BUSINESS PLAN:

INSTITUTION: RIFT VALLEY TECHNICAL TRAINING INSTITUTE

TITLE: HARTZ BATTERY REPAIR AND MAINTAINANCE

PRESENTER:

ADM NO. :

COURSE:

INDEX NO:

DEPARTMENT:

PRESENTED TO:

SUPERVISOR: MRS. CLAIRE

SERIES:

DECLARATION
I do hereby declare that this project is my original work, done with all due Care, devotion and
Commitment and it has never been presented elsewhere or any other examination body, college
or university. Therefore any copyright or reproduction should only be done with my express
permission.

CANDIDATE:

SIGNATURE …………………........

DATE: ……………………………………

SUPERVISOR:

SIGNATURE …………………........

DATE: ……………………………………

DEDICATION
I do dedicate this project to my parents, my brothers, my sisters for their financial and
physiological support in all capacities throughout the course of my studies at Rift valley
Technical Training Institute. Also my teacher for his good guidance throughout the time of
writing this business plan.
Big thanks to all my classmates for their support and consistent encouragement they gave me.

ACKNOWLEDGEMENT
First and foremost, I would like to Thank my almighty God for the strength, protection and
sustenance He has given to me since my admission day, for enabling me to develop my project
successfully. I do also highly appreciate my parents, my brothers and sisters for the different
support they gave me including finance.

To the Rift Valley Technical Training Institute for the provision of the resources and favorable
learning environment. To my lecturers and Department for their Tireless efforts in providing
research material knowledge and practical skills.
Finally, I wish to thank my head of Department for his guidance and advice too. May God bless
you all.

Contents
DECLARATION.........................................................................................................................................ii
DEDICATION...........................................................................................................................................iii
ACKNOWLEDGEMENT..........................................................................................................................iv
1.0 EXECUTIVE SUMMARY....................................................................................................................1
1.2 BUSINESS DESCRIPTION..................................................................................................................1
2.0 MARKETING...................................................................................................................................1
3.0 ORGANIZATION PLAN......................................................................................................................1
4.0 PRODUCTION/OPERATION PLAN...................................................................................................2
5.0 FINANCIAL PLAN..............................................................................................................................2
1.0 BUSINESS DESCRIPTION.......................................................................................................3
1.1 BUSINESS NAME.....................................................................................................................3
 1.2.0 BUSINESS LOCATION AND ADDRESS.................................................................................3
1.3 BUSINESS LOCATION....................................................................................................................3
MAP............................................................................................................................................................4
1.3 FORM OF OWNERSHIP............................................................................................................4
1.4 TYPE OF BUSINESS.................................................................................................................5
1.5 PRODUCT AND SERVICES OFFER.........................................................................................5
1.6 INDUSTRY.................................................................................................................................5
1.7 JUSTIFICATION OF BUSINESS OPPORTUNITY...................................................................5
1.8 GOALS OF THE BUSINESS.......................................................................................................5
1.9 ENTRY AND GROWTH STRATEGY........................................................................................6
CHAPTER TWO.........................................................................................................................................7
2.0.0 MARKET PLAN.....................................................................................................................7
2.1.0 CUSTOMER............................................................................................................................7
2.1.1 INDIVIDUAL CUSTOMERS.................................................................................................7
2.1.2 ORGANIZATION...................................................................................................................7
2.1.3 INSTITUTIONS......................................................................................................................7
2.2.0 MARKET SHARE..................................................................................................................7
2.2.1 MARKET SHARE TABLE.....................................................................................................8
2.3.0 COMPETITIONS....................................................................................................................8
2.3.1 COMPETITIVE STRENGTH AND WEAKNESS..................................................................9
2.4.0 METHOD OF PROMOTION AND ADVERTISING..............................................................9
2.4.1 OFFERING AFTER SALE SERVICES................................................................................10
2.4.2 FREE GIFTS.........................................................................................................................10
2.4.3 PRICE REDUCTION............................................................................................................10
2.4.4 POSTERS..............................................................................................................................10
2.4.5 NEWSPAPERS RADIO AND MAGAZINES.......................................................................10
2.5.0 PRICING STRATEGY..........................................................................................................10
2.5.1 COMPETITIVE PRICING....................................................................................................10
2.5.2 CUSTOMER ORIENTED PRICING METHOD...................................................................11
2.5.3 PSYCHOLOGICAL PRICING CHANGE............................................................................11
2.5.4 OTHER FACTOR THAT FIX PRICES.................................................................................11
2.6.0 SALES TACTICS..................................................................................................................11
2.6.1 OVER THE COUNTER........................................................................................................11
2.6.2 SELF SELECTION................................................................................................................11
 2.6.3 OFFER DISCOUNTS............................................................................................................11
2.6.4 TELEPHONE SELLING.......................................................................................................11
2.6.5 DISTRIBUTION STRATEGY..............................................................................................11
2.7.1 TRANSPORT........................................................................................................................11
2.7.2 STORAGE OF GOODS........................................................................................................12
2.7.3 TIMING STRATEGY............................................................................................................12
CHAPTER THREE...................................................................................................................................13
3.0 ORGANIZATION PLAN..........................................................................................................13
3.1.0 KEY MANAGEMENT PERSONNEL..................................................................................13
3.1.1 BUSINESS MANAGER........................................................................................................13
3.1.2 THE SUPERVISOR...............................................................................................................13
QUALIFICATION OF A SUPERVISOR...........................................................................................14
3.2.0 OTHER PERSONNEL AND DUTIES..................................................................................14
QUALIFICATION OF A CASHIER..............................................................................................14
3.2.1 ORGANISATION STRUCTURE OF MORORCYCLE SPARE SHOP................................15
3.3.0 RECRUITMENT TRAINING AND PROMOTION..............................................................15
3.3.1 TRAINING............................................................................................................................15
3.3.2 PROMOTION........................................................................................................................15
3.4.0 REMUNERATION AND INCENTIVES...............................................................................16
3.5 LICENSE AND PERMITS AND BY LAWS............................................................................17
3.6 SUPPORT SERVICES...............................................................................................................17
CHAPTER FOUR.....................................................................................................................................18
4.0.0 OPERATIONAL/PRODUCTION PLAN..............................................................................18
4.1.0 PRODUCTION FACILITIES AND CAPACITY TABLE.....................................................18
4.1.2 THE ENTERPRISE LAYOUT..............................................................................................18
4.1.3 REPAIR AND MAINTENANCE..........................................................................................19
4.2.0 PRODUCTION STRATEGY.................................................................................................19
4.2.1 PRODUCT DESIGN AND DEVELOPMENT......................................................................19
4.2.2 MONTHLY MATERIAL REQUIREMENT..........................................................................19
4.2.3 MONTHLY LABOUR REQUIREMENT..............................................................................20
4.2.4 MONTHLY PRODUCTION REQUIREMENT (Material and Labour).................................20
4.3.0 PRODUCTION PROCESS/SERVICES................................................................................20
4.4.1 RULES AND REGULATIONS.............................................................................................21
4.4.2 SAFETY REGULATION......................................................................................................21
 4.4.3 ENVIRONMENTAL REQUIREMENT................................................................................21
4.4.4 HEALTH REGULATION......................................................................................................22
4.4.5 FACTORY ACTS..................................................................................................................22
CHAPTER FIVE.......................................................................................................................................23
5.0.FINANCIAL PLAN........................................................................................................................23
5.1.0 PRE-OPERATIONAL COST................................................................................................23
5.2.0 PROPOSED CAPITALISATION.................................................................................................24
5.2.1 TABLE SHOWING THE EXPENSES OF THE ENTERPRISE FOR THE FIRST..............24
5.2.1 TABLE SHOWING THE EXPENSES OF THE ENTERPRISE FOR THE FIRST..............24
5.3 PROFOMA CASH FLOW FOR THE YEAR ONE 2022................................................................25
5.4 PROFOMA CASH FLOW FOR THE YEAR TWO 2023...................................................................26
5.5 PROFOMA CASH FLOW FOR THE YEAR THREE 2024...........................................................27
5.6 QUATERLY INCOME STATEMENT FOR YEAR ONE.........................................................28
5.7 PROFORMA BALANCE SHEET AS AT THE END OF YEAR ONE....................................29
5.8 BREAK-EVEN POINT ANALYSIS...............................................................................................30
5.9 FINANCIAL RATIOS...............................................................................................................31

