Professional Documents
Culture Documents
Dairy Fram Berut
Dairy Fram Berut
BUSINESS PLAN
DECLARATION
I declare that this business plan is purely my original work and has never been submitted to any
examination council for any award.
i
CANDIDATE’S NAME : KIBIWOTT NEHEMIAH BERUT
DATE : ........................................
SIGNATURE : …………………………..
DATE : ………………….............
SIGNATURE : …………………………..
ii
DEDICATION
I wish to dedicate my parents .
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ACKNOWLEDGEMENT
My sincere appreciation goes to my supervisor who guided me while I was writing these plan
I am also grateful to numerous authors whose source i consulted. I am not able to acknowledge
each one individual as most of their names are not available.
iv
TABLE OF CONTENTS
DECLARATION......................................................................................................................................ii
DEDICATION........................................................................................................................................iii
ACKNOWLEDGEMENT.........................................................................................................................iv
CHAPTER ONE.........................................................................................................................................1
Executive summary.....................................................................................................................................1
Business description....................................................................................................................................1
Financial plan..............................................................................................................................................3
CHAPTER TWO........................................................................................................................................4
2.5 Products/Service...................................................................................................................................6
2.7 Industry................................................................................................................................................7
CHAPTER THREE...................................................................................................................................11
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3.0 Marketing plan...................................................................................................................................11
3.1 Customers...........................................................................................................................................11
3.3 Competitors........................................................................................................................................13
3.1.2 Location...................................................................................................................................13
3.3.4 Premises....................................................................................................................................14
CHAPTER FOUR.....................................................................................................................................17
4.6.1 Insurance..................................................................................................................................23
CHAPTER FIVE.......................................................................................................................................24
CHAPTER SIX.........................................................................................................................................28
6.3.3 PROJECTED CASH FLOW FOR HONEY DROPS FARM FOR THE YEAR 2021............................33
CHAPTER SEVEN....................................................................................................................................38
Executive summary
situated within Koilot trading centre. The business targets a market from Koilot traders,
Business description
The pBerut’sosed business will belong to dairy farming industry. It will be offering fresh
milk and other products to its customers. It will be located 2 km along Eldoret – Nakuru
highway.
Marketing plan
The potential customes are domestic customers living around that community and Koilot
town. The customers live within 20 kms from the farm. The business will ensure high
quality milk, affordable price, good communication and quality service. The major
competitors are Bungoma dairy farms. They are located within the distance of 10km, the
busines will be advertised through posters, Sayari radio and signboards. I am intending to
cope withe my competitors by ensuring services offered to users is of hig quality, milk
production will be improved and readily available and also ensure affordable prices.
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Organisation and managment plan
The key personnel of the pBerut’sosed business are the general manage (owner) who will
manage all activities in the farm and ensure that are run smoothly. Following this, her
assistant manager; will identify the customers and where they are located as well as
Accountants clerk;
Security men:
Will feed the cows and operate on the shamba, also cleans cows and ensure envronment
is clean.
Finally, the driver, will be packing and transproting milk together with production manager to
the idefie
Assistant (owner)
Secretary
2
Operation & Production plan
The business will begin with buying the five dairy cows from one of the agricultural
farm. The four-hectares, I will acquire from my parents part of the land will be cultivated
for planting the Napier grass. The other portion will be established with buildings i.e. cow
sheds, administrative offices and remaining is grazing field. The cows will be reared for
six months when artificial insemination will be introduced which by November 2008 will
have calved down some facilities to be occured including milking cans buckets knapsack
sprayer, farm tools e.g. Jembe. They will be milked twice a day in order to serve
Financial plan
The amount needed as start up capital ksh 900,000, the purpose is buying the the five
dairy cows, salary for employees, facilities adn tools, rawa materials e.g. dairy feeds and
other expenses liek transport cost, telephone i.e. overheads cost. The above amount will
be obtained from personal savings, relatives and parents, expected profit is 45% of total
investment.
