TITLE OF BUSINESS : FIRM VIEW HOTEL

INSTITUTION : THE ELDORET NATIONAL

POLYTECHNIC

PRESENTED BY : ANTONY EKESA AUKU

COURSE CODE : 1802

COURSE : CERTIFICATE IN FOOD AND BEVERAGE

PROUCTION AND SERVICES

CENTER CODE:

SUPERVISOR : MR KIBET

PRESENTED TO : KENYA NATIONAL EXAMINATION

COUNCIL IN PARTIAL FULFILMENT
OF THE REQUIREMENTS FOR THE
AWARD OF CERTIFICATE IN FOOD
AND BEVERAGE PRODUCTION AND
SERVICES

SERIES: JULY 2024

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 TABLE OF CONTENT
DEDICATION........................................................................................................................................3
ACKNOWLEDGEMENT.......................................................................................................................4
DECLARATION.....................................................................................................................................8
CHAPTER ONE...................................................................................................................................10
CHAPTER TWO...................................................................................................................................14
CHAPTER THREE...............................................................................................................................17
CHAPTER FOUR.................................................................................................................................21
CHAPTER FIVE...................................................................................................................................24
FINANCIAL MANAGEMENT....................................................................................................................24
PRE-OPERATION COST...........................................................................................................................24
PROFORMA BALANCE SHEET........................................................................................................25
WORKING CAPITAL..........................................................................................................................26
CASH FLOW PROJECTION...............................................................................................................27
PROFORMA INCOME STATEMENT................................................................................................28
BREAK EVEN ANALYSIS.................................................................................................................29
DESIRED FINANCING.......................................................................................................................30
CAPITALIZATION..............................................................................................................................30
PROFITABILITY.......................................................................................................................................30

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 DEDICATION
I dedicate my business plan to my lecturer, parents and to each and everyone who
took part during my hard times may God bless you all.

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ACKNOWLEDGEMENT
I take this opportunity to to acknowledge my supervisor and lecturers for the
encouragement. Special thanks goes to my family and friends for their support
during the production of the business plan.

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DECLARATION
I hereby declare that this business plan is my own original work and it covers all my
business ideas to be applied effectively in the business environment.

NAME: ……………………………………………………………………………………………….

INDEX NUMBER:……………………………………………………………………………………

SIGN………………………… ………………..DATE……………………………………………….

SUPERVISOR NAME…………………………………………………………………………………

SIGN………………………… ………………..DATE…………………………………………………

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CHAPTER ONE
BUSINESS DESCRIPTION

BUSINESS NAME
The business name will be Firm View Hotel. The name was derived from my fathers
Firm Grill Hotel. This will bring a sense of entitlement to the business and create
more attachment to welfare of the business. The other part of the business name
refers to the type of business that is going to be conducted.

BUSINESS LOCATION AND ADDRESS

BUSINESS LOCATION AND ADDRESS

The proposed business will be located in Busia county along Kisumu Kakamega
highway. The reason for choosing this location is because of its strategic since it is
located in a place where there is good infrastructure, well populated with minimal
competition.

A MAP SHOWING THE LOCATION OF FIRM VIEW HOTEL

THREE STAR
HOTEL
MKULIMAHOTEL

KISUMU-KAKAMEGA HIGHWAY

FIRM VIEW HOTEL

BUSINESS ADDRESS
FIRM VIEW HOTEL

P. O BOX 306

BUSIA

EMAIL:firmviewhotel@gmail.com

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FORMS OF BUSINESS OWNERSHIP
The owner is Mr.Antony ekesa auku..The business will be a sole proprietorship form
of business.This means that the profit generated will be enjoyed by a single person
alone

ADVANTAGES OF A SOLE PROPRIETORSHIP

i. Quick decision making and immediate action

ii. Profit is enjoyed by a single person

iii. A sole trader is able to maintain top secret of the business

iv. The trader can get assistance from the family

TYPES OF BUSINESS
The business will be offering food and beverages.We will be selling all food items
including drinks which will be both alcoholic and non alcoholic.

The business wiill be manufacturing since will transform raw materials into a finished
good for example fruits and fresh juice.

Here are the examples of foods services we offer;

PRODUCTS AND SERVICES

GOODS SERVICES

Food items Catering for weddings

Alcoholic drinks Conference facilities

Non alcoholic drinks Home delivery catering

Other beverages

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 JUSTIFICATION OF OPPORTUNITY
This kind of business was selected to help people working in towns or living within
and out of town. It also favours us in terms of customers . Our main target are those
people working in towns and don't have time to prepare food in their homes. Our
price will be fair so it will be more convenient for them to have a hotel at least where
they are.