1.0 EXECUTIVE SUMMARY

1.2 BUSINESS DESCRIPTION

The name of the Business shall be Hartz battery Repair and Maintenance. This is to be located
within Trans Nzioa County at Bamba market. The location was selected since there is good
communication network, transport services and hence large population with ready market. The
location has enough security and it can easily be located.

The nature of the Business shall be sole-proprietor ownership where the owner is self-employed
and has the advantage of easy decision making and non-sharing of profit etc.

The Business is there to offer services such as selling of services like battery repair and
maintenance, different spare parts and Later providing after sales services to all its customers.
The Business shall have both long and short term strategic plans to ensure a smooth and effective
running of the firm.
2.0 MARKETING
The Business shall serve main clients who are individual customers, government institutions and
commercial customers. Like any other Business the firm must brace up for stiff competition and
thus the rivals’ strength and weaknesses has to be critically analyzed as part of the entrance
strategies. The promotion of the Business has to be carried in different ways. This would enable
the market to be aware of the Business existence.

3.0 ORGANIZATION PLAN

The owner shall be the Managing Director of the Business to be assisted by other forces in
running of the firm. The service department operated by Mechanics and represented by the
workshop supervisor shall attend to clients’ queries. The Business shall have an accountant or
cashier to record and keep the daily Business transactions.

The firm shall be secured by a watchman who should ensure that the Business premises are
always secured as all personnel’s would be expected to work purposely towards the achievement
of the firm’s goals.

The recruitment of the staff shall be done through formal interviews upon which successful
candidates shall be employed. The training of employees is done to emphasize on their practical
skills in regard to capacity building.ll

4.0 PRODUCTION/OPERATION PLAN

For effective and efficient running of the firm production and operation facilities has to provide
variety spares for all types of battery.

In order for the Business to operate smoothly repair and maintenance of the premises and
advancing is to be carried out thrice per year. The move shall ensure more reduction on
cumulative and regular maintenance levels.

5.0 FINANCIAL PLAN

Before the set-up of the Business our financial plan shall factor in a pre -operational cost
amounting to Kshs.750,000/=.In this regard, amount referred to as fixed cost of operating the
business normally treated as Estimated working Capital shall also be cover in the tune of
Kshs.3000,000/=.
On the capital source, the firm anticipates to fetch some of its cash from the help of the family
members, relatives and friends. The remaining amount shall be obtained under loan facilities
from willing banks. The net profit after tax for the first year is estimated to be 2,400,000/=.The
firm is expected to break-even at 3,200,000/= of services at a profitable ratio of 159.36 % while
the annual return to hit 66.92 %.

