Professional Documents
Culture Documents
Kioko Business Plan
Kioko Business Plan
Presented to the Kenya National Examination Council in partial fulfillment for award
of Diploma in Mechanical Engineering (Construction Plant Option)
Date of Presentation:
ID No : 32866263
Signature :
Date :
Signature :
Approval Date :
Declaration
I declare that this is my original work and has never been published or presented for award of
any certificate whatsoever in any institution.
SIGNATURE:____________________________
SIGNATURE:____________________________
DATE:____________________________________
ii
Dedication
I dedicate this business plan to my parents Mr. Daniel Munyoki Nyili and Mrs. Jane Kamene
Munyoki who have been there for me in all aspects of my life.
I also dedicate it to my brothers and sisters for the moral support and encouragement in my
studies.
iii
Acknowledgment
I wish to express my most heartfelt gratitude to my supervisor Mr. Pius Gichovi, the school
librarian Mrs. Rosemary Gichovi and my fellow schoolmates who played a role in guiding
me through my process of collecting ideas on how to write my business plan.
My appreciation also goes to my parents, brothers, sisters and friends who gave me financial,
moral and spiritual support throughout my study period.
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EXECUTIVE SUMMARY
Business Description
The name of the business will be JOSPURY MWINGI HARDWARE. It will be located at
Mwingi Town and the name of the owner will be JOSPHAT KIOKO.
Marketing Plan
The business will sell its products within Mwingi and its outskirts. Other markets will be
local schools and farm plantations. The markets share will highly depend on its availability
of customers and services rendered by the competitors.
The owner will be the manager in-charge of recruiting, discharging duties and
responsibilities and accessing employees’ performance.
Production/operational Plan
The business will purchase most of its products and sell them locally.
Financial Plan
The business will have a starting amount of Ksh. 1,500,000. The owner will also obtain
capital from his own saving, bank loan and from friends and relatives.
v
Table of Contents
Declaration ................................................................................................................................ ii
Dedication ................................................................................................................................ iii
Acknowledgment ..................................................................................................................... iv
EXECUTIVE SUMMARY ...................................................................................................... v
Table of Contents ..................................................................................................................... vi
BUSINESS DESCRIPTION ..................................................................................................... 1
1.1 Mission statement ........................................................................................................... 1
1.2 Business Name and Logo................................................................................................ 1
1.3 Business Location and Address ...................................................................................... 2
1.4 Form of Ownership ......................................................................................................... 2
1.5 Types of Business ........................................................................................................... 3
1.6 Products /services............................................................................................................ 3
1.7 Justification of the Opportunity ...................................................................................... 3
1.8 Industry ........................................................................................................................... 3
1.9 Business Goals and Objectives ....................................................................................... 3
1.10 Entry and Growth Strategy. .......................................................................................... 4
1.11 SW0T Analysis ............................................................................................................. 4
Chapter Two.............................................................................................................................. 5
MARKET PLAN ...................................................................................................................... 5
2.0 Introduction ..................................................................................................................... 5
2.1 Identification of Customers............................................................................................. 5
2.2 Competitor Analysis ....................................................................................................... 6
2.3 Market Share ................................................................................................................... 7
2.4 Promotion and Advertisement. ....................................................................................... 8
2.5 Pricing Strategy. .............................................................................................................. 8
2.6 Sales Tactics.................................................................................................................... 9
2.7 Sales Target ..................................................................................................................... 9
2.8 Distribution Strategy ..................................................................................................... 10
2.9 Customer Services ........................................................................................................ 11
Chapter Three.......................................................................................................................... 12
vi
ORGANIZATION AND MANAGEMENT PLAN ............................................................... 12
3.0 Introduction ................................................................................................................... 12
3.1 Organization Structure .................................................................................................. 12
3.2 Management Team........................................................................................................ 13
3.3 Other Business Personnel ............................................................................................. 13
3.4 Recruitment, Training and Promotion .......................................................................... 15
3.5 Remuneration and Incentives ........................................................................................ 16