CHAPTER TWO
The business will engage in milk production and i will be the owner of the business i.e. sole
pBerut’srietorship business. The business will be located within Koilot trading centre in Nandi
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county and will be registered under the dairy farming industry. The business will be a start up
The business will be registered under the following name ‘BERUT’S Dairy Farm’ the name was
derived from the owner’s name. The name because of it’s uniquenes, is easy pronounciation or
The business will be located along Eldoret – Nakuru highway Road 2kms from the trading
center at Koilot location Nandi county. I chose this location because of the accessibility of good
communication networks.
P.O. BOX 39
KOILOT
TEL: NO0714695514
The reason of choosing this loction also is because of good infrustructure and customers
availability.
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Petrol station
Koilot town
The form of ownership will be a start-up sole pBerut’srietorship type of busines, after i pursue
my Diploma course in Land survey in november , 2016. I intend to start-up in Jan 2019
Start-up business skills will determine efforts towards the business success.
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2.4 Type of business
The Berut’s business is a sole pBerut’srietorship where I will be the owner. the business. And
2.5 Products/Service
The business will specialize mostly on production of fresh milk for the first three years then
Currently the products ae not readily available but it is intended to produce products which will
This involves my personnal factor, abilities to come up withe a business idea, gather the
necessary resources and proceed to initiate teh business. I have come up with business ideas
which will raise the standards of living. Also my personal interest to start-up the business will
lead towards the success of my business. As well the good health will facilitate the technical,
entrepreneural and managerial skills, in addition, my personnal experience in like to the business
2.7 Industry
The business belongs to Farming Industry and it is found to be a medium size operation, in the
area it provides products in fairly large scale due to the man-power employed and profits are
promising: it increases as time goes. Previous years the industry is increasing making maximum
profit from its products due to increase in population and quality products gives on developing.
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2.7.1 Industry trends
The industry is expanding and the owner intends to icrease capital to 1,500,000 from the profit
obtained after the first five years in operation if this industry is well supported adn carefully put
into consideration by parent body it will make a concrete industry. The business history tells that
in the few yeas bakc, there was a dairy farm in that community and it collapsed after a short
operation due to a insecurity, mismanagement, which is currently by now securing in the are,
The industry has high demand inside and as well outside the district. It is speciafically
Enough capital will help meet all the business requirments for business to run
Generally the industry have to expand and establish itself fully. It will be improved where it
rapidly increasing and the business will as well become decentralized so as to serve both
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2.8 Goals of the business
The goals of my business are divided into tow categories, short and logn term goals.
Under long term goals the following shall have been attained at the fifth year of operation.
Maximize its profit to tune of 100% and capital increased over 1.5 million shilling
Under short-term goasl I intend to cal for holiday workshop where some officers from
teh distict are to attend e.g. agricultural officer, Nandi District and is goidn to discuss
My business intends to offer quality services to customers, the staff ae offered free training on
how to have good public relations with customers. Tis customers will be retained by offering
them incentives, special discount, credit facilities to few honest. The business is well stable in
terms of finances. The gathered capital is enough to run teh business. Products will have market
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packaging staffing system
Production -Modern technology -Facilities are -Regular -High cost of
staff enhance
efficiency
Finance -Ready capital -Limited -quick decision -Embelzzlements
profits
Environmen -Good infrustructure -Rural urban -Accessibility -Electricity black
climate
The information about venturing into the business will be advertsied through signports place at
Koilot Juntion and a poster place at chebarbar trading center. Newspapers and radio since the
business is believed to run smoothly. Agricultural officers from the district and workers who are
my customers are invited to attend on opening ceremony in the farm special offers to be offered
to every invited guest each shall have a cup of fresh milk and customers are given take away
Some of these invited guest will be agrricultual officers from outside the district and as well
district officers. I expect them to open it officially and legalize the business as well as address the
people on imprortance of agricultur in general. Special documents are only given to those
customers who make a purchase of more than tow litres daily it will last for the fast one month.
