BUSINESS PLAN

BUSINESS TITTLE: WASY DETERGENT SUPPLIER

PRESENTER: WASY KEVIN
INDEX NUMBER: 6161040065
INSTITUTIONAL NAME: THE SIGALAGALA NATIONAL POLYTECHNIC
INSTITUTIONAL CODE: 37616104
COURSE NAME: DIPLOMA IN ANALYTICAL CHEMISTY
COURSE CODE: 2915
EXAMINATION SERIES: NOVEMBER SERIES

PRESENTED TO: KENYA NATIONAL EXAMINATION COUNCIL

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DECLARATION

I hereby declare that all the work contained in this business plan is my original work and self advocated efforts and have never been
presented to any examination body for any award in certificate or diploma course.

No part of the project may be reproduced without the permission of the author.

NAME: KEVIN WASY

DATE: 26/OCT/2020

SIGNATURE:

I therefore submit my business plan to Kenya National Examination Council for the award of diploma in analytical chemistry.

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DEDICATION

I dedicate this business plan to my beloved family members without whose own understanding, encouragements and morals support,
this business plan would not have been written..

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ACKNOWLEDGEMENT

I first take this opportunity to express my sincere thanks to the Almighty God for having given me the strength to carry out this
business plan successfully. I appreciate and thank the entire fraternity of sigalagala national polytechnic, department of applied
science and my supervisor Mr. Samson Osale for guidance he gave in writing of this business plan.

I thank my beloved mother Phyllis Afwande, my beloved sister Veronica Amutavi for the technical support they gave me to
substantiate the smooth running of the business plan and for providing the necessary resources monetary and non-monetary required
for completion of business plan.

May God bless them all?

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TABLE OF CONTENT
DECLARATION…………………………………………………………………………………………………………………………………………………………………………………2

DEDICATION……………………………………………………………………………………………………………………………………………………………………………………3

ACKNOWLEDGEMENT…………………………………………………………………………………………………………………………………………………………………….4

CHAPTER ONE

EXECUTIVE SUMMARY…………………………………………………………………………………………………………………………………………………………………….6

OPERATIONL PLAN………………………………………………………………………………………………………………………………………………………………………….7

CHAPTER TWO

BUSINESS DISCRIPTION………………………………………………………………………………………………………………………………………………………………….8

FORMS OF OWNERSHIP…………………………………………………………………………………………………………………………………………………………………9

THE GOAL OF THE BUSINESS…………………………………………………………………………………………………………………………………………………………10

INDUSTRY……………………………………………………………………………………………………………………………………………………………………………………..11

ENTRY AND GROWTH……………………………………………………………………………………………………………………………………………………………………12

CHAPTER THREE

MARKET PLAN……………………………………………………………………………………………………………………………………………………………………………….13

COMPETITON………………………………………………………………………………………………………………………………………………………………………………..14

WAYS OF OVERCOMING COMPEITION…………………………………………………………………………………………………………………………………………..15

METHODS OF ADVERTISEMENT AND PROMOTION………………………………………………………………………………………………………………………..16

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CHAPTER FOUR

ORGANIZATIONAL AND MANAGEMENT …………………………………………………………………………………………………………………………………….17

ORGANIZATIONAL STRUCTURE……………………………………………………………………………………………………………………………………………………18

STARTING AND OTHER QUALIFICATIONS……………………………………………………………………………………………………………………………………..19

RENUMERATIONS SALARIES AND ALLOWANCES …………………………………………………………………………………………………………………………20

CHAPTER FIVE

OPERATIONAL PLAN ……………………………………………………………………………………………………………………………………………………………………21

PRODUCTION STRATEGY ……………………………………………………………………………………………………………………………………………………………..22

PODUCTION PROCESS…………………………………………………………………………………………………………………………………………………………………..23

GOVERNMENT REGULATIONS AFFECTING OPERATION…………………………………………………………………………………………………………………24

CHAPTER SIX

FINANCIAL PLAN……………………………………………………………………………………………………………………………………………………………………………25

BUSINESS CASH FLOW……………………………………………………………………………………………………………………………………………………………………26

PROFORMA STATEMENT………………………………………………………………………………………………………………………………………………………………...27

PROPOSED CAPITALIZATION……………………………………………………………………………………………………………………………………………………………28

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 CHAPTER ONE
EXECUTIVE SUMMARY

This refers to the summary of all business plan. It has the following content:

1.0 BUSINESS DESCRIPTION

The proposed business name will be Wasy Detergent Supplier which will be located at Sigalagala Market in Shinyalu constituency.

The owner of the business will be Kevin Wasy. The business will operate under the sole proprietorship and will be dealing with
making of cleansing and washing detergents.