CHAPTER ONE

1.0 BUSINESS DESCRIPTION

1.1 BUSINESS NAME
The proposed Business title is Hartz battery Repair and Maintenance. Since The Proposed
Business Location Is Nilotes Dominated, The Name will capture attention of Them and It is also
easier to read and understand and gives a customer the confidence on the services we offer.

1.2.0 BUSINESS LOCATION AND ADDRESS

The business is to be located in Transnzoia county at Bamba Market - Ganze. The entrepreneur
identified the place in consideration of the rapid growth of the Centre towards becoming a city. It
has good road network connecting other Towns. The location of this place is just next to the Bus
stage, Repair Base, Garages and Town service Cars. This means that the firm would have as
many customers as possible since this the place is always among the busiest in Town where
potential customers can be easily trapped.

The address of the Business shall be taken as;

HARTZ BATTERY REPAIR AND MAINTENANCE

P.O.BOX 494-80108

TRANS NZOIA.

TEL: 0719718710

E-MAIL: kelvincollins263@gmail.com

1.3 BUSINESS LOCATION

The business is located in Trans Nzoia county Bamba town along Bamba Road next to Palani
boda boda stage and Yusmac Productions. The place is strategic due to high numbers of people
who dpend on solar energy which will require saving of the energy in the battery and also
majority of the residents use motor driven vehicles which uses battery and they will eventually
create market for the business. The place is also close to county hospital which will provide a
more wider market for the business.

MAP

1.3 FORM OF OWNERSHIP

The proposed business will operate as a sole proprietorship owned by Kelvin who is the owner
and the Managing Director of the firm under the name of Hartz battery Repair And Maintenance.
The firm shall seek both financial and managerial assistance from the family members and
friends so to avoid inconveniences from the outside world. Although the firm shall hire some
expertise the firm plans to employ some as well in keeping the Business going and growing.

Hartz battery Repair And Maintenance shall be operated by sole-proprietorship. Among other
benefits the owner shall not share profits, make financial decisions without consultations and
again shall have the prerogatives of a boss

1.4 TYPE OF BUSINESS

The Business dealings shall be governed under section of Service Industries. The aim of the firm
is to offer both quick services to clients. The proposed Business is to provide job in tender ship
where it identify our major customers in offering the services at any time they need.

1.5 PRODUCT AND SERVICES OFFER

The proposed firm shall offer quality services especially in incubator repair and maintenance.
Furthermore, the Business shall sell spares.

The firm shall be giving out offers inform of service guarantee i.e. break-down of a component
or failure of the service before the specified expiry period shall be exchanged with replacements
or free service.

1.6 INDUSTRY
The proposed Business is to fall under services industry where incubator repair and maintenance
in general is a key to be observed. The firm is going to operate first as a small industry and later
after gaining popularity and secured a bigger clientele base shall be transformed into a medium
industry and thereafter to a large industry. In moving forward some of the new technologies must
be adopted i.e. dealing with modern technological battery which require high qualified
technicians and some new equipment machines in keeping in step with technological trends. The
proposed firm seeks to bring in new developments in the way of handling battery.

1.7 JUSTIFICATION OF BUSINESS OPPORTUNITY

This Business has high chances of success since in the provision of quality services;
technological battery is often produced with sophisticated parts thus the firm needs competent
personnel to equally face the challenge. The sole trader is capable of managing the business
because of the practical entrepreneurial skills acquires from the college.
1.8 GOALS OF THE BUSINESS
Before starting the Business the owner ought to stick to the aims and objectives of the Business.
Consequently both the long and short term goals of Incubator spare shop are;

SHORT TERM GOALS

• To adopt the new and latest technology in the market to maximize the profit
• To provide quality service and prudent management.
• Winning and keeping the full trust our clients’.
• To create employment opportunities annually.

LONG TERM GOALS

• Opening of more Business branches in new markets areas

• Increasing the number of employees gradually
• Being one of the leading mechanical engineering industry within and beyond the region.
• Attaining I.S.O Certified to be recognized internationally and globally.

1.9 ENTRY AND GROWTH STRATEGY

The hartz battery repair and Maintenance shop have a strategy geared towards making use of a
sign post and poster for advertisements. The move shall market our firm for easy location as well
as the services readily to be accessed by the targeted clients in Town and even beyond.
Additionally the firm shall print handouts and quotations to map out the range of services offered
by the Business which shall be dished out to potential customers all over the Town.

In collecting customers views the firm shall set up suggestion boxes where a client can drop his/
her thoughts regarding our services as this will help us easily notice the firm’s strength and
weaknesses. With the many strategies will have the inclusion of the proprietor in listening and
recording customers’ queries for media adverts purposely to achieve customer satisfaction and
promote the firm’s awareness in terms of the range and quality of our services to be offered.
CHAPTER TWO
2.0.0 MARKET PLAN
The Business intends to meet its customers within itself to gather for the following;

2.1.0 CUSTOMER
The customers are categorized under individual organizations, institutions and certain groups.

2.1.1 INDIVIDUAL CUSTOMERS

They include residents of Trans Nzoia, Bamba especially those that use the battery for personal
use at home.

2.1.2 ORGANIZATION
Many organization are willing to access the services among the targeted area organizations that
tend to use Battery for other purposes. The owner receives order from this Business because of
having good public relation to supply spares to the organization for them to repair the battery.

2.1.3 INSTITUTIONS
The enterprise is provided with both public and private institutions base so to maintain on a
constant service as provided by the institution. This is to be serviced either at the beginning of
the term, midterm or at the end of the term. battery spare shop shall ensure an articulated and
certified work is rendered to the institution and in the end should enhance customer good rapport
and trust.

