BUSINESS PLAN.

TITLE : ANTONINA BEAUTY COSMETICS

CANDIDATE NAME : ANTONINA AJUMA LODUNGA

INDEX NUMBER :5092260023

COURSE NAME : DIPLOMA IN SUPPLY CHAIN MANAGEMENT

CENTRE NAME : ELDORET TECHNICAL TRAINNING INSTITUTE

CENTRE CODE : 509226

COURSE CODE : 1903

PAPER NO. : 107A

SUPERVISOR : MADAM ROSE

PRESENTED TO : KENYA NATIONAL EXAMINATION COUNCIL ASPARTIAL

FULFILMENT FOR THE AWARD OF DIPLOMA OF SUPPLY
CHAIN MANAGEMENT.
EXAM SERIES : JULY 2024

DECLARATION
I hereby declare that this is my original work and has never been submitted to any examination body before for any

award.
NAME OF CANDIDATE: ANTONINA AJUMA LODUNGA

SIGNATURE: _______________________________

DATE: _______________________________

DECLARATION BY THE SUPERVISOR

I declare that this project has been submitted with my approval.

NAME: MADAM ROSE

SIGNATURE: ___________________________________

DATE: ___________________________________

DEDICATION
I dedicate this project to my family members who supported me financially, my teachers, my friends and classmates

who encouraged me and supported me during the working of this project.

ii
ACKNOWLEDGEMENT
First and foremost, I would like to glorify the almighty for the strength and courage he accorded me during the

writing of this project, I sincerely wish to acknowledge with gratitude my parents for their financial support

throughout the writing of this project.

I also thank MADAM ROSE for his guidance and supervision during the writing of this project. Lastly my regards

are to my colleagues for their correction during the early stages of this project.

TABLE OF CONTENTS
iii
BUSINESS PLAN...........................................................................................................................i

TITLE :ANTONINA BEAUTY COSMETICS..........................................................................i

DECLARATION...........................................................................................................................ii

DEDICATION..............................................................................................................................iii

ACKNOWLEDGEMENT...........................................................................................................iii

TABLE OF CONTENTS............................................................................................................iv

CHAPTER ONE..........................................................................................................................vii

1.1 Executive Summary.............................................................................................................vii

1.2 Business Description............................................................................................................vii

1.3 Marketing Plan.....................................................................................................................vii

1.4 Organizational Plan............................................................................................................viii

1.5 Operational Plan.................................................................................................................viii

1.6 Financial Plan.....................................................................................................................viii

CHAPTER TWO...........................................................................................................................1

2.0 Business Description.........................................................................................................1

2.1 The Background................................................................................................................1

2.2 Nature of the Business......................................................................................................1

2.3 Business Location and Address........................................................................................1

2.4 Form of Ownership...........................................................................................................1

2.5 Type of Business...............................................................................................................2

2.6 The Products and Services................................................................................................2

2.7 Justification of Opportunity..............................................................................................2

2.8 The Industry......................................................................................................................2

2.9 Business Goals..................................................................................................................3

2.10 The Entry and Growth Strategy........................................................................................3

iv
CHAPTER THREE.......................................................................................................................4

3.0 Marketing Plan..................................................................................................................4

3.1 Customers..........................................................................................................................4

3.2 Competition.......................................................................................................................4

3.3 Market Share.....................................................................................................................5

3.4 Advertising and promotion strategy..................................................................................6

3.5 Pricing Strategy.................................................................................................................7

3.6 Sale Tactics.......................................................................................................................7

3.7 Distribution Strategy.........................................................................................................7

CHAPTER FOUR.........................................................................................................................9

4.0 Organizational and Management Plan..............................................................................9

4.1 Organization......................................................................................................................9

4.2 Details on key management personnel members..............................................................9

4.4 Remuneration and incentives..........................................................................................10

4.5 Licenses, permits and by-laws........................................................................................11

4.6 Support Services.............................................................................................................11

CHAPTER FIVE.........................................................................................................................13

5.0 Operational/ Production Plan..........................................................................................13

5.1 Product design and development....................................................................................13

5.2 Product facilities and capacity........................................................................................13

5.3 Production strategy.........................................................................................................14

5.4. Operation / Production process.......................................................................................14

5.5 Government Regulation Affecting Operation.................................................................14

CHAPTER SIX............................................................................................................................16

