THIKA SCHOOL OF MEDICAL AND HEALTH SCIENCES

DEPARTMENT: APPLIED SCIENCES DEPARTMENT

COURSE: DIPLOMA IN ENVIRONMENTAL SCIENCE

SUBJECT TITLE: ENTERPRENEURSHIP

BUSINESS TITLE: SLY LANDSCAPING COMPANY

PRESENTED BY: SYLVIA NYAWIRA KINYUA

INDEX NUMBER: DES/J-002/THI/19

BUSINESS PLAN

PRESENTED TO: THE KENYA EXAMINATION COUNCIL IN PARTIAL

FULFILLMENT OF THE REQUIREMEMNT FOR THE AWARD OF DIPLOMA
IN ENVIRONMENTAL SCIENCE

SUPERVISOR: MERCY MWAURA

EXAM SERIES: JUNE/JULY 2020

 DECLARATION

I SYLVIA NYAWIRA declare that the business plan submitted is to the best of my knowledge and all
the information obtained is original and derived through my hard work

NAME: SYLVIA NYAWIRA

SIGNATURE: ............

SUPERVISOR: MERCY MWAURA

DATE:12/08/21

ii
 DEDICATION

I dedicate this project to my parents and sisters for their support, encouragement and for giving me ideas
during my writing. May the almighty God bless you

iii
 ACKNOWLEDGEMENT

I would like to express my gratitude to my lecturer Madam Purity who helped me through my
research period. Secondly, I would also like to thank my parents Mr and Mrs Kinyua for their support
and love. Also I would thank my sisters, my classmates and roommates for their contributions in doing
the project and providing a conducive environment.

iv
 BUSINESS DESCRIPTION

SLYLANDSCAPING COMPANY will be owned by SYLVIA NYAWIRA having a Diploma in

Environmental Science It is a sole proprietorship business. The business will be dealing with offering
landscaping services. It will be located in Thika town on Kenyatta Avenue in Kiambu County an area
dealing with landscaping works.

Opportunity and entry

The business will take opportunities and tenders from the government, commercial and individuals
which will help run the operations. The business will personally sell at the start to gain customer's
confidence in the market. Advertising to the local media will help boost the knowledge of the business
to the public. Entry is based to ensuring the business establishes itself in both rural and urban areas.

Target market

The business has targeted the government, the commercial and the individuals as potential customers.
The company will be participating in projects in order to increase the market share in the construction
industry.

Management team

The managing team will be consisting of the managing director, secretary, human resource manager,
marketing manager, accountant, landscape architect, landscape technicians, foremen, watchman and the
driver .The managing director being SYLVIA NYAWIRA will be the sponsor and owner of the
business .The manager will carry the following responsibilities; controlling where the progress of work
will be checked, planning which involves deciding actions in advance, coming up with the capital and
ensuring the set goals are achieved. The marketing manager will be responsible in conducting the
advertisement process; the accountant will be paying invoices, applying customer payments and paying
staff. The human resource manager will conduct recruitments promotions and remunerations and
notifying selected interviewees. The watchman will be conducting security inspection. The foremen will
be coordinating work on site and finally the driver will be transporting materials and personnel to site.

Financial plan

This gives a comprehensive evaluation on the current and future financial state. The pre-operational cost
of the business amount to 2,910,600, the working capital of 8,300,000. The major source of capital is
from owner's equity of 4.3 million and a loan of 750,000. The loan will be repaid in the duration of

v
24months as indicated in the cash flow. Other calculations are shown in the profitability ratio,
contribution margin and in the financial breakeven point.
Overall schedule

The business will be operating from Monday to Saturday. During the week days the operation starts at
8:00am to 5:00 p.m. Saturday, the operation begins at 8:00am to 1: 00pm.A one-hour break is provided
every day.

Critical risks, problems and solutions

At the beginning of a business, various risks were experienced, operating the business in an already
construction environment, gender discrimination where most of the operations and the proprietor in the
construction industry are men. Problems such as low amount of finances and the advanced equipment to
run the operations smoothly caused a threat to the business. The business has come up with solutions to
evacuate the challenges. It has bought various equipment which serve the purpose and borrowed loan
which has enabled the operation work.