2.2.0 MARKET SHARE

The proposed Firm shall claim a market share together with other rivals such as Mkamba’s Auto
battery repair shop , Davy's Garage and Hustler investment. In general according to the market
survey done, the firm is confident of locking in up to about 3,700 clients in the market.
2.2.1 MARKET SHARE TABLE

NO. COMPETITORS APPROXIMATE MARKET SHARE %

CUSTOMERS

1 MKAMBA’S AUTO BATTERY 850 22.97

REPAIR SHOP

2 DAVY’S GARAGE 700 18.92

3 HARTZ BATTERY REPAIR 2,150 58.12

AND MAINTENANCE

TOTAL 3,700 100

The above table shows market share of approximately 3,700 clients. The battery spare shop is
achieving the following percentage through adverts and promotion.

In moving forward we shall also be giving away spare parts at acceptable discounts and so to
quickly secure market advantage over our rivals.

2.3.0 COMPETITIONS
As earlier stated the area is a fast growing Town with a high population. This population is
distributed in homes and rental houses with an average of five persons. Therefore the proprietor
expects to share about 3,500 people as those who seek mechanical service and accessories
among them. The competitors are Mkamba’s Auto battery repair shop and Davy’s garage.
According to the research made the rivals analysis table below would appear as shown below

2.3.1 COMPETITIVE STRENGTH AND WEAKNESS

WEAKNESS STRENGTH

HARTZ Location service -New in the field. -Good location and

BATTERY -Lack of enough modern technologies
REPAIR AND experience low
-Good services with
MAINTENANCE reputation.
good incentives
-No credit facilities.
-Quality service and
Promotion and Advertisement
-High prices. products.

DAVY’S Location service -Poor location. -Good location and

GARAGE competitive services.
-No new method and
lack of labor.

-Lack of incentives.

-Poor customers.

Mkamba’s Auto Location service -Poor location and -Four years experience
battery repair well established
of sizeable garage.
shop services.
Promotion and Advertisement -Availability of credit
-Poor method of
facilities.
advertisement.
-Availability of unique
-No variety of
services.
services and
products.

2.4.0 METHOD OF PROMOTION AND ADVERTISING

The proprietor shall create customer awareness through advertisement and promotion.

2.4.1 OFFERING AFTER SALE SERVICES

This shall be given away in terms of free delivery services so to maintain customers.

2.4.2 FREE GIFTS

The proprietor shall lock in customers strategically by giving them free gifts after elapsing of
specific periods like Holidays for esteemed customers. This move is seen to be having good
assurance of broadening customer base as more clients shall be attracted.
2.4.3 PRICE REDUCTION
In the event that more customer gets attracted to our products and services, the firm shall employ
customer-oriented pricing strategy in order to maximize the profits.

2.4.4 POSTERS
The use of posters shall be very effective if placed in conspicuous points where anyone can
easily spot as all other artistic design aspects are put in to consideration such as attractive colors
and the quality of paints.

2.4.5 NEWSPAPERS RADIO AND MAGAZINES

As the business expands the proprietor intends to market the enterprise through the media for
instance the newspaper. The move should create popularity within and beyond the Business
locality. It is another way of advertising as clients’ passes on to their friends and neighbors
concerning reputation of our firm

2.5.0 PRICING STRATEGY

The proprietor shall use a number of strategies in order to win customers.

2.5.1 COMPETITIVE PRICING

The firm Director shall use the method such that if competitor Y and Z sells at a much higher
cost, this way the owner would give out the same at a slightly cheaper cost so to attract a bigger
clientele with affordable services.

2.5.2 CUSTOMER ORIENTED PRICING METHOD

The Business shall endorse the method while focusing on the purchasing power of our clients as
key factor in determining the rate of return on investment.

2.5.3 PSYCHOLOGICAL PRICING CHANGE

This method is capable of surviving the firm in a market environment dictated by a stiff
competition either as direct or indirect rivalry.

2.5.4 OTHER FACTOR THAT FIX PRICES

The proprietor considers the distance, government policy which includes VAT and government
local deduction to fix the price.

2.6.0 SALES TACTICS

The proprietor shall use several tactics in selling products and service to the customers.
2.6.1 OVER THE COUNTER
The owner would sell spare parts directly to the customers.

2.6.2 SELF SELECTION

The owner would provide the space and shelves arranged well according to sizes and prices for
customers’ selection to be easy.

2.6.3 OFFER DISCOUNTS

Quantity discount would be offered to customers who purchase spare parts in large quantities.

2.6.4 TELEPHONE SELLING

The owner uses telephone to receive calls from customers who need certain services that may
need special care without their presence and also to be transported to other places.

2.6.5 DISTRIBUTION STRATEGY

The owner uses several strategies in form of distribution of goods and receiving and the entire
place of business channels of territory would be as follows;

2.7.1 TRANSPORT
The proprietor uses the channel which used the minimal cost for the goods to reach at the
business place and elsewhere the owner would want the goods to pass.

2.7.2 STORAGE OF GOODS

The owner uses the containers and boxes to keep the goods in proper condition and always
intact.

2.7.3 TIMING STRATEGY

The owner is going to channel that minimize time consumption in transport and also cost to be
incurred. The proprietor wished to use the following channel of distribution.
CHAPTER THREE
3.0 ORGANIZATION PLAN
The proprietor would be the manager and the employees are to report to him either directly or
through their immediate seniors. This would be facilitated through direct contact to avoid
misinformation during the undertaking of routine Business activities. One major aim of the firm
shall be to continually improve the employees’ performance all through the Business life term.
The senior manager shall be responsible for the performance of the various units within the firm
since their teamwork shall guarantee the success of the Business.