The main of the business will be to get more profit and will intend to open more branches across the country so as to offer
employment to the jobless.

1.1 MARKETING PLAN

The product of the proposed business will be put on the display to customers to view them and the services offered on first come first
serve basis.

The product and services will be offered to customers at a speed to avoid delay. It intends to minimize on sales and entrance to long
term customers relation. The potential customers of the proposed business will be the individuals, institution and even government
institution.

1.2 MANAGEMENT PLAN

This shows how the business will coordinate and accomplish its objectives. It also shows the organizational structure of the business
thus main objective of the business will be to get profit.
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This will be accomplished by employing more workers, ensuring good relationship between customers and managements through
good communication between the two parties. The owner will also ensure that there is good relation between him and the employees.

1.3 OPERATION PLAN

The business will lay down strategies that will be followed to offer services to the customers. The operation to be done will depend
upon what type of services to be offered.

The owner of the proposed business will ensure good services are provided. The owner will use various facilities and equipments for
provision of high quality services to customers.

1.4 FINANCIAL PLAN

The owner of the proposed business will determine the amount of the capital that the firm will require to operate the business. He will
also determine how the funds will be used in three years’ time.

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 CHARPTER TWO
2.0 BUSINESS DESCRIPTION

The business will be owned by Kevin .A. Wasy who is a 24years old and Kenyan citizen. He comes from Shinyalu Constituency in
Kakamegacounties’ started his primary education in the year 2000 and then completed in the year 2010 where he sat for his K.C.P.E
and managed to pass with flying colours.In January 2011 he started his secondary education where he complied in 2014 and passed it
well too.

He is currently staying in Kakamega taking a diploma course in Analytical Chemistry at Sigalagala National polytechnic.

The proposed business name isWasy Detergent Supplier which will be allocated at sigalagala market in ShinyaluConstituency. He
decided to start the business because theirs is large number of people in area students by included who need these services and also
due to outbreak of pandemic.

2.1 BUSINESS NAME

The proposed business name will be Wasy Detergent Supplier which will be located at sigalagala market in shinyalu constituency. A
name extracted from business locality.

The following are the reason why he proposed his business name:

1) The name was chosen because it is easily to pronounce and to remember.

2) Sigalagala being density populated area due to students and institution itself and also a market attract customers.

3) Its more famous in the area.

4) Due to outbreak of the corona virus which gave idea to supply.

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2.2FORM OF OWNERSHIP

The proposed business will be a sole proprietorship and will be owned by Kevin .A. Wasy.It’s owned by one person, the owner
finances his own business.

The following are reason why he chooses this type of business:

1) Small capital is required to start a sole proprietorship than any form of partnership or company.

2) He needs to be his own boss. In that owner doesn’t want to be employed by anyone else.

3) The owner wants to run and control her own business so as to attain the set objectives which is to get more profit.

4) The owner controls his own business and enjoys profits alone.

2.3 LOCATION AND ADDRESS

The proposed business will be located at Sigalagala market which is in shitochi sub-location, Khayegalocation, sinyalu sub-county in
Kakamega County. It’s at Hephis Bar Tower room number two just opposite Sigalagala bus stop. The advantage of this location is that
it is easily to identify and the place is full of people.

My postal address will be;

P.O BOX111-50100, KAKAMEGA

EMAIL: www.wasysuppliier.co.ke

CONTACT: 0715105284

2.4 TYPE OF BUSINESS

The business will be a start up where the owner will provide capital that will enable the business to move on well. The business will
deal with the following:

1) Making of sanitizers

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2) Making of cleansing and washing detergents

3) Making of window cleaners

4) Making of Disinfectants

2.5 THE GOAL BUSINESS

The main goal and aim for opening are to get more profit by having good communication skills towards customers. I also intend to
open more branches across my county so as to offer employments.

2.6 PRODUCT AND SERVICES

The main products and services the business will offer to its customers is;

1) Window cleaners

2) Sanitizers

3) Shampoos

4) Cleansing detergents

The other products and services the business will offer to its customers are:

1) M-Pesa services

2) Selling of star soaps

2.7 JUSTIFICATION OF OPPORTUNITY

The factors that favor the choice of proposed business and its location are:

a) Security whereby there is a police station nearby.

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b) High population which will facilitates the market of goods and services. The high population will increase the profit.

c) Good infrastructure which will facilitates better access and supply of goods.

d) Good communication network in the place.

The proposed business will generate employment to the youth and also to the people around.

Also proposed business will generate employment to the youth and also to the living standards of the people.

2.8 INDUSTRY

The business falls under processing industry hence intends to deal with making of cleansing detergents and also offering some m-pesa
services.

The size of the business is medium in order to accommodate all services offered by the business.

