Woods & Sales

We sell the best

092816
092448
092878
092216
089602

Table of Contents
Table of Contents

Executive Summary
The Market
Products and Services
Mission
Competition
Goals
Industry background
Resources that contribute to Woods & Sales success
Objectives
Short term objectives
Long term objectives
Recurrent Objectives

3
3
3
3
3
3
4
4
4
4
5
5

Market analysis.

Research analysis.
Target market
Overall Market Size and trends
Competitive factors
Estimated sales forecast based on market size and market share

6
6
8
9
10

Marketing plan
Pricing
Product
Promotion/Advertising.
Place

11
11
11
11
12

OPERATION
Location
Proximity to suppliers
Access to transportation
Production Process
Quality Assurance and Measurement criteria
Critical Risks

12
12
13
13
13
13
14

Management Summary

15

Management Structure

15

Legal Structure

17

Financial Plan

18

Start-up Funding

18

Projected Profit and Loss

18

Conclusion

19

Appendix
Table 1: Sales Forecast
Table 2: Proposed Balance Sheet
Table 3: Profit and Loss
Table 4: Assumptions
Table 5: Projected Cash Flow

20
20
21
22
23
24

Bibliography

25

Executive Summary
Woods & Sales is a furniture and log cabins establishment. Woods & Sales expects to give a
customer an African feel to the products especially the log cabins due to the stereotype that log
cabins are more of an Western way of living and not so much as African. Woods & Sales
intends to debunk this myth by providing high end finishing to the log cabins and the other
products such as furniture for sale. The company plans to integrate Information Technology to
build a strong market position.
The Market
The furniture industry in Nairobi is experiencing rapid growth due to with the current boom in
real estate, the demand for household and office furniture has grown tremendously. Many estates
and office blocks are coming up countrywide. These homes and offices need to be furnished and
this means more and more furniture will be needed.
Products and Services
Woods & Sales offer a broad range of furniture and log cabin products all made from high quality
wood provided by TimSales Limited which is one of the largest, if not the largest, timber
company in Kenya.
Mission
Woods & Sales aims to offer high quality furniture products and log cabins at reasonable prices
to meet the demand of the rapid boom in the real estate industry.
Keys to success for Woods & Sales include:

Provision of after sale services for the products

Reasonable pricing
Provision of wide variety of products

Competition
Woods & Sales will be facing competition from the formal industry, Jua Kali industry and
imports. Imports of furniture in Kenya between 2009 and 2013 grew by 24 percent. Jua Kali
represent over a third of sales in Kenya and has grown by 10% between 2009 and 2013 and
finally the formal industry holds 60% of the market.

Goals

Give quality products that are attractive and last long.

To sustain the demand of the market as well as their tastes
Provide a wide range of products that are affordable to all social classes.
To produce products but focus on energy efficient ways.
To have good customer relations
To be a leading provider of wooden furniture and home interiors

Background & Purpose

Woods & Sales is a new company that will offer high end finishing and quality furniture and log
cabins with a more African touch to the design at an affordable price as well as collaborate with
architects and construction professionals. This sort of manufacturing is very common in Kenya;
however the furniture has very generic design and is highly priced, Woods & Sales wants to
change that by offering something different something new and this is what makes our products
unique, this is what will make our customers stand out from the rest.
Industry background
Several trends in Kenya are contributing to the growth in demand for furniture. Kenyas economy
has been growing at around 5-6% and is expected to continue growing. The population is
currently 44.35 million and a constantly growing share of the population lives in cities which
means the growing middle class wants to purchase better homes and furniture. There is also a
construction boom in Kenya, from housing to hotels and other commercial buildings the demand
for all these is growing and although concrete, steel and glass are dominant structural surfacing
materials, the use of wood as a construction material is becoming more frequent which bids well
for log cabins which Woods & Sales will be providing. Per a report done by (Indufor, 2016) the
Kenyan government will increase forest cover by 10% to bolster Kenyan producers and reduce
imports.
Resources that contribute to Woods & Sales success
Woods & Sales will require several resources to help achieve success. Since the company wants
to sell quality furniture then the companys focus is speed and quality therefore the equipment
bought and the workforce should be able to achieve the companys focus. Maintaining customers
by surveying customer satisfaction because it is Woods & Sales intent to adding value to the

customers life by delivering quality furniture and log cabins and therefore satisfaction will be
high and they will return to buy from Woods & Sales repeatedly.
Objectives
Short term objectives

Increase number of factories in Nairobi and around different counties in Kenya and have a

showroom established in Nairobi.

