BUSINESS PLAN PROPOSAL

WILLREEN BAKERY AND CAKERY

P.O.BOX 358 -00202 NAIROBI

PRESENTED BY: JACQUELINE MAUREEN BWIRE

NDEX NO : 20403192040
SUBMITED TO : THE KENYA NATIONAL EXAMINATION COUNCIL IN PARTIAL
FULFILLMENT FOR THE AWARD OF DIPLOMA IN INFORMATION COMMUNICATION
AND TECHNOLOGY.

EXAMINATION SERIES :NOVEMBER 2017

i
Contents
DECLARATION.......................................................................................................................................iii
DEDICATION..........................................................................................................................................iv
EXECUTIVE SUMMARY...........................................................................................................................v
CHAPTER ONE........................................................................................................................................1
1.1 BACKGROUND OF THE BUSINESS OWNER.......................................................................................1
1.2 BUSINESS NAME AND LOCATION.....................................................................................................1
1.2.2 BUSINESS LOCATION.....................................................................................................................1
1.2.3 THE BUSINESS LOGO.....................................................................................................................3
1.3 FORM OF BUSINESS.........................................................................................................................4
1.4. PRODUCTS AND SERVICES OF THE BUSINESS................................................................................4
1.5 JUSTIFICATION OF THE BUSINESS OPPORTUNITY............................................................................4
1.6 INDUSTRY........................................................................................................................................4
1.6.1 THE INDUSTRY SIZE...................................................................................................................6
1.6.2 INDUSTRY CHARACTERISTICS......................................................................................................6
1.6.3 INDUSTRY TRENDS......................................................................................................................6
A GRAPH REPRESENTING REVENUE GENERATED BY THE FOOD............................................................7
1.6.4 INDUSTRY OUTLOOK...................................................................................................................7
1.7 GOALS OF THE BUSINESS............................................................................................................8
1.8 THE ENTRY AND GROWTH STRATEGY.......................................................................................8
THE SWOT ANALYSIS FOR THE BUSINESS..............................................................................................9
2.0 MARKETING PLAN........................................................................................................................10
2.1 MARKETING OBJECTIVES............................................................................................................10
2.2 THE POTENTIAL CUSTOMER......................................................................................................10
2.3 MARKET SHARE..............................................................................................................................11
2.4 COMPETITION................................................................................................................................12
THE SWOT ANALYSIS FOR THE COMPETITORS.....................................................................................12
2.5 ADVERTISING AND PROMOTION.................................................................................................14
2.6 PRICING STRATEGY......................................................................................................................14
2.7 SALES TACTICS...............................................................................................................................15
2.8 DISTRIBUTION STRATEGIES............................................................................................................15
CHAPTER THREE...................................................................................................................................15
3.0 ORGANISATION & MANAGEMENT PLAN................................................................................15

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3.1 THE BUSINESS MANAGER AND THE MANAGEMENT TEAM...........................................................16
3.2 FUNCTIONS AND ROLES OF A MANAGER.....................................................................................16
3.5 RECRUITMENT.............................................................................................................................19
3.6 REMUNERATION AND INCENTIVES..............................................................................................20
3.7 SALARY STRUCTURE....................................................................................................................20
3.8 PROMOTION..................................................................................................................................20
3.9 LICENSE AND PERMIT....................................................................................................................21
4.0 OPERATION/PRODUCTION PLAN...................................................................................................22
4.1 Operation and Production Facilities.............................................................................................22
4.2 Machine, Tool & Equipment.......................................................................................................22
4.3 BUSINESS LAYOUT.....................................................................................................................23
4.4 FIRM LAYOUT.................................................................................................................................24
4.6 OPERATION STRATEGY................................................................................................................26
4.6 Production Strategy....................................................................................................................26
4.7 New products...........................................................................................................................27
4. Licenses and Permits- In addition to complying with food safety laws the business must acquire
special permits and licenses before commencing its operation......................................................29
5. Inspections- Your bakery may be subject to regular inspections by health officials. You must
have excellent sanitary practices and maintain a bakery providing food which is safe to eat.........29
5.0 FINANCIAL PLAN.........................................................................................................................30
5.1 Pre-operational Cost...................................................................................................................30
5.3 PROJECTED CASHFLOW STATEMENT OF THE YEAR 2019.............................................................34
PROJECTED CASHFLOW STATEMENT FOR THE YEAR 2020..................................................................35
5.4 PROFORMA INCOME STATEMENT FOR THE YEAR 2018................................................................36
5.7 IMPLEMENTATION TABLE..............................................................................................................39
5.8 APPENDIX.....................................................................................................................................40

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DECLARATION

I declare that the following business plan is my original work and has never been
presented to any college or university for examination.

NAME :JACQUELINE MAUREEN BWIRE

Index no :20403192040

Date :2ND OCTOBER 2017

Signature :

This business plan project has been submitted to the Kenya National Examination
Council with my approval as college supervisor.

Name :

Signature :

Date :

iii
DEDICATION

The business plan is dedicated to my husband William Vemba Lubikulu, my children Bijou, Don de
dieu , Gentil, Mireille and Jollie and lastly my supervisor Mr. Wanganga for their undying support.

iv
EXECUTIVE SUMMARY

Chapter 1: BUSINESS DESCRIPTION

It entails the name of the business which is WILLREEN FRESHY
BAKERY AND CAKERY and it will be located in Nairobi County,
Komarock Estate along Mwangaza Road, The owner of the business will be
Jacqueline Maureen Bwire and the starting capital will be Ksh 3,000,000.It
will be a sole proprietorship form of business.

Chapter 2: MARKETING PLAN

It entails the marketing objectives of the firm to act as a guideline also the
potential customers of the firm. It has the chart showing the market share
between the firm and its competitors. It has the pricing strategy that will be
used by the firm.