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2.9.2 Growth strategy
From the swot analysis it will experience stable financial support from the investment already
made. Favourable conducive environment for dairy farming and good infrustucture. Since the
starting capital was from my own savings the land given by my parents. Market and demand of
these products are existing because of increase in population leading to high consumption rate of
milk. Form one above observation i will expand the business by increasing number of dairy
cows, by intending to receive loans from bank. As well improve on production of milk e.g.
adding processing units of milk by purchasing advanced machines for processing improve on
facilities. From these observations i declare the business will be a profit gnerating business.
CHAPTER THREE
Marketing plan is a service of systematic activities aimed and providing goods and services in
3.1 Customers
My customers vary considerable,y, some of them buy for consupmtion purposes, others buy in
wholesale prices which they will transport to distant customers. My potential customers are the
two high schools. Koilot Boys Secondary schools marcle school, residents of Koilot centre and
Koilot trading centre. They are located within the business premises a distance 4-5km from the
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- the general income is low, middle class: this does not matter so mcu because even the prcice of
- The age doesn’t matter provided that the customers are able.
- Most of them are christians hence they are trusted towards my business.
The followign are some of those factors tht influence customers to prefer on any busienss
products:-
- Affordable prices
The market share for my business will capture a total of 60% under the total industry size.
These shares will come out of the quality produts, improved serivices because of qualified
The business intends to cover areas like Koilot and Serrem trading centre.
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The market share is represented as in the following pie-chart under industry size i.e.
90
80
70
Berut's
60 dairies
50
40 wanga
30
20 homeland
10
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
100
100
3.3 Competitors
My competitors are like Homeland and Wanga dairy firms, they are situated of 10mk away from
Their prices are relatively hgh compared to mine although they operate in long hours like mine
but they don’t co-ordinate well to customers. Although my products are in small scale i normally
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even sell at a credit to trusted customers. My busines has good reputations, employees are trained
free.
3.1.2 Location
Location of my business is along the highway unlike of the competitors inside the village, thus it
is not accessible. This highway is not busy daily hence no traffic jam hence easy movemen of
customers.
Due to quality products offered by my business has captured customers in the neigphouring
schools and trading centres and this will limit the competitors from getting ready market for tier
3.3.4 Premises
My business premises is not big enough tha can withstand a large population of Koilot and
silibwet town. Therefore,I intend to increase the production by increasing the number of dairy
cows, expand the four hectares of shamba, this is earning a loan after a 5th year of operation. The
premise is permently owned and accessible by means of transport this will enable my customers
them and builds imgage of the business. Means of advertising are both printed and word spoken
since teh population is general. This advertisement will cost 200 kenya Shillings twice a year.
The conteents of this advertisements include: the name of the business. Location and products
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available for sale. These advertisemnt willtaget students and teachers of Tenwek and Bungoma
Some of the distinctive features intending to come up withe are sweats made from milk products,
powdered mill. The size and shape will be designed as well as the quality of the products, which
The business will intend to offer cash discount to prominent customers. Also improve on suitable
equipment for milk processing, pricing of these products will be highly considered and has to be
Pricing strategy of my business will depend on economic growth. When itis high the price of my
products becomes slow and vice versa i.e price will increase followign inflation gigures at theat
time.
The products will be made available to custoemrs thoguhout by selling directly to nearby
custoemr sand use of salsmen to distant custoers by use of firms business van. Also can use
wholesalers to sell teh prdocts who are located outside the town , because can have big orders
Credit facilites are only offered to most known and trusted customers, paying depenss on quality
or products price for credit fell is a bit higher than actual price hence this will discourage frequtn
creditors. These credit facilties is only offered by sales maanger only with a permission
authorites.
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Qualities of sales people are:-
Good health
I will transport my products to customers or market place where customers can buy through the
following methods:-
Sale to wholesalers.
I have choosen above channels because its expenses is not costly and its benefits much.