3.5.1 Remuneration ......................................................................................................... 16
3.5.2 Incentives. .............................................................................................................. 16
3.6 Licenses, Permits and Other Requirements .................................................................. 16
3.6.1 Licenses and permits .............................................................................................. 16
3.6.2 Other requirement. ................................................................................................. 17
3.7 Supporting Services ...................................................................................................... 17
Chapter Four ........................................................................................................................... 19
PRODUCTION/OPERATION PLAN.................................................................................... 19
4.0 Introduction ................................................................................................................... 19
4.1 Production Facilities ..................................................................................................... 19
4.2 Production and Operation strategies ............................................................................. 20
4.2.1 Future plans. ........................................................................................................... 20
4.3 Production process. ....................................................................................................... 20
4.3.1: Order ..................................................................................................................... 20
4.3.2: Planning ................................................................................................................ 21
4.3.3: Issuing ................................................................................................................... 21
4.3.4: Payments ............................................................................................................... 21
4.4 Regulations affecting operation .................................................................................... 21
Chapter Five ............................................................................................................................ 22
FINANCIAL PLAN................................................................................................................ 22
5.0 Introduction ................................................................................................................... 22
5.1 Pre-operational plan ...................................................................................................... 22
5.3 Loan and interest repayment ......................................................................................... 23
5.4 Projected cash flow for the first three years.................................................................. 24
5.5: Projected trading and loss account............................................................................... 27
5.6: Preference balance sheet for Jospury Hardware. ......................................................... 27
5.7: Break-even analysis. .................................................................................................... 27
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5.8: Profitability ratio .......................................................................................................... 28
5.9: Desired financing ......................................................................................................... 28
5.10: Proposed Capitalization ............................................................................................. 28
5.11: Potential risks............................................................................................................. 29
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Chapter One
BUSINESS DESCRIPTION
1.0 Introduction
The proposed business enterprise is a hardware that deals with farm tools and building
equipment. These equipment’s and tools include iron sheets, nails, pangas, files, hammers,
wheelbarrows, hacksaws, windowpanes and many others.
1
1.3 Business Location and Address
The business will be located within Nairobi – Garissa Highway in Mwingi town near Java
supermarket opposite Musila Gardens.
P.O.BOX 521-90200,
MWINGI
JOSPURY MWINGI
HARDWARE
Java Supermarket
To Kitui
Round about
From Nairobi
To Garissa
To Musila Garden
Easy management
The starting capital is low
Can be operate by one person
The risks are low
Low competition – in this area there is no a strong hold type of this business.
High demand _People living in the are large scale farmers and there are construction
of buildings hence there is high demand
Security – the chosen location have adequate security due nearby police station. The
owner will also provide security by employing guards.
Low competition there is no nearby hardware’s in the area.
1.8 Industry
The proposed business will fall under hardware industry .The three firm s existing are small
scale, medium scale and large scale. I will apply all modern technologies in the hardware
industry to ensure that it provides high quality goods and services that satisfy customer n
needs.
Hardware industry has been existing since 1960s .It started as a small scale business in
Nairobi. It has been growing up to large scale business across the whole country. It has been
offering services like transport to customers who are far.The prices are fair and also
discounts are given.
The industry has the plan to expand across all over the world to reach more customers in
different countries. This will enable the industry to reach more customers and offer their
services and products to the customers across the world.
1. Short-term goals
3
To provide high quality goods and services to customers at standard price.
To make profit.
Employment of skilled and qualified staff.
Improve farming and building style.
2. Medium-term goals
To attract more customers.
To create employment opportunities to the people in the community
To expand in the near future
3. Long-term goals
Open a new branch in another strategic place after one year of operation.
To develop a high quality business enterprise that provides high quality goods
and services.
To explore other markets in the same line of business.
Sponsoring the needy or orphans.
The owner will use advertising methods which will create awareness of his business to the
public. Adverts and business cards will be used to advertise the business. On the business
cards and adverts, the quality and the price of goods and services are specified.
Growth Strategy
Loans received from bank and savings will be used in the expansion. For growth of business
the owner will conduct frequent market surveys to identify the market needs.