TABLE OF CONTENTS

vi
DECLARATION.........................................................................................................................................ii
DEDICATION...........................................................................................................................................iii
ACKNOWLEDGEMENT.........................................................................................................................iv
BUSINESS DESCRIPTION.......................................................................................................................v
CHAPTER ONE.........................................................................................................................................1
1.0 BUSINESS DESCRIPTION...........................................................................................................1
1.1 INTRODUCTION..........................................................................................................................1
1.2 EDUCATIONAL BACKGROUND..............................................................................................1
1.3 BUSINESS IDENTITY................................................................................................................1
1.4 FORM OF OWNERSHIP...............................................................................................................1
1.5 BUSINESS LOCATION....................................................................................................................2
1.6 PRODUCTS AND SERVICES.......................................................................................................3
1.8 COMPETITIVE ADVANTAGES..................................................................................................3
1.7 BUSINESS OBJECTIVES..............................................................................................................4
1.8 JUSTIFICATION OF THE INDUSTRY........................................................................................4
1.9 ENTRY STRATEGY..........................................................................................................................4
CHAPTER TWO.........................................................................................................................................6
2.0 MARKET PLAN............................................................................................................................6
2.1 Introduction.....................................................................................................................................6
2.2 Importance of marketing...................................................................................................................6
2.3 POLITICAL ENVIRONMENT.......................................................................................................6
2.4 ECONOMICAL ENVIRONMENT...................................................................................................6
2.5 SOCIAL ENVIRONMENT.............................................................................................................7
2.6 COMPETITION..............................................................................................................................7
2.7 Names of competitors and their address..........................................................................................7
2.8 ANALYSIS TABLE...........................................................................................................................7
2.9 COPING WITH COMPETITION.....................................................................................................7
2.10 ADVERTISING STRATEGY..........................................................................................................8
2.11 PRICING STRATEGY....................................................................................................................8
2.12 DISTRIBUTION STRATEGY......................................................................................................9
2.12.1Transport.....................................................................................................................................9
CHAPTER THREE...................................................................................................................................10
3.0 ORGANIZATIONAL PLAN...........................................................................................................10

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 3.1 ORGANIZATIONAL STRUCTURE............................................................................................10
3.2 LICENCES, PERMITS AND BY-LAWS........................................................................................12
3.3 SUPPORTIVE SERVICES..............................................................................................................12
CHAPTER FOUR.....................................................................................................................................14
4.0 PRODUCTION PLAN....................................................................................................................14
4.1 Introduction......................................................................................................................................14
4.2 Production facilities and capacity....................................................................................................14
4.3 LAYOUT.........................................................................................................................................15
4.4Cost of material.................................................................................................................................15
4.5 Cost of labour................................................................................................................................15
4.6 PRODUCTION PROCESS.............................................................................................................16
4.7 REGULATION AFFECTING PRODUCTION...............................................................................17
CHAPTER FIVE.......................................................................................................................................17
5.1 FINANCIAL PLAN.........................................................................................................................17
5.2 PROJECTED CASH FLOW FOR SLYLANDCAPING COMPANY............................................18
5.3 PROFORMA INCOME STATEMENT.........................................................................................20
5.4 PROFOMA BALANCE SHEET..................................................................................................20
5.5 BREAK EVEN POINT...................................................................................................................21
5.6 DESIRED FINANCE..................................................................................................................22
5.7 PROPOSED CAPITALIZATION................................................................................................22
5.8 PROFITABILITY RATIO........................................................................................................23

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 CHAPTER ONE
1.0 BUSINESS DESCRIPTION

1.1 INTRODUCTION
SLYLANDSCAPING COMPANY will be owned by SYLVIA NYAWIRA where it will be
dealing with environmental beautification such as planting trees, grass, and flowers and taking care of
them. This will be done to clients' gardens upon request and signing of contracts. It will also be selling
flowers and trees to individuals for their own personal use.

It will also offer maintenance services to customers e.g. maintenance of gardens by trimming,
mowing and spraying against pests and infections.

1.2 EDUCATIONAL BACKGROUND.

Primary education.

I joined St Michael's Primary school in 2004 to 2013 where I attained the Kenya Certificate of
Primary Education with 381 marks.

Secondary education.

I joined Olc Mugoiri Girls' High school in 2014-2017 where I attained the Kenya Certificate of
Secondary Education having a mean grade of C

1.3 BUSINESS IDENTITY.

SLYLANDSCAPING COMPANY

P.O BOX 6407-01000,

THIKA.

TEL NO: 0717115858

E-MAIL: slylandscape@gmail.com

1.4 FORM OF OWNERSHIP.

The business will be a sole proprietorship. A sole proprietorship has the following advantages:

1. Profits- the owner receives and enjoys all the profits of the business

1
 2. Decision making- decision making is very fast since the owner does not consult anybody on
what to do or not to.