6.0 Financial Support............................................................................................................16

v
 6.1 Pre-Operational Cost.......................................................................................................16

6.2 Working Capital Requirements.......................................................................................16

6.3.1 PROJECTED CASH FLOW MONTLHY DATA FOR THE YEAR 2025.....................18

6.3.2 PROJECTED CASH FLOW MONTLHY DATA FOR THE YEAR 2026.....................18

6.3.3 PROJECTED CASH FLOW MONTHLY DATA FOR THE YEAR 2027.....................20

6.4 Pro-Forma Income Statement.........................................................................................21

6.5 Pro-Forma Balance Sheet................................................................................................21

6.6 Break-Even Level...........................................................................................................22

6.7 Expected Profitability Ratios..........................................................................................22

6.8 Desired Financing...........................................................................................................23

6.9 Proposed Capitalization..................................................................................................23

Appendix I....................................................................................................................................24

Business Locational Map...........................................................................................................24

vi
CHAPTER ONE
1.1 EXECUTIVE SUMMARY.
1.2 BUSINESS DESCRIPTION.
The owner of the proposed business is Antonina Cosmetic, who is currently a student of Eldoret Technical Training

Institute. The name of the business is ANTONINA COSMETIC. The business will be located in Eldoret town,

Usain Gishu County.

The address of the business will be: -

ANTONINA COSMETICS,
P.O BOX 770-30100,
ELDORET.
MOBILE NUMBER: - 0740092850
EMAIL ADDRESS: - antoninaajuma@gmail.com

The business will ensure that it will serve the customers properly. At the proposed business activity these resources

will be available adequately and will be fully utilized in order to achieve the goals and objectives.

1.3 MARKETING PLAN.

The business customers will be categorized into four groups i.e.

a) Wholesales.
b) Institutions.
c) Salons.
d) Retail.

a. Wholesale customers: the potential customers will be the residents of ELDORET town or the frequenters

of the town. These are middle aged, youth and the old. As long as they have the capacity.

b. Institutional customers: These are students of schools and colleges which are located a few meters away

from the town. The institutional customers are approximately 200.

c. Salons: These are cosmetic users who live around the town. They are the best consumers of the cosmetic

products.

d. Retail: They are also the consumers or the buyers

vii
 There are various competitors as established by the sole proprietor.

Namely: -

1. Ben Cosmetics.
2. Sharoo Cosmetics.
3. Brandy Cosmetics.

1.4 ORGANIZATIONAL PLAN.

The following are the employees who will operate the business: -

a) Manager-He will be the overall supervisor of the business.

b) Assistant Manager-Assisting the manager in case the manager is absent.

c) Watchman- He is supposed to make sure that the whole compound is secured and safe for the comfort of

the customers and their property.

d) Cleaners-Ensuring that the place is kept clean all the according to the regulations of the ministry of health.

1.5 OPERATIONAL PLAN.

In this area the production services and their capacities are shown.

This business will be designed such that it will have services department which will be of different purposes. The

tools and equipment of the business will be required. The owner will look for a way to obtain a Trading License.

1.6 FINANCIAL PLAN.

The sources of funds for running the cosmetic is through various means as follows: -

a) Owner’s contribution: -Ksh 100,000 of the required capital will be contributed by the owner.

b) Friends: - Ksh 150,000 of the required capital will be contribution from friends.

c) Loans from banks: - The owner of the business will apply for a bank loan which is to be paid later

depending on the repayment period given by the bank. The amount to be borrowed will be Ksh

100,000.

viii
CHAPTER TWO.

2.0 BUSINESS DESCRIPTION.

2.1 THE BACKGROUND.
The owner of the proposed business is Antonina Ajuma Lodunga. She is a student at Eldoret Technical Training

Institute pursuing a Diploma Supplied Chain Management.

2.2 NATURE OF THE BUSINESS.

The name of the proposed business will be ANTONINA COSMETIC. It will be located at an urban because of the

population of the people and demand of it. Location of the business is Eldoret town, Safina building, opposite the

Comfy Hotel. The business will be a sole proprietorship. The main business activity will be supplying things to near

schools and salons who will be principal customers. The business will be open and running in the next one year.

2.3 BUSINESS LOCATION AND ADDRESS.

Market place will be around the town. The infrastructural facilities in the area are good roads, water and electricity.