Chapter 3: ORGANISATION AND MARKETING PLAN

It outlines the functions of the manager in the business, the organization
chart, duties and responsibilities of the employees, method that will be used
for recruitment and remuneration and incentives.

Chapter 4: OPERATION / PRODUCTION PLAN

It shows the operation process, the production process and operation and
production facilities. It shows the business layout diagram and the firm
layout diagram. It also has the operation and production strategies.

Chapter 5: FINANCIAL PLAN

It entails the projected cash flow for three years, proforma balance sheet for
three consecutive year

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CHAPTER ONE
BUSINESS DESCRIPTION

It entails the name of the business which is WILLREEN FRESHY

BAKERY AND CAKERY and it will be located in Nairobi County,
Komarock Estate along Mwangaza Road, The owner of the business will be
Jacqueline Maureen Bwire and the starting capital will be Ksh 3,000,000.It
will be a sole proprietorship form of business.

1.1 BACKGROUND OF THE BUSINESS OWNER

The owner of the business is Jacqueline Maureen Bwire. She is forty one years old and
married. Attended high school at Nakeel Secondary School where She did her KCSE in
the year 1994, she has a Diploma in Business Administration and has a certificate in
culinary arts, she works at Kenyatta National Hospital is currently pursuing Diploma in
Information Communication Technology at Nairobi Institute of Business Studies. She
hopes in pursuing the same course but at the Degree level two years from now. She plans
on starting a Modern bakery and snack shop which will require a capital of
3,000,000shillings.She has an owner's equity of 250,000 and will acquire a bank loan of
2,750,000shillings.The Business will start as a small family enterprise envisioned to grow
into a professionally managed organization in the near future.

1.2 BUSINESS NAME AND LOCATION

The proposed name of the business will be, ‘WILLREEN FRESHY BAKERYAND
CAKERY”. It will stand out and giving it a competitive advantage in the market around
in that it bakes and makes its own fresh cakes and assorted snacks and pastry and does
not rely on suppliers to bring its supplies as other surrounding businesses. So its
customers will be provided with freshly made and baked snacks with no preservatives.

1.2.2 BUSINESS LOCATION

It is located in Komarock Sector 2 Estate along Kireru Road off Mwangaza Road,
opposite Gertrudes Children Hospital and surrounding schools such as New Light
Academy, Komarock Primary, and Infill Academy. This location will favor the business

vi
 because of the target market of the number of school going children who will buy freshly
made snacks and at reasonable prices.

1.2.2 BUSINESS LOCATION

MAP SHOWING BUSINESS LOCATION

KOMAROCK
SECTOR 2 ESTATE
HSE NO 223,
KKK KIRERU RD
WILLREEN SHOP

MWANGAZA ROAD S

P
GERTRUDES
HOSPITAL I

NAIVAS N

KOMAROCK E

D
BEE CENTRE
FROM KANGUNDO ROAD FROM DONHOLM

SPINE ROAD

vii
RD

FROM OUTERING ROAD

1.2.3 THE BUSINESS LOGO

The logo is a cake giving the business an identity thus associating the business with baked products

WILLREEN FRESHY BAKERY AND CAKERY

PO BOX 358- 00202
NAIROBI
TELEPHONE 0721312610
EMAIL: willreenbakeryand cakery@gmail .com

MOTTO: WE LISTEN WE CARE

VISION STATEMENT: Be the Company of choice that deliver excellent Customer Service and
delightful baked goods that encourage our customers to keep coming back for more and enjoy their time
while in our premises.

MISSION STATEMENT: We strive to provide delicious and quality baked goods for our customers at
an affordable cost.

viii
1.3 FORM OF BUSINESS
The business will be in form of sole proprietorship, whereby the business owner will
own and manage the business and will be responsible for all business transactions.
Some of the benefits of using this form are:
 The startup costs are low.
 One has maximum privacy in the business.
 The business owner keeps all the profits.
 Establishing and operating business is simple.

1.4. PRODUCTS AND SERVICES OF THE BUSINESS

The firm will will offer PRODUCTS such as:
 STOREFRONT PRODUCTS SUCH AS:
 Baked foods-Avariety of cakes flavors, cupcakes, cookies, brownies, pastries,breads,
savory snacks
 Freshly prepared sandwiches, salads, and soups
 Beverages (hot and cold)
 CORPORATE SERVICES SUCH AS:
 Lunch Catering –Sandwiches, Salads ,Soups, Bread rolls, Desserts
Our bakery will focus on breakfast, lunch and snacks serving from a customer base of
pupils and students from surrounding schools, local employees from institutions
around.
 SPECIAL ORDERS SUCH AS:
Catering - for parties, birthday cakes, wedding cakes, all celebration cakes

1.5 JUSTIFICATION OF THE BUSINESS OPPORTUNITY

The business was conceived from the frustration of the owner having to buy snacks for her
school going children from supermarkets which had overstayed on the shelves and were
sometimes stale , expensive and lacked a variety to choose from, thus the quality was
compromised.so she saw the need to start a business that will supply its customers with
freshly made and baked snacks and especially her target being school going children.
Secondly the need to meet target nutritional and regulatory aspect by offering variety of
product that attract not only health-minded shoppers but also those craving classic
indulgence.

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1.6 INDUSTRY
Willreen Freshy Bakery and Cakery belongs to the food manufacturing industry. The
business falls under the ministry of industrialization and entreprise development .

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1.6.1 THE INDUSTRY SIZE
Facts about the bakery Industry
The bakery industry in Kenya includes 179 registered commercial bakeries with annual
revenue of Ksh30 billion. The commercial side of the industry is highly concentrated, with
75% largest companies generating 75% of revenue, on the other hand, the retail side is highly
fragmented, with 25% small companies generating around 25% of revenue. In the retail
industry, most companies operate just one facility. For companies of all sizes, profitability is
strong tied to the efficiency of their operations. Large bakeries are able to reach economies of
scale advantages, while small bakeries can compete by offering specialty goods and offering
superior local services.