3. Job security- the owner enjoys the benefit of being the boss and therefore he cannot be sacked,
thus he is confident about his place of work.

4. Flexibility- the owner permits high degree of flexibility and can change his business operations
to suit the clients' demands.

5. Regulations and by-laws- sole proprietorship is the least regulated form of business. Regulated
laws are almost negligible in its formation, day to day operations and dissolution.

1.5 BUSINESS LOCATION.

The business will be located in Thika town on Kenyatta Ave. in Kiambu County. The offices
will be in KAGZ TOWER.

a) There are few competitors offering the same services. There is only 3 other companies offering
landscaping services in Thika town

b) The business is located in an area where many buildings are coming up hence will require the
landscaping services offered by my company. This means that demand will be high hence more profit.

c) The place is well secured. The area is guarded by a private security company and Thika police station
is in the neighbourhood

d) Banking services are easily accessible. This means that all financial matters will be easily handled
and taken care of.

e) The road network in the area is good hence access to the company offices is quick and efficient.

Kcb bank Thika stadium

Kenyatta avenue

Thika land and dc offices Police station

SLY landscaping company

2
1.6 PRODUCTS AND SERVICES.
The business will be dealing with provision of landscaping services and maintenance. This
Garissa road
includes planting trees, flowers and grass and keeping them in good condition by trimming, pruning and
mowing the grass to give better aesthetic value.

1.8 COMPETITIVE ADVANTAGES.

NAME OF THE STRENGTHS WEAKNESS
COMPANY
a) ENVIRON a) They have good equipment a) Service delivery is very slow.
LANDSCAPING which they use to provide their
COMPANY services. b) They only provide services to big
projects hence leaving out smaller
b) The workmen are organised projects.
making workflow easier.
c) Their prices are high.
c) They offer high quality
services.

b) ELITE a) They have enough workers

LANDSCAPER for their jobs which make them
S more productive a) The products are too expensive.

b) It has several branches all b) They rely on outdated technology.

over the country making a good
reputation. C) Lack good public relations.

a) They have good equipment

which is used in production
c)TWILIGHT process.
VENTURES
b) Has a good reputation due to
long period of service.
a) Their services and products are
expensive.
c) They offer high quality
products.
b) Their technology is outdated.

c) Lack good public relations.

3
 Considering the weakness of the competitors, SLYLANDSCAPING COMPANY will be able to
build a strong reputation and take advantage of the growing market. E.g. use of modern technology to
produce seedlings and train the staff on good public relations. The location will be appropriate to enable
the customers' access products and services effectively.

1.7 BUSINESS OBJECTIVES

To provide quality landscaping services to clients using a professional team

1.8 JUSTIFICATION OF THE INDUSTRY.

The economic survey and research gives an indication that the area selected will provide a high
demand of the products and services to be offered to the customers. The business area is located in a
growing community where the residents are the most potential customers. The business will be offering
high quality products and services at an affordable rate. It will also ensure that there is cooperative staff
who will give adequate services to the customers. Security of the business will be maintained; security
alarm will be installed. These will ensure a smooth running of the business which will help the business
gain more customers.

Short term objectives.

a) To increase the range of customers within six months from 0-6%by establishing a good
relationship between the customers and the business.

b) To provide quality products and services to the clients. This is by use of good quality seedlings
and species to meet clients' demand.

c) To raise the profit margin of the business within five to twelve months to 15% which will be
achieved by fulfilling customers’ demands.

Long term objectives.

a) To expand the business by opening other branches after two years of experience in the industry.

b) To offer after sale services to the clients e.g. managing the gardens for the clients to keep them
looking good and spraying with fumigants.

c)To improve the level of technology in the industry to allow for production of resistant species to

4
 pest attack and draught resistant. Also to provide transaction services and customer interaction
online.

1.9 ENTRY STRATEGY.

For the business to penetrate into the market certain strategies will be developed within the
business location and outside Murang'a and Kiambu counties.

b) Personal selling will be involved so as to gain the customer's confidence in the products and
services

a) Advertising of the business to the local media which will help potential customers identify the
business.

b) The business will also produce business cards and catalogues having the business products
summarized and later on distributed to the customers.

c) Marketing of the business will be desirable, for example, landscaping a few spaces in the town
for free to showcase the company's work and products.

5
 CHAPTER TWO
2.0 MARKET PLAN.
2.1 Introduction.
Marketing is the communication on the value of a product or service to customers, for the
purpose of selling the product or service. They are designed by choosing target markets, understanding
consumer behaviour and the market analysis.