Ready available
Due to its reliability i.e they are daily bread to my business hence promotes expansion.
Although it has benefited me also there were some problems affecting the growth, these are:-
Inadequate means i.e business owns one business van which will not be possible to make
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CHAPTER FOUR
A well managed and organized business will make effective and efficient goals. The following
Assistant manager
The key personnel involved in BERUT’S Dairy Farm is as illustrated by the structure above.
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4.2.1. General Manager
Since the business is owned by the owner then I will be the manager and my duties will be: to
ensure that teh business is running on smoothly. i.e. making decisions, co-ordinate all activities
in the firm, recruit and remunerate new employees and settle any difference, e.g. either emergin
Engineering.
Qualification
Qualifications:
iv) Pulic relation withe potential customers and entire environment by having good
language
Qualification
iv) Trustworthy
ii) Ensure products are in good condition and reach customer on time
Qualifications
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i) 22 years and above
Others include:-
Security men
Qualifcations
iv) Report to top managment on any changes in the farm e.g. sick cow
Qualification
ii) Hardworking
Driver
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Duties and responsibilities
ii) Transporting farm input from the market e.g. animal feeds
Qualifcation
In any given organization personnel is considered as a key factor because it will facilitated an
organization to atttain its goals BERUT’S Dairy Farm is not left behind hadwaroking employees
are being motivated e.e. their salaries raised, offering them gifts as well as allow them to have a
short leave.
Through advertisment new employees are recruited, they are interviewed, those who qualify are
to be trained and orientation is made to them to make them familiar withe teh farm.
incentives which will be based on both monetary and non-monetery i.e. hardworking employees
will be gvein advanced salaries, overtime payment given, some milk to take away and also allow
to have 10.00 o’clock tea. Also given chances to express their grievances and social facilties liek
darts, pool to refresh themselves after work. They are even allowed to have retirement benefits.
In this case my business will obrain the license from Bungoma County. Before issued with any
business shoud meet legal requirements i.e. will be considered under production of agricultural
products. If in any case such legal requirements are not well observed the busines will be closed
For efficeint and smooth running of BERUT’S Dairy Farm, will acquire various supporting
advisors adn services from other firms, the following are some of them:-
This will enable he farm to communicate to th e customers. It is through telephone and mobile
phones.
4.6.1 Insurance
My business will be insured against risks, for this case it will obtaine insurance cover from UAB
Insurance Company at BUNGOMA town. Other services will include power supply, water
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4.6.3 Legal assitance or servies
BERUT’S will get assitance from Kigen Advocates, NDANAI house. They will assist the
busines incase of any legal proceedings, signing of contracts. In addition, for health services i.e
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CHAPTER FIVE
BERUT’S Dairy Farm like any other busienss needs some operatios, this involves processing
The table below shows by summary on some of the facilities to star and run the business.
permits
Land Donation -
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5.2 Production/operaional strategy
I being the manager of BERUT’S Dairy Farm, will ensure that the production is increasing in the
farm by offfering quality services, cows being well managed, maintain the employees personnel
by paying prompmly salary and allowances also improve on equipment and toools for
processing. In five years time my production goals willinclude some of the follwoign:-
- Improve the already existingh products output is more than the input to make my
busienss pBerut’sorious
This concerns withe the proxcedure to be followed when processing materials to finance
products. In any field such steps must be undertaken as in this case the folowing is the procedure
This involves expenses needed to pay those who are invoved in the prodution process as it is
Particulars Cost
Manager 51000
Overheads 73000
Raw materials 43000
Total cost of production 167,000
Labour cost
Secretary 5000
This is the amount required for the management of the business and other expenditures that is
Overheads Amount
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5.5 Regulationss affecting operations
Health regulations must be observed in every environment by all people. I will ensure that good
health is observed by all personnel within the busines premises, this should be observed epecially
in the daiy shed. I will purchase gloves and gumboots, deworming drugs, spary for cleanig the
My business will establish a building to carry out its managment work and also storage purposes.