Chapter Two
MARKET PLAN
2.0 Introduction
This chapter mainly deals with market plan of the enterprise. It entails customers available ,
competition in the market , market share, promotion and advertisement
Residents of Mwingi
These are customers within the business circumference who will offer to buy the products on
regular basis. This customers most of them have personal plantations therefore they will be
using tools like jembes, pangas among others.
it is a company within kitui county which deals mainly with construction of houses and
repair of the houses. Therefore this company will always be buying cement and other
contruction materials.
These is a farm located 5 km away from the business. The farm have a budgeted income
throughout the year. Therefore they always use farm tools like jembes , pangas,
wheelbarrows, among others. No other hardware near this farm.
5
2.2 Competitor Analysis
The following will be my competitors including their strengths and weaknesses.
6
My hardware shop will experience the following strengths and weaknesses
strengths Weaknesses
Paying workers well Business will not operate full time.
Good customers, suppliers and Low technology grounds.
workers relationship. Offer only few products.
Well established business. Poor road transportation.
Large and various varieties of Heavy rain every time.
product.
Giving customers discounts.
Offering transport to customers.
7
Sales
4th Qtr
9%
3rd Qtr
10%
1. Sales promotion –it will be offering discounts in the month of January and December
example of the offer to be given (buy two and get one free)
2. Public relation – I will be using some roan shows to promote and advertise my
business. This will attract more customers
3. Personal selling – the business will offer quality products to the customers according
to their needs. Also will keep g00d relationship with my customers.
4. Advertisement – I will also be using social media like television, radio and magazines
to access to my business.
5. Personal contact – I myself will also be serving my customers as I hear their views.
These will area good contact with customers.
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2.6 Sales Tactics
The business will employ the following tactics in the firm
Tactic Benefit
Offering discounts This will motivate customers.
Will lead to maximum sales
Create good relationships among customers.
This will enlarge the business
Giving warrant to customers. Will lead to improvement of sales.
Creating assurance to the customers.
Enlargement of market.
Attraction of more customers.
Raising views Create more awareness among customers
Motivate customers.
Create good relation among customers.
Create good trust.
Products/Servic
es JA FE MARC AP MA JUN JUL AU SEP OC NO DE
N B H R Y E Y G T T V C
Wheelbarrow 2 3 1 2 2 4 5 3 2 4 5 4
Jembe 7 10 20 21 22 29 30 31 29 28 27 26
Hacksaw 5 11 2 0 1 5 10 15 18 17 6 2
Iron sheet 10 11 10 20 19 16 17 10 11 1 3 4
Panga 4 10 15 16 18 20 25 21 22 23 14 15
Hammer 4 5 3 7 8 10 15 11 12 16 17 19
Pipes 10 11 2 3 1 4 6 7 8 2 3 1
Rakes 5 0 1 6 7 10 9 7 10 11 15 8
Nails 6 7 10 14 18 20 19 16 25 24 13 10
9
II. Sales target for the second year 2021
Products/Services
JAN FEB MARCH APR MAY JUNE JULY AUG SEPT OCT NOV DEC
Wheelbarrow 10 12 13 15 14 16 18 20 17 19 21 22
Jembe 12 10 15 16 18 20 21 23 24 25 27 30
Hacksaw 16 19 14 10 9 12 15 15 16 20 21 21
Iron sheet 21 20 19 18 21 20 19 18 20 21 22 24
Panga 29 28 27 26 22 24 25 21 20 26 28 18
Hammer 19 20 21 19 22 23 24 25 26 29 27 30
Pipes 21 20 19 18 20 21 22 23 19 20 21 22
Rakes 21 20 22 23 18 19 16 17 20 25 26 27
Nails 20 17 18 15 16 17 20 21 22 23 24 25
Products/Servic
es JA FE MARC AP MA JUN JUL AU SEP OC NO DE
N B H R Y E Y G T T V C
Wheelbarrow 21 22 25 26 27 28 30 31 28 26 27 30
Jembe 29 26 25 23 20 29 26 27 25 23 20 29
Hacksaw 20 23 25 26 27 29 30 33 32 31 29 30
Iron sheet 21 23 21 21 21 22 23 24 25 26 27 28
Panga 25 22 23 25 25 15 20 19 28 30 32 33
Hammer 29 30 32 29 26 25 23 29 30 30 30 30
Pipes 25 22 25 25 23 23 21 21 20 22 20 21
Rakes 20 31 22 23 24 25 26 27 31 32 33 34
Nails 29 20 18 19 16 17 20 20 20 30 20 29
My business will allow customers to pay money in installments until he need his own goods;
when situation is good.