2.2 Importance of marketing.

a) It helps the business to be promoted to the potential customers, that is, during marketing
the product and service awareness is introduced to the consumers hence giving an
opportunity to progress and succeed.

b) Marketing builds a label name on a successful business and hence changing the
reputation making it grow, expand and increase in sales.

c) Once the products and services offered by a business are known by the consumers, it
increases the sales since customers will spread word about new product discovered in
the market.

d) When the business is discovered to the consumers and has increased in sales it gives
greater employee satisfaction, for example, a sense of pride and loyalty.

a) Marketing ensures a healthy competitive, that is, for small businesses and new
businesses to enter into the market and grow since it ensures that not only the
known businesses can boost the market but also the less known companies

6
2.3 POLITICAL ENVIRONMENT.
A business licence is needed to operate a legal business. Some permits also need to be applied
for easy running of the business to avoid complications from the municipal and county government. A
KRA pin is also needed so as to make it possible to remit taxes. The government has offered good
infrastructure for easy transportation of goods which is an advantage to the business. The area has also
street lights enabling business to be conducted at late hour and enhances security. Electricity is also
available making it possible for use of electronics.

2.4 ECONOMICAL ENVIRONMENT

A higher percentage of the construction works being carried out are commercial buildings and
private residences

2.5 SOCIAL ENVIRONMENT

The area has an approximate population of 1.2 million comprising of both middle aged and the
youth. The business is not dependent on age. The consumers mainly are corporate organisations and
individuals.

2.6 COMPETITION
The business competitors are minor competitors. One is located on Mama Ngina Street, another
one on Harambee Avenue and the third on Kenyatta Avenue near the business. They have the capital
which helps to increase and give more products and services. They also have managerial skills which
help them understand their customer needs. They also have the equipment and facilities, for example,
machines which they use as their collateral

2.7 Names of competitors and their address.

ENVIRON LANDSCAPING COMPANY

P.O BOX 2047-01000,
THIKA.

ELITE LANDSCAPERS,
P.O BOX 1647-01000,
THIKA.

TWILIGHT VENTURES,
P.O BOX 3707-01000,
THIKA.

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2.8 ANALYSIS TABLE
ITEM MY COMPANY COMPETITOR
Product 5 3
Services 4 2
Quality 3 1
Price 4 2

2.9 COPING WITH COMPETITION

For the business to overcome challenges, the following measures will be undertaken:

a) Improving on the level of technology i.e. new technology comes up with new ideas unlike the
outdated technology. In order to defeat competitors' new methods of m0arketing, production of
improved products helps lead the market.

b) Improving on labor productivity; for a business to succeed it requires enough workmen with
skills. The business will ensure good selection during recruitment staffs since unskilled workers will
not develop but slow down the business objective.

c)To train staff so as to acquire managerial skills which assist them to have good public relations. It
also enables them understand the needs of customers hence boosting the sales.

d)Provision of good quality products and services; consumers like good quality products and
services. The business will ensure good products of demanding quality so as to attract customers to
the business for higher sales.

e) Creation of finance; finance is the strong hold of any business. The business will obtain property
which could be used as collateral for obtaining funds from external sources. This will help the
business in the competitive market since it will come up with new products and services.

2.10 ADVERTISING STRATEGY.

The business will use best techniques to create awareness of its existence to the customers. The
use of billboards will be used which will have catching to customers. The company is expected to pay
kshs. 7,000/= per month for the billboard advertisement. For effectiveness it will be designed clearly
picturing the products and services to improve its effectiveness. Several billboards will be set upon for
many people to read. The business will use its capital for the cost to be incurred in advertisement.

8
2.11 PRICING STRATEGY

The following are the factors to be considered when setting up the price of a product:

a) The industry standards - for a business to fit in the market it has to know what other businesses
are offering, the cost they charge for their services in order to set a standard price.

b) The profit - for any business its main aim is to make profit after selling. The business should set a
price and consider how much money it will make above.

c)The market demand - when the demand of a product is high the business can raise the price and
when there is hardly any work the price should be fair. The business showing high demand means
more work and hence increase in sales and when the market is low, the business will struggle to find
jobs.

d)The government policy - the impact of the government in the business matters, for instance, the
rate of tax charged to a business will determine the price of the products and services. When the
business is charged a high tax possibilities are consumers will buy products expensively and when
the rate is low, the buying price of the products will be fair.

e) After sale service - when the business offers after sale services, the cost of the products will differ.
The charges of transportation, installation have to be included to the selling price. This helps to come up
with a fixed price of the products.