3.1.0 KEY MANAGEMENT PERSONNEL

Qualification, duties and responsibility of top management team.

3.1.1 BUSINESS MANAGER

• He/she shall be the policy maker and the coordinator of all activities.
• He/she is to apply human, designs, managerial and conceptual skills
• The manager in the proposed Business should be able to apply human skills in handling
workers.
• He/she should demonstrate conceptual skills in recognizing different elements in
 situations likely to embattle the firm.

QUALIFICATION OF BUSINESS MANAGER

• He/she must be a Diploma holder preferably in mechanical engineering.

• He/she should have human, conceptual and design key skills for quality work delivery.

3.1.2 THE SUPERVISOR

The proposed supervisor is to be assigned by the manager and may act on his behalf; He is to
compile and submit report to the manager in regard to employees’ performance. He is also
expected to coordinate the work and report any short-coming to the manager. The proposed
supervisor shall supervise the employees in ensuring that high level of efficiency is achieved.

QUALIFICATION OF A SUPERVISOR
• Should posses a certificate in Mechanical engineering automotive option.
• Must have O’level certificate with a mean grade of C plain.
• Should have a minimum of 1.5 years work experience with a busy organization.
• Must be conversant and dedicative to the kind of services offered by the firm
• Should be able to work with minimum supervision.

3.2.0 OTHER PERSONNEL AND DUTIES

• ACCOUNTS OFFICER/CASHIER
The cashier is to carryout the work of issuing payment receipt in exchange of cash or a cheque
after every transaction. In addition to this he or she shall be accountable for stock taking, record
keeping facilitating internal Audit. The person should be able to explain the financial position of
the business as well as writing financial reports when required by the management.

QUALIFICATION OF A CASHIER
• He/she should have a Diploma in accounting.
• Must have O’level certificate with a mean grade of C plain with a pass in English and
Mathematics.
• Should have attained (KATC) intermediate certificate of A.C.N.C. certificate with two
years experience.
 • THE WATCHMAN
• He/she is responsible for safe-guarding the firm at night since the location of the Business
is next to administration police post and district police.
• Must have O’level certificate with a mean grade of at least a D+ plus.
• Must be fluent in English and Kiswahili languages.
• Should be between 35 to 55 age bracket.
• Must be honest with good criminal track record
• Should have 3 years working experience at least with reputable security firm(s).
3.2.1 ORGANISATION STRUCTURE OF MORORCYCLE SPARE SHOP

3.3.0 RECRUITMENT TRAINING AND PROMOTION

The type of that the enterprise would relay on the word of mouth owing to the fact that it is
cheaper as opposed to any other means. The then existing employees would recruit other new
employees in to the enterprise. The proprietor upon consultation with the supervisor shall
determine the correct time the firm would need additional task force while taking into account
the competence and experience expected.
3.3.1 TRAINING
Orientation of the all employees before beginning their jobs should be the first step towards
training competent and delivering candidates. This encompasses briefing them on business
responsibility and expectations since the engineering industry has much of the staff work
performed in direct conduct with customers.
Furthermore much of the training shall be performed in enterprise dealing with customers shall
have experience fast. The new employees shall receive instructions from their supervisors.
3.3.2 PROMOTION
The firm shall carry out promotion based on academic merits and professionalism where
experience banks on added advantage whereas good relation to customers.
3.4.0 REMUNERATION AND INCENTIVES
The proposed manager is to be given appreciation. The following is the remuneration and
incentive table.
JOB TITLE: MANAGER
REMUNERATION AND INCENTIVES AMOUNT (Kshs) TOTAL
SALARY 10,000
HOUSE ALLOWANCE 1,400
MEDICAL ALLOWANCE 1,000
TRAVELLING ALLOWANCE 700
INSURANCE COVER 300
AIRTIME CARD 500 13,900
JOB TITLE: SUPERVISOR
REMUNERATION AND INCENTIVES
SALARY 7,500
HOUSE ALLOWANCE 2,000
MEDICAL ALLOWANCE 300
TRAVELLING ALLOWANCE 400
INSURANCE COVER 200
AIRTIME CARD 1,000 11,600
JOB TITLE: CASHIER
REMUNERATION AND INCENTIVES
SALARY 6,050
HOUSE ALLOWANCE 2,500
MEDICAL ALLOWANCE 1,380
TRAVELLING ALLOWANCE 300
INSURANCE COVER 500 11,030
AMOUNT TOTAL
JOB TITLE: TECHNICIAN MAN
REMUNERATION AND INCENTIVES
SALARY 6,200
HOUSE ALLOWANCE 2,500
 MEDICAL ALLOWANCE 1,520
TRAVELLING ALLOWANCE 500
INSURANCE COVER 500 11,220
JOB TITLE: MECHANIC
REMUNERATION AND INCENTIVES
SALARY 6,200
HOUSE ALLOWANCE 2,500
MEDICAL ALLOWANCE 1,520
INSURANCE COVER 500 11,200
JOB TITLE: WATCHMAN
REMUNERATION AND INCENTIVES
SALARY 6,200
HOUSE ALLOWANCE 1,500
MEDICAL ALLOWANCE 1,520
INSURANCE COVER 500 9,720
GRAND TOTALS 68,670

3.5 LICENSE AND PERMITS AND BY LAWS

The organization requires a license that is worth Kshs.5, 750/= from Kilifi County Council hence
renewed annually. The trade License shall be obtained from Bamba Town. The By-Laws shall
originate from Cap 486 of sale traders and how they operate.