Technology

The owner will use technology to achieve his goal. He will use computer to deal with transactions and later on when business expands
he will introduce machines to assist in making of detergents.

Capital Requirements

The amount of capital required for the proposed business will be bank loans, family members and personal savings.

Sources Amount Kshs

Bank loans 100,000

Family members 50000

Personal savings 100000

Totals 250000

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 2.9 ENTRY AND GROWTH STRATEGIES

The business will starton month of January that when schools open and therefore more demands of products.

The employees will be trained on how to use technology. Good quality goods will be provided and of high quality. The environment
will be kept clean to attract more customers.

The proposed business will be promoted through the following ways;

1) Advertisement on magazines

2) Using of sign-post

3) Advertisement on media e.g. radio at maturity stage

4) Uses of newspapers

2.9.1 MATURITY STAGE

The proposed business will show maturity through the following ways;

1) Using modern technology in the business

2)Receiving high profit.

3) Having many employees in the business.

2.9.2 GROWTH STRATEGY

The quality of the products offered should be high and satisfactory to the customers. The languages used should be good so as to
attract more customers. These should be served as early as possible.

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 CHAPTER THREE
3.0 MARKET PLAN

The proposed business intends to give to give a clear account on how it will sale its product and offer services to its customers. The product of
the proposed business will be put on the display for customers to view them and services offered on a first served basis. It tends to
minimize on the sale and enhance long-term customers’ relations.

3.1 POTENTIAL CUSTOMERS

The potential customers of the business will be individuals:

1. Institutional customers,
2. Passerby customers,
3. Wholesalers
4. Health centered

The customers will be of all ages with undefined level of income and education. People with any occupation will be served. The
product be sold on 24-7 hour clock basis.

3.2 MARKET SHARE

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The area of location of the proposed business has approximately 7000 who form the total business population. This population
represents 100% and the owner the business is targeting 50% of a market share and the remaining will be shared among by
competitors.

The table below show a representation of the competitors, their total proportion and percentage as shared.
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Competitors name Total proportions Percentage%
Wasy Detergents Suppliers 3500 50%
Muliro Detergent Suppliers 2100 30%
Kakamega Cleaners 1400 20%

The proposed business has the following proposed patterns that in the table below.

Customers Daily Customers Total sales

Institutional customers 1500 100,000
Health Centers 300 5000
Passerby customers 50 600
Wholesalers 30 20,000
3.3 COMPETITION

Competitors operating under the same business are;

1. Muliro Detergent Suppliers

2. Kakamega Cleaners
3. Wasy Detergents Suppliers

The following is the strength and weakness of competitors including my own business;

a. Wasy Detergent suppliers

Has the following weakness;

1. Has semi skilledlabour

2. Has small size for firm

Strength

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a) Has good communication with customers which attract them more.

b) Owner has good management of the business which makes it more stable.

c) Access to new technology which makes business work easier.

d) Having many workers that assist customers hence saving more time.

e) Security. The place where business is located is more secured because of presence of police station.

B) Muliro Detergent Suppliers

Have the following weaknesses that undermine her business.

Weakness

a) Poor communication with customers.

b) Poor business management.

c) Use of analog technology.

d) Small size of the firm.

e) Regular increase of prices of commodities.

Strength

a) Have many retailers that facilitate the distribution of goods and services enabling her to earn more profit.

b) Hard working in that opens early and closes late in the evening.

Kakamega suppliers

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Weakness

a) Supply poor quality goods.

b) Poor communication to customers.

c) Inadequate skills to run the business hence unstable business.

Strength

a) Has large size of the business firm.

b) Has many workers.

3.4 WAYS OF OVERCOMING COMPETITION

The following are ways of overcoming competition;

1) Lowering prices of commodities.

2) Offering credit facilitation to frequent customers.

3) Discount on bulky goods sold and cash sale.

3.5 PRICING STRATEGY

The following are factors to consider while setting the price:

a) Number of customers,

b) The level of competition,

c) Tax levied on good and services,

d) Availability of goods and services.

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The owner of proposed business will offer discounts on cash sales and for those customers who will be buying goods and services in
bulky.

He will also ensure that he offer credit facilities to frequent customers so as to maintain relationship.

3.5.1 SALES TACTICS

The proposed business will use various selling methods to reach customers i.e;

i. Personal selling e.g. direct conduct with customers,

ii. Use of agencies, i.e. in direct selling by use of agents.