Provide the customer with after sale products to customers to increase sales by 10%.
To provide employee of the month designations each month throughout the year to mark the

progression of creative input to give employees the competitive edge.

To scrutinize every aspect of quality the leads to the product: the wood, the workmanship and
design.
Long term objectives

Become established as the leading manufacturer of furniture in Kenya.

Receive at least 95% positive customer feedback regarding the furniture or log cabins to allow

the company to improve the products every year.

Building Woods & Sales recognition within the community through community outreach

projects and annual charity events.

To support the high level of innovation and creativity of staff by awarding an employee of the
year award to the employee who provides the most creative input during the year in terms of

practical ideas to improve the company

To pave a new way of living for Kenyans through the building of log cabins.
Recurrent Objectives

Meet delivery deadlines.

Expand outside Kenya.
To support high levels of innovation and creativity among the staff.
To scrutinize the quality of our products before release.
To integrate Information technology to our business.
To provide after sale services for our products.
To market our products in places that have high numbers of people whether tourists or citizens.
Create job opportunities

Market analysis
Research analysis
1. Target market
The woods and sales business has broken down the target market into the following categories:

Real estate developers /Construction companies

Woods and Sales L.T.D will focus on owners of real estate companies and Construction
companies in the regional area who are involved in high-end residential areas and commercial
development regions.
Kenyas population is increasing rapidly especially in urban areas with over 250 000 Kenyans
moving to the urban areas in a year. This therefore increase demand for homes in urban areas
therefore the rise in real estate companies is rapidly growing. This therefore create a wide market
for the products and services such as fixing kitchen cabinets and wooden flooring of homes and
ceiling.
This is the largest market the business have and hope to reap maximum profits from this market
niche.

Offices

Office furniture is a big market that will give the business huge returns. The business has divided
the office furniture into three categories. These are;
1. Corporate Executives office furniture: This market segment is much smaller in size, but has huge
potential for sales as buyers/ owners of corporate business usually buy goods in bulk. There are
fewer large businesses being created therefore it has a slower growth rate. The business target
customers for this kind of office furniture is going to be at a high-end level because the purchase
price is relatively high compared to standard office furniture. (Starting a business made easy,
2015)
2. Small business owners: The research indicate that huge market among the owners of businesses
with fewer than 100 employees. The small office market is quite large, with a 5% growth rate
since many small farms are coming up in Kenya. Most businesses have office workers who

would need the products offered by Woods and Sales. There are many such businesses in this
country. (Starting a business made easy, 2015)
3. Home offices: This segment is a huge market since most business people nowadays prefer
running their businesses from the comfort of their homes. Emergence of home offices in our
country is increasing rapidly in our country. Woods and sales limited would have home offices
for people working from home. This is a big market and it is growing faster than other markets.

Schools
Learning institutions is yet another market for the business products. This market segment is
large as there are many new schools coming up in the country. The demand for class room
furniture, dining hall and hostel furniture is increasing. The business offer furniture for
university, high schools, primary school and nursery school.

Tourist destinations areas

This is yet another market for Woods and sales limited products. Kenya and East Africa is a home
for tourist. There are many tourists attractions sites and this welcomes many tourists into our
country both local tourists and foreign tourists. This leads to need to develop resorts to house
tourists. This market is not that big but Woods and sales limited can reap maximum sales from
this market since it has little or no competition.
Woods and sales limited will construct log cabins resorts which have African feel in it therefore
making it unique and attractive.

Hospitality (hotels, lodges, resorts and clubs)

This market segment is growing at a high rate with the rise in population in the urban centres.
This is a good market for our products as well as our services of fitting wooden floors and
interiors to give the room woody feel. This is a good market for Woods and sales limited product
as it can sell more.

Churches

Per our research many churches have opted to go for wooden seats in the church which are long
lasting. This market is open as at now.