3.6 SUPPORT SERVICES

The firm shall be banking with Kenya commercial Bank for safe custody and the firm to leave
out auditor’s services to transport services, insurance services and security services. The legal
services is also crucial and necessary should be sued in the line of its daily operations thus there
shall be the firm advocate in charge of legal matters.
Additionally the auditor shall require to ascertain the performance of the Business at least once
in every financial year.

CHAPTER FOUR
4.0.0 OPERATIONAL/PRODUCTION PLAN
The operational plan outlines the factors that assist the proprietor in running of the enterprise
successfully for the benefit of the customers. The firm owner should be able to enforce the
government policy as expected .For instance Kenya bureau of standards that protects the
customers.
4.1.0 PRODUCTION FACILITIES AND CAPACITY TABLE
ITEMS QUANTIT COST PER UNIT (Kshs.) TOTAL COST
Y
Diagnostic Machine 2 80,000 160,000
Hydraulic Winch 2 50,000 100,000
Set of Tool Crib/Panel 4 20,000 80,000
Toolbox Kit 4 6,000 24,000
Welding Machine 2 20,000 40,000
Charging Machine 1 30,000 30,000
Gas Cylinder 2 25,000 50,000
Clamp/Vices 10 5,000 50,000
Lathe Machine 1 50,000 50,000
Milling Machine 1 50,000 50,000
Wheel 3 5,000 15,000
Remover/Inserter
Air Compressor 1 12,000 12,000
Grinding Machine 3 3,000 9,000
TOTAL 36 670,000

4.1.2 THE ENTERPRISE LAYOUT

The enterprise layout plan above is to be constructed at a strategic point as earlier stated in
chapter one of this Business Plan. This is to help the firm owner to avoid monthly rental fee and
in one way or another increase the enterprise returns.

4.1.3 REPAIR AND MAINTENANCE

The Business facilities are subjected to repair and maintenance after every one month for
instance welding, milling and hydraulic machines which needs much attention. By correct
practice of both regular and routine maintenance the firm is likely to increase the life span of its
machines as well as durability right beyond their warranty periods.

4.2.0 PRODUCTION STRATEGY

The Business strategy is to come up with various methods of displaying products and services.
The raw material shall be acquired through a tendering process where a willing company takes
and supply the enterprise with correct material. Labor and facilities in use is to be taken care of
at the correct time in terms of payment and safety being taken into consideration.

4.2.1 PRODUCT DESIGN AND DEVELOPMENT

The enterprise is to have a set of qualified technicians and mechanics whose duties shall include
coming up with new and working modified designs in securing the market advantage.
4.2.2 MONTHLY MATERIAL REQUIREMENT
MATERIAL AMOUNT (KSHS.)
WELDING RODS 10,000
SPARE PARTS 30,000
NUTS AND BOLTS 20,000
OILS AND GREASE 12,000
BEARINGS 15,000
TUBES AND TYRES 25,000
PROFILE METALS 30,000
TOTAL KSHS. 142,000

4.2.3 MONTHLY LABOUR REQUIREMENT

DESIGNATION SALARY AMOUNT (KSHS.)
MANAGER 13,900
SUPERVISOR 23,200
CASHIER 11,030
TECHNICIAN MAN 22,440
MECHANIC 112,000
WATCHMAN 9,720
TOTAL KSHS. 192,290
4.2.4 MONTHLY PRODUCTION REQUIREMENT (Material and Labour)
PARTICULARS AMOUNT (KSHS.)
SALARIES 192,290
INSURANCE 6,000
TELEPHONE 12,000
REPAIR/MAINTENANCE 30,000
ADVERTISEMENT 5,000
WATER 8,000
ELECTRICITY 20,000
TOTAL KSHS. 273,290

4.3.0 PRODUCTION PROCESS/SERVICES

The enterprise shall majorly deal with the selling of spare parts and vehicle service. The steps
below are procedures to be followed when a customer brings his vehicle to the garage.
Step 1:
The customer explains the problem or behavior of the Incubator as the technician notes them
down. It’s upon now the technician to use his skills in diagnosing the real problem and generate
solutions.
Step 2:The Incubator is then taken to the respective workshop after the problem is identified.
Then the technician explains to the mechanic concerned who should now dismantle the affected
part(s) and fix the problem.

Step 3:
At this stage the technician then writes an invoice covering the cost of replacing the faulty part(s)
and the service to the workshop attendant for the client to be given the specific spare part(s) after
paying at the cashier.

Step 4:
The expert mechanic then mounts the new component on to the vehicle under assembling
process before he technically tests the vehicle’s conditions again. The testing will go on and on
until a satisfying is achieved then the owner is allowed to take his vehicle away.

4.4.0 RULES AND REGHULATIONS AFFECTING ORGANIZATION

4.4.1 RULES AND REGULATIONS
• Every employee should report at 8.00 am and falls out at 5.30 pm failure to which he or
she shall be dismissed from duties.
• No obligations shall be done on public holidays
• No smoking or drinking during operational hours
• All employees must put on overall and dust coats while on their duties.

4.4.2 SAFETY REGULATION

• Fire extinguishers should be placed in accessible and sight points
• Safety guards should set on before running the machines
• Emergency doors should be built at every room
• The warning signs should be written and stuck on required areas.

4.4.3 ENVIRONMENTAL REQUIREMENT

All rubbish and metal chips should be handled correctly and disposed at the right place.
The workshop shall be cleaned daily during the evening hours be workers can falling out.

