JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND

TECHNOLOGY

COURSE NAME : PUBIC MANAGEMENT AND DEVELOPMENT

UNIT NAME : ENTREPRENURESHIP

UNIT CODE : HRD 2401

JEAN SOLOMON REG N.O

RON MURETHI REG N.O

MOURINE REG N.O

DAN MOKUA REG N.O

ANTHONY ADHIAMBO REG N.O

WAMBUA JOSEPH REG N.O HDC 223-0380/2018

TASK BUSINES PLAN

BUSINESS NAME : VINTAGE VARIETIES WHOLESELLERS

BUSINESS LOGO : v
i
DECLARATION
We declare that this is our original work and it has never been submitted to any examination
body for award of certificate.

ii
DEDICATION
We dedicated this business plan to our lovely parents; we also extend our dedication to our
classmates, brother and sisters.

May the Almighty God bless you all

iii
 ACKNOWLEDGEMENT
We wish to express our heartfelt gratitude and our valued support to all those who participated
to seeing the completion and compiling of this work

To our parents especially for their unconditional and unlimited moral, social and financial
support that we needed the most of your effort only God can reward.

To our classmates,we do also salute them for their effort and cooperation .

iv
 Table of Contents
DECLARATION......................................................................................................................................i
DEDICATION.........................................................................................................................................ii
ACKNOWLEDGEMENT.............................................................................................................................iii
EXECUTIVE SUMMARY.............................................................................................................................vi
1.0 BUSINESS DESCRIPTION..............................................................................................................1
1.1 BACKGROUND OF THE OWNER..............................................................................................1
1.2BUSINESS NAME.........................................................................................................................1
1.3BUSINESS LOCATION AND ADDRESS....................................................................................1
1.3.1MAP.........................................................................................................................................2
1.4 FORM OF OWNERSHIP..............................................................................................................2
1.4.1ADVANTAGES OF SOLE PROPRIETORSHIP....................................................................2
1.4.2DISDAVANTAGES OF SOLE PROPRIETORSHIP..............................................................3
1.5 TYPE OF BUSINESS....................................................................................................................3
1.6 SERVICES AND PRODUCT........................................................................................................3
1.7 JUSTIFICATION OF OPPORTUNITY.........................................................................................3
1.8 INDUSTRY....................................................................................................................................3
1.9 GOALS OF BUSINESS/OBJECTIVE...........................................................................................3
1.9.1 GOALS...................................................................................................................................3
1.9.2 OBJECTIVES.........................................................................................................................3
1.10 ENTRY AND GROWTH STRATEGY.......................................................................................4
1.10.1 ENTRY STRATEGY............................................................................................................4
1.10.2 GROWTH STRATEGY............................................................................................................4
CHAPTER TWO.....................................................................................................................................4
2.0 MARKETING PLAN.........................................................................................................................4
2.1 CUSTOMER..................................................................................................................................4
2.2 MARKET SHARE/SIZE................................................................................................................4
2.3 COMPETITION.............................................................................................................................5
2.4 METHOD OF PROMOTION AND ADVERTISEMENT.............................................................5
2.5 PRICING STRATEGY..................................................................................................................5
2.6 SALES TACTICS..........................................................................................................................6
2.9 DISTRIBUTION STRATEGY......................................................................................................6
CHAPTER THREE..................................................................................................................................7
3.0 ORGANIZATION AND MANAGEMENT PLAN...........................................................................7