2.12 DISTRIBUTION STRATEGY

This is the plan created and method used to get products or services through various distribution
channels to the customers.

Direct distribution

The business intends to use direct distribution of the products due its various advantages.
Products will be offered to the customers by the personnel from the business.

Advantages

9
 a) It creates a good relationship with the customer and thus making communication faster.

b) There is no need to share profit margin since the producer has complete control over the sales
process.

c) It is less expensive and more profitable than agents since minimum channel is used reducing
the cost

d) Consumers may expect choice, that is, the products and brands at the point of sale making
personal selling appropriate

e) It helps to give the customer knowledge especially on the potential customers. it helps the
business know directly from the consumers what they like and what services they prefer.

2.12.1Transport
The business will be using pickups to transport products to the intended destinations where
landscaping is being done. Since it is hard to deliver products to some parts during the wet season due to
poor road conditions, 4-wheel pickups will be used

CHAPTER THREE
3.0 ORGANIZATIONAL PLAN
The end result of the process of setting medium and long term objectives and then developing a strategy
to accomplish those goals. It is mainly going to be done in order to maintain efficiency in delivering of
services without distraction arising. The purpose for an organisation plan is to provide consistent
guidance and an action plan for the rest of the company to follow.

3.1 ORGANIZATIONAL STRUCTURE

MANAGING DIRECTOR

SECRETARY

ACCOUNTANT
10
HUMAN RESOURCE MANAGER MARKETING MANAGER
 Landscape
architect
and
FOREMEN
technician
DRIVER WATCHMAN

MANAGING DIRECTOR'S QUALIFICATION AND THE DUTIES

The managing director is the owner of the business and is in charge of coming up with the
organisational structure to monitor effective control and operation in the business. 3.2
Qualification

e) Must have a degree or diploma in landscape architecture or a related course.

b) Must have at least 2 years working experience.

c) Be between 24-55 years old.

d) Be a Kenyan citizen.

Duties of the managing director

a) Planning; involves deciding in advance the actions to be taken. It also involves setting of
objectives and goals to be achieved and the manager needs to involve employees to get their
commitment in achieving goals.

b) Organizing; the manager is responsible for organizing people in a manner that facilitates
achievement of organization objectives. Must delegate tasks to employees who must have
the resources to perform them effectively.

c)Controlling; the manager must check the progress made towards the desired goal and
correcting deviations which may occur. It also involves measuring and evaluating the work
of each individual and groups to ensure they are on target.

11
 d)Directing; must influence other people towards achieving the organization goals. It
involves guiding, leading, supervising and motivating to achieve set goals and deadlines.

e) Coordinating; it involves working together in various departments to ensure smooth

running of the organization activities, for instance, through regular meetings.

OTHER PERSONNEL

Accountant 1 Paying invoices,

applying customer
payments and

 paying staff

Marketing manager 1

 Conducts the
advertising process
of the business

Landscape architect 1

 Designing
landscaping for
clients.

 Advising on plants
to be used in
landscaping.

Landscape technicians 2

 Production of
drawing.

 Implementing the
designs.

Foremen 3

 Coordination of
work on site as per

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 the drawings.

Watchman 1

 Security.

 Inspection.

Driver 1

 Transporting goods
and personnel to
site

 Office messenger.

3.2 LICENCES, PERMITS AND BY-LAWS

Licence The business will obtain trading licence from the Ministry of Commerce and
Industry through the office of the attorney general. This will take 7-21 days

Permits

The business will obtain permit certificates with the relevant local authority at payable fee of
kshs.15, 000/= where the registration permit will be renewed annually.

By-laws

a) Income tax act - this act requires that the taxation be of income to the business and profit
making organization together with the individuals.

b) Employment act - it requires that an employee should be given off and leaves by the
employer. It stipulates that employees have right to provisions on matters such as
dismissal notices and termination of services.

3.3 SUPPORTIVE SERVICES

For a business to run smoothly and effective, it requires external services. The following are the
services to be relied on by the service.
13
 a) Banking services- the company will keep its money in the bank there being enough security for
the money and also enabling company to earn interest.

b) Insurance services- the business need to be insured, for example against fire, theft. In case of
emergencies it can be compensated.

c)Medical services- during work, accidents occur which require immediate attention; hence the
company will ensure to have medical officer, for first aid.

d)Internet services- the business will require the internet to get new ideas and in improving the
products and services. The business can also post its products and services on its blog to create
awareness to increase its market.