Employees will be living in the area hence it will be a walking distance to and from the business premises. The

address of the business is: -

ANTONINA COSMETIC,
P.O BOX 770-30100,
ELDORET.
Email address: - antoninaajuma@gmail.com

2.4 FORM OF OWNERSHIP.

The capital to start the business is Ksh 250,000. The owner’s contribution is Ksh 100,000, Friends contribution is

Ksh 50,000 and Loans received SH 100,000.

CONTRIBUTION AMOUNT (SH) PERCENTAGE

Owner 100,000 28.6%

Friends 50,000 42.9%

Loans 100,000 28.6%

1
2.5 TYPE OF BUSINESS.
Business will on be whole sale because selling to salons and schools in large quantity and supplying them. As

startup business as time goes expansion may be needed. Perfumes are the products that are most in demand. Method

of making people aware of products is advertising or displaying the product that is connected with a popular film or

movies, people or events.

2.6 THE PRODUCTS AND SERVICES.

Products of the business are perfumes, body lotions and hair weaves for ladies. The size will be medium, with bright

colors so as attract many customers. High quantity and well packed customers will get products which are economic

and have usage flexibility like perfumes. The owner will be giving discounts to the customers so that they can make

frequent visits. The government needs to give licenses that prove that the owner is allowed to sell this type of

products and the owner will be confident with the business.

2.7 JUSTIFICATION OF OPPORTUNITY.

The following things will make business ventures: -

i. Infrastructure to improve the satisfaction of customer’s transportation must be good.

ii. Communication is another major key factor that demands for customers and the business owner to run

smoothly.

iii. The location matters most where the population is large because the demand will be high.

iv. Access to the market, whether there is steady market for the goods.

The local community will benefit from employment opportunities created by the business which will

improve the living standards. Technology assistance will also help improve things.

2.8 THE INDUSTRY.

The industry in which the business is located is the SERVICE INDUSTRY and its small. Technology is used in the

industry; laborers are employed to serve the customers on their needs. The laborer’s working in the Cosmetic must

be experienced. The business needs seven (7) employees. The owner of the business will be the Manager. The

Capital requirement is Ksh 250,000. This breaks down to, Ksh 15,000 for rent, Ksh 5,000 for electricity, Ksh 2,000

for water, Ksh 4,500 for seats and Ksh 100,000 for equipment to be used. Every month the business is expected to

generate more than Ksh 50,000 in profit, which show that the business is growing. The seasonal factors that affect

the business such electricity black outs, water shortages, transport due to poor state of some roads thus hindering

2
 the transportation of products. Many businesses are coming up with new ideas and technology. Within one year the

business hopes to expand and open branches in other towns and a mobile cosmetic.

2.9 BUSINESS GOALS.

The business owner has got the following business goals: -

a) Creation of employment: - The business will create jobs to people who live around hence improving the

standards of living solve the unemployment situation.

b) Promotion of technology: - New things will arrive in the community. By competing in the market level

can develop unique equipment that have improved technology.

c) Capital generation: - The business will be able to generate income to run the business and expand.

d) Expansion of the business: - After two years the business will have expanded and much capital will have

been generated for expansion.

2.10 THE ENTRY AND GROWTH STRATEGY.

THE ENTRY STRATEGY.

The owner will take the following strategy to make the business succeed: -

i. By employing trained personnel to work in the industry who will serve the customers politely.

ii. Lowering the prices and also offering free services to them.

iii. Advertising of the new products through mass media like television, radio, through posters,

exhibitions and others.

As time goes the owner will increase the number of employees from seven (7) to ten (10), this will need the

expansion of the premises for space purposes. The opening various branches in different towns.

3
CHAPTER THREE

3.0 MARKETING PLAN.

3.1 CUSTOMERS.
The potential customers are as follows: -

a) Whole sellers.

b) Institutions.

c) Salons.

d) Retailers.

a) Whole sellers

These are the customers who buy goods in large quantities. The goods need transportation to reach their destination.

b) Institutions.

Around the business there are schools like Mount Kenya University, Eldoret Technical Institute, Elgon View college

among others that need some products like perfumes, lip balms and jewelry among other services.

c) Salons.

They are the most consumers of the products and services. They need things products oils, cutex and hair weaves.

d) Retailers.

