continuous
creation of awareness within and outside the business about their products
services and as well as motivating customers thus boosting sales and services
delivery. The business will ensure that expenses of its market cover a vast region
by establishing boundaries nationwide. The business will provide welfare facilities
such as medical funds to boost the morale of employees to work to their best in
order to increase quality of work output.

2.4 METHOD OF PROMOTION AND ADVERTISEMENT.

The purpose of promotion and advertising is to create awareness to the interests

of large number of potential customers about products and services offered and
good for them. This will contribute to success of the business.

2.4.1 PROMOTION METHODS.

The business will offer extra services to our customers as a sigh of promotion to
our business to encourage and attract more customers. We will also make our
business attractive by decorating it through drawings some of the product which
we will be offering in our business. This will help our customers to see some of
the goods which are available in our business through the drawing. We will also
have road shows to show and create awareness of our products and business to
the people and also the services we render and tell them on the effectiveness of
our products.

2.4.2 METHODS OF ADVERTISEMENT.

We have started a new business which will be dealing with fluid handling
equipment which are pumps, prime movers which are all types of motors, Power
transmission equipment and Energy e.g. solar, inverters. The business will be
located at Nairobi, off Lusaka road, 45 Pemba street. Will have all those and
related products. If you will need the products, you will only get from us. Our
products will last long as compared to other near businesses.

The business intends to provide the following methods in order to advertise our
business and products.

a) Posters.

Posters are to be placed all over at strategic positions for all customers to get the
intended in formation about our business and products.

b) Sigh boards.

They are to be located at a point near business location at a noticeable place

c) Radios.
 Massage shall be passed to customers by sound. It will be appropriate to our
customers since it will be passed through a common language which is
Kiswahili.
d) Internet.
Since current technology its attractive and convenient, Emails and face book
will be used mostly customers should join us to know much about the
business.
The main message to be portrayed is the business location, products it offers,
working hours and also need to acquire our goods other than acquiring from
other businesses.

2.5 PRICING STRATEGY.

The business intends to determine its strategy in relation with the following;
a) Cost.
The business intends to determine its cost of production in relation to its price.
It will entail the cost to purchase the goods and also the labor cost. The other
cost is indirect cost which will consist of licenses, insurance, advertising cost
and rent cost.
b) Competitors.
The price will be competitive but not lower to a point where we will incur
losses in the business.

C) customer price.

Our goods price will favor all customers regarding to their level of income.
 This is to ensure that all customers who are in need of goods can get them
in affordable prices.
d) Supply and demand forces.
Our prices will be flexible for any change depending with season and also the
rate of demand and the price in other businesses.
e) Government policies.
The business will also set its prices according to any government regulation in
this industry.

To determine the creditworthiness of my customers I will seek information

from other customers, determine customer’s behavior from past experience
hence reducing chances of bad debts.
2.6 SALES TACTICS.
The business will use direct selling to customers as well as personal selling in
order to increase total sales. It will have full time sales forces that will assist in
distortion and selling of products to customers and offering services. The
business intents to serve its customers and employ strategies in order to
maintain its customers and also meet its goals .

1.Agents.They are to take goods to customers and explain to them about the
product. The selling team will be trained on hoe to sell the goods to customers at
social prices. The customers will also be given some discount to each product at a
certain percentage.

2.7 DISTIBUTION POLICY.

The business will use direct selling for customers who come to our working place
to purchase the products. The customers who purchase our goods from far they
will be able to get the goods through our agents. The mean of transport will be
road transport. This mean of transport tends to be cheaper and more effective to
our goods. Road transport is affected by traffic jam as we will use passages’
vehicle but we will try to purchase our own trucks which will be used to deliver
our goods to customers.

The business will open up bridges in different towns to minimize on sales and
boost the distribution of products to customers.
 CHAPTER THREE.