2. Overall Market Size and trends

Per World Bank Situational Analysis and Strategy on Furniture Industry in Kenya the market for
furniture is growing at 8% per year, and is projected to increase even higher. Growth has been
driven by urbanization, economic growth, housing and office construction, and these trends are
largely expected to continue. (World bank, 2016)
Woods and sales limited market is large and at the same time very specific as the business strive
to produce quality products. Woods and sales limited are targeting customers who need quality
furniture and are ready to pay more for quality. The rise in high end real estates in our country
give the company a good market for products they offer.
Rural to urban migration has led to rise in population in the urban area. Rise in population in the
urban areas has led to rise in development of many restaurants and clubs. This also favours the
companys market size as it is widened.
High economic growth rate has seen emergence of so many companies who need corporate office
furniture as well as small office furniture. Such a trend is a nice trend for the company.
Development of Real estate, rapid population growth and rise in economic development in the
country is an important trend for the company. Woods and sales limited now have people and
companies who need furniture and who also appreciate the quality custom furniture and are
ready to pay more for quality.

3. Competitive factors
The high-end cabinet market understands the concept of service and support. There are many
competitors in the local market. Although each of them deliver a quality product, Woods and
sales limited feel that they fail to deliver a full package that a customer needs. Design and the
services have a great impact on the quality and value that a customer should pay for. For the
company to beat the existing competition the company must be unique through:

The Products. Woods and sales limited are offering unique high quality custom wood
furniture that best suit the customer's needs and specifications. The products are durable
and of good quality.

The Services: Time is highly volatile; therefore, the company provide services and make
sure to beat the deadlines. Any after sales service we offer it to the best of the companys
knowledge. Woods and sales company will offer the best customer care services. To the
products, the company give their customers a one year warranty on the goods they have
purchased and repair services to the furniture.

Guarantee: Woods and sales guarantees its customers Quality durable and unique
furniture and after sales services. Woods and sales limited also deliver the product on the
specified time and not later than that. Woods and sales limited respect their customers
time.

4. Estimated sales forecast based on market size and market share

Per the sales forecast select furniture items will be purchased around the first few years.
Therefore, the profits for the first three years are as follows:

Year one: Ksh 225,000

Year two: Ksh 465,000
Year three: Ksh 325,000

The total profit of the first three years is thus

Ksh 1,015,000

This profit will go towards to developing of the business. The sales forecast and product pricing
table can be found in the appendix.

Marketing plan
Pricing
Woods and sales limited prices are competitive since their products are custom and of good
quality. Woods and sales limited are also targeting the high-end target market. Custom furniture is
of course more expensive than a lower-end mass produced item. Custom furniture is fully
customized to customer's exact needs and desires. On top of that, their furniture is designed and
hand-crafted by the best.
Product
In the market niche features are very important. Woods and sales limited customers will not make
selection based on price but rather design and quality of the product at hand. Furniture with highquality feel of good wood is more important than price. A quality product begins with a quality
design. We design every piece we build piece-by-piece, making sure that every part is properly
designed, this ensures the final product is as perfect as possible. Our products are durable and of
good quality. (Patchin, 2016)
All the Woods and sales limited products are made of wood. All its wood is kiln-dried before any
construction begins. This will ensure that the final product is free from cracking.
Woods and sales limited finishing process matches gives our furniture the best look.
Promotion/Advertising.
Woods and sales limited marketing strategy is to make itself known through print advertising and
personal contact to architects and contractors. Woods and sales will be focusing on contacting
contractors and architects who are involved with the design/construction of luxury home market
and commercial development.
Woods and sales limited will have a showroom which will be a sales tool. A showroom will give
the company exposure to the public, new arrivals to the area, and construction professionals.
Woods and sales limited can reach the whole country through its website therefore reaching the
entire market.

 Place
Now Woods and sales limited plans to only sell its products directly to the consumers. This is
because its products are mostly custom made. Woods and sales limited are planning to set up our
show room in a high visibility location near high end residential area. This will give the company
exposure to new home contractors and real estate developers as well as its target market that need
their product.