They are also target market for buying the products in large quantities. They are to be given discounts so as to make

them loyal business.

3.2 COMPETITION.
The business will be located where the level of competition is high. The competitors of the business are BEN

COSMETIC, SHAROO COSMETIC and BRANDY COSMETIC. Joy cosmetic is located in the rural areas while

Shinny cosmetic is located far away from the town.

4
 TABLE 1: COMPARISON BETWEEN THE COMPETITORS

COMPETITOR STRENGTH WEAKNESS OPPORTUNITY THREATS

Ben Cosmetic  Qualified  Poor infrastructure  No competition  Lack of capital

personnel  Untrained
 Availability of personnel
capital  Poor transportation
 Enough security

Sharoo cosmetic  Qualified  Untrained  Good infrastructure  Poor service to

personnel personnel customers
 Availability of  Low payment to
capital workers
 Good
infrastructure

Brandy cosmetic  Availability of  Untrained  No competition  Lack of capital

capital personnel  Poor services
 Poor transportation
 Poor infrastructure
 Prices are higher

TABLE 2: OVERALL COMPETITORS AND WEAKNESS OF COMPETITORS

Areas of comparison Ben Cosmetic Sharoo Cosmetic Brandy Cosmetic

Security 5 4 1
Transport 4 3 2
Capital 1 2 3
Management 4 3 3

3.3 MARKET SHARE

The existing enterprises have been enjoying the market share. Ben Cosmetic will also be a participant in

contributing 60% of total market share. This will be experienced during the market first two months at operation but

is set to improve gradually.

Competitors Estimate number of customers Percentage

Ben Cosmetic 264 60%
Sharoo Cosmetic 92 21%
Brandy Cosmetic 48 19%

Total 440 100%

5
CHART OF MARKET SHARE

ANTONINA CHART

19

21 60

BEN COSMETIC SHAROO COSMETIC BRANDY COSMETIC

3.4 ADVERTISING AND PROMOTION STRATEGY

The business is intending to pass all the business to people through the following: -

(i) Posters- The owner of the business will use posters near such places as bus stations, junctions where

people always pass. Posters must be of attractive color to attract people. They will cost approximately

5,000 shillings.

(ii) Mass media e.g. radio. This is the cheapest way of passing information. It helps analyze the

customer’s taste. Things to be included are location, services offered. The cost of advertising through a

radio is cheap compared to other means. It may cost about 3,000 shillings.

(iii) Exhibition – This is the process of displaying products in rag – or mounting of newly products

acquired in strategic positions or location to allow customers to view. This display helps create

6
 awareness among the customers about new products. Displayed items can sometimes be accompanied

by short summary highlighting the contents contained and its uses to customers so as to understand it.

PROMOTION.

(i) Giving out discount to the customers who buy goods in large quantities.

(ii) Credit facilities – Owner gives credit to customers – this will strength the relationship between the

costumers and the proprietor.

(iii) Promotion campaigning in another means is offering free services to the employees. Another

method is giving some samples to customers as a discount. Each promotion will cost about five

hundred shillings. The promotional campaigns can be measured through the more customers

coming more got information about it.

3.5 PRICING STRATEGY.

It is a competition of prices over a given product in relation to the cost of its input. An appropriate pricing system

must consider the total costs incurred in producing the product or service. The owner is able to recover the product

cost and is left with a reasonable profit. The factor to consider when pricing is competition in the area. Selling price

will be variable because of its demand. Credit facilities will be given to frequent customers. The more products one

buys, profit or discount is given or free service is offered.

The Selling Price = Market Cost Production + Make Up Profit.

3.6 SALE TACTICS.

The method Rose Cosmetic will use is: - Telephone or face to face communication to reach potential

customers.

3.7 DISTRIBUTION STRATEGY.

The means of transport will be by means of roads because of availability of tarmac roads. Transport cost per month

will be six thousand shillings.

The Problems to be anticipated during distribution are expected to be as follows: -

(i) Transport – In most cases vehicles overcharge the transportation cost to high prices.

(ii) Security – It becomes insecure when using transportation like bicycles because they are not

reliable during the darkness.

7
 (iii) Weather conditions- Due to poor weather conditions. There may be delay in delivering of goods

and services.

(iv) Fragility

Some goods are very fragile hence requires means of transport as a possible solution.

During weather conditions e.g. raining, plastics bags may be used to protect goods from getting wet.