3.0 ORGANIZATION AND MANANGEMENT PLAN.

3.1 ORGANISATION STRUCTURE.

Proper management of activities in my business will help attaining many business

goals and objectives. The proposed activities will be managed in a way that every
activity is carried out at the right time for the intended purpose.

The general leaders of the business will be the manager followed by the assistant
manager:

3.2 KEY MANANGEMENT PERSONNEL.

The business as a total of five employees. The number will increase depending on
customer’s demand and growth of the business.

The duties and qualification for each other are as follows:

a) MANANGER.

QUALIFICATIONS.

i. Degree holder in business management.

ii. Computer literate.
iii. Good communication skills.
iv. At least three years of working experience.
 v. Know many local languages.
DUTIES.
i. To ensure good relationship between workers and select new employees.
ii. Divide business duties to workers
iii. Motivate employees to reach each objectives.
iv. Final decision maker.
v. Set appropriate deadlines on the business.
b) ASISTANT MANANGER.

DUTIES.

i. Take reads of attendance of employees.

ii. Formulates policy on how business is run.
iii. Solves conflict of staff.
iv. Act in the position of the of the manager.

QUALIFICATIONS.

i. Diploma holder in business management

ii. At least five years of working experience
iii. Computer literate with an IT certificate
c) SECRETARY.

DUTIES.

i. Take minutes during business meetings.

ii. Printing and typing services.
iii. Receive calls from customers.
iv. Produce letters and letter heads for the business.
 QUALIFICATIONS.
i) Diploma in secretarial studies.
ii) Good communication skills.
iii) At least four years working experience.
iv) Honesty and district ion.
v) Good in time management.
d) ACCOUNTANT.
DUTIES.
i. Making payroll od employees.
ii. Keep up to date account books.
iii. Receive cash from customers.
iv. Check invoice delivery note.
v. Estimate employee’s salary from time to time.

QUALIFICATION.

i. At least two years of working experience

ii. Computer literate.
iii. Age between 23 to 25 years.
iv. Holds a CPA from organized institution.

3.3 OTHER PERSONNEL.

e) sales personnel.

DUTIES.

i. Carry out market research.

ii. Write sales report.
iii. Providing advisory services to customers.
iv. Selling products to customers.
v. Answer quotations about products.
vi. Pricing products.

QUALIFICATIONS.

i. Certificate in sales and marketing.

ii. Effective communication
iii. Certificate/diploma in mechanical engineering plant option from a
recognized institution.
iv. At least two years of working experience in engineering field.
e) STORE KEEPER
DUTIES
i. Maintaining store records.
ii. Retrieve goods to customers.
iii. Safe guarding business assets in the store.

QUALIFICATIONS

i. A computer literate.
ii. Ability to communicate effectively.
f) SECURITY OFFICER
DUTIES
i. Ensuring good security within the business property and customers as
whole.
ii. Regulate entry and exit of persons within the premises.
iii. Monitoring and analyzing CCTV footage
 iv. Responding to alarms and emergencies
v. Patrolling and securing the area.
vi. Guarding valuables in a secure area.
vii. Regulate entry and exit of persons within the premises.

QUALIFICATIONS

i. Have at least one year working experience.

ii. Have form four certificate.
iii. Good in communication.
iv. Physical fitness
v. Outstanding surveillance and observation skill
vi. Knowledge of public safety and security.
g) CLEANER
DUTIES
i. Keeps areas around the business tidy.
ii. Clean toilets and office.
iii. Beautifies the compound by watering and wooding flowers.
QUALIFICATIONS
i) Work without supervision.
ii) Form four leaver with D plain and above.

3.4 RECRUITMENT TRAINING AND PROMOTION

3.4.1 RECRUITMENT POLICY

The business will involve identifying a source of employees, selecting a particular

source, training and motivating candidates to apply for the jobs. There will be use
of notice boards, posters, business face book pages to advertise vacancies to the
public after which qualified candidates will be interviewed by the manager and
documents are checked for certainty.