I will ensure that they are well set such that it has some managers offices, processing unit, dairy
cows milking shed and resting place. A watchman will b e emmployed to keep security. These
building will be organized insuch a manner tha a good hygiene should be observed always. It
will be surrounded with a strong fence and have one locakbel main gate. In addition, this
building will be ensured that all are inside the farm and guarded alwasy.
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CHAPTER SIX
This section of the business will telll whether it’s making profit or loss. It’s a too,l, which iused
These are the expenses or cost incurred before the start-up of the business operation BERUT’S
Item Costs(ksh)
Building 120000
equipment 85000
Advertisement 4000
Licenses 11000
Transport 43000
Electricity networking
Total 500000
Assets Liabilities
Current assets Owners equity 850,000
Fixed assets
Building 120,000
Vehicle 200,000
Furniture 30,000
assets Liabilities
Opening balance 579,100 Ownersh equity 438,100
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Cash at hand 79,100 Add net profit 177,500
Fixed assets
Buildings 120,0000
Vehicle 200,000
Furniture 30,000
365,500
36,500
Total 616,600
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PARTICULARS JAN FEB. MARCH APRIL MAY JUNE JULY AUGUST SEPT OCT NOV DEC TOTALS
Cash inflow SH SH SH SH SH SH SH SH SH SH SH SH SH
Beginning cash 100000 30910 17215 6615 4910 20310 54585 66985 82607 95757 121382 170632 724248
Sales - - 80000 84000 88000 92000 96000 100000 104000 108000 112000 116000 980000
Debtors 10000 10000
Bank loan 100000 100000
Total cash inflow 200000 30910 62785 77385 92910 122310 150585 166985 186607 203757 233382 286632 1814248
Cash outflow 103440
Pre – operation 103440 103440
Purchases 2000 21000 22000 23000 24000 25000 26000 28000 29000 29000 245000
Rent 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
Salaries 23000 23000 23000 23000 23000 23000 23000 23000 23000 23000 23000 23000 276000
License and permits 1500 1500
Loan payment 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 100000
Interest on loan 1250 1125 1000 875 750 625 500 375 250 125 6875
Electricity 600 500 550 400 600 500 400 303 200 450 500 600 5603
Water 300 300 350 200 250 300 200 200 400 300 250 250 3300
Security 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 48000
Insurance 12000 12000
Advertisement 4000 3000 4000 2000 13000
Postage 500 200 300 500 500 2000
Telephone 2000 2000 1000 3000 2000 2000 2500 3500 3000 2000 1000 1500 25500
Creditors 5000 5000 12000 12000 10000 10000 62000
Renovation 6000 6000 8000 3000 2000
Miscellaneous 2000 2000 2500 3000 2000 2000 3000 4000 2000 10000 4000 14000 43500
Total out flow 169090 48125 69400 72475 72600 67725 83600 84378 90850 8000 62750 88450 991718
Total cash 30910 17215 6615 4910 20310 54585 66985 82607 95757 121382 170632 198282 822530
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Debtors
Total cash inflow 318382 351982 407382 471182 532132 591432 640582 701882 769782 834932 892682 970382 7485634
Cash outflow
Purchases 30000 31000 32000 33000 34000 35000 36000 37000 38000 39000 40000 41000 426000
Rent 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Salaries 25000 25000 25000 25000 25000 25000 25000 25000 25000 25000 25000 25000 300000
License 1500 1500
Electricity 600 500 550 400 600 500 400 303 200 450 500 600 7400
Water 400 300 500 550 400 450 500 300 350 250 400 400 4800
Security 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 5000 60000
Insurance 12000 12000
Advertisement 4500 3500 4000 3000 15000
Postage 600 200 200 500 500 500 2500