v
 3.1 MANAGEMENT TEAM...............................................................................................................7
3.2 OTHER PERSONEL......................................................................................................................8
3.3 RECRUITMENT,TRAINING AND PROMOTION...................................................................8
3.3.1RECRUITMENT......................................................................................................................8
3.3.2 TRAINING..............................................................................................................................8
3.3.3 PROMOTION........................................................................................................................8
3.4 ENUMERATION AND INCENTIVES.........................................................................................8
3.5 LICENCES, PERMIT AND BY-LAWS........................................................................................9
3.4.1 LICENCES..............................................................................................................................9
3.4.2 PERMIT..................................................................................................................................9
3.4.3 BY-LAWS...............................................................................................................................9
3.6 SUPPORT SERVICES...................................................................................................................9
CHAPTER FOUR..................................................................................................................................11
4.0 PRODUCTION PLAN.....................................................................................................................11
4.1 PRODUCTION FACILITY AND CAPACITY...........................................................................11
FIRM LAYOUT.....................................................................................................................................12
4.2 PRODUCTION STRATEGY.......................................................................................................13
4.3 PRODUCTION PROCESS..........................................................................................................14
ITEMS SELLING PRICE IS AS FOLLOWS...................................................................................14
4.4 PRODUCTION AFFECTING OPERATION..............................................................................14
4.4.1 HEALTHY REGULATIONS................................................................................................14
4.4.2 SAFETY................................................................................................................................14
4.4.3 ENVIRONMENTAL REGULATION..................................................................................15
CHAPTER FIVE....................................................................................................................................16
5.0 FINANCIAL PLAN.........................................................................................................................16
5.1 PRE-OPERATIONAL COSTS....................................................................................................16
5.2 PRO-FORMA BALANCE SHEET..............................................................................................17
5.3 WORKING CAPITAL.................................................................................................................19
5.4 CASH FLOW PROJECTION FOR THE YEAR 2023.................................................................20
5.5 PROFORMA INCOME STATEMENT.......................................................................................21
5.6 BREAK EVEN ANALYSIS........................................................................................................21
VARIABLE COST FOR THE YEAR 2023.......................................................................................22
5.6.1TOTAL CONTRIBUTION=SALES- VARIABLE COST.....................................................22
5.6.2SALES RATIO=CONTRIBUTION/SELLING PRICE*100.................................................23

vi
 5.7 DESIRED FINANCING..............................................................................................................23
5.8 CAPITALIZATION.....................................................................................................................23
5.9 PROFIT RATIO...........................................................................................................................24

EXECUTIVE SUMMARY
CHAPTER ONE

This chapter implies description of the proposed main business. It describes the background of
the owner such as age, name, address and status of the owner. It also proposed name of the
business, the location address of the business. The form of ownership is a sole proprietorship,
type of business, products and services depending on the type of business, justification of the
business such as why you choose the business, industry under the business proposed and goals
and objectives of the business also the growth and entry strategy.

CHAPTER TWO

In chapter two, it describes the market plan and type of customers who will be buying your
services and products. The market share or size will also be required and the rage of the
competition of the business. There will be methods of promotion and advertisement which will
be ether print media or posters. The pricing strategy, sales tactics and distribution strategy of
services or products are also found here.

CHAPTER THREE

This implies the organization and management plan of the proposed business. There will be
management team which implies management members’ team description such as their duties
and responsibilities, qualifications and work experience of each member, purchasing manager
and other personnel of the business management. Also the recruitment training and promotion,
remuneration and incentives to motivate and retain the employees’ .also the licenses, permits
and bylaws will be offered by the government to legalize the business. Lastly there will be
support services to enable the business to carry out the operation effectively.

vii
CHAPTER FOUR

In this chapter it deals with production or operation plan. This implies production facilities and
capacity as it is meant to the type of equipment required and their maintenance and repair and
also firm layout .There will be production strategy, production process which implies the
method of production and stages of production respectively. There is production affecting
operations which explains the health regulations, safety and environmental regulation
respectively.

CHAPTER FIVE

This implies the financial plan of the business. This includes pre-operational costs, proforma
balance sheets, working capital, break even analysis, desired financing, capitalization,
profitability ratios and the risk management which will be social and political risks of the
business plan documentation.

viii
CHAPTER ONE

1.0 BUSINESS DESCRIPTION

1.1 BACKGROUND OF THE OWNER
Our name are Jean ,Mokua, Zeanat,Mourine,Wambua,Adhiambo and Ron. We are students
pursuing Bachelors of science in Public management and development in Jomo Kenyatta
University of Agriculture and Technology.

1.2BUSINESS NAME
The name of our business will be VINTAGE VARIETIES WHOLESALERS. We choose
that particular name because it contains our long term goals of selling a variety of household
products.

BUSINESS LOGO v
1.3BUSINESS LOCATION AND ADDRESS
Our business will be located in MAKONGENI at kamau building ground floor room no. 1
opposite shell petrol station
VINTAGE VARIETIES WHOLESALERS
P.O.BOX 68 THIKA
TELEPHONE: 0720588429
EMAIL : vintagewholesellers@gmail.com
WEBSITE : www.vintagevarieties.com

1
 1.3.1MAP

MAKONGENI VINTAGE
VARIETIES

EQUITY/KCB
BANK

GARISSA ROAD FROM NAIROBI

SHELL PETROL
STATION FROM

THIKA

1.4 FORM OF OWNERSHIP

The form of business will be partnership , we prefer this type of ownership because we will
exploit our creativity in the business and the benefit it comes with.