4.4.4 HEALTH REGULATION

• Harmful and potentially harmful processes should be carried out using properly designed
and well maintained equipment.
• The possibility of toxic or flammable gases existing or as emissions should be indicated
on prominently displayed notices.
• Fume concentration or gases in certain provision should be securely tapped using local
exhaust
4.4.5 FACTORY ACTS
• Machinery installation and services:
The manufacturers of machine tools often do incorporate various safety features many of which
concern the safety of the machine itself. It should be inspected at delivery time so to ensure
safety measures are fully observed
• Workshop Floor:
In nature the condition of a workshop floor pursuant to the factory safety is always rough.

• Electroplating and Anodizing:

The floor of electroplating area should always be made of impervious material and chemically
resistant.

CHAPTER FIVE
5.0.FINANCIAL PLAN
Incubator repaire shop is to acquire its initial capital in terms of money through several ways
which ensure that the Business has enough funds for a start and operation at all times.

5.1.0 PRE-OPERATIONAL COST

The cost of the items required by the firm is tabulated as follows;
ITEMS QUANTIT COST PER UNIT (Kshs.) TOTAL COST
Y
Diagnostic Machine 2 80,000 160,000
Hydraulic Winch 2 50,000 100,000
Set of Tool Crib/Panel 4 20,000 80,000
Toolbox Kit 4 6,000 24,000
Welding Machine 2 20,000 40,000
Charging Machine 1 30,000 30,000
Gas Cylinder 2 25,000 50,000
Clamp/Vices 10 5,000 50,000
Lathe Machine 1 50,000 50,000
Milling Machine 1 50,000 50,000
Wheel Remover/Inserter 3 5,000 15,000
Air Compressor 1 12,000 12,000
Grinding Machine 3 3,000 9,000
 Press Machine 1 25,000 25,000
Hydraulic Jack Machine 3 5,000 15,000
Spray Gun Paint Machine 2 3,000 6,000
Panel Beating Escorted Tools 1 12,000 12,000
Helmet and Gas Muffles 100 500 5,000
Workshop Gloves 100 500 5,000
TOTAL 243 ------- 738,000

5.2.0 PROPOSED CAPITALISATION

Item Amount (Kshs)
Owners’ contribution 800000
Total borrowed loan 400000
Friend / relatives / family 100000
Contribution
Total investment 1300,000

5.2.1 TABLE SHOWING THE EXPENSES OF THE ENTERPRISE FOR THE FIRST
THREE YEARS.
DESCRIPTION YEAR1 YEAR2 YEAR3
Raw Materials 200,00 205,000 220,000
0
Stock of Work in Progress 30,000 33,000 44,000
Stock of Finished Products 25,000 30,000 45,000
Cash at Bank 160,00 180,000 200,000
0
Debtors 225,00 230,000 245,000
0
TOTALS 615,00 678,000 754,000
0

5.2.1 TABLE SHOWING THE EXPENSES OF THE ENTERPRISE FOR THE FIRST
THREE YEARS.

DESCRIPTION YEAR1 YEAR2 YEAR3

Raw Materials 200,00 205,000 220,000
 0
Stock of Work in Progress 30,000 33,000 44,000
Stock of Finished Products 25,000 30,000 45,000
Cash at Bank 160,00 180,000 200,000
0
Debtors 225,00 230,000 245,000
0
TOTALS 615,00 678,000 754,000
0

5.3 PROFOMA CASH FLOW FOR THE YEAR ONE 2022

Receipts/months JAN FEB MARCH APRIL MAY JUNE JULY AUGUST SEP
BEGINNING CASH 3154250 3310650 3460150 3592650 3604700 3816300 3952500 4056000
PERSONAL
                 
SAVINGS
Cash sales 300000 300000 300000 260000 150000 350000 271000 271000 250000
Debtors                  
Capital introduced                
Own contribution 1000000
Bank loan 1500000                
other 500000                
TOTAL CASH
3300000 3454250 3610650 3720150 3742650 3954700 4087300 4223500 4306000
INFLOWS
EXPENSES                
Purchase of inputs 40000 50000 57000 35500 48000 50000 35800 72000 36000
Salaries/wages 48000 48000 48000 48000 48000 48000 48000 48000 48000
Rent /rates 35000 35000 35000 35000 35000 35000 35000 35000 35000
Water /electricity 2000 3600 4500 2000 2450 3000 3500 3500 1000
Transport 1500 3000 1500 2000 2000 1200 3500 2000 3500
licenses 12000                
insurance 6500                
Repairs/renewals 500 2500 1500 3500 1500 800 4000 5000 3000
Stationery/postage 250 1500 3000 1500 1000 400 5000 2000 3000
TOTAL CASH
145750 143600 150500 127500 137950 138400 134800 167500 129500
OUTFLOW
NET CASH FOR
3154250 3310650 3460150 3592650 3604700 3816300 3952500 4056000 4176500
THE MONTH
5.4 PROFOMA CASH FLOW FOR THE YEAR TWO 2023

Receipts/months JAN FEB MARCH APRIL MAY JUNE JULY AUGUST SEP
BEGINNING CASH 4837195 7892145 8049545 8201345 8225845 8237660 8399260 8530260 8645760
PERSONAL
                 