Telephone 3000 2000 1000 2000 2500 3500 3000 2500 2500 1500 2000 2500 25500
Creditors 5000 5000 12000 12000 10000 10000 69000
Renovation 8000 8000 5000 2000 23000
Miscellaneous 10000 2000 1000 1000 5000 2000 3000 1000 2500 2500 3000 4000 39000
Total out flow 90300 72600 68200 75050 80700 94850 96700 82100 86850 92250 79300 115300 1024200
Total cash 227982 279382 339182 396132 451432 496582 553882 619782 682932 742682 816382 855082 6461134
6.3.3 PROJECTED CASH FLOW FOR HONEY DROPS FARM FOR THE YEAR 2021
PARTICULARS JAN FEB. MARCH APRIL MAY JUNE JULY AUGUST SEPT OCT NOV DEC TOTALS
Cash inflow SH SH SH SH SH SH SH SH SH SH SH SH SH
Beginning cash 855082 889882 942332 1005832 1061032 1114782 117182 1241932 1307582 1350932 1415732 1416932 13822234
Sales 150000 151000 152000 154000 155000 156000 158000 160000 162000 164000 165000 166000 1893000
Debtors
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Total cash inflow 10005082 1040882 1094332 1159832 1216032 1270782 1332182 1401932 1469582 1514932 1580732 1628932 15715234
Cash outflow
Purchases 40000 41000 42000 43000 44000 45000 46000 47000 48000 50000 52000 54000 552000
Rent 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 48000
Salaries 30000 30000 30000 30000 30000 30000 30000 30000 30000 30000 30000 30000 360000
License 1500 1500
Electricity 1000 1500 2000 900 800 1000 950 750 1000 1500 1000 950 13350
Water 500 550 500 400 450 200 300 100 150 200 300 450 4100
Security 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 6000 72000
Insurance 12000 12000
Advertisement 4500 5000 5000 4000 23500
Postage 700 500 - - 500 500 500 3100
Telephone 3500 2000 1000 3000 2500 1000 2000 3000 2000 4000 1000 3000 28000
Creditors - 5000 5000 - - 10000 - - 10000 - 15000 18000 58000
Renovation 1000 - - 10000 - - - 10000 - 5000 6000 43000
Miscellaneous 15000 3000 1000 1000 2000 5000 1000 3000 2500 3500 3000 5000 46000
Total out flow 115200 98550 68200 88500 98800 101250 90250 94350 118650 99200 117800 145400 1264550
Total cash 889882 942332 339182 1005832 1061032 1114782 1241932 1307582 1350932 1415732 1462932 1483532 14450684
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6.6. Calculating of break-even points
Licenses 8,000
Insurance 2,000
Advertisement 4,000
Electricity 16,200
Telephone 612,000
Salaries 2,100
Miscellaneous 2,100
Water 9,500
Total 796,600
Step 2:
Separating variables
i) Variable expenses
Items Cost
Electricity 16,200
Telephone 13,300
129,000 9,500
Water 2,100
Miscellaneous
Total 170,100
Insurace 2,000
Advertisement 4,000
Salaries 612,000
Total 626,000
Step 3
1,590,100
Step 4
89.3 / 626,000
100
1,590,100
= 177,500
1,590,000
= 1:0.1
Total Assets
= 177,500
850,000
= 1:0.2
The owner of the business should indicate the source of the pBerut’sosed capitalization.
Source Amount
Personal savings 300,000
CHAPTER SEVEN
The following are some of the problems face in the business operation:-
a) Competition
Due to improved technology and improved standard of learning many people lose
employement. Then they resort to start business to earn profit that enhance living
standard, some of thes business include: Dairy farming. It this occurs i will be forced to
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reduce on my productivity so tha canhave market as well reduce price to attract more
b) Disease outbreak
A certain disease might break in the area e.g. tsetse fly outbreak, this can either kill the
c) Insecurity
In this area security isnot 100% although i will ensure thatthe farm will be well guarded
but it will not be enoug. Raiders from neighbouring community like Pokot, ?Tugen migh
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