1.6.2 INDUSTRY CHARACTERISTICS

 Buyer needs and requirements
The bakery will take into consideration the needs and taste of the final buyer by conducting
periodic research in order to understand the major shifts in consumer needs and requirements.
 Market size and growth rate
Market size refers to the total number of firms operating in the industry.it is important to
know whether the industry is growing, static or declining.
 Number of business rivals
Knowledge of whether the industry contain too many small rivals or is it dominated by few
large firms. Have knowledge about various development in the industry such as mergers and
acquisitions.
 Scope of competitive rivalry
Knowledge of the level of competition. knowledge about the nature of future competition for
example knowledge that for the business to be successful in future it must venture into
diversification of its products, product development and market expansion. This must start
from the very first day.

1.6.3 INDUSTRY TRENDS

By capitalizing on trends in customer, tastes, bakeries of all sizes can increase their margins
and stay in Business. Small companies can cater to people’s desire for handcrafted artisanal
products, healthful baked offering that do not contain trans fats or additives, gluten-free
products tailored with grain sensitivity thus building a recognizable niche that larger
operation would have a hard time replicating. Small Bakeries can appeal to growing demand
for organic products by applying for certification from Kenya Bureau of Standards. This tiny
steps can swing the industry currents in the bakery favor.
The following Graph shows the industry trend for the last five years and the target it hopes to
achieve.

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A GRAPH REPRESENTING REVENUE GENERATED BY THE
FOOD MANUFACTURING INDUSTRY IN KENYA.

REVENUE RAISED BY BAKERY INDUSTRY FROM 2012-2016

300

250

200
KSH IN BILLIONS

150

100

50

YEARS
2016 2013 2012

1.6.4 INDUSTRY OUTLOOK

Several indicators help to give a sense of where the baking industry may be headed in years
to come. As from the graph there is potential increase in bakery revenue generation. The
graph shows the amount of billions of Kenya shillings against the five previous years that is
(2012-2016).the revenue raised in 2012 has steadily increased down the years up to 2015
where revenue remained constant up to 2015 but in 2016 the revenue raised to 30 billion.
It is focasted that by the year 2025 the industry will generate over 365 billion shillings. This
shows that the industry is very promising for startups.

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1.7 GOALS OF THE BUSINESS
The following are the goals of the business;

 To increase cash inflow to the firm monthly in terms of profits.

 To be recognized as one of the best baker nationally in three years.
 To increase the number of clients in our business daily..
 To open another branch in two year
 Aim to offer high quality products at competitive prices to meet the demand of
the middle to higher income local market area residents.
 Provide the highest quality products with personal customer service.
 Expand production to increase corporate customer sales.

1.8 THE ENTRY AND GROWTH STRATEGY

The business will commence on 1st January 2018.

The owner of the business will advertise the business in the following ways;
 Fliers
Fliers will be given randomly to the passersby not only around Komarock estate but also in
other estates. They will contain; the picture of the firm, the products and services we will be
offering, a calendar at the back.

 Word of mouth.
The owner of the business will use word of mouth through friends and giving incentives to
school children.

 Posters.
The owner of the business will print posters which will be posted within its vicinity and
neighbouring estates such as Donholm, Umoja, Kayole etc.

 Internet.
The owner will use social media eg Facebook, Twitter and Instagram account to sell its
products and also for online getting feedback and suggestions from clients.

 Branding
Branding of bakery packaging so that shoppers walk out the door with your name on every
package. This ensures extensive advertisement of the business and help spread the word to
gain more notoriety for the place of business.

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xiv
  Product differentiation
Willreen Freshy Bakery and Cakery will remain innovative in product to stand out
from the competition. It’s will in future introduce new products lines like ‘Organic
food’ during the expansion.

THE SWOT ANALYSIS FOR THE BUSINESS

STRENGTH WEAKNESSES OPPORTUNITIES THREATS
The Business will hire Well The firm is new in Government offers Competition from other
trained employees who will the industry subsidies bakers
provide healthy treat
Variety of products to Inadequate funds Population increase Political instability
choose from
We bake our own products Business faces stiff Expansion of product High banking rates
that assure quality,freshness, competition line in the future charged on loans
and taste.
Adequate modern Since we are a Customer awareness Regulations from the
equipments startup the selection government
of products are
limited and it is a
weakness compare
to the competitor
Personal customer service Since we are a Use of Technology
,staff that are friendly, startup we are yet to Volatility of Raw
welcoming and trained to put be registered in the Materials and Energy
customers first minds of a lot of costs
customers.
Unique family Recipes that High upfront capital Faster market growth Low prices from
differentiate our products investment competitors
from others,
Use of Gluten-free and low Competitors have Business will be Retail Rent
carb ingredients thus superior access involved in
production of organic channels of community activities
products distribution eg sponsorship of
sport to the youth.
Small joint atmosphere- we
connect with our client
Location of the Business will
be placed in such an area that
can easily be accessed, at the
Main entrance of the
residential estate

xv
2.0 MARKETING PLAN
It entails the marketing objectives of the firm to act as a guideline also the
potential customers of the firm. It has the chart showing the market share
between the firm and its competitors. It has the pricing strategy that will be
used by the firm.

2.1 MARKETING OBJECTIVES

 To double the firm’s profits and cash flow at the end of the year.
 To build brand awareness for the business.
 To maintain positive growth which is positive every year.
 To open an outlet in two years.

2.2 THE POTENTIAL CUSTOMER

a. Students and Lecturers.