3.4.2 TRAINING POLICY

The business will train its employees by sending the seminars, exhibitions and also
part time training. There will also be trips whereby employees visits new places
thus getting more knowledge and applying it in the business thus leading to
thriving of the business.

3.4.3 PROMOTION STRATEGY

Promotions depends on merits basis i.e. giving consideration to experience and

qualifications. This will encourage employees to work smart.

There will be no discrimination on the promotion due to things such as family

league and other corruptions. It will be through how hardworking you are and
your work experience in the business. We will also look on employee’s behavior
and long serving at given position.

3.5 RENUMERATION AND INCENTIVES.

3.5.1 RENUMERATION

The business will increase its performance through motivation by giving some
allowance to the employees and also their salary after every month for task as
signed to perform as follows:
 Job category Number of Monthly salary wages Net salary
staff
manager 1 25000 1000 26000
Assistant 1 20000 900 20900
manager
Accountant 1 18000 700 18700
Secretary 1 16000 700 16700
Sales person 2 14000 600 29200
Store keeper 1 13500 600 14100
Security 1 8000 450 84500
officer
Cleaners 3 6000 450 19350
Total 11 146 500 6900 153400

3.5.1 INCENTIVES POLICY

The business will reward its employees in form of payment of non-monetary gifts
and presents to motivate them thus they increase their performance.

These incentives will include;

 i. Workers will be compensated in case of accidents.
ii. Workers will be compensated on overtime work done.
iii. Workers will be given presents for their good performance.

3.6 LICENCE PERMITS AND BY LAWS.

3.6.1 PERMIT REQUREMENTS.

Licenses and permits which regulate the activities of the business and the
expected conduct of a business issued by the government council to run the
business. The business will attain trading license from kamukunji town county
council at cost of ksh 8000 per a permit of one year. This will give mandate to
carry out activities of the business without suspicious.

3.6.2 BY LAWS

The business will employ the following by laws to govern its activities

i. Legal authorities’ taxes.

ii. Income tax.
iii. Labor laws.
iv. Collection and waste disposal.

3.7 OTHER SUPPORT SERVICES

The proposed business will employ the following support services to improve
operation.

3.7.1 BANKING SERVICES.

 The business will open an account within Equity Bank Industrial Area Branch.
The business will also offer business loans when required. This will help
business to expand through acquiring loans from the bank.

3.7.2 INSURANCE SERVICES

My insurance services will be provided by Trident insurance company which is

located at Nairobi town Upper hills building 3rd floor room 9.

TRINDENT INSURANCE COMPANY AGENCY,

PO BOX 10325 14621.

NAIROBI, KENYA.

3.7.3 LEGAL SERVICES

My business will require legal advisors as it will be dealing with different

people of different characters hence the need of a lawyer to represent the
business.

3.7.4 TELEPHONE SERVICES

This business will use phones to coordinate its activities within and outside
premises.

3.7.5 TRANSPORT SERVICES

The business will cater for transport of products and workers during delivery and
installation of our products that are purchased in large quantities by customers an
on basis of cost sharing.

3.7.6 AUDITORS.
The business will have auditors to help evaluate business records.

CHAPTER FOUR

4.0 OPERATION AND PRODUCTION PLAN

4.1 PRODUCT/SERVICES AND DEVELOPMENT

Product design and development (tangible products).

The business will ensure that whatever product or machine equipment’s we

produce is meeting the weights and measures act quality and quantity control Act
of Kenya bureau of standards(KEBS).

The business will also admit machines on evaluating basis to ensure that only
genuine equipment’s are stocked for customers. The business well embrace
evolution technology because it is simple, less expensive, effective and easily be
done over phones when sample equipment’s are captured and shared as photos
between manager and supplier before delivery.

Surface design and development (intangible goods).