3.6 METHODS OF PROMOTION AND ADVERTIZEMENT

1) PROMOTION

It’s the application of various techniques to attract customers and increase sales

Proposed business intends to promote its business through:

i. Free delivery of goods and services to buyers

ii. Customers will be allowed to pick good they wish to buy directly from the shelves to save time.
iii. Personal attending to customers to create friendly atmosphere and relation.
iv. Offering of free gifts for purchase of product or services
v. There will be attractive display of goods in form window display or list price display

2) ADVERTISEMENT

The advertisement will be done using the following ways:

 Signpost
 Daily nation and magazines
 Drawing of goods and services offered to the whole of building
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The owner will be spending ksh5000 on advertising. Then the contend of the advertisement will be the name Detergent Supplier,
services, product offered, working days and hours.

3) DISTRIBUTION

Proposed business will use direct sales and direct offering of services to customers. The product and services will be distributed to use
as and retailors who will assist in reaching the customers.

The owner will use small vehicles to distribute some of the products to retailors customers to different markets in the county.

This will cause the owner ksh10000 per month for fueling of the records and other needs.

The following are problems encountered during distribution of goods and services;

a) During rainy season roads become impossible

b) Competition will also hinder distribution of the products.

The following are solutions to the problems:

i. Deliveries will be done early before rain fall.

ii. Competition will be dealt with by reducing price of commodities.

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 CHAPTER FOUR
4.0 ORGANIZATIONAL AND MANAGEMENT PLAN

Management is way if how the business is controlled and supervised for better growth. The main objectives of the proposed business
are to get profit thus it will accomplish this objective through:

i. Employing more workers.

ii. Ensuring good relationship between management and the customers
iii. Ensuring there is good relation between business members

4.1 KEY MANAGEMENT PERSONEL

The proposed business will be managed by the following;

a) Manager

He will control all the business and ensure that it moves officially for higher profit .He will have an age ranging from 21-35years with
a diploma in business management and working experience in any organization

He will be responsible for training and remuneration of employees and also provision of resources of the business will earn a basic
salary of ksh20000 per month.

b) Supervisor

He will have age ranging from 21-35years and a certificate in any recognized institution and should be a computer literate. Should
have a work experience of at least 3years. He will earn a basic salary of ksh12500 per month.

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c) Production unit employees

Will be expected to have an age 18-25years and have a certificate related course to chemistry. They will be around 7 people who deal
with the production of detergent and will be earning each basic salary of 7000 per month.

d) Sales man

Will be the person of about 18-35 years who has a certificate in any sales and marketing and a 1year working experience. He will
control all the sales and should be good speaking English and Swahili.Will get basic salary of ksh10000.

e) Cleaner

Will be of age between 35years with a K.C.P.E certificate and a working experience in cleaning of environment. He will make sure all
the premises clean at all time.

f) Watchman

A watchman he will be expected to have age between 25-30years with the experience of 2yeras in the same post he will be looking
after the building at night to avoid destruction and theft.

g) Driver

Has to attend the age between 21-30yeras with a mean grade of D+ in K.C.S.E and should have taken arriving course. He will be
expected to have a driving license of 3years working experience.He will be transporting products for sale. He will get basic salary of
ksh10000 per month.

4.2 ORGANIZATIONAL STRUCTURE

The proposed business will employ a number of management, personnel, the personnel will include; the manager who will be the
owner of the business and a supervisor.

Below is the organizational structure of the proposed business.

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MANAGER (owner)

SUPERVISOR

Watchman Driver Production Employees Salesman cleaner

4.3 STARTING AND OTHER QUALIFICATION

This table shows management personal qualification and their duties;

Staff Qualification Duties

Manager Must be age 21 -35years with diploma in Responsible for
business management. must have 2years traingworkers,remuneration of employees
working experience and provision of resources of this business

Supervisor Have age between 21-35 Will ensure that work is being done in a
Must a certificate in any course in more effective way.
chemistry institution. Will be seeking advice from the manager
Should be a computer literate. and be involved in decision making

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 Have good communication skills and a
work experience of 3years
Production employee Will have age of 18 to 25years He or she will be dealing with production
Should have experience in chemistry made of detergent
laboratory

Sales man Will have age of 18 to 25 years. Responsible for selling of all detergents in
Must have certificate in sales and the unit
marketing with working experience of one
year

Driver Must attain the age of 21 to 30years with a Will be transporting products for sales
mean grade of D+ in K.C.S.E and should from the source to the market
have taking a driving course with 3years
experience

Cleaner Must attain the age of 18 to 30years with He will be cleaning inside and outside the
K.C.P.E certificate and experience in building
cleaning of environment

Watchman Should have the age of 25 to 30years with Will be in charge of any security matters
K.C.S.E certificate and a work experience in the business
of 2years in the same post

4.4 REMUNERATION, SALARIES AND ALLOWANCES

This table shows the money to be paid to my employee

Establishment No.ofemployees Basic salary Allowances Gross salary
Manager 1 20,000 5,000 25,000
Supervisor 1 12,500 3,000 15,500

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Production unit 7 47,000 17,500 66,500
Sales man 1 10,000 2,500 12,500
Cleaner 1 4,000 2000 6,000
Watchman 1 5,000 2000 7,000
Driver 1 10,000 2000 12,000
TOTAL 13 110,500 34000 144500

4.5 TRAINING AND PROMOTION

a) Training

The following approaches will be used to determine the training of employees of the proposed business.