Willreen will be situated near schools which will act as an added advantage of
targeting the students, lecturers and staff as potential customers.

b. In and Outgoing patients.

Willreen is opposite gertrudes children Hospital and Modern hospital so the
business will target the in and outgoing patients, doctors, nurses other staff in
the facility.

c. Storefront customers-Direct consumers that is the local market area resident

within the residential estate. Walk-in customers who just want to enjoy a
delicacy or clients celebrating special occasions like birthdays, anniversary,
graduations. Willreen will meet the demand of the local resident within the
vicinity.

xvi
d. Corporate customers-Employees from various institutions within the
business locality for example banks (cooperative bank, family bank and
equity bank

2.3 MARKET SHARE

The population statistics in Komarock is approximately 20000 resident and
kayole is 137866 residents where the willreen bakery will be established. The
total estimated population is around 157866 people. The main competitors are
Naivas Supermarket and Turskys Supermarket. The total number of customers
expected by the three businesses are 145000.The market share will be
distributed based on the years of existence, Naivas Supermarket has existed for
10 years, it will have a market share of 50% which gives it 72500 number of
estimated customers. Then Tursky’s is another competitor which has existed for
only one year , it will have a market share of 30% which gives it 43500 number
of estimated customers Other small kiosks within the estate will have a market
share of 5% which gives them 7250 number of estimated customers. Willreen
Bakery will get the remaining market share of 15% giving it 21750 number of
estimated customers because it will be very new in the industry. The market
share analysis is shown in the pie chart below, the percentages will be
represented in degree form

A CHART SHOWING MARKET SHARE OF COMPETITORS

10%
15%

50%

25%

naivas supermarket turskey's supermarket

Rehoboth shop willreen freshy bakery and cakery

xvii
2.4 COMPETITION
Competition in the local area is somewhat sparse and does not provide nearly
the level of product quality and customer service as willreen intends to. Local
customer are looking for a high quality product. They desire a unique, classy
experience
The following is a list of 3 major competitors for Willreen Bakery;
 Naivas Supermarket which is located on spine road and is the major competitor
 Tursky’s Supermarket
 Rehoboth shop-is a small Retail shop located within the same estate as Willreen
Bakery along Kireru Road.

THE SWOT ANALYSIS FOR THE COMPETITORS

1. NAIVAS SUPERMARKET
STRENGTH WEAKNESSES OPPORTUNITIES THREATS
Prestigious, established, and High upfront capital Stiff Competition from
successful branding so brand investment other bakers
name is acceptable across the
Nation

More variety of products Vulnerable to Population increase Political instability

from other suppliers. competitive
pressures
Over 10 years of existence in High banking rates
the industry. charged on loans
Adequate modern Customer awareness Regulations from the
equipments government
Competitive prices and new Use of Technology
marketing strategies Volatility of Raw
Materials and Energy
costs
Number of staffing is Faster market growth Low prices from
adequate so staff can work in competitors
different shifts thus reducing
burnouts.
Uses best and expensive Retail Rent
advertising strategies such as
billboards, roadshows ,radio
and television to market
themselves
Reputable can access
financing easily
Strong Distribution network
even in remote areas

xviii
 2 TURSKYS SUPERMARKET
STRENGTH
Prestigious, established, and High upfront capital
successful branding so brand investment
name is acceptable across the
Nation
More variety of products
from other suppliers.
Over 15 years of existence in
the industry.
Adequate modern
equipments
Competitive prices and new
marketing strategies
Number of staffing is
adequate so staff can work in
different shifts thus reducing
burnouts.
Uses best and expensive
advertising strategies such as
billboards, roadshows ,radio
and television to market
themselves
3 REHOBOTH SHOP
STRENGTH
Does not manufacturer own
products so does not incur
cost of production
More variety of products
from other suppliers.
Has been in existence in the
estate for more than 5 years.
Offers credit to its loyal
customers who pay at the
end of the month
Low upfront capital
investment
WEAKNESSES OPPORTUNITIES THREATS
Population increase Stiff Competition from
other bakers
Vulnerable to Faster market growth Political instability
competitive
pressures
Customer awareness High banking rates
charged on loans
Use of Technology Regulations from the
government
Diversify into related
courses and services. Volatility of Raw
Materials and Energy
costs
Complacency among Low prices from
other institutions competitors
Enter new market/ Retail Rent
segment
WEAKNESSES OPPORTUNITIES THREATS
Low quality Population increase Stiff Competition
products
Low profits Customer awareness Political instability
Creditors might High banking rates
refuse or delay to charged on loans
pay
Lack of marketing Regulations from the
expertise government
Competitors have
superior access Low prices from
channels of competitors
distribution
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 Retail rent

2.5 ADVERTISING AND PROMOTION

To achieve our goals, we need to first get our neighborhood knowing about us. This is why
word of mouth is our primary strategy. To achieve this, we will focus on the following
methods to advertise and promote products and services:
 Being very active on social media (facebook and twitter especially).
 Word of mouth campaigns through distribution of flyers in the neighborhood,
coupons in the local newspapers.
 Mounting of Banners and posters in the neighborhood.
 Branding of packages
 Participate in community events by providing products at cost to build or refresh our
brand.
 Loyalty rewards- birthday promotions
 Occasional special emails to families wishing them on annual recurrence like
birthdays etc
 Excellent Customer service.

2.6 PRICING STRATEGY

The owner of the Willreen Bakery and Cakery will use the following pricing strategies;

 Penetration pricing policy

With this policy, the initial price for a new product will be very low to achieve quickly the
largest possible market share.
Advantages

 It is well suited for price sensitive market.

 It enables a competitor to enter the market quickly.
 It attracts a large volume of sales in the market.
 Single Pricing Policy
It offers products or services purchased at the same time and same quantity a single price to
all.