1.4.1 ADVANTAGES OF PARTNERSHIP

 We are the boss
 We keep split both profit and loss among us
 Establishment and operating our business is simple
 It has room for expansion
 We share the cost of starting the business

2
1.5 TYPE OF BUSINESS
This is a start-up business and some of the products we will be selling include mattresses’,
pillows and kenpoly chairs.

1.6 SERVICES AND PRODUCT

One of the services our business will offer is free delivery of products .We will ensure that
there is safe delivery of goods to their locations. We will also ensure timely delivery and
ensure our customers never lack. When clients and customers visit our business their views and
opinions will be valid and followed. The business will open from Monday- Saturday from
8:00am – 5:00pm.

1.7 JUSTIFICATION OF OPPORTUNITY

We choose this kind of business after learning what people lack and needs and also the niche in
the market especially in mid-level town like MAKONGENI where most people reside and new
houses are being constructed thus increase in population.

1.8 INDUSTRY
Our business fall under Consumer Industry, there about 3000 companies in Consumer Industry
in Kenya. The Consumer Industry is rapidly growing due to increase in population and
improvement in people standards of living.

1.9 GOALS OF BUSINESS/OBJECTIVE

1.9.1 GOALS
As business expands we will be selling most of the household goods and products thus become
a leading wholesaler in our ward.

1.9.2 OBJECTIVES
To increase profit, minimize cost and be able to meet at least ¾ of our customer needs.

3
1.10 ENTRY AND GROWTH STRATEGY

1.10.1 ENTRY STRATEGY

By offering free delivery many customers will be attracted because most of our competitors do
not offer this service thus an advantage to our business, we will lower prices so that they can be
affordable unlike our competitors who exploit customers.

1.10.2 GROWTH STRATEGY

After starting the business we will introduce cosmetics which will attract ladies and so increase
in demand of more goods .We will also do some advertisement around town so as to attract
more customers.

4
 CHAPTER TWO

2.0 MARKETING PLAN

2.1 CUSTOMER
Our business will mostly cater for individual, families, schools and churches. It will be located
near residential areas where most of our potential customers will come from. There are about 2
similar business around where our business will be located and since they all exploit customers
we will offer services and sell at cheaper/affordable price.

2.2 MARKET SHARE/SIZE

Business around the area are not doing so well because they don’t offer free delivery of items
one of the services we are willing to offer in our business.

Before we penetrated the market

AFYA BORA JAMBO

WHOLESALERS WHOLESALERS

Sales per month Ksh 750,000 Ksh 500,000

Percentage 30% 20%

After penetrating the market

AYFA BORA JAMBO VINTAGE

WHOLESALER WHOLESALER VARIETIES
WHOLESALERS

Sales per Ksh 750000 Ksh 500000 Ksh 625000

month

Percentage 30% 20% 25%

5
2.3 COMPETITION
Our competitors don’t offer a stiff competition because of two major reasons. First, they do not
offer free delivery which is required by most customers thus giving us an advantage over them.
Secondly their business location is away from the main road making it hard to locate them,
unlike our business which is located along the main road.

2.4 METHOD OF PROMOTION AND ADVERTISEMENT

Advertising our business may not cost me a lot because we will use a sales representative to
advertise this is because he/she can be able to penetrate to schools, churches and other
institutions of potential customers. Our business will offer services at a cheaper cost compared
to others. We will also give calendars and posters to advertise our business.

2.5 PRICING STRATEGY

The selling price of the products provided in our business will be in consideration of our
potential customer i.e. the price of services will be that they can afford. We will be offering
discounts when individuals or an institution or organization purchase many products e.g. for
every 10 kenpoly chairs bought they will get 1 free.

2.6 SALES TACTICS

We will be carrying out direct and personal selling so that we can be able to receive the
customer complaints and appreciates them personally in order to be able to understand them
more and also improve our business. When products are ordered in large quantity we will be
able to offer discounts which will attract more customers.

2.9 DISTRIBUTION STRATEGY

Our business will require a distribution strategy. We will hire a vehicle which be distributing
products ordered at free to our customers. This will attract more customers thus an advantage
to the business.