THE INDUSTRY
The industry will be a small scale as it looks forward to be expanding day by day. It
will start with one outlet being located in Busia. Other outlets will be opened in
different parts in Kisumu after doing investigation so as to identify a business gap.
Through these outlets people will be employed thus creating job opportunities.

BUSINESS GOALS AND OBJECTIVES

GOALS
The business will develop strategic goals with an aim of expanding the business,
Increasing the market share, wining and maintaining customers becoming a market
leader and provision of best goods and services. By the end of 2-3 years, the business
will have several selling shops within and outside Busia town so as to also receive
customers. It also plan to produce new products depending on the customers
demand and increase in the market.

OBJECTIVES
i. The business will provide training its members in respect to their roles this will
be achieved through industrial attachment and seminars among other available
means.

ii. To achieve highest profits daily, Increase its sales and minimize the cost of its
products to attract as many customers as possible.

iii. The business will also want to minimize its profit

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ENTRY AND GROWTH STRATEGY
ENTRY PLAN
The business will need to use the best method it can to gain acceptance in the
market. Firm View Hotel will reduce the prices of the products in order to capture
the full attention of the customers. This will enable the business to overcome its
competitor. It will also create awareness of the existence of the business since the
business is new in the operation strategies to be used will include posters ; where
the business will design them bearing the logo trademark of the business. It will also
open a facebook account which will be used to advertise the goods being sold and
their appearance.

GROWTH PLAN
The business is bound to grow because of large and available market demand since it
will supply to the neighbouring social facilities and the local customers. The business
shall improve the growth of the business by implementing favourable prices for
customers, increasing products lines, using its competitors weakness as strengths
and promoting their products by offering after sales services to attract customers.

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CHAPTER TWO
MARKETING PLAN
INTRODUCTION
Marketing are the activities that direct the how of goods and services from the
producer to satisfy customers and accomplish the objectives of the Firm. Its also the
creative management functions which promote the trade and employment by
accessing customer need and initiating research and development to meet them.

CUSTOMERS
Most of the customers to this business are employed within Busia town and students
who attend institutions within the town. Others may be families which might have
visited the town for fun, the homes around town also demand for our services.

MARKET SHARE
This is the portion or the percentage of products and services in the region that the
business will control. This share is used to determine the strength of the business
and compare other business in the same sector. After thorough estimated market
research, the entrepreneur presented the research on the estimated market share as
shown on the pie chart below

MARKET SHARE

10%

30%

60%

Firm View Hotel Mkulima Hotel Three Star Hotel

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COMPETITION
The business face stiff competition from the well established firms who sales same
products and offer the same services. The main competitors of Firm View Hotel are
Mkulima Hotel and Three Stars Hotel.

NAME OF THE BUSINESS STRENGTH WEAKNESS

Firm View Hotel Qualified personnel Shortage of water

Good payment Shortage of electricity

Offers discount

Good products and services

Mkulima Hotel Good networking Slow services

Good labour Poor markets

Good payment Do not offer discount

Three Stars Hotel Quality services Poor supervision

Good payment Insufficient raw materials

Few personnel

Poor services

METHOD OF PROMOTION AND ADVERTISING

The business intends to promote its products and services through various
advertisement. One at they intend to use is through magazines and newspapers.
They also intend to use radio station and that is Emuria FM which is located at Busia
Town and 80% of the residents listen to those stations. The business will also ensure
that posters are in each street that advertise the product and services we offer to
the customers . We also going to have road shows campaign about our products and
services which will enhance promotions.

PRICING STRATEGIES
The pricing of the products and services depends on the customer demand and also
selling price is calculated by adding half of the buying price to the market price for
instance if a loaf costs sh.20 it will be sold by 10+20=30 discount will be offered to
take away food items e.g. French fries and snacks, other offer device like watching
will cost 50 and free for our new rooms.

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SALES TACTICS
The decision on the strategic way to enter in to the market in order to make sales is
very important. The business will make the following considerations on making
strategic decisions on sale:

1. After sales service when the customer buy goods band services such as transport
will be offered to them.

2. The person presenting the products into the market will be able to deal with the
customer directly hence passing the information to them making more sa;les.
The competency of the sales person will boost a lot about the business success.