Operation
Location
Woods and sales limited companys workshop will be in Njoro and its outlets are in Nakuru,
Nairobi, Kisumu and Eldoret
The reason to set up the workshop in Njoro is for easy access to raw materials from wood
logging companies like Teamsales and availability of cheap labour. This helps the company to cut
down the cost of production. It is in a centralized location therefore we can easily deliver the
products to the major towns in Kenya.
However, Woods and sales Limiteds show room will be in a high visibility location near high
end residential area in the specific towns that we will be operating in. This will give the company
exposure to new home contractors and real estate developers as well as its target market that need
the companys product.

Proximity to suppliers
In Njoro the main supplier of raw materials is less than 15 Km away. This will help Woods and
sales limited minimize transportation cost.
Access to transportation
There is good transport network that link Njoro to the major towns in Kenya. The roads that link
these towns are in good conditions.

Production Process
Njoro is situated in a place where the company can get labour at a low cost. Our products are
made locally by the best designers. In the production, the company will need land, raw materials,
labour, finance, Machinery, time and plant.

Land- The land in which the plant will be set up.

Labour- It is a factor of production. Refers to the personnel who puts in effort to come up with

the final product.

Raw materials- it is a factor of production. It refers to all the components that are brought

together to make the final product.

Finance- the wages of the employees, the cost of the raw materials, and the purchase of the

machinery will all need financial resources

Machinery- tool used by our workman to make furniture.
Time- the timing of operations needs to be well planned and organized.
Quality Assurance and Measurement criteria
Woods and Sales limited will assure that its customers get quality product by designing and
carefully making the products to give deliver the best. Woods and sales limited will give warranty
to all its products to show the quality of the product. Woods and sales limited will measure the
quality of its product from how long it has been in use.

Critical Risks
1. Competition from of big existing companies:
The existing companies are a problem for our business since those companies are already known
by the customer and they are already thriving in the region, we will need to spend high amounts
of money to attract the customers such as reducing the price and offer incentives such as
promotions to the customer.
2. Reputation of existing companies and their current connection with the customer:
If the brand is recognized in the market, customers are attracted to the existing company because
they offer items that have caused their customers to stay for long periods. Also, if the company
already has loyal customers it will be very difficult to us to attract them. We will need to search
for a marketing strategy to attract the customers.
3. Competitive barriers:
The existing companies will hinder our company from penetrating the market, by creating
barriers that will prevent the new company to prosper.
4. Incentives offered by existing companies:
When a new company is created, the existing company can try strategies that will not allow the
new company to market their products. (Greene, 2016)

Management Summary
The proposed organizational structure is by function. This was selected to ensure:
1. Specialisation which optimizes use of manpower: Finance will only be handled by those
who deal with finance.
2. Performance of all activities necessary for reaching organisational objectives.
3. Easy delegation of authority.
4. Effective control of processes.
5. Little or no duplication of work thus allowing quicker decision making within
departments.
6. Acquisition of managers with specific skills which is cheaper (since managers will
specialise as well, acquisition can be specific to the needs of the business).
(Nisar & Jared, 1997)
Management Structure
The organisation will maintain a tall structure after the C.E.O, meaning the departments will be
hierarchical. The tall structure will require a high competence level from the manager (C.E.O). A
high level of interaction will be expected from this structure i.e. between the highest level in the
structure and the lowest level (Pride & Robert J. Hughes, 1999).
The structure of management for the proposed business is as follows (in order of authority):

Victor Bett: Chairman of board

Peter Opiyo: Board member and chair of Human Resource Committee
Samuel Aronda: Board member and chair of business development committee
David Mwambali: Board Member and chair of Audit Committee

The decision to be part of the board, as opposed to the rest of the organisational structure, has
been made to locate people with the required expertise and years of experience to run the
business efficiently.
As for the rest of the organisational structure, these are the qualifications expected for the
respective posts:
Chief Executive Officer (C.E.O)
Degree: Bachelors of Business Management or equivalent

Professional Qualifications: CPA as well as member of recognized professional body