6
 CHAPTER THREE

3.0 ORGANIZATION AND MANAGEMENT PLAN

3.1 MANAGEMENT TEAM
MANAGING DIRECTOR

DUTIES

 Overall supervisor in charge of ensuring that the business is running smoothly

 In charge of ensuring that the business assets are well maintained
 Staffing
 offering help to customers in case they need assistance

QUALIFICATIONS

 he/she have at least a diploma in business administration or any other related

course
 he/she must be an honest person
 he/she must be able to work with minimum supervision or no supervision

EXPERIENCE

 Should have at least 2 years of experience

 Having worked in the same field.

ASSISTANT MANAGING DIRECTOR

DUTIES

 Perform all duties performed by the managing director in-case absent.

QUALIFICATION

 he/she must have at least a diploma in business management

 he/she should have at least 1 year experience in same field

7
3.2 OTHER PERSONEL

TITLE NO QUALIFICATION DUTIES

I. ACCOUNTANT 1 CPA 2 Financial controller

II. IT MANAGER 1 Diploma in ICT Manage system

III. SALES REP 1 Diploma in sales and Marketing and advertising the
marketing business

IV. SECURITY 1 Certificate in security Safeguarding business property

management

V. CLEANER 1 KCSE CERTIFICATE Maintain tidiness

VI. LOADER 2 KCSE CERTIFICATE Load and offload items

3.3 RECRUITMENT,TRAINING AND PROMOTION

3.3.1RECRUITMENT
Our management team will be recruited through poaching, this will ensure we have employees
who are experienced and conversant with the market.

3.3.2 TRAINING
Induction training will be given to newly employed staff and also for those who are promoted,
this will add and improve on employees skills in attending the business.

3.3.3 PROMOTION
The personnel will be promoted in basis of merit and performance, this will motivate workers
to work harder for their own welfare.

3.4 ENUMERATION AND INCENTIVES

TITLE NO. MONTHLY ALLOWANCE/BENEFITS TOTAL
WAGES

MANAGING 1 35,000 10,000 45,000

8
 DIRECTOR

ASSISTANT 1 30,000 5,000 35,000

MANAGING
DIRECTOR

IT EXPERT 1 30,000 5,000 35,000

ACCOUNTANT 1 32,000 5,000 37,000

SALES REP 1 25,000 4,000 29,000

SECURITY 1 15,000 3,000 18,000

GUARD

CLEANER 1 13,000 2,000 15,000

LOADER 2 @16,000 @3000 38,000

Monthly salary increment will be as per employee’s performance.

3.5 LICENCES, PERMIT AND BY-LAWS

3.4.1 LICENCES
We will get a county government licence for our business which will cost us ksh20, 000 per
annum.

3.4.2 PERMIT
We will get the permit to operate the business from the relevant government bodies.

3.4.3 BY-LAWS
Our business will have to comply with the laws issued by the county government and the
national government which is in interest of the Kenyan citizen.

3.6 SUPPORT SERVICES

The business will require banking services which will be acquired at equity bank, this account
will be a current account for customer deposits.

INSURANCE SERVICES

We will require insurance services for all assets which will be acquired through Britam
insurance. The business will be insured against fire.

9
CONSULTANT SERVICES

No any consultation needed from ministries, advice will be sourced from the suppliers of the
products

LEGAL SERVICES

The business will require an advocate from Muchai Advocates firm, it will offer legal
consultation and advices in need be.

10
CHAPTER FOUR
4.0 PRODUCTION PLAN
4.1 PRODUCTION FACILITY AND CAPACITY

To start the business will require two offices and one spacious store. We will also require
some paints, timbers for making pallets the pallets will be used in store for placing mattresses.
Paints will be used as our favourite colour in business to create a good image. We will require
some furniture, i.e. seven chairs and office desks.

ITEMS QUANTITY COST CAPACITY

OFFICE 2 20,000 5 personnel

STORE 1 20,000 Mattresses, pillows

& kenpoly chairs

PAINTS 1 bucket 5,000 Painting the walls

TIMBERS 20 15,000 Making pallets

FURNITURE(CHAIR) 7 7,000 7 personnel

OFFICE DESK 2 10,000 5 personnel

COMPUTERS 4 100,000 4 personnel

11
For maintenance purpose
We will be the IT Manager where we will maintain all the systems. We will also make sure
that all the computers are kept clean. We will also purchase furniture that are of good quality
for durability. We will also ensure that there is good housekeeping in the store and offices to
avoid unnecessary accidents that may happen and thus lower maintenance cost.

For distribution of products,

We will hire a pick-up which will be delivering products to customers for free, therefore our
future plans will be to purchase our own pick-up which will be doing the same job as the
business expands.