DISTRIBUTION STRATEGIES
As the business kicks off it will sell its products to the institutions because of
weakness in finance to eliminate distribution cost. Gradually as the business grows,
It will be at a position to purchase a van that will deliver goods to strategic positions
that are accessible to customers and at fair prices. This is advantageous because
products are able to be distributed to various destinations

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CHAPTER THREE
ORGANISATION AND MANAGEMENT PLAN
MANAGEMENT TEAM
This is basically a list of work and processes that the business will be dealing with ;
the position that the work will be holding and dealing on planning will help the
business to achieve its target. The business will have an organization which will help
it.

MANAGEMENT

FINANCE
DEPARTMENT

SUPPORT STAFF

QUALIFICATIONS, WORK AND EXPERIENCE DUTIES

AND RESPONSIBILITIES
QUALIFICATIONS OF A MANAGING DIRECTOR

For the successive operation of the business the managing director must have
specific qualifications concerning business and operation . They are:

i. Must have a holder in diploma

ii. Must have diploma in related field

iii. Should have an experience of entrepreneurial skills

iv. Must have gained skills and experience on how to nrun the business as they will
be considered the top thinkers in the business

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FUNCTIONS OF MANAGER

a) Planning: the manager is supposed to decide what is to be done ;

aims/objectives, means, plans and where is to be done, who will do it and what
result are to be evaluated

b) Organizing: the manager determines the activities to be done by grouping its

activities to the individuals (division of labour) and creating a structure of
activities and responsibilities among the objectives.

c) Directing: Is the process of shifting all information collected during the course of
execution to the supervising staff and this is achieved by giving instructions to
their interiors

d) Ensures that suitable working environment is created to ensure efficiency of

staff.

PERSONNELS NO QUALIFICATIONS DUTIES

ACCOUNTANT 1 CPA certified computer literate Keeps records of

two years experience people

Advice the manager

about finance issues

Work closely to the

manager

CHEFS 6 Diploma in Food and Beverage To prepare meals of

production different types

To satisfy the
customers needs

WAITERS 6 Diploma in Food and Beverage To welcome the

services guests

To take orders to the

kitchen

To serve the guests

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RECRUITMENT, TRAINING AND PROMOTION
RECRUITMENT
This is where the business prepares itself to bring in new employees to the
organizing its mostly done through interviews. Below are ways that the business is
going to use to recruit its members:

1. The business will announce vacancies through advertisement which will be done
through media such as radio station, newspapers, posters etc..

2. Application forms and letters are received and sorted according to qualified
applicants and short-listed will be done.

TRAINING
This includes all attempts to improve performance in order to attain and maintain
high standard and quality produces as expected. Advance training will be offered to
employees. This will be done before the employees get down to the real work within
the business.

PROMOTION
This is an increment in the rank and level may also be accompanied by the raise in
salaries,allowances and responsibilities to the hard-working personnel in the
business premises.When giving promotion the following will be considered:

1. Experience-This is what the workers and employees have attained and gained to
improve the living and progression of the business through sacrificing their time.

2. Merits- This is the only and potential way that the workers and employees of
the business should display to work in order for them to get a promotion.

REMUNERATION AND INCENTIVES

REMUNERATION

SAMPLE PAY ROLL

NO PERSONELS SALARY PER MONTH SALARY PER YEAR

1 Manager 25,000 300,000

2 Accounts 7,000 84,000

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3 Chefs 6,000 72,000

4 Store Keeper 5,000 54,000

5 Waiters 5,000 48,000

6 Cleaners 4,000 42,000

TOTAL 25,000 600,000

INCENTIVES
For the business to achieve setting goals and objectives the human resources must
be involved. It will give incentives to her workers so as to motivate them in their
daily activities

LICENCE PERMITS AND BY-LAWS

LICENCES
In order for the business to operate within the government policies it has to meet its
laws. Firm View Hotel will acquire production licence in order to operate within the
location.The licence will enable the business to carry on its full operation without
government interruptions.

PERMITS
For the enterprise to operate nomarlly/legally several licences and permit will be
obtained in pursuant to the council law from the county government offices which in
this case will be the county government of Busia.

BY-LAWS
As per the law of the ministry of hospitality, any business opaerating under its
jurisdiction as sole proprietorship has to have licence which is renewed either
monthly or yearly depending on the choice of the permit.