Organization analysis to determine where training emphasis should be placed operation analysis to decide as to what the train program
should consist including a study of what the person should be thought.

Main analysis to determine who need to be trained and what skills, knowledge or attitude should be augmented. The business will also
offer seminaries and workshop to the employees to enable them acquire new skills.

b) Promotion

This means to a position appointing an employee to a provision of greater responsibility or authority. The promotion methods that will
be used by the proposed business will be meant based promotion because this method motivates competent employees who might
otherwise leave the organization for the better prospects.

4.6 LICENCES, PERMITS, BY LAWS AND LEGAL REQUIREMENTS

For the proposed business to operate legally it will obtain a trading license from the county government of Kakamega a permit for the
transportation of goods to the nearest place.

A business license will be obtained at sh.3000 and a permit at sh.1, 500.taxes will be also levied through VATE at sh.100 per week.

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I) waste disposal

The waste will be collected together and taken to the compost where it will destroyed either by burning or destroying by chemical
means.

ii) Healthy and Safety

The business premise will be insured against risk or fire. The owner of the proposed business will pay NHIF for employees that will
enable them to be treated free.

iii) Environmental pollution

The proposed business will ensure that its environment is kept clean. There will be no pollution of environment because there will be
proper disposal of waste materials and minimal noise.

4.7 BUSINESS CONTROL OF ASSETS

i) Financial assets

The proposed business will have an account with equity bank, Kakamega branch. The bank will be financing the proposed business
with loans for expansion of the business.

It will also advice the owner on how to use the funds correctly.

ii) Insurance

The owner will ensure the business and its premise is insured of fire and risk that may occur accidentally.

This will be obtained from Kings Insurance Company Kakamega branch.

iii) Management advice

The manager wills advice the staff on how to become more productive in order to enable the business to grow.

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 CHAPTER FIVE
5.0 OPERATION PLAN

The proposed business will lay down strategies that will be followed to offer services to the customers. The operation to be done will
depend upon what type of services.

The owner of the proposed business will ensure that goods and services are provided to customers he will use various facilities and
equipment for provision of high quality services to the customers.

5.1 PRODUCTION DESIGN AND DEVELOPMENT

i) Design of product

The proposed business will be dealing with manufacturing of cleansing and washing detergents liquid soap, shampoos, disinfectant
and star soft soaps. I also intend open more branches across the countries so as to offer employments to the youths and also to ensure
that I reach to all my customers.

Designing of this business will cost Ksh, 3000 which will be used to purchase raw materials and equipments for making of detergents.
In mean time I will use manual or analogue technology on making of detergents. As time goes b I will use modern technology
whereby I will require purchasing machine which will facilitate my work and also ensure that more customers are served.

I will ensure that reach to my customers and listen to my views so that to deal with changes that may occur in technology.

ii) Development

The building of my business will be painted colour green and it will also be drawn those equipments that am going to sale which will
make it different from the other building making it attract customers.

5.2 PRODUCTION FACILITY AND EQUIPMENT

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The proposed business will require good facilities and equipment necessary for the operation of the business. The facilities and
equipment will influence more customers as well as quick services from the workers offering services without delays.

The equipment will be bought at Kenya Processing Machinery Company and furniture from carpentry shop.

i) Facilities

The proposed business will be operating under rental houses of which the owner will be paying ksh.5000 per month, it will have
enough space for packing of cars of customers, also there will resting plan for those customers who waits to be served or for those
willing to rest.

ii) Equipments

The proposed business will purchase various tools and equipments for the business operations. The table shows a table of equipments
that will be purchased for the proposed.

Facilities Number Date acquired Source Cost per unit Total

Computer 1 05/DEC/2020 Computer dealers 20000 20000
Telephones 1 06/DEC/2020 Safaricom Shop 3000 3000
Record books 2 07/DEC/2020 Book shop 200 400
Furniture 5 08/DEC/2020 Carpentry shop 1500 7500
Packing materials 150 09/DEC/2020 General stores 100 15000
Recipient book 2 10/DEC/2020 Bookshop 150 300
padlock 2 11/DEC/2020 supermarket 200 400
pens 5 12/DEC/2020 Bookshop 10 50
container 5 13/DEC/2020 General stores 100 500
Star rods 5 14/DEC/2020 General stores 100 500
Bulb 2 15/DEC/2020 Electrical shop 100 200
calculator 2 16/DEC/2020 Bookshop 1500 3000
TOTAL 50850

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The maintenance of the machine and equipment will be done by the respective engineers.