Advantages
 It simplifies transactions

 It creates customer trust

 It makes bookkeeping easier

xx
2.7 SALES TACTICS
 The owner of the business will offer free samples to increase sale volumes in the early
stages.
 The business owner will combine several services and products for one price.
 The business owner will make home deliveries for various customers.

2.8 DISTRIBUTION STRATEGIES

The owner of the business will use a direct distribution strategy.

Producer

Consumer

The following are the advantages of this strategy of distribution;

 It will reduce the cost incurred in products delivery.

 It will create a friendly relationship between the producer and consumer.
 It will be easier for the business owner to manage the business.

CHAPTER THREE
3.0 ORGANISATION & MANAGEMENT PLAN
It outlines the functions of the manager in the business, the organization
chart, duties and responsibilities of the employees, method that will be used
for recruitment and remuneration and incentives.
xxi
3.1 THE BUSINESS MANAGER AND THE MANAGEMENT
TEAM
The manager of the business will be the owner of the business. The business manager will be
required to have a Diploma in business management, computer literate and at least some
expertise in culinary arts especially in baking. The business will also have a management
team comprising of Human resource manager, Sales manager and a Team coordinator.

3.2 FUNCTIONS AND ROLES OF A MANAGER

Functions of a manager

 Inspect work areas or operating equipment to ensure performance and quality service.
 Training workers in proper operational procedures and functions.
 Collaborating with staff members to develop or plan programs of events
 Taking disciplinary actions to address performance problems

Roles of a manager

 Organize tasks and allocate the right people to do them.

 Motivate the staff mold them into a cooperative team.
 To develop people through finding, training and nurturing employees.

xxii
3.3 0RGANISATIONAL CHART

MANAGERER

HR SALES CHIEF
MANAGER SUPERVISOR
MANAGER BAKER

CASHIER SECURITY CLEANER

MANAGER

3.4 DUTIES AND RESPONSIBILITIES

E Duties Roles Academic Qualification and
Experience
Manager  Inspect work
areas to ensure  Set goals and  Diploma in business
quality service. objectives. management.
 Taking  Organize tasks and  K.C.S.E Certificate
disciplinary allocating the right  At least some expertise in
actions people. culinary especially baking
Human
Resourc  To train  To manage risks  Diploma in Human resourc

xxiii
e
Manager employees. managed by the management
 To recruit business.  K.C.S.E certificate
workers.  To recruit and select .At least 2 years’ experienc
 To motivate and employees.
supervise
employees.
Sales
Manager  To study market  Prepare reports of the  Diploma in sales and marke
conditions and department regularly.  K.C.S.E certificate
give suggestions.  Make sincere efforts at  At least 2 years’ experience
 To maintain achieving sales target.
discipline in sale  Resolve customer
organization. complaints.
 To organize
activities relating
to sale
promotion.
SUPER
VISOR/  Offer routine  Train on new tasks and  One should have good
DRIVE instructions to programs. leadership and communicat
R members.  Lead and support staff. skills.
 Ensure  Offer routine reports  A K.C.S.E certificate.
performance of regularly.  At least a 2years’ experienc
team members.  Do the deliveries  Driving license
 Review and
approve time
sheets.
 Do delivery
CHIEF
BAKER  Responsible for  Responsible for training  Diploma in Hotel managem
preparing new bakers.  K.C.S.E certificate
different flavor  Makes sure that quality  At least a 2 year experience
and style for all in maintained all times.
bakery products.
 Make lists and
budget for
bakery supplies.
 Oversees the
entire bakery
process.

CLEAN  K.C.S.E Certificate

ER  Responsible for  Ensure that toiletries and  Certificate in cleaning and
cleaning the supplies don’t run out of support services skills.
cleaning the stock  At least 1 Year experience
baking facility at  Any other duty assigned

xxiv
 all times. by supervisor.
 Cleans both the
interior and  Maintain clean and
exterior of the orderly checkout areas
building.

SECURI
TY  Ensure that the  prepares security reports  K.C.S.E Certificate
OFFICE facility is secure weekly  Security guard training.
R at all time.  any other duty assigned  Basic computer skills
 Control traffic by supervisor.
and organize  Offer customers carry-out
parking. service at the completion
 Patrols around of transactions
the building on a
24 hour basis.
 Monitor the
CCTV Camera
CASHI
ER  Receive payment  Count money in cash  K.C.S.E Certificate.
by cash, check, drawers at the beginning  Basic Computer skills,
credit cards, of shifts to ensure that  Basic Book keeping Skills
vouchers, or amounts are correct.  At least 2year experience
automatic debits.  Ensure that there is
adequate change.
 Issue receipts,  Greet customers entering
refunds, credits, establishments.
or change due to  Stock shelves, and mark
customers. prices on shelves and
items.
 Weigh items sold by
weight in order to
determine prices.

3.5 RECRUITMENT
The manager of the firm will use Internal Recruitment method to create a pool of applicants.
Internal recruitment is a method used by a business manager to fill a vacancy in the business
from within its existing workforce.
The following are the advantages of Internal Recruitment;

xxv
 It cuts on the costs of advertisements
 It helps in keeping workers who may have been considering to flight from the
company.
 It offers wonderful opportunities for the current staff to further their careers.
 The manager will have the opportunity of choosing a talented and competent
candidate.
 Internal recruitment workers don’t demand for huge pay