The business will arrange premises such that each technical work is assigned
different work and are located in different workstations example; repair
workshop, motor winding workshop, welding workshop, pump installation and
repair workstation, alignment workstation and packaging are to avoid delay in
service delivery.

The business will also employ skilled labor with required technical skills for
effective service delivery. The business will also offer training facilities to its
employees to enable them cope with the new technology in order to ensure that
services delivery technique meets customer’s satisfaction by performing quality
service delivery

4.1.1 QUALITY CONTROL

The business will employ use of effective technology in service delivery solicit
suggestions from customers to identify their view and expectations

4.2 PRODUCTION FACILITIES AND CAPACITIES

4.2.1 PRODUCTCTION FACILITIES AND CAPACITIES.

Computers will be essential to the business since they be used in data recording
and minimizing workload e.g. calculating sales, profits and salaries. Telephones
will be used as a media of communication within the workers and the customers.
Drawers will also be used by the accountant to keep the money before depositing
it in the bank and also before paying the employees. The business will be in need
of furniture that is chairs and tables where customers will settle before being
served.

There will also be need of CCTV cameras to ensure that we monitor every
movement for our security purposes. We will also prepare tool boxes, working
benches and shelves for storing our working equipment’s such as spanners, drills,
grinders, squares, tape measure etc.
 Items Number Cost Installation Total
required cost
Computers 4
Telephones 3
Drawers 3
Tables 3
Chairs 10
CCTV 4
Tool box 2
counters 2

Full P.P.E kits 10

First aid kit 2

Total

4.2.2 BUSINESS PREMISES

D.Kioko Engineering’s being a sole proprietor the business house will be rented.
The facilities installed at the business are water, electricity, counter shelves, and
also and also the house renovation by painting blue and white color inside and
outside also including some drawings to show equipment’s and products related
with what

we deal with. The renovation cost is about ksh 18,000 and the renting cost per
month is approximately ksh 47,000
4.3 PRODUCTION STRATEGY

4.3.1 MONTHLY MATERIAL REQUREMENTS

Items Number source Unit cost total

requirement
Pump casing 15 Aira 1500 15 22500
and housing automations
Impeller and 15 sets Lubi suppliers 300 15 4500
blades
Shafts and 5 cartons Asar 2000 5 10000
bearings engineering
Seals and 7 cartons 7 cartons 1600 7 11200
gaskets
motors 12 pieces Aira 3000 12 36000
automations
Valves 26 pieces Aira 600 26 15600
animations
Sensors 3 cartons Lubi suppliers 1400 3 4200
Gear box 15 packages Asar 5000 15 75000
engineering
Chains 13 of them Asar 800 13 10400
engineering
Sprockets 7 cartons Asar 2300 7 16100
engineering
Pilot bore 4 cartons Aira 2200 4 8800
pulleys automations
Solar panels 12 of them Denmar 6000 12 72000
suppliers
Inverters 12 of them Denmar 1200 12 14400
suppliers
Cable 5 rolls Alveren cables 1400 5 7000
batteries 10 of them Denmar 2000 10 20000
suppliers
taper bush 2 cartons Aira 1500 2 3600
pulley and automations
locks
Couplings 3 cartons Aira 1200 3 3600
automations
flange 5 cartons Aira 2000 5 10000
automations
Total 347300

4.3.2 MONTHLY LABOUR REQUIREMENTS

The business will be required to pay labour done by employees per month

Position Level of skills Numbers of Cost of labour total

workers per month
manager Degree in an 1 26000 26000
engineering
specialty
 Assistant Diploma in 1 20900 20900
manager business
accountant Graduate in 1 18700 18700
finance
secretary Diploma in 1 16700 16700
secretary
studies
Sales person Graduate in 2 14600 2 29200
marketing
Store keeper Graduate in 1 14100 14100
marketing
Security Four years of 1 84500 84500
officer experience
cleaner Certificate in 3 6450 3 19350
form four
Total