Security throughout the day even at the night so that goods can be distributed throughout.

Transporting goods safely by use of vehicles not bicycles or carts.

8
CHAPTER FOUR

4.0 ORGANIZATIONAL AND MANAGEMENT PLAN

4.1 ORGANIZATION.
The owner will be the manager the business. He will manage the responsibilities, these are to supervise the

employees about work. The salary of the month is ten thousand. (Compensation of the management team is giving

them tea break, lunch and selling them products at low prices. Also, through offering them free services.

THE ORGANIZATION CHART.

MANAGER

ASSISTANT
MANAGER

CASHIER WATCHMAN SALESMAN CLEANER

9
4.2 DETAILS ON KEY MANAGEMENT PERSONNEL MEMBERS.
NAME QUALIFICATION DUTIES AND SALARIES
RESPONSIBILITY
The Manager 24 years old. Punctual in Motivates and supervises 13,000 shillings
his work. Must be an employees.
experienced person. Goal
oriented, problem solver.
Assistant Manager Aged 24 years, problem Assists or takes over when 9,800 shillings
solver. Goal oriented. manager is absent
Punctual and honest.
Cashier Aged 23 years, an Honest Keeps money or receipts of 8,800 shillings
person. Responsible in his money
work. Must be trust
worthy.
Salesman Above 18 years, honest, Serving customers. 6,000 shillings
punctual Transportation of goods and
offering services.
Cleaner Aged 22 years. Punctual in Doing cleanness very well 3,900 shillings
his/her work
Watchman 20 years. Punctual and Safe guards the compound and 5,700 shillings
honest directs customers

RECRUITMENT, TRAINING AND PROMOTION.

(a) Recruitment.

Recruitment of the employee is done through advertisement, in the newspaper, mass media like radio and

television. It will be done only when there is vacancy in the business. Interviews are done during

recruitment day.

(b) Training.

Training is done to those employees who do not have any experience. Seminars can be held for them about

the business every month.

(c) Promotion.

10
 Promotion is given to workers according to how they the work. Promotion is given to them so as to

motivate to work. Every year promotions can be given out, things to considered during promotion include

the following punctuality, honesty and hardworking.

4.4 REMUNERATION AND INCENTIVES.

The enterprise will provide the following incentives to the workers. Medical allowance, transport allowance, house

allowance. These will make workers to be satisfied in their salary.

TABLE SHOWING THE EMPLOYEES’ SALARY

Post Basic Salary Allowances (Ksh) Total (Ksh)

(Ksh)
Medical Transport House
Manager 10,000 500 1,000 2,000 13,500
Asst. Manager 8,000 300 500 1,000 9,800
Cashier 7,000 300 500 1,000 8,800
Cleaner 3.000 150 250 500 3,900
Watchman 5,000 300 150 500 5,700
Salesman 4,000 500 400 1,100 6,000

4.5 LICENSES, PERMITS AND BY-LAWS.

Document Authority Using Amount (Ksh) Remarks

Licenses Local authority 4,000 Expires every one years
P.O. Box 450
ELDORET.
County Council License County Council 3,000 Expires after one year
P.O. Box 480
ELDORET.
Health permit ELDORET Public Health 1000 Expires after six months
P.O. Box 1000
ELDORET.

11
4.6 SUPPORT SERVICES.
The business will not be able to run without any financial support. The following supporting services for Rose

Cosmetic will ensure smooth running of the business and to achieve the goals.

(i) Banking.

The enterprise will open a bank at ELDORET to be able to get advice on credit and finance to the business. The

deductions of the bank will be 1,000 shilling every month.

ABSA ELDORET BRANCH,

P.O. BOX 003,

ELDORET.

(ii) Electricity

Electricity is an important thing that a Cosmetic cannot do without. No work will be done without it. Business will

be run until 9.00pm and electricity is needed. Fees charged will be 500 shillings a month.

KENYA POWER AND LIGHTING,

P.O. BOX 212,

ELDORET.

(iii) Postal Services

It’s where communication takes place between customers. It will make the supplement of the products to different

places easy. Payment is 1000 (Ksh) every month.

CO-OPERATIVE BANK BRANCH,

P.O. BOX 013,
ELDORET.

(iv) Insurance Services

This is required for the safe guarding of the business against certain risks like theft cases or any natural calamities

like foods.