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 CHAPTER FOUR
4.0 PRODUCTION PLAN

4.1 Introduction
Production involves the process of assembling resources together with human effort to come up with a
product. It consists of facilities which aid in obtaining the final products. For effective production, a lot
of facilities are required. They could include equipment, tools and machines which could either be
bought or hired.

4.2 Production facilities and capacity.

The company will require the following facilities to ensure quality services to clients.

ITEMS QUANTITY CAPACITY SUPPLIER UNIT TOTAL REMARK

PRICE PRICE

Computer 3 160GB HP LTD 25,000 75,000 Start up

COMPANY

Pick up 2 120CC DT DOBIE 500,000 1,000,000 Start up

Hoe 10 Imexic 300 3,000 Start up

hardware

Panga 10 Imexic 250 2,500 Start up

hardware

Wheel barrow 5 0.15m3 Imexic 3,000 15,000 Start up

hardware

Printer 3 HP 350,000 3,000 Start up

Photocopier 2 200copies HP 50,000 100,000 Start up

15
 Furniture Mv 16,000 Start up
furniture's

TOTAL 1,220,500

4.3 LAYOUT
WWA
Seedlings area

Store

OFFICE
Pot making section

GATE Parking

4.4Cost of material
ITEM QUANTITY AMOUNT (KSHS)PER MONTH

Red soil 2 tonnes 20,000

Manure 100 kgs 5,000

Plastic bags 2 bails 1,000

Seeds 5 kg 2,500

Pesticides 2k 1,000

Fertilizer 50 kg 6,000

TOTAL 35,500

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4.5 Cost of labour
PERSONNEL NUMBER SALARY (PER MONTH) SALARY (PER

YEAR)

Managing director 1 12,000 144,000

Secretary 1 5,000 60,000

Human resource 1 5,000 60,000

Accountant 1 5,000 60,000

Marketing manager 1 5,000 60,000

Landscape architect 1 10000 120,0000

l. technician 2 12000 144,000

Foremen 3 12,000 144,000

Watchman 2 6,000 72,000

Driver 1 5,000 60,000

TOTAL 14 77,000 924,000

4.6 PRODUCTION PROCESS

a) Quotation.

The quotation is given to client and after the go on, he pays 50% down payment before
commencement of work. Quotations will also be given to clients who order for special flowers
especially those who do not need services for landscaping. Customers will pay by cash or
cheque for sold flowers/trees. After the contractor/client in charge gives a go ahead for the
service, the architect will give the drawings with details.

b) Costing

Quantity surveyor estimates the cost of the whole service to be offered. He/she relays the
information to the client who will pay for the service offered.

17
 c)Contractual process

The managing director on behalf of the company will enter the contract with the client
and the work starts. After the landscaping process has began, the client/architect will inspect and
ensure that work is as desired.

d) Handing over

It's done by the company after successive completion of the work and approval by architect and
client. The managing director is given a certificate of completion by client/architect.

4.7 REGULATION AFFECTING PRODUCTION

The following factors affect the easy running of the business. The business should adhere to the
set acts for smooth operations to take place. The regulations include:

a) Copyright Act - this ensures the company is not going to copy anything from any other company
and so should the rest. It helps the company brand its own products and acquire legal registration.

b) Health and Safety Act- this ensures that each employee is working in a safe environment and do
not get harsh treatment from clients and also around the office. These regulations ensure that the
premises have fire extinguishers, first aid kits as well as fire exits. It also ensures that there are
adequate ventilations.

c)Labour act- in this act, the company is expected to treat its employees according to the set rules
and regulations which include paying them basic salaries and allowances. Also honoring terms and
conditions and observing working hours.

d)Working compensation act- the act clearly defines the circumstances under which the employees
will be compensated when he/she has encountered an accident in the course of duty. However, it's
required that the injured employee to provide evidence that they are injured and could have the right
to sue the employer if necessary.

e) The government policy regulation- the government requires that the business to be registered
and conform to the services offered. The business will also pay taxes to the local government

18
 and the rate will be included in the licence that will be paid annually.