FIRM LAYOUT
DISPATCH BAY

OFFICE

STORE

COMMON OFFICE

12
 WASHROOMS

4.2 PRODUCTION STRATEGY

In the main store products will be dispatched at the dispatch bay. These products will be purchased
from JUNGLE NUT COMPANY. I.e. our suppliers

The security guard will make sure that whatever items leave the premises is accompanied by a delivery
note.

For efficiency our business requires workers who are literate.

All products sold must be posted in the system and accounted for. I.e. mattresses, pillows and chairs.

13
4.3 PRODUCTION PROCESS

ITEMS SELLING PRICE IS AS FOLLOWS

I. HIGH DENSITY 48*6 =ksh3,400

42*6 =ksh3,000

II. MEDIUM 48*6 =ksh2,750

42*6 =2,450
36*6 =2150

III. STANDARD 48*6 =ksh1500

42*6 =ksh1300
36*6 =ksh1100

IV. PILLOW = @ksh100

V. KENPOLY CHAIRS =@485

4.4 PRODUCTION AFFECTING OPERATION

Over taxation/double taxation from the county government and national government

4.4.1 HEALTHY REGULATIONS

All requirements of the public health will be adhered to in handling all the materials in the
business.
Advice will be sort from the government in updating regulations.

4.4.2 SAFETY
We will provide helmet to loaders and dust-masks to prevent injury and dust inhalation

14
4.4.3 ENVIRONMENTAL REGULATION
In order to keep the environment clean, there will be dustbins in every room where any waste
materials can be dumped and then disposed as per the regulations.

15
CHAPTER FIVE
5.0 FINANCIAL PLAN
 Maintain a health liquidity position throughout the trading period
 Maintain return on the owners’ equity e.g 30%
 Realize a steady growth of income throughout the period
 Maintain and control expenses
 Maintain effective accounting system.

FINANCIAL ASSUMPTIONS

 The expenses are expected to be raised e.g. at 5% as the business expands

 Creditors are to be increased at a certain percentage per annum
 Debtors are to increase at a certain percentage per annum
 Net profit is expected to increase at a certain percentage per annum
 Net profit realized will be ploughed back to the business so as to expand the
business.

5.1 PRE-OPERATIONAL COSTS

They include all the expenses the business will incur before commencing

PRE-OPERATIONAL COST OF VINTAGE VARIETIES WHOLESALERS

ITEM AMOUNT(KSH)

Research/travelling 5,000

Designing 37,000

Licence 20,000

Advertisement 20,000

Recruitment 10,000

Professional fee 10,000

Electricity 2,000

Rent deposits 20,000

Equipment 100,000
16
TOTAL 224,000
5.2 PRO-FORMA BALANCE SHEET
VINTAGE VARIETIES WHOLESALERS BALANCE SHEET AS 31ST DECEMBER
2023

ASSETS

FIXED ASSETS AMOUNT(KSH)

Building cost 20,000

Land -

Motor vehicle -

Furniture and fittings 37,000

Less depreciation 10,000

TOTAL 47,000

CURRENT ASSET AMOUNT(KSH)

Stock 400,000

Cash in bank 50,000

Debtors 40,000

Pre-payment 30,000

TOTAL 470,000

CURRENT AMOUNT(KSH)
LIABILITIES

Creditors 70000

Bank overdraft 30,000

TOTAL 100,000

17
18
5.3 WORKING CAPITAL

FINANCED BY----------our parent

WORKING CAPITAL(WC) =CURRENT ASSETS(CA) – CURRENT LIABILITY (CL)

470,000-100,000=370,000

CURRENT ASSET AMOUNT(KSH)

Cash at hand 100,000

CURRENT AMOUNT(KSH)
Cash at bank
LIABILITIES 50,000

Debtors
Creditors 40,000 70000
Stock
Bank overdraft 300000 30,000
TOTAL
TOTAL 490,000 100,000

19
 5.4 CASH FLOW PROJECTION FOR THE YEAR 2023
RECEIPTS JAN FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTAL
Loan 50000 - - - - - - - - - - 50,000
Sales 4,588,750 4,588750 4,558,750 5,014,625 5,014,625 5,470,500 6,382,250 6,838125 7,294,000 7,294,000 7,394,000 7,754,875 71,099,000

Debtors 40,000 40,000 40,000 40,000 45,000 45,000 35,000 25,000 40,000 40,000 30,000 35,000 495,000