The chargeable fee is 2,000 shillings.

Municipal Council,
P. O. Box 121,
Eldoret.

12
CHAPTER FIVE.

5.0 OPERATIONAL/ PRODUCTION PLAN.

5.1 PRODUCT DESIGN AND DEVELOPMENT.
Products that the business will be selling must be of high quality which can satisfy the customers’ needs. The

appearances of the products also matter in that they must be attractive to the customers Must be also a long lasting.

The business aims at providing quality products at reasonable prices. Selling of products will be divided into

different quantities according to sizes.

5.2 PRODUCT FACILITIES AND CAPACITY.

(i) The equipment include:-benches, a counter, mirror displays, rag, nail cutters, driers.

(ii) The equipment and machinery maintenance is to be done throughout. When the machinery are

repaired they won’t break down. But preventive measures must be taken every year.

(iii) The layout of the Rose Cosmetic is as follows in the diagram.

(iv) After 3 years the business will have expanded and capital will also have increased. There will a

need to purchase a pick-up to support transportation of goods.

Business Layout

Products on Sale
Counter

Service Place

Bench Display Rag

13
5.3 Production strategy
(i) Equipment Cost

Bench 5,000.00
Mirror 2,500.00
Driver 30,000.00
Counter 10,000.00
Display rag 2,000.00
TOTAL 49,500.00

(ii) Monthly Labor requirement

Personnel Salary
Manager 13,500.00
Assistant Manager 9,800.00
Cashier 8,800.00
Cleaner 3,900.00
Watchman 5,700.00
Salesman 6,000.00
TOTAL 47,000.00

5.4. OPERATION / PRODUCTION PROCESS

The business offered some service to the customers like transportation of goods. The supplying of the products and

after receiving and confirming that they reach the customer at exactly time.

5.5 GOVERNMENT REGULATION AFFECTING OPERATION

The government requirement will be obtained from the municipal council around for example, Licenses, these will

enable smooth running of the business public health requirement also are need like proper toilets cleanness around

e.g. disposal of rubbish there must be dustbin.

(a) Registration of Business Names acts Cap 48

Rose cosmetic will register legally by acquiring permit from an act of parliament making provision to the

registration sole proprietorship which bears the name of the owner address and term of operation.

(b) Local Government Act Cap 44

The business will acquire a license from the act of parliament making provision for the establishment of

authorities for local government such as the county council.

14
(c) Public health Act Cap 74

The proprietor will be required by the ministry of health and municipal council to observe good hygiene

and general cleanness of the business premises as required by the public health.

(d) Trade License Cap 14

The proprietor shall obtain permits from the Municipal council of Eldoret. This will allow the proprietor to

run the business whereas the trading license grants permission for the business to start operation as per the

trading regulations.

(e) Employment Act Cap 300

The business will agree to pay the employees the time for workers to agree with the manager.

15
CHAPTER SIX
6.0 FINANCIAL SUPPORT
The financial plan which will be used to run the business will be from the bank savings, contribution from friends.

It is as follows:-

Contribution Amount (Ksh)

The owner 100,000

Friends 150,000

Loans 100,000
TOTAL 350,000

6.1 PRE-OPERATIONAL COST.

Pre-operational cost of the business is as follows:-

Item Amount (Ksh)

Installation of electricity 3,000

Installation of water 4,000
Rent payment
Business permit/ trade license 4,000
Insurance policy payment 2,000

Total 13,000

6.2 WORKING CAPITAL REQUIREMENTS.

The working capital is the requirement to run the business and is as follows:-

ITEM YEAR 1 (KSH) YEAR 2 (KSH) YEAR 3 (KSH)

Stock of raw material

Work in progress
Stock of finished goods
Debtors 150,000 120,000 150,000
Cash in hand 70,000 90,000 100,000
Cash at bank 50,000 100,000 150,000
TOTAL 270,000 310,000 400,000

16
Assumption.

The assumption is done by multiplying by the months.