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CHAPTER FOUR
OPERATION/ PRODUCTION PLAN
The production plan is the way in which production of the business is planned and
organised for efficiency and effective operation

PRODUCTION FACILITIES AND CAPACITY

ITEMS QUALITY CAPACITY MAKE PRICE TOTALPRICE SUPPLY REMARKS

UNIT

Land & - - - - 60,000 Local Every

Office agency year
renting

Firm 2 1.5 Toyota 240,000 500,000 - Every 2

machinery tonnes years

FIRM LAYOUT

WASH ROOM SERVICE

KITCHEN AREA

STORE
PARKING

WASH

SECURITY ROOM

PRODUCTION STRATEGY
There are patterns and actions that the business takes to produce the products and
services, this help to tell and Shows in which directions the operation of the
business should employ:

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 Labour

 Expenses

 Technology

1. Labour
The skilled and unskilled personnel will be necessary for the smooth operation and
running of the organisation. Temporary employment might be necessary if a big
tender for supplying goods has been acquired and needs more than manpower, both
direct and indirect workers will be needed.

2. Expenses
The expenses for each month will be taken care of . The expenses may include
Salaries, wages,electricity, rent, water, adverts and transport

3. Technology
The business will adapt any change in technology so as to cope with the competition
in the sales and market sector

ITEMS AMOUNT

Power and electricity 10,000

Water 7,000

Fuel and Petrol 12,000

Transport 4,000

Telephone 3,000

Wages 14,000

Advertisement 10,000

Rent 14,000

TOTAL 74,000

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PRODUCTION PROCESSES
The business will involve itself in production and services of foods and beverages to
its clients. The business will be placing orders to recommended wholesalers. After
the products are purchased, the business pays for them and they are delivered to its
premises where they are stocked for sale

REGULATION AFFECTING PRODUCTION

SAFETY REGULATION
There are safety rules require first aid kits within the firm premises to prevent
further injuries in case of accidents. The business will also ensure installation of fire
extinguishers that will be necessary incase of any unfortunate flame. An emergency
door will also be available to allow easy exit incase of of emergency.

ENVIRONMENTAL REGULATION
This act will control the pollution of the environment, protection and the biodiversity
conservation and provides a legal framework to protect and manage ecological
communities. The business will ensure that all the wastes are disposed properly and
if possible are extinguished to maintain hygiene around the restaurant. It will also
put into consideration the planting of trees which may later provide shades as
relaxation points around the Firm.

HEALTH REGULATIONS
Keeping the health of our employees and customers in good state in the business
top priorities. Sparkling cleaning services will ensure this is well taken care of by
obtaining licences from health ministry. There will be a medical;l cover to all the
employees but at an affordable price. There will be provision of first aid kit for minor
injuries during work hour.

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CHAPTER FIVE

FINANCIAL MANAGEMENT

PRE-OPERATION COST

ITEMS AMOUNT

Power and Electricity 13,950

Water 5,400

Transport 22,900

Fuel/Petrol 41,500

Telephone 4,650

Wages 129,000

Advertisement 8,000

Rent 1,650

Stationery 3,420

Computers 48,000

TOTAL 278,470

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PROFORMA BALANCE SHEET

ITEMS AMOUNT ITEMS AMOUNT

ASSETS LIABILITIES

Fixed assets Long-term liabilities 300,000

Salary and wages 1,548,000 Loan 900,000

Rent 22,000 Personal selling 100,000

Computer 48,000 Relatives & Friends 52,800

Loan Interest 13,200

Loan payment 250,000

TOTAL FIXED ASSET 1,881,200 TOTAL LONGTERM 1,352,800

LIABILITIES

Current assets Short term 489,900

Cash in hand 154,000 Liabilities

Cash at bank 720,000 Net profit after tax

Debtors 141,500

TOTAL CURRENT 367,500 TOTAL SHORT TERM 489,900

ASSETS LIABILITIES

TOTAL ASSETS 2,248,700 TOTAL LIABILITIES 1,842,700

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WORKING CAPITAL
Working Capital=Current Asset - Current Liabilities

ITEM AMOUNT(KSH) ITEMS AMOUNT(KSH)

Cash in hand 50,000 Loan 400,000

Cash at bank 1,000,000

Stock 200,000 Capital 200,000

Debtors 300,000

TOTAL 1,550,000 600,000

ESTIMATION ON=Current Assent - Current Liabilities

WORKING CAPITAL= 1,550,000-600,000

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 CASH FLOW PROJECTION
Particulars JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Balance B/F - 598,000 444,950 258,090 104,540 565,990 498,690 408,740 352,790 261,090 190,890 111,220 5,282,440