In 3years to come the business will have been expanded and more branches open in the country thus machinery and equipments will
be bought in large quantity and in large quality.

The proposed business will also require land and building where by in the land is where the building will be constructed at it will be
used as rental houses to the customers.

The repairing and maintenance of the machine will cost the owner Ksh 10000 as the total.

5.3 PRODUCTION STRATEGY

The proposed business will require the following equipments at the beginning of the business for its
operation;computer,recordbooks,furniture,recipientbooks,raw materials for detergents and parking material.

The table below shows the list of monthly requirements.

A) Monthly material requirements

Material\requirements Quality NO. Price Total amount

Packing material High 150 100 15000
Raw material High 15000 15000
Record books High 2 200 400
Recipient books High 2 150 300
calculator High 2 1500 3000
furniture High 5 1500 7500
pens High 5 10 50
b) monthly labor requirements

Labor NO. Monthly payments

Manager 1 25000
Supervisor 1 15500
Production unit 7 66500
Salesman 1 12500
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Cleaner 1 6000
Watchman 1 7000
Driver 1 12000
Totals 15 144500

c) Monthly production expenses

The table below shows the monthly production expenses of the proposed business

Expenses Monthly payment

Electricity 2000
Food for workers 5000
Food for visitors 3000
Totals 10000

d) Monthly total cost production

This is the sum of monthly materials requirements, labor and monthly expenses

Monthly expenses Amount in Kshs

Monthly materials requirements 35640
Monthly labor requirements 84800
Monthly production 10000
Totals 130440

5.4 PRODUCTION PROCESS

The proposed business will be serving customers according to the type of products they require and every product will be on display
for the customers. 22

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The procedure for the making of detergent is confidential so as to avoid competition from other business.

5.5 GOVERNMENT REGULATION AFFECTING OPERATION

The following is the government regulation that affects the operational of the business;

a) Safety regulatory act

b) Environmental regulatory act

c) Health regulatory act

1) Safety regulatory act

The business will be insured against risk and theft. The owner of the proposed business will pay NHIF for the employees. This cost
him 400 per month for every employee.

2) Environmental regulatory act

The proposed business will ensure that its environment is kept clean. There will be no pollution of environment because there will be
proper disposal of waste products and minimum noise.

3) Health regulatory act

The proposed business will ensure that all employees will be covered by NHIF which will ensure that they are fully covered with
health services. 23

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 CHAPTER SIX
6.0 FINANCIAL PLAN

The owner of the business will determine the amount of the capital the firm will require to operate the business. He will also determine
how the funds will be used and show the financial position of the business in three years.

6.1 PRE-OPERATION COST

The table below shows preoperational cost of the proposed business.

Particular Amount(ksh)
Stock 210000
Rent 5000
Electricity/water 800
Renovation 10000
Totals 235800

6.2 WORKING CAPITALS

Current assets-current liabilities

A table below shows working capital of the business.

Particulars
Current assets
Cash at hand 300000 350000 320000
Cash at bank 20000 30000 100000
Debtors 10000 15000 20000
Stock 40000 60000 75000
Totals 370000 455000 515000

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 Current liabilities
Bank overdraft 100000 120000 100000
Creditors 20000 50000 40000
Totals 120000 170000 140000
Working capitals=(C.A-C.L)
250000 285000 375000

6.3.1 BUSINESS CASH FLOW OF WASY DETERGENT SUPPLIER IN THE YEAR 2021

PARTICULAR JAN FEB MA APR MA JUN JUL AUG SEP OCT NOV DEC TOTA
R Y LS
CASH FLOW
CAPITAL 2500
00
BAL B/D - 4050 4527 5112 5588 78350 91195 90835 90555 7600 8234 85785 787845
00 50 50 00 0 0 0 0 50 00 0 0
SALES 1000 1500 2000 2000 3500 25000 10000 10000 10000 1800 1500 25000 210000
00 00 00 00 00 0 0 0 0 00 00 0 0
DEPTORS 2000 3000 2000 2000 - - 4000 3000 - - 2500 2500 66000
00 0
TOTALS 5500 5850 6547 7132 9088 10335 10159 10113 10055 9400 9759 11103 100444
00 00 50 50 00 00 50 50 50 50 00 50 50
CASHOUTFLOW/
EXPENSES
PURCHASE 5000 4000 5000 6000 3000 25000 10000 15000 15000 2000 2000 20000 490000
0 0 0 0 0 0 0 0
CREDITORS 2000 3000 4000 5000 6000 7000 8000 1000 6000 7000 8000 3000 60000
ELECTRICTY 500 150 200 350 200 450 500 500 250 250 250 300 3900
WATER 300 200 200 200 200 200 200 300 250 400 800 500 3750
LISENCE 3000 - - - - - - - - - - - 3000