Through ordering goods online where goods are offered to customers who are far. .It will
have mobile vehicle which move from one place to another hence reaching all customers.
Delivering goods to the customers. This will enable the customers who have problems in
accessing the business to get products.
Buying over the counter. Customers will get the products will buy the products over the
counter. Goods will be delivered hand in hand.
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2.9 Customer Services
I will use the following means to keep and maintain my customers whenever they come for
the products.
Self-service - I will allow every customer to select product which he or she is going to buy.
Mode of payment - My customers will use either cash or M.PESA or any other means of
payment.
Quality assurance - I will bring new and quality products to the business and customers will
afford the products.
Customer relationship - I will create good customer relationship. E.g. By knowing where
they come from.
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Chapter Three
3.0 Introduction
The business will consist of management crew of seven persons who will work together and
ensure effective running of the business. They include: manager (owner) , secretary,
technician, salesman , storekeeper , customer attendant and watchman.
manager
secretary
security workers
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3.2 Management Team
A. MANAGER
Qualifications:
A. SECRETARY
Qualification
B. Supervisor
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Qualification
C. Security
Qualification
D. General workers
Qualifications
Kenyan citizen
Literate and holders in construction plant
Hardworking, honesty and ready to work
Aged between 20 to 40 years
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Duties and responsibilities
Recruitment
1) Job Advertisement
This will be achieved by placing posters indicating the personnel required and the
qualifications.
2) Receiving Application
The personnel will be required to send their applications within the specified time.
3) Shortlisting
Sorting of the applications will be done and those will qualify will be called for an interview.
4) Interview
The interview will be conducted by the manager; those who will succeed will be given
appointment paper.
The qualified applicants will be issued with business card and reporting date with some rules
and regulations
TRAINING
The training will be offered to the qualified employees offered the employment.
PROMOTION
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3.5 Remuneration and Incentives
The remuneration and incentives will be given just to motivate and boost the morale of the
employees.
3.5.1 Remuneration
Personnel Monthly payment
Manager 30,000
Supervisor 15,000
Secretary 10,000
Security 12,000
General workers 10,000
Total payments 77,000
3.5.2 Incentives.
1) Allowances
2) Overtime payment
3) Public holidays
4) Aprons and safety boots
5) Promotions
Licenses acquired from E-citizen through online application. Business registration from
the county government.
The business will use the following to get licenses and permits to allow smooth operations
of the business:-
i. Municipal council.
ii. City council.
iii. E-citizen.
i. Transport permit.
ii. Hospital permit.
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iii. Trade permit.
The business will use the following services to help boosting the business and ensure smooth
running and operation
1) Banking services
The business will open bank account at National Bank Mwingi branch.
Jospury Hardware
National Bank
MWINGI
2) Legal services
The business will contact the following law firm for legal services
P.O.BOX 59-9200
MWINGI
3) Postal services
MWINGI
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4) Electricity
The business will contact Kenya power and lighting for electricity supply at Mwingi
KPLC supply
MWINGI
5) Medical services
P.O.BOX 292-9200
MWINGI
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Chapter Four
PRODUCTION/OPERATION PLAN
4.0 Introduction
The proposed business will be offering products and selling tools and equipment which will
facilitate production to meet customers’ needs. Production will be modern and easy due to
the current technology.
The business will consider the following factors to buy the equipment.