xxvi
3.6 REMUNERATION AND INCENTIVES
POST BASIC SALARY INCENTIVES GROSS PAY

Manager 25000 5000 30,000

Human Resource 20000 2000 22,000

Manager

Sales 20000 2000 22,000

Manager/Driver

Chief Baker 10500 1000 11,500

Supervisor 10500 1000 11,500

Cleaner 7000 250 7,250

Security Officer 7000 250 7,250

Cashier 8000 500 8,500

GRAND TOTAL 120,000

3.7 SALARY STRUCTURE

JOB TITLE JOB STARTING HIGHEST
CATEGORY SALARY SALARY
Manager K1 30000 80000
Human Resource K2 22000 65000
Manager
Sales Manager K3 22000 60000
Chief Baker k4 11500 50000
Supervisor K5 11500 40000
Cashier K7 7250 30000
Cleaner K7 7250 20000
Security Officer K6 8500 20000

xxvii
3.8 PROMOTION
The manager will use promotion on the basis of merit.
Merit is a formula whereby the promotion is made based on the qualifications which an
employee possesses. The following are some of its advantages;
a) It encourages employees to increase their knowledge in maintaining a high level of
productivity.
b) It helps in putting the most competent and productive person.
c) New employees are encouraged to improve their performance
d) It results in overall improvement of their organization.

3.9 LICENSE AND PERMIT

The owner of the business will acquire the license from the Nairobi County Council. It will contain
health permit, name of business, Fire licences and Food Handling Certificate for workers who handle
food preparation.

3.10 SUPPORT SERVICES

 The owner of the business will get financial assistance from Cooperative bank.

COOPERATIVE BANK OF KENYA(KAYOLE BRANCH)

P.O. BOX 6897-00203
NAIROBI

 The business owner will also get need water services from

NAIROBI WATER AND SEWERAGE COMPANY

P.O.BOX
NAIROBI

xxviii
xxix
4.0 OPERATION/PRODUCTION PLAN
4.1 Operation and Production Facilities
The office will require the following:

 Cashpoint
 Book keeping
 Computers
 CCTVS for security
 Reception area
 Fire safety measures i.e. fire extinguishers
 Toilet facilities.

4.2 Machine, Tool & Equipment

PARTICULARS QUANTITY PRICE SUPPLIERS TOTAL

PER UNIT AMOUNT
Gas cookers 1 30000 Sony 30000
Convection Oven 1 300000 Caterina UK 300000
Microwave 20000 Samsung 20000
Mixer 1 150000 Caterina UK 150000
Display counter 1 100000 100000
Fridge 1 80000 Samsung 80000
Baking tins and 70000 Lion Brand 70000
other accesories Ltd
Automatic Bread 1 50000 Caterina UK 50000
Slicer
Computer 2 50000 HP KENYA 100000

xxx
 4.3 BUSINESS LAYOUT

WASHROOMS

MANAGER’S OFFICE SALES MANAGER

H.RESOU
CE OFFICE

BAKING
SUPER
AREA
VISOR

RECEPTION AREA CASHIER

SECURIY

ENT EXIT
RA
NCE xxxi
 4.4 FIRM LAYOUT

OFFICES

BAKING AREA

RECEPTION CASHIER

SECURIY

xxxii
4.5 THE PRODUCTION PROCESS OF BAKING BREAD AND CAKES

MEASURING AND
PRE MIXING

DIVIDING

MOULDING

PROOFING

BAKING

COOLING

SLICING.

PACKING

DISPLAYING ON
THE COUNTER

xxxiii
4.6 OPERATION STRATEGY
The following strategies are going to be used to ensure that services are delivered in the best way
and there is continuous improvement.

i. Obtain licenses from local authorities.

ii. Have a unique recipes.
iii. Invest in security like purchase of cctv cameras etc.
iv. Have a computerized cash register system i.e. customers paying via swipe cards and
do away with manual processes.
v. Seek post-sale feedback from clients.
vi. The Business will cater to a niche consumer by using organic or vegan products
vii. The Business shall take the time to find out customers' expectations.

viii. The Business shall follow up on both positive and negative feedback they receive.
ix. The Business shall continuously look for ways to improve the level of customer service
delivery.

4.6 Production Strategy

The business shall use the following strategies to ensure that the quality of its products and services
is maintained at the highest level.

i. Save money by purchasing ingredients in larger quantities, giving you a greater ability to
offer your products for a competitive price.
ii. The Business will have regular health inspections by a health officer
iii. The Business shall Invest in food storage facilities/equipment.
iv. The Business shall Create more links in the internet for marketing purposes and
home delivery.
v. The Business shall Connect with the clients by giving them a platform to give their
feedback.
vi. The Business shall Establish a customer complaint policy
vii. The Business shall Recognise and reward staff behaviour that you want repeated.
viii. The Business shall Review recruitment practices to ensure you employ the right front-line
staff.
ix. The Business shall Include a staff training program and review staff performance regularly

x. The Business shall Encourage ideas, suggestions and observations from all staff and establish
an anonymous staff suggestion box if staff are uncomfortable sharing ideas.
xi. The Business shall Record client details in a Customer Relationship Management (CRM)
database
xii. Treat every Customer as if they were the only customer the Business is relying on.
xiii. Train the staff to provide excellent customer service.

xxxiv
 4.6 NEW SERVICES

The Business shall venture into the following services to its customer:

1.The Business will differentiate itself through added services, such as customized
cake orders or delivery or rush service options.

2. Reward customers with a customer loyalty program.

4.7 New products

Willreen cakery and Bakery will come up with 2 New Products, these are the diabetic cake
and Vegan cake for vegetarians.

DIABETIC CAKE FOR DIABETIC PATIENTS

INGREDIENTS

100g plain flour

1 heaped tbsp artificial granulated sweetener

1 level tsp ground cinnamon

6g baking powder

3 eggs

3 level tbsp skimmed milk

75g low-fat spread, melted

1kg apples

knob unsaturated margarine, for greasing

METHOD

xxxv
 Preheat the oven to 200°C/gas 6.