CHAPTER FIVE
5.1 FINANCIAL PLAN
It will entail annual projections of income and expenses. It will be used to estimate cash needs
and decisions on how to raise the cash. This will help to analyse the validity of the business. It shows
the amount of money needed to be spent, profit and income regulations

5.2 PROJECTED CASH FLOW FOR SLYLANDCAPING COMPANY

YEAR 1

MA MA AU NO TOT
ITEM JAN FEB R APR Y JUN JUL G SEP OCT V DEC AL
CASH
INFLO
W
1,14 1,40 1,50 1,89 2,09 2,27 2,28 2,27 2,43 2,64
Balanc 906, 4,84 6,55 8,76 0,19 0,56 8,45 5,35 7,42 2,28 0,48 20,86
e b/f 100 0 0 5 0 5 0 5 0 5 0 1,000
Cash- 30,0 32,0 18,0 10,0 26,0 30,0 21,5 42,5 15,0 20,5 19,0 55,4 320,0
in-hand 00 00 00 00 00 00 00 00 00 50 00 50 00
Cash at 150, 205, 210, 105, 420, 208, 110, 90,0 140, 203, 140, 369, 2,350
bank 000 000 000 000 000 000 000 00 000 000 000 000 ,000
Cash 200, 200, 250, 240, 160, 180, 300, 150, 100, 140, 240, 340, 2,500
sales 000 000 000 000 000 000 000 000 000 000 000 000 ,000
8,00 7,00 9,50 5,00 6,00 6,00 8,20 9,00 7,20 8,10 9,40 8,60 92,00
Debtor 0 0 0 0 0 0 0 0 0 0 0 0 0
750, 750,0
Loan 000 00
Total 1,13 1,35 1,63 1,76 2,12 2,31 2,53 2,56 2,54 2,64 2,84 3,41
cash 8,00 0,10 2,34 6,55 0,76 4,19 0,26 9,95 7,55 9,07 0,68 3,53 26,87
inflow 0 0 0 0 5 0 5 0 5 0 5 0 3,000
CASH
OUTF
LOW
Purcha 100, 100, 120, 110, 90,0 80,0 100, 140, 130, 70,0 60,0 100, 1,200
ses 000 000 000 000 00 00 000 000 000 00 00 000 ,000
Salarie 77,0 77,0 77,0 77,0 77,0 77,0 77,0 77,0 77,0 77,0 77,0 77,0 924,0
s 00 00 00 00 00 00 00 00 00 00 00 00 00
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Electri 3,10 3,25 3,35 3,28 3,40 3,41 2,98 2,99 2,98 3,04 3,15 3,20 38,13
city 0 0 0 0 0 0 0 0 0 0 0 0 0
2,50 2,15 2,56 2,36 2,75 2,65 2,87 2,45 2,89 2,90 2,69 2,45 31,22
Water 0 0 0 0 0 0 0 0 0 0 0 0 0
Licenc 15,0 15,00
e 00 0
Adverti 7,50 7,50 15,00
sement 0 0 0
18,0 18,0 18,0 18,0 18,0 18,0 18,0 18,0 18,0 18,0 18,0 18,0 216,0
Rent 00 00 00 00 00 00 00 00 00 00 00 00 00
Teleph 1,50 1,56 1,58 1,67 1,75 1,89 1,67 1,78 1,59 1,57 1,69 1,65 19,90
one 0 0 0 0 0 0 0 0 0 0 0 0 0
Insuran 3,30 3,30 3,30 3,30 3,30 3,30 3,30 3,30 3,30 3,30 3,30 3,30 39,60
ce 0 0 0 0 0 0 0 0 0 0 0 0 0
Station 4,00 3,00 3,00 10,00
ary 0 0 0 0
Loan
repaym 31,2 31,2 31,2 31,2 31,2 31,2 31,2 31,2 31,2 281,2
ent 50 50 50 50 50 50 50 50 50 50
Loan 3,12 3,12 3,12 3,12 3,12 3,12 3,12 3,12 3,12 28,12
interest 5 5 5 5 5 5 5 5 5 5
miscell 4,50 4,80 7,80 4,12 4,70 3,60 2,78 32,30
aneous 0 0 0 0 0 0 0 0
Total
cash
outflo 231, 205, 225, 257, 230, 223, 251, 284, 270, 216, 200, 242, 2,841
w 900 260 790 785 575 625 815 595 135 785 205 755 ,225
Net 1,14 1,40 1,50 1,89 2,09 2,27 2,28 2,27 2,43 2,64 3,17
cash 906, 4,84 6,55 8,76 0,19 0,56 8,45 5,35 7,42 2,28 0,48 0,77 24,03
inflow 100 0 0 5 0 5 0 5 0 5 0 5 1,775