Description
Speedometer 300 20 6,000
wheelbarrow 200 20 4,000
Lubricants 250 15 3,750
Cement 3,000 10 30,000
Calculators 800 3 2,400
Paper punch 500 3 1,500
Stapler 500 3 1,500
Office chair 2,000 4 8,000
Office desk 2,000 4 8,000
Iron sheets 800 30 24,000
86,750
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b) Raw materials.
Quality control
Maintain and train staff
Vending of high quality equipment
Training of staff
Product will undergo some processes within the premises and have the following steps:
4.3.1: Order
Customers will make an order on a certain products using phones, online or accessing
him/her to the business premises.
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4.3.2: Planning
Employees will make a plan on how to get the products odered by customers i.e. from the
business stores or other shops.
4.3.3: Issuing
Customers will be able to confirm the products to ensure that they are the correct ones.
4.3.4: Payments
The owner of the business will adhere to government rules and regulations in the country.
1. Public health and health act. The business will offer and enquire health certificate.
2. Employment act. Workers will be treated equally and will be disciplined to attain
goals and objectives of the business.
3. Sex discrimination act. The manager will not consider sex gender to employ or favor
the workers as per their gender.
4. Sales of good act. The manager will consider rules on how to sell, where and when to
sell.
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Chapter Five
FINANCIAL PLAN
5.0 Introduction
The cost that the business will incur before its operation will be,
Details Amount
Licenses 5000
Advertisements 5000
Insurance 4000
Bills 8000
Buildings 20000
Transport 5000
Uniforms 4000
Raw material 250000
Equipment 1200000
Miscellaneous expenses 5000
Total 1504000
The business will borrow Ksh. 500000 from K.C.B bank at an interest rate of
12% p.a, with a grace period of 4 months.
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5.4 Projected cash flow for the first three years.
Details Jan Feb March April May June July Aug Sep Oct Nov Dec Total
Cash in
flow
Beginning
600, 000 724, 500 698, 100 517, 300 471, 130 493, 460 438, 790 394, 120 425, 850 465, 180 509, 110 618, 510 6, 356050
cash
Sales 221, 500 163, 600 110, 200 169, 500 188, 000 161, 000 172, 500 152, 900 159, 000 154, 600 209, 400 158, 500 2, 020, 700
T-cash in
821, 500 888, 100 808, 300 686, 800 659, 130 654, 460 611, 290 547, 020 668, 110 610, 780 718, 510 777, 010 8, 451, 010
flow
Cash out
_ _ _ _ _ _ _ _ _ _ _ _ _
of flow
Purchases 247, 500 100, 000 200, 000 100, 000 50, 000 100, 000 100, 000 _ _ _ 100, 000 200, 000 1, 197, 500
Bank
_ _ _ 26, 670 26, 670 26, 670 26, 670 26, 670 26, 670 26, 670 26, 670 26, 670 240, 030
loan
Rent 20, 000 _ _ _ _ _ _ _ _ _ _ _ 20, 000
Insurance 4, 000 4, 000 4, 000 4, 000 4, 000 4, 000 4, 000 4, 000 4, 000 4, 000 4, 000 4, 000 48, 000
Salaries 78, 000 78, 000 78, 000 78, 000 78, 000 78, 000 78, 000 78, 000 78, 000 78, 000 78, 000 78, 000 936, 000
Bills 8, 000 6, 000 6, 000 7, 000 7, 000 7, 000 8, 500 8, 500 8, 000 8, 000 8, 000 8, 500 85, 000
M.