1. Sift the flour into a bowl, add the artificial sweetener, baking powder and
cinnamon into the flour and mix.

2. Make a well in the middle of the dry ingredients and add the eggs and the
milk. Whisk and add in the melted butter.

3. Peel and core the apples and remove the seeds. Cut them into large
slices. Add the apple slices to the mixture and fold in gently.

4. Grease a cake tin (around 23cm in diameter) with the knob of margarine.
Pour the mixture into the tin and bake in the oven for 35 minutes.

5. Turn out onto a cooling rack. Leave to cool and serve

VEGAN LEMON CAKE FOR VEGETARIANS

Ingredients

 2 cups of flour
 1 tsp baking powder
 1 tsp baking soda
 ½ tsp salt
 ½ cup sugar
 zest of a lemon
 ½ cup olive oil
 1 ½ tbsp water
 1 cup soy yoghurt
 1 tsp vanilla powder (optional, can be substituted with vanilla essence)
 ¼ cup lemon juice
 50 g (1.76 oz) vegan butter, melted

Lemon Glaze

 1 cup icing sugar

 1 ½ tbsp lemon juice
 1 tbsp water

Instructions

1. Preheat the oven at 160°C/320F. Grease a bread form and line the inside with a
baking sheet or breadcrumbs.
2. Sift the flour in a bowl and combine with baking powder, baking soda, vanilla
powder, salt, lemon zest and sugar.
3. Add water, olive oil, vegan yoghurt, lemon juice and melted vegan butter and quickly
combine all the ingredients to a smooth batter (be careful not to overmix).

xxxvi
 4. Pour the batter in the bread form and bake in the oven for 40-45 min or until a skewer
comes out clean (note in the comments that some covered the cake with foil and let it
bake for longer). Carefully remove the cake from the form and let cool completely.
5. Mix icing sugar and lemon juice to a creamy consistency, spread over the cake and let
it firm before slicing the cake.

4.8 REGULATIONS AFFECTING THE BUSINESS.

1. Government Taxes- the Business must pay sales taxes on baked goods which are a
burden to small Businesses.

2.Banking- getting Financial assistance from Banks is not easy for small Businesses.

3. Dietary and nutritional guidelines- people are now more conscious to their health.

4. Licenses and Permits- In addition to complying with food safety laws the business
must acquire special permits and licenses before commencing its operation
5. Inspections- Your bakery may be subject to regular inspections by health officials.
You must have excellent sanitary practices and maintain a bakery providing food
which is safe to eat.

4.9 RISK MANAGEMENT

The following are hazards the Business may face:

 Theft- Theft from employees and outsiders

 Fire- outbreak of fires.
 Floods- heavy rains may cause flooding
 Power failure- power outages may affecting services
 Water shortage- rationing of water
 Absence of Key Staff- in case of sickness
 Baked products becoming stale.

The following are measures the business will apply to mutigate the above
risks:

 Use of CCTV’s
 Use of burglar proof doors
 Use of fire extinguishers
 Train employees on fire safety
 Dig drains
 Use of generators
 Invest in large water tanks
 Train all employees on basic baking skills
xxxvii
  Market your products well and good customer service.

5.0 FINANCIAL PLAN

5.1 Pre-operational Cost

PARTICULARS AMOUNT

Rent with two months deposit 80,000

Business legislation 50,000

Insurance 5,000

Loan repayment from bank 2,750,000

Salaries 120,000

, 1,625,000

xxxviii
5.2 Working Capital
PARTICULARS AMOUNT

Expenses 278,000

Stock 380,000

Electricity 5,000

Water 2,000

Miscellaneous 120,000

Taxes 590,000

TOTAL 1,375,000

 Preoperational Cost + Working capital=Desired Financing

1,625,000 + 1,375,000 = 3,000,000
 Owners’ Equity + bank loan = Proposed Capitalization
250,000 +2,750,000 = 3,000,000

xxxix
xl
 5.2 Projected Cash flow Statement for the Year 2018

PARTICULARS JAN FEB MAR APR MAY JUN JULY AUG SEPT OCT NOV DEC TOTAL

Beginning Cash 120000 135000 140000 155000 160000 163000 200000 230000 235000 240000 245000 250000 2273000
Cash sales 250000 252000 260000 263000 265000 268000 270000 273000 275000 280000 285000 290000 3231000
Bank loan 2750000 2750000
Owners’ Equity 250000 250000
Debtors 5000 8000 10000 12000 14000 20000 69000
TOTAL CASH 3370000 387000 405000 418000 425000 439000 470000 513000 510000 532000 544000 560000 8573000
INFLOW
License 3516 3516 3516 3516 3516 3516 3516 3516 3516 3516 3516 3516 42192
Insurance 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
Electricity 2000 1500 900 1000 1100 1000 1200 900 1500 1000 1500 2000 15600
Rent 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 84000
Bank Loan 99305 99305
Repayment

Purchases 15000 18000 48000 64000 72000 289000

Advertisement 2000 5000 3500 1500 2000 5000 3500 4000 4500 2000 2500 3000 38500

Salaries 120000 120000 120000 120000 120000 120000 120000 120000 120000 120000 120000 120000 1440000