32
TELEPHONE 200 100 300 100 100 100 100 200 200 200 200 200 2000
INSURANCE 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
STATIONARY 500 300 300 300 300 300 300 300 300 300 300 300 3800
RENT 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000
SALARY /WAGES 8200 8200 8200 8200 8200 82000 82000 82000 8200 8200 8200 82000 984000
0 0 0 0 0 0 0
TAX 500 500 500 500 500 500 500 500 500 500 500 500 6000
TOTAL 1450 1322 1435 1544 1253 12155 10760 10580 24550 1166 1180 11280 162845
00 50 00 50 00 0 0 0 0 50 50 0 0
NET PAY 4050 4527 5112 5588 7835 91195 90835 90555 76005 8234 8578 99755 887600
00 50 50 00 00 0 0 0 0 00 50 0 0

6.3S CASH FLOW STATEMENT OF WASY DETERGENT SUPPLIER IN THE YEAR 2022

PARTICULAR JAN FEB MA APR MAY JUN JUL AUG SEP OCT NOV DEC TOT
R AL
SASHFLOW
BAL B/D 9975 9786 8768 8593 9487 1037 1147 1384 1297 1260 1166 1176 13168
50 50 50 00 50 150 50 250 500 800 250 250 050
SALES 1500 1000 1000 2000 2000 2500 3000 1500 1500 1000 2000 2000 21000
00 00 00 00 00 00 00 00 00 00 00 00 00
DEPTORS 3000 4000 5000 3000 1000 2000 3000 5000 5000 3000 2500 2500 13800
0 0 0 0
TOTAL 1177 1118 9818 1062 1158 1289 1485 1539 1452 1363 1368 1378 15406
550 650 50 300 750 150 050 250 500 800 750 750 050

33
CASHOUTFLOW/
EXPENSES
PURCHASE 1000 1500 3000 2000 2500 1000 1000 1500 1000 1000 1000 3000 82500
0 0 0 0 0 0 0 00 00 00 00 0 0
SALARY/WAGES 8200 8200 8200 8200 8200 8200 8200 8200 8200 8200 8200 8200 98400
0 0 0 0 0 0 0 0 0 0 0 0 0
CREDITORS 6000 2000 3000 4000 7000 5000 1000 2000 2000 8000 3000 5000 48000
ELECTRICTY 500 500 250 250 300 300 400 400 500 250 250 300 4200
WATER 200 300 300 400 200 200 500 250 300 200 250 300 3400
LISENCE 3000 3000
TELEPHONE 200 200 300 200 200 100 100 300 200 200 100 200 2300
INSURANCE 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
STATIONARY 500 300 200 200 400 300 300 300 200 200 100 200 2300
RENT 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000
TAX 500 500 500 500 500 500 500 500 500 500 500 500 6000
TOTAL 1989 2418 1225 1135 1216 1044 1008 2417 1917 1975 1925 1246 19517
00 00 50 50 00 00 00 50 00 0 00 00 00
NET PAY 9786 8768 8593 9487 1037 1184 1384 1297 1260 1166 1176 1254 13424
50 50 00 50 50 750 250 500 800 250 250 150 650

6.3.3BUSINESS CASH FLOW STATEMENT FOR THE YEAR 2023

PARTICULA JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTA
R L
CASH IN
FLOW
BALB/F 12541 13049 13890 13742 13617 14550 15534 16989 16572 16665 17448 17046 181647
50 5 50 50 50 50 50 00 00 00 00 0 00
SALES 30000 30000 10000 10000 20000 20000 25000 15000 20000 20000 10000 15000 225000
0 0 0 0 0 0 0 0 0 0 0 0 0
DEPTORS 5000 30000 10000 10000 5000 5000 2000 3000 3000 2000 2500 2500 125000
TOTAL 16041 16349 14990 14842 15667 16600 18054 18519 18602 18685 18473 18571 205397