5, 000 2, 000 3, 000 _ _ _ _ 4, 000 3, 000 _ 2, 000 2, 000 21, 000
Expenses
T. cash
out of 97, 000 190, 000 291, 000 115, 670 115, 670 115, 670 117, 170 121, 170 119, 670 110, 670 109, 170 109, 170 1, 312, 030
flow
Net cash
724, 500 698, 100 515, 300 493, 460 438, 790 394, 120 425, 850 465, 180 509, 110 618, 510 467, 510 467, 840 6, 223, 890
flow
24
Details Jan Feb March April May June July Aug Sep Oct Nov Dec Total
Cash in
flow
Beginning
467, 840 423, 170 426, 500 463, 830 457, 360 507, 290 565, 820 612, 150 531, 080 611, 410 753, 740 803, 370 6, 467, 840
cash
Sales 180, 000 178, 000 263, 000 224, 600 218, 200 233, 200 276, 000 243, 600 210, 000 272, 000 284, 300 267, 200 2, 849, 100
T-cash in
647, 840 601, 170 682, 500 682, 030 681, 960 740, 490 841, 842 855, 750 741, 080 883, 410 103, 840 107, 557 3, 316, 940
flow
Cash out
_ _ _ _ _ _ _ _ _ _ _ _ _
of flow
Purchases 100, 000 50, 000 100, 000 100, 000 50, 000 50, 000 100, 000 200, 000 _ _ 100, 000 _ 950, 000
Bank
26, 670 26, 670 26, 670 26, 670 26, 670 26, 670 26, 670 26, 670 26, 670 26, 670 26, 670 26, 670 320, 040
loan
Insurance 5, 000 5, 000 5, 000 5, 000 5, 000 5, 000 5, 000 5, 000 5, 000 5, 000 5, 000 5, 000 60, 000
Salaries 85, 000 85, 000 85, 000 85, 000 85, 000 85, 000 90, 000 90, 000 90, 000 90, 000 90, 000 90, 000 1, 050, 000
Bills 8, 000 8, 000 8, 000 8, 000 8, 000 8, 000 8, 000 8, 000 8, 000 8, 000 8, 000 8, 000 96, 000
M.
_ _ _ - _ _ _ _ _ _ _ _ _
Expenses
T. cash
out of 224, 670 174, 670 224, 670 224, 670 174, 670 174, 670 224, 670 324, 670 129, 670 129, 670 229, 670 129, 670 2, 021, 703
flow
Net cash
423, 170 426, 500 463, 830 457, 360 507, 290 565, 820 612, 150 531, 080 611, 410 753, 440 808, 370 946, 070 12, 952, 240
flow
25
Details Jan Feb March April May June July Aug Sep Oct Nov Dec Total
Cash in
flow
Beginning
946, 070 929, 070 873, 970 840, 670 800, 270 791, 770 763, 670 750, 170 718, 470 740, 070 780, 970 828, 470
cash
Sales 188, 000 149, 900 171, 700 164, 600 196, 500 156, 900 171, 500 153, 300 204, 600 191, 900 232, 500 191, 600
T-cash in
1134070 1078970 1045670 1005270 996770 948670 935170 903470 959070 935170 965970 1013470
flow
Cash out
_ _ _ _ _ _ _ _ _ _ _ _ _
of flow
Purchases 100000 100000 100000 100000 100000 80000 80000 80000 80000 80000 80000 80000
Bank
_ _ _ _ _ _ _ _ _ _ _ _ _
loan
Insurance 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000
Salaries 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000 90000
Bills 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 120000
M.
_ _ _ _ _ _ _ _ _ _ _ _ _
Expenses
T. cash
out of 205000 205000 205000 205000 205000 185000 185000 185000 185000 185000 185000 185000
flow
Net cash
929070 873970 840670 800270 791770 763770 750170 718470 740070 780970 780970 828470
flow
26
5.5: Projected trading and loss account.
Item Year 1 Year 2 Year 3
Sales 2020700 2849100 2173000
Purchase 1197500 950000 1060000
G. profit 1823200 1899100 1113000
Expenses
Rent 20000
Loans 240030 320040
License 60000 60000 60000
Advertisement 60000 90000 100000
Total 380030 470040 160000
Net profit 1443170 1429060 953000
Item Amount
Bank loan 500000
Personal savings 750000
Relative contribution 550000
28
5.11: Potential risks
Fire – the business will be installed with fire-fighting equipment that would be used to
overcome fire in case it arises.
Debts – the business will be avoiding huge debts to its customers.
Low sales – the business will have to make more advertisements to avoid risks of low sales.
Theft – the business will employ security guards to minimize the risk of theft.
29