SAVINGS
Cash sales 200000 300000 300000 150000 150000 300000 271000 271000 250000
Debtors                  
Capital introduced                
Own contribution 1000000
Bank loan 1500000                
other 500000                
TOTAL CASH
8037195 8192145 8349545 8351345 8375845 8537660 8670260 8801260 8895760
INFLOWS
EXPENSES                
Purchase of inputs 38000 50000 55000 35500 48000 50000 42000 60000 36000
Salaries/wages 48000 48000 48000 48000 48000 48000 48000 48000 48000
Rent /rates 35000 35000 35000 35000 35000 35000 35000 35000 35000
Water /electricity 3000 3600 4500 1000 2450 3000 2500 3500 1000
Transport 1500 3000 1500 1000 2000 1200 3500 2000 3500
licenses 12000                
insurance 6500                
Repairs/renewals 600 1000 1200 3500 1500 800 4000 5000 3000
Stationery/postage 450 2000 3000 1500 1235 400 5000 2000 3000
TOTAL CASH
145050 142600 148200 125500 138185 138400 140000 155500 129500
OUTFLOW
NET CASH FOR
7892145 8049545 8201345 8225845 8237660 8399260 8530260 8645760 8766260
THE MONTH

5.5 PROFOMA CASH FLOW FOR THE YEAR THREE 2024

Receipts/months JAN FEB MARCH APRIL MAY JUNE JULY AUGUST SEP OC
BEGINNING CASH 9447805 9473505 9632505 9819805 9944105 9955920 10187520 10320520 10436570 105
PERSONAL
                   
SAVINGS
Cash sales 150000 300000 300000 250000 150000 350000 271000 271000 250000 320
Debtors                    
Capital introduced                  
 Own contribution 0
Bank loan 0                  
other 0                  
TOTAL CASH
9597805 9773505 9932505 10069805 10094105 10305920 10458520 10591520 10686570 108
INFLOWS
EXPENSES                  
Purchase of inputs 23000 50000 36000 35500 48000 50000 40000 60000 36000 600
Salaries/wages 48000 48000 48000 48000 48000 48000 48000 48000 48000 480
Rent /rates 30000 35000 20000 35000 35000 15000 35000 35000 42000 350
Water /electricity 1500 2000 4500 1200 2450 3000 2500 3500 2500 200
Transport 1500 3000 1500 1000 2000 1200 3500 2000 1000 125
licenses 12000                  
insurance 6500                  
Repairs/renewals 1600 1000 1200 3500 1500 800 4000 5000 3000 200
Stationery/postage 200 2000 1500 1500 1235 400 5000 1450 3000 250
TOTAL CASH
124300 141000 112700 125700 138185 118400 138000 154950 135500 150
OUTFLOW
NET CASH FOR
9473505 9632505 9819805 9944105 9955920 10187520 10320520 10436570 10551070 107
THE MONTH

5.6 QUATERLY INCOME STATEMENT FOR YEAR ONE

DESCRIPTION JAN- APRIL-JUN JUL- OCT-DEC
MAR SEPT

Service 220,000 240,000 219,100 232,000

Debtor Collection 100,000 150,000 153,200 149,000

Cash in Hand 15,000 100,000 150,000 135,000

Cash at Bank 149,000 160,000 149,700 184,000

Total 619,000 650,000 670,000 700,000

Less Cost of Serviced 151,300 148,500 150,850 141,600

Gross Profit 468,000 502,000 519,150 559,000

Less Expenses 75,000 75,000 75,000 75,000

Salaries 10,000 - - -
 License 3,300 4,500 4,750 4,600

Telephone Bill 5,000 7,000 7,520 9,000

Insurance 12,000 - - -

Advertisement 10,000 20,000 22,350 18,000

Electricity Bill 36,000 42,000 41,230 35,000

Total Expenses 151,300 148,500 150,850 141,600

Net Profit Before Tax 317,300 35,400 368,000 417,400

10% Tax 317,730 35,400 36,830 417,400

Net Profit After Tax 31,730 35,400 36,830 417,400

5.7 PROFORMA BALANCE SHEET AS AT THE END OF YEAR ONE

ITEMS AS AT THE END OF YEAR ONE
Machine and Accessories 2,000,000
Furniture and Fittings 155,000
Tools and Equipment 250,000

Total Assets 2,405,000

Less Depreciation at 5%

Building 400,000

Furniture and Fittings 31,000

Tools and Equipments 50,000

Total Depreciation 481,000

Less Depreciation 1,925,000

Current Assets

Cash at Bank 6,495,000

Cash at Hand 1,088,000

Debtors 255,000

Stocks 50,000

Total Current Assets 7,888,000

Total Fixed and Current Assets 9,813,000

Current Liability
Creditors 205,000
Bank Loan 250,000
Contribution from Family 350,000
Owners Equity 1,500,000
Net Profit 3,350,000
Total Liability and Owners Equity 2,405,000
5.8 BREAK-EVEN POINT ANALYSIS
FIXED COST YEAR ONE

A TOTAL REVENUE

Services 1,850,000

Less Purchases 92,500

GROSS PROFIT 1,757,500

B FIXED COST

License & Permit 2,000

Salaries 300,000

Insurance 10,000

Rent 120,000

TOTAL 432,000

C VARIABLE COST

Telephone 18,000
 Advertisement 9,000

Water and Renovation 40,000

Repair & Maintenance 20,000

TOTAL VARIABLE COST 87,000

D TOTAL EXPENDITURE 519,000

PROFIT BEFORE TAX 1,238,000

PROFIT AFTER TAX 5% 1,176,100

5.9 FINANCIAL RATIOS

• CONTRIBUTION = (Sales/Services- Total Variable Cost)

= 1,850,000-87,000

= 1,763,000

• CONTRIBUTION MARGIN (Services-Total Variable Cost) X 100

= (1,850,000-870,000) X 100

= 980,000

• PERCENTAGE GROSS PROFIT RATIO = Gross Profit X 100 %

Sales

= 1,238,000 X 100

1,850,000

= 66.92 %

• RETURN OF EQUITY = Net Profit X 100

Capital Employed

= 1,176,100 X 100

738,000
= 159.36 %