17
 6.3.1 PROJECTED CASH FLOW MONTLHY DATA FOR THE YEAR 2025
PARTICULARS JAN FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL

Cash Balance 1400000 2051000 2887000 4029000 5021000 5664000 6346000 7028000 7501000 8183000 8852000 9730000 68692000

Cash inflow

Cash sales 1200000 1300000 1300000 1200000 1200000 1300000 1300000 1200000 1300000 1400000 1200000 1200000 15200000

Data collection 400000 450000 450000 700000 350000 300000 300000 200000 300000 200000 600000 300000 4750000

Loans 300000 350000 306000 200000 400000 400000 300000 200000 3000000 2450000

Total cash inflow 1900000 2100000 2056000 19000000 1750000 2000000 2000000 1700000 1800000 1900000 1800000 1500000 22400000

Total cash available 3300000 4157000 4943000 5929000 6771000 7664000 8346000 8728000 9301000 100083000 10652000 11230000 91092000

Cash outflow

Rent 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 600000

Salaries 148000 148000 150000 150000 148000 148000 148000 150000 150000 1520000 1520000 1520000 1796000

Raw materials 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 626000 7512000

Transport bill 50000 50000 60000 60000 50000 50000 50000 60000 60000 60000 70000 70000 690000

telephone bill 10000 10000 12000 11000 11000 12000 12000 12000 11000 10000 11000 11000 132000

Repairs & 20000 20000

maintainance

Stationery 5000 5000 6000 5000 6000 6000 6000 5000 6000 6000 6000 6000 67000

Loan repayment 320000 370000 420000 210000 420000 420000 320000 210000 320000 2890000

Consultancy 15000 15000 150000

Miscellaneous 5000 5000 6000 6000 5000 6000 6000 5000 6000 6000 6000 7000 70000

Total cash outflow 1249000 1264000 1344500 908000 1107000 1381000 1318000 1227000 1118000 1231000 9229000 922000 13492000

Net cash out flow 2051000 2887000 4029000 5021000 5664000 6346000 7028000 7501000 8183000 8852000 9730000 10308000 77600000

18
 6.3.2 PROJECTED CASH FLOW MONTLHY DATA FOR THE YEAR 2026
PARTICULARS JAN FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL

Cash Balance 10308000 11088000 11889000 12867000 13565000 14962000 1595800 1694700 1789800 188690000 10068000 21362000 22453000

Cash inflow

Cash sales 1400000 1500000 1600000 1600000 1600000 1700000 1600000 1600000 1600000 1700000 1700000 1700000 1930000

Data collection 400000 300000 400000 500000 300000 400000 350000 400000 500000 600000 400000 300000 4950000

Loans 200000 300000 400000 300000 400000 200000 300000 400000 2500000

Total cash inflow 2000000 2100000 2400000 21000000 2000000 2300000 2400000 21500000 2300000 2200000 2300000 2500000 26750000

Total cash available 12308000 13188000 14289000 14967000 15965000 17262000 1858000 19097000 20198000 21069000 22368000 23862000 21293100

Cash outflow

Rent 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 600000

Salaries 160000 160000 160000 160000 160000 160000 160000 170000 170000 170000 170000 170000 1970000

Raw materials 650000 650000 650000 650000 650000 650000 650000 650000 650000 650000 650000 650000 7800000

Transport bill 100000 100000 120000 120000 120000 120000 120000 100000 110000 100000 100000 100000 1320000

telephone bill 10000 9000 10000 12000 12000 10000 9000 8500 7000 8000 6000 7000 107500

Repairs 30000 30000

&maintainance

Stationery 5000 5000 6000 5000 6000 6000 6000 5000 6000 6000 6000 6000 67500

Loan repayment 320000 370000 420000 210000 420000 420000 320000 210000 320000 2890000

Consultancy 150000

Miscellaneous 5000 5000 6000 6000 5000 6000 6000 5000 6000 6000 6000 7000 70000

Total cash outflow 1220000 1299000 1422000 1002000 1003000 1324000 1411000 1199000 1329000 1001000 1006000 1409000 14650000

Net cash out flow 11088000 11889000 12867000 139657000 14962000 1595800 1694700 17898000 18869000 20068000 21362000 22453000 19832600

19
 6.3.3 PROJECTED CASH FLOW MONTHLY DATA FOR THE YEAR 2027
PARTICULARS JAN FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL

Cash Balance 22453000 23578000 24856000 26033000 27270500 28264000 29411000 30627000 31743000 32858000 84064000 35258000 34396000

Cash inflow

Cash sales 1700000 1700000 1800000 1800000 1800000 1800000 1800000 1800000 1900000 1900000 2000000 2000000 22000000