Water 1000 500 1200 1500 1000 1000 1500 1800 2000 1000 1500 1800 15800

Stock 15000 20000 25000 30000 20000 15000 10000 20000 20000 150000 30000 220000

TOTAL CASH 252821 160516 164116 182516 175616 188516 154716 214216 161516 157516 266016 170316 1865397
OUTFLOW

Net Cash 3117179 226484 240884 235484 249384 250484 315284 298784 348484 374484 277984 389684 6418603
Balance

xli
 5.3 PROJECTED CASHFLOW STATEMENT OF THE YEAR
2019

PARTICULARS JAN FEB MAR APR MAY JUN JULY AUG SEPT OCT NOV DEC TOTALS
BEGINNING 311717 226484 240884 235484 249384 250484 315284 298784 348484 374484 277984 389684 6418603
CASH 9
CASH SALES 253000 280000 300000 350000 378000 380000 400000 420000 435000 450000 480000 450000 4586000
OWNERS 35000 50000 45000 55000 60000 245000
EQUITY
DEBTORS 15000 20000 35000 50000 46000 46000 212000
TOTAL CASH 385117 541484 458000 560884 627384 710484 715284 768784 838484 870484 879840 885684 11461603
INFLOW 9
LICENSE 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
INSURANCE 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
ELECTRICITY 1000 1500 900 1000 1200 1500 2000 1500 1000 1200 1000 1000 14800
SALARIES 132000 132000 132000 132000 132000 132000 132000 132000 132000 132000 132000 132000 1584000
Bank Loan 99305 99305
Repayment
WATER 1000 1500 1000 2000 2500 1000 1500 2000 1000 2500 1500 1000 18500
ADVERTISMEN 1500 2000 2000 500 6000
T
RENT 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 84000
CREDITORS 2000 5000 10000 3000 20000
STOCK 15000 5000 12000 15000 10000 57000
PURCHASES 3000 3500 3000 4000 4200 4500 4000 3500 3000 3200 4200 4000 44100
TOTAL CASH 264805 152500 148900 163000 151900 151000 163500 163000 149000 165900 154200 160000 1987705
OUTFLOW
NET CASH 304037 388984 309100 397884 375484 559484 551784 605784 689484 704584 663784 725684 9012414
BALANCE 4

xlii
 PROJECTED CASHFLOW STATEMENT FOR THE YEAR 2020
PARTICULARS JAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC TOTALS
BEINING CASH 3040374 388984 309100 397884 357484 559484 551784 605784 689484 704584 663784 725684 9012414
CASH SALES 260000 270000 315000 320000 330000 370000 400000 450000 500000 550000 565000 570000 4900000
OWNER’S 30000 15000 12000 10000 12000 79000
EQUITY
DEBTORS 15000 10000 20000 30000 50000 80000 205000
TOTAL CASH 3081374 688984 624100 727884 420484 949484 963784 1085784 1199484 1304584 1228784 1387684 14196414
INFLOW
LICENSE 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000
INSURANCE 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 3000 36000
ELECTRICITY 1500 1000 1500 2000 2500 2000 1500 2500 1000 1000 2000 2500 21000
SALARIES 145200 145200 145200 145200 145200 145200 145200 145200 145200 145200 145200 145200 1742400
Bank Loan Repay 99305 99305
WATER 2000 2500 1000 900 1500 2500 2000 1000 1500 900 2000 2500 20300
ADVERTISEMENT 1500 2000 2500 1500 1000 8500
RENT 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 7000 84000
CREDITORS 10000 50000 30000 45000 135000
STOCK 15000 10000 20000 10000 50000 105000
PURCHASES 3500 3000 2500 3800 3000 2500 3200 2800 3800 3000 2500 2000 35600
TOTAL CASH 278505 163700 183700 163900 166200 234200 166400 163500 205000 162100 212600 209200 2309005
OUTFLOW
NET CASH 2802869 525284 440400 563984 254284 715284 797384 1642284 994484 1142484 1016184 1178484 11887409
BALANCE

xliii
5.4 PROFORMA INCOME STATEMENT FOR THE YEAR 2018

PARTICULARS AMOUNT
Sales 3231000
Cost of Sales (247000)
Gross Profit 2984000
EXPENSES
Salaries 1440000
Rent 84000
Insurance 36000
Water 15800
License 42192
Advertisement 38500
Bank loan Repayment 99305
Stock 22000
Purchases 289000
Electricity 15600
Total Expenses 2082397
Net Profit(gross profit –Total Expenses) 901603
Net Profit after tax 270480

xliv
5.5 FINANCIAL POSITION AS AT 31ST DECEMBER 2017
PARTICULARS AMOUNT
FIXED ASSETS
Vehicle 360000
Machinery 112500
Computer 12250
Furniture 60000
Total Fixed Assets 544750
CURRENT ASSETS
Stock 57000
Cash at Bank 2206378
Cash at Hand 800000
Debtors 212000
Total Current Assets 3875378
Net Total Assets 3820128
CURRENT LIABILITIES
Creditor 57000
Accrual 125000
Rent 84000
Electricity 14800
Water 18600
Total Current Liabilities 299400
LONGTERM LIABILITIES
Loan 2750000
Net profit 770728
Total Long term Liabilities 3520728
Net Total Liabilities 3820128

xlv
PARTICULARS YEAR 1 YEAR 2 YEAR 3

Salary 1440000 1584000 1742400

License 24000 24000 24000

Loan Repayment 99305 99305 99305

Totals 1563305 1707305 1865705

VARIABLE COSTS

Electricity 15600 14800 21000

Water 16800 18600 20300

Banking Charges 25000 15000 8000

Advertisements 38500 6000 8500

Totals 94900 54400 57800

Annual Sales 3231000 4586000 4900000

Break Even Points 1610611 1727800 1887975

Fixed cost/Contribution
Ratio

xlvi
EVENT STARTING EXPECTED DATE OF SUPERVISOR
DATE COMPLETION
Generation of business idea 31st Dec 2016 12th February 2018 General Manager
Business registration 13th Jan 2017 15th January General Manager

Resource mobilization 13th February 17th February Human Resource manager

Advertising 12th Feb 2018 20th June 2018 Sales manager
Launching new services 1st June 2018 13th June 2018 Sales manager

Customer’s offer 10th April 2018 17th April 2018 Human Resource manager

5.7 IMPLEMENTATION TABLE

xlvii
5.8 APPENDIX

xlviii