34
 5 50 50 50 50 50 50 00 00 00 00 50 00
CASHOUTFL
OW
PURCHASE 20000 15000 30000 30000 2000 15000 15000 10000 10000 30000 50000 15000 890000
0 0 0 0 0
SALARY/ 82000 82000 82000 82000 82000 82000 82000 82000 82000 82000 82000 82000 984000
WAGES
CREDITORS 6000 6000 5000 3000 2000 2000 2000 5000 4000 4000 3000 2000 44000
ELECTRICIT 500 500 300 300 300 300 250 400 400 300 300 300 4150
Y
WATER 300 200 200 200 300 300 300 400 400 200 250 250 3200
LICENSE 3000 - - - - - - - - - - - 3000
TELEPHONE 300 300 400 200 400 300 300 200 200 400 300 200 3500
INSURANCE 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
STATIONERI 600 400 400 300 200 200 200 200 200 300 300 200 3500
ES
RENT 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000
TAX 500 500 500 500 500 500 500 500 500 500 500 500 6000
TOTAL 29920 24590 12480 12250 11170 10660 10655 19470 19370 12370 14265 24145 201335
0 0 0 0 0 0 0 0 0 0 0 0 0
NET PAY 13049 13890 13742 13617 14550 15534 16989 16572 16665 17448 17046 16157 185262
50 50 50 50 50 50 00 00 00 00 50 00 50

6.4 PROFORMA STATEMENT

PARTICULAR First year Second year Third year

Cash sale 2100000 2100000 2250000

less cost of goods sold

opening stock - 250000 250000

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Add purchase 490000 825000 890000
Less closing stock 112800 124600 241450
Total 602800 1199600 1381450
Gross profit 1497200 900400 868550

EXPENSES
Electricity 3650 4200 4150
Salary/wages 82000 82000 82000
License 3000 3000 3000
Water bills 2550 3400 3200
Telephones 2000 2300 3500
Insurance 12000 12000 12000
Stationary 3800 3800 3500
Rent 60000 60000 60000
Total expenses 169000 170700 171350
Net profit 1328200 729700 697200
10%tax 132820 72970 69720

N.P.A.T 1195380 656730 697480

6.5 PR0FORMA BALANCE SHEET

PARTICULAR FIRST YEAR 2021 SECOND YEAR 2022 THIRD YEAR2023

FIXED ASSET
Insurance 12000 12000 12000
Rent 60000 60000 60000

Current assets
Cash at hand 300000 350000 320000
Cash at bank 20000 30000 100000
Debtors 10000 15000 20000

36
Stock 40000 60000 75000
Total assets 370000 455000 515000

Liabilities
Current liabilities
Bank overdraft 100000 120000 100000
Creditors 20000 50000 40000
Total C-L 120000 170000 140000

Long term liability

Owners equity 250000 285000 375000
T.A-C.L
N.P.A.T 1370700 1067670 1143585
Total long term liability
Total liabilities 1620700 1352670 1518585
1740700 1522670 1658585

6.6 PROFITABILITY RATIOS

6.6.1 gross profit ratio=gross profit from income statement*100

Cost of sales

First Second Third year

1497200(100) 900400(100) 868550(100)
21000000 =71.3 2100000 =42.88 2250000

6.6.2 NET PROFIT RATIO

37
Net profit ratio= Net profit

Sales

First Year 2020 Second year 2021 Third Year 2022

1328200(100) 729700(100) 697200(100)
2100000 =71.3 2100000 =34.75 2250000 =30.99

6.6.3 RETURN ON INVESTMENT

=net profit after tax *100

Capital

First Year 2021 Second year 2022 Third year 2023

1195380 *100 656730*100 627480*100
25000 250000 250000
=250.99

6.7 BREAK-EVEN-POINT

6.7.1Contribution

The table below shows break-even-point

Particular First year 2021 Second year 2022 Third year 2023
Fixed cost
Insurance 12000 12000 12000

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Rent 6000 6000 6000
Wages/salaries 984000 984000 984000
Total 1056000 1056000 1056000
Variables
Electricity 3650 4200 4150
Water bills 2550 3400 3200
Telephones 2000 2300 3500
stationeries 3800 3800 3500
Totals 12000 13700 14350

6.7.2 Contribution margin

=contribution*100

Sales

First year Second year Third year

84000*100 85700*100 86350*100
2100000 2100000 2250000
=4.0 =4.08 =3.84

6.7.3 Break –Even-Level

=fixed cost*100

Contribution

First year Second year Third year

72000*1000 7200 *100 72000 *100
8400 85700 86350
=85.71 84.01 =83.38

39
6.74 Break-Even-Unit

=contribution *100

Fixed costs

First year Second year Third year

84000 *100 85700 *100 86350 *100
72000 72000 72000
=116.67 =119.23 =119.93

6.8 DESIRE FINANCING

ITEM AMOUNT
Preoperational 235800
Working capital 250000
Totals 485800

6.9 PROPOSED CAPITALISATION

SOURCE AMOUNT
Bank loans 100000
Family members 50000
Personal savings 100000
Totals 250000

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