Years of experience: Minimum of seven years
Deposition: Diligent, Team player, Good communicator and Visionary
Finance: Company Secretarial, Accounts and Procurement
Degree: Bachelors of Commerce (accounting or finance option) or equivalent
Professional Qualifications: CPA or ACCA as well as member of recognized professional body,
knowledgeable in Information Technology and Procurement
Years of experience: Minimum of four years
Deposition: Diligent, Team player and Good with Figures
Sales and Marketing: Research and Development (R & D)
Degree: Bachelors of Commerce (marketing option) or equivalent
Professional Qualifications: Member of Marketing society of Kenya
Years of Experience: Minimum of three years
Deposition: A good communicator- can sell ice to an eskimo
Production: Quality Control, Design and Repairs and Maintenance
Degree: Bachelors of Interior Design or equivalent
Professional Qualifications:
Years of Experience: Minimum of two years
Deposition: Innovative, thinks outside the box
Human Resource (HR) and Administration
Degree: Bachelor of Business Administration (Human Resource option) or equivalent
Professional Qualifications: Higher Diploma in Human Resource and member of the Institute of
Human Resource Management (IHRM-K)
Years of Experience: Minimum of two years
Deposition: Peoples person, Approachable and Empathetic

Legal Structure
Our business will be listed as a private company. The following are a list of our company
guidelines:

The directors will be selected by the board and the C.E.O, not excluding the C.E.O.
The Memorandum of association in summary will show our boundaries (Kenya, this is

until further research then we will expand to East Africa)

The Article of Association will state that the Human Resource manager will hire and fire
after consulting the chair to human resource.
The main advantages of being a company is the perpetual life and economies of scale as we grow
while the main disadvantage is changes in regulations by the government depending on how
manoeuvrable they may be for the company.

Financial Plan
The financial goals of the business are as follows:

Finance the development of the business through the retained earnings

Achieve a 10% to 15% gross margin for the first two years
Form an operating line of credit, i.e. source of funding, from a financial institution.
Repay any loans taken within three to five years of operations

Start-up Funding
The business funding will be expected from the following sources:
1.

Personal savings

2.

Friends and family

3.

Sacco

4.

Angel Investors

Loss at start-up expenses:

Building warehouse on purchased land

Painting warehouse
Transporting equipment
Purchasing equipment

Projected Profit and Loss

Insurance on:
1.
2.
3.
4.
5.
6.
7.

Fidelity guarantee- Ksh 10,000 per month 120,000

Money- Ksh 5,000 per month of sales forecast total profit
Engineer-plant and equipment- 1% of sales forecast total profit
Good in transit- based on value of goods transported
Personal accident and life insurance- 10% of total salaries (110% of sales forecast total profit)
Medical insurance- Ksh 30,000 per person (12)
Fire- 1.5% of sales forecast total profit

Conclusion
Woods & Sales strongly feels that this proposal is feasible due to the many forces going against
the furniture industry in Kenya such as imports. A great deal of time was involved in developing
the optimal mission, objectives and strategies. The preceding business plan provides detailed
information regarding major functional areas of Woods & Sales, namely operating requirements,
production, marketing & sales and financing. Our established functional areas form the
foundation for all the production of the furniture and log cabins within the company. For
example, one of the company's main objective is to produce quality furniture with an African
feel. How can this objective be reached is by the company? The answer is through the company
making its own furniture within the borders of Kenya and not rely on import which will set the
company apart from other furniture businesses. For Woods & Sales to be an industry leader, it
must secure capital. This capital will be used for start- up, to establish a reputable company and
to further develop the business, business infrastructure, internal systems, production development
and extensive marketing. Once the company acquires its funding requirements, Woods and Sales
will be able to achieve operational success for many years to come
In closing I would like to, once again, state Woods & Sales mission:
Woods & Sales aims to offer high quality furniture products and log cabins at reasonable prices
to meet the demand of the rapid boom in the real estate industry.