4.3.3 MONTHLY EXPENSES

The expenses of the business are electricity, rent, water, allowances transport and
advertisement bills

Expenses Cost ksh

Electricity 2000
Rent 47000
Water 1000
Allowances 6900
Transport 8000
Advertisement bills 2700
Total 67600

4.4 PRODUCTION AND OPERATION PROCESS

Most of our products will be imported. Our main activities will be combining and
assembling the parts of the accessories to reach the final products. We will first
identify the competence we need to assemble and fit the components in housing,
such; pneumatic, hydraulic or vacuum, include the pipes of the fluid and power
components and test the working efficiency of the equipment.

We will also involve the following steps to acquire and dispatch an equipment to
customers.

 Making orders; The business will give orders for specific product of delivery.
The following will be made to ascertain whether orders have been
accepted.
 Delivery of goods; The products will either be delivered by suppliers or
collected from the supplier by business personnel.
 Inspection of goods; Reception of goods and inspected to ascertain on the
quality and quantity of ordered.
 Storage; goods are stored safely in the stores awaiting to be dispatched.
 Dispatch and collection; good are dispatched to customers in accordance
with the orders or customers to collect from the store.

The table below shows steps the business will involve in selling its product to its
customers. MARKETING ORDER
 RECEIVING GOODS

INSPECTION

RECEIPTION OF ORDERS FROM CUSTOMERS

DISPATCHING AND COLLECTION

4.5 GOVERNMENT REGULATIONS AFFECTING OPERATION

The business requires trading license from kamukunji town council at a cost of
8000 per permit of one year before business is to begin as operation of smooth
and effective operation.

 Trade disputes act this outlet guidelines and procedures the business will
use to solve disputes between employer with institutions NHIF and NSSF to
ensure that their health status is catered for. It will also ensure that its
employees are given pensions after retirement at old age, will also have

STORAGE
 good and clean toilets, safe drinking, drainage, sanitation and clean
surrounding.
 Building regulations will be observed to ensure enough working space,
clean floors and walls, proper roofing and ventilation in the business
premises
 Safety measures will be first priority where fire fighter’s devices, safety
gears such as head helmets, safety boots, overalls, emergency doors and
windows and conduct code will be observed to ensure the safety pf
workers through out of the work.

5.0 FINANCIAL PLAN

5.1 PRE OPERATIONAL COST

ITEMS AMOUNT
Rent deposit 47000
Renovation 10000
Water deposit 1000
Electricity 2000
Telephones deposit 1500
License and permit 8000
By laws 4500
Machinery and equipment 16000
 Installation cost 7000
Advertisement cost 9000

Total 106000

5.2 working capital

Particulars End of year 1 End of year 2 End of year 3

Stock 347300 350000 360000

Debtors 70000 70000 100000
Cash in hand 100000 100000 120000
Cash at bank 200000 250000 270000
Creditors 80000 80000 100000
Bank over draft 20000 20000 50000