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5.3 PROFORMA INCOME STATEMENT
Items 1st year 2nd year 3rd year
Sales 2,500,000 3,087,500 3,780,000
Purchase 1,200,000 1,235,000 1,512,000
Gross profit 1,300,000 1,852,500 2,268,000
EXPENCES
Loan interest 28,125 37,500 9,375
Salary 924,000 924,000 924,000
Advertisement 15,000 15,000 15,000
Insurance 39,600 39,600 39,600
Water 31,220 33,840 30,560
Electricity 38,130 41,540 41,830
Licence 15,000 15,000 15,000
Rent 216,000 216,000 216,000
Stationary 10,000 9,300 19,550
Telephone 19,900 33,030 16,540
miscellaneous 32,300 29,420 29,300
TOTAL 1,369,275 1,394,230 1,356,755

Net profit before tax -69,275 458,270 911,245

16% tax -11,084 73,23.2 145,799.2
Net profit after tax -58,191 384,946.8 765,445.8

5.4 PROFOMA BALANCE SHEET

This is a financial statement showing the financial position of the business at the
specified period on the basis of assets and liabilities.

ITEM 1st year 2nd year 3rd year

Fixed assets

Equipment & machinery 220,500 300,000 250,000

Vehicles 1,000,000
TOTAL 1,220,500 300,000 250,000
Current assets
Cash in hand 320,000 412,000 306,500
Cash at bank 2,350,000 2,035,000 1,881,000
Debtors 92,000 104,700 105,400
Stock 1,200,000 1,235,000 1,512,000
TOTAL 3,962,000 3,786,700 3,804,900

Total assets 5,182,500 4,086,700 4,054,900

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Current liabilities
Tax pro statement -69275 458,270 911,245
TOTAL -69275 458,270 911,245

Long term liabilities

Owners’ equity 4,391,775 3,583,930 3,118,655
Relatives 65,000 23,500 15,000
Friends 45,000 21,000 10,000
Loan 750,000
TOTAL 5,251,775 3,628,430 3,143,655
Total liabilities 5,182,500 4,086,700 4,054,900

Working capital= current assets- current liabilities

1st year= 3,962,000--69,275= 4,031,275
2nd year= 3,786,700-458,270= 3,328,430
3rd year= 3,804,900-911,245= 2,893,655

5.5 BREAK EVEN POINT

This is where the business does not register the profit or the loss.

ITEM 1st year 2nd year 3rd year

Fixed cost
Salaries 924,000 924,000 924,000
Insurance 39,600 39,600 39,600
License 15,000 15,000 15,000
Loan interest 28,125 37,500 9,375
Rent 216,000 216,000 216,000
Advertisement 15,000 15,000 15,000
Loan repayment 28,250 375,000 93,750
TOTAL 1,265,975 1,622,100 1,312,725
Variable cost
Electricity 38,130 41,540 41,830
Water 31,220 33,840 30,560
Purchases 1,200,000 1,235,000 1,512,000
Stationary 10,000 9,300 19,550
Telephone 19,900 33,030 16,540
miscellaneous 32,300 29,420 29,300
TOTAL 1,331,550 1,382,130 1,649,780
Contribution margin

=Total sales-total variables

1st year=2,500,000-1,331,550=1168450
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2nd year=3,087,500-1,382,130=1,705,370

3rd year=3,780,000-1,649,780=2,130,220

Contribution margin%

1st year=1,116,450/2,500,000*100=46.74%

2nd year=1,705,370/3,087,500*100=55.23%

3rd year=2,130,220/3,780,000*100=55.36%

Breakeven point=fixed cost/contribution margin%

951 000/66.25%

=14,354.72

5.6 DESIRED FINANCE

It’s the capital required to start up a business

ITEMS AMOUNT

Pre-operational cost 2,331,350

Working capital 4,031,275

TOTAL 6,326,625

5.7 PROPOSED CAPITALIZATION

Is the total investment brought into the business

ITEMS AMOUNT

Owners equity 4,391,775

loan 750,000

friends 45,000

relatives 65,000

total 5,251,775

5.8 PROFITABILITY RATIO

Net profitability ratio=net profit after tax/total sales*100

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 1st year=58,191/2,5000,000*100=-2.33%

2nd year=384,946.8/3,087,500*100=12.47%

3rd year=765,445.8/3,780,000*100=20.25%

Owners equity ratio=net profit after tax/owners equity *100%

1st year=-58,191/4,391,775*100=-1.32%

2nd year=384,946.8/3,583,930*100=10.74%

3rd year=765,445.8/3,118,655*100=24.54%

Sales turn over=net profit after tax/total sales*100%

1st year=-69,275/2,500,000*100=-2.77%

2nd year=458,270/3,087,500*100=14.87%

3rd year=911,245/3,780,000*100=24.11%

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