Appendix
Table 1: Sales Forecast

Product name

Product price Year 1

Units

Year 2
Cost

sold
Arm chair
Circular
table

Ksh 30,000
dining Ksh 205,000

plus

Units

Year 3
Cost

sold

Units

Cost

sold

Ksh 150,000

Ksh 150,000

Ksh 180,000

Ksh 410,000

Ksh 820,000

Ksh 1,025,000

chairs
Dining chair

Ksh 20,000

Ksh 80,000

Ksh 80,000

Ksh 100,000

Stool

Ksh 10,000

Ksh 30,000

Ksh 30,000

Ksh 40,000

Standard bed

Ksh 20,000

Ksh 80,000

Ksh 120,000

Ksh 140,000

Bedroom

Ksh 10,000

Ksh 60,000

Ksh 70,000

Ksh 80,000

cabinets
Total Sales

Ksh 810,000

Product name

Production
price

Arm chair
Circular
table

Ksh 20,000
dining Ksh 180,000

plus

Year 1

Ksh 1,270,000
Year 2

Ksh 1,565,000
Year 3

Units

Production

Units

Production

Units

Production Cost

sold

Cost

sold

Cost

sold

Ksh 100,000

Ksh 100,000

Ksh 120,000

Ksh 360,000

Ksh 520,000

Ksh 900,000

chairs
Dining chair

Ksh 10,000

Ksh 40,000

Ksh 40,000

Ksh 50,000

Stool

Ksh 5,000

Ksh 15,000

Ksh 15,000

Ksh 20,000

Standard bed

Ksh 10,000

Ksh 40,000

Ksh 60,000

Ksh 70,000

Bedroom

Ksh 5,000

Ksh 30,000

Ksh 70,000

Ksh 80,000

cabinets
Subtotal Direct Cost of Sales

Ksh 585,000

Ksh 805,000

Ksh 1,240,000

Table 2: Proposed Balance Sheet

Year 1

Year 2

Year 3

Cash

Ksh 225,000

Ksh 465,000

Ksh 365,000

Inventory

Ksh 585,000

Ksh 805,000

Ksh 1,240,000

Other (office equipment)

Ksh 250,000

Ksh 250,000

Ksh 260,000

Total current assets

Ksh 1,060,000

Ksh 1,520,000

Ksh 1,865,000

Land (1/8 acre)

Ksh 285,000

Ksh 0

Ksh 0

Total long term assets

Ksh 285,000

Ksh 0

Ksh 0

Total Assets

Ksh 1,345,000

Ksh 1,520,000

Ksh 1,865,000

Ksh 200,000

Ksh 200,000

Ksh 200,000

Payable Ksh 150,000

Ksh 125,000

Ksh 120,000

Ksh 350,000

Ksh 325,000

Ksh 320,000

Owner

Ksh 1,000,000

Ksh 0

Ksh 0

Investor

Ksh 1,000,000

Ksh 1,000,000

Ksh 1,000,000

Additional Investment

Ksh 1,500,000

Ksh 1,500,000

Ksh 1,500,000

Total Planned Investment

Ksh 3,500,000

Ksh 2,500,000

Ksh 2,500,000

Loss at Start-up

Ksh 1,000,000

Ksh 0

Ksh 0

Total Capital

Ksh 4,500,000

Ksh 2,500,000

Ksh 2,500,000

Assets
Current Assets

Long term assets

Liabilities and Capital

(Liabilities)
Current Borrowing
Long-term Liabilities
Accounts
(Outstanding Bills)
(Total Liabilities)
Capital

Total Capital and Liabilities

Ksh 4,145,000

Ksh 2,175,000

Ksh 2,180,000

Total Funding

Ksh 4,500,000

Ksh 2,500,000

Ksh 2,500,000

Table 3: Profit and Loss

Year 1

Year 2

Year 3

Sales

Ksh 810,000

Ksh 1,270,000

Ksh 1,565,000

(Direct Cost of Sales)

Ksh 585,000

Ksh 805,000

Ksh 1,240,000

Gross Profit

Ksh 225,000

Ksh 465,000

Ksh 325,000

Insurance

Ksh 788,675

Ksh 788,675

Ksh 788,675

Rent

Ksh 1,500

Ksh 1,500

Ksh 1,500

Permits and Licences

Ksh 50,000

Ksh 50,000

Ksh 50,000

Salaries

Ksh 1,116,500

Ksh 1,116,500

Ksh 1,116,500

Total Operating Expenses

Ksh 1,956,675

Ksh 1,956,675

Ksh 1,956,675

Ksh 465,000

Ksh 325,000

Expenses

Profit Before Interest and Ksh 225,000

Taxes
Interest Expense (14%)