Capital 400,000 - - - - - - - - - - - 500,000

Debtors - - - 5,500 6,000 7,500 8,000 1,000 9,500 8,000 9,000 10,500 74,000

Loan 3,000,000 - - - 600,000 - - - - - - - 300,000

Sales 200,000 154,440 113,540 124,500 134,500 164,000 165,200 179,100 186,000 193,000 199,800 162,510 1,824,600

TOTAL IN FLOW 900,000 700,850 558,490 388,090 845,040 737,490 671,890 597,840 548,290 462,090 399,690 284,230 7,981,040

Cash outflow - - - - - - - - - - - - -

Salaries 129,000 129,000 129,000 129,000 129,000 129,000 129,000 129,000 129,000 129,000 129,000 129,000 129,000

Purchases 66,000 75,000 77,000 60,000 73,000 73,000 70,000 61,000 80,000 80,000 75,000 71,000 861,000

Electricity 1,200 1000 900 1,500 1,450 1,300 1,000 1,000 1,200 1,300 950 1,150 13,950

Water 400 500 500 500 600 400 300 450 500 500 450 300 5,400

Transport 2,000 2,000 2,000 2,000 2,000 2,000 2,000 1,650 2,000 1,800 1,400 2,050 22,900

Petrol 2,000 3,000 4,500 4,000 5,000 3,000 4,000 3,500 3,000 2,000 3,500 4,000 41,500

Telephone 250 300 300 400 350 400 500 550 350 400 450 400 4,650

Advertisement 1,500 2,000 - - 1,500 - - 1,500 - - 1,500 - 8,000

Rent - - - - - - - - - - - 1,620 1,620

Stationary 150 2,000 100 50 50 100 250 300 50 100 120 150 3,420

Computers 48,000 - - - - - - - - - - - 48,000

Loan interest 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100

Loan payment - - 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000

Equipment 50,000 40,000 60,000 60,000 40,000 35,000 30,000 20,000 45,000 30,000 50,000 40,000 468,500

TOTAL OUTFLOW 301,600 255,900 300,400 283,550 279,050 238,800 263,150 245,050 287,200 2IN71,20 288,470 253,270 2,906,320
0

NET CASH 598,400 444,950 258,090 104,540 565,990 498,690 408,740 352790 261,090 190,890 111,220 30,960 5,589,720

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PROFORMA INCOME STATEMENT

ITEMS AMOUNT

Sales 1,824,600

Less purchases 861,000

Gross profit 963,600

Expenses

Salaries/Wages 1,548,000

Power/Electricity 13,950

Water 5,400

Transport 22,900

Fuel/Petrol 41,500

Telephone 4,650

Advertisement 8,000

Rent 42,000

Stationary 1,620

Computers 48,000

Loan interest 13,200

Equipment 500,000

Total expenses 2,667,910

Net profit tax 1,304,310

Less tax 16% 208,689.6

Net profit after tax 1,095,620.4

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BREAK EVEN ANALYSIS
This is where there has been no net loss or profit gained in the business. Although
opportunity cost has been made and capital has revealed the adjusted expected
returns.

ITEM AMOUNT

Fixed Assets

Salaries/wages 1,548,000

Rent 42,000

Computer 48,000

Loan interest 13,000

Loan Payment 250,000

TOTAL FIXED ASSETS 1,901,200

Variable Cost

Power/Electricity 13,950

Water 5,400

Transport 22,900

Fuel/Petrol 41,500

Telephone 4,650

Statinary 11,620

Advertisement 8,000

TOTAL VARIABLE COST 510,220

Contribution Margin=Total Sales per year-Total variable cost

=1,901,200-108,220

Contribution Margin=Contribution Margin/Total Sales*100%

=1,792,980/1,901,980*100%= 94.31%

Break even point = Fixed Cost

Contribution Margin%

=1,901,200 =94.31%#

=Ksh. 20,159

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DESIRED FINANCING

ITEM AMOUNT

Pre-operational cost 278,470

Working capital 950,000

TOTAL 1,228,470

CAPITALIZATION

ITEM AMOUNT

Bank 300,000

Personal savings 150,000

Aid from friends 50,000

TOTAL 450,000

PROFITABILITY
Sales turn over = Net profit after tax*100%

Total sales

=1,095,620/1,901,200*100

=57.63%

Returned on Capital employed = Net profit after tax*100%

Total sales

=1,095,620/1,901,200*100%

=57.63%

Current Asset Ratio= Net profit after tax*100%

=Total Current Assets

=1,095,620*100%

=367,500

=79.6%

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