Data collection 300000 200000 300000 300000 400000 350000 400000 500000 600000 400000 300000 4950000

Loans 200000 300000 400000 300000 300000 400000 300000 2500000

Total cash inflow 2300000 2300000 2450000 26000000 2400000 2650000 2300000 22000000 2200000 2600000 2700000 2650000 29550000

Total cash available 24953000 25878000 27286000 28633000 29670500 30914500 31711000 3227000 33943000 35458000 36764000 37908000 375946000

Cash outflow

Rent 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 50000 600000

Salaries 170000 170000 170000 170000 180000 180000 180000 180000 180000 180000 180000 180000 2120000

Raw materials 650000 650000 650000 650000 650000 650000 650000 650000 650000 650000 650000 650000 7800000

Transport bill 150000 150000 150000 150000 160000 160000 160000 160000 160000 150000 160000 150000 1860000

telephone bill 10000 11000 11000 10000 12000 10000 10000 10000 12000 11000 12000 11000 130000

Repairs & maintaince 15000 15000

Stationery 5000 5000 6000 6500 7000 6000 6000 7000 7000 6500 7000 6500 78000

Loan repayment 320000 210000 320000 320000 420000 320000 420000 2680000

Consultancy 150000

Miscellaneous 5000 5000 6000 6000 5000 6000 6000 5000 6000 6000 6000 7000 77000

Total cash outflow 1375000 1042000 1253000 1362500 1406000 1503500 1084000 1084000 1085000 1394000 1506000 1395000 15490000

Net cash out flow 23578000 24836000 26003300 27270500 28264000 29411000 30627000 31743000 32858800 34064000 35258000 36573000 360456000

20
 6.4 PRO-FORMA INCOME STATEMENT.
ITEM AMOUNT (KSHS)

Sales and Debtors 564,000.00

Less Cost of sales 84,000.00

Gross profit 480,000.00

Salaries and Wages 216,000.00

Rent 2,900.00

Water 7,200.00

Telephone 6,000.00

Advertising 3,600.00

Licenses 3,000.00
Total Expenses 238,200.00

Net Profit Before Tax = Gross Profit –Expenses

= 480,000-238,800

= 241,800

Net Profit = 325,80

6.5 PRO-FORMA BALANCE SHEET.

FIXED ASSET AMOUNT CAPITAL LIABILITIES AMOUNT
Building 300,000 Bank loan 100,000
Furniture 50,000 Net profit 325,800
Motor vehicle 50,000 Owner 100,000
TOTAL 400,000 TOTAL 525,800

CURRENT ASSETS AMOUNT CURRENT LIABILITIES AMOUNT

Creditors 144,200
Debtors 150,000
Cash at bank 70,000
Cash in hand 50,000
TOTAL CURRENT ASSETS 270,000 TOTAL CURRENT LIABILITIES 144,200

21
 670,000 670,000

6.6 Break-Even Level.

i. Total contribution margin = Sales – Total variable cost

= 564,000 - 238,200

= 325,800

ii. Contribution margin expressed as a percentage

= 325,800 × 100
564,000

= 57.77%

iii. Total Fixed Cost.

Fixed Asset Amount

Building 300,000

Furniture 50,000

Motor vehicle 50,000

Total 400,000

The total fixed assets 400,000.

iv. Break-even in shillings = 400,000 × 100

58

= 689.655

6.7 Expected Profitability Ratios.

i. Gross profit percentages

= 480,000 × 100
564,000

= 85.1%

22
 ii. Return on equity = Net profit after tax × 100
Owner equity

= 325,800 × 100
100,000

= 325.8%

iii. Return on investment = Net profit after tax × 100

Total investment

= 325,800 × 100
350,000

= 93.09%

6.8 Desired Financing.

Item Amount (Ksh)

Pre-operation cost 13,000.00

Working capital 400,000.00

Fixed assets 400,000.00

Total desired financing 413,000.00

6.9 Proposed Capitalization.

KSHs

Your own contribution 150,000.00

Fund from borrowed sources 100,000.00

Total investment 250,000.00

23
 APPENDIX I

BUSINESS LOCATIONAL MAP

ANTONINACOSMETIC

AIC FELLOWSHIP

MOI REFERRAL
STAGE

SAITO CENTER Uganda Road

24