Ksh 31,500

Ksh 65,100

Ksh 45,500

Taxes Incurred (30%)

Ksh 67,500

Ksh 139,500

Ksh 97,500

Total Expenses

Ksh 2,280,675

Ksh 2,616,275

Ksh 2,425,675

Net Profit

-Ksh 2,055,675

-Ksh 2,151,275

-Ksh 2,100,675

Table 4: Assumptions
The following assumptions are important to the business operations.
Year 1

Year 2

Year 3

Plan Month

December

December

December

Current Interest Rates*

14%

14%

14%

Long-term Interest Rates*

14%

14%

14%

Tax Rate

30%

30%

30%

*These rates are per NIC bank.

Table 5: Projected Cash Flow

Year 1

Year 2

Year 3

Cash sales

Ksh 810,000

Ksh 1,270,000

Ksh 1,565,000

Additional Investment

Ksh 1,500,000

Ksh 1,500,000

Ksh 1,500,000

Additional Cash received

Ksh 2,200,000

Ksh 3,000,000

Ksh 3,000,000

Cash Spent

Ksh 2,543,175

Ksh 2,763,175

Ksh 3,198,175

Sales tax (30%)

Ksh 243,000

Ksh 381,000

Ksh 469,500

Net Cash Flow

Ksh 1,723,825

Ksh 2,625,825

Ksh 2,397,325

Cash Balance

Ksh 1,723,825

Ksh 2,625,825

Ksh 2,397,325

Cash received

Expenditures

Loan Payment

Table 6: Projected Product Prices

Product name
Arm chair
Circular dining table plus 5 chairs
Square dining table plus 4 chairs
Circular table
Square table
Dining chair
Circular Coffee table
Rectangular coffee table
Stool
Outdoor Chair
Outdoor table
Outdoor set (table plus 4 chairs)

Product price
Ksh 30,000
Ksh 205,000
Ksh 155,000
Ksh 105,000
Ksh 85,000
Ksh 20,000
Ksh 60,000
Ksh 50,000
Ksh 10,000
Ksh 15,000
Ksh 60,000
Ksh 110,000

Outdoor Day bed

Kitchen Cabinets 5 compartments
Kitchen Table
Book shelf large
Double decker with desk
Standard bed
Queen size bed
King size bed
Bedroom cabinets
King bed plus 2 cabinets
Queen bed plus 2 cabinets
Office Chairs
Office desks (4 compartments)
3 seater sofa sets
5 seater sofa sets
Television cabinets

Ksh 110,000
Ksh 70,000
Ksh 45,000
Ksh 45,000
Ksh 55,000
Ksh 20,000
Ksh 30,000
Ksh 50,000
Ksh 10,000
Ksh 70,000
Ksh 50,000
Ksh 40,000
Ksh 100,000
Ksh 130,000
Ksh 150,000
Ksh 120,000

Bibliography
1.

Indufor. (2016). Kenyan Wood Industry is Growing. Retrieved November 01, 2016, from

2.

http://www.indufor.fi/blogs/jyrki-salmi/kenyan-wood-industry-growing
Greene, B. (2016). Risk of entry into the furniture business. Retrieved from Chron:

3.

http://smallbusiness.chron.com/risk-entry-fu
Nisar, A. S., & Jared, B. B. (1997). Chapter 10: Departmentation. In A. S. Nisar, & B. B. Jared,
Management (Principles and Practice) Simplified (pp. 147-149). Nairobi: N.A. Saleemi

4.

Publishers.
Pride, W. M., & Robert J. Hughes, J. R. (1999). Organizational Height. W. M. Pride, & J. R.

5.
6.
7.

Robert J. Hughes, Business Sixth Edition (. 175). Boston, New York: Houghton Mifflin.
Patchin, J. (2016, 11). J. Alexander. Retrieved from woodworking: http://jawoodworking.com/
Starting a business made easy. (2015, 10). Retreived from Bplan: http://www.bplans.com/
World bank. (2016). Furniture Industry in Kenya. Nairobi: International Bank for Reconstruction
and Development.