Discount
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
received

TOTAL 4,603750 4,603,750 4,603,750 5,059625 5,064,625 5,520,500 6,422,250 6,868,125 7,339,000 7,339000 7,379,000 7,794,875 66,639,375

Payment

purchases 3,775,000 3,775,000 3,775,000 4,247,000 4,247,000 4,656,000 5,422,000 5,820,000 6,208,000 6,208,000 6,233,750 6,584,000 60,085,750
Salaries/
214,000 214,000 214,000 214,000 214,000 214,000 214,000 214,000 214,000 214,000 214,000 214,000 2,568,000
Wages
Creditors 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 480,000

Discount
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
allowed

TOTAL 3,250,500 3,250,500 4,033,000 4,505,000 4,505,000 4,914,000 5,707,000 6,078,000 6,466,000 6,466,000 6,477,750 6,842,000

Cash flow 570750 570750 570750 554625 559625 606500 715250 790125 873000 873000 901250 952875

Balance b/d - 570750 1141500 1198550 1753175 2312800 2919300 3634550 4424675 5297675 6170675 7081925

Balance C/d 570750 1141500 1198550 1753175 2312800 2919300 3634550 4424675 5297675 6170675 7081925 8034800

20
5.5 PROFORMA INCOME STATEMENT

ITEMS Year 1 Year 2 Year 3

Sales 71,099,000 73,000,000 75,000,000

Purchases 60,085,750 61,000,000 62,000,000

Gross profit 11,013,250 12,000,000 13,000,000

EXPENSES

Salaries/wages 2,568,000 2,568,000 2,568,000

Rent 480,000 480,000 480,000

Telephone 17,000 17,000 17,000

Transport 180,000 180,000 180,000

TOTAL 3,245,000 3,245,000 3,245,000

NET PROFIT 7,768,250 8,755,000 9,755,000

BEFORE
TAXATION

NET PROFIT 1,242,920 1,400,800 1,560,800

AFTER
TAXATION

Net profit after taxation (16%)

5.6 BREAK EVEN ANALYSIS

FIXED COST FOR THE YEAR 2023

21
 Item Amount(ksh)

Salary 214,000

Rent 480,000

Licence 240,000

Total 934,000

VARIABLE COST FOR THE YEAR 2023

Item Unit (Ksh)

Electricity 2000

Telephone 17000

Advertisement 20,000

Transport 180,000

Maintenance 30,000

Stationeries 4,000

Equipment 100,000

Furniture 37,000

TOTAL 390,000

Total costs=fixed costs +variable costs

934000+390000=1,324,000

5.6.1TOTAL CONTRIBUTION=SALES- VARIABLE COST

71099000-390000=70709000

B.E.P=FIXED COST/CONTRIBUTION* SELLING PRICE

934000/70709000*100=1.3%

22
5.6.2SALES RATIO=CONTRIBUTION/SELLING PRICE*100

70709000/71099000*100=99.4%
NUMBER OF UNIT FOR TARGET=FIXED COST + TARGET
PROFIT/CONTRIBUTION
934000+1,400,000/70709000=0.033 units

5.7 DESIRED FINANCING

PRE-OPERATIONAL COST + WORKING CAPITAL + FIXED ASSETS

ITEMS AMOUNT(KSH)

Pre-operational cost 224,000

Working capital 370,000

Fixed assets 47,000

TOTAL 641,000

5.8 CAPITALIZATION
ITEM AMOUNT(KSH)

Bank loan 50,000

Savings 100,000

Borrowings 50,000

Family contribution 300,000

Youth fund 70,000

TOTAL 570,000

23
5.9 PROFIT RATIO

GROSS PROFIT (GP)=GP/SALES*100

11013250/71099000*100=15.4%

NET PROFIT =NP/SALES*100

1242920/71099000*100=1.7%

RETURN ON EQUITY= NET PROFIT*100/OWNER EQUITY

OWNER EQUITY=OPENING STOCK +NET PROFIT/DRAWINGS

ASSET TURN OVER=TOTAL SALES/ASSETS

71099000-443000=70,656,000

ASSETS= AMOUNT OF CURRENT ASSET- FIXED ASSET

490,000-47,000=443000

QUICK RATIO=CURRENT ASSETS-CLOSING STOCK/CURRENT LIABILITIES

490000-370000/100000=1.2%

24
LIQUIDITY RATIO=CURRENT ASSET/CURRENT LIABILITIES

490,000/100000=4.9%s

25