Total 817300 870000 1100000

5.3 cash flow

Particulars Jan feb mar April May June July Aug Sep Oct Nov Dec Total

Cash ksh ksh ksh ksh ksh ksh ksh ksh ksh ksh ksh ksh ksh
inflows
Binging 120600 128130 14317 156660 17573 19270 2108 21650 2214 2322 2541 2835 23357
capitals 0 0 00 0 60 60 960 060 260 460 660 360 720
Sales 400000 700000 71000 700000 68000 65000 6700 60000 6800 8000 8000 8900 85800
0 0 0 0 00 0 00 00 00 00 00
Debtors 6000 4000 3000 2000 1000 2000 0 8000 1000 1200 1400 1500 77000
0 00 0 0
Total cash 186200 198530 21447 226860 24383 25790 2778 27730 2904 3134 3405 3740 29235
In flows 0 0 00 0 60 60 960 60 260 460 660 360 820
Cash out 347300 320000 30000 290000 28600 25000 3900 34000 3600 3700 3500 3800 19773
flows 0 0 0 00 0 00 00 00 00 00
purchase
Salaries 153400 153400 15340 153400 15340 15340 1534 15340 1534 1534 1534 1534 18408
0 0 0 00 0 00 00 00 00 00
Transport 8000 7000 6500 7000 6000 7000 8000 7000 5000 8000 6000 9000 72500
Postage 3000 200 200 200 200 200 300 200 200 200 200 200 22000
Electricity 2000 3000 3000 2500 2500 2000 3000 2000 3500 3000 3000 3000 2600
Insurance 3000 300
Water 1000 1500 1000 1500 1500 1800 1800 1500 2000 1500 2000 1500 18300
bills
Advertise 9000 7000 7000 8000 6000 6500 9000 6000 9000 8000 7000 6000 68500
ment
Licenses 8000 8000
Rent 47000 47000 47000 47000 47000 47000 4700 47000 4700 4700 4700 4700 56400
0 0 0 0 0 0
Telephon 200 200 200 200 200 200 200 200 200 200 200 200 2400
e
Miscellani 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 18000
es
Total cash 580700 553600 57810 511300 51130 47010 6139 55880 5818 5928 5703 6018 35524
outflows 0 0 0 00 0 00 00 00 00 00
Net cash 128130 143170 15666 175730 19270 21089 2165 22142 2322 2322 2541 2835 25290
(cash 0 0 00 0 60 60 060 60 260 460 660 360 280
inflows
cash
outflows)

5.4 PRO.FORMA INCOME STATEMENT PROFIT AND LOSS ACCOUNT

particulars 2028 2029 2030

sales 8580000 9250000 10460000
Less purchase 977300 2640200 2980400
Gross profit 602700 6609800 7479600
expenses
transport 72500 80600 82600
postage 2600 3600 3800
Wages and 1840800 1840800 1840800
salaries
Electricity bill 22000 22500 23500
insurance 3000 3000 3000
Water bills 18300 19000 20000
advertisement 68500 70000 73000
license 8000 8000 8000
rent 564000 564000 564000
telephone 2400 2400 2400
miscellaneous 18000 20000 22000
Total expenses 2620100 2632900 2643100
Net profit 3982600 3976900 4836500
before tax
Tax provision 995650 994250 1209125

Net profit after 9286950 2982675 3627375

tax

5.5 PRO.FORMA BALANCE SHEET

Particulars 2028 2029 2030
 Assets
Fixed assets
Machinery 9000 13000 30000
Equipment 8000 12000 25000
Building 60000 55000 115000
Furniture and 24000 20000 80000
fittings
Total fixed assets 100000 100000 250000
Current assets
Cash at hand 100000 100000 120000
Cash at bank 200000 350000 270000
Debtors 70000 70000 100000
Stock 347300 350000 360000
Total current assets 717500 770000 850000

Total assets 817300 870000 1100000

Liabilities
Short term liabilities
Creditors 80000 80000 100000
Total short term 80000 80000 100000
liabilities
Long term liabilities
Bank loan 120000 120000 150000
Equity net worth 617300 670000 850000
Total liabilities 817300 870000 1100000

5.6 BREAK ANALYSIS

PARENTALS TOTALS
Fixed cost
Salaries 1840800
Insurance 3000
Interest loan 120000
Total fixed cost 1963800
Variable
Electricity bills 22000
Telephone bills 2400
Water bills 18300
Total variables 42700

5.7 DESIRED FINANCING

NO ITEMS AMOUNT REMARKS
1 Pre operational 240000
cost
2 Working capital 817300
3 Fixed cost 40000
4 Fixed asset 100000

TOTAL 1197300

5.8 PROPOSE CAPITALIZATION

ITEMS AMOUNT
Savings 850000
Friends 20000
Family 80000
Bank loans 120000
Total 1070000